2021 Annual Report of Zhejiang NHU Co., Ltd.
Zhejiang NHU Co., Ltd.
2021 Annual Report
April 2022
2021 Annual Report of Zhejiang NHU Co., Ltd.
Section I Important Notes, Contents, and Definitions
The Board of Directors and its members, Board of Supervisors and its members,
and senior executives of the Company hereby guarantee that the information
presented in this annual report is authentic, accurate, complete and free of false
records, misleading statements or material omissions, and they will bear
individual and joint liabilities for such information.
胡 柏 藩 (Hu Baifan), the Company’s legal representative, 石 观 群 (Shi
Guanqun), the officer in charge of accounting, and 王晓碧 (Wang Xiaobi), the
head of accounting department hereby declare that they guarantee the financial
statements in this annual report are authentic, accurate and complete.
All members of the Board of Directors have attended the meeting of the Board
of Directors for deliberation of this annual report.
The future plan and other forward-looking information disclosed in this annual
report shall not be regarded as a commitment to investors. We kindly remind
investors of all possible risks in investments.
We draw your attention to item “XI. Outlook for the future development of the
Company” under “Section III Management Discussion and Analysis”, which
explicitly states the possible risks in business operation and countermeasures
thereon.
Profit distribution proposal deliberated and approved by the meeting of the
Board of Directors is as follows: Temporarily based on total shares of
2,563,842,524 shares [Note] as of March 31, 2022, the Company intends to
distribute cash dividend of 7 yuan (tax included) and no bonus shares per 10
shares to all shareholders, and to distribute 2 shares per 10 shares by converting
capital reserve to all shareholders.
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Note: As of March 31, 2022, the Company’s share capital totaled 2,578,394,760 shares,
including repurchased share of 14,552,236 shares. 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 changes due to the conversion of convertible
bonds, share repurchase, exercise of equity incentives, refinancing and listing of
new shares, etc. before the implementation of the profit distribution proposal,
the total 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
Chinese version, the Chinese version prevails.
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Contents
Section I Important Notes, Contents, and Definitions...........................................................................................1
Section II Company Profile and Key Financial Indicators ................................................................................5
Section III Management Discussion and Analysis ...................................................................................................9
Section IV Corporate Governance ..................................................................................................................................36
Section V Environmental and Social Responsibilities .........................................................................................52
Section VI Significant Events .............................................................................................................................................57
Section VII Movements in Shares and Conditions of Shareholders ...........................................................66
Section VIII Preferred Shares ............................................................................................................................................74
Section IX Bonds ........................................................................................................................................................................75
Section X Financial Report ..................................................................................................................................................76
2021 Annual Report of Zhejiang NHU Co., Ltd.
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 certified
public accountants;
III. Originals of all the Company’s documents and announcements published on newspapers designated by the
China Securities Regulatory Commission during the reporting period;
IV. Other documents for reference.
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Definitions
Abbreviations Refers to Contents of definitions
The Company, NHU Refers to ZHEJIANG NHU CO., LTD.
CSRC Refers to China Securities Regulatory Commission
CSRC, Zhejiang Office Refers to China Securities Regulatory Commission, Zhejiang Office
PPS Refers to Polyphenylene sulfide
PPA Refers to Poly phthalamide
VOC Refers to Volatile organic compound
NH-acid Refers to Taurine
HSE Refers to Healthy and safe environment
FV 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
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Section II Company Profile and Key Financial Indicators
I. 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 新和成
Chinese
Company name in foreign ZHEJIANG NHU CO., LTD.
language (if any)
Company Abbreviation in NHU
foreign language (if any)
Legal representative Hu Baifan
Registered address No.418 Xinchang Dadao West Road, Qixing Sub-district, Xinchang County, Zhejiang Province,
China
Postal code of registered 312500
address
On May 28, the Company’s registered address was changed from No.4 Jiangbei Road, Yulin
Historical changes of
Sub-district, Xinchang County, Zhejiang Province, China to No.418 Xinchang Dadao West Road,
registered address
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
E-mail 002001@cnhu.com
II. Contact information
Items Board secretary Securities affairs representative
Name Shi Guanqun 曾淑颖 (Zeng Shuying)
No.418 Xinchang Dadao West Road, Qixing No.418 Xinchang Dadao West Road, Qixing
Contact address Sub-district, Xinchang County, Zhejiang Sub-district, Xinchang County, Zhejiang
Province, China 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 Shenzhen Stock Exchange: http://www.szse.cn
report
Securities Times, Shanghai Securities News, China Securities
Medias and websites with which the Company discloses the Journal
annual report Giant Tide Information Network: www.cninfo.com.cn
Site where the annual report was prepared and completed Securities Department of the Company
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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 information
Accounting firm engaged by the Company
Name Pan-China Certified Public Accountants LLP
Office address Resources Building, 1366 Qianjiang Road, Jianggan District,
Hangzhou 310020, China
Certified Public Accountants 滕培彬 (Teng Peibin), 朱丽丽 (Zhu Lili)
The sponsor institution engaged by the Company, which performed the duty of continuous guidance and supervision during the
reporting period
□ Applicable √ Not Applicable
The financial advisor engaged by the Company, who performed the duty of continuous guidance and supervision during the reporting
period
□ 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 restatement
Other reasons
YoY
Year 2020 Year 2019
growth rate
Items Year 2021
Before adjustment After adjustment After Before adjustment After adjustment
adjustment
Operating revenue 14,797,989,091.20 10,314,084,354.21 10,314,084,354.21 43.47% 7,660,412,519.26 7,660,412,519.26
(yuan)
Net profit attributable
to shareholders of 4,324,150,263.31 3,563,759,939.48 3,563,759,939.48 21.34% 2,165,282,489.11 2,165,282,489.11
listed company (yuan)
Net profit attributable to
shareholders of listed
company after deducting 4,147,933,364.84 3,410,367,513.01 3,410,367,513.01 21.63% 1,934,679,280.23 1,934,679,280.23
non-recurring profit or
loss (yuan)
Net cash flows from
operating activities 5,837,878,051.57 3,122,807,363.21 3,122,807,363.21 86.94% 2,106,765,618.26 2,106,765,618.26
(yuan)
Basic EPS (yuan/share) 1.68 1.66 1.38 21.74% 1.01 0.84
Diluted EPS 1.68 1.66 1.38 21.74% 1.01 0.84
(yuan/share)
Increased by
21.07% 19.63% 19.63% 1.44 13.20% 13.20%
Weighted average ROE
percentage
points
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YoY
Dec. 31, 2020 Dec. 31, 2019
growth rate
Items Dec. 31, 2021
Before adjustment After adjustment After Before adjustment After adjustment
adjustment
Total assets (yuan) 34,692,165,111.88 30,897,007,799.54 30,897,007,799.54 12.28% 28,723,817,186.44 28,723,817,186.44
Net assets attributable to
shareholders of listed 21,799,977,645.94 19,336,254,922.95 19,336,254,922.95 12.74% 17,010,913,336.77 17,010,913,336.77
company (yuan)
Note: After the implementation of the Company’s 2020 profit distribution plan, its share capital was increased from 2,148,662,300
shares to 2,578,394,760 shares. The above EPS of the comparative period was recalculated based on the adjusted share capital.
VII. 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
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 IFRS Standards and
Chinese accounting standards.
2. Difference in net profit and net assets in financial statements disclosed respectively under overseas
accounting 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 accounting
standards and Chinese accounting standards.
VIII. Key financial indicators by quarter
Unit: RMB Yuan
Items First quarter Second quarter Third quarter Fourth quarter
Operating revenue 3,743,831,818.61 3,510,389,819.40 3,262,074,936.89 4,281,692,516.30
Net profit attributable to 1,136,774,983.04 1,271,724,150.46 957,591,164.57 958,059,965.24
shareholders of listed company
Net profit attributable to
shareholders of listed company 1,090,734,420.46 1,188,720,235.17 922,007,774.31 946,470,934.90
after deducting non-recurring profit
or loss
Net cash flows from operating 1,076,704,398.64 1,194,453,083.13 1,559,667,008.75 2,263,200,889.07
activities
Is there any significant difference between the above financial indicators or their totals and the correspondent financial indicators
disclosed in quarterly or semi-annual reports?
□ Yes √ No
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IX. Non-recurring profit or loss
√ Applicable □ Not Applicable
Unit: RMB Yuan
Items Year 2021 Year 2020 Year 2019 Remarks
Gains or losses on disposal of non-current
assets, including write-off of provision for -61,427,624.58 -37,808,614.38 31,242,497.42
impairment
Government grants included in profit or loss
(excluding those closely related to operating
activities of the Company, satisfying 151,398,630.02 125,612,538.90 89,067,069.07
government policies and regulations, and
continuously enjoyed with certain quantity
or quota based on certain standards)
Gains or losses on assets consigned to the 57,777,633.53 106,249,559.87 154,280,805.13
third party for investment or management
Net profit or loss on subsidiaries acquired
through business combination under -4,136,941.61 -3,333,716.78
common control from the beginning of the
period to the combination date
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 48,751,702.84 6,293,430.49 -8,720,482.58
held-for-trading financial assets and
held-for-trading financial liabilities,
excluding those arising from hedging
business related to operating activities
Other non-operating revenue or expenditures 8,727,858.40 -11,107,533.03 4,462,321.94
Less: Enterprise income tax affected 28,969,203.00 31,786,463.26 36,378,554.21
Non-controlling interest affected (after 42,098.74 -76,449.49 16,731.11
tax)
Total 176,216,898.47 153,392,426.47 230,603,208.88 --
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 for
Public 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 Information
Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss.
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Section III Management Discussion and Analysis
I. The industry in which the Company operates during the reporting period
The Company mainly operates in the fine chemical industry. Relying on the two core platforms of chemical and biology, it produces
various functional chemicals, including nutrition, flavor and fragrance, new materials, and APIs. It has broad prospects in the future.
Nutrition: With the growth and aging of the global population, the improvement of people’s living standards and their increased
awareness of health, the demand for nutrition and health services and products keeps growing. The global nutrition market
represented by vitamins and methionine maintains steady growth. Vitamins are trace organic substances essential to humans and
animals. The market demand mainly comes from the downstream feed, food, medicine and other fields. The overall demand is
growing steadily at a low speed. The supply concentration is high, and the market price has long-term cyclical fluctuations. As the
largest producer of vitamins, China produced about 0.40 million tons of vitamins in 2021, a year-on-year increase of 3.70%,
accounting for 81.80%1 of global production. In 2021, the domestic downstream market demand grew steadily, and the vitamin
market was relatively prosperous. As the first-limiting amino acid of non-grain protein, methionine has great economical effects on
poultry, dairy cows, pigs and aquaculture. In 2021, the global production of feed amino acids (lysine, methionine, threonine and
tryptophan) totaled around 5.62 million tons, with a slight increase from the same period last year. The total output of feed
methionine in China was around 3.44 million tons, at a year-on-year increase of 9.90%. In 2021, the global DL-methionine 99%
production capacity was around 2.03 million tons, with a slight increase over the same period of last year, while the domestic
methionine production capacity was around 0.48 million tons, at a year-on-year increase of 13.10%. The global increase in
methionine mainly came from China. The global output was around 1.60 million tons, at a year-on-year increase of 3.00%, and the
domestic output was around 0.37 million tons, at a year-on-year increase of 22.90%, accounting for 23% of the global output, with an
increase of 5 percentage points from last year. The global demand was around 1.50 million tons, with a year-on-year increase of
3.40%, and the domestic demand was around 0.39 million tons, with a year-on-year increase of 11.40%. In the recent five years, the
development of China’s methionine industry has accelerated, as a result, the production capacity and supply have tilted to the
domestic market2. With the continuous recovery of the global economy and the rapid economic development of emerging countries,
the demand for meat has grown steadily, which leads to the steady growth of the global feed production. As a result, the demand for
methionine is significantly increased.
Flavor and fragrance: After centuries of development, the global flavor and fragrance industry has gone through the era of the origin
of fragrance, the era of bulk fragrance, the era of high-end fragrance, and the era of oligopoly3. The global market size has exceeded
USD 30.00 billion and has been growing at a compound growth rate of 4%4 in recent years. In 2021, the market size of flavor and
fragrance was estimated to be around USD 29.00 billion, and is expected to reach USD 37.30 billion in 2026, with a compound
growth rate of 5.10%5. The growth of the flavor and fragrance market is mainly supported by the growing populations of emerging
economies, such as China, India, Indonesia, South Korea, Brazil and South Africa. The industry is expected to continue to grow
steadily in the future, and its future development prospects are promising.
1
The “2021 Vitamin Market Annual Analysis Report” by BOYAR
2
The “2021 Amino Acid Market Annual Analysis Report” by BOYAR
3
The “Analysis Report on China's Flavor and Fragrance Industry in 2021 - Industry Status Quo and Future Planning Analysis” by
Insight and Info
4
Data from IAL Consulting Agency
5
MARKET and MARKET
https://www.marketsandmarkets.com/Market-Reports/flavors-fragrance-market-175163912.html#utm_source=Email&utm_medium=
Mailgun-CH
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New polymer materials: The “Guidelines under 14th Five-Year Plan and Vision for 2035” issued by the central government in 2020
pointed out that it is necessary to vigorously develop strategic emerging industries, accelerate the growth of a new generation of
information technology, biotechnology, new energy, new materials, high-end equipment, new energy vehicles, green environmental
protection, aerospace, marine equipment etc. According to the China Petroleum and Chemical Industry Federation, the value of
global output of new chemical materials in 2019 reached USD 370.00 billion, and is expected to reach USD 480.00 billion by 2025,
with a compound growth rate of 4.40% from 2019 to 2025. From an international perspective, as a strategic and fundamental industry,
the development of the new material industry has become an important symbol for measuring the economic and technological
strength of a country or region. Under the background of a new round of scientific and technological revolution and industrial
revolution, new technologies and new industries continue to generate huge demand for new materials. Breakthroughs in new material
technologies and emergence of new materials and new substance structures continually increasing the supplies. The global new
material industry is on the track of rapid growth.
From a domestic perspective, China is experiencing a period of strategic transformation, and the strategic demand for new materials
is more prominent, providing a rare historical opportunity for the development of the new material industry. However, in the R&D
and production of advanced and high-end materials, there are still problems such as lack of innovation lack of coordination between
innovation chain and industrial chain, lack of a risk-proof system covering the innovation chain, industrial chain and supply chain,
etc., which fails to fully satisfy the needs of China’s economy and social development. China still has a long way to go in the road of
new materials6. Benefiting from the huge domestic demand, the rapid development of new technologies and the support of national
policies, some products broke through the key technology barriers, which provides us with a broad space for growth.
APIs: API is the pillar industry of the domestic pharmaceutical industry and one of the key industries supported by government. At
present, China is the world’s largest producer and exporter of APIs. Due to the supply imbalance caused by the pandemic and other
factors, some European and American countries are also advocating to engaging in the API manufacturing, but it is foreseeable that in
the wave of market globalization, the production advantages of APIs will still be concentrated in emerging countries such as China.
China is a major producer and exporter of bulk APIs, and its production technology has reached the international advanced level.
Most of the APIs are exported to foreign countries for processing into characteristic APIs and preparations. Due to the uncertainty
caused by the global Covid-19 pandemic, the export of major API producing countries such as India and Italy is under pressure. As
APIs are rigid demand, Chinese API companies have certain advantages in the global competition.
Challenges always come with opportunities. We all know that China announced that it would reach carbon peak by 2030 and be
carbon neutral by 2060 (known as double carbon target 3060). To reach the target, China is making solid progress to control the total
volume and intensity of carbon emissions. The National Development and Reform Commission issued the Plan for Improving the
Dual Control System of Energy Consumption Intensity and Total Volume, proposing to improve the dual control system, with a focus
on the control of fossil energy consumption. The Comprehensive Work Plan on Energy Saving and Emission Reduction under the
14th Five-Year Plan proposes that by 2025, the national energy consumption per unit of GDP shall be reduced by 13.50% compared
with 2020. Affected by the “double carbon target and dual control system”, the procurement of basic chemical raw materials faces
challenges of rising cost, limited procurement channels, etc. The Company also faces challenges in project approval and power
supply. In the future, the Company will ensure the supply of raw materials and inventory reserves by developing more qualified
suppliers and choosing more green and sustainable products as raw materials. Besides, the Company insists on technological
transformation and equipment innovation, strengthens end-of-line management, to achieve energy conservation and emission
reductions.
6
“The 14th Five-Year Plan for the Development of New Materials Industry in Zhejiang Province”
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II. The main business of the Company during the reporting period
The Company is a national high-tech company mainly engaged in the production and sales of nutrition, flavor and fragrance, new
polymer 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
continuously improves the quality of human life with high-quality, healthy and green products, and creates sustainable value for
stakeholders. With leading technology, scientific management and sincere service, the Company has become one of the four major
world vitamin manufacturers, one of the top 100 national fine chemical companies, one of the top 10 companies in China’s light of
industry fragrance and a well-known special engineering plastics manufacturer.
1. Main products and applications
Nutrition: The Company’s vitamin products, as the main business, have a substantial market share, with a prominent position in the
industry and obvious brand advantages. It is in a leading position in both domestic and overseas markets. Its main products include
vitamin E, vitamin A, vitamin C, methionine, vitamin D3, biotin, coenzyme Q10, carotenoids, etc. They are mainly used in feed
additives and nutrition supplements of food, beverages, health food, etc. The Company actively implements the serialized and
differentiated development of nutrition, and continuously improves the competitiveness of its products by optimizing the processing
line and tackling key issues. In addition, through internal integration and external cooperation, it embraces the ideology of open
cooperation. It actively deploys cutting-edge biotechnology, and builds the Company’s “Bio+” platform. During the reporting period,
for the Company’s second phase of methionine 250,000 tons/year project, 100,000-ton equipment was running steadily, with cost and
quality continuously improved, and the 150,000-ton equipment was constructed according to schedule, and the overall process was
under control.
Flavor and fragrance: At present, the main fragrance products target the global market, in which, the products are competitive, with a
high market share and relatively stable market structure. The main products include linalool, citral, and cis-3-hexenol series, and
methyl dihydrojasmonate, raspberry ketone and ligustral, which are widely used in personal care, cosmetic and food fields. Relying
on the two major technology platforms of chemical synthesis and biological fermentation, the Company continuously enriches the
varieties of fragrance products to meet the changing market demands. During the reporting period, the project with an annual output
of 5,000 tons of menthol was constructed on schedule, and the project progress was under control.
New polymer materials: The Company focuses on the development of high molecular polymers and key intermediates, and
appropriately develops downstream applications of materials according to the principles of integration and serialization. The entire
industry chain of PPS from raw materials to high molecular polymers, then through modifying processing to special fibers has
enabled the Company as the only company in China that can stably produce fiber grade, injection molding grade, extrusion grade and
coating grade PPS. The main products include PPS and PPA. They are mainly used in electronic and electrical, automotive,
environmental protection, etc. During the reporting period, the third-phase project with an annual output of 7,000 tons of PPS was put
into construction.
APIs: The main products are concentrated in the series of vitamins and antibiotics. The main products include moxifloxacin
hydrochloride, vitamin A, vitamin D3, etc., which are mainly used as active pharmaceutical ingredients for 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 a
combination of long-term strategic cooperation and open competitive procurement, and makes best use of market trend analysis, to
ensure the stable supply of the Company’s strategic materials. The Company pays attention to source procurement, and continuously
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promotes the removal of intermediate links in the supply chain to reduce procurement costs; the Company implements transparent
procurement, and launches information systems such as procurement platform, supplier and bidding management system, etc. to
make the procurement process more transparent, standardized and efficient, which promotes the healthy development of the supply
chain and 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
through analysis of changes in market demands, effective response to repeated epidemic waves and dual-control power cuts, and
reasonable production plans. In addition, the Company keeps innovating the production model, digging out internal potentials, and
optimizing the production process, in order to promote safe, green, standardized and efficient production, and continuously improve
the competitiveness 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 product
application fields, and establishes a sales model that suits market needs according to market characteristics and industry practices.
Most of the Company’s sales are achieved through direct sales. By doing so, it establishes long-term and stable strategic cooperative
relationships with end customers to create greater value for them. Meanwhile, it also selects excellent agents or distributors for
distribution. By doing so, it services customers indirectly based on market and customer features.
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 platforms
interdependent. 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 resist risks and respond to market emergencies.
During the reporting period, in the face of the raging Covid-19 epidemic and the more complex international economic situation, the
Company coordinated the epidemic control and business development, actively responded to market changes, adjusted sales
strategies, strengthened supply chain scheduling, and reasonably arranged production plans to ensure its product supply, and strive to
create value for customers and the society. Moreover, the Company continued to increase investment in R&D and technological
upgrading. The development and construction of new projects and new products were carried out in an orderly manner, whereas the
refined operation of existing products promoted the sales price and quantity, which promoted the Company’s sales performance. The
improvement of the Company’s performance was in line with the development pattern of the industry.
During the reporting period, the Company’s main business and its business model remained unchanged.
III. Core competitiveness analysis
Since its establishment, the Company has focused on fine chemicals, and adhered to innovation-driven development. Through
decades of development, it has gradually formed an industrial system with nutrition, flavor and fragrance, new polymer materials and
APIs as its main business. The market share of its main products is among the top tier in the world market. The Company’s core
competitiveness lies 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
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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 wealth
and material wealth, provides a platform and opportunity for employees to develop and realize life value, and contributes to social
innovation development, green development and shared development. During the reporting period, the Company deepened cultural
publicity 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
greatly in R&D activities. The R&D investments accounted for more than 5% of the operating revenue for many years in a row. It has
built the innovative R&D system spanning from basic research, engineering development, process optimization to product
application development. With its focus on the development of common, critical and forward-looking technologies in the chemicals
industry, the Company has developed and mastered a number of key technologies that have a strategic impact on economic
development and has promoted the transformation and upgrading of the industry. The Company cooperates closely with famous
research institutes and universities at home and abroad, such as Zhejiang University, Chinese Academy of Sciences, Jiangnan
University, China Agricultural University, Zhejiang University of Technology, CysBio biotechnology company of Denmark, and
organizes and utilizes global basic scientific research resources to jointly develop forward-looking studies and application field
researches on chemicals. As the core of the 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-leading scientific research instruments and equipment. Its achievements of domestic leading
technologies such as supercritical reaction, high vacuum distillation, and continuous reaction have made it a nationally recognized
enterprise technology center, national post-doctoral scientific research workstation, and national model academician and expert
workstation. During the reporting period, the Company’s key R&D projects were steadily implemented as planned, and the
innovation achievements were recognized by the society. The project of “Key Innovation and Industrialization Technology for
Tailoring Supported Catalysts in the Micro-nano Dimension “ won the first prize of Zhejiang Province Technology Invention Award
of 2020. Intellectual property work was continuously progressed forward, and 88 patents were authorized. The full-process patent
layout of key products was completed.
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 company benefits 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 intelligent operation, it promotes the continuous improvement of management efficiency. In addition, the Company is committed
to the development of green chemicals, vigorously promotes clean production, recyclable economy and 7S on-site management, and
adopts an environmental governance model that focuses on source control and final disposal. It is determined to take the road of
sustainable development.
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 higher level of automation, aiming to save energy and reduce emissions, to improve productivity and product quality,
Page 13 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
to increase the intrinsic safety of production process, to lower production costs, and to improve the level of automation. Currently, the
Company has developed various 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 respect to specific processes, and remarkable results have been achieved in continuous transformation
of reaction, vapor-liquid-solid heterogeneous reaction, and separation of air sensitive and heat sensitive materials through continuous
improvement of large-size equipment.
5. Talent
The Company has always been adhering to the management concept of “standardization and efficiency” and the employment concept
of “valuing both integrity and talent, and matching people with right positions”, and has created a pioneering, innovative, pragmatic
and efficient talent team and a long-term, stable and excellent management team with a high sense of responsibility, which promotes
the Company’s sustained, healthy and rapid development. The Company continues to strengthen the construction of the talent supply
chain. It continuously improves the talent training system, strengthens the training of “management talents, skilled talents,
international talents, core technical talents, and leadership talents”, systematically cultivates and reserves university graduates,
introduces various professionals, and continues to promote the training and reserve of senior talents. It also promotes the rotation
training in zigzag and cross-sequence pattern, in order to promote the integration of management and profession, and to build a team
with a balanced talent structure. During the reporting period, the Company was awarded the national advanced entity for professional
and technical talents, and its post-doctoral research workstation was granted the qualification of independently recruiting
post-doctors.
6. Brand
The Company follows the “integrity first” guideline, and has always regarded serving customers and creating industry value with
customers as the goal of the Company. Through technological innovation, the Company continuously provides customers with safe
and high-quality products, as well as efficient and satisfactory services. After years of development and accumulation, the Company
has been awarded many honorary titles in the global fine chemical industry, such as one of top ten feed additive brands in China, one
of the largest vitamin feed additive companies in China, etc. Good reputation in market has laid a solid foundation for the Company’s
healthy and long-term development.
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 Discussion
and Analysis” for details.
2．Revenue and cost
(1) Operating revenue
Unit: RMB Yuan
Year 2021 Year 2020
Items YoY growth rate
Amount % to total Amount % to total
Total 14,797,989,091.20 100% 10,314,084,354.21 100% 43.47%
By industry
Pharmaceutical 13,786,221,640.74 93.16% 9,513,390,811.51 92.24% 44.91%
chemicals
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Year 2021 Year 2020
Items YoY growth rate
Amount % to total Amount % to total
Others 1,011,767,450.46 6.84% 800,693,542.70 7.76% 26.36%
By product
Nutrition 11,127,987,778.92 75.20% 7,152,084,881.08 69.34% 55.59%
Flavor and fragrance 2,238,700,529.12 15.13% 1,955,729,401.52 18.96% 14.47%
New polymer 873,994,673.98 5.90% 722,638,797.47 7.01% 20.94%
materials
Others 557,306,109.18 3.77% 483,631,274.14 4.69% 15.23%
By region
Domestic sales 7,123,812,423.17 48.14% 4,536,018,908.08 43.98% 57.05%
Overseas sales 7,674,176,668.03 51.86% 5,778,065,446.13 56.02% 32.82%
By sales model
Direct sales 11,477,870,900.52 77.56% 8,167,791,726.07 79.19% 40.53%
Agent sales 3,320,118,190.68 22.44% 2,146,292,628.14 20.81% 54.69%
(2) Industries, products and regions that account for more than 10% of the total operating revenue or
operating profit
√ Applicable □ Not Applicable
Unit: RMB Yuan
Growth rate of
Items Operating revenue Operating cost Gross rate Growth rate of Growth rate of
operating
operating cost gross rate
revenue
By industry
Pharmaceutical 13,786,221,640.74 7,524,635,557.32 45.42% 44.91% 78.62% Decreased by
chemicals 10.30%
Others 1,011,767,450.46 687,657,388.95 32.03% 26.36% 33.64% Decreased by
3.71%
By product
Nutrition 11,127,987,778.92 5,893,700,909.97 47.04% 55.59% 95.20% Decreased by
10.74%
Flavor and 2,238,700,529.12 1,295,613,509.31 42.13% 14.47% 48.78% Decreased by
fragrance 13.34%
By region
Domestic sales 7,123,812,423.17 4,304,266,719.31 39.58% 57.05% 88.37% Decreased by
10.04%
Overseas sales 7,674,176,668.03 3,908,026,226.96 49.08% 32.82% 60.02% Decreased by
8.65%
In case the statistical caliber of the Company’s main business data was adjusted during the reporting period, the Company’s main
business data of the preceding period adjusted according to the caliber at the end of the period shall be indicated
□ Applicable √ Not Applicable
Page 15 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
(3) Whether the Company’s goods sales income is greater than service income
√ Yes □ No
By industry Items Unit Year 2021 Year 2020 YoY growth rate
Sales Tons 560,201.79 241,247.40 132.21%
Pharmaceutical Production Tons 581,022.52 255,477.31 127.43%
chemicals
Stock Tons 55,141.48 34,320.75 60.67%
Sales Tons 20,323.14 17,519.90 16.00%
Others Production Tons 18,857.92 18,059.16 4.42%
Stock Tons 2,848.33 4,313.55 -33.97%
Remarks on reason for relevant data with absolute growth rate over 30%
√ Applicable □ Not Applicable
a. The YoY growth rates of sales, production and stock of chemical industry were over 30%, mainly due to the
joint effect of following factors: a. Increased downstream demand for products such as vitamin E and
methionine; and b. increased production of amino acid products
b. The YoY growth rate of stock of others was under -30%, mainly due to decrease in stock of PPS products
whose sales increased with growing market demand.
(4) The performance of major sales contracts and major purchase contracts signed by the Company during
the reporting period
□ Applicable √ Not Applicable
(5) Composition of operating cost
By industry and product
Unit: RMB Yuan
Year 2021 Year 2020
By industry Items YoY growth rate
Amount % to total Amount % to total
Chemical Cost of main 7,438,277,802.68 90.57% 4,152,975,659.63 87.85% 79.11%
industry operations
Others Cost of main 686,701,505.46 8.36% 512,070,058.95 10.83% 34.10%
operations
Unit: RMB Yuan
Year 2021 Year 2020
By product Items YoY growth rate
Amount % to total Amount % to total
Nutrition Cost of main 5,810,172,906.75 70.75% 2,959,568,683.97 62.61% 96.32%
operations
Flavor and Cost of main 1,292,783,757.89 15.74% 869,842,533.19 18.40% 48.62%
fragrance operations
New materials Cost of main 592,371,747.63 7.21% 445,892,384.85 9.43% 32.85%
operations
Others Cost of main 429,650,895.87 5.23% 389,742,116.57 8.24% 10.24%
operations
Remarks
None.
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2021 Annual Report of Zhejiang NHU Co., Ltd.
(6) Whether the consolidation scope has changed during the reporting period
√ Yes □ No
Entities Equity acquisition method
浙江新和成尼龙材料有限公司 (Zhejiang NHU Nylon Materials Investment and establishment
Co., Ltd.*)
NHU Singapore PTE. LTD. Investment and establishment
(7) Significant changes or adjustments to the Company’s business, products or services during the
reporting period
□ Applicable √ Not Applicable
(8) Major customers and major suppliers
Major customers
Total sales amount (yuan) of top 5 customers 2,631,845,264.42
Proportion to the total balance of annual sales amount (%) 17.79%
Proportion of related party transaction to the total balance of 0.00%
annual sales amount (%)
Top 5 customers
No. Customers Sales amount (yuan) Proportion to the total balance of sales
amount (%)
1 Client A 1,090,633,930.45 7.37%
2 Client B 553,597,741.99 3.74%
3 Client C 417,521,095.52 2.83%
4 Client D 353,717,339.50 2.39%
5 Client E 216,375,156.96 1.46%
Total -- 2,631,845,264.42 17.79%
Remarks on other information of major customers
□ Applicable √ Not Applicable
Major suppliers
Total purchase amount (yuan) of top 5 suppliers 927,110,934.55
Proportion to the total balance of annual purchase amount (%) 11.47%
Proportion of related party transaction to the total balance of
0.00%
annual purchase amount (%)
Top 5 suppliers
No. Suppliers Purchase amount (yuan) Proportion to the total balance of purchase
amount (%)
1 Supplier A 270,477,214.33 3.35%
2 Supplier B 189,798,840.70 2.35%
3 Supplier C 187,488,797.04 2.32%
*
The English name is for identification purpose only.
Page 17 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
No. Suppliers Purchase amount (yuan) Proportion to the total balance of purchase
amount (%)
4 Supplier D 148,816,101.63 1.84%
5 Supplier E 130,529,980.85 1.61%
Total -- 927,110,934.55 11.47%
Remarks on other information of major suppliers
□ Applicable √ Not Applicable
3. Expenses
Unit: RMB Yuan
Items Year 2021 Year 2020 YoY growth rate Remarks on significant changes
It was mainly due to freight and
Selling expenses 107,037,085.96 312,957,940.58 -65.80% insurance fees included in operating
cost under the revised revenue standard
during the reporting period.
Administrative expenses 423,584,417.67 422,853,851.25 0.17%
Financial expenses 269,968,353.24 304,543,014.49 -11.35%
It was mainly due to increase of
R&D expenses 782,661,708.54 545,562,375.72 43.46% remuneration of R&D department and
direct input materials into its projects
during the reporting period.
4. R&D input
√ Applicable □ Not Applicable
Expected effect on the
Main R&D projects Purposes Progress Targets to be fulfilled Company’s future
development
It is expected to enrich the
To develop new products, product chain and the
Development on To realize mass production of
so as to realize mass industrial chain of the
synthetic process of Under construction NH acid with competitive
production of NH acid Company and improve the
NH acid products cost
with competitive cost comprehensive
competitiveness.
It is expected to extend the
Joint production
To develop a preparation To realize industrialization of industrial chain layout,
period of caronic
method for medical Under construction caronic anhydride and vince enhance the Company’s
anhydride and vince
intermediates lactam production ability in the field of API, and
lactam
protect human life and health.
It is expected to realize the
localization of menthol
products, enhance the
To develop new menthol
R&D of new Company’s position in the
products and realize To realize industrialization of
synthesis process of Under construction field of fragrances, and
industrialization of menthol
menthol promote the upgrading of
menthol
domestic nursing, food
industry, pharmacy and other
downstream industries.
To develop new FV
It is expected to further
products, realize
Research on the The pilot-scale To prepare FV products with enhance the Company’s
industrialization of FV
process of FV experiment is continuous process or partial overall position and impact
products and further
products completed continuous process resistance in the vitamin
enrich the product chain
market.
of the Company
Innovation and To research on and The pilot-scale To research and develop It is expected to expand API
industrialization of develop synthetic process experiment is synthetic process of businesses of the Company,
synthetic process of of perfluorohexyl octane completed perfluorohexyl octane and and improve the
Page 18 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Expected effect on the
Main R&D projects Purposes Progress Targets to be fulfilled Company’s future
development
halothane series eye and perfluorobutyl perfluorobutyl pentane, competitiveness.
medicine pentane, and conduct conduct magnification design
magnification design and and debugging, and expand
debugging business cooperation
relationships
It is expected to enrich the
To broaden the market,
Company’s product
develop new liquid
Development of categories, form industrial
methionine products, and Under pilot-scale To realize the industrialization
liquid methionine complementarity with solid
realize the experiment of liquid methionine products
products methionine products, and
industrialization of liquid
meet the differentiated needs
methionine products
of customers.
It is expected to help the
Company break through the
technical barrier of
Preparation of R&D of adiponitrile product
adiponitrile, become the first
adiponitrile by Chemical synthesis of technology and realization of
Under pilot-scale domestic company to master
butadiene method adiponitrile and its production technology
experiment this technology, break the
and its industrialization localization of adiponitrile
monopoly of foreign
industrialization product
companies, and promote the
development of domestic
related industries
To research on the
precise design, synthesis
and mechanism of
Precise high-performance
To realize the Company’s
development and selective hydrogenation
precise regulation of
industrial catalysts for selective During its It is expected to enhance the
nano-metal in hydrogenation
application of hydrogenation of application in mass comprehensive
catalyst, and significantly
high-performance unsaturated ketone and production competitiveness of products
improve activity, selectivity
hydrogenation triple bond involving
and stability of catalysts
catalyst chemical synthesis of
vitamin E and vitamin A,
and to realize its
industrial application
To research on the application
effect of newly developed
ethoxyquinoline-free vitamin
To develop high- safety It is expected to improve the
and carotenoid preparation
fat-soluble vitamin and Company’s independent
products in premix and feeds,
Research on the carotenoid preparations research and development
and their bioutilization effect
development and and research on the effect During its level in the development and
in different animal fields.
application of and mechanism of their application in mass application of pharmaceutical
Establish feed processing
high-safety nutrient application in production products, so as to lay a solid
platform and breeding test
products downstream premix, product foundation for
base for pilot-scale
feeds and animals (in consolidation of the European
experiments, so as to evaluate
vitro and in vivo). feed products market.
the application effect of
high-safety vitamin and
carotenoid.
As the Company has
To establish relevant obtained the CNAS
It is expected to provide a full
standards and detection laboratory
To provide analytical range of analysis and testing
Research on drug methods for synthetic accreditation
technology services for services for the Company’s
quality standards intermediates; to carry certificate, it is
enterprises, establish innovation of products and
and technical out research on currently able to
analytical technology technologies, and help solve
services for analysis preparation, separation support the research
development, and assist in key technical problems in
and testing and purification of trace on analytical
products development production and in the R&D
impurities, determine technologies inside
process.
impurity structure, etc. and outside the
Company.
Establish safety Safety and To improve the safety It is expected to improve the
Research on safety
assessment laboratory environmental assurance technology of essential safety level of
risk of fine
which is equipped with protection laboratory chemical production and enterprises and effectively
chemical reaction
calorimetry equipment is established, which storage process. To carry out prevent accidents.
Page 19 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Expected effect on the
Main R&D projects Purposes Progress Targets to be fulfilled Company’s future
development
(DSC, ARC, RC1e, etc.) enables the issue of process optimization for the
and analysts, carry out process safety relatively-high risks of the
kinetic and evaluation report that process, so as to essentially
thermodynamic analysis meets the reduce the risk of the reaction
on related materials and requirements of process.
chemical reaction safety supervision
process, and when department.
necessary, carry out
amplification and
debugging procedures on
corresponding processes
To systematically
The Company is able
research on the
to conduct analysis
influencing factors of
and research on
each product in the
crystallization
crystallization process,
thermodynamics, It is expected to achieve
find out the optimal
kinetics and To systematically research on product quality improvement
Research on crystallization process
polycrystal type, and the crystallization process of through the innovation and
development and parameter, realize the
has development existing and developing development of crystallization
application of controllability of crystal
ability of cooling and products, and support to solve process, so as to meet the
crystallization products in aspects
other three practical production needs of different customers
technology including particle size
crystallization problems. and Improve the market
distribution, appearance,
processes as well as competitiveness of products.
crystal shape, and solve
the development
actual production
ability of continuous
problems through
crystallization
production debugging in
process.
the workshop
It is expected to continuously
To research on strain
To research on the strain improve the process
Research on strain The Company has modification of the existing
transformation of the competitiveness of existing
development and formed the ability of products, so as to improve the
Company’s existing products, so as to improve the
modification strain modification competitiveness of product
products Company’s position in the
process
fermentation industry
Details of R&D personnel
Items Year 2021 Year 2020 Percentage of change
Number of R&D personnel 2,368 1,962 20.69%
(persons)
% to total employees 21.92% 19.43% Increased by 2.49 percentage
points
Educational background —— —— ——
structure
Doctor 58 38 52.63%
Master 605 484 25.00%
Bachelor 1,189 971 22.45%
Junior college 367 326 12.58%
Technical secondary school, 149 143 4.20%
high school and below
Total 2,368 1,962 20.69%
Age structure —— —— ——
Below 30 years old 1,169 907 28.89%
30-40 years old 894 819 9.16%
Over 40 years old 305 236 29.24%
Total 2,368 1,962 20.69%
Page 20 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Details of R&D input
Items Year 2021 Year 2020 Percentage of change
R&D input amount (yuan) 782,661,708.54 545,562,375.72 43.46%
% to total operating revenue 5.29% 5.29% 0.00%
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 2021 Year 2020 YoY growth rate
Subtotal of cash inflows from 15,585,137,046.52 10,804,599,576.68 44.25%
operating activities
Subtotal of cash outflows from 9, 747,258,994.95 7,681,792,213.47 26.89%
operating activities
Net cash flows from operating 5,837,878,051.57 3,122,807,363.21 86.94%
activities
Subtotal of cash inflows from 1,969,695,872.13 4,068,475,319.50 -51.59%
investing activities
Subtotal of cash outflows from 5, 361,464,680.21 4,262,105,699.60 25.79%
investing activities
Net cash flows from investing -3, 391,768,808.08 -193,630,380.10 -1,651.67%
activities
Subtotal of cash inflows from 7,383,209,509.05 7,470,348,792.97 -1.17%
financing activities
Subtotal of cash outflows from 8,727,832,760.73 8,846,567,487.61 -1.34%
financing activities
Net cash flows from financing -1,344,623,251.68 -1,376,218,694.64 2.30%
activities
Net increase of cash and cash 1,045,230,762.14 1,455,748,960.67 -28.20%
equivalents
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 86.94%, which was mainly due to increase of sales during the
reporting period leading to increase of collection of relevant payments for goods.
The YoY growth rate of net cash flows from investing activities was -1,651.67%, which was mainly due to decrease of financial
products arising from redemption upon maturity, and increase of cash payment for construction in progress during the reporting
period.
The YoY growth rate of cash and cash equivalents was -28.20%, which was mainly due to decrease of financial products arising from
redemption upon maturity, and increase of cash payment for construction in progress during the reporting period.
Page 21 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Remarks on reason for significant difference between net cash flows from operating activities during the reporting period and net
profit of the current period
□ Applicable √ Not Applicable
V. Non-main business analysis
√ Applicable □ Not Applicable
Unit: RMB Yuan
% to total
Items Amount profit Reason for balance Whether has continuity
before tax
It was mainly due to gains on financial products
Investment income 127,969,715.41 2.54%
and profit generated by the associates during the No
reporting period.
It was mainly due to changes in fair value of
Gains on changes in 37,863,705.44 0.75% forward foreign exchange settlement during the No
fair value
reporting period.
Credit impairment -50,043,349.49 -0.99% It was mainly due to bad debts accrued in No
loss accounts receivable.
It was mainly due to losses arising from
Assets impairment -54,250,408.9 -1.08% provision for impairment made on each asset in No
loss
accordance with assets impairment principles.
Gains on asset -1,544,436.08 -0.03% It was mainly due to disposal of fixed assets. No
disposal
Non-operating 12,287,842.84 0.24% No
It was mainly due to indemnity income.
revenue
It was mainly due to gains on retirement of
Non-operating 64,603,824.24 1.28% No
assets and donation expenditures during the
expenditures
reporting period.
Other income 152,380,704.67 3.03% It was mainly due to government grants No
received during the reporting period.
VI. Assets and liabilities analysis
1. Significant changes in asset composition
Unit: RMB Yuan
Dec. 31, 2021 Jan. 1, 2021
Items Percentage of Remarks on
Amount % to total Amount % to total change significant changes
Cash and bank 5,952,909,626.94 17.16% 4,927,657,236.24 15.95% 1.21%
balances
Held-for trading 1,250,736,359.24 3.61% 852,227,964.70 2.76% 0.85%
financial assets
Accounts 2,755,168,573.14 7.94% 1,930,930,930.01 6.25% 1.69%
receivable
Inventories 3,193,657,367.16 9.21% 3,117,042,558.78 10.09% -0.88%
Other current 895,782,268.87 2.58% 1,777,569,473.96 5.75% -3.17%
assets
Long-term equity 351,327,625.75 1.01% 343,378,891.18 1.11% -0.10%
investments
Fixed assets 14,318,919,487.82 41.27% 13,914,151,215.54 45.03% -3.76%
Construction in 2,984,835,072.82 8.60% 1,325,545,420.56 4.29% 4.31%
progress
Right-of-use 3,123,637.11 0.01% 3,113,997.88 0.01% 0.00%
assets
Short-term 1,403,332,827.92 4.05% 2,363,525,192.53 7.65% -3.60%
borrowings
Page 22 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Dec. 31, 2021 Jan. 1, 2021
Items Percentage of Remarks on
Amount % to total Amount % to total change significant changes
Contract 61,135,258.36 0.18% 56,302,537.11 0.18% 0.00%
liabilities
Non-current
liabilities to be 2,029,499,509.43 5.85% 1,275,980,921.58 4.13% 1.72%
due within one
year
Long-term 5,148,811,786.49 14.84% 4,136,875,354.33 13.39% 1.45%
borrowings
Lease liabilities 2,936,868.15 0.01% 3,021,369.62 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
Accumulated Provision for Amount
Gains on Amount sold
Items Opening balance changes in fair changes in fair impairment made purchased during during the
Other Closing balance
value included in the current the reporting changes
value reporting period
in equity period period
Financial assets
1. Held-for-trading
financial assets 850,000,000.00 1,250,000,000.00 850,000,000.00 1,250,000,000.00
(derivative financial
assets excluded)
2. Derivative 2,227,964.70 -1,491,605.46 736,359.24
financial assets
Subtotal of 852,227,964.70 -1,491,605.46 1,250,000,000.00 850,000,000.00 1,250,736,359.24
financial assets
Total 852,227,964.70 -1,491,605.46 1,250,000,000.00 850,000,000.00 1,250,736,359.24
Financial liabilities 0.00 0.00 0.00 0.00 0.00
Remarks on other changes
Whether 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 238,372,088.71 yuan pledged and not on demand for payments, which
was with use restrictions.
(2) Closing balance of receivables financing included 131,943,711.14 yuan pledged for bank acceptance and not on demand for
payments, which was with use restrictions.
(3) Closing balance of notes receivable included 236,268,835.12 yuan pledged for bank acceptance and not on demand for payment,
which was with use restrictions.
(4) Closing carrying amount of fixed assets included 79,957,441.31 yuan mortgaged to the bank for borrowings, which was with use
restrictions.
(5) Closing carrying amount of intangible assets included 9,463,498.51 yuan mortgaged to the bank for borrowings, which was with
use restrictions.
Page 23 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
VII. Investment status analysis
1. Overall information
√ Applicable □ Not Applicable
Investments during the reporting period Investments of the preceding period (yuan) Percentage of change
(yuan)
2,489,162,047.36 1,677,781,310.34 48.36%
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
Unit: RMB 0,000 yuan
Amount Profit or
Whether Categories Amount sold Provision Proportion
purchased loss during
Counterparty Related party related of Initial Date of Date of Opening
during the
during the for Closing of
the
relationship party derivative investments commencement termination balance reporting impairment balance investments
reporting reporting
transaction investments period (if any) to net assets
period period
Structured
Bank Non-related No 9,753.7 7/20/2020 2/24/2021 2,459.6 2,459.6 27.8
forward
party
contracts
Bank Non-related No Forward 4,802.49 12/15/2020 3/25/2021 4,802.49 4,802.49 144.94
party contracts
Structured
Bank Non-related No 19,803 12/22/2020 3/25/2021 19,803 19,803 -26.56
forward
party
contracts
Structured
Bank Non-related No 19,686.44 12/30/2020 2/22/2021 13,116.48 13,116.48 0
forward
party
contracts
Structured
Bank Non-related No 15,744.4 12/30/2020 1/25/2021 10,487.2 10,487.2 0
forward
party
contracts
Structured
Bank Non-related No 9,840.25 12/30/2020 1/25/2021 6,554.5 6,554.5 0
forward
party
contracts
Structured
Bank Non-related No 39,361.13 1/6/2021 1/19/2021 39,361.13 39,361.13 9.93
forward
party
contracts
Structured
Bank Non-related No 9,251.42 2/9/2021 2/18/2021 9,251.42 9,251.42 2.76
forward
party
contracts
Structured
Bank Non-related No 3,186.36 1/8/2021 2/22/2021 3,186.36 3,186.36 14.72
forward
party
contracts
Page 24 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Amount Profit or
Whether Categories Amount sold Provision Proportion
purchased loss during
Counterparty Related party related of Initial Date of Date of Opening
during the
during the for Closing of
the
relationship party derivative investments commencement termination balance reporting impairment balance investments
reporting reporting
transaction investments period (if any) to net assets
period period
Structured
Bank Non-related No 41,085 1/8/2021 3/26/2021 41,085 41,085 121.16
forward
party
contracts
Bank Non-related No Forward 12,923.7 1/13/2021 1/25/2021 12,923.7 12,923.7 -4.9
party contracts
Bank Non-related No Forward 8,768.32 1/13/2021 3/26/2021 8,768.32 8,768.32 19.2
party contracts
Bank Non-related No Forward 7,117 1/14/2021 1/29/2021 7,117 7,117 24.86
party contracts
Structured
Bank Non-related No 32,624 1/28/2021 3/25/2021 32,624 32,624 119.51
forward
party
contracts
Structured
Bank Non-related No 25,468 1/28/2021 5/25/2021 25,468 25,468 243.99
forward
party
contracts
Structured
Bank Non-related No 32,516 2/5/2021 3/26/2021 32,516 32,516 32.8
forward
party
contracts
Structured
Bank Non-related No 19,485 2/19/2021 3/15/2021 19,485 19,485 36.6
forward
party
contracts
Bank Non-related No Forward 12,625.6 2/23/2021 4/26/2021 12,625.6 12,625.6 213.3
party contracts
Bank Non-related No Forward 38,986.4 2/26/2021 5/17/2021 38,986.4 38,986.4 60.67
party contracts
Bank Non-related No Forward 13,088.15 3/8/2021 5/25/2021 13,088.15 13,088.15 122.14
party contracts
Bank Non-related No Forward 3,293.25 4/1/2021 4/26/2021 3,293.25 3,293.25 55.17
party contracts
Bank Non-related No Forward 3,293.8 4/1/2021 4/26/2021 3,293.8 3,293.8 55.72
party contracts
Bank Non-related No Forward 17,233.23 4/7/2021 8/25/2021 17,233.23 17,233.23 201.67
party contracts
Bank Non-related No Forward 3,117.63 4/9/2021 4/26/2021 3,117.63 3,117.63 -11.25
party contracts
Bank Non-related No Forward 9,431.22 4/19/2021 6/25/2021 9,431.22 9,431.22 129.22
party contracts
Bank Non-related No Forward 12,948 4/30/2021 5/25/2021 12,948 12,948 168
party contracts
Structured
Bank Non-related No 16,246.8 4/30/2021 7/26/2021 16,246.8 16,246.8 123.2
forward
party
contracts
Bank Non-related No Forward 19,397.1 5/13/2021 7/26/2021 19,397.1 19,397.1 92.58
party contracts
Bank Non-related No Forward 15,812.5 5/18/2021 11/22/2021 15,812.5 15,812.5 779.39
party contracts
Bank Non-related No Forward 12,815 6/4/2021 6/25/2021 12,815 12,815 -66.8
party contracts
Bank Non-related No Forward 19,270.25 6/7/2021 7/26/2021 19,270.25 19,270.25 -111.78
party contracts
Bank Non-related No Forward 1,553.69 6/15/2021 6/25/2021 1,553.69 1,553.69 17.65
party contracts
Bank Non-related No Forward 5,448.24 6/15/2021 7/26/2021 5,448.24 5,448.24 114.02
party contracts
Bank Non-related No Forward 19,290.9 6/17/2021 6/25/2021 19,290.9 19,290.9 -31.87
party contracts
Bank Non-related No Forward 4,527.6 6/22/2021 6/25/2021 4,527.6 4,527.6 18.97
party contracts
Bank Non-related No Forward 6,175.4 6/30/2021 8/25/2021 6,175.4 6,175.4 98.39
party contracts
Structured
Bank Non-related No 8,410.93 7/14/2021 7/21/2021 8,410.93 8,410.93 2.14
forward
party
contracts
Bank Non-related No Forward 6,154.8 7/2/2021 8/25/2021 6,154.8 6,154.8 75.42
party contracts
Bank Non-related No Forward 40,329.3 7/7/2021 9/24/2021 40,329.3 40,329.3 266.61
party contracts
Bank Non-related No Forward 7,776.91 7/8/2021 7/29/2021 7,776.91 7,776.91 27.6
party contracts
Bank Non-related No Forward 4,573.64 7/22/2021 7/28/2021 4,573.64 4,573.64 -17.5
party contracts
Bank Non-related No Forward 13,037.2 7/27/2021 8/25/2021 13,037.2 13,037.2 113.47
party contracts
Page 25 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Amount Profit or
Whether Categories Amount sold Provision Proportion
purchased loss during
Counterparty Related party related of Initial Date of Date of Opening
during the
during the for Closing of
the
relationship party derivative investments commencement termination balance reporting impairment balance investments
reporting reporting
transaction investments period (if any) to net assets
period period
Bank Non-related No Forward 9,738.34 8/10/2021 8/27/2021 9,738.34 9,738.34 39.64
party contracts
Bank Non-related No Forward 3,247.25 8/19/2021 8/25/2021 3,247.25 3,247.25 16.33
party contracts
Bank Non-related No Forward 15,301.4 8/16/2021 10/22/2021 15,301.4 15,301.4 292.5
party contracts
Bank Non-related No Forward 3,813.49 8/30/2021 8/31/2021 3,813.49 3,813.49 7.14
party contracts
Bank Non-related No Forward 3,850.25 9/7/2021 10/27/2021 3,850.25 3,850.25 158.95
party contracts
Bank Non-related No Forward 10,353.85 9/28/2021 10/22/2021 10,353.85 10,353.85 121.32
party contracts
Bank Non-related No Forward 6,476.25 9/30/2021 10/22/2021 6,476.25 6,476.25 70.2
party contracts
Bank Non-related No Forward 2,247.69 10/19/2021 11/24/2021 2,247.69 2,247.69 100.08
party contracts
Bank Non-related No Forward 10,470.6 10/25/2021 12/27/2021 10,470.6 10,470.6 423.33
party contracts
Bank Non-related No Forward 743.18 10/25/2021 10/26/2021 743.18 743.18 5.14
party contracts
Bank Non-related No Forward 3,201.65 11/5/2021 11/23/2021 3,201.65 3,201.65 17.13
party contracts
Bank Non-related No Forward 12,801.5 11/5/2021 12/23/2021 12,801.5 12,801.5 69.41
party contracts
Bank Non-related No Forward 1,921.69 11/11/2021 11/24/2021 1,921.69 1,921.69 9.34
party contracts
Structured
Bank Non-related No 26,270.5 11/19/2021 11/23/2022 26,270.5 12,870.5 13,400 0.62% 128.13
forward
party
contracts
Bank Non-related No Forward 3,615.1 11/30/2021 12/23/2021 3,615.1 3,615.1 16.32
party contracts
Bank Non-related No Forward 6,376.62 12/2/2021 12/27/2021 6,376.62 6,376.62 18.11
party contracts
Bank Non-related No Forward 22,427.09 12/9/2021 3/24/2022 22,427.09 6,477.54 15,949.55 0.73% 73.89
party contracts
Bank Non-related No Forward 3,193.15 12/10/2021 12/23/2021 3,193.15 3,193.15 14.59
party contracts
Bank Non-related No Forward 10,835.78 12/17/2021 12/30/2021 10,835.78 10,835.78 30.68
party contracts
Total 783,139.13 -- -- 57,223.27 703,508.85 731,382.57 29,349.55 1.35% 4,875.17
Fund source Self-owned fund
Conditions of involved lawsuits (if applicable) None
Disclosure date of the Board of Directors
announcement for the approval of derivatives March 31, 2021
investment (if any)
Disclosure date of the general meeting of
shareholders announcement for the approval of Not Applicable
derivatives investment (if any)
Remarks on risk analysis and control measures for
holding derivative positions during the reporting
In order to prevent exchange rate risks, the Company and its subsidiaries carried out derivative instrument businesses. The Company
period (including but not limited to market risk,
and its subsidiaries strictly implemented the Management Measures on Foreign Exchange Hedging Business.
liquidity risk, credit risk, operational risk, legal
risk, etc.)
In the case of changes in market prices or fair
value of invested derivatives during the reporting
Floating income from changes in fair value of the invested derivatives amounted to 9.37 million yuan at the beginning of the reporting
period, the analysis on fair value of derivatives
period; floating income from changes in fair value of the invested derivatives amounted to 37.86 million yuan at the end of the
shall disclose the specific methods for their uses,
reporting period.
and the setting of relevant assumptions and
parameters
Remarks on whether there were significant
changes in the accounting policies and specific
accounting principles for the Company’s Not Applicable
derivatives during the reporting period compared
to the previous reporting period
The Company has formulated the Management Measures on Foreign Exchange Hedging Business to strengthen internal control,
implement risk prevention measures, improve the level of operation and management, and formulate specific operating procedures for
foreign exchange hedging business. The Company has performed analysis on the feasibility of carrying out foreign exchange hedging
Special opinions of independent directors on the
business, which indicated that in general, it is feasible to carry out foreign exchange hedging, for it can effectively reduce the risk of
Company’s derivatives investment and risk control
exchange rate fluctuations, and help stabilize the profit level. The contents of and review procedures for the event comply with
relevant laws, regulations, normative documents, the Articles of Association, etc., and would not damage the interests of the Company
and other shareholders. We all agree that the Company shall carry out foreign exchange hedging business this time.
Page 26 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
5. Use of raised funds
√ Applicable □ Not Applicable
(1) Overall use of raised funds
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
Accumulated
Total raised amount of Proportion of
Purposes of
Accumulated funds with raised funds raised funds
Amount used Total raised raised funds
Year of fund-raising Way of Total amount amount of changes in with changes with changes Raised funds being idle
in the current funds not yet not yet used
fund-raising raised raised funds uses during in uses in uses to for over two years
period used and the
used the reporting during the total raised
whereabouts
period reporting funds
period
Deposited in
special
accounts for
raised funds,
used to
Private
Year 2017 placement of 486,707.55 43,721.70 208,744.63 0 0 0.00% 277,962.92 purchase 0
bank
shares
financial
products,
deposited as
structured
deposits
Total -- 486,707.55 43,721.70 208,744.63 0 0 0.00% 277,962.92 -- 0
Remarks on overall use of raised funds
The Company’s raised funds used in previous years amounted to 1,650.23 million yuan, the net amount of interest on cash in bank received in previous years less handling charges
amounted to 48.53 million yuan, gains on financial products and structured deposits received in previous years amounted to 429.13 million yuan, and the net expenditure on financial
products and structured deposits purchased in previous years amounted to 3,550.00 million yuan; the raised funds actually used in 2021 amounted to 437.22 million yuan, the net
amount of interest on cash in bank received in 2021 less handling charges amounted to 3.22 million yuan, gains on financial products and structured deposits received in 2021
amounted to 145.53 million yuan, and the net recovery from financial products and structured deposits purchased in 2021 amounted to 1,100.00 million yuan; the accumulated amount
of the raised funds used amounted to 2,087.45 million yuan, the accumulated net amount of interest on cash in bank received less handling charges amounted to 51.75 million yuan,
the accumulated amount of gains on financial products and structured deposits received amounted to 574.66 million yuan, and net expenditure on financial products and structured
deposits purchased amounted to 2,450.00 million yuan. As of December 31, 2021, the balance of the special account for raised funds amounted to 956.03 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
Whether
Whether Total Total Investment Date of Benefit Whether
Input Accumulated there was
Committed investment changed committed amount progress as reaching realized in the
during the input as of the significant
projects and over-raised (including investment after of the designed the expected
reporting period end changes in
funds whereabouts partial in raised adjustment period end usable reporting benefit is
period (2) feasibility of
changed) funds (1) (3)=(2)/(1) conditions period reached
the project
Committed investment projects
Partially
Methionine project with reached the
annual output of 0.25 No 486,707.55 486,707.55 43,721.7 208,744.63 42.89% designed 34,677.91 Yes No
million tons usable
conditions
Subtotal -- 486,707.55 486,707.55 43,721.7 208,744.63 -- -- 34,677.91 -- --
Over-raised funds whereabouts
No
Total -- 486,707.55 486,707.55 43,721.7 208,744.63 -- -- 34,677.91 -- --
Conditions of and reasons Pursuant to the results deliberated and approved by the eighth meeting of the eighth session of Board of Directors and the seventh
for not meeting the planned meeting of the eighth session of the Board of Supervisors dated October 27, 2021, the Company intended to adjust the date when the
schedule or estimated methionine project with annual output of 0.25 million tons reaches the designed usable conditions from the originally planned
Page 27 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
revenue (by specific December 2021 to June 2023, with other contents remaining unchanged. Main reasons: Due to the impact of the COVID-19 and the
project) 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 None.
projects
Amount, purposes and
progress of use of Not Applicable
over-raised funds
Changes in implementation
locations of investment Not Applicable
projects with raised funds
Adjustment on the
implementation method of Not Applicable
investment projects with
raised funds
Preliminary investment and Applicable
replacement of investment
Preliminary investment amounted to 36.06 million yuan, and the replacement of raised funds is completed.
projects with raised funds
Temporary replenishment of
working capital with idle Not Applicable
raised funds
Amount of and reasons for
the balance of raised funds Not Applicable
in the implementation of
projects
Uses and whereabouts of Deposited in special accounts for raised funds, used to purchase bank financial products, deposited as structured deposits
unused raised funds
Problems or other situations
in the use and disclosure of None.
raised funds
(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
There is no sale of major equities during the reporting period.
Page 28 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
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 Registered Total assets Net assets Operating revenue Operating profit Net profit
businesses capital
山东新和成维生
Production
素有限公司
(Shandong NHU Subsidiary and sales of 500 million 3,507,972,008.78 1,992,132,835.76 2,625,693,553.55 1,211,515,560.60 1,042,888,638.98
feed yuan
Vitamins Co., additives
Ltd.*)
上虞新和成生物
Production
化工有限公司
(Shangyu NHU Subsidiary and sales of 50 million 4,913,490,480.90 3,400,763,066.05 2,002,380,570.38 967,077,107.49 833,335,883.42
feed yuan
Bio-Chem Co., additives
Ltd.*)
山东新和成药业
有限公司 Production
586 million
(Shandong NHU Subsidiary and sales of 2,953,376,286.76 2,434,882,978.21 2,625,306,028.72 842,187,235.59 690,705,685.57
yuan
Pharmaceutical fragrances
Co., Ltd.*)
山东新和成氨基
酸有限公司 Production
930 million
(Shandong NHU Subsidiary and sales of 5,979,372,615.23 4,723,128,397.93 2,876,669,426.09 737,319,015.03 647,803,095.88
yuan
Amino-acids Co., methionine
Ltd.*)
Remarks on major holding investees
The Company’s methionine project with annual output of 250,000 tons included the 100,000-ton equipment officially put into
operation in October 2020. In 2021, the production and sales of methionine was increased compared to the preceding period, and the
sales revenue and net profit of Shandong NHU Amino-acids Co., Ltd. was increased compared to the preceding period.
Details of acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not Applicable
Subsidiaries Method for acquisition and disposal of Effect on the overall production, operation
subsidiaries during the reporting period and performance
Zhejiang NHU Nylon Materials Co., Ltd. Investment and establishment No significant effect at the beginning of the
period.
NHU Singapore PTE. LTD. Investment and establishment No significant effect at the beginning of the
period.
X. Structured entities controlled by the Company
□ Applicable √ Not Applicable
XI. Outlook for the future development of the Company
1. The Company’s development strategy
The Company will consistently adhere to the development strategy of integration, serialization and synergy, adhere to the strategic
platforms of “chemical+” and “biology+”, improve the application research and application service capabilities, and focus on main
businesses including nutrition, flavor and fragrance, and new polymer materials and APIs, insist on innovation-driven, develop
various functional chemicals, strengthen the construction of technology platforms and industrial platforms, and strengthen the
introduction and cooperation 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
*
The English names are for identification purpose only.
Page 29 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
chain and promote the sustainable and high-quality development. Meanwhile, it will actively seek opportunities for its functional
chemicals in strategic emerging industries such as the plant protection industry, new energy industry, energy conservation and
environmental protection industry, and information industry.
(1) It will continue to expand and strengthen the nutrition business. On the basis of integration and market synergy, it will maintain
the competitiveness of existing products, meanwhile rapidly develop strategic products, continuously enrich product categories, and
improve 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
and synergistic, 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 new material business is the Company’s future pillar industry. The
Company insists on cost-leading, integrated and serialized development, and focuses on the development of large polymer products
and key intermediates. It will moderately develop downstream application 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
integrate company resources, plan and build a professional base, increase the research and application of new products, new
technologies and new equipment in the field of APIs, actively promoting the core competitiveness of existing products and the
expansion of emerging markets.
2. Business plan of the Company
In 2022, the Company will follow the guideline of “development guided by strategy, green and intelligent operation, strengthening
functional management, and improving business performance”, and closely focus on the strategic planning goals. It will work hard to
expand new product markets, release existing product stocks, implement strategic projects, and improve management efficiency. The
Company will unite every force to ensure its steady development, with key focus on the following work.
(1) It will strengthen strategic leadership, improve strategic management, promote the implementation of strategic projects, and
improve product layout. Following the strategic goals and annual business plans, it will implement the whole-process management of
strategic projects; following the requirements of strategic planning, and the development strategy of integration, serialization and
synergy, it will take the opportunity to break through the technology bottleneck, and accelerate the implementation of new strategic
projects with focus on the progress of major projects.
(2) It will keep on innovation and create new advantages for development. Based on the platforms of “chemical+” and “biology+”, it
will increase the introduction of talents and technologies, explore forward-looking industries, and promote the R&D and reserve of
green safety technology. It will integrate product research, technical research, scale-up design and production debugging more
closely to improve product promotion efficiency, and continue to enhance the capacity building of scientific research platforms, in
order to assist the efficient implementation of technology R&D, pilot verification, scale-up design, and technical transformation
projects. It will strengthen intellectual property risk avoidance and response, and better the patent layout of new strategic products.
(3) It will focus on green and low-carbon development, and promote the establishment of an energy and carbon resource management
system. It will comprehensively analyze the far-reaching impact of the double carbon target on production and operation, apply for
development quota, and comprehensively promote the construction of an energy management system. It will strengthen the research
on the trend of macro policies, continue to improve the carbon emission control system, and promote the implementation of the
concept of green development.
(4) It will deepen the empowerment of digital intelligence and promote the transformation of traditional management to intelligent
operation. Based on the pilot experience of digital projects, it will realize the promotion and further application of intelligent factory
Page 30 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
systems. It will also promote the construction of data governance system and intelligent manufacturing system, and gradually realize
the transformation from traditional production to intelligent operation.
(5) It will strengthen functional management and improve management level. Using digital management as the powerful tool, it will
make the best use of the functional departments, and strengthen system construction and standard setting. It will continuously
improve the management level, and at the same time improve the operating risk management and control, so as to ensure the
sustainable and healthy development of the Company.
3. Possible risks
(1) Macroeconomic risks
Affected by the complex and volatile international environment and the recurrence of the global Covid-19 pandemic, the global
economy is facing many uncertainties. The Company will pay close attention to the evolution of the pandemic and its impact on the
macroeconomy and the industry, actively respond to the impact of the pandemic, so as to ensure the steady development.
(2) Industry and market competition risks
The Company is facing peer competition in both domestic and international markets. The development of new technologies by its
competitors will not only impact the market, but also challenge the Company’s market position in the industry. In the future, the
Company will continuously enhance its R&D and innovation capabilities, improve its technology, strengthen cost control, and
improve the 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-demand imbalance of raw material will have an impact on the Company’s profit. In the future, the Company will reduce the
adverse impact of raw material price fluctuations through market research and judgment, establishing strategic partnership with
suppliers, and improving the 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 trade
friction between China and US and the international political and economic instability. In the future, the Company will take targeted
measures to tackle changes in the international market, cement its position in the international market and explore new economic
growth 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 CPC
Central Committee, and the strategic goal of “carbon emission peak and carbon neutrality”, the requirements for energy conservation,
emission reduction, safety and environmental protection in the chemical and pharmaceutical manufacturing industry in which the
Company operates are stricter than before. The Company will operate with higher standards and explore more environmentally
friendly ways of production to achieve sustainable development.
Page 31 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
XII. Researches, communications, and interviews received by the Company during the
reporting period
√ Applicable □ Not Applicable
Major contents of
Index for basic
Date of Reception site Way of Type of visitor Visitors conversation and
information of the
reception reception information
investigation
provided
Please refer to the
Investor Relations
Activities Record
Sheet as at April 9,
April 9, 2021 Not Others Others Investors who attended the Company’s online Answer questions
2021 published at
applicable annual performance presentation in 2020 from investors
the website
http://irm.cninfo.co
m.cn/ssessgs/S0020
01 for details.
1. 睿郡资产 Wisdomshire Asset (刘力 Liu Li);
2. 中信资管 Citic Asset Management (罗四维
Luo Siwei); 3. 长江证券 Changjiang Securities (张
俊 Zhang Jun & 马太 Ma Tai); 4. 中信产业基金
Citic PE (李国洪 Li Guohong); 5. 招商证券
China Merchants Securities (曹承安 Cao
Chengan); 6. 天风证券 TF Securities (李辉 Li
Hui); 7. 申万宏源 Shenwan Hongyuan Securities
(宋涛 Song Tao & 胡双 Hu Shuang); 8. 敦和投
资 DH Investment (梁作强 Liang Zuoqiang); 9.
中信证券 Citic Securities (赵芳芳 Zhao Fangfang
& 李鸿钊 Li Hongzhao）10. 华泰资产 Huatai
Asset Management (杨林夕 Yang Linxi); 11. 开
源证券 Kaiyuan Securities (吉金 Ji Jin & 金益腾
Jin Yiteng）12. 锐意资本 Brilland Capital (肖辉
Xiao Hui); 13. 鹏泰投资 Pengtai Investment
(祝凯伦 Zhu Kailun); 14. 睿远基金 Foresight
Fund (钟明 Zhong Ming); 15. 国盛证券
Guosheng Securities (杜鹏 Du Peng); 16. 中银国
际 BOC International (余嫄嫄 Yu Yuanyuan); 17.
国信证券 Guosen Securities (张玮航 Zhang
Weihang); 18. 中泰化工 Zhongtai Chemical (夏
文奇 Xia Wenqi); 19. 光大证券 Everbright
Please refer to the
Securities (吴裕 Wu Yu); 20. 中金公司 CICC (肖 Investor Relations
亚平 Xiao Yaping); 21 虢盛资本 GS Capital (李飞 Introduce the Activities Record
Meeting room 翔 Li Feixiang); 22. 瑞银资管 UBS Asset operating conditions Sheet as at April 21,
April 21, 2021 Field Institution
of the Management (陈梅清 Chen Meiqing); 23. 华宝投 of the Company and 2021 published at
research
Company 资 Hwabao Investment (董书成 Dong Shucheng); answer questions the website
24. 华安基金 HuaAn Funds (张瑞 Zhang Rui); from investors http://irm.cninfo.co
25. 华泰保兴 Huatai Baoxing Fund Management m.cn/ssessgs/S0020
01 for details.
(黄佳丽 Huang Jiali); 26. 博道基金 Broad Fund
(王伟淼 Wang Jiamiao); 27. 浙商基金 Zheshang
Fund (景徽 Jing Hui); 28. 建信基金 CCB
Principal Asset Management (刘克飞 Liu Kefei);
29. 交银施罗德 Bocom Schroders (张明晓
Zhang Mingxiao); 30. 永禧投资 Winshero
Investment (王超 Wang Chao); 31. 和谐汇一
Visione Asset (赵辰 Zhao Chen); 32. 兴业证券
Industrial Securities (刘梦岚 Liu Menglan); 33.
阳光资管 Sunshine Asset Management (马敦超
Ma Dunchao); 34. 星石投资 StarRock Investment
(向仕杰 Xiang Shijie); 35. 中再资产 China Re
Asset (孙博睿 Sun Borui); 36. 遂玖投资 Suijiu
Investment (吕连杰 Lyu Lianjie); 37. 安信证券
Essence Securities (黄翔 Huang Xiang); 38. 兴银
基金 Xingyin Fund (袁作栋 Yuan Zuodong); 39.
塔基资产 Tagee Asset Management (魏博
Weibo); 40. 重阳投资 Chongyang Investment (贺
建青 He Jiaqing); 41. 东方证券 Orient Securities
(袁帅 Yuan Shuai); 42. 山东明湖投资 Shandong
Minghu Investment (王东民 Wang Dongmin); 43.
深圳正圆投资 Zhengyuan Investment (张萍
Zhang Ping); 44. 洪仁投资 Hongren Investment
Page 32 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Major contents of
Index for basic
Date of Reception site Way of Type of visitor Visitors conversation and
information of the
reception reception information
investigation
provided
(张凯驰 Zhang Kaichi); 45. 大众进出口
Dazhong Import and Export (戚昕 Qi Xin); 46. 北
京鸿澄投资 HC Capital (陈骞 Chen Qian); 47.
环懿投资 Universal Wisdom Investment (杨伟
Yang Wei); 48. 沣京资本 Funding Capital
Management (李正强 Li Zhengqiang); 49. 明世
伙伴基金 DIB Asset Management (霍霄 Huo
Xiao & 胡彧 Hu Yu); 50. 德淞咨询 Desong
Consulting (邬欣雷 Wu Xinlei); 51. 汇丰前海
HSBC Qianhai Securities (沈科 Shen Ke); 52. 深
圳红筹投资 Hongchou Investment (王羽 Wang
Yu); 53. Citic Securities (刘沛显 Liu Peixian); 54.
中国人寿 China Life (吴颖 Wu Ying); 55. 北京
磐沣 Beijing Panfeng Investment Management (杨
涛 Yang Tao); 56. 乐中投资 Lezhong Investment
Management (程勇 Cheng Yong & 朱韫智 Zhu
Yunzhi); 57. 李焕玲 Li Huanling, etc.
1. TF Securities (Li Hui); 2. Wisdomshire Asset
(Liu Li); 3. CICC (Xiao Yaping); 4. Orient
Securities (Yuan Shuai); 5. 明泽投资 Mingze
Capital (常先通 Chang Xiantong & 韩玉玲 Han
Yuling); 6. 盘京投资 Panjing Investment (张奇
Zhang Qi); 7. 长城证券 Great Wall Securities (张
Please refer to the
玉龙 Zhang Yulong); 8. 胜帮投资 Shengbang
Investor Relations
Investment (刘倩倩 Liu Qianqian & 黄杰 Huang Introduce the Activities Record
Meeting room Jie); 9. 华安证券 HuaAn Securities (王强峰 operating conditions Sheet as at July 1,
July 1, 2021 Field Institution Wang Qiangfeng); 10. Chongyang Investment (贺
of the of the Company and 2021 published at
research
Company 建青 He Jianqing); 11. 景林资产 Greenwoods answer questions the website
Asset (蒋文超 Jiang Wenchao); 12. 华夏基金 from investors http://irm.cninfo.co
China Asset Management (杨晋 Yang Jin); 13. 兴 m.cn/ssessgs/S0020
银理财 Xingyin Fund Management (陈亚龙 01 for details.
Chen Yalong); 14. 海螺创投 Conch Venture
Capital (陆陈伟 Lu Chenwei); 15. 国海富兰克林
Franklin Templeton Sealand Fund (徐荔蓉 Xu
Lirong & 张琼刚 Xhang Qionggang & 杜飞 Du
Fei & 刘晓 Liu Xiao & 刘磊 Liu Lei)
1. Centerline Investment Management (BenXu); 2.
Fenghe Asia F&H Fund Management (叶涛 Ye
Tao); 3. 同犇资管 Tongben Investment (何先畅
He Xianchang); 4. 湘禾投资 Xiang He Capital
(罗林 Luo Lin); 5. TX Capital (Edward Choi); 6.
兴聚资管 Xingju Asset Management (刘力 Liu
Li); 7. 和聚投资 Heju Investment (麦土荣 Mai
Turong); 8. 楹联基金 Yinglian Fund (应振洲
Ying Zhenzhou); 9. 大成基金 Dacheng Fund (廖
书迪 Liao Shudi); 10. 涌峰资管 Topfund
Investment Management (李莉芳 Li Lifanng); 11.
淡水泉 Springs Capital (王凡 Wang Fan); 12.
Please refer to the
Chongyang Investment (贺建青 He Jianqing); 13.
Investor Relations
东方基金 Orient Fund Management (房建威 Activities Record
Fang Jianwei); 14. 宸鑫资管 Chenxin Asset Introduce the
Sheet as at
September 14, Telephone Management (施雨辰 Shi Yuchen); 15. 睿石投资 operating conditions
Others Institution September 14, 2021
communicat of the Company and
2021 Cityreits Investment Management (才典 Cai published at the
ion answer questions
Dian); 16. 锐意资管 Brilliant Asset Management from investors
website
(Xiao Hui); 17. 东吴基金 Soochow Asset http://irm.cninfo.co
Management (徐嶒 Xu Ceng); 18. 行健资管 Zeal m.cn/ssessgs/S0020
01 for details.
Asset Management (张韬 Zhang Tao); 19. 富国基
金 Fullgoal Fund Management (沈衡 Shen Heng);
20. Hongchou Investment (唐亮 Tang Liang); 21.
广发基金 GF Fund Management (王琪 Wang Qi);
22. 金之灏基金 J.Z.H. Fund (陈飞云 Chen
Feiyun); 23. 国投瑞银基金 UBS SDIC Fund
Management (马少章 Ma Shaozhang); 24. 武当
资管 Wudang Asset Management (汪平 Wang
Ping); 25. 杭州昊晟投资 Hangzhou Haosheng
Investment Management (吕露 Lyu Lu); 26. 熙山
资管 Xishan Investment Management (余继刚 Yu
Jigang); 27. 恒安保险 HengAn Insurance (斯华
Page 33 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Major contents of
Index for basic
Date of Reception site Way of Type of visitor Visitors conversation and
information of the
reception reception information
investigation
provided
景 Si Huajing); 28. 太平基金 Taiping Fund
Management (Xia Wenqi); 29. 华宝基金 Hwabao
WP Fund Management (Dong Shucheng); 30. 太
平养老 Taiping Pension (姚宏福 Yao Hongfu &
庄晋 Zhuang Jin); 31. 华杉瑞联基金 Huashan
Ruilian Fund (田春姝 Tian Chunshu); 32. 泰康资
管 Taikang Asset Management (刘忠卫 Liu
Zhongwei); 33. 华商基金 Huashang Fund
Management (黄露禾 He Luhe); 34. 泰信基金
First-trust Fund Management (刘雨馨 Liu Yuxin);
35. Huatai Asset Management (Yang Linxi); 36. TF
Securities (Li Hui); 37. 万联证券 Wanlian
Securities (高翔 Gao Xiang); 38. 慎知资管
ShenZhi Asset (陈增博 ChenZengbo); 39. 交银基
金 BoCom Schroders Fund (张明晓 Zhang
Mingxiao); 40. 昭融匯利 Top Aplpha Investment
(李智慧 Li Zhihui); 41. 景顺长城基金 Invesco
Great Wall Fund Management (高田昊 Gao
Tianhao); 42. 兴全基金 AEGON-INDUSTRIAL
Fund (徐留明 Xu Liuming); 43. 和德资管 Hede
Asset Management (张特 Zhang Te); 44. 磐耀资
管 Panyao Capital (葛立法 Ge Lifa); 45. 莲盛投
资 Liansheng Investment Management (肖耀勃
Xiao Yaobo); 46. Sunshine Asset Management (黄
抒雁 Huang Shuyan & 马敦超 Ma Dunchao); 47.
诺安基金 Lion fund (赵森 Zhao Sen); 48. 谦信
投资 Kenshin Capital (宋喆 Song Zhe); 49. 银华
基金股份 Yinhua Fund Management (罗婷 Luo
Ting); 50. 鹏华基金 Penghua Fund Management
(丁冯佳 Ding Fengjia & 谢书英 Xie Shuying);
51. 前海人寿 Foresea Life (贾宇博 Jia Yubo);
52. 英睿财富 Yingrui Fortune (张丹阳 Zhang
Danyang); 53. 长信基金 Chang Xin Asset
Management (唐卓菁 Tang Zhuojing); 54. 瑞民资
管 Rui Min Fund (匡立春 Kuang Lichun & 黄晓
坤 Huang Xiaokun); 55. Foresight Fund (朱璘);
56. 旌安资管 Jingan Investment (李泽恺 Li
Zekai); 57. 百勋资管 Baixun Investment (陈卿云
Chen Qingyun); 58. 巽升资管 Xuncent Asset (沈
杰 Shen Jie); 59. 保银资管 Pinpoint Asset
Management (林建军 Lin Jianjun); 60. 英睿资管
Enreach International Capital Management (马智
琴 Ma Zhiqin); 61. 呈瑞资管 Crassets
Investment (刘青林 Liu Qinglin); 62. 中农理财
CHAMPGC Asset Management (公晓晖 Gong
Xiaohui); 63. 复霈资管 Fupei Investment (韩守
晖 Han Shouhui); 64. 中国人保 PICC (曾沭崴
Zeng Shuwei); 65. 名禹资管公司 Mingyu Fund
(王友红 Wang Youhong); 66. Citic Asset
Management (杨大志 Yang Dazhi); 67. 摩根士丹
利 Morgan Stanley (吕洪良 Lyu Hongliang); 68.
兴业资管 Industrial Asset Management (陈亚龙
Chen Yalong & 庄伟彬 Zhuang Weibin); 69. 银
河基金 Galaxy Asset Management (石磊 Shi Lei
& 姚雯薏 Yao Wenyi & 祝建辉 Zhu Jianhui);
70. 汇添富基金 China Universal Asset
Management (谭志强 Tan Zhiqiang & 林小伟
Lin Xiaowei); 71. 精至资产 Finest Asset
Management (黄登峰 Huang Dengfeng & 杨文凡
Yang Wenfan & 陈鸿 Chen Hong）
1. Shenwan Hongyuan Securities (宋涛 Song Tao Please refer to the
& 胡双 Hu Shuang); 2. 东北证券 Northeast Investor Relations
Securities (陈俊杰 Chen Junjie & 伍豪 Wu Hao); Introduce the Activities Record
November 17, Meeting room operating conditions Sheet as at
Field Institution 3. 南方基金 Southern Fund (郑勇 Zheng Yong);
of the of the Company and November 17, 2021
2021
Company
research 4. 瑞民投资 Rui Min Investment (黄晓坤 Huang answer questions published at the
Xiaokun & 匡立春 Kuang Lichun); 5. 财通证券 from investors website
Caitong Securities (朱乾栋 Zhu Qiandong); 6. http://irm.cninfo.co
Winshero Investment (王超 Wang Chao); 7. TF m.cn/ssessgs/S0020
Page 34 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Major contents of
Index for basic
Date of Reception site Way of Type of visitor Visitors conversation and
information of the
reception reception information
investigation
provided
Securities (Li Hui); 8. 精致投资 Finest 01 for details.
Investment (Chen Hong & Huang Dengfeng); 9.
浙商证券 Zheshang Securities (Zhang Yulong);
10. Orient Securities (Yuan Shuai); 11. Kaiyuan
Securities (Jin Yiteng & Jijin); 12. Hwabao
Investment (Dong Shucheng & 杨奇 Yang Qi);
13. 弘毅远方 Hony Horizon Fund (黄振东
Huang Zhendong); 14. Hongchou Investment (王羽
Wang Yu); 15. 正心谷 Loyal Valley Capital (施航
Shi Hang); 16. 胜邦投资 Shenbon Enterprise
Investment (刘倩倩 Liu Qianqian); 17. Changjiang
Securities (张俊 Zhang Jun); 18. 申万研究所
SWS Research (余玉君 Yu Yujun & 张静含
Zhang Jinghan); 19. 申万投资 SWS Investment
(袁鹏 Yuan Peng); 20. 银叶投资 Silver Leaf
Investments (李悦 Li Yue); 21. Everbright
Securities (赵乃迪 Zhao Naidi & 周家诺 Zhou
Jianuo & 蔡嘉豪 Cai Jiahao)
Page 35 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Section IV Corporate Governance
I. Basic information
During the reporting period, the Company further improved its corporate governance structure and internal control system,
strengthened its information disclosure management, actively carried out investor relations management and constantly promoted its
corporate governance in strict accordance with the “Company Law of the People’s Republic of China”, the “Securities Law of the
People’s Republic 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
requirements of the “Rules for General Meetings of Listed Companies” and its “Rules of Procedure of General Meetings”, treats all
shareholders equally, 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
through general meetings, and does not directly or indirectly interfere with the decision-making and operation activities of the
Company beyond the 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 of Directors, 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 accordance
with the selection and appointment procedures as stipulated in the “Company Law” and the “Articles of Association”. The board size
and 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 and all shareholders, actively participate in relevant training, learn relevant laws and regulations, and promote the
standardized operation and scientific decision-making of the Board of Directors. The meeting procedures of the Board of Directors
comply with legal requirements, the minutes are complete and true, and the disclosure of information related to the meetings is timely,
accurate and sufficient.
4. About supervisors and the Board of Supervisors: The Company’s Board of Supervisors strictly implements relevant provisions of
the “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
Supervisors perform their duties conscientiously, conducts supervision on the Company’s financial position, significant events,
related party transactions as well as the legality and compliance of directors and other senior executives in the performance of their
duties, and expresses 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 incentive
mechanism is fair and transparent, and the emoluments of directors, supervisors and senior executives are based on the Company’s
performance and individual performance; the appointment of senior executives strictly follows the “Articles of Association” and
relevant laws and regulations.
6. About information disclosure and transparency: The Company designates the secretary of the Board of Directors to be responsible
for information disclosure and receiving visits and inquiries from shareholders, and designates Securities Times, Shanghai Securities
News, China Securities Journal, and Cninfo (http://www.cninfo .com.cn) as the designated newspapers and websites for the
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Company’s information disclosure; Complying with relevant laws and regulations and the requirements of the Company’s
“Information Disclosure Management 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 the
coordination and balance of interests among shareholders, employees, society and other parties, and jointly promote the sustainable
and healthy development of the Company.
Whether there is a significant difference between the actual situation of corporate governance and laws, administrative regulations
and rules 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 rules
on 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 controller
During 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 to
operate 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 of
the 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 labor
contracts with employees, and formulated a strict labor system such as employment, assessment, promotion, training, etc. All
employees are paid by the Company. All senior executives work full-time and receive emoluments from the Company, and do not
hold any 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 independent
industrial 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 and
financial management system to makes financial decisions independently. The Company opens bank accounts and pays taxes
independently.
5. Independence of organization
The Company’s organization is independent from the controlling shareholder. The Company has established a relatively sound
organizational 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
Management Department, Engineering Equipment Management Department, Logistics Department, Marketing Service Department,
Science and Technology Cooperation Department, Intellectual Property Department, Research Institute and other functional
departments. The aforementioned institutions and functional departments operate independently, and there is no situation where the
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2021 Annual Report of Zhejiang NHU Co., Ltd.
controlling shareholder’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 reporting
period
1. General meeting of shareholders
Proportion of
Session Type of meetings participating Meeting date Disclosure date Resolutions
investors
10 proposals including the
“Annual Work Report of the
Board of Directors of 2020”
General meeting of Annual general meeting 54.00% April 21, 2021 April 22, 2021 were deliberated and approved.
shareholders of 2020 of shareholders Please refer to Announcement
No. 2021-019 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
number of number of
Number of Number of
shares shares Other
Termination shares held at shares held Reasons for
Name Position Status Gender Age Commencement date of the beginning
increased in decreased in increase/
at the end of increase or
date of service the current the current decrease
service of the period the period decrease
period period (shares)
(shares) (shares)
(shares) (shares)
Conversion
Hu Baifan Chairman Incumbent Male 60 2/26/1999 9/15/2023 9,667,915 1,000 0 1,933,583 11,602,498 of capital
reserve into
share capital
Conversion
Vice
胡柏剡 Incumbent Male 55 2/26/1999 9/15/2023 10,136,062 0 0 2,027,212 12,163,274 of capital
Chairman,
(Hu Baishan) reserve into
President
share capital
Director, Vice Conversion
Shi Guanqun President, Incumbent Male 51 2/26/1999 9/15/2023 7,276,277 0 0 1,455,255 8,731,532 of capital
CFO, Secretary reserve into
of the Board share capital
Conversion
王学闻 Director, Vice Incumbent Male 53 2/26/1999 9/15/2023 6,165,230 0 0 1,233,046 7,398,276 of capital
(Wang Xuewen) President reserve into
share capital
Conversion
王正江
Director Incumbent Male 53 4/12/2008 9/15/2023 318,750 0 0 63,750 382,500 of capital
(Wang
reserve into
Zhengjiang)
share capital
Conversion
周贵阳 Director Incumbent Male 47 4/20/2011 9/15/2023 114,752 0 0 22,950 137,702 of capital
(Zhou Guiyang) reserve into
share capital
俞柏金 Director Incumbent Male 55 9/15/2020 9/15/2023 0 0 0 0 0
(Yu Baijin)
黄灿 Independent Incumbent Male 43 7/12/2017 9/15/2023 0 0 0 0 0
(Huang Can) Director
金赞芳 Independent Incumbent Female 46 7/12/2017 9/15/2023 0 0 0 0 0
(Jin Zanfang) Director
朱剑敏 Independent Incumbent Female 58 7/12/2017 9/15/2023 0 0 0 0 0
(Zhu Jianmin) Director
季建阳 Independent Incumbent Male 43 9/15/2020 9/15/2023 0 0 0 0 0
(Ji Jianyang) Director
Page 38 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
number of number of
Number of Number of
shares shares Other
Termination shares held at shares held Reasons for
Name Position Status Gender Age Commencement date of the beginning
increased in decreased in increase/
at the end of increase or
date of service the current the current decrease
service of the period the period decrease
period period (shares)
(shares) (shares)
(shares) (shares)
Chairman of
石方彬 Incumbent Female 46 9/15/2020 9/15/2023 0 0 0 0 0
the Board of
(Shi Fangbin) Supervisors
吕国锋 Supervisor Incumbent Male 50 9/15/2020 9/15/2023 0 0 0 0 0
(Lyu Guofeng)
俞宏伟 Supervisor Incumbent Male 51 9/15/2020 9/15/2023 0 0 0 0 0
(Yu Hongwei)
严宏岳 Supervisor Incumbent Male 52 9/15/2020 9/15/2023 0 0 0 0 0
(Yan Hongyue)
陈召峰 Supervisor Incumbent Male 45 9/15/2020 9/15/2023 0 0 0 0 0
(Chen Zhaofeng)
郑根土 Incumbent Male 60 9/29/2018 1/31/2022 0 0 0 0 0
Vice President
(Zheng Gentu)
Total -- -- -- -- -- -- 33,678,986 1,000 0 6,735,796 40,415,782 --
Whether there was any resignation of directors and supervisors and dismissal of senior executives during the reporting period
□ Yes √ No
Changes of directors, supervisors and senior executives
□ Applicable √ Not applicable
2. Profiles of directors, supervisors and senior executives
Professional background, work experience and main responsibilities of the current directors, supervisors and senior executives
Hu Baifan (Graduate, Senior Economist) currently serves as the Chairman of the Company. He used to work in Xinchang Dashiju
Vocational 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 the
Company. 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 of
the Company, and the General Manager of the Nutrition Business Department. He used to be the manager of the Company’s supply
and marketing company.
Wang Zhengjiang (Master’s degree, Senior Engineer) currently serves as the Director of the Company, General Manager of
Methionine Business Department, and the General Manager of Shandong NHU Amino-acids Co., Ltd. He used to be the manager of
Shangyu NHU Bio-Chem Co., Ltd.
Zhou Guiyang (Bachelor’s degree) currently serves as the Director of the Company and General Manager of 浙江新和成特种材料
有限公司 (Zhejiang NHU Special Materials Co., Ltd.). He used 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 黑龙江新和成生物科技有
限公司 (Heilongjiang NHU Biotechnology Co., Ltd.*). He used to be the Chairman of 浙江广义实业有限公司 (Zhejiang Guangyi
Industrial Co., Ltd.*) and 浙江新柴集团有限公司 (Zhejiang Xinchai Group Co., Ltd.*).
Huang Can (Doctor of Management, Independent Director) is a professor of Zhejiang University. He currently serves as the
The English names are for identification purpose only.
Page 39 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Independent Director of 浙江运达风电股份有限公司 (Zhejiang Windey Co., Ltd.*) and 甘肃上峰水泥股份有限公司 (Gansu
Shangfeng Cement Co., Ltd.*).
Jin Zanfang (Doctor of Environmental Engineering, Independent Director) is a professor of Zhejiang University of Technology. She
currently serves as the Independent Director of 浙江菲达环保科技股份有限公司 (Zhejiang Feida Environmental Science &
Technology Co., Ltd.) and 浙江景兴纸业股份有限公司 (Zhejiang Jingxing Paper Joint Stock Co., Ltd.*).
Zhu Jianmin (Master’s degree, Independent Director) currently serves as the Deputy General Manager and CFO of 每日互动股份有
限公司 (Merit Interactive Co., Ltd.*).
Ji Jianyang (Master’s degree, Independent Director) currently serves as the Partner of 北京观韬中茂（杭州）律师事务所 (Beijing
Guantao Zhongmao (Hangzhou) Law Firm*) and the Independent Director of 浙江金固股份有限公司 (Zhejiang Jingu Co., Ltd.*)
Shi Fangbin (Bachelor’s degree) currently serves as the Chairman of the Company’s Board of Supervisors, and CFO of 新和成控股
集团有限公司 (NHU Holding Group Co., Ltd.*). She used to be the Director of Financial Department, Director of Audit
Department and Director of Board Office of the Company.
Lyu Guofeng (Master’s degree) currently serves as the Supervisor of the Company, General Manager of Fragrance Business
Department and General Manager of Shandong NHU Pharmaceutical Co., Ltd. He used to be the General Manager of Shangyu
Production Area of Nutrition Business Department.
Yu Hongwei (Bachelor’s degree) currently serves as the Supervisor of the Company, General Manager of Shandong Industrial Park
and General Manager of Shandong NHU Vitamins Co., Ltd. and 山东新和成精化科技有限公司 (Shandong NHU Fine Chemical
Science and Technology Co., Ltd.*). He used to be the Deputy Chief Engineer of 浙江巨化集团有限公司 (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
used to be the General Manager of Shandong NHU Vitamins Co., Ltd., Assistant to General Manager and Deputy General Manager
of Shandong NHU Pharmaceutical Co., Ltd.
Chen Zhaofeng (Master’s degree) currently serves as the Supervisor of the Company and Executive Deputy General Manager of
Heilongjiang NHU Biotechnology Co., Ltd. He used to be the Workshop Director of the Company.
Zheng Gentu (Master’s degree) currently serves as the Assistant to President of the Company. He used to be the Director and General
Manager of 浙江开尔新材料股份有限公司 (Zhejiang Kaier New Materials Co., Ltd.*).
Directors, supervisors and senior executives that serve in shareholders
√ Applicable □ Not applicable
Whether receive
Name of Name of shareholders Position in Commencement Termination date of emoluments and
persons shareholders date of service service allowances from
shareholders
Hu Baifan NHU Holding Group Co., Chairman, General 11/11/2011 11/26/2023 No
Ltd. Manager
Hu Baishan NHU Holding Group Co., Director 11/11/2011 11/26/2023 No
Ltd.
Shi Guanqun NHU Holding Group Co., Director 11/11/2011 11/26/2023 No
Ltd.
Wang Xuewen NHU Holding Group Co., Director 11/11/2011 11/26/2023 No
Ltd.
The English names are for identification purpose only.
Page 40 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Whether receive
Name of Name of shareholders Position in Commencement Termination date of emoluments and
persons shareholders date of service service allowances from
shareholders
Shi Fangbin NHU Holding Group Co., CFO 9/15/2020 11/26/2023 Yes
Ltd.
Remarks None
Directors, supervisors and senior executives that serve in other entities
√ Applicable □ Not applicable
Whether receive
Name of Name of other entities Position in other Commencement Termination emoluments and
persons entities date of service date of service allowances from
other entities
浙江耕读投资有限公司
Hu Baifan Executive Director 9/4/2015 To date No
(Zhejiang Gengdu Investment
and General Manager
Co., Ltd.)
新昌县和丽投资有限公司
Hu Baifan (Xinchang Heli Investment Co., Director 1/3/2017 To date No
Ltd.*)
安丰创业投资有限公司 (Safe
Hu Baifan & Rich Venture Capital Co., Director 2/28/2008 To date No
Ltd.*)
杭州通衡浙商投资管理有限公
Hu Baifan 司 (THE Investment Director 9/21/2015 To date No
Management Co., Ltd.*)
新昌勤进投资有限公司
Hu Baifan Chairman and General 6/10/2015 To date No
(Xinchang Qinjin Investment
Manager
Co., Ltd.*)
浙江新昌农村商业银行股份有
Hu Baifan 限公司 (Xinchang Rural Director 1/26/2005 To date No
Commercial Bank Co., Ltd.*)
杭州福膜新材料科技股份有限
Hu Baifan 公司 (Hangzhou Foremost Director 10/29/2019 10/28/2022 No
Material Technology Co., Ltd.*)
北京福元医药股份有限公司
Hu Baifan (Beijing Winsunny Director 5/16/2019 5/15/2022 No
Pharmaceutical Co., Ltd.*)
绍兴越秀教育发展有限公司
Hu Baifan Chairman and General 12/5/2016 6/9/2023 No
(Shaoxing Yuexiu Education Manager
Development Co., Ltd.*)
浙江汇贤创业投资有限公司
Hu Baifan (Zhejiang Huixian Venture Executive Director 3/16/2017 To date No
Capital Co., Ltd.*)
浙江和丰投资有限公司
Hu Baifan (Zhejiang Hefeng Investment Executive Director 4/20/2018 To date No
Co., Ltd.*)
北京和成地产控股有限公司
Hu Baifan (NHU Real Estate Holding Co., Director 12/2/2010 3/19/2023 No
Ltd.*)
新昌县和成置业有限公司
Hu Baifan (Xinchang County NHU Real Director 3/20/2017 To date No
Estate Co., Ltd.*)
浙江新赛科药业有限公司
Hu Baishan (Zhejiang Second Pharma Co., Director 9/15/2017 12/20/2024 No
Ltd.*)
Hu Baishan Shaoxing Yuexiu Education Director 12/5/2016 To date No
Development Co., Ltd.
Shi Guanqun Xinchang Heli Investment Co., Chairman 11/30/2012 To date No
The English names are for identification purpose only.
Page 41 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Whether receive
Name of Name of other entities Position in other Commencement Termination emoluments and
persons entities date of service date of service allowances from
other entities
Ltd.
Shi Guanqun Xinchang Qinjin Investment Co., Director 6/10/2015 To date No
Ltd.
Shi Guanqun Shaoxing Yuexiu Education Director 12/5/2016 To date No
Development Co., Ltd.
Shi Guanqun NHU Real Estate Holding Co., Director 12/2/2010 3/19/2023 No
Ltd.
浙江璟实置业有限公司
Shi Guanqun (Zhejiang Jingshi Real Estate Director 9/22/2020 9/21/2023 No
Co., Ltd.*)
浙江德力装备有限公司
Shi Guanqun (Zhejiang Deli Equipment Co., Director 10/24/2016 10/27/2024 No
Ltd.*)
Shi Guanqun Beijing Winsunny Director 5/16/2019 5/15/2022 No
Pharmaceutical Co., Ltd.
Shi Guanqun Xinchang County NHU Real Director 3/20/2017 To date No
Estate Co., Ltd.
帝斯曼新和成工程材料（浙江）
Zhou Guiyang 有限公司 (DSM NHU Vice Chairman 1/7/2016 To date No
Engineering Materials
(Zhejiang) Co., Ltd.*)
浙江赛亚化工材料有限公司
Zhou Guiyang (Zhejiang Saiya Chemical Director 1/3/2017 5/7/2023 No
Materials Co., Ltd.*)
Huang Can Gansu Shangfeng Cement Co., Independent Director 5/7/2019 5/5/2022 Yes
Ltd.
Huang Can Zhejiang Windey Co., Ltd. Independent Director 5/12/2016 5/12/2022 Yes
Jin Zanfang Zhejiang Jingxing Paper Joint Independent Director 6/19/2017 9/29/2023 Yes
Stock Co., Ltd.
Jin Zanfang Zhejiang Feida Environmental Independent Director 6/8/2018 9/10/2024 Yes
Science & Technology Co., Ltd.
Ji Jianyang Zhejiang Jingu Co., Ltd. Independent Director 10/16/2020 10/16/2023 Yes
浙江丰立智能科技股份有限公
Ji Jianyang 司 (Zhejiang Fore Intelligent Independent Director 12/15/2020 12/15/2023 Yes
*
Technology Co., Ltd. )
浙江优全护理用品科技股份有
Ji Jianyang 限公司 (Zhejiang Uniquality Independent Director 3/3/2020 11/15/2024 Yes
Care Products Technology Co.,
Ltd.*)
Zhu Jianmin Merit Interactive Co., Ltd. Deputy General 6/22/2016 5/30/2022 Yes
Manager, CFO
Shi Fangbin Zhejiang Jingshi Real Estate Chairman 9/22/2020 9/21/2023 No
Co., Ltd.
Shi Fangbin DSM NHU Engineering Supervisor 1/7/2016 To date No
Materials (Zhejiang) Co., Ltd.
Shi Fangbin Zhejiang Saiya Chemical Supervisor 1/3/2017 5/7/2023 No
Materials Co., Ltd.
Shi Fangbin Zhejiang Second Pharma Co., Supervisor 12/21/2012 12/21/2021 No
Ltd.
绍兴璟和酒店管理有限公司
Shi Fangbin (Shaoxing Jinghe Hotel Director 5/27/2021 5/26/2024 No
Management Co., Ltd. )
Shi Fangbin Zhejiang Deli Equipment Co., Director 10/28/2021 10/27/2024 No
Ltd.
The English names are for identification purpose only.
Page 42 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Penalties imposed by securities regulators on current and outgoing directors, supervisors and senior executives of the Company in the
past three years
√ Applicable □ Not applicable
Please refer to item “XII. Penalties and rectification” under “Section VI Significant Events” for details.
3. Emoluments of directors, supervisors and senior executives
Decision-making procedure, basis for determination and actual payment of emoluments of directors, supervisors and senior
executives
Decision-making procedure: According to the standards stipulated by the Company’s unified remuneration management system, the
emoluments of the Company’s directors, supervisors and senior executives are determined based on the result of the regular
assessment under the Company’s performance appraisal mechanism. The allowance standard for independent directors shall be
deliberated and decided by the general meeting of shareholders.
Basis for determination: Emoluments of directors, supervisors and senior executives are determined based on the Company’s results
of operations and performance appraisal indicators.
Emoluments of directors, supervisors and senior executives during the reporting period
Unit: RMB 0,000 yuan
Total pre-tax Whether receive
Name Position Gender Age Status emoluments emoluments from
received from the related parties of
Company the Company
Hu Baifan Chairman Male 60 Incumbent 647.48 No
Hu Baishan Vice Chairman, Male 55 Incumbent 388.60 No
President
Director, Vice
Shi Guanqun President, CFO, Male 51 Incumbent 186.45 No
Secretary of the
Board
Wang Xuewen Director, Vice Male 53 Incumbent 285.26 No
President
Wang Zhengjiang Director Male 53 Incumbent 245.92 No
Zhou Guiyang Director Male 47 Incumbent 110.25 No
Yu Baijin Director Male 55 Incumbent 141.82 No
Huang Can Independent Director Male 43 Incumbent 10 No
Jin Zanfang Independent Director Female 46 Incumbent 10 No
Zhu Jianmin Independent Director Female 58 Incumbent 10 No
Ji Jianyang Independent Director Male 43 Incumbent 10 No
Shi Fangbin Chairman of the Female 46 Incumbent 0 Yes
Board of Supervisor
Lu Guofeng Supervisor Male 50 Incumbent 114.52 No
Yu Hongwei Supervisor Male 51 Incumbent 167.43 No
Yan Hongyue Supervisor Male 52 Incumbent 121.20 No
Chen Zhaofeng Supervisor Male 45 Incumbent 69.38 No
Zheng Gentu Vice President Male 60 Incumbent 118.94 No
Total -- -- -- -- 2,637.25 --
Page 43 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
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
19 proposals including the “Annual Work Report of
the Board of Directors of 2020” were deliberated and
The fifth meeting of the eighth 3/29/2021 3/31/2021 approved. Please refer to Announcement No.
session of Board of Directors
2021-005 disclosed on http://www.cninfo.com.cn for
details.
The sixth meeting of the eighth 4/27/2021 N/A The “First Quarterly Report of 2021” was
session of Board of Directors deliberated and approved.
4 proposals including the “Semi-annual Report of
Board of Directors of 2020 and Summary” were
The seventh meeting of the eighth 8/18/2021 8/20/2021 deliberated and approved. Please refer to
session of Board of Directors
Announcement No. 2021-023 disclosed on
http://www.cninfo.com.cn for details.
4 proposals including the “Third Quarterly Report of
The eighth meeting of the eighth 10/27/2021 10/29/2021 2021” were deliberated and approved. Please refer to
session of Board of Directors Announcement No. 2021-032 disclosed on
http://www.cninfo.com.cn for details.
3 proposals including the “Proposal on Foreign
Investments and Signing of Letter of Intent for
The ninth meeting of the eighth 12/24/2021 12/27/2021 Cooperative Joint Venture” were deliberated and
session of Board of Directors approved. Please refer to Announcement No.
2021-039 disclosed on http://www.cninfo.com.cn for
details.
2. Directors’ attendance at meetings of the Board of Directors and general meetings of shareholders
Directors’ attendance at meetings of the Board of Directors and general meetings of shareholders
Number of Whether directors
Number of board Number of Number of Number of Number of
board meetings failed to attend
Name of meetings to be board meetings board meetings absences general
attended two consecutive
directors present during the attended on attended by from board meetings
through audio board meetings in
reporting period site proxy meetings attended
visual means person
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 5 0 0 0 No 1
Wang 5 1 4 0 0 No 0
Zhengjiang
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 1
Jin Zanfang 5 1 4 0 0 No 1
Zhu Jianmin 5 1 4 0 0 No 0
Ji Jianyang 5 1 4 0 0 No 0
Remarks on failure to attend two consecutive board meetings in person
N/A
3. Directors’ objections to relevant matters of the Company
Whether directors have raised objections to relevant matters of the Company
□ Yes √ No
Directors have not raised any objections to relevant matters of the Company during the reporting period.
Page 44 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
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 adopted
During the reporting period, the directors, in strict accordance with the “Articles of Association”, “Rules of Procedures of the Board
of Directors” and relevant laws and regulations, actively attended board meetings and general meetings, performed their duties with
diligence, put forward relevant opinions on significant governance and operation decisions in accordance with the actual situation of
the Company, formed unanimous opinions after full communication and discussion, and resolutely supervised and promoted the
implementation of the resolutions made by the Board of Directors to ensure scientific, timely and efficient decision-making and
safeguard the legitimate rights and interests of the Company and all shareholders.
VII. Special committees under the Board of Directors during the reporting period
Important
Other Details of
Name of Members Number of Meeting date Content of meeting comments and
performance of dispute (if
committees meetings held suggestions
duties any)
made
The eighth session Ji Jianyang, Hu The “Remuneration Plan of NHU
of Remuneration Baishan, Huang 1 4/7/2021 Management Team for the Term
and Assessment Can, Zhu Jianmin, from 2021 to 2023” was deliberated
Committee Shi Guanqun and approved.
3 proposals including “Summary of
Internal Audit for the First Quarter
of 2021 and Work Plan for the
Second Quarter of 2021”, “Report
4/20/2021 on Special Audit of the Deposit and
Use of Raised Funds from January
to March 2021” and “First Quarterly
Report of 2021” were deliberated
and approved.
3 proposals including “Summary of
Internal Audit for the Half Year of
2021 and Work Plan for the Third
The eighth session Zhu Jianmin, Jin Quarter of 2021”, “Report on
of Audit Zanfang, Shi 3 8/12/2021 Special Audit of the Deposit and
Committee Guanqun Use of Raised Funds for the Half
Year of 2021” and “Semi-annual
Report of 2021” were deliberated
and approved.
3 proposals including “Summary of
Internal Audit for the Third Quarter
of 2021 and Work Plan for the
Fourth Quarter of 2021”, “Report on
10/21/2021 Special Audit of the Deposit and
Use of Raised Funds from January
to September 2021” and “Third
Quarterly Report of 2021” 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 1,845
the reporting period
Number of active employees of major subsidiaries at the end of 8,960
the reporting period
Total number of active employees at the end of the reporting 10,805
period
Page 45 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Total number of employees receiving remuneration in the current 10,805
period
Number of retired cadres and employees whose expenses borne 0
by the parent company and major subsidiaries
Professional workforce
Categories Number
Production staff 7,288
Sales staff 142
Technical staff 2,368
Finance staff 103
Administrative staff 904
Total 10,805
Education level
Categories Number
Doctoral degree 65
Master’s degree 854
Bachelor’s degree 3,085
Associate degree 3,866
High school education, secondary vocational school education or 2,935
below
Total 10,805
2. Remuneration policy
The Company formulates the “Remuneration Management System” in accordance with the “Labor Law of the People’s Republic of
China” and relevant laws and regulations to provide competitive remunerations. A remuneration package is mainly composed of base
salary, performance-based pay and benefits. The Company also offers employee incentives including incremental rewards, special
contribution rewards, incentives during the tenure, and additional rewards for high performance beyond expectations. The Company
pays 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 point
and job-based talent standards as the direction to promote various types of talent training in an orderly manner. It launches leadership
training courses for middle level, high level and grassroots management cadres to effectively improve the management ability and
quality of management cadres. It also launches professional ability development classes related to equipment, HSE and R&D to
strengthen technical staff skills. For new staff, the Company offers induction training to enhance their cultural identities and
professional abilities. It organizes on-the-job training, skill level training, certification training for special equipment and special type
of 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
further improves the development and utilization of internal lecturer resources and absorbs internal excellent experiences and
practices for a better enterprise succession; On the other hand, it combines “inviting in” and “going out” to establish a cooperation
mechanism for training 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 can fulfill themselves and achieve personal growth along with the Company. Talents are the most valuable,
sustainable and competitive strategic resources of the Company.
4. Labor outsourcing
□ Applicable √ Not applicable
Page 46 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
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 dividend
policy
√ Applicable □ Not applicable
Pursuant to the 2020 profit distribution plan deliberated and approved by the general meeting of 2020 date April 21, 2021, based on
total shares of 2,148,662,300 shares as of December 31, 2020, the Company distributed cash dividend of 7.00 yuan (tax included) per
10 shares and distributed 2 shares per 10 shares by converting capital reserve to all shareholders. Such plan had been completed on
May 19, 2021.
Special remarks on cash dividend policy
Whether it complies with the Articles of Association or the Yes
resolution of the general meeting:
Whether the criteria and proportion of dividends are clear and Yes
unambiguous:
Whether relevant decision-making procedures and mechanisms Yes
are complete:
Whether the independent directors have performed their duties Yes
and responsibilities and played their due roles:
Whether small and medium-sized shareholders have adequate
opportunities to express their opinions and demands, and whether Yes
their legitimate rights and interests are adequately protected:
In case of changes or adjustments of the cash dividend policy,
whether the conditions and procedures are compliant and N/A
transparent:
The Company is profitable during the reporting period and the parent company’s profit available for distribution is positive but no
cash dividend distribution plan has been proposed
□ Applicable √ Not applicable
Profit distribution and conversion of capital reserve into share capital during the reporting period
√ Applicable □ Not applicable
Number of bonus shares for every 10 shares (shares) 0
Dividends for every 10 shares (yuan) (tax included) 7.00
Number of shares increased for every 10 shares (shares) 2
Equity base for distribution proposal (shares) 2,563,842,524
Amount of cash dividends (yuan) (tax included) 1,794,689,766.80
Amount of cash dividends by other methods (such as share 320,360,784.48
repurchase) (yuan)
Total cash dividends (including those by other methods) (yuan) 2,115,050,551.28
Profit available for distribution (yuan) 5,886,750,011.71
Proportion of total cash dividends (including those by other methods) 100%
to total profit distribution
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
Temporarily based on total shares of 2,563,842,524 shares [Note] as at March 31, 2022, the Company intends to distribute cash
dividend of 7 yuan (tax included) and no bonus shares per 10 shares to all shareholders, and to distribute 2 shares per 10 shares by
converting capital reserve to all shareholders.
Page 47 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Note: As of March 31, 2022, the Company’s share capital totaled 2,578,394,760 shares, including repurchased share of 14,552,236
shares. 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 other
employee 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 Total shares Changes Proportion to total share Sources of fund to
employees held capital of the Company implement the plan
Legal remuneration of
Directors, supervisors, senior
the employees,
executives of the Company, and
self-raised funds and
regular employees of the Company 681 10,131,522 N/A 0.39% other methods permitted
and its holding subsidiaries or
by laws and
wholly-owned subsidiaries who meet
administrative
the criteria
regulations
Shareholdings of directors, supervisors and senior executives in the employee stock ownership plan during the reporting period
Number of shares held Number of shares held Proportion to total
Name Position at the beginning of the at the end of the share capital of the
reporting period reporting period Company
Hu Baishan, Shi Guanqun, Wang
Xuewen, Wang Zhengjiang, Zhou
Directors, supervisors 257,455 1,334,431 0.05%
Guiyang, Yu Baijin, Shi Fangbin, Lyu
and senior executives
Guofeng, Yu Hongwei, Yan Hongyue,
Chen Zhaofeng, Zheng Gentu
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 period
Pursuant to the “Third Phase of Employee Stock Ownership Plan (Draft)”, such plan voluntarily waives the voting rights of holding
shares in the general meeting of the Company, while shares acquired through the employee stock ownership plan carry no voting
Page 48 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
rights in the general meeting. During the reporting period, the employee stock ownership plan did not exercise the voting rights of
holding shares 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
correspondence dated June 9, 2021, Mr. 邱金倬 (Qiu Jinzhuo) was elected as a member of the management committee of the third
phase of employee stock ownership plan and together with Ms. 张丽英 (Zhang Liying), Mr. 董小方 (Dong Xiaofang), Mr. 张广
利 (Zhang Guangli) and Ms. 张莉瑾 (Zhang Lijin), who were elected at 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 19, 2021, the Company implemented the annual equity distribution of 2020, and the shares held by the third phase of
employee stock ownership plan were transferred from 8,442,935 shares to 10,131,522 shares after the transfer, with the proportion to
total 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 based
on 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
and internal management requirements. The Company’s internal controls can cover the major aspects of operation and management,
and the 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 improved its own system construction and optimized the existing internal control
management system on a continuous basis, so as to strengthen each internal control process; it improved the internal control process
manual, incorporated the content of enterprise internal control risk prevention, division of responsibility and authority, assignment of
task matters, etc. into the internal control process description, covering the work process design of 17 types of internal controls
(including funds, procurement, inventories, sales, fixed assets, engineering projects, etc.). It also assessed the potential risks to ensure
the effective operation of the internal control system.
2. Details on material deficiencies in internal control identified during the reporting period
□ Yes √ No
Page 49 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
XIII. Management control in subsidiaries during the reporting period
Problems
Name of Integration plan Progress of Solutions adopted Progress of Follow-up
encountered in
subsidiaries integration solutions solutions
integration
Zhejiang NHU
Nylon Materials N/A N/A N/A N/A N/A N/A
Co., Ltd.
NHU Singapore N/A N/A N/A N/A N/A N/A
PTE. LTD.
IV. Internal control self-assessment report or auditor’s report on internal control
1. Internal control self-assessment report
Date of report April 15, 2022
Full text of report Please refer to the “Internal Control Self-Assessment Report of 2021 of Zhejiang NHU
Co., Ltd.” disclosed on http://www.cninfo.com.cn on April 15, 2022 for details.
Proportion of the total assets of entities
included in the assessment scope to the 100.00%
total assets in the Company’s consolidated
financial statements
Proportion of the operating revenue of
entities included in the assessment scope to 100.00%
the operating revenue in the Company’s
consolidated financial statements
Criteria for identifying deficiencies
Categories Financial reporting Non-financial reporting
Indicators of material deficiencies in
financial reporting include: 1) fraud by
directors, supervisors and senior executives; The following circumstances are
2) correction of published financial reports identified as indicators of material
by the Company; 3) discovery by the auditor deficiencies, while others are
of a material misstatement in the current respectively identified as indicators of
financial report that was not detected by significant deficiencies or general
internal control in the course of operation; deficiencies according to the degree of
and 4) ineffective monitoring of internal impact: 1) lack of democratic or
control by the Company. Indicators of scientific decision-making procedures,
significant deficiencies in financial reporting leading to decision-making errors; 2)
Qualitative criteria include: 1) failure to select and apply violation of laws and regulations, such as
accounting policies in accordance with environmental pollution, failure to report
CASBEs; 2) failure to establish anti-fraud or disclose information in accordance
procedures and controls; and 3) individual or with regulations; 3) loss of executives or
multiple deficiencies in the financial technical personnel in key positions; 4)
reporting process that, although not meeting internal control evaluation stating that
the criteria for determining a significant material or significant deficiencies have
deficiency, affect the objective of integrity not been rectified; 5) lack of system
and accuracy. General deficiencies in control or systemic failure in important
financial reporting are control deficiencies businesses.
other than the above-mentioned material and
significant deficiencies.
The Company uses 5% of profit before
The Company uses 5% of profit before tax
tax as the overall materiality of the
as the overall materiality of the financial
financial statements. A material
statements. A material deficiency is
deficiency is identified when the
identified when the potential misstatement is
potential misstatement is greater than or
greater than or equal to the overall
equal to the overall materiality. A
Quantitative criteria materiality. A significant deficiency is
significant deficiency is identified when
identified when the potential misstatement is
the potential misstatement is less than the
less than the overall materiality but greater
overall materiality but greater than or
than or equal to 20% of the overall
equal to 20% of the overall materiality. A
materiality. A general deficiency is identified
general deficiency is identified when the
When the potential misstatement is less than
potential misstatement is less than 20%
20% of the overall materiality.
of the overall materiality.
Page 50 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Number of material deficiencies in internal 0
control over financial reporting
Number of material deficiencies in internal 0
control over non-financial reporting
Number of significant deficiencies in 0
internal control over financial reporting
Number of significant deficiencies in
internal control over non-financial 0
reporting
2. Auditor’s report on internal control
□ Applicable √ Not applicable
XV. Self-examination and rectification concerning the special action of corporate governance
Not applicable.
Page 51 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Section V Environmental and Social Responsibilities
I. Major environmental issues
Whether the Company and its subsidiaries belong to the key pollutant discharging units announced by departments of environmental
protection administration
√ Yes □ No
Name of main Executive
Number of Distribution Total Total verified Excessive
Name pollutants and Discharge Discharge pollutant
discharge of discharge amount of amount of discharge
pollutant method concentration discharge
outlets outlets discharge discharge or not
characteristics1 standard
The Company COD Sewer 1 Plant area 147mg/L 500mg/L 16.7t ≤189.5t/a No
connection
The Company NH3-N Sewer 1 Plant area 1.7mg/L 35mg/L 0.22t ≤13.28t/a No
connection
The Company SO Filtered 1 Plant area 4mg/m 3
50mg/m3
0.1t ≤8.612t/a No
discharge
The Company NOx Filtered 1 Plant area 36mg/m3 50mg/m3 0.7t ≤28t/a No
discharge
Shangyu NHU Bio-Chem Co., Ltd. COD Sewer 1 Plant area 286.291mg/L 500mg/L 222.11t ≤447.4t/a No
connection
Shangyu NHU Bio-Chem Co., Ltd. NH3-N Sewer 1 Plant area 19.706mg/L 35mg/L 15.288t ≤31.318t/a No
connection
Shangyu NHU Bio-Chem Co., Ltd. TN Sewer 1 Plant area 32.022mg/L 70mg/L 24.843t ≤62.637t/a No
connection
Shangyu NHU Bio-Chem Co., Ltd. NOx Filtered 1 Plant area 25.16mg/m 200mg/m 10.751t ≤12.96t/a No
discharge
Shangyu NHU Bio-Chem Co., Ltd. VOC Filtered 1 Plant area 31.4mg/m 3 3
100mg/m 13.417t ≤217.182t/a No
discharge
浙江新和成药业有限公司
COD Sewer 1 Plant area 286.291mg/L 500mg/L 145.336t ≤292.37t/a No
(Zhejiang NHU Pharmaceutical Co.,
connection
Ltd.2)
Zhejiang NHU Pharmaceutical Co., NH3-N Sewer 1 Plant area 19.706mg/L 35mg/L 10.006t ≤20.467t/a No
Ltd. connection
Zhejiang NHU Pharmaceutical Co., TN Sewer 1 Plant area 32.022mg/L 70mg/L 16.254t ≤40.932t/a No
Ltd. connection
Zhejiang NHU Pharmaceutical Co., VOC Filtered 2 Plant area 10.7mg/m 100mg/m 5.786t ≤167.9t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., NOx Filtered 1 Plant area 31.26mg/m 200mg/m 4.105t ≤8.64t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., NOx Filtered 1 Plant area 50.21mg/m 300mg/m 20.544t ≤28.08t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., NOx Filtered 1 Plant area 34.533mg/m 50mg/m 4.257t ≤65.85t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., SO Filtered 1 Plant area 0.22mg/m 200mg/m 0.029t ≤0.039t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., SO Filtered 1 Plant area 3.515mg/m 50mg/m 1.438t ≤37.94t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., SO Filtered 1 Plant area 2.652mg/m 200mg/m 0.327t ≤91.42t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., PM Filtered 1 Plant area 1.34mg/m 15mg/m 0.176t ≤0.304t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., PM Filtered 1 Plant area 2mg/m 30mg/m 0.817t ≤8.42t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., PM Filtered 1 Plant area 2.701mg/m 20mg/m 0.333t ≤77.597t/a No
Ltd. discharge
Zhejiang NHU Special Materials PM Filtered 2 Plant area 3.1mg/m 5mg/m 0.710t ≤17.73t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials SO Filtered 2 Plant area 5mg/m 35mg/m 1.430t ≤67.92t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials NOx Filtered 2 Plant area 26.8mg/m 50mg/m 8.555t ≤83.28t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials VOC Filtered 1 Plant area 7mg/m 60mg/m 1.212t ≤69.72t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials COD Sewer 1 Plant area 270mg/L 500mg/L 84.478t ≤182.1t/a No
Co., Ltd. connection
1
COD, NH3-N, SO , NOx, TN, VOC, PM and TP stand for chemical oxygen demand, ammonia nitrogen, sulfur dioxide, nitrogen
oxides, total nitrogen, volatile organic compound, particulate matter and total phosphorus, respectively.
2
The English name is for identification purpose only.
Page 52 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Name of main Executive
Number of Distribution Total Total verified Excessive
Name pollutants and Discharge Discharge pollutant
discharge of discharge amount of amount of discharge
pollutant method concentration discharge
outlets outlets discharge discharge or not
characteristics1 standard
Zhejiang NHU Special Materials NH3-N Sewer 1 Plant area 18mg/L 35mg/L 5.632t ≤12.747t/a No
Co., Ltd. connection
Zhejiang NHU Special Materials TN Sewer 1 Plant area 33mg/L 70mg/L 10.325t ≤25.494t/a No
Co., Ltd. connection
Shandong NHU Pharmaceutical PM Filtered 5 Plant area 1.37mg/m 10mg/m 1.413t ≤5.761t/a No
Co., Ltd. discharge
Shandong NHU Pharmaceutical SO Filtered 4 Plant area 0.073mg/m 50mg/m 1.193t ≤4.006t/a No
Co., Ltd. discharge
Shandong NHU Pharmaceutical NOx Filtered 5 Plant area 12.1mg/m 100mg/m 9.349t ≤75.513t/a No
Co., Ltd. discharge
Shandong NHU Pharmaceutical VOC Filtered 3 Plant area 16.3mg/m 60mg/m 6.02t ≤28.481t/a No
Co., Ltd. discharge
Shandong NHU Pharmaceutical COD Sewer 1 Plant area 591mg/L 1000mg/L 275t ≤599.43t/a No
Co., Ltd. connection
Shandong NHU Pharmaceutical NH3-N Sewer 1 Plant area 18.7mg/L 100mg/L 8.17t ≤59.95t/a No
Co., Ltd. connection
Shandong NHU Pharmaceutical TN Sewer 1 Plant area 40.4mg/L 120mg/L 18.4t ≤72.07t/a No
Co., Ltd. connection
山东新和成药业有限公司热电分
公司 (Thermal Power Branch of PM Filtered 1 Plant area 0.62mg/m 5mg/m 1.82t ≤10.51t/a No
Shandong NHU Pharmaceutical discharge
Co., Ltd.)
Thermal Power Branch of Shandong SO Filtered 1 Plant area 9.52mg/m 35mg/m 25t ≤73.61t/a No
NHU Pharmaceutical Co., Ltd. discharge
Thermal Power Branch of Shandong NOx Filtered 1 Plant area 22.7mg/m 50mg/m 62.1t ≤105.16t/a No
NHU Pharmaceutical Co., Ltd. discharge
Shandong NHU Amino-acids Co., SO Filtered 4 Plant area 5.1975mg/m 50mg/m 10.916t ≤92.59t/a No
Ltd. discharge
Shandong NHU Amino-acids Co., NOx Filtered 3 Plant area 40.03mg/m 100mg/m 47.743t ≤230.77t/a No
Ltd. discharge
Shandong NHU Amino-acids Co., PM Filtered 5 Plant area 1.77mg/m 10mg/m 2.16t ≤21.19t/a No
Ltd. discharge
Shandong NHU Amino-acids Co., VOC Filtered 4 Plant area 7.76mg/m 60mg/m 42.64t ≤123.27t/a No
Ltd. discharge
Shandong NHU Amino-acids Co., VOC / Plant area / / / / No
Unorganized
Ltd.
Shandong NHU Amino-acids Co., COD Sewer 1 Plant area 417mg/L 1000mg/L 176.69t ≤592.22t/a No
Ltd. connection
Shandong NHU Amino-acids Co., NH3-N Sewer 1 Plant area 7.73mg/L 100mg/L 3.2t ≤59.222t/a No
Ltd. connection
Shandong NHU Amino-acids Co., TN Sewer 1 Plant area 50.33mg/L 120mg/L 21.6t ≤70.38t/a No
Ltd. connection
Shandong NHU Vitamins Co., Ltd. VOC Filtered 3 Plant area 2.15mg/m 60mg/m 1.08t ≤173.53t/a No
discharge
Shandong NHU Vitamins Co., Ltd. VOC Unorganized / Plant area / / 1.08t ≤173.53t/a No
Shandong NHU Vitamins Co., Ltd. SO Filtered 2 Plant area 22.51mg/m 50mg/m 4.81t ≤50.65t/a No
discharge
Shandong NHU Vitamins Co., Ltd. NOx Filtered 4 Plant area 51.96mg/m 100mg/m 28.15t ≤73.66t/a No
discharge
Shandong NHU Vitamins Co., Ltd. PM Filtered 5 Plant area 1.88mg/m 10mg/m 0.946t ≤7.42t/a No
discharge
Shandong NHU Vitamins Co., Ltd. COD Sewer 1 Plant area 348mg/L 2000mg/L 108.105t ≤1140t/a No
connection
Shandong NHU Vitamins Co., Ltd. NH3-N Sewer 1 Plant area 21.6mg/L 100mg/L 4.948t ≤57t/a No
connection
Shandong NHU Vitamins Co., Ltd. TN Sewer 1 Plant area 69.6mg/L 120mg/L 16.638t ≤68.4t/a No
connection
Heilongjiang NHU Biotechnology PM Filtered 2 Plant area 11.8mg/m 30mg/m 7.46t ≤43.812t/a No
Co., Ltd. discharge
Heilongjiang NHU Biotechnology PM Filtered 4 Plant area 27.57mg/m 200mg/m 7.46t ≤43.812t/a No
Co., Ltd. discharge
Heilongjiang NHU Biotechnology PM Filtered 1 Plant area 41.67mg/m 120mg/m 7.46t ≤43.812t/a No
Co., Ltd. discharge
Heilongjiang NHU Biotechnology SO Filtered 2 Plant area 22.1mg/m 200mg/m 28.617t ≤142.33t/a No
Co., Ltd. discharge
Heilongjiang NHU Biotechnology SO Filtered 4 Plant area 167.47mg/m 850mg/m 28.617t ≤142.33t/a No
Co., Ltd. discharge
Heilongjiang NHU Biotechnology SO Filtered 1 Plant area 67.3mg/m 550mg/m 28.617t ≤142.33t/a No
Co., Ltd. discharge
Heilongjiang NHU Biotechnology NOx Filtered 1 Plant area 57.04mg/m 250mg/m 28.4t ≤99.11t/a No
Co., Ltd. discharge
The English name is for identification purpose only.
Page 53 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Name of main Executive
Number of Distribution Total Total verified Excessive
Name pollutants and Discharge Discharge pollutant
discharge of discharge amount of amount of discharge
pollutant method concentrationdischarge
outlets outlets discharge discharge or not
characteristics1 standard
Heilongjiang NHU Biotechnology NOx Filtered 1 Plant area 82.03mg/m 200mg/m 28.4t ≤99.11t/a No
Co., Ltd. discharge
Heilongjiang NHU Biotechnology NOx Filtered 5 Plant area 73.66mg/m 240mg/m 28.4t ≤99.11t/a No
Co., Ltd. discharge
Heilongjiang NHU Biotechnology VOC Filtered 1 Plant area 41.64mg/m 150mg/m 11.089t ≤118.8t/a No
Co., Ltd. discharge
Heilongjiang NHU Biotechnology COD Sewer 1 Plant area 143.88mg/L 350mg/L 587.723t / No
Co., Ltd. connection
Heilongjiang NHU Biotechnology NH3-N Sewer 1 Plant area 6.85mg/L 35mg/m 14.494t / No
Co., Ltd. connection
Heilongjiang NHU Biotechnology TP Sewer 1 Plant area 2.92mg/L 50mg/L 8.958t / No
Co., Ltd. connection
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 green
chemistry, developing and producing products that are more environment-friendly. 2. Transferring from support-orientation to
responsibility-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 production
sewage, domestic sewage, initial rainwater and accident water to separate the clean water and rainwater from the sewage. The waste
pool is sealed with a cover, and all the waste gases are effectively collected and eventually incinerated, which effectively reduces the
emission of waste gas.
Waste gas treatment: The Company adopts the self-developed nitrogen sealing system to effectively reduce the waste gas emission; it
uses different pretreatment technologies according to the composition and nature of different waste gases, and introduces advanced
foreign waste gas treatment devices to strengthen its waste gas treatment capacity. The Company carries out regular waste gas leak
detection and repair (LDAR) every year to effectively supervise and reduce unorganized waste gases. The Company actively
upgrades coal-fired thermal oil furnaces via the “coal to gas” conversion, introduces natural gas boilers, carries out low-NOx
transformation, and adds SNCR denitrification facilities to the terminal to actively carry out NOx treatment. The Company operates
and maintains the facilities of odor evaluation system, focuses all monitoring points and monitoring data on a daily basis, conducts
trend analysis, tracking feedback on the reasons for data exceeding the standard in a timely manner, so as to basically realize that the
odor can be warned, traced and evaluated.
Solid waste disposal: The Company has a standardized temporary storage warehouse for hazardous wastes and hazardous waste
incineration devices. The solid wastes entrusted for external treatment are transferred in strict accordance with the “Management
Measures for the Transfer of Hazardous Wastes Using Quintuplicate Vouchers” and entrusted to qualified units for treatment.
Noise prevention and control: The Company chooses low-noise equipment, and adopts the noise reduction measures of foundation
damping for the equipment that does not need to be fixed. In addition to taking foundation damping for air compressors, blowers and
various 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 of
the plant boundary in real time. It introduces VOC online monitors to monitor the gas emission data in real time and uploads the
detection data to the monitoring platform. It monitors the waste water emission index in real time by waste water online monitoring
system of “one enterprise one pipe” and upload it to the Bureau of Ecology and Environment. It introduces domestic first-class
elevated flare technology to specifically deal with abnormal waste gas in the production process. It also introduces domestic
first-class leak stoppage technology under pressure to reduce the abnormal leakage of pipelines, valves, flanges and tanks to the
minimum, thus reducing the environmental impact caused by a large number of leaks.
Page 54 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Environmental impact assessment (EIA) of construction projects and other administrative permits for
environmental protection
On November 16, 2021, Shandong NHU Amino-acids Co., Ltd. obtained the EIA approval for the “Methionine Industry Chain
Extension Project with Annual Output of 0.25 million Tons” with the document numbered Wei Huan Shen Zi [2021] B16.
On December 13, 2021, Shandong NHU Amino-acids Co., Ltd. reapplied for a pollutant discharge permit, which related to a new
project of the “Methionine Industry Chain Extension Project with Annual Output of 0.25 million Tons”.
Heilongjiang NHU Biotechnology Co., Ltd. finished the environmental protection acceptance for the completion of part of the
second phase project of Heilongjiang Suihua NHU Biological Fermentation Industrial Park.
On April 8, 2021, Shandong NHU Pharmaceutical Co., Ltd. passed the verification, assessment and acceptance of cleaner production
and received the government document of approval.
On August 8, 2021, Shandong NHU Vitamins Co., Ltd. obtained the record-filing receipt of the “Post-Evaluation Report on the
Waste Incinerators of Waste Gas, Wastewater, and Solid Waste” with the document numbered Wei Bin Huan Ping Bei An [2021] 1.
On August 11, 2021, Shandong NHU Vitamins Co., Ltd. reapplied for a pollutant discharge permit and a hazardous waste license.
On December 25, 2021, Shandong NHU Vitamins Co., Ltd. passed the preparation of cleaner production assessment report.
Environmental emergency response plan
In accordance with the “Administrative Measures for the Record-filing of Environmental Emergency Response Plans of Enterprises
and Public Institutions (Trial)”, Shandong NHU Pharmaceutical Co., Ltd. formulated the “Environmental Emergency Response Plan
of Shandong NHU Pharmaceutical Co., Ltd.” based on its actual situation, and filed and submitted to Weifang Bureau of Ecology
and Environment, Binhai Sub-bureau in May 2021, obtaining the record-filing receipt numbered 370703-2021-046-H.
On December 10, 2021, Shandong NHU Vitamins Co., Ltd. obtaining the record-filing receipt numbered 370-703-2021-150-M for
its environmental emergency response plan.
Heilongjiang NHU Biotechnology Co., Ltd. completed the revision of the “Environmental Emergency Response Plan of
Heilongjiang NHU Biotechnology Co., Ltd.” according to the construction and commissioning of new projects in a timely manner,
and filed and submitted to Suihua Bureau of Ecology and Environment in April 2021, obtaining the record-filing receipt numbered
231200-2021-001-H.
Environmental self-monitoring program
The Company has strong pollutant discharge monitoring and management abilities, and it can inform the departments of
environmental protection administration and the public of monitoring information in a timely manner. The Company has developed a
self-testing program, which covers the indicators of organized waste gas, unorganized waste gas, groundwater, etc. Meanwhile, the
Company has entrusted a third-party testing agency to perform regular monitoring.
The Company has disclosed its environmental information on the platforms of environmental information management system of key
provincial and municipal pollutant discharging units in strict accordance with requirements at national, provincial, municipal and
county levels on enterprise environmental information disclosure.
Administrative penalties for environmental problems during the reporting period
Name Reasons for Violations Results of Impact on the production and Rectification measures of
punishment punishment operation of the Company the Company
N/A N/A N/A N/A N/A N/A
Page 55 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Other environmental information that should be disclosed
None.
Measures taken to reduce carbon dioxide emissions during the reporting period and their effects
√ Applicable □ Not applicable
The Company reduces the proportion of purchased steam by using scraps and other wastes to produce steam by itself; it improves the
energy recovery efficiency through the steam boiler waste heat recovery project; the Company adopts carbon dioxide emissions per
10,000 yuan of output value as the significant indicator of processing route of new products and environmental feasibility assessment,
applies green technology in the research and development of new products, and improves atomic efficiency, so as to reduce carbon
dioxide emissions from raw material consumption at source.
Other information related to environmental protection
None.
II. Social responsibilities
Please refer to the announcement disclosed on http://www.cninfo.com.cn on April 15, 2022 for the full text of the “Social
Responsibility Report of 2021”.
III. Details on consolidating poverty alleviation achievements and promoting rural vitalization
None.
Page 56 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Section VI Significant Events
I. Commitment performance
1. Commitment performance fulfilled during the reporting period and not fulfilled as of the end of the reporting period by
parties related to commitments including the actual controller of the Company, shareholders, related parties, acquirers and
the Company
√ Applicable □ Not Applicable
Commitments Parties making Types of Content of commitments Time of Term of
Performance
commitments commitments commitment commitment
Commitments to None None None None None
shares reform
Commitments
made in reports
on acquisition None None None None None
and changes in
equity
Commitments
made in asset None None None None None
restructuring
NHU Holding
Group Co., Ltd. and The signing of
张平一 (Zhang Commitments “Commitment on No
Pingyi), 石程 (Shi on horizontal Engagement in Horizontal
Cheng), 袁益中 competition, Competition” and
June 25, 2004 Long-term Strictly
(Yuan Yizhong), Hu related party commitments on no
performed
Baishan, Shi transactions and engagement in business
Guanqun, Wang occupation of activities result in horizontal
Xuewen, 崔欣荣 funds competition with operations
(Cui Xinrong), 王 of the Company after listing
旭林 (Wang Xulin)
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,
Commitments and make the following
made in IPO or commitments in accordance
refinancing with the relevant provisions
of the CSRC for the full
Hu Baifan; Hu performance of measures on
Baishan; Guanqun; filling immediate returns: 1.
Wang Xuewen; Cui not to transfer benefits to January 12, Strictly
other entities or individuals 2017 Long-term
Xinrong; Wang performed
Zhengjiang; Zhou without compensation or on
Guiyang 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
Page 57 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
system formulated by the
Board of Directors or
remuneration committee to
the implementation of
measures on filling
immediate returns; 5. to link
vesting conditions of equity
incentive to be published in
the future to the
implementation of measures
on filling immediate returns.
Not to interfere in the
Company’s business and
management activities in
Hu Baifan; NHU excess of authority; not to
January 12, Long-term Strictly
Holding Group Co., encroach on benefits of the
2017 performed
Ltd. Company; to perform
measures on filling
immediate returns in a
practical way.
Commitments to None None None None None
equity incentive
Other
commitments to
minority None None None None None
shareholders of
the Company
Whether
commitments Yes
are performed
on time
If commitment performance is not fulfilled on time, please explain detailed reasons for it and the next work plans. Not
applicable
2. Realization of profit forecasts for the Company’s assets or projects and its reasons if there are profit forecasts for assets or
projects 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 and
other related parties
□ Applicable √ Not Applicable
There is no non-operating occupation of funds over listed companies by controlling shareholders and other related parties during the
reporting period.
III. Illegal external guarantees
□ Applicable √ Not Applicable
There is no illegal external guarantee during the reporting period.
IV. Explanations by the Board of Directors on the latest “Modified Auditor’s Report”
□ Applicable √ Not Applicable
Page 58 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
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 the
reporting period
□ Applicable √ Not Applicable
VI. Changes of accounting policies and estimates or significant accounting error correction
compared to the financial reports in the previous year
√ Applicable □ Not Applicable
The Company has adopted the “CASBE 21 – Leases” revised by the Ministry of Finance (the “revised lease standard”) since January
1, 2021. Pursuant to regulations on convergence between original and revised standards, no adjustment shall be made on comparable
information, and the cumulative impact arising from adoption on the adopting date shall be retrospectively adjusted into retained
earnings and other related financial statement items at the beginning of the reporting period. Please refer to item “V. Significant
accounting policies and estimates” under “Section X Financial Report” for details.
VII. Changes in the scope of consolidated financial statements compared to the financial
reports in the previous year
√ Applicable □ Not Applicable
Please refer to item “IV (6) Whether the consolidation scope has changed during the reporting period” under “Section III
Management Discussion and Analysis” for details.
VIII. Engagement and dismissal of accounting firms
Domestic accounting firms engaged currently
Name Pan-China Certified Public Accountants LLP
Remuneration (thousand yuan) 2,100.00 (tax included)
Continuous years for audit services 21 years
Certified Public Accountants Teng Peibin, Zhu Lili
Certified Public Accountants’ continuous years for audit services 2 years for Teng Peibin and 1 year for Zhu Lili
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.
Page 59 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
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
Types of
Name Position Causes Conclusions (if any) Disclosure Disclosure
investigation
date reference
and penalties
On October 18, 2021, CSRC, Zhejiang Office
issued the “Written Decision of
Administrative Penalty” ([2021] No.19) and
considered Li Li, the then-manager of data
enhancement department of Internet service
business group of Merit Interactive Co., Ltd.
An employee surnamed Li of Merit falsified several sales contracts and related
Interactive Co., Ltd. falsified several settlement documents between the company
sales contracts and related settlement and its customers by forging seals. Merit
documents between the company and Interactive Co., Ltd. failed to timely discover
its customers by forging seals. Merit the falsity of the above contracts and
Interactive Co., Ltd. failed to timely businesses, recognized the related sales
discover the falsity of the above revenues and prepare financial statements
contracts and businesses, recognized accordingly, resulting in false recording of its
the related sales revenues and prepare Third Quarterly Report and Annual Report of
Filed for 2019, First Quarterly Report, Semi-Annual
financial statements accordingly,
investigation Report, and Third Quarterly Report of 2020..
resulting in false recording of its
Zhu Independent or Not Not
Third Quarterly Report and Annual
Jianmin director administrative applicable applicable
Report of 2019, First Quarterly
penalties by The action of Merit Interactive Co., Ltd.
Report, Semi-Annual Report, and mentioned above violated article 63 of the
CSRC
Third Quarterly Report of 2020. Merit 2005 Securities Law and paragraph 2 of
Interactive Co., Ltd. was suspected of article 78 of the 2019 Securities Law, which
violating laws and regulations in constituted a violation of information
information disclosure and was disclosure under paragraph 2 of article 197 of
investigated by CSRC. Zhu Jianmin, the 2019 Securities Law. Zhu Jianmin the
an independent director of the then deputy general manager and chief
Company, was the then deputy financial officer who was in charge of
general manager and chief financial financial work, failed to ensure the
officer of Merit Interactive Co., Ltd. truthfulness, accuracy and completeness of
the company’s information disclosure and was
the person in charge directly responsible for
the information disclosure violation. Zhu
Jianmin was given a warning and fined RMB
800,000 yuan according to paragraph 2 of
article 197 of the 2019 Securities Law.
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
Page 60 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
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 financial
companies.
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 the
Company 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.
Page 61 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
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)
Announcement Whether
Actual Actual Counter Whether
Guaranteed date of disclosure Amount Types of Collaterals Period of the
commencement amount guarantees guarantee for
parties of amount guaranteed guarantees (if any) guarantee guarantee
date guaranteed (if any) related parties
guaranteed is mature
Total amount of guarantees
approved during the reporting 0 Total amount actually guaranteed during the 0
reporting period (A2)
period (A1)
Total amount of guarantees
approved at the end of the 0 Total amount actually guaranteed at the end of 0
the reporting period (A4)
reporting period (A3)
The Company’s guarantees to subsidiaries
Announcement Whether
Actual Actual Counter Whether
Guaranteed date of disclosure Amount Types of Collaterals Period of the
commencement amount guarantees guarantee for
parties of amount guaranteed guarantees (if any) guarantee guarantee
date guaranteed (if any) related parties
guaranteed is mature
Joint and
NHU (Hong
12/28/2018 123,000 5/14/2019 9,563.55 several 5/14/2019 - Yes No
Kong) Trading
Co., Ltd. liability 5/13/2021
guarantee
Heilongjiang Joint and
NHU 12/28/2018 200,000 6/24/2019 200,000 several 6/24/2019 - No No
Biotechnology liability 12/31/2023
Co., Ltd. guarantee
Joint and
Shandong NHU
12/28/2018 90,000 11/29/2019 50,000 several 11/29/2019 - No No
Vitamins Co.,
Ltd. liability 12/21/2023
guarantee
Joint and
Shangyu NHU
17,000 several 2/28/2020 - Yes
Bio-Chem Co., 12/28/2018 17,000 2/28/2020 No
Ltd. liability 2/27/2021
guarantee
Zhejiang NHU Joint and
Imports & 5/21/2020 15,000 6/30/2020 10,000 several 6/30/2020 - Yes No
Exports Co., liability 9/13/2021
Ltd. guarantee
Joint and
Shandong NHU
10,000 several 6/22/2020 - Yes
Pharmaceutical 5/21/2020 20,000 6/22/2020 No
Co., Ltd. liability 6/21/2021
guarantee
Joint and
NHU (Hong
5/21/2020 120,000 7/15/2020 7,219.72 several 7/15/2020 - Yes No
Kong) Trading
Co., Ltd. liability 6/18/2021
guarantee
Joint and
NHU (Hong
Kong) Trading 5/21/2020 120,000 7/30/2020 7,219.72 several 7/30/2020 - Yes No
Co., Ltd. liability 7/14/2021
guarantee
Joint and
NHU (Hong
5/21/2020 120,000 9/7/2020 51,005.6 several 9/7/2020 - No No
Kong) Trading
Co., Ltd. liability 9/7/2023
guarantee
Page 62 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Joint and
NHU (Hong
5/21/2020 120,000 9/22/2020 54.77 several 9/22/2020 - Yes No
Kong) Trading
Co., Ltd. liability 1/10/2021
guarantee
Joint and
NHU (Hong
5/21/2020 120,000 9/24/2020 5,100.56 several 9/24/2020 - Yes No
Kong) Trading
Co., Ltd. liability 5/21/2021
guarantee
Joint and
NHU (Hong
5/21/2020 120,000 12/31/2020 92.83 several 12/31/2020 - Yes No
Kong) Trading
Co., Ltd. liability 5/20/2021
guarantee
Shandong NHU Joint and
Fine Chemical
5/21/2020 50,000 3/24/2021 50,000 several 3/24/2021 - No No
Science and
Technology Co., liability 12/25/2025
Ltd. guarantee
Joint and
NHU (Hong
Kong) Trading 5/21/2020 120,000 4/6/2021 82.06 several 4/6/2021 - Yes No
Co., Ltd. liability 7/30/2021
guarantee
Joint and
NHU (Hong
4/21/2021 120,000 6/18/2021 7,219.72 several 6/18/2021 - No No
Kong) Trading
Co., Ltd. liability 6/17/2022
guarantee
Joint and
NHU (Hong
Kong) Trading 4/21/2021 120,000 6/21/2021 64.74 several 6/21/2021 - Yes No
Co., Ltd. liability 10/30/2021
guarantee
Joint and
NHU (Hong
4/21/2021 120,000 7/16/2021 7,219.72 several 7/16/2021 - No No
Kong) Trading
Co., Ltd. liability 7/14/2022
guarantee
Heilongjiang Joint and
NHU 4/21/2021 40,000 8/26/2021 37,000 several 8/26/2021 - No No
Biotechnology liability 12/21/2025
Co., Ltd. guarantee
Joint and
NHU (Hong
4/21/2021 120,000 9/8/2021 78.26 several 9/8/2021 - No No
Kong) Trading
Co., Ltd. liability 1/30/2022
guarantee
Zhejiang NHU Joint and
Imports & 4/21/2021 10,000 9/22/2021 10,000 several 9/22/2021 - No No
Exports Co., liability 5/31/2022
Ltd. guarantee
Joint and
NHU (Hong
4/21/2021 120,000 12/9/2021 60.73 several 12/9/2021 - No No
Kong) Trading
Co., Ltd. liability 5/30/2022
guarantee
新昌新和成维 Joint and
生素有限公司 12/16/2021 - No
(Xinchang NHU 4/21/2021 40,000 12/16/2021 29,000 several No
liability 12/25/2026
Vitamins Co.,
Ltd.*) guarantee
Total amount of guarantees
approved for subsidiaries during 455,000 Total amount actually guaranteed for 140,725.23
subsidiaries during the reporting period (B2)
the reporting period (B1)
Total amount of guarantees 806,005.6 Total amount actually guaranteed for 441,584.03
approved for subsidiaries at the subsidiaries at the end of the reporting period
*
The English name is for identification purpose only.
Page 63 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
end of the reporting period (B3) (B4)
Guarantees by subsidiaries to subsidiaries
Announcement Whether
Actual Amount Counter Whether
Guaranteed date of disclosure Amount Types of Collaterals Period of the
commencement actually guarantee (if guarantee for
parties of amount guaranteed guarantees (if any) guarantee guarantee
date guaranteed any) related parties
guaranteed is mature
Total amount of guarantees Total amount actually guaranteed
approved for subsidiaries during 0 for subsidiaries during the reporting 0
the reporting period (C1) period (C2)
Total amount of guarantees Total amount actually guaranteed
approved for subsidiaries at the 0 for subsidiaries at the end of the 0
end of the reporting period (C3) reporting period (C4)
Total amount guaranteed by the Company (namely sum of the above three items)
Total amount of guarantees Total amount actually guaranteed
approved during the reporting 455,000 during the reporting period 140,725.23
period (A1+B1+C1) (A2+B2+C2)
Total amount of guarantees Total amount actually guaranteed at
approved at the end of the 806,005.6 the end of the reporting period 441,584.03
reporting period (A3+B3+C3) (A4+B4+C4)
Proportion of the amount actually guaranteed (A4+B4+C4) to net assets of the Company 20.26%
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) 362,584.03
The amount of the total amount guaranteed exceeding 50% of net assets (F) 0
Total amount guaranteed of three items above (D+E+F) 362,584.03
Remarks on unexpired guarantee contracts with guarantee liabilities incurred or evidence indicating the None
possibility of undertaking joint liquidation liabilities during the reporting period (if applicable)
Remarks on external guarantee in violation of provisions (if applicable) None
3. Entrusted cash assets management
(1) Entrusted financing
√ Applicable □ Not Applicable
Entrusted financing during the reporting period
Unit: RMB 0,000 yuan
Impairment amount
Types Source of entrusted Entrusted amount Unexpired balance Amount overdue accrued for financial
funds and not recovered products overdue
and not recovered
Bank financial Raised funds 362,000 245,000 0 0
products
Total 362,000 245,000 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 of
entrusted financial products
Page 64 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
□ 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
Pursuant to the “Proposal on Share Repurchase” deliberated and approved by the seventh meeting of the eighth session of the Board
of Directors dated August 18, 2021, the Company was agreed to repurchase part of public shares through centralized bidding
transactions with self-owned funds for the purpose of equity incentive plan or employee stock ownership plan. The repurchase
amount in 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. The specific amount of shares to be repurchased and the proportion to the total shares are subject to
the amount of shares actually repurchased at the expiration of the repurchase period. The implementation period of share repurchase
should not exceed 12 months since the approval date of general meeting of shareholders. As of December 28, 2021, the Company has
repurchased 10,988,369 shares through centralized bidding transactions using special securities account for repurchase, accounting
for 0.4262% of total shares. The highest price of shares was 30.03 yuan per share while the lowest price was 26.15 yuan per share,
and the accumulated transaction amount was 320,335,151.32 yuan (transaction fees excluded). Such repurchase complied with
relevant laws and regulations, as well as the repurchase plan of the Company. Please refer to relevant announcements published in the
media designated by the Company or the website http://www.cninfo.com.cn for details.
XVII. Significant events of subsidiaries of the Company
□ Applicable √ Not Applicable
Page 65 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Section VII Movements in Shares and Conditions of Shareholders
I. Movements in shares
1. Details
Unit: Shares
Before Movements After
Items Issue of Reserve
Quantity % to Bonus
new transferred to Others Subtotal Quantity % to total
total shares
shares shares
I. Restricted shares 27,821,505 1.29% 5,051,846 -2,561,517 2,490,329 30,311,834 1.18%
1. Held by other 27,821,505 1.29% 5,051,846 -2,561,517 2,490,329 30,311,834 1.18%
domestic parties
Including: Held by 27,821,505 1.29% 5,051,846 -2,561,517 2,490,329 30,311,834 1.18%
domestic legal persons
II. Unrestricted shares 2,120,840,795 98.71% 424,680,614 2,561,517 427,242,131 2,548,082,926 98.82%
1. RMB ordinary shares 2,120,840,795 98.71% 424,680,614 2,561,517 427,242,131 2,548,082,926 98.82%
III. Total 2,148,662,300 100.00% 429,732,460 0 429,732,460 2,578,394,760 100.00%
Reason for movements
√ Applicable □ Not Applicable
1. On March 15, 2021, non-restricted shares were increased by 2,562,267 shares in total due to unlocking of the restricted shares held
by the former seventh-session director Cui Xinrong and the former supervisor Ye Yueheng, Qiu Jinzhuo, 梁晓东 (Liang Xiaodong),
who had left their post for over six months.
2. Pursuant to the “Proposal on Equity Allocation Plan of 2020”, based on total shares of 2,148,662,300 shares as at May 19, 2021,
the Company increased 429,732,460 shares at 2 shares per 10 shares by converting capital reserve to all shareholders. After the
increase, the total share capital amounted to 2,578,394,760 shares.
3. On July 15, 2021, the Chairman of the Board Hu Baifan increased his shares by 1,000 shares, including restricted shares of 750
shares.
Approval on movements in shares
√ Applicable □ Not Applicable
Pursuant to the “Proposal on Profit Distribution Plan of 2020” deliberated and approved by the general meeting of 2020, the
Company was permitted to increase 429,732,460 shares at 4 shares per 10 shares by converting capital reserve to all shareholders.
After the increase, the total share capital amounted to 2,578,394,760 yuan.
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, net
assets 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.
Page 66 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
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: Shares
Shareholders Opening balance Increase Decrease due to Closing balance Reason for Date of unlocking
unlocking restriction
100% locked up
since the
Cui Xinrong 2,083,962 2,083,962 0 executive had left 3/15/2021
the post for six
months
100% locked up
since the
Ye Yueheng 191,250 191,250 0 executive had left 3/15/2021
the post for six
months
100% locked up
since the
Qiu Jinzhuo 95,805 95,805 0 executive had left 3/15/2021
the post for six
months
100% locked up
since the
Liang Xiaodong 191,250 191,250 0 executive had left 3/15/2021
the post for six
months
75% of total shares
Locked up for the
Hu Baifan 7,250,936 1,450,937 0 8,701,873 shares are held by held by the executive
are locked up on an
the executive
annual basis.
75% of total shares
Locked up for the
Hu Baishan 7,602,046 1,520,409 0 9,122,455 shares are held by held by the executive
are locked up on an
the executive
annual basis.
75% of total shares
Locked up for the
Shi Guanqun 5,457,208 1,091,441 0 6,548,649 shares are held by held by the executive
are locked up on an
the executive
annual basis.
75% of total shares
Locked up for the
Wang Xuewen 4,623,922 924,785 0 5,548,707 shares are held by held by the executive
are locked up on an
the executive
annual basis.
75% of total shares
Locked up for the
Wang 239,062 47,812 0 286,874 shares are held by held by the executive
Zhengjiang are locked up on an
the executive
annual basis.
75% of total shares
Locked up for the
Zhou Guiyang 86,064 17,212 0 103,276 shares are held by held by the executive
are locked up on an
the executive
annual basis.
Total 27,821,505 5,052,596 2,562,267 30,311,834 -- --
II. Issuance and listing of securities
1. Issuance of securities (preferred shares excluded) within the reporting period
□ Applicable √ Not Applicable
Page 67 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
2. Movements in total shares of the Company and structure of shareholders, movements in structure of
assets and liabilities of the Company
√ Applicable □ Not Applicable
Pursuant to the “Proposal on Equity Allocation Plan of 2020”, based on total shares of 2,148,662,300 shares as at May 19, 2021, the
Company increased 429,732,460 shares at 2 shares per 10 shares by converting capital reserve to all shareholders. After the increase,
the total share capital amounted to 2,578,394,760 shares.
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
Total
shareholders of
shareholders
preferred shares
of preferred
Total shareholders Total shareholders at the with voting
shares with
of ordinary shares 78,234 month end prior to the 64,016 voting rights 0 rights restored at 0
at the end of the disclosure date of the month end
restored at the
reporting period annual report prior to the
end of the
disclosure date
reporting
of annual report
period (if any)
(if any)
Shareholders with holding proportion over 5% or the top 10 shareholders with largest holding proportions
Quantity of Shares pledged, marked or
Movements
shares at the Quantity of Quantity of frozen
Shareholders Nature of Holding during the
shareholders proportion
end of the restricted unrestricted
reporting Condition Quantity
reporting shares shares
period
period
Domestic
non-state-
NHU Holding 48.55% 1,251,903,644 208,650,607 0 1,251,903,644
owned
Group Co., Ltd.
legal
person
Hong Kong
Overseas
Securities 2.87% 73,893,329 16,341,514 0 73,893,329
legal
Clearing
person
Company Limited
上海重阳战略投
资有限公司
(Shanghai
Chongyang
Strategic 1.75% 45,060,167 10,480,229 0 45,060,167
Others
Investment Co.,
Ltd.*) －
Chongyang
Strategic Huizhi
Fund
National Social
Security Fund Others 1.08% 27,786,092 17,596,993 0 27,786,092
No.112 Portfolio
National Social
Security Fund Others 0.78% 20,000,000 2,999,986 0 20,000,000
No.503 Portfolio
*
The English name is for identification purpose only.
Page 68 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Kuwait Overseas
Investment legal 0.59% 15,318,702 15,318,702 0 15,318,702
Authority person
Shanghai
Chongyang
Strategic
Investment Co., 0.51% 13,164,209 7,664,109 0 13,164,209
Others
Ltd. －
Chongyang
Strategic Qizhou
Fund
Domestic
Hu Baishan natural 0.47% 12,163,274 2,027,212 9,122,455 3,040,819
person
北京源峰私募基
金管理合伙企业
(有限合伙)
(Beijing Yuanfeng
Private Equity
Fund Management Others 0.46% 11,977,187 -7,012,634 0 11,977,187
Partnership (LP)*)
－ Yuanfeng
Value Private
Equity Investment
Fund
Domestic
重阳集团有限公 non-state-
司 (Chongyang owned 0.45% 11,635,159 1,939,193 0 11,635,159
Group Co., Ltd.*) legal
person
Strategic investors or ordinary
legal persons that became one Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Huizhi Fund became
of the top 10 shareholders due one of the top 10 shareholders due to its participation in private placement of shares in 2017.
to the allotment of new shares
Remarks on relationships or The above shareholder Hu Baishan is the director of NHU Holding Group Co., Ltd. The Company
concerted action of the above does not know whether other shareholders have relationships and whether they are persons acting in
shareholders concert as defined in “Administration of the Takeover of Listed Companies Procedures”.
Remarks on proxy voting and
waiver of voting right of the None
above shareholders
Special remarks on top 10
shareholders with special Not applicable
repurchase accounts (if any)
Top 10 shareholders with unrestricted shares
Category of shares
Quantity of unrestricted shares at
Shareholders
the end of the reporting period Category Quantity
NHU Holding Group Co., Ltd. 1,251,903,644 RMB ordinary shares 1,251,903,644
Hong Kong Securities Clearing 73,893,329 RMB ordinary shares 73,893,329
Company Limited
Shanghai Chongyang Strategic
Investment Co., Ltd. － Chongyang 45,060,167 RMB ordinary shares 45,060,167
Strategic Huizhi Fund
National Social Security Fund No.112 27,786,092 RMB ordinary shares 27,786,092
Portfolio
National Social Security Fund No.503 20,000,000 RMB ordinary shares 20,000,000
Portfolio
Kuwait Investment Authority 15,318,702 RMB ordinary shares 15,318,702
Shanghai Chongyang Strategic
Investment Co., Ltd. － Chongyang 13,164,209 RMB ordinary shares 13,164,209
Strategic Qizhou Fund
*
The English names are for identification purpose only.
Page 69 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Beijing Yuanfeng Private Equity Fund
Management Partnership (LP) － 11,977,187 RMB ordinary shares 11,977,187
Yuanfeng Value Private Equity
Investment Fund
Chongyang Group Co., Ltd. 11,635,159 RMB ordinary shares 11,635,159
The Company－Employee stock 10,131,522 RMB ordinary shares 10,131,522
ownership plan phase III
The above shareholder Hu Baishan is the director of NHU Holding Group Co., Ltd. The
Remarks on proxy voting and waiver
Company does not know whether other shareholders have relationships and whether they are
of voting right of the above
persons acting in concert as defined in “Administration of the Takeover of Listed Companies
shareholders
Procedures”.
Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Huizhi Fund
holds 45,060,106 shares through client account of collateral securities for margin trading of
国泰君安证券股份有限公司 (Guotai Junan Securities Co., Ltd.*); Shanghai Chongyang
Strategic Investment Co., Ltd. － Chongyang Strategic Qizhou Fund holds 13,164,133
Remarks on top 10 shareholders of shares through client account of collateral securities for margin trading of 国金证券股份有
ordinary shares participating in 限公司 (Sinolink Securities Co., Ltd.*); Beijing Yuanfeng Private Equity Fund Management
securities margin trading (if any) Partnership (LP) －Yuanfeng Value Private Equity Investment Fund holds 5,988,587 shares
through client account of collateral securities for margin trading of 华泰证券股份有限公司
(Huatai Securities Co., Ltd.*); Chongyang Group Co., Ltd. holds 11,634,955 shares through
client account of collateral securities for margin trading of 招商证券股份有限公司 (China
Merchants Securities Co., Ltd.*).
Note: The Company’s special securities account for repurchase is attributable to the top 10 shareholders with largest balances in
unrestricted shares, who however 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 repurchase
transaction 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 agreed
repurchase transaction during the reporting period.
2. Controlling shareholders
Nature of shareholders: Natural person holding
Category of shareholders: Legal person
Holding shareholders Legal representative/ Date of establishment Unified social credit Main business scope
Head of the entity code
Industrial investments,
goods import and export;
NHU Holding Group Co., production and sales of
Hu Baifan 2/14/1989 91330624146424869T chemical products,
Ltd.
pharmaceutical
intermediates, chemical
materials
Equity conditions of other
domestic and overseas listed
companies that the holding Not applicable
shareholders control or
participate in during the
reporting period
Changes of holding shareholders during the reporting period
□ Applicable √ Not applicable
The Company has no changes of holding shareholders during the reporting period.
*
The English names are for identification purpose only.
Page 70 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
3. Actual controllers and persons acting in concert
Nature of actual controller: Domestic natural persons
Category of actual controller: Natural persons
Actual controller Relationship with the Nationality Whether has permanent residence in other
actual controller countries or regions
Hu Baifan Self China No
Person acting in
concert (including the
Hu Baishan following forms: China No
agreement, relatives,
common control)
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
Main occupation and position 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 No
control within a decade
Changes of actual controller within the reporting period
□ Applicable √ Not applicable
The Company has no changes in actual controller within the reporting period.
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2021 Annual Report of Zhejiang NHU Co., Ltd.
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
shareholders or the largest shareholder and his person acting in concert accounts for over 80% of total
shares of the Company 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
IV. Actual implementation of share repurchase during the reporting period
Actual progress of share repurchase
√ Applicable □ Not applicable
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Proportion of
Quantity of repurchased shares
Date of Quantity of
% to total Amount of shares Repurchase Purposes repurchased to the underlying
proposal shares to be
to be repurchased period shares (unit: shares involved in
disclosure repurchased
shares) the equity incentive
plan (if any)
The shares are to be
repurchased for
equity incentive
plan or employee
stock ownership
7,317,073 plan. If the
shares - 0.28% - 0.57% RMB 300 million 8/18/2021 - Company fails to 10,988,369 Not applicable
8/24/2021
14,634,146 - 600 million 8/17/2022 utilize the shares
shares within 36 months
since the repurchase
for the above
purposes, the
unused portion will
be cancelled.
Implementation progress of shareholding reduction for shares repurchased through centralized bidding
□ Applicable √ Not applicable
Page 73 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Section VIII Preferred Shares
□ Applicable √ Not applicable
The Company has no preferred shares during the reporting period.
Page 74 of 175
Section IX Bonds
□ Applicable √ Not applicable
Page 75 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Section X Financial Report
I. Auditor’s Report
Audit Opinion Standard unqualified opinion
Date of Auditor’s Report April 13, 2022
Accounting Firm Pan-China Certified Public Accountants LLP
Number of Auditor’s Report PCCPAAR [2022] No. 2358
Signatory Certified Public Accountants Teng Peibin, Zhu Lili
Auditor’s Report
To the Shareholders of Zhejiang NHU Co., Ltd.:
I. Audit Opinion
We have audited the accompanying financial statements of Zhejiang NHU Co., Ltd. (the “Company”), which comprise the
consolidated and parent company balance sheets as at December 31, 2021, the consolidated and parent company income statements,
the consolidated and parent company cash flow statements, and the consolidated and parent company statements of changes in equity
for the year then ended, 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 at
December 31, 2021, and of its financial performance and its cash flows for the year then ended in accordance with China Accounting
Standards for Business Enterprises.
II. Basis for Audit Opinion
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those standards are further
described in the Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the China Code of Ethics for Certified Public Accountants, and we have fulfilled
other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit 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
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not express a separate opinion on these matters.
(I) Revenue recognition
1. Key audit matters
Please refer to item V 20, VII 39 and XV 1 of this section for details.
The Company is mainly engaged in manufacturing and sales of nutrition, flavor and fragrance, new polymer materials, etc. In 2021,
the operating revenue amounted to 14,797.99 million yuan.
Pursuant to sales contracts between the Company and its customers, sales of products are performance obligations satisfied at a point
in time. Revenue from domestic sales is recognized when the Company has delivered goods to the customer as agreed by contract
and has obtained delivery note signed by the customer, 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. Revenue from overseas sales is recognized
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2021 Annual Report of Zhejiang NHU Co., Ltd.
when the Company has declared goods to the customs based on contractual agreements and has obtained a 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. Real estate sales are performance obligations satisfied at a point in time. Revenue from real estate sales is
recognized when the Company has delivered house property to the customer as agreed by contract and has obtained the acceptance
receipts signed by the customer, 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.
As operating revenue is one of the key performance indicators of the Company, there might be inherent risks that the Company’s
management (the “Management”) adopts inappropriate revenue recognition to achieve specific goals or expectations, we have
identified 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,
determined whether 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 revenue
recognition method was appropriate;
(3) We performed analysis procedure on operating revenue and gross margin by month, product, client, etc., so as to identify whether
there 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,
including sales contracts, sales invoices, delivery lists, shipping documents, client acceptance receipts, etc.; for revenue from
overseas sales, we obtained information from Electron Port and checked it with accounting records, and checked supporting
documents including sales contracts, 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 procedure
of accounts receivable;
(6) We performed cut-off tests on the operating revenue recognized around the balance sheet date, and assessed whether the operating
revenue was recognized in the appropriate period; and
(7) 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 VII 1 of this section for details.
At the balance sheet date, the Company’s cash and bank balances amounted to 5,952.91 million yuan, which is one of the main assets
of the Company. As the amount of cash and bank balances is significant, the existence and integrity of cash and bank balances have
significant 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
these controls, 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;
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2021 Annual Report of Zhejiang NHU Co., Ltd.
(3) We obtained and checked bank statements and bank reconciliation statements, and performed confirmation procedures on balance
of bank accounts;
(4) We checked bank statements and bank journals, performed bidirectional tests on bank statements of significant accounts, and
checked 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
combination with enterprise credit reports;
(6) We reviewed interest income, and checked whether interest income was consistent with the amount of cash and bank balances;
and
(7) We checked whether information related to cash and bank balances had been presented appropriately in the financial statements.
(III) Recognition and measurement of fixed assets and construction in progress
1. Key audit matters
Please refer to item V 13, 14, VII 12 and 13 of this section for details.
As of December 31, 2021, the Company’s carrying amount of fixed assets and construction in progress totals 17,303.75 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
including the determination of capitalization criteria for expenditures, time point of construction in progress transferred to fixed
assets and the beginning 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 judgement
mentioned above has significant influence on financial statements, we have identified recognition and measurement of fixed assets
and construction 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
these controls, determined whether they had been executed, and tested the effectiveness of the operation;
(2) We checked the accuracy of capitalization amount in combination with the audit of bank borrowings;
(3) We checked acceptance reports related to construction projects or project progress reports, payment documents of construction
schedule payments, etc. by sampling method, and decided whether the time point of construction in progress transferred to fixed
assets was 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 in
combination with conditions of the industry; and
(7) We checked whether information related to fixed assets and construction in progress had been presented appropriately in the
financial statements.
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2021 Annual Report of Zhejiang NHU Co., Ltd.
IV. Other Information
The Management is responsible for the other information. The other information comprises the information included in the
Company’s annual report, but does not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required
to report that fact. We have nothing to report in this regard.
V. Responsibilities of the Management and Those Charged with Governance for the Financial Statements
The Management is responsible for preparing and presenting fairly the financial statements in accordance with China Accounting
Standards for Business Enterprises, as well as designing, implementing and maintaining internal control relevant to the preparation of
financial 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
Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
VI. Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with China Standards on Auditing will always detect
a material misstatement 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 China
Standards 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
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, 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 disclosures
made by the Management.
(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
Page 79 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company to cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements represent
the 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 within
the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of
the group audit. We remain 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 regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in
the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to 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, 2021
Unit: RMB Yuan
Items December 31, 2021 December 31, 2020
Current assets:
Cash and bank balances 5,952,909,626.94 4,927,657,236.24
Settlement funds
Loans to other banks
Held-for-trading financial assets 1,250,736,359.24 852,227,964.70
Derivative financial assets
Notes receivable 349,145,316.03 332,064,366.59
Accounts receivable 2,755,168,573.14 1,930,930,930.01
Receivables financing 182,891,179.65 295,393,346.17
Advances paid 78,969,960.60 116,063,557.59
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 254,497,248.13 178,610,951.64
Including: Interest receivable
Page 80 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2021 December 31, 2020
Dividend receivable 7,159,278.00
Financial assets under reverse repo
Inventories 3,193,657,367.16 3,117,042,558.78
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 895,782,268.87 1,777,569,473.96
Total current assets 14,913,757,899.76 13,527,560,385.68
Non-current assets:
Loans and advances
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 351,327,625.75 343,378,891.18
Other equity instrument investments 22,998,147.55 22,998,147.55
Other non-current financial assets
Investment property
Fixed assets 14,318,919,487.82 13,914,151,215.54
Construction in progress 2,984,835,072.82 1,325,545,420.56
Productive biological assets
Oil & gas assets
Right-of-use assets 3,123,637.11
Intangible assets 1,521,729,757.66 1,407,067,129.87
Development expenditures
Goodwill
Long-term prepayments 18,591,707.06 13,369,412.48
Deferred tax assets 55,805,191.95 65,143,706.00
Other non-current assets 501,076,584.40 277,793,490.68
Total non-current assets 19,778,407,212.12 17,369,447,413.86
Total assets 34,692,165,111.88 30,897,007,799.54
Current liabilities:
Short-term borrowings 1,403,332,827.92 2,363,525,192.53
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 694,124,946.73 497,644,517.23
Accounts payable 1,435,966,427.76 1,463,728,316.04
Advances received
Contract liabilities 61,135,258.36 56,302,537.11
Financial liabilities under repo
Absorbing deposit and interbank deposit
Page 81 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2021 December 31, 2020
Deposit for agency security transaction
Deposit for agency security underwriting
Employee benefits payable 370,609,333.07 322,646,061.45
Taxes and rates payable 420,743,262.69 268,864,472.38
Other payables 56,712,103.36 129,839,228.89
Including: Interest payable
Dividend payable
Handling fee and commission payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year 2,029,499,509.43 1,275,888,293.32
Other current liabilities 5,133,310.10 4,956,463.49
Total current liabilities 6,477,256,979.42 6,383,395,082.44
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 5,148,811,786.49 4,136,875,354.33
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 2,936,868.15
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 1,063,699,676.16 873,066,181.34
Deferred tax liabilities 135,751,304.31 99,839,731.45
Other non-current liabilities
Total non-current liabilities 6,351,199,635.11 5,109,781,267.12
Total liabilities 12,828,456,614.53 11,493,176,349.56
Equity:
Share capital 2,578,394,760.00 2,148,662,300.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 4,121,063,080.96 4,560,522,556.84
Less: Treasury shares 320,360,784.48
Other comprehensive income -1,614,172.31 27,803,829.31
Special reserve 12,692,218.51 9,550,346.85
Surplus reserve 1,289,197,380.00 1,074,331,150.00
General risk reserve
Undistributed profit 14,120,605,163.26 11,515,384,739.95
Total equity attributable to the parent company 21,799,977,645.94 19,336,254,922.95
Non-controlling interest 63,730,851.41 67,576,527.03
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2021 December 31, 2020
Total equity 21,863,708,497.35 19,403,831,449.98
Total liabilities & equity 34,692,165,111.88 30,897,007,799.54
Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Wang Xiaobi
2. Parent company balance sheet
Unit: RMB Yuan
Items December 31, 2021 December 31, 2020
Current assets:
Cash and bank balances 4,319,521,960.26 2,790,740,377.97
Held-for-trading financial assets 200,000,000.00 851,949,945.63
Derivative financial assets
Notes receivable 349,145,316.03 332,064,366.59
Accounts receivable 746,349,980.29 704,086,691.03
Receivables financing
Advances paid 203,802,390.93 1,631,550.49
Other receivables 3,095,039,415.47 4,247,680,763.92
Including: Interest receivable
Dividend receivable 7,159,278.00
Inventories 442,360,365.52 566,205,506.19
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 552,376,721.31 552,859,738.36
Total current assets 9,908,596,149.81 10,047,218,940.18
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 8,054,952,017.02 6,372,637,172.92
Other equity instrument investments 22,998,147.55 22,998,147.55
Other non-current financial assets
Investment property
Fixed assets 674,187,271.03 737,784,631.31
Construction in progress 1,396,104.03
Productive biological assets
Oil & gas assets
Right-of-use assets 2,952,929.08
Intangible assets 113,952,307.99 105,425,506.93
Development expenditures
Goodwill
Long-term prepayments 4,266,859.15 5,919,401.23
Deferred tax assets 33,889,948.73 42,345,228.44
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2021 December 31, 2020
Other non-current assets 2,311,441.46 7,202,988.32
Total non-current assets 8,910,907,026.04 7,294,313,076.70
Total assets 18,819,503,175.85 17,341,532,016.88
Current liabilities:
Short-term borrowings 582,373,105.49 1,243,628,965.48
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 464,150,033.90 155,953,161.50
Accounts payable 84,472,375.02 100,374,347.92
Advances received
Contract liabilities 13,839,278.19 8,494,783.78
Employee benefits payable 88,415,827.18 82,688,797.50
Taxes and rates payable 60,253,580.60 33,578,246.55
Other payables 15,631,151.00 15,543,517.50
Including: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due within one year 1,238,333,387.67 635,930,890.44
Other current liabilities 1,799,106.15 1,104,321.89
Total current liabilities 2,549,267,845.20 2,277,297,032.56
Non-current liabilities:
Long-term borrowings 2,935,717,876.76 2,209,521,076.40
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 2,924,244.46
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 15,164,020.12 18,884,041.56
Deferred tax liabilities 20,547,468.08 13,011,703.03
Other non-current liabilities
Total non-current liabilities 2,974,353,609.42 2,241,416,820.99
Total liabilities 5,523,621,454.62 4,518,713,853.55
Equity:
Share capital 2,578,394,760.00 2,148,662,300.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 3,861,393,399.57 4,300,852,875.45
Less: Treasury shares 320,360,784.48
Other comprehensive income 506,954.43 506,954.43
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2021 December 31, 2020
Special reserve
Surplus reserve 1,289,197,380.00 1,074,331,150.00
Undistributed profit 5,886,750,011.71 5,298,464,883.45
Total equity 13,295,881,721.23 12,822,818,163.33
Total liabilities & equity 18,819,503,175.85 17,341,532,016.88
3. Consolidated income statement
Unit: RMB Yuan
Items Year 2021 Year 2020
I. Total operating revenue 14,797,989,091.20 10,314,084,354.21
Including: Operating revenue 14,797,989,091.20 10,314,084,354.21
Interest income
Premiums earned
Revenue from handling charges and commission
II. Total operating cost 9,927,169,339.91 6,427,974,430.00
Including: Operating cost 8,212,292,946.27 4,727,264,003.94
Interest expenses
Handling charges and commission expenditures
Surrender value
Net payment of insurance claims
Net provision of insurance policy reserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges 131,624,828.23 114,793,244.02
Selling expenses 107,037,085.96 312,957,940.58
Administrative expenses 423,584,417.67 422,853,851.25
R&D expenses 782,661,708.54 545,562,375.72
Financial expenses 269,968,353.24 304,543,014.49
Including: Interest expenses 337,753,271.80 249,052,551.92
Interest income 164,418,967.90 42,376,836.40
Add: Other income 152,380,704.67 121,321,220.19
Investment income (or less: losses) 127,969,715.41 160,154,552.44
Including: Investment income from associates 59,304,344.04 57,689,812.69
and joint ventures
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) 37,863,705.44 9,369,917.28
Credit impairment loss -50,043,349.49 -4,095,147.32
Assets impairment loss -54,250,408.90 -12,369,945.69
Gains on asset disposal (or less: losses) -1,544,436.08 3,744,385.58
III. Operating profit (or less: losses) 5,083,195,682.34 4,164,234,906.69
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Items Year 2021 Year 2020
Add: Non-operating revenue 12,287,842.84 1,942,296.14
Less: Non-operating expenditures 64,603,824.24 56,285,459.79
IV. Profit before tax (or less: total loss) 5,030,879,700.94 4,109,891,743.04
Less: Income tax 690,514,446.51 532,664,232.53
V. Net profit (or less: net loss) 4,340,365,254.43 3,577,227,510.51
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net 4,340,365,254.43 3,577,227,510.51
loss)
2. Net profit from discontinued operations (or less: net
loss)
(II) Categorized by the portion of equity ownership
1. Net profit attributable to owners of parent company 4,324,150,263.31 3,563,759,939.48
2. Net profit attributable to non-controlling 16,214,991.12 13,467,571.03
shareholders
VI. Other comprehensive income after tax -37,096,882.86 -8,335,210.90
Items attributable to the owners of the parent company -29,418,001.62 -9,962,055.86
(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 -29,418,001.62 -9,962,055.86
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 -29,418,001.62 -9,962,055.86
7. Others
Items attributable to non-controlling shareholders -7,678,881.24 1,626,844.96
VII. Total comprehensive income 4,303,268,371.57 3,568,892,299.61
Items attributable to the owners of the parent company 4,294,732,261.69 3,553,797,883.62
Items attributable to non-controlling shareholders 8,536,109.88 15,094,415.99
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 1.68 1.38
(II) Diluted EPS (yuan per share) 1.68 1.38
Net profit realized by the combined party in business combination under common control before the business combination in the
current 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: Wang Xiaobi
Page 86 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
4. Parent company income statement
Unit: RMB Yuan
Items Year 2021 Year 2020
I. Operating revenue 4,554,078,901.38 3,914,694,978.67
Less: Operating cost 3,235,286,634.28 2,520,745,377.84
Taxes and surcharges 28,779,899.07 23,325,274.17
Selling expenses 26,691,429.90 34,157,186.47
Administrative expenses 154,022,840.72 138,393,238.02
R&D expenses 216,563,446.14 185,233,909.72
Financial expenses 45,975,949.63 151,091,514.33
Including: Interest expenses 179,393,799.37 153,182,358.41
Interest income 144,933,772.10 25,270,283.02
Add: Other income 43,875,430.64 39,377,993.84
Investment income (or less: losses) 1,535,436,661.17 1,278,065,859.75
Including: Investment income from associates 60,097,137.98 57,147,042.17
and joint ventures
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) 11,815,408.19 926,797.97
Credit impairment loss 58,950,663.78 -2,985,835.52
Assets impairment loss -52,176,656.64 -8,731,005.06
Gains on asset disposal (or less: losses) -1,332,803.02 -23,489.80
II. Operating profit (or less: losses) 2,443,327,405.76 2,168,378,799.30
Add: Non-operating revenue 5,010,140.26 32,523.34
Less: Non-operating expenditures 1,500,375.08 4,064,208.41
III. Profit before tax (or less: total loss) 2,446,837,170.94 2,164,347,114.23
Less: Income tax 139,622,202.68 157,078,255.68
IV. Net profit (or less: net loss) 2,307,214,968.26 2,007,268,858.55
(I) Net profit from continuing operations (or less: net 2,307,214,968.26 2,007,268,858.55
loss)
(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
Page 87 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Items Year 2021 Year 2020
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 2,307,214,968.26 2,007,268,858.55
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 2021 Year 2020
I. Cash flows from operating activities:
Cash receipts from sale of goods or rendering of 14,128,039,148.63 9,963,208,363.11
services
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 917,132,022.82 636,725,260.98
Other cash receipts related to operating activities 539,965,875.07 204,665,952.59
Subtotal of cash inflows from operating activities 15,585,137,046.52 10,804,599,576.68
Cash payments for goods purchased and services 7,309,063,593.18 5,456,523,584.87
received
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 1,345,745,150.27 1,036,396,136.99
Cash payments for taxes and rates 783,199,680.00 712,390,345.50
Other cash payments related to operating activities 309,250,571.50 476,482,146.11
Subtotal of cash outflows from operating activities 9,747,258,994.95 7,681,792,213.47
Net cash flows from operating activities 5,837,878,051.57 3,122,807,363.21
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Items Year 2021 Year 2020
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 2,273,784.59
Cash receipts from investment income 145,185,573.83 136,028,766.52
Net cash receipts from the disposal of fixed assets, 24,510,298.30 56,302,768.39
intangible assets and other long-term assets
Net cash receipts from the disposal of subsidiaries &
other business units
Other cash receipts related to investing activities 1,800,000,000.00 3,873,870,000.00
Subtotal of cash inflows from investing activities 1,969,695,872.13 4,068,475,319.50
Cash payments for the acquisition of fixed assets, 3,472,724,469.42 2,352,928,950.30
intangible assets and other long-term assets
Cash payments for investments 83,904,479.79 19,705,719.78
Net increase of pledged borrowings
Net cash payments for the acquisition of subsidiaries 74,433,508.94
& other business units
Other cash payments related to investing activities 1,804,835,731.00 1,815,037,520.58
Subtotal of cash outflows from investing activities 5,361,464,680.21 4,262,105,699.60
Net cash flows from investing activities -3,391,768,808.08 -193,630,380.10
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 7,383,209,509.05 7,379,136,085.77
Other cash receipts related to financing activities 91,212,707.20
Subtotal of cash inflows from financing activities 7,383,209,509.05 7,470,348,792.97
Cash payments for the repayment of borrowings 6,557,328,243.08 7,441,048,519.96
Cash payments for distribution of dividends or profits 1,841,063,211.24 1,375,494,130.75
and for interest expenses
Including: Cash paid by subsidiaries to 12,381,785.50
non-controlling shareholders as dividend or profit
Other cash payments related to financing activities 329,441,306.41 30,024,836.90
Subtotal of cash outflows from financing activities 8,727,832,760.73 8,846,567,487.61
Net cash flows from financing activities -1,344,623,251.68 -1,376,218,694.64
IV. Effect of foreign exchange rate changes on cash & -56,255,229.67 -97,209,327.80
cash equivalents
V. Net increase in cash and cash equivalents 1,045,230,762.14 1,455,748,960.67
Add: Opening balance of cash and cash equivalents 4,669,306,776.09 3,213,557,815.42
VI. Closing balance of cash and cash equivalents 5,714,537,538.23 4,669,306,776.09
6. Parent company cash flow statement
Unit: RMB Yuan
Items Year 2021 Year 2020
I. Cash flows from operating activities:
Cash receipts from sale of goods and rendering of 5,109,886,806.38 4,271,109,080.89
services
Receipts of tax refund 79,006,050.97 90,400,700.96
Other cash receipts related to operating activities 196,474,615.50 67,743,551.55
Subtotal of cash inflows from operating activities 5,385,367,472.85 4,429,253,333.40
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Items Year 2021 Year 2020
Cash payments for goods purchased and services 3,268,785,597.91 3,459,364,445.85
received
Cash paid to and on behalf of employees 281,446,896.19 235,542,732.63
Cash payments for taxes and rates 129,270,605.04 198,675,951.59
Other cash payments related to operating activities 114,356,348.57 107,913,610.24
Subtotal of cash outflows from operating activities 3,793,859,447.71 4,001,496,740.31
Net cash flows from operating activities 1,591,508,025.14 427,756,593.09
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 2,182,000.00
Cash receipts from investment income 1,382,569,901.85 1,066,822,932.23
Net cash receipts from the disposal of fixed assets, 2,862,302.06 4,525,917.26
intangible assets and other long-term assets
Net cash receipts from the disposal of subsidiaries &
other business units
Other cash receipts related to investing activities 2,974,222,044.69 4,421,643,617.82
Subtotal of cash inflows from investing activities 4,359,654,248.60 5,495,174,467.31
Cash payments for the acquisition of fixed assets, 45,427,101.23 72,488,934.93
intangible assets and other long-term assets
Cash payments for investments 1,672,800,000.00 943,000,000.00
Net cash payments for the acquisition of subsidiaries
& other business units
Other cash payments related to investing activities 1,286,337,315.10 2,187,072,657.51
Subtotal of cash outflows from investing activities 3,004,564,416.33 3,202,561,592.44
Net cash flows from investing activities 1,355,089,832.27 2,292,612,874.87
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Cash receipts from borrowings 4,449,379,400.00 3,601,191,700.00
Other cash receipts related to financing activities 50,000,000.00
Subtotal of cash inflows from financing activities 4,449,379,400.00 3,651,191,700.00
Cash payments for the repayment of borrowings 3,772,893,927.30 3,850,779,227.27
Cash payments for distribution of dividends or profits 1,686,503,402.65 1,241,069,586.61
and for interest expenses
Other cash payments related to financing activities 324,177,230.24 5,739,388.60
Subtotal of cash outflows from financing activities 5,783,574,560.19 5,097,588,202.48
Net cash flows from financing activities -1,334,195,160.19 -1,446,396,502.48
IV. Effect of foreign exchange rate changes on cash and -13,812,643.89 -20,646,627.52
cash equivalents
V. Net increase in cash and cash equivalents 1,598,590,053.33 1,253,326,337.96
Add: Opening balance of cash and cash equivalents 2,593,272,980.50 1,339,946,642.54
VI. Closing balance of cash and cash equivalents 4,191,863,033.83 2,593,272,980.50
Page 90 of 175
7. Consolidated statement of changes in equity
Current period cumulative
Unit: RMB Yuan
Year 2021
Equity attributable to parent company
Items Other equity instruments Other General Non-controlling
Less: Surplus Total equity
Share capital Capital reserve comprehensive Special reserve risk Undistributed profit Others Subtotal interest
Preferred Perpetual Others Treasury shares reserve
shares bonds income reserve
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
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
2. Capital contributed by holders of other equity
instruments
3. Amount of share-based payment included in
equity
4. Others 320,360,784.48 -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 -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 -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 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
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 3,141,871.66 3,141,871.66 3,141,871.66
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 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
Page 91 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Preceding period comparative
Unit: RMB Yuan
Year 2020
Equity attributable to parent company
Items Other equity instruments Less: Other General Non-controlling
Surplus Total equity
Share capital Capital reserve Treasury comprehensive Special reserve risk Undistributed profit Others Subtotal interest
Preferred Perpetual Others reserve
shares bonds shares income reserve
I. Balance at the end of prior year 2,148,662,300.00 4,709,068,757.66 37,765,885.17 5,337,505.56 951,844,916.62 9,158,233,971.76 17,010,913,336.77 52,482,111.04 17,063,395,447.81
Add: Cumulative changes of accounting policies
Error correction of prior period
Business combination under common control
Others
II. Balance at the beginning of current year 2,148,662,300.00 4,709,068,757.66 37,765,885.17 5,337,505.56 951,844,916.62 9,158,233,971.76 17,010,913,336.77 52,482,111.04 17,063,395,447.81
III. Current period increase (or less: decrease) -148,546,200.82 -9,962,055.86 4,212,841.29 122,486,233.38 2,357,150,768.19 2,325,341,586.18 15,094,415.99 2,340,436,002.17
(I) Total comprehensive income -9,962,055.86 3,563,759,939.48 3,553,797,883.62 15,094,415.99 3,568,892,299.61
(II) Capital contributed or withdrawn by owners
1. Ordinary shares contributed by owners
2. Capital contributed by holders of other equity instruments
3. Amount of share-based payment included in equity
4. Others
(III) Profit distribution 122,486,233.38 -1,196,817,383.38 -1,074,331,150.00 -1,074,331,150.00
1. Appropriation of surplus reserve 122,486,233.38 -122,486,233.38
2. Appropriation of general risk reserve
3. Appropriation of profit to owners -1,074,331,150.00 -1,074,331,150.00 -1,074,331,150.00
4. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
3. Surplus reserve to cover losses
4. Changes in defined benefit plan carried over to retained
earnings
5. Other comprehensive income carried over to retained
earnings
6. Others
(V) Special reserve 4,212,841.29 4,212,841.29 4,212,841.29
1. Appropriation of current period 13,350,385.03 13,350,385.03 13,350,385.03
2. Application of current period -9,137,543.74 -9,137,543.74 -9,137,543.74
(VI) Others -148,546,200.82 -9,791,787.91 -158,337,988.73 -158,337,988.73
IV. Balance at the end of current period 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
Page 92 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
8. Parent company statements of changes in equity
Current period cumulative
Unit: RMB Yuan
Year 2021
Other equity instruments Other
Items Less: Treasury Special Undistributed
Share capital Preferred Perpetual Others Capital reserve comprehensive Surplus reserve Others Total equity
shares reserve profit
shares bonds income
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
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 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
3. Amount of share-based payment included in equity
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 214,866,230.00 -214,866,230.00
2. Appropriation of profit to owners -1,504,063,610.00 -1,504,063,610.00
3. Others
(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
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
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
Page 93 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Preceding period comparative
Unit: RMB Yuan
Year 2020
Other equity instruments Less: Other
Items Special Undistributed
Share capital Preferred Perpetual Others Capital reserve Treasury comprehensive Surplus reserve Others Total equity
reserve profit
shares bonds shares income
I. Balance at the end of prior year 2,148,662,300.00 4,300,852,875.45 506,954.43 951,844,916.62 4,488,013,408.28 11,889,880,454.78
Add: Cumulative changes of accounting policies
Error correction of prior period
Others
II. Balance at the beginning of current year 2,148,662,300.00 4,300,852,875.45 506,954.43 951,844,916.62 4,488,013,408.28 11,889,880,454.78
III. Current period increase (or less: decrease) 122,486,233.38 810,451,475.17 932,937,708.55
(I) Total comprehensive income 2,007,268,858.55 2,007,268,858.55
(II) Capital contributed or withdrawn by owners
1. Ordinary shares contributed by owners
2. Capital contributed by holders of other equity instruments
3. Amount of share-based payment included in equity
4. Others
(III) Profit distribution 122,486,233.38 -1,196,817,383.38 -1,074,331,150.00
1. Appropriation of surplus reserve 122,486,233.38 -122,486,233.38
2. Appropriation of profit to owners -1,074,331,150.00 -1,074,331,150.00
3. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
3. Surplus reserve to cover losses
4. Changes in defined benefit plan carried over to retained
earnings
5. Other comprehensive income carried over to retained
earnings
6. Others
(V) Special reserve
1. Appropriation of current period
2. Application of current period
(VI) Others
IV. Balance at the end of current period 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
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2021 Annual Report of Zhejiang NHU Co., Ltd.
III. Company profile
Zhejiang NHU Co., Ltd. (the “Company”) was jointly established by 新昌县合成化工厂 (Xinchang County Synthetic Chemical
Plant, renamed as NHU Holding Group Co., Ltd. on November 17, 2009) and 9 natural persons including Zhang Pingyi, Yuan
Yizhong, Shi Cheng, Hu Baishan, Shi Guanqun, Wang Xuewen, 石三夫 (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 Shaoxing City, 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 of 2,578,394,760.00 yuan, total share of 2,578,394,760 shares (each with par value of
one yuan), of which, 30,311,834 shares are restricted outstanding shares, and 2,548,082,926 shares are unrestricted outstanding
shares. The Company’s shares were listed on Shenzhen Stock Exchange on June 25, 2004.
The Company belongs to pharmaceutical manufacturing industry and is mainly engaged in manufacturing and sales of nutrition,
flavor and fragrance, and new polymer materials. The Company’s main products are nutrition, flavor and fragrance, and new polymer
materials.
The financial statements were approved and authorized for issue by the tenth meeting of the eighth session of the Board of Directors
dated April 13, 2022.
The Company has brought 24 subsidiaries including Xinchang NHU Vitamins Co., Ltd., Zhejiang NHU Import & Export Co., Ltd.,
浙江维尔新动物营养保健品有限公司 (Zhejiang Vityesun Animal Nutrition and Health Co., Ltd.*), etc. into the consolidation
scope. Please refer to item VIII and IX of this section 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 concern
within the 12 months after the balance sheet date.
V. Significant accounting policies and estimates
Note to specific accounting policies and estimates: The Company has set up accounting policies and estimates on transactions or
events such as impairment of financial instruments, depreciation of fixed assets, depreciation of right-of-use assets, amortization of
intangible assets, 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 Business
Enterprises (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.
The English names are for identification purpose only.
Page 95 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
3. Operating cycle
Except for the real estate industry, the Company has a relatively short operating cycle for its business, an asset or a liability is
classified as current if it is expected to be realized or due within 12 months. The operating cycle for real estate industry starts from
the development of property and ends at sales, which normally extends over 12 months and is subject to specific projects, therefore,
an asset 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 of
subsidiaries engaged in overseas operations including NHU (Hong Kong) Trading Co., Ltd., NHU Europe GmbH and NHU
Singapore PTE. LTD. 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 the
consolidated financial statements of the ultimate controlling party at the combination date. Difference between carrying amount of
the equity of the combined party included in the consolidated financial statements of the ultimate controlling party and that of the
combination consideration or total par value of shares issued is adjusted to capital reserve, if the balance of capital reserve is
insufficient to 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, the
excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities and contingent liabilities, and the
measurement 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 are
compiled by the parent company according to “CASBE 33 – Consolidated Financial Statements”, based on relevant information and
the 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 spot
exchange rate at the transaction date at initial recognition. At the balance sheet date, monetary items denominated in foreign currency
are translated at the spot exchange rate at the balance sheet date with difference, except for those arising from the principal and
interest of exclusive borrowings eligible for capitalization, included in profit or loss; non-cash items carried at historical costs are
translated at the approximate exchange rate similar to the spot exchange rate at the transaction date, with the RMB amounts
unchanged; non-cash items 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, other
than undistributed profit, are translated at the spot rate at the transaction date; the revenues and expenses in the income statement are
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translated 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 value
through profit or loss; (2) financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when
the continuing involvement approach applies; (3) financial guarantee contracts not fall within the above categories (1) and (2), and
commitments to provide a loan at a below-market interest rate, which do not fall within the above category (1); (4) financial
liabilities at 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 financial
assets and financial liabilities initially recognized by the Company are measured at fair value; for the financial assets and liabilities at
fair value through profit or loss, the transaction expenses thereof are directly included in profit or loss; for other categories of
financial assets and financial liabilities, the transaction expenses thereof are included into the initially recognized amount. However,
at initial recognition, for accounts receivable that do not contain a significant financing component or in circumstances where the
Company does not consider the financing components in contracts within one year, the Company measures the transaction price in
accordance with “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 assets
that are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when the financial
assets 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 on
foreign exchange that calculated using effective interest method shall be included into profit or loss, while other gains or losses are
included into other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive income
should be transferred out into 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
cost recovery) shall be included into profit or loss, while other gains or losses are included into other comprehensive income.
Accumulated gains or losses that initially recognized as other comprehensive income should be transferred out into retained earnings
when the financial 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 and
dividends) 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 are
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liabilities) 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 own
credit risk shall be included into other comprehensive income, unless such treatment would create or enlarge accounting mismatches
in profit or loss. Other gains or losses on those financial liabilities (including interests, changes in fair value that are attributable to
reasons other than changes in the Company’s own credit risk) shall be included into profit or loss, except for financial liabilities that
are part of hedging relationships. Accumulated gains or losses that originally recognized as other comprehensive income should be
transferred 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 continuing
involvement approach applies
The 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-market
interest 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 impairment
requirements of financial instruments; b. the amount initially recognized less the amount of accumulated amortization recognized in
accordance 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
liabilities that are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when the
financial liabilities 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; or
b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with “CASBE 23 – Transfer of
Financial Assets”.
2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the financial liability be
derecognized 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, it
derecognizes 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
the financial asset. Where the Company does not transfer or retain substantially all of the risks and rewards related to the ownership
of a financial asset, it is dealt with according to the circumstances as follows respectively: (1) if the Company does not retain its
control over the financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is recognized
independently as an asset or a liability; (2) if the Company retains its control over the financial asset, according to the extent of its
continuing involvement in the transferred financial asset, it recognizes the related financial asset and recognizes the relevant liability
accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the amounts of the
following two items is included in profit or loss: (1) the carrying amount of the transferred financial asset as of the date of
derecognition; (2) the sum of consideration received from the transfer of the financial asset, and the accumulative amount of the
changes of the fair value originally included in other comprehensive income proportionate to the transferred financial asset (financial
assets transferred refer to debt instrument investments at fair value through other comprehensive income). If the transfer of financial
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asset partially satisfies the conditions 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 of the following two items is included into profit or loss: (1) the carrying amount of the portion
which is derecognized; (2) the sum of consideration of the portion which is derecognized, and the portion of the accumulative
amount of the changes in the fair value originally included in other comprehensive income which is corresponding to the portion
which is derecognized (financial assets transferred refer to debt instrument investments at fair value through other comprehensive
income).
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 are
available to measure fair value. The inputs to valuation techniques used to measure fair value are arranged in the following hierarchy
and used accordingly:
(1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the
measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for
identical or similar assets 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
cannot be corroborated by observable market data at commonly quoted intervals, historical volatility, future cash flows to be paid to
fulfill the disposal 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 instrument
investments at fair value through other comprehensive income, contract assets, leases receivable, loan commitments other than
financial liabilities at fair value through profit or loss, financial guarantee contracts not belong to financial liabilities at fair value
through profit or loss or financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when
the continuing involvement 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
and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate.
Among which, 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 initial
recognition 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
financial instrument has increased significantly since initial recognition. The Company shall measure the loss allowance for the
financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has
increased significantly since initial recognition; otherwise, the Company shall measure the loss allowance for that financial
instrument at an amount equal to 12-month expected credit loss.
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Considering reasonable and supportable forward-looking information, the Company compares the risk of a default occurring on the
financial 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 the
financial 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 the
Company 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 allowance
arising therefrom shall be included into profit or loss as impairment losses or gains. For a financial asset measured at amortized cost,
the loss allowance reduces the carrying amount of such financial asset presented in the balance sheet; for a debt investment measured
at fair value through other comprehensive income, the loss allowance shall be recognized in other comprehensive income and shall
not reduce 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
Other receivables – Portfolio grouped
Based on historical credit loss experience, the
with VAT refund receivable
Nature of receivables current situation and the forecast of future
Other receivables – Portfolio grouped
economic conditions, the Company calculates
with land bond receivable
expected credit loss through exposure at
Other receivables – Portfolio grouped
default and 12-month or lifetime expected
with deposits receivable from customs
credit loss rate.
and tax authorities
Other receivables – Portfolio grouped Ages
with 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
Based on historical credit loss experience, the
Bank acceptance receivable
current situation and the forecast of future
Type of notes economic conditions, the Company calculates
Trade acceptance receivable expected credit loss through exposure at
default and lifetime expected credit loss rate.
Based on historical credit loss experience, the
current situation and the forecast of future
economic conditions, the Company prepares
Accounts receivable – Portfolio grouped Ages the comparison table of ages and lifetime
with ages
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
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offsets a 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 the
associated 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-down
are made on the excess of its cost over the net realizable value. The net realizable value of inventories held for sale is determined
based on the amount of the estimated selling price less the estimated selling expenses and relevant taxes and surcharges in the
ordinary course of business; the net realizable value of materials to be processed is determined based on the amount of the estimated
selling price less the estimated costs of completion, selling expenses and relevant taxes and surcharges in the ordinary course of
business; at the balance sheet date, when only part of the same item of inventories have agreed price, their net realizable value are
determined separately and are 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. 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 be
presented 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
conditional on 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
amount is due) from the customer as a contract liability.
12. 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 relevant
activities require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the
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financial and 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 the
carrying amount of the equity of the combined party included in the consolidated financial statements of the ultimate controlling
party as the initial cost of the investment. The difference between the initial cost of the long-term equity investments and the carrying
amount of the combination consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve
is insufficient 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
Company determines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as a whole are considered as one
transaction in accounting 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 controlling party. The difference between the initial investment cost of long-term equity investments at the acquisition
date and the carrying amount of the previously held long-term equity investments plus the carrying amount of the consideration paid
for the newly acquired equity is 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 of
considerations paid.
When long-term equity investments are obtained through business combination not under common control achieved in stages, the
Company 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 held
long-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 “bundled
transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, the
carrying amount of the acquirer’s previously held equity interest in the acquiree is remeasured at the acquisition-date fair value, and
the difference between the fair value and the carrying amount is recognized in investment income; when the acquirer’s previously
held equity interest in the acquiree involves other comprehensive income under equity method, the related other comprehensive
income is reclassified as income for the acquisition period, excluding other comprehensive income arising from changes in net
liabilities or assets from 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 equity
investment obtained by making payment in cash is the purchase cost which is actually paid; that obtained on the basis of issuing
equity securities is the fair value of the equity securities issued; that obtained through debt restructuring is determined according to
“CASBE 12 – Debt Restructuring”; and that obtained through non-cash assets exchange is determined according to “CASBE 7 –
Non-cash Assets 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
with joint control or significant influence relationship, it is accounted for with equity method.
4. Disposal of a subsidiary in stages resulting in the Company’s loss of control
(1) Stand-alone financial statements
The difference between the carrying amount of the disposed equity and the consideration obtained thereof is recognized in profit or
loss. If the disposal does not result in the Company’s loss of significant influence or joint control, the remained equity is accounted
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for with equity method; however, if the disposal results in the Company’s loss of control, joint control, or significant influence, the
remained 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 control
Before the Company’s loss of control, the difference between the disposal consideration and the proportionate share of net assets in
the disposed subsidiary from acquisition date or combination date to the disposal date is adjusted to capital reserve (capital premium),
if the 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 of
disposal consideration and the fair value of the remained equity, less the share of net assets in the disposed subsidiary held before the
disposal from the acquisition date or combination date to the disposal date is recognized in investment income in the period when the
Company loses control over such subsidiary, and meanwhile goodwill is offset correspondingly. Other comprehensive income related
to 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 control
In 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
proportionate share of net assets in the disposed subsidiary is recognized as other comprehensive income at the consolidated financial
statements and reclassified as profit or loss in the period when the Company loses control over such subsidiary.
13. 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
administrative purposes, and expected to be used during more than one accounting year. Fixed assets are recognized if, and only if, it
is probable that future 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 Residual value Annual depreciation rate
(years) proportion (%) (%)
Buildings and structures Straight-line method 7-35 5 13.57-2.71
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
(3) Recognition basis, measurement and depreciation method of fixed assets leased in finance leases
None.
14. 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 flow
to the Company, and the cost of the item can be measured reliably. Construction in progress is measured at the actual cost incurred to
reach 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 the
auditing of the construction in progress was not finished while reaching the designed usable conditions, it is transferred to fixed
assets using estimated value first, and then adjusted accordingly when the actual cost is settled, but the accumulated depreciation is
not to be adjusted retrospectively.
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15. 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 of
assets eligible for capitalization, it is capitalized and included in the costs of relevant assets; other borrowing costs are recognized as
expenses 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 already
incurred; 2) the borrowing costs have already incurred; and 3) the acquisition and construction or production activities which are
necessary 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 abnormally
and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs is suspended; the borrowing costs
incurred during such period are recognized as expenses, and are included in profit or loss, till the acquisition and construction or
production of the asset restarts.
(3) Ceasing of capitalization: when the qualified asset under acquisition and construction or production is ready for the intended use
or sale, 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-capitalized amount of interests is determined in light of the actual interest expenses incurred (including amortization of
premium or discount based on effective interest method) of the special borrowings in the current period less the interest income on
the unused borrowings as a deposit in the bank or as a temporary investment; where a general borrowing is used for the acquisition
and construction or production of assets eligible for capitalization, the Company calculates and determines the to-be-capitalized
amount of interests on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative
asset disbursements less the general borrowing by the capitalization rate of the general borrowing used.
16. 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 is
based on its cost.
2. For intangible assets with finite useful lives, their amortization amounts are amortized within their useful lives systematically and
reasonably, if it is unable to determine the expected realization pattern reliably, intangible assets are amortized by the straight-line
method 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 asset
arising from the development phase of an internal project is recognized if the Company can demonstrate all of the followings: (1) the
technical feasibility of completing the intangible asset so that it will be available for use or sale; (2) its intention to complete the
intangible asset and use or sell it; (3) how the intangible asset will generate probable future economic benefits, among other things,
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the Company can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to
be used internally, the usefulness of the intangible asset; (4) the availability of adequate technical, financial and other resources to
complete the development and to use or sell the intangible asset; and (5) its ability to measure reliably the expenditure attributable to
the intangible asset during its development.
17. 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 assets
with 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
indication of impairment, impairment test is performed annually. Impairment test on goodwill is performed on related asset group or
asset group portfolio.
When the recoverable amount of such long-term assets is lower than their carrying amount, the difference is recognized as provision
for assets impairment through profit or loss.
18. Long-term prepayments
Long-term prepayments are expenses that have been recognized but with amortization period over one year (excluding one year).
They are recorded with actual cost, and evenly amortized within the beneficiary period or stipulated period. If items of long-term
prepayments fail to be beneficial to the following accounting periods, residual values of such items are included in profit or loss.
19. Employee benefits
(1) Employee benefits include short-term employee benefits, post-employment benefits, termination benefits
and other long-term employee benefits.
(2) Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service, short-term employee benefits actually
incurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset.
(3) 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 defined
contribution 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 estimate
related demographic variables and financial variables, measure the obligations under the defined benefit plan, and determine the
periods to which the obligations are attributed. Meanwhile, the Company discounts obligations under the defined benefit plan to
determine the present 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
benefit plan assets from the present value of the defined benefit plan obligation as a net defined benefit plan liability or net defined
benefit plan asset. When a defined benefit plan has a surplus, the Company measures the net defined benefit plan asset at the lower of
the surplus 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
benefit plan: a. service cost; b. net interest on the net defined benefit plan liability (asset); and c. changes as a result of
remeasurement of the net 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 recognized in other comprehensive income and is not to be reclassified subsequently to profit or loss. However, the
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Company may transfer those amounts recognized in other comprehensive income within equity.
(4) Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability for termination benefits, with a
corresponding charge to profit or loss at the earlier of the following dates: a. when the Company cannot unilaterally withdraw the
offer of termination benefits because of an employment termination plan or a curtailment proposal; or b. when the Company
recognizes cost or expenses related to a restructuring that involves the payment of termination benefits.
(5) Other long-term employee benefits
When other long-term employee benefits provided to the employees satisfied the conditions for classifying as a defined contribution
plan, those benefits are accounted for in accordance with the requirements relating to defined contribution plan, while other benefits
are accounted for in accordance with the requirements relating to defined benefit plan. The Company recognizes the cost of employee
benefits arising from other long-term employee benefits as the followings: a. service cost; b. net interest on the net liability or net
assets of other long-term employee benefits; and c. changes as a result of remeasurement of the net liability or net assets of other
long-term employee benefits. As a practical expedient, the net total of the aforesaid amounts is recognized in profit or loss or
included in the cost of a relevant asset.
20. 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, and
determine 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
obligation is satisfied at a point in time: (1) the customer simultaneously receives and consumes the economic benefits provided by
the Company’s performance 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 payments for 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
towards complete satisfaction of that performance obligation. In the circumstance that the progress cannot be measured reasonably,
but the costs incurred in satisfying the performance obligation are expected to be recovered, the Company shall recognize revenue
only to the extent 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 determine whether the customer has obtained control of goods, the Company shall consider the following indications: (1) the
Company has a present right to payment for the goods, i.e., the customer is presently obliged to pay for the goods; (2) the Company
has transferred the legal title of the goods to the customer, i.e., the customer has legal title to the goods; (3) the Company has
transferred physical possession of the goods to the customer, i.e., the customer has physically possessed the goods; (4) the Company
has transferred significant risks and rewards of ownership of the goods to the customer, i.e., the customer has obtained significant
risks and rewards of ownership of the goods; (5) the customer has accepted the goods; (6) other evidence indicating the customer has
obtained control over 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 price
is 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 variable
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consideration at expected value or the most likely amount. However, the transaction price that includes the amount of variable
consideration only to the extent that it is high probable that a significant reversal in the amount of cumulative revenue recognized
will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
(3) In the circumstance that the contract contains a significant financing component, the Company shall determine the transaction
price based 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
method over contractual period. The effects of a significant financing component shall not be considered if the Company expects, at
the contract inception, that the period between when the customer obtains control over goods or services and when the customer pays
consideration will be one year or less.
(4) For contracts containing two or more performance obligations, the Company shall determine the stand-alone selling price at
contract inception of the distinct good underlying each performance obligation and allocate the transaction price to each performance
obligation on 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 performance
obligations satisfied at a point in time. Revenue from domestic sales is recognized when the Company has delivered goods to the
customer as agreed by contract and has obtained delivery note signed by the customer, 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. Revenue from
overseas sales is recognized when the Company has declared goods to the customs based on contractual agreements and has obtained
a 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 the
Company has delivered properties to the customer as agreed by contract and has obtained the client acceptance receipts signed by the
customer, 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.
Differences in accounting policies on revenue recognition due to the adoption of different business models for similar businesses
None.
21. Government grants
1. Government grants shall be recognized if, and only if, the following conditions are all met: (1) the Company will comply with the
conditions attaching to the grants; (2) the grants will be received. Monetary government grants are measured at the amount received
or receivable. Non-monetary government grants are measured at fair value, and can be measured at nominal amount in the
circumstance that 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
assets under requirements of government. In the circumstances that there is no specific government requirement, the Company shall
determine based on the primary condition to acquire the grants, and government grants related to assets are government grants whose
primary condition is to construct or otherwise acquire long-term assets. They offset carrying amount of relevant assets, or they are
recognized as deferred income. If recognized as deferred income, they are included in profit or loss on a systematic basis over the
useful lives of the relevant assets. Those measured at notional amount are directly included into profit or loss. For assets sold,
transferred, disposed or damaged within the useful lives, balance of unamortized deferred income is transferred into profit or loss of
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the period in which the disposal 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
both parts related to assets and parts related to income, in which those two parts are blurred, they are thus collectively classified as
government grants related to income. For government grants related to income used for compensating the related future cost,
expenses or losses, they are recognized as deferred income and included in profit or loss or used to offset relevant cost during the
period in which the 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
based on business nature, while those not related to the ordinary course of business shall be included into non-operating revenue or
expenditures.
5. Policy interest subvention
(1) In the circumstance that government appropriates interest subvention to lending bank, who provides loans for the Company with a
policy subsidised interest rate, borrowings are carried at the amount received, with relevant borrowings cost computed based on the
principal and the policy subsidised interest rate.
(2) In the circumstance that government directly appropriates interest subvention to the Company, the subsidised interest shall offset
relevant borrowing cost.
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
and tax base of assets and liabilities (and the difference of the carrying amount and tax base of items not recognized as assets and
liabilities but with their tax base being able to be determined according to tax laws) and in accordance with the tax rate applicable to
the period during 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 can
be deducted from the deductible temporary difference. At the balance sheet date, if there is any exact evidence that it is probable that
future taxable income will be available against which deductible temporary differences can be utilized, the deferred tax assets
unrecognized 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 is
reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow the benefit of the deferred
tax asset to be utilized. Such reduction is subsequently reversed to the extent that it becomes probable that sufficient taxable income
will 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 those
arising 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, which
shall not contain a purchase option; the Company recognizes a lease as a lease of a low-value asset if the underlying asset is of low
value 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
a low-value asset.
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For all short-term leases and leases of low-value assets, lease payments are recognized as cost or profit or loss with straight-line
method/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 recognizes
right-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
incurred by the lessee; and 4) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset,
restoring the site 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 the right-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 lease term.
(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 at
that date, discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the Company’s incremental
borrowing rate shall be used. Unrecognized financing expenses, calculated at the difference between the lease payment and its
present value, are recognized as interest expenses over the lease term using the discount rate which has been used to determine the
present value of lease payment and included in profit or loss. Variable lease payments not included in the measurement of lease
liabilities are included in profit or loss in the periods in which they are incurred.
After the commencement date, if there is a change in the following items: a. actual fixed payments; b. amounts expected to be
payable under residual value guarantees; c. an index or a rate used to determine lease payments; d. assessment result or exercise of
purchase option, extension option or termination option., the Company remeasures the lease liability based on the present value of
lease payments after changes, and adjusts the carrying amount of the right-of-use asset accordingly. If the carrying amount of the
right-of-use asset is reduced 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 rewards
incidental to ownership of an underlying asset. Otherwise, it is classified as an operating lease.
Operating lease
Lease receipts are recognized as lease income with straight-line method/unit-of-production method over the lease term. Initial direct
costs incurred shall be capitalized, amortized on the same basis as the recognition of lease income, and included into profit or loss by
installments. Variable lease payments related to operating lease which are not included in the lease payment are charged as profit or
loss 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 Work
Safety Fund” numbered Cai Qi [2012] 16 by Ministry of Finance and State Administration of Work Safety. Standard work safety
fund is included in the cost or current profit or loss, meanwhile accounted for under “special reserve”. When work safety fund is used
as an expense, it is to offset special reserve directly. When work safety fund is qualified to be included in the cost of fixed assets, it is
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2021 Annual Report of Zhejiang NHU Co., Ltd.
accounted for under “construction in progress” and transferred to fixed assets when related safety projects reach the designed useful
conditions; meanwhile, the cost included in fixed assets is to offset “special reserve”, and accumulated depreciation shall be
recognized at 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 and
internal 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 the
segment 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
purchased shares 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 existing shareholders for repurchase is to reduce capital reserve, or retained earnings when the capital reserve is not
enough to reduce. If the Company repurchases vested equity instruments in equity-settled share-based payment transactions with
employees, cost of treasury shares granted to employees and capital reserve (other capital reserve) accumulated within the vesting
period are to be written off on the 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 has adopted the “CASBE 21 – Leases”
revised by the Ministry of Finance (the “revised lease
standard”) since January 1, 2021. Pursuant to regulations on
Please refer to Announcement No.
convergence between original and revised standards, no
N/A 2021-027 disclosed on
adjustment shall be made on comparable information, and
www.cninfo.com.cn on August 20,
the difference arising from adoption on the first adoption
2021 for details.
date shall be retrospectively adjusted into retained earnings
and other comprehensive income at the beginning of the
reporting period.
Changes in accounting policies arising from changes in CASBEs
1. The Company has adopted revised lease standard since January 1, 2021 (the “first adoption date”).
1) For the contract existed prior to the first adoption date, the Company does not reassess whether it is, or contains, a lease.
2) For lease contracts with the Company as lessee, the cumulative effect arising from adoption of the revised lease standard at the
first adoption date shall be retrospectively adjusted into retained earnings and other related financial statement items at the beginning
of the reporting period, and no adjustment shall be made on comparable information. The specific treatments are as follows:
For operating leases prior to the first adoption date, the Company measures lease liabilities at the present value of remaining lease
payments, which are discounted using the incremental borrowing rate at the first adoption date, and measures right-of-use assets at
the amount equivalent to lease liabilities through necessary adjustments based on prepaid leasing fees at the first adoption date.
At the first adoption date, pursuant to section V (17) of this section, the Company performs impairment test on right-of-use assets and
conducts corresponding accounting treatments.
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a. Main effects on the financial statements as at January 1, 2021 due to the adoption of the revised lease standard are as follows:
Unit: RMB Yuan
Consolidated balance sheet
Items
Dec. 31, 2020 Effect due to revised lease Jan. 1, 2021
standard
Right-of-use assets 3,113,997.88 3,113,997.88
Non-current liabilities due within one 1,275,888,293.32 92,628.26 1,275,980,921.58
year
Lease liabilities 3,021,369.62 3,021,369.62
Unit: RMB Yuan
Parent company balance sheet
Items
Dec. 31, 2020 Effect due to revised lease Jan. 1, 2021
standard
Right-of-use assets 3,113,997.88 3,113,997.88
Non-current liabilities due within one 635,930,890.44 92,628.26 636,023,518.70
year
Lease liabilities 3,021,369.62 3,021,369.62
The weighted average of the Company’s incremental borrowing rates used for lease liabilities included in the balance sheet at the
first adoption date is 4.75%.
b. Simplified approach is adopted for operating leases prior to the first adoption date.
a) For lease contracts completed within 12 months after the first adoption date, the Company adopts a simplified approach and does
not recognize right-of-use assets and lease liabilities;
b) The Company applies a single discount rate to a portfolio of leases with similar characteristics when measuring lease liabilities;
The adoption of the above simplified approach has no significant effect on the Company’s financial statements.
3) For lease contracts in which the Company as the lessor, the revised lease standard is adopted since the first adoption date.
2. The Company has adopted the “Interpretation of China Accounting Standards for Business Enterprises No. 14” issued by the
Ministry of Finance in 2021 since January 26, 2021. Such change in accounting policies has no impact on the Company’s financial
statements.
3. The Company has adopted the regulations about disclosure of centralized fund management in the “Interpretation of China
Accounting Standards for Business Enterprises No. 15” issued by the Ministry of Finance since December 31, 2021. Such change in
accounting policies has no impact on the Company’s financial statements.
(2) Significant changes in accounting estimates
□ Applicable √ Not Applicable
(3) Details on financial statement items at the beginning of the period adjusted due to the first adoption of
the revised lease standard in 2021
√ Applicable □ Not Applicable
Whether it is necessary to adjust the opening balance of balance sheet items
√ Yes □ No
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Consolidated balance sheet
Unit: RMB Yuan
Items December 31, 2020 January 1, 2021 Adjustments
Current assets:
Cash and bank balances 4,927,657,236.24 4,927,657,236.24
Settlement funds
Loans to other banks
Held-for-trading financial assets 852,227,964.70 852,227,964.70
Derivative financial assets
Notes receivable 332,064,366.59 332,064,366.59
Accounts receivable 1,930,930,930.01 1,930,930,930.01
Receivables financing 295,393,346.17 295,393,346.17
Advances paid 116,063,557.59 116,063,557.59
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 178,610,951.64 178,610,951.64
Including: Interest receivable
Dividend receivable
Financial assets under reverse repo
Inventories 3,117,042,558.78 3,117,042,558.78
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 1,777,569,473.96 1,777,569,473.96
Total current assets 13,527,560,385.68 13,527,560,385.68
Non-current assets:
Loans and advances
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 343,378,891.18 343,378,891.18
Other equity instrument investments 22,998,147.55 22,998,147.55
Other non-current financial assets
Investment property
Fixed assets 13,914,151,215.54 13,914,151,215.54
Construction in progress 1,325,545,420.56 1,325,545,420.56
Productive biological assets
Oil & gas assets
Right-of-use assets 3,113,997.88 3,113,997.88
Intangible assets 1,407,067,129.87 1,407,067,129.87
Development expenditures
Goodwill
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2020 January 1, 2021 Adjustments
Long-term prepayments 13,369,412.48 13,369,412.48
Deferred tax assets 65,143,706.00 65,143,706.00
Other non-current assets 277,793,490.68 277,793,490.68
Total non-current assets 17,369,447,413.86 17,372,561,411.74 3,113,997.88
Total assets 30,897,007,799.54 30,900,121,797.42 3,113,997.88
Current liabilities:
Short-term borrowings 2,363,525,192.53 2,363,525,192.53
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 497,644,517.23 497,644,517.23
Accounts payable 1,463,728,316.04 1,463,728,316.04
Advances received
Contract liabilities 56,302,537.11 56,302,537.11
Financial liabilities under repo
Absorbing deposit and interbank
deposit
Deposit for agency security transaction
Deposit for agency security
underwriting
Employee benefits payable 322,646,061.45 322,646,061.45
Taxes and rates payable 268,864,472.38 268,864,472.38
Other payables 129,839,228.89 129,839,228.89
Including: Interest payable
Dividend payable
Handling fee and commission payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one 1,275,888,293.32 1,275,980,921.58 92,628.26
year
Other current liabilities 4,956,463.49 4,956,463.49
Total current liabilities 6,383,395,082.44 6,383,487,710.70
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 4,136,875,354.33 4,136,875,354.33
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 3,021,369.62 3,021,369.62
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 873,066,181.34 873,066,181.34
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2020 January 1, 2021 Adjustments
Deferred tax liabilities 99,839,731.45 99,839,731.45
Other non-current liabilities
Total non-current liabilities 5,109,781,267.12 5,112,802,636.74 3,021,369.62
Total liabilities 11,493,176,349.56 11,496,290,347.44 3,113,997.88
Equity:
Share capital 2,148,662,300.00 2,148,662,300.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 4,560,522,556.84 4,560,522,556.84
Less: Treasury shares
Other comprehensive income 27,803,829.31 27,803,829.31
Special reserve 9,550,346.85 9,550,346.85
Surplus reserve 1,074,331,150.00 1,074,331,150.00
General risk reserve
Undistributed profit 11,515,384,739.95 11,515,384,739.95
Total equity attributable to the parent 19,336,254,922.95 19,336,254,922.95
company
Non-controlling interest 67,576,527.03 67,576,527.03
Total equity 19,403,831,449.98 19,403,831,449.98
Total liabilities & equity 30,897,007,799.54 30,900,121,797.42 3,113,997.88
Remarks on adjustments
Pursuant to the “CASBE 21 – Leases” issued by the Ministry of Finance in 2018 (Cai Kuai [2018] No. 35), the Company has adopted
the revised lease standard since January 1, 2021 and makes adjustments on related financial statement items.
Parent company balance sheet
Unit: RMB Yuan
Items December 31, 2020 January 1, 2021 Adjustments
Current assets:
Cash and bank balances 2,790,740,377.97 2,790,740,377.97
Held-for-trading financial assets 851,949,945.63 851,949,945.63
Derivative financial assets
Notes receivable 332,064,366.59 332,064,366.59
Accounts receivable 704,086,691.03 704,086,691.03
Receivables financing
Advances paid 1,631,550.49 1,631,550.49
Other receivables 4,247,680,763.92 4,247,680,763.92
Including: Interest receivable
Dividend receivable
Inventories 566,205,506.19 566,205,506.19
Contract assets
Assets held for sale
Non-current assets due within one year
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2020 January 1, 2021 Adjustments
Other current assets 552,859,738.36 552,859,738.36
Total current assets 10,047,218,940.18 10,047,218,940.18
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 6,372,637,172.92 6,372,637,172.92
Other equity instrument investments 22,998,147.55 22,998,147.55
Other non-current financial assets
Investment property
Fixed assets 737,784,631.31 737,784,631.31
Construction in progress
Productive biological assets
Oil & gas assets
Right-of-use assets 3,113,997.88 3,113,997.88
Intangible assets 105,425,506.93 105,425,506.93
Development expenditures
Goodwill
Long-term prepayments 5,919,401.23 5,919,401.23
Deferred tax assets 42,345,228.44 42,345,228.44
Other non-current assets 7,202,988.32 7,202,988.32
Total non-current assets 7,294,313,076.70 7,297,427,074.58 3,113,997.88
Total assets 17,341,532,016.88 17,344,646,014.76 3,113,997.88
Current liabilities:
Short-term borrowings 1,243,628,965.48 1,243,628,965.48
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 155,953,161.50 155,953,161.50
Accounts payable 100,374,347.92 100,374,347.92
Advances received
Contract liabilities 8,494,783.78 8,494,783.78
Employee benefits payable 82,688,797.50 82,688,797.50
Taxes and rates payable 33,578,246.55 33,578,246.55
Other payables 15,543,517.50 15,543,517.50
Including: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due within one 635,930,890.44 636,023,518.70 92,628.26
year
Other current liabilities 1,104,321.89 1,104,321.89
Total current liabilities 2,277,297,032.56 2,277,389,660.82
Non-current liabilities:
Long-term borrowings 2,209,521,076.40 2,209,521,076.40
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2020 January 1, 2021 Adjustments
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 3,021,369.62 3,021,369.62
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 18,884,041.56 18,884,041.56
Deferred tax liabilities 13,011,703.03 13,011,703.03
Other non-current liabilities
Total non-current liabilities 2,241,416,820.99 2,244,438,190.61 3,021,369.62
Total liabilities 4,518,713,853.55 4,521,827,851.43 3,113,997.88
Equity:
Share capital 2,148,662,300.00 2,148,662,300.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 4,300,852,875.45 4,300,852,875.45
Less: Treasury shares
Other comprehensive income 506,954.43 506,954.43
Special reserve
Surplus reserve 1,074,331,150.00 1,074,331,150.00
Undistributed profit 5,298,464,883.45 5,298,464,883.45
Total equity 12,822,818,163.33 12,822,818,163.33
Total liabilities & equity 17,341,532,016.88 17,344,646,014.76 3,113,997.88
Remarks on adjustments
Pursuant to the “CASBE 21 – Leases” issued by the Ministry of Finance in 2018 (Cai Kuai [2018] No. 35), the Company has adopted
the revised lease standard since January 1, 2021 and makes adjustments on related financial statement items.
(4) Remarks on retrospective adjustments on comparable information of prior period due to the first
adoption of the revised lease standard in 2021
□ Applicable √ Not Applicable
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2021 Annual Report of Zhejiang NHU Co., Ltd.
VI. Taxes
1. Main taxes and tax rates
Taxes Tax bases Tax rates
13%, 9%, 6%, 5% and 19%; export goods enjoy the
The output tax calculated based on the
“exemption, credit and refund” policy and the refund
revenue from sales of goods or rendering
Value-added tax (VAT) rate ranges from 0% to 13%; the subsidiary Zhejiang
of services in accordance with the tax
NHU Import & Export Co., Ltd. enjoys the “refund
law, net of the input tax that is allowed to
upon collection” policy and the refund rate ranges
be deducted in the current period
from 0% to 13%.
A four-grade progressive tax system is adopted. The
rates are: 30% for appreciated value not over 50% of
The incremental amount arising from the total deductible amount; 40% for appreciated value
Land appreciation tax transfer of state-owned land use right and over 50% but not over 100% of total deductible
the buildings and structures that are amount; 50% for appreciated value over 100% but
constructed on the land not over 200% of total deductible amount; and 60%
for appreciated value over 200% of total deductible
amount.
For housing property levied on the basis
of price, housing property tax is levied at
the rate of 1.2% of the balance after
Housing property tax deducting 30% of the cost; for housing 1.2%, 12%
property levied on the basis of rent,
housing property tax is levied at the rate
of 12% of rent revenue.
Urban maintenance and Turnover tax actually paid 5%, 7%
construction tax
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%
Enterprise income tax Taxable income 15%, 17%, 25%
Note: The subsidiaries NHU EUROPE GmbH, NHU PERFORMANCE MATERIALS GMBH and Bardoterminal GmbH are subject
to 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%
NHU EUROPE GmbH 15%
NHU PERFORMANCE MATERIALS GMBH 15%
Bardoterminal GmbH 15%
NHU Singapore PTE. LTD. 17%
Taxpayers other than the above-mentioned 25%
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2021 Annual Report of Zhejiang NHU Co., Ltd.
2. Tax preferential policies
According to the Hi-Tech Enterprise Certificate (GR202033003531) issued by Zhejiang Provincial Department of Science and
Technology, 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
the rate of 15% for enterprise income tax in 2021.
According to the Hi-Tech Enterprise Certificate (GR201933005736) issued by Zhejiang Provincial Department of Science and
Technology, 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 2019 to 2021. It is
subject to the rate of 15% for enterprise income tax in 2021.
According to the Hi-Tech Enterprise Certificate (GR202037001084) issued by Department of Science and Technology of Shandong
Province, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary Shandong NHU
Pharmaceutical Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2020 to 2022. It is
subject to the rate of 15% for enterprise income tax in 2021.
According to the Hi-Tech Enterprise Certificate (GR202037000197) issued by Department of Science and Technology of Shandong
Province, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary Shandong NHU
Vitamins Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2020 to 2022. It is
subject to the rate of 15% for enterprise income tax in 2021.
According to the Hi-Tech Enterprise Certificate (GR202137000086) issued by Department of Science and Technology of Shandong
Province, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary Shandong NHU
Amino Acid 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 2021.
According to the Hi-Tech Enterprise Certificate (GR202133008939) issued by Zhejiang Provincial Department of Science and
Technology, Zhejiang Provincial Department of Finance and Zhejiang Provincial Tax Service, STA, the subsidiary Zhejiang NHU
Special Materials 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 2021.
According to the Hi-Tech Enterprise Certificate (GR202123000560) issued by Heilongjiang Provincial Department of Science and
Technology, Heilongjiang Provincial Department of Finance and Heilongjiang Provincial Tax Service, STA, the subsidiary
Heilongjiang 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 2021.
VII. Notes to items of consolidated financial statements
1. Cash and bank balances
Unit: RMB Yuan
Items Closing balance Opening balance
Cash on hand 14,537.85 10,735.55
Cash in bank 5,684,842,466.04 4,669,296,040.54
Other cash and bank balances 268,052,623.05 258,350,460.15
Total 5,952,909,626.94 4,927,657,236.24
Including: Deposited overseas 38,739,302.11 21,518,199.53
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Other remarks
(1) Other cash and bank balances
Unit: RMB Yuan
Items Closing balance Opening balance
Deposit for bank acceptance 149,724,511.46 233,849,274.66
Deposit for letters of credit 86,212,564.30 23,350,000.00
Deposit for engineering labor costs 1,654,664.15 741,108.87
Deposit for construction safety 405,056.50 404,076.62
Deposit for ETC 16,500.00 6,000.00
Deposit for water fees 358,792.30
Deposited investment fund 29,680,534.34
Subtotal 268,052,623.05 258,350,460.15
2. Held-for-trading financial assets
Unit: RMB Yuan
Items Closing balance Opening balance
Financial assets at fair value through profit 1,250,736,359.24 852,227,964.70
or loss
Including: Financial products with 1,250,000,000.00 850,000,000.00
guaranteed principal and floating income
Derivative financial assets 736,359.24 2,227,964.70
Total 1,250,736,359.24 852,227,964.70
3. Notes receivable
(1) Details on categories
Unit: RMB Yuan
Items Closing balance Opening balance
Bank acceptance 349,145,316.03 332,064,366.59
Total 349,145,316.03 332,064,366.59
Unit: RMB Yuan
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion
Including:
Notes receivable with provision for 349,145,316.03 100.00% 349,145,316.03
bad debts made on a collective basis
Including:
Bank acceptance 349,145,316.03 100.00% 349,145,316.03
Total 349,145,316.03 100.00% 349,145,316.03
Page 120 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion
Including:
Notes receivable with provision for 332,064,366.59 100.00% 332,064,366.59
bad debts made on a collective basis
Including:
Bank acceptance 332,064,366.59 100.00% 332,064,366.59
Total 332,064,366.59 100.00% 332,064,366.59
(2) Pledged notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance of pledged notes
Bank acceptance 236,268,835.12
Total 236,268,835.12
(3) Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance 3,050,000.00
Total 3,050,000.00
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little possibility of
failure 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,
according to the China Commercial Instrument Law.
4. Accounts receivable
(1) Details on categories
Unit: RMB Yuan
Closing balance
Categories 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 2,902,396,632.04 100.00% 147,228,058.90 5.07% 2,755,168,573.14
basis
Total 2,902,396,632.04 100.00% 147,228,058.90 5.07% 2,755,168,573.14
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2021 Annual Report of Zhejiang NHU Co., Ltd.
(Continued)
Opening balance
Categories 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 2,037,464,941.46 100.00% 106,534,011.45 5.23% 1,930,930,930.01
basis
Total 2,037,464,941.46 100.00% 106,534,011.45 5.23% 1,930,930,930.01
Accounts receivable with provision for bad debts made on a collective basis using age analysis method
Unit: RMB Yuan
Closing balance
Items
Book balance Provision for bad debts Provision proportion
Within 1 year 2,899,884,561.24 144,994,228.10 5.00%
1-2 years 297,000.00 59,400.00 20.00%
2-3 years 203,200.00 162,560.00 80.00%
Over 3 years 2,011,870.80 2,011,870.80 100.00%
Total 2,902,396,632.04 147,228,058.90 --
Ages analysis:
Unit: RMB Yuan
Ages Book balance
Within 1 year (inclusive) 2,899,884,561.24
1-2 years 297,000.00
2-3 years 203,200.00
Over 3 years 2,011,870.80
3-4 years 286,550.00
4-5 years 165,790.00
Over 5 years 1,559,530.80
Total 2,902,396,632.04
(2) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
Increase/Decrease
Categories Opening balance Closing balance
Accrual Recovery/ Write-off Others
Reversal
Provision made on a 106,534,011.45 40,694,047.45 147,228,058.90
collective basis
(3) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Debtors Closing balance Proportion to the total balance of Closing balance of provision for
receivables (%) bad debts
Client A 388,004,290.79 13.37% 19,400,214.54
Client B 313,899,385.63 10.82% 15,694,969.28
Client C 226,272,072.97 7.80% 11,313,603.65
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Debtors Closing balance Proportion to the total balance of Closing balance of provision for
receivables (%) bad debts
Client D 122,191,892.27 4.21% 6,109,594.61
Client E 83,097,860.00 2.86% 4,154,893.00
Total 1,133,465,501.66 39.06%
5. Receivables financing
Unit: RMB Yuan
Items Closing balance Opening balance
Bank acceptance 182,891,179.65 295,393,346.17
Total 182,891,179.65 295,393,346.17
Current increase/decrease and changes in fair value
√ Applicable □ Not applicable
Unit: RMB Yuan
Closing balance
Items
Initial cost Interest Interest Changes in fair Carrying amount Provision for
adjustment accrued value impairment
Bank acceptance 182,891,179.65 182,891,179.65
Total 182,891,179.65 182,891,179.65
(Continued)
Unit: RMB Yuan
Opening balance
Items
Initial cost Interest Interest Changes in fair Carrying amount Provision for
adjustment accrued value impairment
Bank acceptance 295,393,346.17 295,393,346.17
Total 295,393,346.17 295,393,346.17
Other remarks:
(1) Pledged notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance of pledged notes
Bank acceptance 131,943,711.14
Subtotal 131,943,711.14
(2) Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance derecognized
Bank acceptance 794,114,911.13
Subtotal 794,114,911.13
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little possibility of
failure 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,
according to the China Commercial Instrument Law.
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2021 Annual Report of Zhejiang NHU Co., Ltd.
6. Advances paid
(1) Age analysis
Unit: RMB Yuan
Closing balance Opening balance
Ages
Amount % to total Amount % to total
Within 1 year 78,853,695.19 99.85% 115,835,410.14 99.81%
1-2 years 109,065.41 0.14% 108,449.06 0.09%
2-3 years 7,200.00 0.01% 34,278.04 0.03%
Over 3 years 85,420.35 0.07%
Total 78,969,960.60 -- 116,063,557.59 --
(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 16,704,666.71 21.15
Supplier B 10,560,902.65 13.37
Supplier C 6,461,700.00 8.18
Supplier D 5,237,238.93 6.63
Supplier E 5,002,888.54 6.34
Subtotal 43,967,396.83 55.67
7. Other receivables
Unit: RMB Yuan
Items Closing balance Opening balance
Dividend receivable 7,159,278.00
Other receivables 247,337,970.13 178,610,951.64
Total 254,497,248.13 178,610,951.64
(1) Dividend receivable
Unit: RMB Yuan
Items/Investees Closing balance Opening balance
浙江春晖环保能源股份有限公司
(Zhejiang Chunhui Environmental 7,159,278.00 0.00
Protection Energy Co., Ltd.*)
Total 7,159,278.00 0.00
(2) Other receivables
1) Categorized by nature
Unit: RMB Yuan
Nature of receivables Closing book balance Opening book balance
Security deposits 136,459,247.48 126,960,566.33
Export tax refund 69,372,321.60 51,751,067.61
*
The English name is for identification purpose only.
Page 124 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Nature of receivables Closing book balance Opening book balance
Receivables of returned equipment 45,213,200.00
Refundable VAT 3,310,397.40 2,139,904.45
Employee petty cash 5,688,937.00 4,764,737.00
Temporary advance payment receivable 2,456,748.36 2,470,070.51
Others 653,640.31 584,839.49
Total 263,154,492.15 188,671,185.39
2) Provision for bad debts
Unit: RMB Yuan
Phase I Phase II Phase III
Provision for bad debts Total
12 month expected Lifetime expected credit Lifetime expected credit
credit losses losses (credit not impaired) losses (credit impaired)
Opening balance 573,660.51 1,522,658.59 7,963,914.65 10,060,233.75
Opening balance in the current
period
--Transferred to phase II -179,053.77 179,053.77
--Transferred to phase III -1,075,165.33 1,075,165.33
Provision made in the current 2,521,270.72 89,668.05 3,145,349.50 5,756,288.27
period
Closing balance 2,915,877.46 716,215.08 12,184,429.48 15,816,522.02
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) 139,999,021.92
1-2 years 3,581,075.41
2-3 years 10,375,826.67
Over 3 years 109,198,568.15
3-4 years 6,990,477.95
4-5 years 227,173.58
Over 5 years 101,980,916.62
Total 263,154,492.15
3) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
Increase/Decrease
Categories Opening balance Closing balance
Accrual Recovery/ Write-off Others
Reversal
Provision made on a 10,060,233.75 5,756,288.27 15,816,522.02
collective basis
Total 10,060,233.75 5,756,288.27 15,816,522.02
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2021 Annual Report of Zhejiang NHU Co., Ltd.
4) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Proportion to the total
Debtors Nature of receivables Book balance Ages balance of other Provision for bad debts
receivables (%)
Weifang Municipal
Bureau of Land and Security deposits 97,900,000.00 Over 3 years 37.20%
Resource, Binhai
District Branch
State Taxation
Administration Export tax refund 69,372,321.60 Within 1 year 26.36%
(Export tax refund
receivable)
无锡华光锅炉股份
有限公司 (Wuxi Receivables of 17,280,000.00 Within 1 year 6.57% 864,000.00
Huaguang Boiler returned equipment
Co., Ltd.*)
Suihua Municipal Security deposits 400,000.00 1-2 years 3.84% 9,188,392.42
Labor Security Security deposits 3,000,490.53 2-3 years
Supervision
Detachment Security deposits 6,708,000.00 Over 3 years
杭州汽轮机股份有
限公司 (Hangzhou Receivables of 7,440,000.00 Within 1 year 2.83% 372,000.00
Steam Turbine Co., returned equipment
Ltd.*)
Total -- 202,100,812.13 -- 76.80% 10,424,392.42
8. Inventories
(1) Details on categories
Unit: RMB Yuan
Closing balance Opening balance
Provision for Provision for
inventory inventory
Items write-down/ write-down/
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
impairment of impairment of
cost to fulfill a cost to fulfill a
contract contract
Raw materials 456,431,898.77 653,463.45 455,778,435.32 558,843,825.21 986,354.24 557,857,470.97
Work in process 1,008,021,313.66 1,008,021,313.66 820,838,241.10 820,838,241.10
Goods on hand 1,247,338,255.71 14,685,437.55 1,232,652,818.16 1,201,225,837.45 10,578,367.06 1,190,647,470.39
Development cost 197,045,414.10 197,045,414.10 294,084,933.10 294,084,933.10
Developed 122,679,279.65 122,679,279.65 129,785,192.22 129,785,192.22
products
Goods dispatched 88,307,137.99 88,307,137.99 50,257,257.15 50,257,257.15
Materials on
consignment for 4,102,415.43 4,102,415.43 4,033,866.34 4,033,866.34
further processing
Packages 14,276,697.20 14,276,697.20 15,062,156.67 15,062,156.67
Low-value 70,793,855.65 70,793,855.65 54,475,970.84 54,475,970.84
consumables
Total 3,208,996,268.16 15,338,901.00 3,193,657,367.16 3,128,607,280.08 11,564,721.30 3,117,042,558.78
*
The English names are for identification purpose only.
Page 126 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
(2) Inventories – Development cost
Unit: RMB Yuan
Items Estimated total investment Opening balance Closing balance
Boao NHU Resort 550 million 33,575,305.88 33,723,820.73
Weifang NHU Town Phase II 398.53 million 260,509,627.22 163,321,593.67
Subtotal 294,084,933.10 197,045,414.40
(3) Inventories – Developed products
Unit: RMB Yuan
Items Date of Opening balance Increase Decrease Closing balance
completion
Boao NHU Resort Center Dec. 2014 129,785,192.22 7,151,804.33 14,257,716.90 122,679,279.65
Subtotal 129,785,192.22 7,151,804.33 14,257,716.90 122,679,279.65
(4) Provision for inventory write-down and provision for impairment of cost to fulfill a contract
Unit: RMB Yuan
Increase Decrease
Items Opening balance Closing balance
Accrual Others Recovery/ Others
Reversal
Raw materials 986,354.24 332,890.79 653,463.45
Goods on hand 10,578,367.06 25,275,549.36 21,168,478.87 14,685,437.55
Total 11,564,721.30 25,275,549.36 21,501,369.66 15,338,901.00
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
Estimated selling price of relevant finished goods less Inventories with provision for inventory write-down
Raw materials cost to be incurred upon completion, estimated selling made at the beginning of period were used or sold
expenses, and relevant taxes and surcharges. in the current period.
Estimated selling price of relevant finished goods less Inventories with provision for inventory write-down
Goods on hand estimated selling expenses, and relevant taxes and made at the beginning of period were sold in the
surcharges. current period.
9. Other current assets
Unit: RMB Yuan
Items Closing balance Opening balance
Bank financial products and structured 550,000,000.00 950,000,000.00
deposits
Prepaid VAT or input VAT to be credited 336,963,113.65 817,273,751.05
Prepaid enterprise income tax 5,070,275.22 5,193,417.21
Prepaid insurance premiums 3,727,306.74 5,056,905.47
Prepaid housing rents 12,335.78
Prepaid urban maintenance and 10,786.63 16,532.22
construction tax
Prepaid education surcharge 6,472.01 9,919.36
Prepaid local education surcharge 4,314.62 6,612.87
Total 895,782,268.87 1,777,569,473.96
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10. Long-term equity investments
Unit: RMB Yuan
Increase/Decrease
Closing
Opening carrying Investment Adjustment in Closing carrying balance of
Investees Cash dividend/ Provision
amount Investments Investments income/losses other Changes in Others amount provision for
Profit declared for
increased decreased recognized under comprehensive other equity impairment
for distribution impairment
equity method income
I. Joint ventures
II. Associates
Zhejiang Chunhui
Environmental Protection 199,358,330.80 60,097,137.98 -9,727,015.88 40,855,278.00 208,873,174.90
Energy Co., Ltd.
Zhejiang Saiya Chemical 98,309,710.69 5,533,827.30 54,679.83 103,898,217.82
Materials Co., Ltd.
Zhejiang sanbo polymer
Co., Ltd
DSM NHU Engineering
Materials (Zhejiang) Co.,
Ltd.
山东滨安职业培训学校有
限公司 (Shandong Bin’an 6,391,064.12 -495,463.27 5,895,600.85
Vocational Training School
Co., Ltd.*) [Note]
CysBio ApS 39,319,785.57 -5,831,157.97 -827,995.42 32,660,632.18
Subtotal 343,378,891.18 59,304,344.04 -9,727,015.88 40,855,278.00 -773,315.59 351,327,625.75
Total 343,378,891.18 59,304,344.04 -9,727,015.88 40,855,278.00 -773,315.59 351,327,625.75
Other remarks:
Note: It was formerly named as 山东滨安科技有限公司 (Shandong Bin’an Technology Co., Ltd.*), and was renamed as Shandong
Bin’an Vocational Training School Co., Ltd. on December 15, 2021.
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
上海联创永津股权投资企业(有限合伙)
(Shanghai NewMargin Yongjin Eqiuty 15,208,000.00 15,208,000.00
Enterprise (LP)*)
Total 22,998,147.55 22,998,147.55
12. Fixed assets
Unit: RMB Yuan
Items Closing balance Opening balance
Fixed assets 14,318,919,487.82 13,914,151,215.54
Total 14,318,919,487.82 13,914,151,215.54
(1) Details
Unit: RMB Yuan
Items Buildings and Generali equipment Special equipment Transport facilities Total
structures
I. Cost:
1. Opening balance 5,471,048,302.28 148,005,902.83 12,294,355,532.66 25,738,968.49 17,939,148,706.26
2. Increase 836,601,746.21 41,934,813.54 769,353,236.08 1,122,543.76 1,649,012,339.59
(1) Acquisition 285,687,891.98 34,246,572.27 325,846,946.66 1,115,685.35 646,897,096.26
(2) Transferred in 294,766,526.21 7,688,241.27 443,506,289.42 6,858.41 745,967,915.31
*
The English names are for identification purpose only.
Page 128 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Items Buildings and Generali equipment Special equipment Transport facilities Total
structures
from construction in
progress
(3) Transferred in 256,147,328.02 256,147,328.02
from inventories
3. Decrease 14,245,770.31 4,030,191.07 103,102,272.08 1,768,165.93 123,146,399.39
(1) Disposal/ 14,245,770.31 4,030,191.07 103,102,272.08 1,768,165.93 123,146,399.39
Scrapping
4. Closing balance 6,293,404,278.18 185,910,525.30 12,960,606,496.66 25,093,346.32 19,465,014,646.46
II. Accumulated
depreciation
1. Opening balance 522,190,479.09 84,230,573.73 3,401,522,313.16 16,291,440.70 4,024,234,806.68
2. Increase 163,902,276.56 18,682,829.26 1,002,411,067.77 1,993,170.08 1,186,989,343.67
(1) Accrual 163,902,276.56 18,682,829.26 1,002,411,067.77 1,993,170.08 1,186,989,343.67
3. Decrease 5,313,720.12 3,774,660.44 84,623,998.89 1,143,718.22 94,856,097.67
(1) Disposal/ 5,313,720.12 3,774,660.44 84,623,998.89 1,143,718.22 94,856,097.67
Scrapping
4. Closing balance 680,779,035.53 99,138,742.55 4,319,309,382.04 17,140,892.56 5,116,368,052.68
III. Provision for
impairment
1. Opening balance 16,110.64 1,141.64 729,136.75 16,295.01 762,684.04
2. Increase 20,964,371.17 22,419.03 7,988,069.34 28,974,859.54
(1) Accrual 20,964,371.17 22,419.03 7,988,069.34 28,974,859.54
3. Decrease 10,437.62 10,437.62
(1) Disposal/ 10,437.62 10,437.62
Scrapping
4. Closing balance 20,980,481.81 23,560.67 8,706,768.47 16,295.01 29,727,105.96
IV. Carrying amount
1. Closing balance 5,591,644,760.84 86,748,222.08 8,632,590,346.15 7,936,158.75 14,318,919,487.82
2. Opening balance 4,948,841,712.55 63,774,187.46 8,892,104,082.75 9,431,232.78 13,914,151,215.54
(2) Fixed assets temporarily idle
Unit: RMB Yuan
Items Cost Accumulated Provision for Carrying amount Remarks
depreciation impairment
Buildings and 47,473,208.51 26,497,772.70 20,975,435.81
structures
General equipment 3,238,827.27 2,524,446.75 22,419.03 691,961.49
Special equipment 251,479,852.63 220,109,064.98 8,488,091.95 22,882,695.70
Subtotal 302,191,888.41 249,131,284.43 29,485,946.79 23,574,657.19
(3) Fixed assets leased out under operating leases
Unit: RMB Yuan
Items Closing carrying amount
Buildings and structures 24,307,887.52
Subtotal 24,307,887.52
Page 129 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
(4) Fixed assets with certificate of titles being unsettled
Unit: RMB Yuan
Items Carrying amount Reasons for unsettlement
Buildings and structures 1,250,034,807.78 Relevant procedures have not yet been
completed.
Subtotal 1,250,034,807.78
13. Construction in progress
Unit: RMB Yuan
Items Closing balance Opening balance
Construction in progress 2,984,835,072.82 1,325,545,420.56
Total 2,984,835,072.82 1,325,545,420.56
(1) Details
Unit: RMB Yuan
Closing balance Opening balance
Items
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
impairment impairment
Shandong Industrial 30,856,442.13 30,856,442.13 4,682,266.37 4,682,266.37
Park Project phase I
Hongweisu project 367,528,650.61 367,528,650.61 125,379,657.49 125,379,657.49
Auxiliary materials
supporting project of
Heilongjiang NHU 62,373,927.07 62,373,927.07
Biological Fermentation
Industrial Park
Heilongjiang Xinhao 83,453,010.80 83,453,010.80 24,493,344.31 24,493,344.31
Project phase II
Methionine project with
annual output of 0.25 90,355,454.04 90,355,454.04 16,754,982.19 16,754,982.19
million tons
Shandong Industrial 215,871,416.04 215,871,416.04
Park 615 Project
Shandong Industrial 1,718,828.38 1,718,828.38 71,756,558.71 71,756,558.71
Park 617A Project
Shandong Industrial 47,927,444.49 47,927,444.49
Park 603 Project
Shandong Industrial 16,423,904.95 16,423,904.95
Park MH Project
Shangyu Industrial Park 341,096,363.93 341,096,363.93 43,358,686.84 43,358,686.84
PPS Project
Shandong Industrial 1,173,527,758.16 1,173,527,758.16 448,565,055.49 448,565,055.49
Park TMB Project
Renovation and
upgrading project of 58,503,795.45 58,503,795.45
biochemical workshop
Daming Life and Health 228,847,778.44 228,847,778.44
Industry Project
Shandong Industrial
Park 603 project phase 3,019,859.02 3,019,859.02
II
616 Joint Production 393,488,496.81 393,488,496.81
Project
Other piecemeal 270,942,430.50 270,942,430.50 189,454,381.16 189,454,381.16
projects
Total 2,984,835,072.82 2,984,835,072.82 1,325,545,420.56 1,325,545,420.56
Page 130 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
(2) Changes in significant projects
Unit: RMB Yuan
Including:
Accumulated Amount of
Annual
Projects Budgets Opening balance Increase Transferred to Accumulated Completion amount of borrowing cost Fund
Other decrease Closing balance capitalization
fixed assets input to budget percentage borrowing cost capitalization source
rate
capitalization in current
period
Shandong
Industrial Park 311,600.00 4,682,266.37 35,283,588.83 7,833,859.50 1,275,553.57 30,856,442.13 84.71% 99.00% 87,993,003.25 Others
Project phase I
Hongweisu 47,822.98 125,379,657.49 242,148,993.12 367,528,650.61 76.85% 80.00% 1,840,275.00 1,840,275.00 4.05% Others
project
Auxiliary
materials
supporting
project of 8,739.61 62,373,927.07 13,054,460.73 75,428,387.80 86.31% 100.00% Others
Heilongjiang
NHU Biological
Fermentation
Industrial Park
Heilongjiang
Xinhao Project 10,746.25 24,493,344.31 58,959,666.49 83,453,010.80 77.66% 80.00% Others
phase II
Methionine
project with 536,984.22 16,754,982.19 80,293,926.62 6,693,454.77 90,355,454.04 38.86% 45.00% Raised
annual output of funds
0.25 million tons
Shandong
Industrial Park 215,871,416.04 215,871,416.04 Others
615 Project [Note
1]
Shandong
Industrial Park 8,500.00 71,756,558.71 1,718,828.38 58,322,544.91 13,434,013.80 1,718,828.38 86.44% 90.00% Others
617A Project
Shandong
Industrial Park 9,728.03 47,927,444.49 47,391,517.14 95,318,961.63 97.99% 100.00% Others
603 Project
Shandong
Industrial Park 16,423,904.95 16,423,904.95 Others
MH Project
[Note 2]
Shangyu
Industrial Park 70,900.00 43,358,686.84 297,737,677.09 341,096,363.93 48.11% 50.00% Others
PPS Project
Shandong
Industrial Park 123,160.59 448,565,055.49 741,286,863.95 16,324,161.28 1,173,527,758.16 96.61% 100.00% 7,718,970.51 7,718,970.51 4.28% Others
TMB Project
Renovation and
upgrading project 6,911.00 58,503,795.45 6,289,505.68 64,793,301.13 93.75% 100.00% Others
of biochemical
workshop
Daming Life and
Health Industry 45,772.07 228,847,778.44 228,847,778.44 63.75% 80.00% Others
Project
Shandong
Industrial Park 8,983.60 3,019,859.02 3,019,859.02 3.36% 5.00% Others
603 Project phase
II
616 Joint
Production 77,213.69 393,488,496.81 393,488,496.81 50.96% 55.00% Others
Project
Total 1,267,062.04 1,136,091,039.40 2,149,521,162.30 324,714,671.02 247,004,888.36 2,713,892,642.32 -- -- 97,552,248.76 9,559,245.51 --
Note 1: Shandong Industrial Park 615 Project cannot reach the designed usable conditions due to changes of planning. In the current
period, equipment available for use amounting to 160,764,472.56 yuan was transferred into 616 Joint Production Project, assets
amounting to 2,787,450.02 yuan were disposed, and the remaining part amounting to 52,319,493.46 yuan was retired.
Note 2: Shandong Industrial Park MH Project was included into 616 Joint Production Project for accounting after the latter was
established.
Page 131 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
14. Right-of-use assets
Unit: RMB Yuan
Items Buildings and structures Total
I. Cost
1. Opening balance 3,113,997.88 3,113,997.88
2. Increase 292,642.27 292,642.27
(1) Leased in 292,642.27 292,642.27
3. Decrease
4. Closing balance 3,406,640.15 3,406,640.15
II. Accumulated depreciation
1. Opening balance
2. Increase 283,003.04 283,003.04
(1) Accrual 283,003.04 283,003.04
3. Decrease
4. Closing balance 283,003.04 283,003.04
III. Carrying amount
1. Closing balance 3,123,637.11 3,123,637.11
2. Opening balance 3,113,997.88 3,113,997.88
Note: Please refer to item V 27 (1) of this section for details on the difference between the opening balance and the closing balance of
the preceding period (i.e. December 31, 2020).
15. Intangible assets
(1) Details
Unit: RMB Yuan
Items Land use right Patent right Non-patented Software Total
technology
I. Cost
1. Opening balance 1,535,867,143.93 15,634,893.87 1,880,000.00 24,620,367.22 1,578,002,405.02
2. Increase 135,472,652.16 12,444,620.84 470,000.00 1,176,700.46 149,563,973.46
(1) Acquisition 135,472,652.16 12,444,620.84 470,000.00 1,176,700.46 149,563,973.46
3. Closing balance 1,671,339,796.09 28,079,514.71 2,350,000.00 25,797,067.68 1,727,566,378.48
II. Accumulated amortization
1. Opening balance 156,112,743.86 1,297,796.00 41,777.78 13,482,957.51 170,935,275.15
2. Increase 31,271,003.28 1,586,615.16 167,111.10 1,876,616.13 34,901,345.67
(1) Accrual 31,271,003.28 1,586,615.16 167,111.10 1,876,616.13 34,901,345.67
3. Closing balance 187,383,747.14 2,884,411.16 208,888.88 15,359,573.64 205,836,620.82
III. Carrying amount -
1. Closing balance 1,483,956,048.95 25,195,103.55 2,141,111.12 10,437,494.04 1,521,729,757.66
2. Opening balance 1,379,754,400.07 14,337,097.87 1,838,222.22 11,137,409.71 1,407,067,129.87
At the balance sheet date, intangible assets formed through internal research and development account for 0.00% of total intangible
assets.
Page 132 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
(2) Land use right with certificate of titles being unsettled
Unit: RMB Yuan
Items Carrying amount Reasons for unsettlement
Land use right 135,590,077.30 Relevant procedures have not yet been
completed.
Subtotal 135,590,077.30
16. Goodwill
(1) Cost
Unit: RMB Yuan
Investees or Increase Decrease
events resulting Opening balance Closing balance
Business Translation Disposal Translation
in goodwill combination reserve reserve
Bardoterminal 2,307,297.60 231,534.80 2,075,762.80
GmbH
Total 2,307,297.60 231,534.80 2,075,762.80
(2) Provision for impairment
Unit: RMB Yuan
Investees or Increase Decrease
events resulting Opening balance Closing balance
Accrual Translation Disposal Translation
in goodwill reserve reserve
Bardoterminal 2,307,297.60 231,534.80 2,075,762.80
GmbH
Total 2,307,297.60 231,534.80 2,075,762.80
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 13,230,866.20 925,144.78 3,777,100.31 10,378,910.67
Site leveling fees 48,664.80 16,221.60 32,443.20
Afforestation fees 89,881.48 89,881.48
Catalysts 9,499,764.99 1,319,411.80 8,180,353.19
Total 13,369,412.48 10,424,909.77 5,202,615.19 18,591,707.06
18. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
Unit: RMB Yuan
Closing balance Opening balance
Items
Deductible temporary Deferred tax assets Deductible temporary Deferred tax assets
difference difference
Provision for impairment 65,402,828.30 11,004,917.24 41,096,831.73 6,778,514.76
of assets
Unrealized profit from 116,662,766.83 17,499,415.02 180,352,009.29 28,516,508.65
internal transactions
Deferred income 143,266,156.26 21,489,923.45 132,441,298.90 19,866,194.83
Page 133 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Closing balance Opening balance
Items
Deductible temporary Deferred tax assets Deductible temporary Deferred tax assets
difference difference
Difference in
depreciation of fixed 38,739,574.92 5,810,936.24 66,549,918.38 9,982,487.76
assets
Total 364,071,326.31 55,805,191.95 420,440,058.30 65,143,706.00
(2) Deferred tax liabilities before offset
Unit: RMB Yuan
Closing balance Opening balance
Items
Taxable temporary Deferred tax liabilities Taxable temporary Deferred tax liabilities
difference difference
Difference due to one-off
pre-tax deduction of 513,284,381.91 89,042,045.24 391,333,594.21 71,800,274.33
fixed assets
Profit before tax of NHU
(Hong Kong) Trading 311,395,060.48 46,709,259.07 184,979,768.52 27,746,965.28
Co., Ltd.
Changes in fair value of
held-for-trading financial 1,949,945.63 292,491.84
instruments, derivative
financial instruments
Total 824,679,442.39 135,751,304.31 578,263,308.36 99,839,731.45
(3) Deferred tax assets or liabilities after offset
Unit: RMB Yuan
Closing balance of Closing balance of Opening balance of Opening balance of
Items deferred tax assets offset deferred tax assets/ deferred tax assets offset deferred tax assets/
by deferred tax liabilities liabilities after offset by deferred tax liabilities liabilities after offset
Deferred tax assets 55,805,191.95 65,143,706.00
Deferred tax liabilities 135,751,304.31 99,839,731.45
(4) Details of unrecognized deferred tax assets
Unit: RMB Yuan
Items Closing balance Opening balance
Deductible temporary difference 381,427,135.81 253,988,934.04
Deductible losses 976,794,270.71 428,660,231.59
Total 1,358,221,406.52 682,649,165.63
(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 3,312,384.19
Year 2027 11,527,268.52 11,527,269.04
Year 2028 38,888,442.26 38,888,442.26
Year 2029 104,197,877.04 104,129,305.33
Year 2030 260,165,696.64 270,802,830.77
Year 2031 558,702,602.06
Total 976,794,270.71 428,660,231.59 --
Page 134 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
19. Other non-current assets
Unit: RMB Yuan
Closing balance Opening balance
Items Provision Provision
Book balance Carrying Book balance Carrying amount
for for
amount
impairment impairment
Pollution emission trading fees 1,611,305.24 1,611,305.24 14,447,447.94 14,447,447.94
Payments for coal quota 65,896,000.00 65,896,000.00 68,296,000.00 68,296,000.00
Prepayments for long-term 433,569,279.16 433,569,279.16 195,050,042.74 195,050,042.74
assets
Total 501,076,584.40 501,076,584.40 277,793,490.68 277,793,490.68
20. Short-term borrowings
(1) Details on categories
Unit: RMB Yuan
Items Closing balance Opening balance
Guaranteed borrowings 10,013,902.78
Credit borrowings 1,383,332,827.92 2,225,474,073.09
Credit and pledged borrowings 100,000,000.00
Pledged and guaranteed borrowings 28,037,216.66
Credit and guaranteed borrowings 20,000,000.00
Total 1,403,332,827.92 2,363,525,192.53
21. Notes payable
Unit: RMB Yuan
Categories Closing balance Opening balance
Bank acceptance 694,124,946.73 497,644,517.23
Total 694,124,946.73 497,644,517.23
22. Accounts payable
(1) Details
Unit: RMB Yuan
Items Closing balance Opening balance
Materials and labor costs 658,235,707.69 567,395,890.15
Payments for engineering and equipment 777,730,720.07 896,332,425.89
Total 1,435,966,427.76 1,463,728,316.04
23. Contract liabilities
Unit: RMB Yuan
Items Closing balance Opening balance
Payments for goods received in advance 61,135,258.36 56,302,537.11
Total 61,135,258.36 56,302,537.11
Page 135 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
24. Employee benefits payable
(1) Details
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
I. Short-term employee benefits 322,646,061.45 1,424,679,325.78 1,376,716,054.16 370,609,333.07
II. Post-employment benefits – 76,328,654.93 76,328,654.93
defined contribution plan
Total 322,646,061.45 1,501,007,980.71 1,453,044,709.09 370,609,333.07
(2) Details of short-term employee benefits
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
1. Wage, bonus, allowance and 259,201,281.23 1,248,471,547.31 1,190,271,242.90 317,401,585.64
subsidy
2. Employee welfare fund 82,518,675.71 82,518,675.71
3. Social insurance premium 43,165,402.73 43,165,402.73
Including: Medicare premium 38,047,525.90 38,047,525.90
Occupational injuries 2,948,069.88 2,948,069.88
premium
Maternity premium 2,169,806.95 2,169,806.95
4. Housing provident fund 41,250,117.58 41,250,117.58
5. Trade union fund and 63,444,780.22 9,273,582.45 19,510,615.24 53,207,747.43
employee education fund
Total 322,646,061.45 1,424,679,325.78 1,376,716,054.16 370,609,333.07
(3) Details of defined contribution plan
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
1. Basic endowment insurance 73,480,864.56 73,480,864.56
premium
2. Unemployment insurance 2,847,790.37 2,847,790.37
premium
Total 76,328,654.93 76,328,654.93
25. Taxes and rates payable
Unit: RMB Yuan
Items Closing balance Opening balance
VAT 45,928,799.96 30,247,041.09
Enterprise income tax 324,899,257.88 197,310,396.17
Individual income tax withheld for tax 3,749,309.86 1,951,726.31
authorities
Urban maintenance and construction tax 3,686,070.96 1,971,609.80
Land appreciation tax 15,244,826.82 14,519,045.43
Housing property tax 15,577,742.83 13,209,123.23
Land use tax 8,351,133.07 8,067,682.42
Education surcharge (local education 3,273,420.39 1,537,328.96
surcharge)
Stamp duty 32,700.92 7,902.60
Local water conservancy construction fund 39,142.74
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Items Closing balance Opening balance
Environmental protection tax 3,473.63
Total 420,743,262.69 268,864,472.38
26. Other payables
Unit: RMB Yuan
Items Closing balance Opening balance
Other payables 56,712,103.36 129,839,228.89
Total 56,712,103.36 129,839,228.89
1) Categorized by nature
Unit: RMB Yuan
Items Closing balance Opening balance
Security deposits 32,961,596.12 23,102,033.05
Temporary receipts payable 11,425,312.83 9,575,676.08
Earnest money for housing purchase (Boao 100,000.00 1,893,256.00
NHU Resort Center)
Payments for equity transfer 83,904,479.79
Call loans 3,243,666.67
Others 12,225,194.41 8,120,117.30
Total 56,712,103.36 129,839,228.89
27. Non-current liabilities due within one year
Unit: RMB Yuan
Items Closing balance Opening balance
Long-term borrowings due within one year 2,029,254,131.97 1,275,888,293.32
Lease liabilities due within one year 245,377.46 92,628.26
Total 2,029,499,509.43 1,275,980,921.58
Note: Please refer to item V 27 of this section for details on the difference between the opening balance and the closing balance of the
preceding period (i.e. December 31, 2020).
28. Other current liabilities
Unit: RMB Yuan
Items Closing balance Opening balance
Output VAT to be recognized 5,133,310.10 4,956,463.49
Total 5,133,310.10 4,956,463.49
Page 137 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
29. Long-term borrowings
(1) Categories
Unit: RMB Yuan
Items Closing balance Opening balance
Mortgaged borrowings 37,669,008.56 49,635,844.80
Guaranteed borrowings 945,155,611.12 1,175,331,152.79
Credit borrowings 4,165,987,166.81 2,911,908,356.74
Total 5,148,811,786.49 4,136,875,354.33
30. Lease liabilities
Unit: RMB Yuan
Items Closing balance Opening balance
Unpaid lease payments 4,331,618.17 4,557,047.64
Less: Unrealized financing expenses 1,394,750.02 1,535,678.02
Total 2,936,868.15 3,021,369.62
Note: Please refer to item V 27 of this section for details on the difference between the opening balance and the closing balance of the
preceding period (i.e. December 31, 2020).
31. Deferred income
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance Reasons for balance
The Company received government
Government grants 873,066,181.34 275,798,900.00 85,165,405.18 1,063,699,676.16 grants related to assets, which were
amortized based on the depreciation
progress of corresponding assets.
Total 873,066,181.34 275,798,900.00 85,165,405.18 1,063,699,676.16 --
Details of government grants
Unit: RMB Yuan
Grants
Grants included Grants
Items Opening Increase included into Other Closing balance Related to
into other offsetting
balance non-operating changes assets/income
income relevant cost
revenue
Special funds for Biological
Fermentation Industrial Park 476,914,860.00 49,336,020.00 427,578,840.00 Related to assets
Project
Special funds for enterprise
development (Shandong 84,635,251.75 9,672,600.20 74,962,651.55 Related to assets
Vitamins)
Special funds for joint
production project of Xinhao 35,547,916.69 3,774,999.96 31,772,916.73 Related to assets
Thermal Power
Technical renovation for green 34,260,000.00 34,260,000.00 Related to assets
deep processing of 2019
Special funds for enterprise 38,950,549.48 8,000,000.00 1,145,604.36 45,804,945.12 Related to assets
development (Amino Acid)
Subsidies for land leveling of 29,026,913.28 718,189.44 28,308,723.84 Related to assets
Shandong
Enterprise development funds 19,285,039.00 437,814.12 18,847,224.88 Related to assets
of Shandong
Page 138 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Grants
Grants included Grants
Items Opening Increase included into Other Closing balance Related to
into other offsetting
balance non-operating changes assets/income
income relevant cost
revenue
PPS construction project with 13,238,499.92 1,826,000.04 11,412,499.88 Related to assets
annual output of 10,000 tons
Subsidies for PPS resin with
annual output of 5,000 tons and 11,400,000.00 2,850,000.00 8,550,000.00 Related to assets
PPS composite materials with
annual output of 6,000 tons
Enterprise development funds
of Advanced Manufacturing 8,690,037.83 198,251.76 8,491,786.07 Related to assets
Industrial Park
Effective industrial input 7,022,400.00 957,600.00 6,064,800.00 Related to assets
expansion of 2016
Funds for key thematic projects
of industrial revitalization and 5,351,785.70 1,427,142.84 3,924,642.86 Related to assets
technical renovation of 2012
Fiscal subsidies for low-rent 6,339,417.24 240,857.16 6,098,560.08 Related to assets
housing
Subsidies from land transfer 5,123,252.66 250,231.57 4,873,021.09 Related to assets
fees of Shandong dormitory
Subsidies for inputs in
biochemical infrastructure of 4,898,735.72 317,771.88 4,580,963.84 Related to assets
Shangyu
Construction project of public 4,000,000.00 999,999.96 3,000,000.04 Related to assets
testing service platform
Subsidies for infrastructure 8,275,875.00 797,625.00 7,478,250.00 Related to assets
supporting fees
Compensation for resource
conservation and environmental 3,840,000.00 480,000.00 3,360,000.00 Related to assets
protection projects of 2017
Subsidies for new materials,
land and infrastructure 3,242,880.00 810,720.00 2,432,160.00 Related to assets
construction
Special fiscal funds for
revitalization of the substantial 2,679,299.82 539,228.52 2,140,071.30 Related to assets
economy (transformation of
traditional industries) of 2017
Subsidies for RTO Project 1,666,666.86 399,999.96 1,266,666.90 Related to assets
Special subsidies for
development of marine 2,000,000.00 2,000,000.00 Related to assets
economy of 2017
Special subsidies for
high-quality development of 2,109,286.90 304,957.20 1,804,329.70 Related to assets
manufacturing industry
Enterprise development fund 52,224,561.00 52,224,561.00 Related to assets
(Shandong Fine Chemical)
Special funds for Taishan 7,400,000.00 7,400,000.00 Related to assets
industry leading talents
Food security control and 25,080,000.00 209,000.00 24,871,000.00 Related to assets
emergency facilities project
Policy incentives for industrial 25,000,000.00 786,778.65 24,213,221.35 Related to assets
production projects of 2020
Special funds for Heilongjiang
Biological Fermentation 111,810,000.00 111,810,000.00 Related to assets
Industrial Park Project
Incentives for enterprises
settling in Industrial
Collaborative Innovation Center 27,728,800.00 3,473,383.27 24,255,416.73 Related to assets
by Hangzhou Bay Shangyu
Economic and Technological
Development Zone
Subsidies for upgrading 260,000.00 37,142.88 222,857.12 Related to assets
coal-fired boilers of 2017
Subsidies for low-nitrogen
transformation of gas-fired 495,000.00 29,464.25 465,535.75 Related to assets
boilers of Xinchang County
Special funds for technical 20,500,000.00 330,396.63 20,169,603.37 Related to assets
renovation
Incentives for investment 25,000,000.00 17,858.29 24,982,141.71 Related to assets
promotion
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Grants
Grants included Grants
Items Opening Increase included into Other Closing balance Related to
into other offsetting
balance non-operating changes assets/income
income relevant cost
revenue
Special fiscal supporting funds
for high-quality development
(investment projects) of 4,875,100.00 4,875,100.00 Related to assets
manufacturing industry of
Xinchang County of 2021
Special funds for supporting
advanced manufacturing 19,650,000.00 19,650,000.00 Related to assets
industry and modern service
industry
Other piecemeal subsidies 12,342,952.49 2,795,767.24 9,547,185.25 Related to assets
Total 873,066,181.34 275,798,900.00 85,165,405.18 1,063,699,676.16
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
Movements
Items Opening balance Closing balance
Issue of new Bonus Reserve transferred to Others Subtotal
shares shares shares
Total shares 2,148,662,300.00 429,732,460.00 429,732,460.00 2,578,394,760.00
Other remarks, including remarks on current movements and reasons for movements:
Pursuant to the 2020 profit distribution plan deliberated and approved by the general meeting of 2020, based on total shares of
2,148,662,300 shares as at December 31, 2020, the Company increased shares at 2 shares per 10 shares by converting capital reserve
to all shareholders. After the increase, the total share capital amounted to 2,578,394,760 yuan. Such capital increase had been
verified by Pan-China Certified Public Accountants LLP, and a Capital Verification Report numbered PCCPACVR [2021] 234 was
issued thereon.
33. Capital reserve
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Share/capital premium 4,277,237,673.92 429,732,460.00 3,847,505,213.92
Other capital reserve 283,284,882.92 9,727,015.88 273,557,867.04
Total 4,560,522,556.84 439,459,475.88 4,121,063,080.96
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
VII 32 of this section for details. Current decrease of other capital reserve was due to changes in the Company’s proportionate share
in net assets of the associate Zhejiang Chunhui Environmental Protection Energy Co., Ltd. arising from capital increase made by
individual investors.
34. Treasury shares
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Treasury shares 320,360,784.48 320,360,784.48
Total 320,360,784.48 320,360,784.48
Other remarks, including remarks on current movements and reasons for movements:
Page 140 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Current increase of treasury shares was due to the repurchase of public shares by the Company for the purpose of equity incentive
plan and employee stock ownership plan.
35 Other comprehensive income (OCI)
Unit: RMB Yuan
Current period cumulative
Less: OCI Less: OCI
previously previously Closing
Items Opening balance Current period Less: Attributable to
recognized but recognized but Attributable to balance
cumulative before Income non-controlling
transferred to profit transferred to parent company
income tax tax shareholders
or loss in current retained earnings in
period current period
Items not to be
reclassified 27,803,829.31 -37,096,882.86 -29,418,001.62 -7,678,881.24 -1,614,172.31
subsequently to profit or
loss
Including: Other
comprehensive income
to be transferred to 506,954.43 506,954.43
profit or loss under
equity method
Translation reserves 27,296,874.88 -37,096,882.86 -29,418,001.62 -7,678,881.24 -2,121,126.74
Total 27,803,829.31 -37,096,882.86 -29,418,001.62 -7,678,881.24 -1,614,172.31
36. Special reserve
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Work safety fund 9,550,346.85 27,879,615.83 24,737,744.17 12,692,218.51
Total 9,550,346.85 27,879,615.83 24,737,744.17 12,692,218.51
37. Surplus reserve
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Statutory surplus reserve 1,074,331,150.00 214,866,230.00 1,289,197,380.00
Total 1,074,331,150.00 214,866,230.00 1,289,197,380.00
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,
which may cease when the appropriation of statutory surplus reserve is accumulated up to 50% of the registered capital.
38. Undistributed profit
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Opening balance 11,515,384,739.95 9,158,233,971.76
Add: Net profit attributable to owners of the 4,324,150,263.31 3,563,759,939.48
parent company
Less: Appropriation of statutory surplus reserve 214,866,230.00 122,486,233.38
Dividend payable on ordinary shares 1,504,063,610.00 1,074,331,150.00
Others 9,791,787.91
Closing balance 14,120,605,163.26 11,515,384,739.95
Page 141 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Other remarks:
Pursuant to the 2020 profit distribution plan deliberated and approved by the general meeting of 2020, based on total shares of
2,148,662,300 shares as of December 31, 2020, the Company distributed cash dividend of 7.00 yuan (tax included) per 10 shares to
all shareholders. Cash dividend distributed totaled 1,504,063,610.00 yuan.
39. Operating revenue/Operating cost
Unit: RMB Yuan
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 14,647,980,675.91 8,124,979,308.14 10,230,925,578.36 4,665,045,718.58
Other operations 150,008,415.29 87,313,638.13 83,158,775.85 62,218,285.36
Total 14,797,989,091.20 8,212,292,946.27 10,314,084,354.21 4,727,264,003.94
Including: Revenue
from contracts with 14,795,863,202.58 8,211,656,091.12 10,313,379,331.85 4,726,763,036.02
customers
Whether the lower of audited net profit before deducting non-recurring profit or loss and that after deducting non-recurring profit or
loss is negative?
□ Yes √ No
Details of revenue:
Unit: RMB Yuan
Categories of contracts Total
By operating region
Including: Domestic 7,121,686,534.55
Overseas 7,674,176,668.03
Subtotal 14,795,863,202.58
By product
Including: Nutrition 11,127,987,778.92
Flavor and fragrance 2,238,700,529.12
New materials 873,994,673.98
Others 555,180,220.56
Subtotal 14,795,863,202.58
By revenue recognition time
Including: Goods (transferred at a point in time) 14,795,863,202.58
Subtotal 14,795,863,202.58
By sales channel
Including: Direct sales 11,475,745,011.90
Agent sales 3,320,118,190.68
Subtotal 14,795,863,202.58
Information related to performance obligations:
None.
Information related to transaction price allocated to the remaining performance obligations:
As of December 31, 2021, revenue corresponding to performance obligations for which the Company has entered into contracts but
Page 142 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
not yet performed or fulfilled amounted to 3,023,570,072.19 yuan, of which, 3,023,570,072.19 yuan is expected to be recognized as
revenue in 2022.
40. Taxes and surcharges
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Urban maintenance and construction tax 30,312,419.65 29,198,412.36
Education surcharge (local education 27,571,975.04 26,384,789.31
surcharge)
Land appreciation tax 1,487,064.65 569,089.05
Stamp duty 5,571,964.17 3,803,865.23
Housing property tax 36,023,723.71 25,702,227.37
Land use tax 29,553,065.04 28,110,810.83
Vehicle and vessel use tax 35,481.54 32,998.67
Environmental protection tax 1,069,134.43 991,051.20
Total 131,624,828.23 114,793,244.02
41. Selling expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Handling charges, freight and insurance 200,763,871.66
fees
Sales commission and customs declaration 15,913,870.35 37,778,102.90
charges
Advertising and promotion expenses, 8,131,154.24 7,330,825.13
business entertainment expenses
Employee benefits 57,976,469.34 48,690,106.45
Office expenses, business traveling 15,428,583.10 11,621,637.87
expenses
Others 9,587,008.93 6,773,396.57
Total 107,037,085.96 312,957,940.58
42. Administrative expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Employee benefits 201,712,221.78 214,752,624.21
Office expenses, business traveling 59,903,319.54 63,620,806.74
expenses
Taxes 9,628,608.33 9,282,039.35
Depreciation, amortization of intangible 88,011,620.25 64,923,789.85
assets
Business entertainment expenses 21,149,038.92 17,678,602.63
Insurance premiums 15,035,969.98 10,758,291.77
Consulting fees 15,521,872.12 13,253,853.76
Others 12,621,766.75 28,583,842.94
Total 423,584,417.67 422,853,851.25
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2021 Annual Report of Zhejiang NHU Co., Ltd.
43. R&D expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Direct input 291,075,726.28 183,593,482.21
Employee benefits 344,464,922.47 257,824,436.43
Depreciation, amortization of intangible 51,416,050.04 38,566,126.15
assets
Office expenses, business traveling 47,138,539.85 18,739,316.57
expenses
Outsourcing expenses 24,718,470.93 23,824,873.91
Others 23,847,998.97 23,014,140.45
Total 782,661,708.54 545,562,375.72
44. Financial expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Interest expenses 337,753,271.80 249,052,551.92
Less: Interest income 164,418,967.90 42,376,836.40
Losses on foreign exchange (or less: gains) 86,391,384.65 82,411,129.59
Others 10,242,664.69 15,456,169.38
Total 269,968,353.24 304,543,014.49
45. Other income
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Government grants related to assets [Note] 85,165,405.18 46,559,530.37
Government grants related to income 66,054,648.19 73,856,347.35
[Note]
Refund of handling fees for withholding 1,160,651.30 905,342.47
individual income tax
Total 152,380,704.67 121,321,220.19
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 59,304,344.04 57,689,812.69
investments under equity method
Investment income from disposal of 10,887,997.40 -3,076,486.79
financial instruments
Including: Financial assets classified as at 12,582,646.77 1,211,398.15
fair value through profit or loss
Financial liabilities classified as at fair -1,694,649.37 -4,287,884.94
value through profit or loss
Interest income from discounted notes -259.56 -708,333.33
Investment income from bank financial 57,777,633.53 106,249,559.87
products and structured deposits
Total 127,969,715.41 160,154,552.44
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2021 Annual Report of Zhejiang NHU Co., Ltd.
47. Gains on changes in fair value
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Held-for-trading financial assets 39,426,345.82 11,724,972.46
Including: Gains on changes in fair value
arising from financial assets classified as at 39,426,345.82 11,724,972.46
fair value through profit or loss
Held-for-trading financial liabilities -1,562,640.38 -2,355,055.18
Including: Gains on changes in fair value
arising from financial liabilities classified -1,562,640.38 -2,355,055.18
as at fair value through profit or loss
Total 37,863,705.44 9,369,917.28
48. Credit impairment loss
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Bad debts -50,043,349.49 -4,095,147.32
Total -50,043,349.49 -4,095,147.32
49. Assets impairment loss
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Inventory write-down loss -25,275,549.36 -12,369,945.69
Impairment loss of fixed asset -28,974,859.54
Total -54,250,408.90 -12,369,945.69
50. Gains on asset disposal
Unit: RMB Yuan
Sources Current period cumulative Preceding period comparative
Gains on disposal of non-current assets -1,544,436.08 3,744,385.58
Total -1,544,436.08 3,744,385.58
51. Non-operating revenue
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative Amount included in
non-recurring profit or loss
Indemnity income 11,227,600.39 1,148,712.35 11,227,600.39
Gains on damage or retirement 12,775.00 12,775.00
of non-current assets
Others 1,047,467.45 793,583.79 1,047,467.45
Total 12,287,842.84 1,942,296.14 12,287,842.84
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2021 Annual Report of Zhejiang NHU Co., Ltd.
52. Non-operating expenditures
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative Amount included in
non-recurring profit or loss
Donation expenditures 2,003,374.90 12,025,637.84 2,003,374.90
Losses on damage or retirement 59,895,963.50 41,552,999.96 59,895,963.50
of non-current assets [Note]
Local water conservancy 703,398.76
construction fund
Others 2,704,485.84 2,003,423.23 2,704,485.84
Total 64,603,824.24 56,285,459.79 64,603,824.24
Note: It included 52,319,493.46 yuan as losses on scrapping of construction in progress, as Shandong Industrial Park 615 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 645,264,359.60 513,114,239.32
Deferred income tax expenses 45,250,086.91 19,549,993.21
Total 690,514,446.51 532,664,232.53
(2) Reconciliation of accounting profit to income tax expenses
Unit: RMB Yuan
Items Current period cumulative
Profit before tax 5,030,879,700.94
Income tax expenses based on statutory/applicable tax rate 754,631,955.14
Effect of different tax rate applicable to subsidiaries -5,052,076.69
Effect of prior income tax reconciliation -2,381,352.00
Effect of non-taxable income -9,720,778.97
Effect of non-deductible costs, expenses and losses 9,378,437.39
Effect of utilization of deductible losses not previously recognized as deferred tax -5,790,832.98
assets
Effect of deducible temporary differences or deductible losses not recognized as 71,388,881.46
deferred tax assets in the current period
Tax deduction of investments in special equipment for environmental protection, -4,481,359.34
energy and water conservation and safety production purposes
Effect of tax rate changes on opening balance of deferred tax assets/liabilities 946,543.44
Effect of extra deduction of R&D expenses -118,404,970.94
Income tax expenses 690,514,446.51
54. Other comprehensive income
Please refer to item VII 35 of this section for details.
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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 164,418,967.90 42,376,836.40
Receipt of government grants 335,719,965.91 139,491,325.41
Recovery of temporary borrowings and 10,265,762.72 9,519,261.10
security deposits
Receipt of temporary receipts payable 4,711,009.18 2,511,261.50
Other receipts and net current accounts 24,850,169.36 10,767,268.18
Total 539,965,875.07 204,665,952.59
(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 95,705,009.75 65,578,330.93
Handling charges, freight and insurance 199,589,254.76
fees
Office expenses and business traveling 107,041,859.39 75,242,444.61
expenses
Advertising and promotion expenses, 29,280,193.16 25,009,427.76
business entertainment expenses
Sales commission and customs declaration 15,913,870.35 37,778,102.90
charges
Insurance expenses 13,706,371.25 11,366,760.02
Consulting fees 15,521,872.12 13,253,853.76
Other payments and net current accounts 32,081,395.48 48,663,971.37
Total 309,250,571.50 476,482,146.11
(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 3,850,000,000.00
Recovery of deposits for contingent 4,780,000.00
options
Recovery of land bond 19,090,000.00
Total 1,800,000,000.00 3,873,870,000.00
(4) Other cash payments related to investing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Payments for losses on forward foreign 15,037,520.58
exchange settlement
Payments for purchase of financial 1,800,000,000.00 1,800,000,000.00
products and structured deposits
Payments for land bond 4,835,731.00
Total 1,804,835,731.00 1,815,037,520.58
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2021 Annual Report of Zhejiang NHU Co., Ltd.
(5) Other cash receipts related to financing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Recovery of cash and bank balances 85,412,707.20
pledged for borrowings
Recovery of swap margin for borrowing 2,800,000.00
interest
Receipt of call loans 3,000,000.00
Total 91,212,707.20
(6) Other cash payments related to financing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Payments for bank financing handling 3,786,203.45 4,555,462.31
charges
Payments of handling charges for issuing 1,600,495.28 3,152,912.84
letters of guarantee for borrowings
Repayments of principal and interest of 389,323.20
leases
Repurchase of treasury shares 320,360,784.48
Repayments of call loans and interest 3,304,500.00 22,184,386.28
Payments of guarantee fees 132,075.47
Total 329,441,306.41 30,024,836.90
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 4,340,365,254.43 3,577,227,510.51
Add: Provision for assets impairment loss 104,293,758.39 -16,465,093.01
Depreciation of fixed assets, oil and gas 1,186,989,343.67 831,274,849.16
assets, productive biological assets
Depreciation of right-of-use assets 283,003.04
Amortization of intangible assets 34,901,345.67 32,642,629.85
Amortization of long-term prepayments 5,202,615.19 1,695,355.76
Losses on disposal of fixed assets,
intangible assets and other long-term 1,544,436.08 -3,744,385.58
assets (Less: gains)
Fixed assets retirement loss (Less: 59,883,188.50 41,552,999.96
gains)
Losses on changes in fair value (Less: -37,863,705.44 -9,369,917.28
gains)
Financial expenses (Less: gains) 338,987,833.23 343,115,287.01
Investment losses (Less: gains) -127,969,715.41 -160,154,552.44
Decrease of deferred tax assets (Less: 9,338,514.05 -1,019,795.07
increase)
Increase of deferred tax liabilities 35,911,572.86 20,569,788.28
(Less: decrease)
Decrease of inventories (Less: -358,037,685.76 -960,709,136.37
increase)
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Supplement information Current period cumulative Preceding period comparative
Decrease of operating receivables -520,188,422.82 -614,676,296.13
(Less: increase)
Increase of operating payables (Less: 761,094,844.23 36,655,277.27
decrease)
Others 3,141,871.66 4,212,841.29
Net cash flows from operating 5,837,878,051.57 3,122,807,363.21
activities
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 5,714,537,538.23 4,669,306,776.09
Less: Cash at the beginning of the period 4,669,306,776.09 3,213,557,815.42
Add: Cash equivalents at the end of the
period
Less: Cash equivalents at the beginning of
the period
Net increase of cash and cash equivalents 1,045,230,762.14 1,455,748,960.67
(2) Composition of cash and cash equivalents
Unit: RMB Yuan
Items Closing balance Opening balance
I. Cash 5,714,537,538.23 4,669,306,776.09
Including: Cash on hand 14,537.85 10,735.55
Cash in bank on demand for payment 5,684,842,466.04 4,669,296,040.54
Other cash and bank balances on 29,680,534.34
demand for payment
II. Cash and cash equivalents at the end of 5,714,537,538.23 4,669,306,776.09
the period
Remarks:
Closing balance of cash and bank balances amounted to 5,952,909,626.94 yuan, including deposit for bank acceptance of
149,724,511.46 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.
Opening balance of cash and bank balances amounted to 4,927,657,236.24 yuan, including deposit for bank acceptance of
233,849,274.66 yuan, deposit for letters of credit of 23,350,000.00 yuan, deposit for engineering labor costs of 741,108.87 yuan,
deposit for ETC of 6,000.00 yuan and deposit for construction safety of 404,076.62 yuan, which was not cash and cash equivalents.
Page 149 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
57. Assets with title or use right restrictions
Unit: RMB Yuan
Items Closing carrying amount Reasons for restrictions
Please refer to supplement information to
Cash and bank balances 238,372,088.71 the cash flow statement of this section for
details.
Notes receivable 236,268,835.12 Please refer to notes to notes receivable of
this section for details.
Fixed assets 79,957,441.31 Mortgaged for bank borrowings.
Intangible assets 9,463,498.51 Mortgaged for bank borrowings.
Receivables financing 131,943,711.14 Please refer to notes to receivables
financing of this section for details.
Total 696,005,574.79 --
58. Monetary items in foreign currencies
(1) Details
Unit: RMB Yuan
Items Closing balance in foreign Exchange rate RMB equivalent at the end of the
currencies period
Cash and bank balances -- -- 555,718,818.48
Including: USD 75,657,949.45 6.3757 482,372,388.31
EUR 7,437,675.19 7.2197 53,697,783.57
HKD 1,378,911.45 0.8176 1,127,398.00
JPY 333,610,456.00 0.0554 18,482,019.26
SGD 8,315.00 4.7179 39,229.34
Accounts receivable -- -- 2,076,349,690.20
Including: USD 289,293,258.85 6.3757 1,844,447,030.45
EUR 32,120,816.62 7.2197 231,902,659.75
Other receivables 5,793,484.57
Including: EUR 798,865.14 7.2197 5,767,566.65
HKD 31,700.00 0.8176 25,917.92
Short-term borrowings 434,229,656.08
Including: EUR 60,145,110.75 7.2197 434,229,656.08
Accounts payable 35,195,736.73
Including: USD 109,474.60 6.3757 697,977.21
EUR 4,778,281.58 7.2197 34,497,759.52
Other payables 9,990,081.52
Including: USD 1,528,509.72 6.3757 9,745,319.42
EUR 31,020.10 7.2197 223,955.82
HKD 25,448.00 0.8176 20,806.28
Long-term borrowings 37,669,008.56
Including: EUR 5,217,531.00 7.2197 37,669,008.56
Non-current liabilities due within 7,091,159.85
one year
Including: EUR 961,662.00 7.2197 6,942,911.14
HKD 181,321.81 0.8176 148,248.71
Page 150 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
(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 currency
shall 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 of
51%; 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
in Singapore, with SGD as functional currency.
59. Government grants
(1) Government grants related to assets
Unit: RMB Yuan
Opening Closing balance
Items Increase Amortization Amortization Remarks
balance of of deferred
presented under
deferred income income
Pursuant to the
Special funds for
Biological Fermentation 476,914,860.00 49,336,020.00 427,578,840.00 Other income document numbered
Sui Jing Kai Guan
Industrial Park Project
[2018] 55
Special funds for
enterprise development 84,635,251.75 9,672,600.20 74,962,651.55 Other income
(Shandong Vitamins)
Pursuant to the
Special funds for joint
production project of 35,547,916.69 3,774,999.96 31,772,916.73 Other income document numbered
Sui Jing Kai Guan
Xinhao Thermal Power
Wei Han [2018] 123
Pursuant to the
Technical renovation for
green deep processing of 34,260,000.00 34,260,000.00 Other income document numbered
Zhe Fa Gai Mi
2019
[2019] 127
Pursuant to the
documents
Special funds for
enterprise development 38,950,549.48 8,000,000.00 1,145,604.36 45,804,945.12 Other income numbered Wei Bin
Cai Zhi Zi [2018] 40
(Amino Acid)
and Wei Bin Cai Jin
Yu [2021] 44
Subsidies for land leveling 29,026,913.28 718,189.44 28,308,723.84 Other income
of Shandong
Pursuant to the
documents
numbered Wei Bin
Enterprise development 19,285,039.00 437,814.12 18,847,224.88 Other income Cai Zhi Zi [2014]
funds of Shandong 513, Wei Bin Cai Zhi
Zi [2016] 194 and
Wei Bin Cai Zhi Zi
[2017] 307
PPS construction project
with annual output of 13,238,499.92 1,826,000.04 11,412,499.88 Other income
10,000 tons
Subsidies for PPS resin
with annual output of
5,000 tons and PPS 11,400,000.00 2,850,000.00 8,550,000.00 Other income
composite materials with
annual output of 6,000
tons
Page 151 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Opening Closing balance
Items Increase Amortization Amortization Remarks
balance of of deferred
presented under
deferred income income
Enterprise development
funds of Advanced 8,690,037.83 198,251.76 8,491,786.07 Other income
Manufacturing Industrial
Park
Effective industrial input 7,022,400.00 957,600.00 6,064,800.00 Other income
expansion of 2016
Special funds for
new cephalosporin
antibiotics project
with annual output
of 10 tons according
to the document
Funds for key thematic
numbered Zhe Cai
projects of industrial 5,351,785.70 1,427,142.84 3,924,642.86 Other income Qi [2012] 276 issued
revitalization and technical
by Department of
renovation of 2012
Finance of Zhejiang
Province and
Economy and
Informatization
Commission of
Zhejiang Province
Fiscal subsidies for 6,339,417.24 240,857.16 6,098,560.08 Other income
low-rent housing
Subsidies from land
transfer fees of Shandong 5,123,252.66 250,231.57 4,873,021.09 Other income
dormitory
Subsidies for inputs in
biochemical infrastructure 4,898,735.72 317,771.88 4,580,963.84 Other income
of Shangyu
Construction project of
public testing service 4,000,000.00 999,999.96 3,000,000.04 Other income
platform
Subsidies for infrastructure 8,275,875.00 797,625.00 7,478,250.00 Other income
supporting fees
Compensation for resource
conservation and 3,840,000.00 480,000.00 3,360,000.00 Other income
environmental protection
projects of 2017
Subsidies for new
materials, land and 3,242,880.00 810,720.00 2,432,160.00 Other income
infrastructure construction
Special fiscal funds for
revitalization of the Pursuant to the
substantial economy 2,679,299.82 539,228.52 2,140,071.30 Other income document numbered
(transformation of Xin Cai Qi [2019]
traditional industries) of 151
2017
Pursuant to the
Subsidies for RTO Project 1,666,666.86 399,999.96 1,266,666.90 Other income document numbered
Wei Cai Qi Zhi
[2014] 207
Pursuant to the
Special subsidies for
2,000,000.00 2,000,000.00 document numbered
development of marine
Shang Yu Cai Jian
economy of 2017
[2018] 12
Pursuant to the
Special subsidies for
high-quality development 2,109,286.90 304,957.20 1,804,329.70 Other income document numbered
Xin Jing Xin [2020]
of manufacturing industry
79
Enterprise development Pursuant to the
fund (Shandong Fine 52,224,561.00 52,224,561.00 document numbered
Chemical) Wei Bin Cai Zhi Zi
Page 152 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Opening Closing balance
Items Increase Amortization Amortization Remarks
balance of of deferred
presented under
deferred income income
[2020] 34
Pursuant to the
documents
numbered Lu Zheng
Special funds for Taishan Ban Zi [2021] 13, Lu
industry leading talents 7,400,000.00 7,400,000.00 Zu Zi [2021] 24, Wei
project Bin Cai Xing Zhi Zi
[2021] 1, and Wei
Cai Xing Zhi [2021]
16
Food security control and
emergency facilities Pursuant to the
project – investment plan 25,080,000.00 209,000.00 24,871,000.00 Other income document numbered
within budget of the Hei Fa Gai Tou Zi
central government of [2020] 542
2020
Pursuant to the
Policy incentives for
industrial production 25,000,000.00 786,778.65 24,213,221.35 Other income document numbered
Hei Cai Zhi (Chan
projects of 2020
Ye) [2020] 558
Special funds for
Heilongjiang Biological 111,810,000.00 111,810,000.00
Fermentation Industrial
Park Project
Incentives for enterprises
settling in Industrial
Collaborative Innovation
Center by Hangzhou Bay 27,728,800.00 3,473,383.27 24,255,416.73 Other income
Shangyu Economic and
Technological
Development Zone
Pursuant to the
Subsidies for upgrading 260,000.00 37,142.88 222,857.12 Other income document numbered
coal-fired boilers of 2017 Xin Cai Jian [2018]
204
Subsidies for low-nitrogen Pursuant to the
transformation of gas-fired 495,000.00 29,464.25 465,535.75 Other income document numbered
boilers of Xinchang Xin Huan Yu [2018]
County 25
Special funds for technical 20,500,000.00 330,396.63 20,169,603.37 Other income
renovation
Pursuant to the
Incentives for investment 25,000,000.00 17,858.29 24,982,141.71 Other income document numbered
promotion Wei Bin Cai Gong
Zhi Zi [2021] 14
Special fiscal supporting
funds for high-quality Pursuant to the
development (investment 4,875,100.00 4,875,100.00 Other income document numbered
projects) of manufacturing Xin Jing Xin [2021]
industry of Xinchang 50
County of 2021
Special investment plan
within budget of the
Pursuant to the
central government for
supporting advanced 19,650,000.00 19,650,000.00 Other income document numbered
Fa Gai Tou Zi [2021]
manufacturing industry
1117
and modern service of
2021
Other piecemeal subsidies
- investment plan within 12,342,952.49 2,795,767.24 9,547,185.25 Other income
budget of the central
government of 2020
Page 153 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Opening Closing balance
Items Increase Amortization Amortization Remarks
balance of of deferred
presented under
deferred income income
Subtotal 873,066,181.34 275,798,900.00 85,165,405.18 1,063,699,676.16
(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 18,306,370.00 Other income Related to income
Other subsidies 38,268,540.45 Other income Related to income
Special subsidies 9,479,737.74 Other income Related to income
Subtotal 66,054,648.19
(3) Fiscal interest subvention
Unit: RMB Yuan
Opening Amounts Closing balance Amounts
Items balance of Increase carried of deferred carried forward Remarks
deferred income forward income presented under
Fiscal interest 178,576.65 178,576.65 Financial
subvention expenses
Subtotal 178,576.65 178,576.65
(4) In the current period, government grants included into profit or loss totaled 151,398,630.02 yuan.
VIII. Changes in the consolidation scope
1. Changes in the consolidation scope due to other reasons
Unit: RMB Yuan
Equity
Companies Equity acquisition date Capital contribution Capital contribution
acquisition
proportion (%)
method
Zhejiang NHU Nylon Materials Establishment November 9, 2021
Co., Ltd.
NHU Singapore PTE. LTD. Establishment November 6, 2021 12,800,000.00 100.00%
IX. Interest in other entities
1. Interest in subsidiaries
(1) Composition of the group
Holding proportion (%)
Subsidiaries Main operating Place of Business nature Acquisition
place registration Direct Indirect method
Shangyu NHU Bio-Chem Shangyu, Shangyu, Manufacturing 100.00% Establishment
Co., Ltd. Zhejiang Zhejiang
Shandong NHU Weifang, Weifang, Manufacturing 100.00% Establishment
Pharmaceutical Co., Ltd. Shandong Shandong
NHU (Hong Kong) Trading Hong Kong, Hong Kong, Commerce 100.00% Establishment
Co., Ltd. China China
Zhejiang NHU Special Shangyu, Shangyu, Manufacturing 100.00% Establishment
Materials Co., Ltd. Zhejiang Zhejiang
Shandong NHU Weifang, Weifang, Manufacturing 100.00% Establishment
Amino-acids Co., Ltd. Shandong Shandong
NHU EUROPE GmbH Luneburg, Luneburg, Trade 51% [Note 1] Establishment
Germany Germany
Page 154 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Holding proportion (%)
Subsidiaries Main operating Place of Business nature Acquisition
place registration Direct Indirect method
山东新和成控股有限公司
Weifang, Weifang, Service 100.00% Establishment
(Shandong NHU Holdings
Shandong Shandong
Co., Ltd.*)
Shandong NHU Vitamins Weifang, Weifang, Manufacturing 100.00% Establishment
Co., Ltd. Shandong Shandong [Note 2]
Heilongjiang NHU Suihua, Suihua, Manufacturing 100.00% Establishment
Biotechnology Co., Ltd. Heilongjiang Heilongjiang
NHU Singapore PTE. LTD. Singapore Singapore Trade 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
Holding proportion of Non-controlling Dividend declared to
Subsidiaries Closing balance of
non-controlling shareholders’ profit or non-controlling
non-controlling interest
shareholders loss shareholders
NHU EUROPE GmbH 49.00% 16,214,991.12 12,381,785.50 63,730,851.41
(3) Main financial information of significant not wholly-owned subsidiaries
Unit: RMB Yuan
Closing balance
Subsidiaries
Current assets Non-current Total assets Current liabilities Non-current Total liabilities
assets liabilities
NHU EUROPE 860,365,259.01 95,891,993.02 956,257,252.03 788,525,281.39 37,669,008.56 826,194,289.95
GmbH
(Continued)
Opening balance
Subsidiaries
Current assets Non-current assets Total assets Current liabilities Non-current Total liabilities
liabilities
NHU EUROPE 557,333,673.19 109,005,921.19 666,339,594.38 478,792,469.90 49,635,844.80 528,428,314.70
GmbH
Unit: RMB Yuan
Current period cumulative Preceding period comparative
Subsidiaries Total Cash flows Total Cash flows from
Operating Net profit Operating Net profit
comprehensive from operating comprehensive operating
revenue revenue
income activities income activities
NHU EUROPE 1,655,950,052.91 33,091,818.61 -7,679,716.03 72,448,446.07 1,695,307,096.25 27,484,838.84 30,804,930.61 27,888,174.39
GmbH
*
The English name is for identification purpose only.
Page 155 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
2. Interest in joint venture or associates
(1) Significant joint ventures or associates
Holding proportion (%) Accounting treatment
Joint ventures or associates Main operating Place of Business nature on investments in
place registration Direct Indirect joint ventures or
associates
Zhejiang Chunhui
Shangyu, Shangyu, Manufacturing 34.0918% Equity method
Environmental Protection
Zhejiang Zhejiang
Energy Co., Ltd.
DSM NHU Engineering Shangyu, Shangyu, Manufacturing 40.00% Equity method
Materials (Zhejiang) Co., Ltd. Zhejiang Zhejiang
Zhejiang Saiya Chemical Shangyu, Shangyu, Manufacturing 49.00% Equity method
Materials Co., Ltd. Zhejiang Zhejiang
(2) Main financial information of significant joint ventures
Unit: RMB Yuan
Closing balance/Current period cumulative Opening balance/Preceding period comparative
DSM NHU DSM NHU
Zhejiang Chunhui Zhejiang Saiya Zhejiang Chunhui Zhejiang Saiya
Items Engineering Engineering
Environmental Chemical Environmental Chemical
Materials Materials
Protection Energy Materials Co., Protection Energy Materials Co.,
(Zhejiang) Co., (Zhejiang) Co.,
Co., Ltd. Ltd. Co., Ltd. Ltd.
Ltd. Ltd.
Current assets 293,596,545.38 68,240,155.87 71,896,100.56 315,880,629.16 46,855,677.24 45,646,530.22
Non-current assets 559,076,086.33 13,956,368.94 157,938,616.58 455,644,920.86 14,760,235.10 175,471,429.07
Total assets 852,672,631.71 82,196,524.81 229,834,717.14 771,525,550.02 61,615,912.34 221,117,959.29
Current liabilities 199,269,854.33 97,736,253.17 15,537,056.20 167,519,267.96 74,217,481.09 19,238,056.31
Non-current 40,724,142.33 2,459,280.00 22,544,241.63 2,804,190.00
liabilities
Total liabilities 239,993,996.66 97,736,253.17 17,996,336.20 190,063,509.59 74,217,481.09 22,042,246.31
Equity attributable
to shareholders of 612,678,635.05 -15,539,728.36 211,838,380.94 581,462,040.43 -12,601,568.75 199,075,712.98
parent company
Proportionate share 208,873,174.90 -6,215,891.34 103,800,806.66 199,358,330.80 -5,040,627.50 97,547,099.36
in net assets
- Goodwill 762,611.33 762,611.33
- Unrealized profit 665,200.17
in internal trading
Accumulated -6,215,891.34 -5,040,627.50
unrecognized losses
Carrying amount of
investments in 208,873,174.90 103,898,217.82 199,358,330.80 98,309,710.69
associates
Operating revenue 474,138,506.11 112,672,114.30 248,551,895.41 311,051,317.66 53,650,355.15 176,311,795.62
Net profit 163,208,658.71 -2,938,159.61 11,439,773.30 174,601,374.25 -14,922,845.82 4,781,275.08
Total
comprehensive 163,208,658.71 -2,938,159.61 11,439,773.30 174,601,374.25 -14,922,845.82 4,781,275.08
income
Dividend from
associates received 40,855,278.00 12,960,000.00
in the current period
(3) Aggregated financial information of insignificant joint ventures and associates
Unit: RMB Yuan
Closing balance/ Opening balance/
Current period cumulative Preceding period comparative
Joint ventures: -- --
Proportionate shares in the following items -- --
Associates: -- --
Total carrying amount of investments 38,556,233.03 45,710,849.69
Proportionate shares in the following items -- --
-- Net profit -4,562,583.45 -889,348.68
Page 156 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Closing balance/ Opening balance/
Current period cumulative Preceding period comparative
-- Total comprehensive income -4,562,583.45 -889,348.68
X. Risks related to financial instruments
In risk management, the Company aims to seek the appropriate balance between the risks and benefits from its use of financial
instruments and to mitigate the adverse effects that the risks of financial instruments have on the Company’s financial performance,
so as to maximize the profits of shareholders and other equity investors. Based on such risk management objectives, the Company’s
risk management 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, liquidity
risk, 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 an
obligation.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each balance sheet date, the Company assesses whether the credit risk on a financial instrument has increased significantly since
initial recognition. When assessing whether the credit risk has increased significantly since initial recognition, the Company takes
into account reasonable and supportable information, which is available without undue cost or effort, including qualitative and
quantitative analysis based on historical data, external credit risk rating, and forward-looking information. The Company determines
the changes in default risk of financial instruments during the estimated lifetime through comparison of the default risk at the balance
sheet date and the initial recognition date, on an individual basis or a collective basis.
The Company considers the credit risk on a financial instrument has increased significantly when one or more of the following
qualitative 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 remaining
lifetime has risen by more than a certain percentage compared with the initial recognition;
2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial position, present or
expected changes in technology, market, economy or legal environment that will have significant adverse impact on the debtor’s
repayment ability.
(2) Definition of default and credit-impaired assets
A financial instrument is defined as defaulted when one or more following events have occurred, of which the standard is consistent
with that for credit-impairment:
1) significant financial difficulty of the debtor;
2) a breach of binding clause of contract;
3) it is very likely that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having granted to the
debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default, loss rate of default, and exposure to
Page 157 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
default risk. The Company develops a model of the probability of default, loss rate of default, and exposure to default risk on the
basis of quantitative analysis of historical data (e.g. counterparty rating, guarantee measures and collateral type, payment method,
etc.) and forward-looking information.
3. Please refer to item VII 4 and 7 of this section for details on the reconciliation table of opening balance and closing balance of
provision for losses of financial instrument.
4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks, the
Company 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 credible
and well-reputed customers based on credit assessment result, and conducts ongoing monitoring on balance of receivables, to avoid
significant risks in bad debts.
As the Company only conducts business with credible and well-reputed third parties, collateral is not required from customers. The
Company manages credit risk aggregated by customers. As of December 31, 2021, the Company has certain concentration of credit
risk, and 39.06 % (December 31, 2020: 35.19%) of the total accounts receivable was due from the five largest customers of the
Company. 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 risk
Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated with cash or other
financial assets settlement, which is possibly attributable to failure in selling financial assets at fair value on a timely basis, or failure
in 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
capital requirements and expenditures.
Financial liabilities classified based on remaining time period till maturity
Unit: RMB Yuan
Closing balance
Items
Carrying amount Contract amount not Within 1 year 1-3 years Over 3 years
yet discounted
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
Page 158 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
(Continued)
Unit: RMB Yuan
December 31, 2020
Items
Carrying amount Contract amount not Within 1 year 1-3 years Over 3 years
yet discounted
Bank borrowings 7,776,288,840.18 8,221,866,812.16 3,874,954,917.32 4,176,224,771.56 170,687,123.28
Notes payable 497,644,517.23 497,644,517.23 497,644,517.23
Accounts payable 1,463,728,316.04 1,463,728,316.04 1,463,728,316.04
Other payables 129,839,228.89 129,839,228.89 129,839,228.89
Lease liabilities
Subtotal 9,867,500,902.34 10,313,078,874.32 5,966,166,979.48 4,176,224,771.56 170,687,123.28
(III) Market risk
Market risk is the risk that the Company may encounter fluctuation in fair value or future cash flows of financial instruments due to
changes in market price. Market risk mainly includes interest risk and foreign currency risk.
1. Interest risk
Interest risk is the risk that an enterprise may encounter fluctuation in fair value or future cash flows of financial instruments due to
changes in market interest. The Company’s fair value interest risks arise from fixed-rate financial instruments, while the cash flow
interest risks arise from floating-rate financial instruments. The Company determines the proportion of fixed-rate financial
instruments and floating-rate financial instruments based on the market environment, and maintains a proper financial instruments
portfolio through regular review and monitoring. The Company’s interest risk in cash flows relates mainly to bank borrowings with
floating interest rate.
As of December 31, 2021, balance of borrowings with interest accrued at floating interest rate totaled 8,581,398,746.38 yuan
(December 31, 2020: 7,776,288,840.18 yuan). If interest rates had been 50 basis points higher/lower and all other variables were held
constant, the Company’s profit before tax and equity will not be significantly affected.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial instrument resulted from changes
in exchange rate. The Company’s foreign currency risk relates mainly to foreign currency monetary assets and liabilities. When
short-term imbalance occurred to foreign currency assets and liabilities, the Company may trade foreign currency at market exchange
rate when 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 the
end 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
Fair value as at the balance sheet date
Items
Level 1 fair value Level 2 fair value Level 3 fair value Total
measurement measurement measurement
I. Recurring fair value measurement -- -- -- --
1. Held-for-trading financial assets and other 736,359.24 1,250,000,000.00 1,250,736,359.24
non-current financial assets
Financial assets classified as at fair value 736,359.24 1,250,000,000.00 1,250,736,359.24
through profit or loss
Page 159 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Fair value as at the balance sheet date
Items
Level 1 fair value Level 2 fair value Level 3 fair value Total
measurement measurement measurement
Financial products with guaranteed principal 1,250,000,000.00 1,250,000,000.00
and floating income
Derivative financial assets 736,359.24 736,359.24
2. Receivables financing 182,891,179.65 182,891,179.65
3. Other equity instrument investments 22,998,147.55 22,998,147.55
Total liabilities at recurring fair value 736,359.24 1,455,889,327.20 1,456,625,686.44
measurement
2. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 2 fair value
at recurring and non-recurring fair measurement
Fair value was determined at forward exchange rate published by 中国银行股份有限公司 (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 value
at recurring and non-recurring fair measurement
1. Fair value of short-term financial products with guaranteed principal and floating income and structured deposits was determined
based on their par value.
2. Fair value of bank acceptance was determined based on its par value.
3. As there is no significant change in the operating environment, operating condition and financial position of the invested entities
Zhejiang Second Pharma Co., Ltd. and Shanghai NewMargin Yongjin Eqiuty Enterprise (LP), the Company took investment cost as
the reasonable estimation of fair value.
XII. Related parties and related party transactions
1. Parent company
Voting right
Parent company Place of registration Business nature Registered capital Holding proportion
proportion over the
over the Company
Company
NHU Holding Group Xinchang, Zhejiang Manufacturing 120.00 million 48.55% 48.55%
Co., Ltd.
Remarks on the parent company
The 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.
*
The English name is for identification purpose only.
Page 160 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
4. Other related parties of the Company
Related parties Relationships with the Company
大连保税区新旅程国际贸易有限公司 (Synchem International Its shareholder is the actual controller of the Company
Co., Ltd.*) [Note]
北京福元医药股份有限公司 (Beijing Winsunny Pharmaceutical Controlled by NHU Holding Group Co., Ltd.
Co., Ltd.*)
浙江爱生药业有限公司 (Zhejiang Asen Pharmaceutical Co., Controlled by NHU Holding Group Co., Ltd.
Ltd.*)
新昌县禾春绿化有限公司 (Xinchang County Hechun Greening Controlled by NHU Holding Group Co., Ltd.
Co., Ltd.*)
Zhejiang Deli Equipment Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
*
福元药业有限公司 (Front Pharmaceutical PLC. ) Controlled by NHU Holding Group Co., Ltd.
Xinchang County NHU Real Estate Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
绥化和成置业有限公司 (Suihua NHU Real Estate Co., Ltd.*) Controlled by NHU Holding Group Co., Ltd.
潍坊和成置业有限公司 (Weifang NHU Real Estate Co., Ltd.*) Controlled by NHU Holding Group Co., Ltd.
琼海和悦物业服务有限公司 (Qionghai Heyue Property Controlled by NHU Holding Group Co., Ltd.
Services Co., Ltd.*)
琼海博鳌和悦酒店管理有限公司 (Qionghai Boao Holliyard Controlled by NHU Holding Group Co., Ltd.
Hotel Management Co., Ltd.*)
绍兴和悦物业服务有限公司 (Shaoxing Heyue Property Controlled by NHU Holding Group Co., Ltd.
Services Co., Ltd.*)
绍兴上虞和成置业有限公司 (Shaoxing Shangyu NHU Real Controlled by NHU Holding Group Co., Ltd.
Estate Co., Ltd.*)
上海纳岩新材料科技有限公司 (Shanghai Rossence Advanced Controlled by NHU Holding Group Co., Ltd.
Material Technology 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.
浙江越秀外国语学院 (Zhejiang Yuexiu University of Foreign Controlled by NHU Holding Group Co., Ltd.
Languages*)
绍兴福膜新材料有限公司 (Shaoxing Formost Material Co., Its shareholder is the actual controller of the Company
Ltd.*)
黑龙江昊天玉米开发有限公司 (Heilongjiang Haotian Corn Non-controlling shareholders of subsidiaries
Development Co., Ltd.*)
Other remarks
Note: On November 4, 2021, the entity controlled by the actual controller of the Company withdrew from Synchem International Co.,
Ltd.
As Client C holds 25% equity of NHU Europe GmbH, the holding subsidiary of the Company’s subsidiary NHU (Hong Kong)
Trading Co., Ltd., the Company discloses transactions between Client C and NHU Europe GmbH as well as balances in related party
transactions for the sake of prudence.
5. Related party transactions
(1) Purchase and sale of goods, rendering and receiving of services
Purchase of goods and receiving of services
Unit: RMB Yuan
Related parties Content of transaction Current period Transaction limit Whether exceeds Preceding period
cumulative approved transaction limit comparative
Purchase of goods 91,325,844.40 55,382,554.92
Zhejiang Deli Equipment 90,000,000.00 Yes
Co., Ltd. Receiving of services 84,619.46 4,424.78
Zhejiang Chunhui Purchase of steam 69,512,700.69 70,200,000.00 No 59,039,785.77
*
The English names are for identification purpose only.
Page 161 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Related parties Content of transaction Current period Transaction limit Whether exceeds Preceding period
cumulative approved transaction limit comparative
Environmental Protection Waste disposal service 229,665.43 133,030.80
Energy Co., Ltd. fees
Zhejiang Saiya Chemical Purchase of goods 173,706,742.56 175,000,000.00 No 142,845,498.21
Materials Co., Ltd.
Zhejiang Asen Purchase of goods 2,035,921.32 2,039,879.70
Pharmaceutical Co., Ltd.
Xinchang County Hechun Purchase of goods 7,990,317.44 13,670,000.00 No 11,980,644.40
Greening Co., Ltd.
Catering and
Qionghai Boao Holliyard 123,967.00 99,630.00
accommodation
Hotel Management Co., Ltd.
services
Qionghai Heyue Property 653,877.42 816,689.09
Property management
Services Co., Ltd.
Shaoxing Heyue Property Property management 375,868.30 225,748.73
Services Co., Ltd.
Catering and
Xinchang County NHU Real 1,000,524.16 937,487.04
accommodation
Estate Co., Ltd.
services
Heilongjiang Haotian Corn Purchase of goods 1,123,079.89
Development Co., Ltd.
Shaoxing Shangyu NHU Maintenance funds 644,538.00 982,207.96
Real Estate Co., Ltd.
Shandong Bin’an Vocational 1,512,911.01
Receiving of services
Training School Co., Ltd.
Shaoxing Yuexiu Education 4,561.63
Receiving of services
Development Co., Ltd.
长白山保护开发区和悦酒
店管理有限公司 (Changbai Catering and
Mountain Protection and accommodation 140,000.00
Development Zone Heyue services
Hotel Management Co.,
Ltd.*)
Zhejiang Yuexiu University Receiving of services 24,733.44
of Foreign Languages
Subtotal 350,489,872.15 348,870,000.00 274,487,581.40
Sale of goods and rendering of services
Unit: RMB Yuan
Related parties Content of transaction Current period cumulative Preceding period comparative
Synchem International Co., Ltd. Pharmaceutical intermediates 164,095,134.62 113,624,941.20
Front Pharmaceutical PLC. Test fees 203,097.35
Beijing Winsunny Pharmaceutical Test fees 141,509.43 6,018.87
Co., Ltd.
Zhejiang Asen Pharmaceutical Pharmaceutical intermediates, 476,759.56 566,371.68
Co., Ltd. test fees
Zhejiang Deli Equipment Co., Ltd. Scrapped materials 117,269.93
New materials 78,620,470.09 39,183,650.98
6,914.41
DSM NHU Engineering Materials Hazardous waste disposal fees
(Zhejiang) Co., Ltd. Labor costs, etc. 64,377.36 575.22
Utilities fees 1,139,072.54 609,215.80
Scrapped materials 20,609.89
Shandong Bin’an Vocational
Training School Co., Ltd. Management service fees 226,415.09
Raw materials 258,816.65
Heilongjiang Haotian Corn
Development Co., Ltd. Thermal power 237,532.11
*
The English name is for identification purpose only.
Page 162 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Related parties Content of transaction Current period cumulative Preceding period comparative
Glucose mother solution 1,371,282.65
Utilities fees 15,976.75
Shaoxing Formost Material Co.,
Ltd. New materials 11,221.23
Shanghai Rossence Advanced Composite materials 534,513.28
Material Technology Co., Ltd.
Total 246,482,912.92 155,048,833.77
(2) Related party leases
The Company as the lessor:
Unit: RMB Yuan
Lessees Types of assets leased Lease income recognized in the Lease income recognized in
current period preceding period
Qionghai Boao Holliyard Hotel 60,000.00
Land use right and buildings
Management Co., Ltd.
Zhejiang Deli Equipment Co., 77,064.23 31,192.66
Land use right and buildings
Ltd.
DSM NHU Engineering 601,412.47 384,481.07
Land use right and buildings
Materials (Zhejiang) Co., Ltd.
NHU Holding Group Co., Ltd. Land use right and buildings 16,513.76 27,522.94
Weifang NHU Real Estate Co., 21,428.57
Land use right and buildings
Ltd.
Zhejiang Jingshi Real Estate 41,100.92
Land use right and buildings
Co., Ltd.
The Company as the lessee:
Unit: RMB Yuan
Lessors Types of assets leased Lease expenses recognized in Lease expenses recognized in
the current period preceding period
NHU Holding Group Co., Ltd. Land use right and buildings 1,712,675.89 1,811,812.80
(3) Related party guarantees
The Company as guaranteed parties
Unit: RMB Yuan
Guarantors Amount guaranteed Commencement date Maturity date Whether the guarantee is
mature
500,000,000.00 January 23, 2019 December 21, 2023 No
200,000,000.00 July 31, 2020 July 18, 2022 No
200,000,000.00 July 31, 2020 June 15, 2022 No
NHU Holding Group Co., Ltd. 300,000,000.00 November 17, 2020 November 16, 2022 No
500,000,000.00 December 3, 2020 September 21, 2025 No
200,000,000.00 January 20, 2021 January 19, 2023 No
100,000,000.00 April 14, 2021 April 12, 2023 No
Subtotal 2,000,000,000.00
(4) Key management’s emoluments
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Key management’s emoluments 26,372,671.30 18,690,000.00
Page 163 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
(5) Other related party transactions
1. Call loans from related parties
At the beginning of the period, the Company shall pay Weifang NHU Real Estate Co., Ltd. principal of 3,000,000.00 yuan and
interest of 243,666.67 yuan. According to the agreed interest rate, the Company shall pay fund occupation fees of 60,833.33 yuan in
the current period. As of December 31, 2021, both the principal and interest have been settled.
2. Purchase of fixed assets
(1) The Company’s subsidiary Shangyu NHU Bio-Chem Co., Ltd. purchased commercial housing totaling 46,009,338.00 yuan from
Shaoxing Shangyu NHU Real Estate Co., Ltd. to provide and improve accommodation for employees. The above assets had been
assessed by 坤元资产评估有限公司 (Canwin CPVs Ltd.*) and an Asset Appraisal Report (CWAAR [2020] No. 449) was issued
thereon. The entity paid 27,605,603.00 yuan in 2020, and paid 18,403,735.00 yuan as well as supplementary payments for difference
of dormitory area of 635,800.46 yuan in 2021. As of the balance sheet date, the commercial housing has been delivered to the entity.
(2) The Company’s subsidiary Zhejiang NHU Pharmaceutical Co., Ltd. purchased commercial housing totaling 46,005,580.00 yuan
from Shaoxing Shangyu NHU Real Estate Co., Ltd. to provide and improve accommodation for employees. The above assets had
been assessed by Canwin CPVs Ltd. and an Asset Appraisal Report (CWAAR [2020] No. 447) was issued thereon. The entity paid
27,603,348.00 yuan in 2020, and paid 18,402,232.00 yuan as well as supplementary payments for difference of dormitory area of
701,325.61 yuan in 2021. As of the balance sheet date, the commercial housing has been delivered to the entity.
(3) The Company’s subsidiary Zhejiang NHU Special Materials Co., Ltd. purchased commercial housing totaling 76,324,329.00
yuan from Shaoxing Shangyu NHU Real Estate Co., Ltd. to provide and improve accommodation for employees. The above assets
had been assessed by Canwin CPVs Ltd. and an Asset Appraisal Report (CWAAR [2020] No. 448) was issued thereon. The entity
paid 45,794,597.00 yuan in 2020, and paid 30,529,732.00 yuan in 2021. As of the balance sheet date, the commercial housing has
been delivered to the entity.
(4) The Company’s subsidiary Heilongjiang NHU Biotechnology Co., Ltd. purchased commercial housing, parking spots, etc.
totaling 10,559,633.00 yuan to provide and improve accommodation for employees. The above assets had been assessed by Canwin
CPVs Ltd. and an Asset Appraisal Report (CWAAR [2020] No. 450) was issued thereon. As of the balance sheet date, the
commercial housing and parking spots have been delivered to the entity.
3. Others
(1) Owners of 博鳌度假中心公寓 (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 110,207,977.84 yuan to Client C. At the end of the
period, balance of accounts receivable amounted to 6,343,958.26 yuan.
*
The English names are for identification purpose only.
Page 164 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
6. Balance due to or from related parties
(1) Balance due from related parties
Unit: RMB Yuan
Closing balance Opening balance
Items Related parties
Book balance Provision for bad Book balance Provision for bad
debts debts
Synchem
International Co., 27,012,516.04 1,350,625.80 24,564,693.12 1,228,234.66
Ltd.
Accounts receivable DSM NHU
Engineering 26,166,564.42 1,308,328.22 18,972,791.53 948,639.58
Materials (Zhejiang)
Co., Ltd.
Subtotal 53,179,080.46 2,658,954.02 43,537,484.65 2,176,874.24
Zhejiang Chunhui
Environmental 20,000.00 1,000.00 80,000.00 80,000.00
Protection Energy
Other receivables Co., Ltd.
DSM NHU
Engineering 18,862.50 943.13
Materials (Zhejiang)
Co., Ltd.
Subtotal 38,862.50 1,943.13 80,000.00 80,000.00
Shaoxing Shangyu
NHU Real Estate 101,003,548.00
Other non-current
Co., Ltd.
assets
Zhejiang Deli 45,362,374.00
Equipment Co., Ltd.
Subtotal 45,362,374.00 101,003,548.00
(2) Balance due to related parties
Unit: RMB Yuan
Items Related parties Closing book balance Opening book balance
Zhejiang Deli Equipment Co., Ltd. 29,272,703.74 7,314,438.78
Zhejiang Chunhui Environmental 5,185,881.68 7,449,905.70
Protection Energy Co., Ltd.
Zhejiang Saiya Chemical Materials Co., 2,640,661.94 115.04
Ltd.
Accounts payable Xinchang County Hechun Greening 1,943,036.80
Co., Ltd.
Suihua NHU Real Estate Co., Ltd. 10,374,865.03
Zhejiang Second Pharma Co., Ltd. 6,408.00
Qionghai Heyue Property Services Co., 300,000.00
Ltd.
Subtotal 37,405,655.36 27,082,361.35
Zhejiang Deli Equipment Co., Ltd. 13,009.64 13,009.64
Contract liabilities
Zhejiang Asen Pharmaceutical Co., Ltd. 1,858.41
Subtotal 13,009.64 14,868.05
Zhejiang Deli Equipment Co., Ltd. 443,500.00 3,500.00
Other payables Xinchang County Hechun Greening 13,102.77 480.00
Co., Ltd.
Weifang NHU Real Estate Co., Ltd. 87,148,146.46
Subtotal 456,602.77 87,152,126.46
Other current liabilities Zhejiang Deli Equipment Co., Ltd. 1,691.25
Page 165 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Items Related parties Closing book balance Opening book balance
Subtotal 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, as
of December 31, 2021, details of the Company’s unsettled forward exchange settlement contracts are as follows:
Currencies Nominal amount Agreed exchange rate Settlement date
2,000,000.00 7.2010 January 20, 2022
5,000,000.00 7.2415 January 20, 2022
2,000,000.00 7.2420 January 20, 2022
EUR
3,000,000.00 7.2640 February 22, 2022
5,000,000.00 7.2520 February 22, 2022
5,000,000.00 7.2700 March 24, 2022
Subtotal 22,000,000.00
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
中国银行股份有限公司新昌 Performance guarantee USD 122,750.00 Occupying credit line
支行 (Bank of China Limited The Company
Performance guarantee USD 95,260.00 Occupying credit line
Xinchang Sub-branch*)
汇丰银行（中国）有限公司杭 Financing guarantee EUR 10,000,000.00 Occupying credit line
州分行 (HSBC Bank (China) The Company
Company Limited Hangzhou Financing guarantee EUR 10,000,000.00 Occupying credit line
Branch*)
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
USD 28,790.70 Occupying credit line
USD 29,189.70 Occupying credit line
Bank of China Limited Xinchang The Company
Sub-branch USD 226,620.60 Occupying credit line
USD 11,286.00 Occupying credit line
招商银行股份有限公司杭州分
行 (China Merchants Bank Co., The Company 130,000,000.00 Occupying credit line
Ltd. Hangzhou Branch*)
Bank of China Limited Xinchang Zhejiang NHU Import & USD 294,000.00 Occupying credit line
Sub-branch Export Co., Ltd.
中国建设银行股份有限公司潍 EUR 1,096,000.00 Occupying credit line
坊滨海支行 (China Construction Shandong NHU
Bank Corporation Weifang Binhai Pharmaceutical Co., Ltd. USD 77,400.00 Occupying credit line
Sub-branch*)
*
The English names are for identification purpose only.
Page 166 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Issuing banks Applicants Balance of L/C Conditions
中国银行潍坊滨海支行 (Bank EUR 1,855,000.00 Deposit of 14,942,418.00 yuan
Shandong NHU Amino-acids
of China Limited Weifang Binhai
* Co., Ltd. EUR 1,501,150.00 Deposit of 12,000,000.00 yuan
Sub-branch )
JPY 220,000,000.00 Deposit of JPY 220,000,000.00
JPY 2,696,400.00 Deposit of JPY 2,696,400.00
中国银行股份有限公司上虞支
Zhejiang NHU Special USD 62,900.00 Deposit of USD 62,900.00
行 (Bank of China Limited Materials Co., Ltd.
Shangyu Sub-branch*) USD 461,580.00 Deposit of USD 461,580.00
USD 6,522,499.20 Deposit of USD 6,522,499.20
交通银行绍兴新昌支行 (Bank
of Communications Co., Ltd. The Company CNY 20,000,000.00 Deposit of 2,000,000.00 yuan
*
Shaoxing Xinchang Sub-branch )
4. The “notes pool” business
Pursuant to the “Notes Pool Service Agreement on Yuntong Account of Bank of Communications” entered into between the
Company and 交通银行股份有限公司 (Bank of Communications Co., Ltd.*), the Company pledged and endorsed bank acceptance
to the depositary bank, forming a pledged notes pool; the Company also opened a notes pool deposit account to provide guarantee for
the credit granted under the note pledge and to deposit the pledged bank acceptance for payments. The available credit line for pledge
is the sum of pledged notes and the actual balance of deposit account less pledged notes used. As stipulated in the agreement, the sum
of pledged notes and the balance of deposit account shall not be less than the pledged amount used for issuing notes. Pursuant to the
“Notes Pool Cooperation Agreement” entered into among the Company, its subsidiaries Shangyu NHU Bio-Chem Co., Ltd., Zhejiang
NHU Pharmaceutical Co., Ltd., Zhejiang NHU Special Materials Co., Ltd., 绍兴裕辰新材料有限公司 (Shaoxing Yuchen New
Materials Co., Ltd.*), Shandong NHU Pharmaceutical Co., Ltd., Shandong NHU Vitamins Co., Ltd., Shandong NHU Amino-acids
Co., Ltd., Heilongjiang NHU Biotechnology Co., Ltd., Shandong NHU Fine Chemical Science and Technology Co., Ltd., 黑龙江新
昊热电有限公司 (Heilongjiang Xinhao Thermal Power Co., Ltd.*), Xinchang NHU Vitamins Co., Ltd., Zhejiang Vityesun Animal
Nutrition and Health Co., Ltd. and 浙商银行股份有限公司 (China Zheshang Bank Co., Ltd.*), the Company pledged assets pool or
notes pool for guarantee, and opened a notes deposit account to pay deposits at a certain percentage, with no specific agreement on
the amount of deposits. As of December 31, 2021, balance of pledged bank acceptance amounted to 368,212,546.26 yuan, deposits of
notes pool in China Zheshang Bank Co., Ltd. amounted to 102,061,887.99 yuan.
5. Besides the aforementioned events and assets with title or use right restrictions as stated in this section, the Company has no other
significant 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 planned to be distributed 1,794,689,766.80
Profit or dividend approved to be distributed 1,794,689,766.80
2. Others
As of the date of approval for issuing the financial statements, the Company has no other significant events after the balance sheet
date to be disclosed.
*
The English names are for identification purpose only
Page 167 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
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 and
internal reporting system, and based on business segments. Assets and liabilities shared by different segments are allocated among
segments proportionate to their respective sizes.
(2) Financial information of reportable segments
Unit: RMB Yuan
Items Pharmaceutical chemicals Others Inter-segment offsetting Total
Revenue from main 13,849,752,754.47 1,102,338,139.50 304,110,218.06 14,647,980,675.91
operations
Cost of main operations 7,602,032,783.42 827,056,742.78 304,110,218.06 8,124,979,308.14
Total assets 33,053,825,742.39 2,566,771,327.95 928,431,958.46 34,692,165,111.88
Total liabilities 12,515,959,435.08 1,240,929,137.91 928,431,958.46 12,828,456,614.53
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
which the underlying asset is of low value. The amounts of short-term leases and low-value asset leases included into profit or loss
are as follows:
Unit: RMB Yuan
Items Current period cumulative
Expense relating to short-term leases 1,841,763.55
Total 1,841,763.55
(3) Profit or loss and cash flows related to leases
Unit: RMB Yuan
Items Current period cumulative
Interest expenses on lease liabilities 153,023.91
Total cash outflows related to leases 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
Lease income 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.
Page 168 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
(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
Within 1 year 833,000.00
1-2 years 696,000.00
2-3 years 310,000.00
Total 1,839,000.00
3. Others
(I) Employee stock ownership plan
Pursuant 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
Directors and the second meeting of the eighth session of the Board of Supervisors dated October 26, 2020 and the second
extraordinary general meeting 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 on
February 26, 2021 through bidding in secondary market, accounting for 0.39% of total shares, with transaction amount totaling
303,710,918.74 yuan and average transaction price of 35.97 yuan per share. On May 19, 2021, holding shares in the third phase of
employee 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 the
employee stock ownership plan covers 12 months since the announcement date of purchase completion (i.e., from February 27, 2021
to February 26, 2022). Therefore, the lock-up period has expired on February 26, 2022. The duration of employee stock ownership
plan shall not exceed 24 months since the approval date of general meeting of shareholders (i.e., from November 11, 2020 to
November 11, 2022).
(II) Progress of share repurchase
Pursuant to the “Proposal on Share Repurchase” deliberated and approved by the seventh meeting of the eighth session of the Board
of Directors dated August 18, 2021, the Company was agreed to repurchase part of public shares through centralized bidding
transactions with self-owned funds for the purpose of equity incentive plan or employee stock ownership plan. The repurchase
amount in 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, 2021, the Company has repurchased 10,988,369 shares through centralized bidding transactions using special
securities account for repurchase, accounting for 0.4262% of total shares. The highest price of shares was 30.03 yuan per share while
the lowest price was 26.15 yuan per share, and the accumulated transaction amount was 320,335,151.32 yuan (transaction fees
excluded). Such repurchase complied with relevant laws and regulations, as well as the repurchase plan of the Company.
(III) Foreign investments and signing of letters of intent on cooperative joint venture
Pursuant to the “Proposal on Foreign Investments and Signing of Letter of Intent on Cooperative Joint Venture” deliberated and
approved by the ninth meeting of the eighth session of Board of Directors dated December 24, 2021, the Company was agreed to sign
the “Letter of Intent on Cooperative Joint Venture” with 中国石油化工股份有限公司镇海炼化分公司 (Sinopec Zhenhai Refining
& Chemical Company*, hereinafter referred to as “ZRCC”) to jointly establish a joint venture as the implementing subject of a
methionine production facility, with total investment amount of 3.00 billion yuan.
*
The English name is for identification purpose only.
Page 169 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
The Company and ZRCC jointly invested a methionine production facility in Zhenhai District, Ningbo City with estimated total
investment amount of 3.00 billion yuan. The joint venture they jointly established is responsible for production and sales of
methionine products. The registered capital of the joint venture accounts for 30% of the total investment amount, which is
contributed in the form of cash. The holding proportion of both parties is tentatively set at 50%. The Board of Directors of the joint
venture consists of 4 directors, with each party having the right to appoint two directors. The management personnel of the joint
venture shall consist of personnel from the Company and ZRCC.
(IV) Purchase of financial products using raised funds
Pursuant to the “Proposal on Using Part of Idle Raised Funds for Cash Management” deliberated and approved by the general
meeting of 2020 dated April 21, 2021, the Company was agreed to use idle raised funds not exceeding 3.57 billion yuan (inclusive) to
purchase short-term principal-guaranteed financial products with high security and liquidity for a period not exceeding 12 months
from the date of approval by the general meeting of 2020 to the date of the general meeting of 2021 on a rolling basis, on the premise
that the investment projects of raised funds are not influenced. As of December 31, 2021, the actual balance of financial products and
structured deposits purchased using idle raised funds amounted to 2.45 billion yuan.
XVI. Notes to main items of parent company financial statements
1. Accounts receivable
(1) Details on categories
Unit: RMB Yuan
Closing balance Opening balance
Categories Book balance Provision for bad debts Book balance Provision for bad debts
Carrying amount Carrying amount
Amount % to total Amount Provision Amount % to total Amount Provision
proportion proportion
Including:
Receivables with
provision made on 785,631,558.20 100.00% 39,281,577.91 5.00% 746,349,980.29 741,143,885.29 100.00% 37,057,194.26 5.00% 704,086,691.03
a collective basis
Total 785,631,558.20 100.00% 39,281,577.91 5.00% 746,349,980.29 741,143,885.29 100.00% 37,057,194.26 5.00% 704,086,691.03
Provision made on a collective basis using age analysis method
Unit: RMB Yuan
Closing balance
Items
Book balance Provision for bad debts Provision proportion
Within 1 year 785,631,558.20 39,281,577.91 5.00%
Total 785,631,558.20 39,281,577.91 --
Age analysis
Unit: RMB Yuan
Ages Book balance
Within 1 year (inclusive) 785,631,558.20
Total 785,631,558.20
Page 170 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
(2) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
Increase/Decrease
Categories Opening balance Closing balance
Accrual Recovery/ Write-off Others
Reversal
Provision made on a 37,057,194.26 2,224,383.65 39,281,577.91
collective basis
Total 37,057,194.26 2,224,383.65 39,281,577.91
(3) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Debtors Book balance Proportion to the total balance of Provision for bad debts
accounts receivable (%)
Client 1 533,759,020.53 67.94% 26,687,951.03
Client 2 66,425,426.16 8.46% 3,321,271.31
Client 3 30,027,727.46 3.82% 1,501,386.37
Client 4 25,492,000.00 3.24% 1,274,600.00
Client 5 10,874,000.00 1.38% 543,700.00
Total 666,578,174.15 84.84% --
2. Other receivables
Unit: RMB Yuan
Items Closing balance Opening balance
Dividend receivable 7,159,278.00
Other receivables 3,087,880,137.47 4,247,680,763.92
Total 3,095,039,415.47 4,247,680,763.92
(1) Dividend receivable
1) Details on categories
Unit: RMB Yuan
Items/Investees Closing balance Opening balance
Zhejiang Chunhui Environmental 7,159,278.00
Protection Energy Co., Ltd.
Total 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 100,300,037.50 98,617,037.50
Export tax refund 10,812,822.80 2,982,236.49
Employee petty cash 3,148,937.00 3,754,737.00
Temporary advance payment receivable 178,933.01 178,933.01
Call loans 3,131,287,854.18 4,361,194,541.67
Others 495,303.74 472,076.44
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Nature of receivables Closing book balance Opening book balance
Total 3,246,223,888.23 4,467,199,562.11
2) Provision for bad debts
Unit: RMB Yuan
Phase I Phase II Phase III
Provision for bad debts Total
12 month expected Lifetime expected credit Lifetime expected credit
credit losses losses (credit not impaired) losses (credit impaired)
Opening balance 218,136,891.03 546,150.58 835,756.58 219,518,798.19
Opening balance in the —— —— —— ——
current period
--Transferred to phase II -32,913.50 32,913.50
--Transferred to phase III -151,437.98 151,437.98
Provision made in the current -61,341,384.86 -295,972.10 462,309.53 -61,175,047.43
period
Closing balance 156,762,592.67 131,654.00 1,449,504.09 158,343,750.76
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) 3,146,064,676.16
1-2 years 658,270.00
2-3 years 757,189.90
Over 3 years 98,743,752.17
3-4 years 64,977.95
4-5 years 126,657.60
Over 5 years 98,552,116.62
Total 3,246,223,888.23
3) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
Increase/Decrease
Categories Opening balance Closing balance
Accrual Recovery/Reversal Write-off Others
Portfolio grouped by ages 219,518,798.19 61,175,047.43 158,343,750.76
Total 219,518,798.19 61,175,047.43 158,343,750.76
4) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Proportion to the total
Debtors Nature of Book balance Ages Provision for bad
balance of other
receivables debts
receivables (%)
Heilongjiang NHU Call loans 759,064,539.08 Within 1 year 23.38% 37,953,226.95
Biotechnology Co., Ltd.
Shandong NHU Fine
Chemical Science and Call loans 527,873,315.10 Within 1 year 16.26% 26,393,665.76
Technology Co., Ltd.
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Proportion to the total
Debtors Nature of Book balance Ages Provision for bad
balance of other
receivables debts
receivables (%)
Shandong NHU Amino-acids Call loans 500,000,000.00 Within 1 year 15.40% 25,000,000.00
Co., Ltd.
Shandong NHU Vitamins Co., Call loans 393,000,000.00 Within 1 year 12.11% 19,650,000.00
Ltd.
Zhejiang NHU Special Call loans 367,000,000.00 Within 1 year 11.31% 18,350,000.00
Materials Co., Ltd.
Total -- 2,546,937,854.18 -- 78.46% 127,346,892.71
3. Long-term equity investments
Unit: RMB Yuan
Closing balance Opening balance
Items
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
impairment impairment
Investments in 7,846,078,842.12 7,846,078,842.12 6,173,278,842.12 6,173,278,842.12
subsidiaries
Investments in associates 208,873,174.90 208,873,174.90 199,358,330.80 199,358,330.80
and joint ventures
Total 8,054,952,017.02 8,054,952,017.02 6,372,637,172.92 6,372,637,172.92
(1) Investments in subsidiaries
Unit: RMB Yuan
Increase/Decrease Closing
Investees Opening carrying Closing carrying balance of
amount Investments Investments Provision for Others amount provision for
increased decreased impairment impairment
Xinchang NHU
Vitamins Co., 49,407,990.15 100,000,000.00 149,407,990.15
Ltd.
Zhejiang NHU
Import & Export 13,500,000.00 13,500,000.00
Co., Ltd.
琼海博鳌丽都
置业有限公司
(Qionghai Boao 54,020,492.00 54,020,492.00
Lidu Real Estate
Co., Ltd.*)
Zhejiang
Vityesun
Animal 5,000,000.00 5,000,000.00
Nutrition and
Health Co., Ltd.
Shangyu NHU
Bio-Chem Co., 414,100,091.44 414,100,091.44
Ltd.
NHU (Hong
Kong) Trading 16,406,160.00 16,406,160.00
Co., Ltd.
Zhejiang NHU
Pharmaceutical 480,000,000.00 480,000,000.00
Co., Ltd.
Zhejiang NHU
Special 554,844,108.53 554,844,108.53
Materials Co.,
Ltd.
*
The English name is for identification purpose only.
Page 173 of 175
2021 Annual Report of Zhejiang NHU Co., Ltd.
Increase/Decrease Closing
Investees Opening carrying Closing carrying balance of
amount Investments Investments Provision for Others amount provision for
increased decreased impairment impairment
Shandong NHU
Amino-acids 2,900,000,000.00 1,000,000,000.00 3,900,000,000.00
Co., Ltd.
Shandong NHU
Holdings Co., 786,000,000.00 586,000,000.00 200,000,000.00
Ltd.
Heilongjiang
NHU 900,000,000.00 400,000,000.00 1,300,000,000.00
Biotechnology
Co., Ltd.
Shandong NHU
Pharmaceutical 586,000,000.00 586,000,000.00
Co., Ltd.
Shandong NHU
Fine Chemical
Science and 160,000,000.00 160,000,000.00
Technology Co.,
Ltd.
Zhejiang NHU
Nylon Materials
Co., Ltd.
NHU Singapore 12,800,000.00 12,800,000.00
PTE. LTD.
Total 6,173,278,842.12 2,258,800,000.00 586,000,000.00 7,846,078,842.12
(2) Investments in associates and joint ventures
Unit: RMB Yuan
Increase/Decrease
Investment Closing
Opening carrying Adjustment Closing carrying balance of
Investees income Cash dividend/
amount Investments Investments in other Changes in Provision for Others amount provision for
recognized Profit declared
increased decreased comprehens other equity impairment impairment
under equity for distribution
ive income
method
I. Associates
Zhejiang
Chunhui
Environmental 199,358,330.80 60,097,137.98 -9,727,015.88 40,855,278.00 208,873,174.90
Protection
Energy Co.,
Ltd.
Zhejiang
Sanpo Polymer
Co., Ltd.
Subtotal 199,358,330.80 60,097,137.98 -9,727,015.88 40,855,278.00 208,873,174.90
Total 199,358,330.80 60,097,137.98 -9,727,015.88 40,855,278.00 208,873,174.90
4. Operating revenue/Operating cost
Unit: RMB Yuan
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 4,490,464,824.38 3,190,769,298.95 3,894,400,776.08 2,510,546,533.77
Other operations 63,614,077.00 44,517,335.33 20,294,202.59 10,198,844.07
Total 4,554,078,901.38 3,235,286,634.28 3,914,694,978.67 2,520,745,377.84
Including: Revenue from 4,550,933,427.10 3,233,713,897.14 3,911,746,924.63 2,519,286,947.15
contracts with customers
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2021 Annual Report of Zhejiang NHU Co., Ltd.
Details of revenue
Unit: RMB Yuan
Categories of contracts Total
By operating region
Including: Domestic 2,323,586,403.31
Overseas 2,227,347,023.79
Subtotal 4,550,933,427.10
By product
Including: Nutrition 4,490,464,824.38
Others 60,468,602.72
Subtotal 4,550,933,427.10
By revenue recognition time
Including: Transferred at a point in time 4,550,933,427.10
Subtotal 4,550,933,427.10
Information related to performance obligations:
None.
Information related to transaction price allocated to the remaining performance obligations:
As of December 31, 2021, revenue corresponding to performance obligations for which the Company has entered into contracts but
not yet performed or fulfilled amounted to 616,538,878.73 yuan, of which, 616,538,878.73 yuan is expected to be recognized as
revenue in 2022.
5. Investment income
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Investment income from long-term equity 60,097,137.98 57,147,047.58
investments under equity method
Investment income from long-term equity 1,289,000,000.00 955,025,000.00
investments under cost method
Investment income from disposal of 384,955.72 2,417,028.91
financial instruments
Including: Financial assets classified as at 1,292,607.39 2,911,524.03
fair value through profit or loss
Financial liabilities classified as at fair -907,651.67 -494,495.12
value through profit or loss
Interest income from call loans 142,819,103.02 172,513,666.92
Investment income from bank financial 43,135,464.45 90,963,116.34
products and structured deposits
Total 1,535,436,661.17 1,278,065,859.75
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2021 Annual Report of Zhejiang NHU Co., Ltd.
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 -61,427,624.58
Government grants included in profit or loss (excluding those closely
related to operating activities of the Company, satisfying government 151,398,630.02
policies and regulations, and continuously enjoyed with certain quantity
or quota based on certain standards)
Gains on assets consigned to the third party for investment or 57,777,633.53
management
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 48,751,702.84
financial liabilities, excluding those arising from hedging business related
to operating activities
Other non-operating revenue or expenditures 8,727,858.40
Less: Enterprise income tax affected 28,969,203.00
Non-controlling interest affected 42,098.74
Total 176,216,898.47 --
Remarks on other profit or loss satisfying the definition of non-recurring profit or loss:
□ Applicable √ Not applicable
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss.
Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria for
Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss
□ Applicable √ Not applicable
2. ROE and EPS
EPS (yuan/share)
Profit of the reporting period Weighted average ROE (%)
Basic EPS Diluted EPS
Net profit attributable to shareholders of 21.07% 1.68 1.68
ordinary shares
Net profit attributable to shareholders of
ordinary shares after deducting 20.21% 1.61 1.61
non-recurring profit or loss
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
Standards and Chinese accounting standards
□ Applicable √ Not applicable
(2) Difference in net profit and net assets in financial statements disclosed respectively under overseas
accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
Page 176 of 175
