2022 Annual Report of Zhejiang NHU Co., Ltd.
Zhejiang NHU Co., Ltd.
2022 Annual Report
April 2023
2022 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.
Hu Baifan, the Company’s legal representative, Shi Guanqun, the officer in
charge of accounting, and Zhang Lijin, 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: Based on the 3,073,421,680 shares (total share capital of
3,090,907,356 excluding 17,485,676 repurchased shares[Note]), a cash dividend of
5 yuan (tax included) will be distributed to all shareholders for every 10 shares,
and no bonus shares will be distributed, and the capital reserve will not be
converted into share capital.
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Note: According to the “Rules on Share Repurchase of Listed Companies”, shares in the special
account for repurchase of listed companies carry no right of profit distribution and conversion
of capital reserve into share capital.
If the Company’s total share capital 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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2022 Annual Report of Zhejiang NHU Co., Ltd.
Contents
Section I Important Notes, Contents, and Definitions ............................................................................... 1
Section II Company Profile and Key Financial Indicators ........................................................................ 6
Section III Management Discussion and Analysis ................................................................................... 11
Section IV Corporate Governance......................................................................................................... 37
Section V Environmental and Social Responsibilities.............................................................................. 53
Section VI Significant Events ................................................................................................................ 59
Section VII Movements in Shares and Conditions of Shareholders .......................................................... 68
Section VIII Preferred Shares ............................................................................................................... 75
Section IX Bonds .................................................................................................................................. 76
Section X Financial Report ................................................................................................................... 77
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2022 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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2022 Annual Report of Zhejiang NHU Co., Ltd.
Definitions
Abbreviations Refers to Contents of definitions
The Company, NHU Refers to ZHEJIANG NHU CO., LTD.
Daily Interaction Refers to Daily Interactive Co., Ltd
CSRC Refers to China Securities Regulatory Commission
CSRC, Zhejiang Office Refers to China Securities Regulatory Commission, Zhejiang Office
PPS Refers to Polyphenylene sulfide
PPA Refers to Poly phthalamide
VOC Refers to Volatile organic compound
NH-acid Refers to Taurine
HSE Refers to Healthy and safe environment
F5 Refers to Vitamin B5
CNAS Refers to China National Accreditation Service for Conformity
Assessment
DSC Refers to Differential Scanning Calorimetry
ARC Refers to Accelerating ratecalori meter
RC1e Refers to Reaction calorimeter
XL Refers to Fragrances
PCY Refers to Umbelliferous hydrocarbons
MV Refers to Vanillin
PH Refers to Jasmonaldehyde
HY Refers to Cycloalkynes
PF Refers to Lupin
IBU 酸 Refers to Ibuprofen
CDE Refers to State Drug Administration Drug Review Center
MS Refers to Moxifloxacin
CEP Refers to European Pharmacopoeia applicability certification
Pd 催化剂 Refers to Palladium catalyst
IPDA Refers to Isophorone diamine
NBC Refers to Azabicycles
CLA Refers to Karon anhydride
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2022 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, 2020,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 Zeng Shuying
No.418 Xinchang Dadao West Road, Qixing Sub- No.418 Xinchang Dadao West Road, Qixing Sub-
Contact address district, Xinchang County, Zhejiang Province, district, Xinchang County, Zhejiang Province,
China 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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2022 Annual Report of Zhejiang NHU Co., Ltd.
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, Shangcheng District,
Hangzhou 310020, China
Certified Public Accountants Teng Peibin Jian Yanhui
The sponsor institution engaged by the Company, which performed the duty of continuous guidance and supervision during 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
Accounting policy changes and other reasons
YoY
Year 2021 growth Year 2020
Items Year 2022 rate
After
Before adjustment After adjustment[Note 2] adjustmen Before adjustment After adjustment
t
15,933,984,403. 14,797,989,091. 10,314,084,354. 10,314,084,354.
Operating revenue 14,917,101,500.91 6.82%
(yuan) 41 20 21 21
-
Net profit attributable 3,620,271,034.9 4,324,150,263.3 3,563,759,939.4 3,563,759,939.4
to shareholders of 4,356,010,628.22 16.89
listed company (yuan) 6 1 8 8
%
Net profit attributable to
shareholders of listed 3,410,367,513.01
company after deducting 3,586,873,100.22 4,147,933,364.84 4,179,793,729.75 -14.19% 3,410,367,513.01
non-recurring profit or
[Note 1]
loss (yuan)
Net cash flows from 3,122,807,363.21
operating activities 4,361,481,083.61 5,837,878,051.57 5,837,878,051.57] -25.29% 3,122,807,363.21
(yuan) [Note 1]
Basic EPS (yuan/share) 1.17 1.68 1.41[Note 1] -17.02% 1.66 1.15[Note 1]
Diluted EPS 1.17 1.68 1.41[Note 1] -17.02% 1.66 1.15[Note 1]
(yuan/share)
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Decreas
ed by
Weighted average ROE 16.08% 21.07% 21.21% 5.13 19.63% 19.63%
percenta
ge points
YoY
Dec. 31, 2021 growth Dec. 31, 2020
Items Dec. 31, 2022 rate
After
Before adjustment After adjustment adjustmen Before adjustment After adjustment
t
Total assets (yuan) 38,267,625,155.83 34,692,165,111.88 34,724,025,476.79 10.21% 30,897,007,799.54 30,897,007,799.54
Net assets attributable to
shareholders of listed 23,574,859,468.61 21,799,977,645.94 21,831,838,010.85 7.98% 19,336,254,922.95 19,336,254,922.95
company (yuan)
[Note1] After the implementation of the Company’s 2021 profit distribution plan, its share capital was increased from 2,578,394,760
shares to 3,090,907,356 shares. The above EPS of the comparative period was recalculated based on the adjusted share capital.
[Note2] The company has implemented The Interpretation of Accounting Standards for Business Enterprises No. 15 since January 1,
2022. The interpretation requires that if the company sells the products or by-products produced before the fixed assets reach the
expected serviceable state or during the research and development process, the income and cost related to the trial operation sales shall
be accounted for separately and included in the current profit and loss, The net amount of the revenue from trial operation sales after
offsetting the relevant costs shall not be used to offset the cost of fixed assets or R&D expenses. The company makes retroactive
adjustment according to requirements.
The company's net profit before and after deducting non-recurring gains and losses in the last three fiscal years, whichever is lower, is
negative, and the audit report of the latest year shows that the company's ability of continuing operation is uncertain.
□ Yes √ No
The lower of the net profit before and after deducting extraordinary gains and losses is a negative value.
□ Yes √ No
VII. Differences in accounting data under Chinese accounting standards and 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.
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2022 Annual Report of Zhejiang NHU Co., Ltd.
VIII. Key financial indicators by quarter
Unit: RMB Yuan
Items First quarter Second quarter Third quarter Fourth quarter
Operating revenue 4,307,991,748.95 3,907,047,528.08 3,694,978,856.40 4,023,966,269.98
Net profit attributable to 1,203,327,294.72 1,010,550,124.53 797,168,419.00 609,225,196.71
shareholders of listed company
Net profit attributable to
shareholders of listed company 1,142,767,059.69 951,288,889.93 833,476,722.26 659,340,428.34
after deducting non-recurring profit
or loss
Net cash flows from operating 422,441,679.66 820,015,058.54 1,285,029,625.87 1,833,994,719.54
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
IX. Non-recurring profit or loss
√ Applicable □ Not Applicable
Unit: RMB Yuan
Items Year 2022 Year 2021 Year 2020 Remarks
Gains or losses on disposal of non-current
assets, including write-off of provision for -74,232,517.88 -61,427,624.58 -37,808,614.38
impairment
Tax rebates and exemptions that are
approved beyond authority or without 8,476,745.63
official approval documents
Government grants included in profit or loss
(excluding those closely related to operating
activities of the Company, satisfying 175,761,119.94 151,398,630.02 125,612,538.90
government policies and regulations, and
continuously enjoyed with certain quantity
or quota based on certain standards)
Fees charged to non-financial enterprises for
fund occupancy included in current profit or 988,193.62
loss
Gains or losses on assets consigned to the 52,749,284.13 57,777,633.53 106,249,559.87
third party for investment or management
Net profit or loss on subsidiaries acquired -4,136,941.61
through business combination under
common control from the beginning of the
period to the combination date
This is mainly due
Gains or losses on changes in fair value of to the change in
held-for-trading financial assets and held-
for-trading financial liabilities, and fair value of
investment income from disposal of held- -86,980,602.84 48,751,702.84 6,293,430.49 forward exchange
for-trading financial assets and held-for-
trading financial liabilities, excluding those settlement during
arising from hedging business related to the reporting
operating activities
period.
Other non-operating revenue or expenditures 2,411,616.08 8,727,858.40 -11,107,533.03
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Other profit and loss items that meet the
1,102,494.25
definition of non-recurring profit or loss
Less: Enterprise income tax affected 46,826,444.91 28,969,203.00 31,786,463.26
Non-controlling interest affected (after 51,953.28 42,098.74 -76,449.49
tax)
Total 33,397,934.74 176,216,898.47 153,392,426.47 --
Remarks on other profit or loss satisfying the definition of non-recurring profit or loss:
□ Applicable √ Not Applicable
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss.
Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria 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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2022 Annual Report of Zhejiang NHU Co., Ltd.
Section III Management Discussion and Analysis
I. The industry in which the Company operates during the reporting period
Based on the fine chemical industry, the company takes "Chemical+" and "Bio+" as its core technology platform to produce various
functional chemicals around nutrition, flavors and fragrances, new materials and APIs.
Nutrition:
With the growth of global population and the deepening of population aging, the improvement of people's living standard and health
awareness will bring more demand for nutritional health services and products, and the consumption demand for nutritional products
in the global market will continue to grow steadily. Nutritional products include human nutritional products and animal nutritiona l
products. Human nutritional products are mainly used in food, beverage and other nutritional health care fields; animal nutritiona l
products are mainly used in poultry, livestock, aquaculture and other breeding fields.
Vitamins and methionine are the representatives of the nutritional products market. Vitamins are trace organic substances essential 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 0.41 million tons of vitamins in 2022, accounting for 83.40% of the global
production. The vitamin industry faced various challenges in 2022, such as market demand falling under expectations, complex changes
in the industry structure, and rising production costs, etc. The price of vitamin E and other products rose, most product prices fell1 .
Methionine is the only sulfur-containing amino acid among the essential amino acids. It cannot be produced by animal itself and must
be obtained from outside. It is widely used in medicine and health products, food and feed. During recent years, the development of
China’s methionine industry has accelerated, as a result, the production capacity and supply have tilted to the domestic market. The
global increase in methionine mainly comes from China, since some factories in Europe periodically reduced production, affecting by
energy and other factors. In 2022, China's methionine output is 443 thousand tons, at a year-on-year increase of 21.4%, accounting for
26.7% of global production.2
Flavor and fragrance:
The flavor and fragrance industry is an industry with high technological content, strong matching and high correlation with other
industries in the national economy. It includes fragrances (synthetic fragrances, natural fragrances) and essences (daily chemical flavors,
food flavors, tobacco flavors, etc.), which are used in various daily life scenarios such as personal care, home care, food, and beverages.
The global market size is about 35 billion US dollars, and the industry maintains long-term stable growth. From the perspective of
downstream, the global demand and consumption growth of processed food, personal care and cosmetics are the main factors driving
market growth. From the perspective of regional markets, emerging markets, especially China, India, Southeast Asia and other regions
are the main driving force for the development of the global flavor and fragrance market. The Asia-Pacific region accounted for the
largest share of the global flavors and fragrances market in 2022, which exceeds 31.4%. 3 China already becomes one of the most
important fragrance suppliers in the world, and an important market with a large proportion of the industry, and one of the important
focus areas for global fragrance and flavor research and development, new technologies and new products. China's market accounts
for about one-fifth of the global market, which has also injected power and vitality into the development of the industry. Companies
1 The “2022 Vitamin Market Annual Analysis Report” by BOYAR
2 The “2022 Amino Acid Market Annual Analysis Report” by BOYAR
3 https://www.grandviewresearch.com/industry-analysis/flavors-fragrances-market
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2022 Annual Report of Zhejiang NHU Co., Ltd.
should keep up with the development trend of world technology and industry, pay attention to the research and development of green
production technology, and continuously strengthen the competitiveness and influence of enterprises.4
New polymer materials:
As a strategic and fundamental industry, new polymer materials has become an important symbol for measuring the economic and
technological strength of a country or region. The “Guidelines under 14th Five-Year Plan and Vision for 2035” pointed out that it is
necessary to vigorously develop strategic emerging industries, including new generation information technology, biotechnology, new
energy, high-end equipment and other fields. These fields have huge demand for new materials. New polymer materials include general-
purpose plastics, engineering plastics and special engineering plastics, and downstream processing forms include modified composite
materials, films, fibers, foams, coatings, etc., which are widely used in traditional fields such as automobiles, electronic applianc es, as
well as new energy, 5G communication, artificial intelligence and other emerging fields. With the upgrading of consumption and the
high-quality development of the manufacturing industry, the future market growth space of the polymer material industry is huge.
In the new round of scientific and technological revolution and industrial revolution, new material technology continues to innovate
and break through, and new materials and new material structures keep emerging. China has broken through key technical problems in
some products and enjoys a huge domestic market demand and national policy support. China is in a period of strategic transformation,
the strategic demand for new materials has become more prominent, providing a rare historical opportunity for the development of new
materials industry. However, there are still problems in the R&D and production of advanced high-end materials, such as weak
innovation capability, low degree of synergy between innovation chain and industrial chain, incomplete innovation chain, industrial
chain and supply chain system to resist risks, etc., which cannot fully meet the demand of China's economic and social development,
and there is still a long way to go to become a strong material country. 5
API industry:
API is the pillar industry of domestic pharmaceutical industry and one of the key industries supported by the state. China and India are
the main source countries of API production. The advantages of API production are concentrated in emerging countries such as China,
which has become a major producer and exporter of bulk APIs, and the production technology process has reached international leading
level. 2021, the market size of APIs is USD 177.05 billion, and is expected to grow at a CAGR of about 7.5% in the future. 6The new
crown pandemic has impacted the API market, and market demand is shifting from traditional drugs such as anti-infectives and
cardiovascular to more complex APIs for novel formulations and for specific disease areas. Pulmonary, cardiology and oncology remain
the main application areas and are expected to continue their high growth trend in the coming years.
II. The main business of the Company during the reporting 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
4 Huajing Intelligence Network "China Flavors and Fragrances Industry Market In-depth Analysis
5 Zhejiang Province, the development of new materials industry "fourteen five" plan
6 Active Pharmaceutical Ingredients (API) Market Analysis - Industry Report - Trends, Size & Share (mordorintelligence.com)，
https://www.mordorintelligence.com/ industry-reports/global-active-pharmaceutical-ingredients-api-market
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Nutrition: The current products mainly cover vitamins, amino acids and pigments, etc. Specific products include vitamin E, vitamin A,
vitamin C, methionine, vitamin D3, biotin, coenzyme Q10, carotenoids, etc. They are mainly used in feed additives and 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.
Flavor and fragrance: At present, our main fragrance 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. From the
perspective of competitiveness and market share, NHU becomes an important supplier in the global flavor and fragrance industr y.
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.
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.
APIs: The main products are concentrated in the series of vitamins and antibiotics. The main products include moxifloxacin
hydrochloride, vitamin A, vitamin D3, caronic anhydride, azabicyclic, etc., which are mainly used as active pharmaceutical ingredient s
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
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. At the same time, through measures
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2022 Annual Report of Zhejiang NHU Co., Ltd.
such as holding customer service months, strengthening customer strategic cooperation, establishing customer evaluation models, and
optimizing customer classification management, we will continue to expand market areas, increase new large-scale customers, and
enhance brand influence.
3. Key performance drivers
The Company has built four modern industrial bases across the country. It adheres to the development strategy of integration,
serialization and synergy, and insists on innovation-driven. Relying on the solid foundation of fine chemical industry, it focuses on
“chemical+” and “biology+” to form NHU featured R&D models with industrial clusters, and technology and industry 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, the company's original products were refined and the construction of new projects, the R&D of ne w
products were carried out in an orderly manner. In the nutrition sector, the Company’s second phase of methionine 250,000 tons/year
project, of which 100,000-ton equipment was operating smoothly, with comprehensive competition continuously improved. And of
which 150,000-ton equipment was constructed according to schedule and the construction is expected to be completed in June 2023.
The company deployed the liquid methionine project, signed the "Shareholder Agreement between China Petroleum & Chemical
Corporation and Zhejiang NHU Co., Ltd.", and jointly built a 180,000-ton/year liquid methionine (purified) production plant. 5,000
tons / year vitamin B6 and 3,000 tons / year B12 started production and sales, 30,000 tons/year NH-acid project was constructed under
schedule. In the Flavor and fragrance sector, the project with an annual output of 5,000 tons of menthol was constructed according to
the schedule, and the project progress was controllable. In the new polymer materials sector, the commissioning of the phase III PPS
project with an annual output of 7,000 tons was progressing smoothly; The adiponitrile project was in the pilot test stage, and the
project approval process was advancing in an orderly manner. In the API sector, the 500 tons/year azabicyclo project was commissioned
and the products was sold. Now the process route has been opened and the process is in the process of continuous improvement. In the
future, the API product structure will be adjusted, transformed and upgraded, the specific project is in the process of approval.
During the reporting period, with the uncertainty of the macro environment in both domestic and foreign markets, as well as market
changes of main vitamin products, We actively takes countermeasures, strives to overcome various unfavorable factors, gives full play
to the advantages of sector linkage, and maintains a stable development trend of production and operation. During the reporting period,
new projects were gradually put into production, R&D investment and technology upgrades were continuously strengthened, and the
global network layout was further improved. Flavors and Fragrances, New Materials, and the methionine business developed stea dily
throughout the year, both volume and price rose, maintaining a relatively high growth rate and making a greater contribution to the
company’s performance. At the same time, affected by the macro market environment, the price of some raw materials rose , leads to
an increase in product costs.
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-qualit y
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2022 Annual Report of Zhejiang NHU Co., Ltd.
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 research and development topics were steadily promoted according to the planned nodes, and the innovation achievements we re
recognized by the society. The company's patent "Pdln alloy catalyst and its preparation method and application" won the 23rd China
Patent Excellence Award. The project of "Technology Development and Industrialization of High Performance Polyphenylene Sulfide
Manufacturing Package" jointly developed by the company and Zhejiang University won the First Prize of Zhejiang Province
Technology Invention, and the project of "Key Technology Innovation and Industrialization of Stable Solid Loading Fat Soluble
Nutrients on Starch-based Carrier" jointly developed with Ningbo Engineering Institute and Zhejiang University won the Second Prize
of Zhejiang Province Science and Technology Progress. The project of "key technological innovation and industrialization of starch-
based carrier stabilized solid-loaded fat-soluble nutrients" jointly developed with Ningbo Engineering College and Zhejiang University
won the second prize of Zhejiang Province Science and Technology Progress.
3. Production management
The Company has always been adhering to the production strategy based on the principle of “production and sales coordination,
efficient operation, excellent quality, and cost leadership” and the HSE guideline of “safety first, green development, full participation,
and continuous improvement”. The Company takes planning as the goal, cost management as the main line, and maximizing 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
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2022 Annual Report of Zhejiang NHU Co., Ltd.
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, a nd higher
level of automation, aiming to save energy and reduce emissions, to improve productivity and product quality, 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 Shaoxing City "Award for Talent and Love of Talent".
6. Brand
The Company follows the “integrity first” guideline, and has always regarded serving customers and creating industry value 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 won many honors in the global fine chemical industry, such as one of the top ten feed additive brands in China and one of the large
vitamin feed additive enterprises in China, and has been ranked among the top 500 petroleum and chemical enterprises (comprehensive
category) and the top 100 enterprises in China's basic chemical raw material manufacturing industry. In addition, the company has won
many awards such as "Top 30 Best Internal Control in Zhejiang Province", "Best Investor Relations Award" and "Best Board of
Directors Award" of listed companies in mainstream media, which are widely favored by the market and investors.
IV. Main business analysis
1. Introduction
Please refer to item “II. The main business of the Company during the reporting period” under “Section III Management Discussion
and Analysis” for details.
2．Revenue and cost
(1) Operating revenue
Unit: RMB Yuan
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Year 2022 Year 2021
Items YoY growth rate
Amount % to total Amount % to total
Total 15,933,984,403.41 100% 14,917,101,500.91 100% 6.82%
By industry
Pharmaceutical 14,672,567,397.29 92.08% 13,905,334,050.45 93.22% 5.52%
chemicals
Others 1,261,417,006.12 7.92% 1,011,767,450.46 6.78% 24.67%
By product
Nutrition 10,951,828,026.72 68.73% 11,168,279,277.21 74.87% -1.94%
Flavor and fragrance 2,967,080,657.65 18.62% 2,247,045,847.92 15.06% 32.04%
New polymer 1,166,099,937.05 7.32% 873,994,673.98 5.86% 33.42%
materials
Others 848,975,781.99 5.33% 627,781,701.80 4.21% 35.23%
By region
Domestic sales 8,262,678,396.21 51.86% 7,242,924,832.88 48.55% 14.08%
Overseas sales 7,671,306,007.20 48.14% 7,674,176,668.03 51.45% -0.04%
By sales model
Direct sales 11,874,529,226.77 74.52% 11,596,983,310.23 77.74% 2.39%
Agent sales 4,059,455,176.64 25.48% 3,320,118,190.68 22.26% 22.27%
(2) Industries, products and regions that account for more than 10% of the total operating revenue or
operating profit
√ Applicable □ Not Applicable
Unit: RMB Yuan
Growth rate of Growth rate
Items Operating revenue Operating cost Gross rate Growth rate of gross
operating of operating
rate
revenue cost
By industry
Pharmaceutical Decreased by 6.92
14,672,567,397.29 9,047,305,017.94 38.34% 5.52% 18.86%
chemicals percentage points
By product
Decreased by 10.47
Nutrition 10,951,828,026.72 6,944,683,082.59 36.59% -1.94% 17.46%
percentage points
Flavor and Increased by 7.06
2,967,080,657.65 1,514,064,279.99 48.97% 32.04% 15.99%
fragrance percentage points
By region
Domestic sales Decreased by 5.94
8,262,678,396.21 5,500,701,397.66 33.43% 14.08% 25.26%
percentage points
Overseas sales Decreased by 8.36
7,671,306,007.20 4,547,599,469.28 40.72% -0.04% 16.37%
percentage points
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
(3) Whether the Company’s goods sales income is greater than service income
√ Yes □ No
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2022 Annual Report of Zhejiang NHU Co., Ltd.
By industry Items Unit Year 2022 Year 2021 YoY growth rate
Sales Tons 655,683.43 560,201.79 17.04%
Pharmaceutical Production Tons 669,038.97 581,022.52 15.15%
chemicals
Stock Tons 68,497.02 55,141.48 24.22%
Sales Tons 24,551.07 20,323.14 20.80%
Others Production Tons 25,496.03 18,857.92 35.20%
Stock Tons 3,793.29 2,848.33 33.18%
Remarks on reason for relevant data with absolute growth rate over 30%
√ Applicable □ Not Applicable
The YoY growth rate of stock of others was up 30%, mainly due to the increase of PPS products due to the growth
of 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
Unit: RMB Yuan
Year 2022 Year 2021
By industry Items YoY growth rate
Amount % to total Amount % to total
Chemical Cost of main 9,001,010,480.60 89.58% 7,523,727,426.47 90.65% 19.63%
industry operations
Others Cost of main 1,000,074,989.18 9.95% 686,701,505.46 8.27% 45.63%
operations
Unit: RMB Yuan
Year 2022 Year 2021
By product Items YoY growth rate
Amount % to total Amount % to total
Nutrition Cost of main 6,913,932,973.18 68.81% 5,885,885,789.08 70.92% 17.47%
operations
Flavor and Cost of main 1,498,519,852.06 14.91% 1,302,520,499.35 15.69% 15.05%
fragrance operations
New materials Cost of main 901,961,435.46 8.98% 592,371,747.63 7.14% 52.26%
operations
Others Cost of main 686,671,209.08 6.83% 429,650,895.87 5.18% 59.82%
operations
(6) Whether the consolidation scope has changed during the reporting period
√ Yes □ No
Entities Equity acquisition method
NHU/CHR.OLESEN LATIN AMERICA A/S Acquisitions
Wuniu (Shandong) Investment Co., Ltd Investment and establishment
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2022 Annual Report of Zhejiang NHU Co., Ltd.
(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 1,785,960,267.70
Proportion to the total balance of annual sales amount (%) 11.22%
Proportion of related party transaction to the total balance of 0.00%
annual sales amount (%)
Top 5 customers
No. Customers Sales amount (yuan) Proportion to the total balance of sales
amount (%)
1 Client A 762,597,273.32 4.79%
2 Client B 310,066,601.40 1.95%
3 Client C 272,489,141.93 1.71%
4 Client D 239,161,882.66 1.50%
5 Client E 201,645,368.39 1.27%
Total -- 1,785,960,267.70 11.22%
Remarks on other information of major customers
□ Applicable √ Not Applicable
Major suppliers
Total purchase amount (yuan) of top 5 suppliers 1,384,823,955.33
Proportion to the total balance of annual purchase amount (%) 9.81%
Proportion of related party transaction to the total balance of
0.00%
annual purchase amount (%)
Top 5 suppliers
No. Suppliers Purchase amount (yuan) Proportion to the total balance of purchase
amount (%)
1 Supplier A 327,108,116.00 2.32%
2 Supplier B 294,207,023.92 2.08%
3 Supplier C 284,667,190.27 2.02%
4 Supplier D 258,541,625.14 1.83%
5 Supplier E 220,300,000.00 1.56%
Total -- 1,384,823,955.33 9.81%
Remarks on other information of major suppliers
□ Applicable √ Not Applicable
3. Expenses
Unit: RMB Yuan
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Year 2022 Year 2021 YoY growth rate Remarks on significant changes
This is mainly due to the increase in the
Selling expenses 122,257,619.47 107,037,085.96 14.22% personnel remuneration and sales
commission during this reporting
period.
This is mainly due to the increase in
Administrative expenses 504,674,730.69 423,584,417.67 19.14% personnel remuneration, deprecation
and amortization in this reporting
period.
This was mainly due to exchange gains
Financial expenses 44,401,778.13 269,968,353.24 -83.55% arising from exchange rate fluctuations
during the reporting period.
This is mainly due to the increase in
R&D expenses 858,945,406.13 782,661,708.54 9.75% remuneration of the R&D department,
deprecation and amortization in this
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
Establishing relevant Obtained CNAS
standards and testing national laboratory
methods for synthetic accreditation, and Provide a full range of
Provide analytical technology
Drug quality intermediates; carrying passed the regular analysis and testing services
services for companies,
standard research out research on the supervisory review for the company's product
establish analytical
and analytical preparation, separation and extended re- technology innovation and
technology development, and
testing technology and purification of trace assessment, and can assist in solving key technical
assist companies in product
services impurities and impurity carry out analytical problems in the production
development
structure determination technology research and R&D process
structure determination, support inside and
etc. outside the company
Establish safety
assessment laboratory
which is equipped with Safety and
calorimetry equipment environmental To improve the safety
(DSC, ARC, RC1e, etc.) protection laboratory assurance technology of
and analysts, carry out is established, which chemical production and
It is expected to improve the
Research on safety kinetic and enables the issue of storage process. To carry out
essential safety level of
risk of fine thermodynamic analysis process safety process optimization for the
enterprises and effectively
chemical reaction on related materials and evaluation report that relatively-high risks of the
prevent accidents.
chemical reaction meets the process, so as to essentially
process, and when requirements of reduce the risk of the reaction
necessary, carry out safety supervision process.
amplification and department.
debugging procedures on
corresponding processes
Synthesis and HY and other raw materials, The chemical synthesis routes
optimization of flavor through the addition reaction, of PCY, MV and PH all
in the process of
Research on highly and fragrance industry ammonolysis reaction and involve the positioning
making a small trial
selective localized PCY, MV, PH and other acidification reaction and substitution of benzene rings,
and scaling up the
substitution of large scale, in the post-treatment and other unit and the breakthrough of
design of the
benzene rings in the pharmaceutical and operations to obtain the highly selective positioning
production process of
synthesis of XL cosmetic industry has an corresponding target products, substitution technology can
the route extension
products important application of the overall route green, safe effectively improve the
product.
the fragrance species and environmentally friendly, corresponding product quality
production process high degree of automation and reduce production costs.
Research on To systematically The Company is able To systematically research on It is expected to achieve
development and research on the to conduct analysis the crystallization process of product quality improvement
application of influencing factors of and research on existing and developing through the innovation and
crystallization each product in the crystallization products, and support to solve development of crystallization
technology crystallization process, thermodynamics, practical production process, so as to meet the
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2022 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
find out the optimal kinetics and problems. needs of different customers
crystallization process polycrystal type, and and Improve the market
parameter, realize the has development competitiveness of products.
controllability of crystal ability of cooling and
products in aspects other three
including particle size crystallization
distribution, appearance, processes as well as
crystal shape, and solve the development
actual production ability of continuous
problems through crystallization
production debugging in process.
the workshop
Research on some of the
existing unit operations
Formation of different scale
and equipment that are
multi-kettle tandem
commonly used by the
continuous reaction model
company and facilitate
Kettle and pipeline test platform, pipeline reactor Improve the workshop
continuous operation, so
research on continuous reaction model test platform, falling automation, continuous
that each production site
Continuous process model test platform, film evaporator basic data design and operation process
can form a mature
equipment continuous extraction verification device, to accumulate experience and
continuous reaction,
technology and continuous continuous crystallization lay the foundation for the
continuous
development and crystallization model model test platform, company to fully realize
chromatography,
application research platform have been continuous extraction model continuous and automated
continuous washing,
built test platform, membrane production in the future
continuous
separation model test
crystallization,
platform, microchemical
continuous extraction and
platform
other continuous
production lines
Enhance the company's
Process research and quality
Develop new products in technical level in the
Development of IBU acid has research on several PF
PF category and obtain development capability and
PF product completed pilot products, forming
official license and declaration of certification of
technology testing independent R&D technology
customer approval PF products, especially API
and quality standards
PF products
Vitamin A, D3 and E
Enhance the reliability of have completed
process routes, improve pharmacological Conducting thorough
the quality of drugs, studies; Vitamin D3 pharmacological studies on
reduce production costs and VE have products with existing Enhance our industry position
Development of
and reduce process route obtained CDE review synthetic processes, such as in the API industry, especially
Pharmaceutical
contamination by approval; Coenzyme vitamin A, to find the best our competitiveness in the
grade product
developing and Q10 has declared pharmaceutical production high-specification vitamin
technology
optimizing a variety of domestic API process and obtain official market
synthesis processes for registration; MS has approval and customer
pharmaceutical grade completed CEP API approval
products registration
application
To research on the application
effect of newly developed
To develop high- safety ethoxyquinoline-free vitamin It is expected to improve the
3 products for large
fat-soluble vitamin and and carotenoid preparation Company’s independent
production
Research on the carotenoid preparations products in premix and feeds, research and development
applications; the
development and and research on the effect and their bioutilization effect level in the development and
platform has
application of high- and mechanism of their in different animal fields. application of pharmaceutical
completed
safety nutrient application in Establish feed processing products, so as to lay a solid
construction and
products downstream premix, platform and breeding test product foundation for
started normal
feeds and animals (in base for pilot-scale consolidation of the European
operation
vitro and in vivo). experiments, so as to evaluate feed products market.
the application effect of high-
safety vitamin and carotenoid.
Adiponitrile Chemical synthesis and Pilot and further Research on technology Break through the technical
technology and its industrialization of scale-up design development of adiponitrile barriers of adiponitrile, break
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2022 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
industrialization adiponitrile is the main phase products and localization of the monopoly of foreign
purpose of this project production technology of companies, and promote the
adiponitrile products development of domestic
related industries
Research and
development of
antioxidant compound
formulations to improve Since feed additives and
Large-scale
the stability of vitamin premixes containing
production Development of compounded
formulations; ethoxyquinoline and
applications have antioxidant formulations, use
research on development of high- downstream manufacturers
been completed; of high pressure
formulated vitamin pressure homogeneous are restricted by the EU,
product application homogenization emulsion
A and AD3 Process emulsification opening a production process
effect evaluation tests technology, development of
innovation technology to improve for non-ethoxyquinoline as
in feed processing composite materials for
the quality of vitamin antioxidant feed additives is
and premixes are embedding
products; development of the best choice to preserve the
being carried out
composite wall materials EU market
for encapsulation of fat-
soluble vitamins; stability
evaluation technology
Key Technology To study the design,
Development and synthesis and catalytic
Application mechanism of metal Improve the synthesis
Small pilot The precise design, synthesis,
Demonstration for catalysts as the primary technology of related
optimization and development and application
Equivalent task, and explore the products, such as useful to Pd
pilot commissioning of our new and old products
Reduction of Pd industrial development catalysts, to reduce costs and
in progress involving Pd catalysts, etc.
Catalyst for Vitamin and application of high improve competitiveness
and Antibiotic performance metal
Synthesis catalysts
The new process
technology of
pigment
emulsification and
spray drying
equipment has been
applied in large scale Formation of a set of
production commissioning equipment
Completion of small suitable for the development
pilot tests on of powder, tablet, drop and Develop new products of
Research and capsule type formulation
enantiomeric nutrient preparations to
development of new products with a batch output
Research on new pantolactone, improve the product range of
dosage forms of of about 50Kg
dosage formulations separation of inter-o- our nutritional products
Coenzyme Q10 and other
and process para-cymene Simulation of moving bed Improve the separation
products such as
technology of hydrocarbons, and equipment and target product technology and operation of
granules, pressed tablets,
nutrient products chromatographic process research, and the chromatographic
drops, emulsions, gels,
purification of food- according to the target separation process for the
etc.
grade vitamin D3; product and impurities, select company's products
Completed the the appropriate simulation of
production and moving bed, process
commissioning of conditions parameters, etc.
pharmaceutical grade
coenzyme Q10
product purification
and vitamin C
mother liquor
recovery project
Meet the company's Completion of small Simulate moving bed
research on Improve the separation
Simulation of product production pilot tests on equipment and target product technology and operation of
moving bed process in the enantiomers of process research, and the chromatographic grade
technology and chromatography level pantolactone, according to the target separation process required
application separation technology separation of inter- product and impurities, select for our products
improvement and octa-paraffin the appropriate simulated
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2022 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
research and hydrocarbons, and moving bed, process
development needs chromatographic conditions parameters, etc.
purification of food-
grade vitamin D3;
Completion of
pharmaceutical grade
coenzyme Q10
product purification
and vitamin C
mother liquor
recovery project
production
commissioning
Preparation and
Development and
application technology Strengthen the company's
application of high Optimization of the
development of catalysts Catalyst preparation carbonylation-related product
efficiency carbonylation synthesis unit
involving carbonylation technology synthesis process technology
multiphase technology in the company's
synthesis unit in the optimization in to improve product
carbonylation product process line
synthesis of new and old competitiveness
catalysts
products of the company
Research on the synthesis
of new IPDA products
Break the monopoly of
under high-pressure
foreign technology, enter and
conditions, develop new Achieve continuous
compete for the market,
polymers and new production and sales of IPDA,
Project construction promote industrial upgrading,
HA Project isocyanates based on the polymorphs and isocyanates
phase enter new fields, and improve
company's existing raw on a large scale of more than
the international influence and
materials and 10,000 tons
core competitiveness of the
intermediates, and enrich
company's brand
the company's industrial
chain
Details of R&D personnel
Items Year 2022 Year 2021 Percentage of change
Number of R&D personnel 2,629 2,368 11.02%
(persons)
% to total employees 22.81% 21.92% 0.89%
Educational background —— —— ——
structure
Technical secondary school,
139 149 -6.71%
high school and below
Junior college 370 367 0.82%
Bachelor 1,345 1,189 13.12%
Master 700 605 15.70%
Doctor 75 58 29.31%
Total 2,629 2,368 11.02%
Age structure —— —— ——
Below 30 years old 1,293 1,169 10.61%
30-40 years old 947 894 5.93%
Over 40 years old 389 305 27.54%
Total 2,629 2,368 11.02%
Details of R&D input
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Year 2022 Year 2021 Percentage of change
R&D input amount (yuan) 858,945,406.13 782,661,708.54 9.75%
Increased by 0.14 percentage
% to total operating revenue 5.39% 5.25%
point
Capitalized amount (yuan) 0.00 0.00 0.00%
% to total R&D input 0.00% 0.00% 0.00%
Reason for significant changes in structure of the Company’s R&D personnel and the effect
□ Applicable √ Not Applicable
Reason for significant changes in the proportion of total R&D input to operating revenue compared to the preceding period
□ Applicable √ Not Applicable
Reason for significant changes in capitalization rate of R&D input and remarks on the reasonability
□ Applicable √ Not Applicable
5. Cash flows
Unit: RMB Yuan
Items Year 2022 Year 2021 YoY growth rate
Subtotal of cash inflows from 16,712,001,413.64 15,585,137,046.52 7.23%
operating activities
Subtotal of cash outflows from 12,350,520,330.03 9,747,258,994.95 26.71%
operating activities
Net cash flows from operating 4,361,481,083.61 5,837,878,051.57 -25.29%
activities
Subtotal of cash inflows from 1,919,918,190.77 1,969,695,872.13 -2.53%
investing activities
Subtotal of cash outflows from 5,759,332,104.36 5,361,464,680.21 7.42%
investing activities
Net cash flows from investing -3,839,413,913.59 -3,391,768,808.08 -13.20%
activities
Subtotal of cash inflows from 6,855,158,371.64 7,383,209,509.05 -7.15%
financing activities
Subtotal of cash outflows from 8,125,152,950.95 8,727,832,760.73 -6.91%
financing activities
Net cash flows from financing -1,269,994,579.31 -1,344,623,251.68 5.55%
activities
Net increase of cash and cash -562,695,606.37 1,045,230,762.14 -153.83%
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 -25.29%, which was mainly due to the increase in raw material
purchases during this reporting period.
The YoY growth rate of net cash flows from investing activities was -13.20%, which was mainly due to due to the increase in
construction in progress during this reporting period.
The YoY growth rate of cash and cash equivalents was -153.83%, which was mainly due to the increase in raw material purchases
and the increase in projects under construction during the reporting period.
Remarks on reason for significant difference between net cash flows from operating activities during the reporting period and net
profit of the current period
□ Applicable √ Not Applicable
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2022 Annual Report of Zhejiang NHU Co., Ltd.
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 128,695,043.73 3.04% and profit generated by the associates during the No
reporting period.
Gains on changes in It was mainly due to changes in fair value of
fair value -66,321,783.72 -1.56% forward foreign exchange settlement during the No
("-" means loss) reporting period.
Assets impairment It was mainly due to losses arising from
loss -157,808,680.97 -3.72% provision for impairment made on each asset in No
("-" means loss) accordance with assets impairment principles.
Non-operating 4,985,224.34 0.12% It was mainly due to indemnity income. No
revenue
It was mainly due to gains on retirement of
Non-operating 79,532,730.91 1.88% assets and donation expenditures during the No
expenditures
reporting period.
Other income 176,863,614.19 4.17% 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, 2022 Jan. 1, 2022
Items Percentage of Remarks on
Amount % to total Amount % to total change significant changes
Cash and bank 5,343,851,967.72 13.96% 5,952,909,626.94 17.14% -3.18%
balances
Accounts 2,476,269,041.23 6.47% 2,755,168,573.14 7.93% -1.46%
receivable
Inventories 4,144,557,702.39 10.83% 3,193,657,367.16 9.20% 1.63%
Long-term equity 432,503,568.48 1.13% 351,327,625.75 1.01% 0.12%
investments
Fixed assets 16,523,867,858.53 43.18% 14,350,779,852.73 41.33% 1.85%
Construction in 5,089,233,908.22 13.30% 2,984,835,072.82 8.60% 4.70%
progress
Right-of-use 2,830,136.37 0.01% 3,123,637.11 0.01% 0.00%
assets
Short-term 1,846,373,441.01 4.82% 1,403,332,827.92 4.04% 0.78%
borrowings
Contract 60,660,929.75 0.16% 61,135,258.36 0.18% -0.02%
liabilities
Long-term 5,273,637,508.87 13.78% 5,148,811,786.49 14.83% -1.05%
borrowings
Lease liabilities 2,822,404.07 0.01% 2,936,868.15 0.01% 0.00%
Proportion of foreign assets to total assets is comparatively high
□ Applicable √ Not Applicable
25
2022 Annual Report of Zhejiang NHU Co., Ltd.
2. Assets and liabilities at fair value
√ Applicable □ Not Applicable
Unit: RMB Yuan
Accumulate
Provision for Amount
Gains on d changes in Amount sold
Items Opening balance impairment purchased during Other Closing balance
changes in fair fair value during the
made in the the reporting changes
value included in reporting period
current period period
equity
Financial assets
1. Held-for-trading 720,000,000.0 1,250,000,000 720,000,000.
financial assets 1,250,000,000.00
(derivative financial 0 .00 00
assets excluded)
2. Derivative 736,359.24 -421,782.81 314,576.43
financial assets
720,000,000.0 1,250,000,000 720,314,576.
Subtotal of 1,250,736,359.24 -421,782.81
financial assets 0 .00 43
720,000,000.0 1,250,000,000 720,314,576.
Total 1,250,736,359.24 -421,782.81
0 .00 43
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 192,010,035.86 yuan pledged and not on demand for payments, which was
with use restrictions.
(2) Closing balance of receivables financing included 136,554,892.05 yuan pledged for bank acceptance and not on demand for
payments, which was with use restrictions.
(3) Closing balance of notes receivable included 233,192,351.27 yuan pledged for bank acceptance and not on demand for payment,
which was with use restrictions.
(4) Closing carrying amount of fixed assets included 79,692,425.35 yuan mortgaged to the bank for borrowings, which was with use
restrictions.
(5) Closing carrying amount of intangible assets included 9,734,671.13 yuan mortgaged to the bank for borrowings, which was with
use restrictions.
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)
5,034,909,624.27 2,489,162,047.36 102.27%
26
2022 Annual Report of Zhejiang NHU Co., Ltd.
2. Significant equity investments made during the reporting period
□ Applicable √ Not Applicable
3. Significant non-equity investments in progress during the reporting period
□ Applicable √ Not Applicable
4. Investments in financial assets
(1) investments in securities
□ Applicable √ Not Applicable
There is no investment in securities during the reporting period.
(2) Investments in derivatives
√ Applicable □ Not Applicable
1） Derivative investments for hedging purposes during the reporting period
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
Investment
amount at
the end of
the period
Gains or
Accumulated Amount as a
losses on Amount sold
Initial fair value purchased End of percentage
Types of Derivatives changes during the
Investment changes during the period of the
Investments in fair reporting
Amount recorded in reporting amount company's
value for period
equity period net assets at
the period
the end of
the
reporting
period
Structured forward
60,425.70 -1,443.84 0 34,155.20 47,555.20 0 0.00%
contracts
Forward contracts 547,929.55 -5,188.34 0 525,502.45 505,945.71 35,506.29 1.51%
Total 608,355.25 -6,632.18 0 559,657.65 553,500.91 35,506.29 1.51%
description of the
accounting policies
and specific
principles of The Company accounts for the hedging business conducted in accordance with the relevant provisions of the Ministry of Finance's
accounting for AS 22 - Recognition and Measurement of Financial Instruments, AS 24 - Hedge Accounting, AS 23 - Transfer of Financial Assets
hedging operations and AS 37 - Presentation of Financial Instruments and its guidance. There were no significant changes in accounting policies and
during the reporting specific principles of accounting compared with the previous reporting period.
period, and whether
there have been any
significant changes
27
2022 Annual Report of Zhejiang NHU Co., Ltd.
compared to the
previous reporting
period
In order to reduce the impact of exchange rate fluctuations on the Company's operating results, the Company
Description of actual carried out foreign exchange hedging business in accordance with a certain percentage of its export business ,
profit or loss for the with business varieties mainly including forward exchange settlement and other foreign exchange derivative
reporting period products, all of which were within the expected scale of sales business, and the actual gain or loss on
derivatives at the end of the reporting period was -86.56 million yuan.
The Company carries out foreign exchange hedging business based on the principle of exchange rate risk
Description of the
neutrality. By carrying out foreign exchange hedging business, the Company reduces the impact of exchange
hedging effect
rate fluctuation on the Company's operation and effectively controls the operation risk.
Derivatives
Self-funded.
Investment Funding
Risk analysis and
description of
control measures for
derivative positions
during the reporting In order to prevent exchange rate risk, the Company and its subsidiaries have carried out derivative busines s
period (including but and the Company and its subsidiaries have strictly implemented the "Foreign Exchange Hedging Business
not limited to market Management Regulations".
risk, liquidity risk,
credit risk,
operational risk,
legal risk, etc.)
Changes in market
prices or product fair
values of invested
derivatives during
the reporting period,
and the analysis of
the fair value of Tht floating loss on fair value of derivatives during the reporting period was 66.32 million Yuan.
derivatives should
disclose the specific
methods used and
the setting of
relevant assumptions
and parameters
Litigation involved
No
(if applicable)
Date of disclosure of
board announcement
for approval of April 15, 2022
derivative
investments (if any)
The Company has formulated the "Management Measures for Foreign Exchange Hedging Business", which
Special opinion of sets out specific operating procedures for conducting foreign exchange hedging business by strengthening
independent internal controls, implementing risk prevention measures and improving management. The Company has
directors on the analyzed the feasibility of its foreign exchange hedging business and, in general, it is practical and feasible
company's for it to carry out foreign exchange hedging, which can effectively reduce the risk of exchange rate
derivatives fluctuations and is conducive to stabilizing the profit level. The content and consideration procedures of the
investment and risk matter are in compliance with the relevant laws, regulations, regulatory documents and the Articles of
control Association, and do not constitute any damage to the interests of the Company and other shareholders. We
unanimously agree with the Company to carry out foreign exchange hedging business this time.
28
2022 Annual Report of Zhejiang NHU Co., Ltd.
2） Investments in derivatives for speculative purposes during the reporting period
□ Applicable √ Not Applicable
The Company had no derivative investments for speculative purposes during the reporting period.
5. Use of raised funds
√ Applicable □ Not Applicable
(1) Overall use of raised funds
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
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 fund- Total amount amount of changes in with changes with changes Raised funds being idle
in the current funds not yet not yet used
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 486,707.55 169,075.16 377,819.79 0 0 0.00% 108,887.76 purchase 0
bank
shares
financial
products,
deposited as
structured
deposits
Total -- 486,707.55 169,075.16 377,819.79 0 0 0.00% 108,887.76 -- 0
Remarks on overall use of raised funds
The Company’s raised funds used in previous years amounted to2,087.44 million yuan, the net amount of interest on cash in bank received in previous years less handling charges
amounted to 51.74 million yuan, gains on financial products and structured deposits received in previous years amounted to 574.65 million yuan, and the net expenditure on financial
products and structured deposits purchased in previous years amounted to 2,450.00 million yuan; the raised funds actually used in 2022 amounted to 1,690.75million yuan, the net
amount of interest on cash in bank received in 2022 les s handling charges amounted to 36.36 million yuan, gains on financial products and structured deposits received in 2022
amounted to 56.16 million yuan, and the net recovery from financial products and structured deposits purchased in 2022 amount ed to 1,730.00 million yuan; the accumulated amount
of the raised funds used amounted to 3,778.19 million yuan, the accumulated net amount of interest on cash in bank received less handling charges amounted to 88.11 million yuan,
the accumulated amount of gains on financial products and structured deposits received amounted to 630.82 million yuan, and net expenditure on financial products and structured
deposits purchased amounted to 720.00million yuan. As of December 31, 2022, the balance of the special account for raised funds amounted to 1,087.81 million yuan (including the
net amount of interest on cash in bank less handling charges, gains on financial products and structured deposits received on an accumulated basis).
(2) Committed projects with raised funds
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
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
486,707.5 486,707.5 169,075.1 Partially
Methionine project with
annual output of 0.25 No 377,819.79 77.63% reached the 78,587.65 Yes No
million tons 5 5 6 designed
usable
29
2022 Annual Report of Zhejiang NHU Co., Ltd.
conditions
486,707.5 486,707.5 169,075.1
Subtotal -- 377,819.79 -- -- 78,587.65 -- --
5 5 6
Over-raised funds whereabouts
No
486,707.5 486,707.5 169,075.1
Total -- 377,819.79 -- -- 78,587.65 -- --
5 5 6
Pursuant to the results deliberated and approved by the eighth meeting of the eighth session of Board of Directors and the seventh
meeting of the eighth session of the Board of Supervisors dated October 27, 2021, the Company intended to adjust the date when the
Conditions of and reasons methionine project with annual output of 0.25 million tons reaches the designed usable conditions from the originally planned
for not meeting the planned December 2021 to June 2023, with other contents remaining unchanged. Main reasons: Due to the impact of the macro economy,
schedule or estimated the construction progress of the project’s infrastructure has been delayed, the procurement and delivery time of some equipment and
revenue (by specific materials has been extended, the installation and commissioning of equipment has been delayed, and the overall progress of t he
project) 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 over- Not Applicable
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
30
2022 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
Production
Shandong NHU
Vitamins Co., Subsidiary and sales of 500 million 1,014,112,566.1
feed yuan 3,463,387,502.87 2,874,391,136.48 2,075,764,687.69 876,228,159.55
Ltd. 9
additives
Production
Shangyu NHU
Bio-Chem Co., Subsidiary and sales of 50 million
feed yuan 4,349,921,984.60 3,214,077,883.32 1,400,216,069.29 465,789,099.55 413,314,817.27
Ltd.
additives
Shandong NHU Production
Subsidiary and sales of 590million 1,334,076,813.3 1,093,263,139.7
Pharmaceutical
yuan 3,428,957,803.17 2,644,922,760.01 3,213,679,238.56
Co., Ltd. fragrances 8 3
Shandong NHU Production
1,030
Amino-acids Co., Subsidiary and sales of 1,307,637,045.7 1,187,212,432.3
million yuan 7,950,528,475.38 6,937,727,210.12 3,914,397,309.64
Ltd. methionine 9 0
Remarks on major holding investees
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
NHU/Chr.Olesen Latin America A/S[Note] Acquisition No significant effect at the beginning of the
period.
Wuniu (Shandong) Investment Co., Ltd Investment No significant effect at the beginning of the
period.
[Note] NHU/CHR.OLESEN LATIN AMERICA A/S holds two subsidiaries, respectively NHU/CHR.OLESEN BRASIL LTDA. ，
holding 100%, and CHR.OLESEN MEXICO SAPI DE CV, holding 87%.
X. Structured entities controlled by the Company
□ Applicable √ Not Applicable
XI. Outlook for the future development of the Company
1. The Company’s development strategy
The Company will consistently adhere to the development strategy of integration, serialization and synergy, adhere to the 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 chain and promote the
sustainable and high-quality development.
(1) It will continue to expand and strengthen the nutrition business. On the basis of integration and market synergy, it will maintain the
competitiveness of existing products, meanwhile rapidly develop strategic products, continuously enrich product categories, and
improve the comprehensive competitiveness of products.
31
2022 Annual Report of Zhejiang NHU Co., Ltd.
(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 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 technologie s 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 2023, the company clarified "competing to expand the market, innovating to reduce costs, professionally strengthening internal
skills, and stabilizing and preventing risks" as the guiding ideology of operation, scientifically researching and judging development
opportunities and challenges, adhering to the principle of stability, seeking progress while maintaining stability. We will ensure stable
production , expand the market, practice internal skills, strengthen innovation, promote projects, etc., to achieve steady growth in
efficiency and high-quality development of the enterprise. Focusing on the strategic goals of the 14th Five-Year Plan., We will grasp
the two main lines of improving quality, increase efficiency, stabilize growth, and stabilize operation to prevent risks. Adhere to the
three principles of safe production as the bottom line, innovation as the primary driving force, and talents as the primary resource.
The Company will unite every force to ensure its steady development, with key focus on the following work.
(1) With the sales as the leader, we will efficiently link production, supply and sales to expand the market. First, we must innovate
marketing management to build market competitiveness. To promote value marketing, improve service satisfaction, win customer trust,
form a multi-party collaborative marketing model, consolidate key customer cooperation, expand market share, optimize marketing
organizational structure, establish a professional marketing team, and improve professional service capabilities and differences
marketing. Second, we will optimize operation and management to ensure stable production, fully tapping the potential market,
enhancing product competitiveness. It is necessary to strengthen the construction of supplier management and procurement
informationization, and do a good job in the analysis and prediction of the procurement market in a timely manner
(2) With the strategy as the core, we will promote the project construction at a high level. First, we must attach importance to project
quality, schedule, safety and cost control. We will do a good job in the connection between domestic and foreign universities,
engineering companies and equipment manufacturers, complete the development of new project process packages, ensure engineering
design nodes, optimize project costs, control project construction costs, strengthen contractor management, improve the bidding process,
and solve project quality problems. Second, we must focus on strategic goals and promote the construction of key projects. Ke y projects
must ensure the legality of the approval process, and ensure that the trial run and production are carried out on time.
(3) With innovation as the driving force, we will accelerate the development momentum. We plan to focus on core technologies and
achieve key innovation breakthroughs. We plan to introduce innovative methods, optimize product structure, improve technical level,
strengthen cooperation and exchanges, and protect intellectual property rights to improve R&D efficiency and quality. We plan to
promote open cooperation and integrate global high-quality resources. We will realize global layout and resource integration by
launching joint venture projects, expanding scientific research cooperation and deepening strategic cooperation.
(4) We will take digital transformation as an opportunity to improve the level of intelligent manufacturing, accelerate the construction
of smart factories and promote the high-quality development of smart manufacturing. With the goal of intelligent operation, we will
improve the integrated business process of production, supply and marketing, and promote the implementation of the intelligent
32
2022 Annual Report of Zhejiang NHU Co., Ltd.
manufacturing system. We will accelerate the construction of the middle platform and comprehensively improve the company's
management and control capabilities. With the goal of intelligent management, we will accelerate the construction of the three major
platforms of data central platform, technology central platform and business central platform.
(5) Taking system construction as the starting point, we will lay a solid foundation for high-quality development management. We plan
to deepen the construction of HSE management system and realize normal operation.We will settle the implementation of the systematic
framework of the quality management system. We will establish an energy management system and form a regular energy audit
mechanism. Also, we will improve and promote the equipment integrity system.
(6) Based on talent construction, we will make every effort to build a talent highland, sorting and optimizing the organizational structure,
continuously expanding recruitment channels, optimizing talent selection standards, accelerating the construction of grassroots and
professional sequence talent training systems, and creating high-performance output highlands. New measures should be taken to
integrate cultural construction into management. It is necessary to refine and improve the connotation of cultural concepts, summarize
the successful experience of NHU, and refine the behavioral requirements of culture for employees. We will further explore and
improve the working mechanism of political commissars, innovate communication methods for employees, and improve employees'
sense of belonging and satisfaction.
(7) With compliance operation as the bottom line, we will lay a solid foundation for the steady development of the enterprise. We deside
to strengthen the ability of financial guidance and operation, focus on the construction of the three major systems of compre hensive
budget management, asset management and tax management and the financial intelligence platform, strengthen cash flow management.
We will strengthen the construction of the compliance management system, strengthen the prevention and control of legal risks,
implement safety and environmental protection compliance management, strengthen the protection of business secrets, promote
competition compliance management, improve the legal dispute resolution process, improve the ability to avoid intellectual property
risks, consolidate anti-fraud management, strengthen Internal audit supervision and management.
3. Possible risks
(1) Macroeconomic risks
The global economy is facing numerous uncertainties due to international trade frictions and possible intensification of geopolitica l
conflicts. In order to promote the Company's sound development, the Company will strengthen international cooperation, expand
market development and establish a diversified innovation chain, supply chain and customer base to actively cope with the impact.
(2) Industry and market competition risks
The Company is facing peer competition in both domestic and international markets. The development of new technologies by 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.
33
2022 Annual Report of Zhejiang NHU Co., Ltd.
(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.
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 of April 22,
April 22, 2022 Not Others Others Investors who attended the Company’s online Answer questions
2022, which published
applicable annual performance presentation in 2021 from investors
at the website
http://irm.cninfo.com.c
n/ssessgs/S002001 for
details.
Please refer to the
Investor Relations
Introduce the
Activities Record
1. Finest Asset Management (Huang Dengfeng & operating
Meeting room Sheet of May 10,
May 10, 2022 Field Others Chen Hong &Zhan Xuan） 2. Baofang Printing And conditions of the
of the 2022, which published
research Dyeing (Qi xin & Yu Shaobo); 3. Tang Binghui; Company and
Company at the website
4. .Zhu Yunzhi answer questions
http://irm.cninfo.com.c
from investors
n/ssessgs/S002001 for
details.
1. Essence Fund Management (Liang Bingzhe); 2.
Essence Asset Management (Li Zhe); 3. Bosera
Asset Management (Cai Bin); 4. Truvalue Asset
Management (Wang Xin); 5. Springs Capital (Bu
Zhongyu);6. Orient Securities Asset Management
(Yang Renmei & Cai Zhipeng); 7. Orient Fund
Management (Liu Tengyao); 8. Donghai Securities
(Jin Changhao); 9. Soochow Securities (Wu
Changbai); 10. Founder Asset Management (Chen
Yuanjun); 11. Fullgoal Fund Management ( Shen
Heng & Li Miao); 12. Gaoyi Asset Management
(Deng Xiaofeng); 13. Everbright Pramerica Fund
Management (Su Miao); 14. Everbright Securities
Asset Management (Wu Angda); 15. Guangdong
Private Investment (Cui Wei); 16. GF Fund
Please refer to the
Management (Wang Qi); 17. Franklin Templeton
Investor Relations
Sealand Fund (Zhao Xiaodong & .Xu Cheng & Liu Introduce the
Activities Record
Mu & .Du Fei & Xhang Qionggang ); 18. CPIC Fund operating
Telephone Sheet of May 17,
May 17, 2022 Not Institution Management (Wang Dong); 19. Guoshou Fund (.Liu conditions of the
communicat 2022, which published
applicable Zhijun & Li Bowen); 20. China Life Pension (Yu Company and
ion at the website
Lei); 21. China Life Insurance Asset Management answer questions
http://irm.cninfo.com.c
(Zhao Wen & Long Gongcheng); 22. Guotai Junan from investors
n/ssessgs/S002001 for
Securities (Ye Feng & Qian Xiaojie & Deng
details.
Shifeng); 23. China Conch Venture Holdings (Lu
Chengwei); 24. UBS SDIC Fund Management
(Zhou Sijie); 25. ABC Life Insurance (Zhao Jin); 26.
United Advance Capital (Wang Yehua); 27. Visione
Asset (Wang Chengqiang); 28. Heju Investment
(Mai Turong & Ma Wei & Chen Jian); 29.
Evergrande Life (Chen Mo); 30. Hongcheng Capital
(Chen Qian); 31 Huaan Securities (Yang Ming & Liu
Xiao); 32.Huaan Fund Management (Zhang Rui);
33.China Asset Management ( Zhang Mu & Ai
Bangni); 34. Huayin Tianxia Asset Management (Ye
Fan); 35. High-Flyer Quant Investment
Management (Xu Chenghui); 36. Hsbc Jintrust Fund
Management ( Zhen Xiaobing); 37. Amundi BOC
Wealth Management; 38. China Universal Asset
34
2022 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
Management (Zhao Pengcheng & Wang Xi & Bian
Zheng); 39. Kingsun Investment (Wu Shixian); 40.
BOCOM Financial Asset Investment (Zhang
Mingxiao); 41.Jingan Investment Management (Li
Zekai); 42.Greenwoods Asset (Jiang Wenchao); 43.
Invesco Great Wall Fund Management (Jiang
Xueting); 44. Kaidu Investment (Wang Hui); 45.
KaiFeng Investment Management (He Xuanju); 46.
Morgan Stanley Huaxin Fund Management (Duan
Yifan); 47. Mohui Investment (Jiang Xing); 48.
Southern Fund Management (Zhen Yong & Luo
Shuai & Chen Zhuo); 49. ABC-CA Fund
Management (Wang Haofei); 50. Lion fund (Ding
Yunbo); 51.Lord Abbett China Asset Management
(Fan Fei); 52.Panjing Investment (Zhang Qi);
53.Penghua Fund Management ( Luo Zheng & Du
Liang & Deng Zhaoming); 54.Pengyang Fund
Management (Xu Kunlun); 55.Ping An Annuity
Insurance (Jin Li & Chen Xushan); 56. Shanghai
Pudong Development Bank (Dai Chenyang);57.
PICC Asset Management (Tian Lei & Cai Chungen);
58. PICC Pension (Yang Tong & Xie Yifei & Wu
Qiang & Zeng Shuwei); 59. Ren Bridge Asset
Management (Xia Junjie); 60.Rongtong Fund
Management (Li Wenhai); 61.Wisdomshire Asset
Management (Liu Li); 62.Foresight Fund (Zhu Lin
& Zhong Ming & Cui Wenqi); 63.International Fund
Management (Li Dehui); 64. SWS MU Fund
Management (Yao Hongfu); 65.Rock Bay
Investment (Zhen Hui & Zhang Jian); 66. Taiping
Fund Management (Xia Wenqi & Ji Jingyuan); 67.
Manulife Teda Fund Management (Liu Shaoqing);
68. Taikang Asset Management (Wang Yilin & Liu
Shaojun); 69. TF Securities Asset Management (Liu
Shude); 70.Tibet East Wealth Fund Management
(Zhu Liang); 71. Citic-prudential Life Insurance
(Wu Hao & Sun Huicheng); 72. First State Cinda
Fund Management (Li Diandian ); 73. AEGON-
INDUSTRIAL Fund (Xu Liuming & Xie Zhiyu &
Wu Zhaohua & Chen Jinquan & Chen Hong); 74.
Xingyin Fund (Shi Liang); 75. Xingyin Fund
Management ( Chen Yalong); 76. Yanniu Finance
Information (Zhou Jiexin); 77. Galaxy Asset
Management ( Fang Wei); 78. E Fund Management
(Xie Yunchang & Liu Peixian & Chen Hao & Ge
Qiushi); 79. Yinhua Fund Management (Yan
Kailiang & Wang Jian & Shi Lei & Hu Xiaohui); 80.
Silver Leaf Investments (Cao Qing); 81. Yunion
Investment Management (Ying Zhenzhou); 82.
Maxwealth Fund Management (Chang Yuan); 83.
Yude Capital Management (Cai Jianjun); 84. Golden
Trust Sinopac Fund Management (Fan Yan); 85.
China Merchants Fund Management ( Fu Bin); 86.
Zhengyuan Investment (Hu Chaoyun); 87. CMB
Wealth Management (Peng Zhili & Hao Xuemei);
88. ZheShang Fund Management (Zhang Yulong &
Shen Guoqiong); 89. Zhonggeng Fund (Luo
Zhiyuan & Liu Sheng); 90. Rabbit Fund (Xiao
Yongsheng); 91. CITIC-Prudential Life Insurance
(Wang Rui & Jiang Feng & Hu Zhe); 92.China Post
& Capital Fund Management (Zhen Lin & Jiang
Liuwei); 93. Huashang Fund Management (Huang
Luhe); 94. Taikang Fund Management (Lin Peng
Hui); 95. Binghuai Assets (Mao Wei); 96. Qianhai
Brilland Capital (Xiao Hui & Xia Yue & Qian
Xiaoyu & Lu Hui); 97. SWS MU Fund Management
(Lu Xinzhi); 98. Sunshine Insurance (Fang Yuan &
Zhang Xuepeng);
1. Bocom Schroders (He Shuai & Qiu Hua & Zhang Please refer to the
Sanwei & Zhang Mingxiao & Liu Peng); 2. Introduce the Investor Relations
Meeting room Zheshang Securities (Li Hui & Li Jiajun); 3. Jingan operating Activities Record
July 14, 2022 of the Field Institution Investment Management (Cao Pengyuan & Li conditions of the Sheet of July 14, 2022,
research Zekai); 4. China Asset Management (Xu Mengyuan Company and which published at the
Company & Zhou Tianlin); 5. Ping An Fund Management answer questions website
(.Liu Binbin); 6. CMB Wealth Management (Peng from investors http://irm.cninfo.com.c
Zhili); 7. Pengyang Fund Management (Xu Kunlun); n/ssessgs/S002001 for
35
2022 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
8. Yude Capital Management (Sun Jiali); 9. Funding details.
Capital Management (Feng Feiyang);
1. Shenwan Hongyuan Securities (Hu Shuang &
Dong Jie); 2. Hengyue Fund (Chen Kaixi); 3. Please refer to the
Greenwoods Asset (Jiang Wenchao); 4.Hzbank Investor Relations
Introduce the
Wealth Management (Liu Aizhu); 5. Jingan Activities Record
operating
Meeting room Investment Management (Li Zekai); 6. Yongan Sheet of July 20,
July 20, 2022 Field Institution conditions of the
of the Guofu Asset Management (Hong Shaochao); 7. 2022,which published
research Company and
Company Huaneng Guicheng Trust (Tian Jiarui & Li Tingpan); at the website
answer questions
8.Qingdao Guoxin Development (Yuan Xiaotong & http://irm.cninfo.com.c
from investors
Qu Wei); 9. Foresight Fund (Zhu Lin); 10. Binghuai n/ssessgs/S002001 for
Asset Management (Mao Wei); 11. CR Asset details.
Management (Wang Xingyi);
1. Huachuang Securities (Yang Hui & Wu Yu); 2.
Western Securities (Li Mengyuan & He Minxiu); 3.
Chongyang Investment (Hu Min); 4. CICC (Xiao
Please refer to the
Yaping); 5. E Fund Management (Liu Peixian); 6.
Investor Relations
Zheshang Securities (Li Hui); 7. Orient Securities Introduce the
Activities Record
(Yuan Shuai); 8. GF Fund Management (Wang Qi); operating
August 31, Meeting room Sheet of August 31,
Field Institution 9. Penghua Fund Management (Su Dong); 10. conditions of the
of the 2022, which published
2022 research Huatai Asset Management (Yang Linxi); 11. ABC- Company and
Company at the website
CA Fund Management (Wang Haofei); 12. China answer questions
http://irm.cninfo.com.c
Asset Management (Li Jiajia & Xu Mengyuan & from investors
n/ssessgs/S002001 for
Zhou Tianlin); 13. Bocom Schroders (Zhang
details.
Mingxiao & Chen Junhua & Sun Jiekan & Wang
Yiwei); 14. Zheshang Fund (Jing Hui); 15. HuaAn
Securities (Wang Qiangfeng);
Please refer to the
1. AGI Group (Kelvin Wong); 2. Dymon Asset
Investor Relations
Management (Hefeideng); 3. AIIM AI Squared Introduce the
Activities Record
Mgmt Ltd.(Chad); 4. Golden Pine Capital Managent operating
September 8, Telephone Sheet of September 8,
Not Institution (Yanbeina); 5. Lazard Asset Managent (Rose Lu); 6. conditions of the
communicat 2022, which published
2022 applicable Balyasny Asset Management.(Si Tingting); 7. Company and
ion at the website
Anatole Investment Management .(Lyu Xuelong);8. answer questions
http://irm.cninfo.com.c
Torq Capital .(Alex Xu); 9.UBS Securities (Guo from investors
n/ssessgs/S002001 for
Yifan);
details.
Please refer to the
1. Kaiyuan Securities (Jin Yiteng & Xu Zhengfeng);
Investor Relations
2. Hongchou Investment ( Wang Zhidong); 3. Chen
Activities Record
Yan Asset Management (Yang Guan); 4. Tebon Fund
Sheet of September
September 26, Meeting room Management (Zhang Peidong); 5. TF Securities
Field Institution Answer questions 26, 2022, which
of the (Wang Xingjia); 6. China Securities (Tao Aipu); 7.
2022 research from investors published at the
Company etock capital (Qi Chenzhi); 8. Chang Xin Asset
website
Management (Huang Zhenhau); 9. Zheyun
http://irm.cninfo.com.c
Investment (Ding Xiefeng & Ge Liegang); 10.
n/ssessgs/S002001 for
Yuanxin Investment (Yang Dazhi);
details.
1. Northeast Securities (Chen Junjie); 2. Shangyan
Keling Capital (Li Tong); 3. HSBC Qianhai
Securities (Huang Qian & Ru Yi); 4. Ruiwen Cci Please refer to the
Capital (Xu Weiwei); 5. Chang'an Fund Investor Relations
Introduce the
Management (Xiao Yuqi); 6. Hangzhou Zhuocai Activities Record
operating
November 11, Telephone Investment Management (Wu Dengyan); 7. Tak Sheet of November 11,
Not Institution conditions of the
communicat Fook Investment (Zhu Baili); 8. Northeast Securities 2022, which published
2022 applicable Company and
ion (Tang Bowen); 9.Bosera Asset Management (Wang at the website
answer questions
Huanji); 10. Huachuang Securities (Yang Hui & Wu http://irm.cninfo.com.c
from investors
Yu); 11. Johnson Investment (Li Yuqiao); 12. State n/ssessgs/S002001 for
Teachers Retirement System of Ohio (zhouping); 13. details.
Dajia Capital (Hu Xiao & Jiang Jincheng & Kuai
Xuezhang, etc.);
Please refer to the
Investor Relations
Activities Record
December 16, Meeting room 1. CICC (Xiao Yaping & Jia Xiongwei & Wu Di & Sheet of December 16,
Field Institution Answer questions
of the Fu Ximing & Hou Yilin); 2. Goldman Sachs (Zheng 2022, which published
2022 research from investors
Company Ruifeng & Lin Yan); at the website
http://irm.cninfo.com.c
n/ssessgs/S002001 for
details.
36
2022 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 standardize d 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 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
37
2022 Annual Report of Zhejiang NHU Co., Ltd.
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 susta inable
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 controlling
shareholder’s institutions act on behalf of the Company.
38
2022 Annual Report of Zhejiang NHU Co., Ltd.
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
11 proposals including the
Annual Work Report of the
Board of Directors of 2021
General meeting of Annual general meeting 52.50% May 10, 2022 May 11, 2022 were deliberated and approved.
shareholders of 2021 of shareholders Please refer to Announcement
No. 2022-029 disclosed on
http://www.cninfo.com.cn for
details.
2. Preference shareholders with restored voting rights request to convene an extraordinary general meeting
□ Applicable √ Not applicable
V. Directors, supervisors and senior executives
1. Basic information
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 increased in decreased in increase/
date of the beginning 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 61 2/26/1999 9/15/2023 11,602,498 2,320,500 13,922,998 of capital
reserve into
share capital
Conversion
Vice
Hu Baishan Chairman, Incumbent Male 56 2/26/1999 9/15/2023 12,163,274 2,432,655 14,595,929 of capital
reserve into
President
share capital
Director, Vice Conversion
Shi Guanqun President, Incumbent Male 52 2/26/1999 9/15/2023 8,731,532 1,746,306 10,477,838 of capital
CFO, Secretary reserve into
of the Board share capital
Conversion
Director, Vice Incumbent Male 54 2/26/1999 9/15/2023 7,398,276 1,479,655 8,877,931 of capital
Wang Xuewen
President reserve into
share capital
Conversion
Wang Director Incumbent Male 54 4/12/2008 9/15/2023 382,500 76,500 459,000 of capital
Zhengjiang reserve into
share capital
Conversion
Zhou Guiyang Director Incumbent Male 48 4/20/2011 9/15/2023 137,702 27,540 165,242 of capital
reserve into
share capital
Yu Baijin Director Incumbent Male 56 9/15/2020 9/15/2023 0 0 0 0 0
Independent Incumbent Male 44 7/12/2017 9/15/2023 0 0 0 0 0
Huang Can
Director
Independent Incumbent Female 47 7/12/2017 9/15/2023 0 0 0 0 0
Jin Zanfang
Director
Independent Incumbent Female 59 7/12/2017 9/15/2023 0 0 0 0 0
Zhu Jianmin
Director
Independent Incumbent Male 44 9/15/2020 9/15/2023 0 0 0 0 0
Ji Jianyang
Director
Chairman of
Shi Fangbin the Board of Incumbent Female 47 9/15/2020 9/15/2023 0 0 0 0 0
Supervisors
Lyu Guofeng Supervisor Incumbent Male 51 9/15/2020 9/15/2023 0 0 0 0 0
39
2022 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)
Yu Hongwei Supervisor Incumbent Male 52 9/15/2020 9/15/2023 0 0 0 0 0
Yan Hongyue Supervisor Incumbent Male 53 9/15/2020 9/15/2023 0 0 0 0 0
Chen Zhaofeng Supervisor Incumbent Male 46 9/15/2020 9/15/2023 0 0 0 0 0
Zheng Gentu Vice President Leave office Male 61 9/29/2018 1/31/2022 0 0 0 0 0
Total -- -- -- -- -- -- 40,415,782 0 0 8,083,156 48,498,938 --
Whether there was any resignation of directors and supervisors and dismissal of senior executives during the reporting period
√ Yes □ No
Please refer to item “V. Directors, supervisors and senior executives，I. Basic information” under “Section IV Corporate
Governance” for details.
Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Position Type Date Reasons
Expiration of
Zheng Gentu Vice President Expiration of employment Jan 31, 2022
employment
2. Profiles of directors, supervisors and senior executives
Professional background, work experience and main responsibilities of the current directors, supervisors and senior executive s
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 Zhejiang NHU Special
Materials Co., Ltd. and General Manager of Zhejiang Xinhecheng Nylon Material Co., Ltd. and General Manager of Shangyu Base.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 Heilongjiang NHU
Biotechnology Co., Ltd. He used to be the Chairman of Zhejiang Guangyi Industrial Co., Ltd. and Zhejiang Xinchai Group Co., Ltd.
Huang Can (Doctor of Management, Independent Director) is a professor of Zhejiang University. He currently serves as the
Independent Director of Zhejiang Windey Co., Ltd. and Gansu Shangfeng Cement Co., Ltd.
40
2022 Annual Report of Zhejiang NHU 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 Zhejiang Feida Environmental Science & Technology Co., Ltd.
Zhu Jianmin (Master’s degree, Independent Director) currently serves as the Deputy General Manager and CFO of Merit Interactive
Co., Ltd.
Ji Jianyang (Master’s degree, Independent Director) currently serves as the Partner of Beijing Guantao Zhongmao (Hangzhou) Law
Firm and the Independent Director of Zhejiang Jingu Co., Ltd.
Shi Fangbin (Bachelor’s degree) currently serves as the Chairman of the Company’s Board of Supervisors, and CFO of NHU 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 Shandong NHU Fine Chemical Science and Technology Co., Ltd. He
used to be the Deputy Chief Engineer of Zhejiang Juhua Group Co., Ltd.
Yan Hongyue (Bachelor’s degree) currently serves as the Supervisor of the Company and General Manager of Xinchang Base. He 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.
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 11/25/2023 No
Ltd. Manager
Hu Baishan NHU Holding Group Co., Director 11/11/2011 11/25/2023 No
Ltd.
Shi Guanqun NHU Holding Group Co., Director 11/11/2011 11/25/2023 No
Ltd.
Wang Xuewen NHU Holding Group Co., Director 11/11/2011 11/25/2023 No
Ltd.
Shi Fangbin NHU Holding Group Co., CFO 9/15/2020 11/25/2023 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
Hu Baifan Zhejiang Gengdu Investment Executive Director 9/4/2015 To date No
Co., Ltd. and General Manager
41
2022 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
Hu Baifan Xinchang Heli Investment Co., Director 1/3/2017 To date No
Ltd.
Hu Baifan Safe & Rich Venture Capital Director 2/28/2008 To date No
Co., Ltd.
Hu Baifan THE Investment Management Director 9/21/2015 To date No
Co., Ltd.
Hu Baifan Xinchang Qinjin Investment Co., Chairman and General 6/10/2015 To date No
Ltd. Manager
Hu Baifan Xinchang Rural Commercial Director 1/26/2005 To date No
Bank Co., Ltd.
Hu Baifan Hangzhou Foremost Material Director 10/29/2019 11/25/2025 No
Technology Co., Ltd.
Hu Baifan Beijing Winsunny Director 5/16/2022 5/27/2025 No
Pharmaceutical Co., Ltd.
Hu Baifan Shaoxing Yuexiu Education Chairman and General 12/5/2016 6/9/2023 No
Development Co., Ltd. Manager
Hu Baifan Zhejiang Huixian Venture Executive Director 3/16/2017 To date No
Capital Co., Ltd.
Hu Baifan Zhejiang Hefeng Investment Executive Director 4/20/2018 To date No
Co., Ltd.
Hu Baifan NHU Real Estate Holding Co., Director 12/2/2010 3/19/2023 No
Ltd.
Hu Baifan Xinchang County NHU Real Director 3/20/2017 To date No
Estate Co., Ltd.
Hu Baishan Zhejiang Second Pharma Co., Director 9/15/2017 12/20/2024 No
Ltd.
Hu Baishan Shaoxing Yuexiu Education Director 12/5/2016 9/6/2023 No
Development Co., Ltd.
Shi Guanqun Xinchang Heli Investment Co., Chairman 11/30/2012 To date No
Ltd.
Shi Guanqun Xinchang Qinjin Investment Co., Director 6/10/2015 To date No
Ltd.
Shi Guanqun Shaoxing Yuexiu Education Director 12/5/2016 6/9/2023 No
Development Co., Ltd.
Shi Guanqun NHU Real Estate Holding Co., Director 12/2/2010 3/19/2023 No
Ltd.
Shi Guanqun Zhejiang Jingshi Real Estate Director 9/22/2020 9/21/2023 No
Co., Ltd.
Shi Guanqun Zhejiang Deli Equipment Co., Director 10/24/2016 10/27/2024 No
Ltd.
Shi Guanqun Beijing Winsunny Director 5/16/2019 5/27/2022 No
Pharmaceutical Co., Ltd.
Shi Guanqun Xinchang County NHU Real Director 3/20/2017 To date No
Estate Co., Ltd.
Zhou Guiyang DSM NHU Engineering Vice Chairman 1/7/2016 To date No
Materials (Zhejiang) Co., Ltd.
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 5/19/2025 Yes
Ltd.
Huang Can Zhejiang Windey Co., Ltd. Independent Director 5/12/2016 5/27/2022 Yes
Huang Can Hangzhou Oxygen Generator Independent Director 30/5/2022 27/1/2024 Yes
Group Co., Ltd
Jin Zanfang Zhejiang Jingxing Paper Joint Independent Director 6/19/2017 12/7/2022 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
Ji Jianyang Zhejiang Fore Intelligent Independent Director 12/15/2020 12/15/2023 Yes
Technology Co., Ltd.
42
2022 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
Ji Jianyang Zhejiang Uniquality Care Independent Director 3/3/2020 12/31/2022 Yes
Products Technology Co., Ltd.
Zhu Jianmin Merit Interactive Co., Ltd. Deputy General 6/22/2016 5/1/2025 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 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.
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
On October 18, 2021, the Zhejiang Securities Regulatory Bureau issued an "Administrative Penalty Decision" (No. [2021]19), which
stated that Li Li, the manager of the Data Enhancement Department of the Internet Service Business Group of Every Interaction Co.,
Ltd. at the time, forged multiple sales contracts and related settlement documents between the company and its customers through the
fabrication of seals and other means. Every Interaction failed to timely discover the aforementioned false contracts and business,
confirmed the relevant sales revenue, and prepared financial statements based on them, resulting in false records in its third quarter
report for 2019, annual report for 2019, first quarter report for 2020, half-year report for 2020, and third quarter report for 2020.
Every Interaction's above-mentioned behavior violated the provisions of Article 63 of the 2005 Securities Law and Article 78(2) of
the 2019 Securities Law, and constituted an illegal disclosure of information as defined in Article 197(2) of the Securities Law of
2019.
Zhu Jianmin, an independent director of the company and the former vice president and financial director of Every Interaction, was
responsible for financial management, but failed to ensure the truthfulness, accuracy, and completeness of Every Interaction's
information disclosure, and was directly responsible for the illegal information disclosure as the supervisory personnel. Acc ording to
the provisions of Article 197(2) of the Securities Law of 2019, the Zhejiang Securities Regulatory Bureau decided to give Zhu
Jianmin a warning and impose a fine of 800,000 yuan. On February 24, 2022, the Shenzhen Stock Exchange issued a "Decision on
Giving Notification and Criticism Punishments to Every Interaction Co., Ltd. and Related Parties," and gave Zhu Jianmin a
notification and criticism punishment for the above-mentioned matters.
3. Emoluments of directors, supervisors and senior executives
Decision-making procedure, basis for determination and actual payment of emoluments of directors, supervisors and senior 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
43
2022 Annual Report of Zhejiang NHU Co., Ltd.
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 61 Incumbent 468.77 No
Hu Baishan Vice Chairman, Male 56 Incumbent 290.66 No
President
Director, Vice
Shi Guanqun President, CFO, Male 52 Incumbent 183.64 No
Secretary of the
Board
Wang Xuewen Director, Vice Male 54 Incumbent 165.26 No
President
Wang Zhengjiang Director Male 54 Incumbent 224.36 No
Zhou Guiyang Director Male 48 Incumbent 138.56 No
Yu Baijin Director Male 56 Incumbent 160.87 No
Huang Can Independent Director Male 44 Incumbent 10 No
Jin Zanfang Independent Director Female 47 Incumbent 10 No
Zhu Jianmin Independent Director Female 59 Incumbent 10 No
Ji Jianyang Independent Director Male 44 Incumbent 10 No
Shi Fangbin Chairman of the Female 47 Incumbent 0 Yes
Board of Supervisor
Lu Guofeng Supervisor Male 51 Incumbent 272.59 No
Yu Hongwei Supervisor Male 52 Incumbent 121.08 No
Yan Hongyue Supervisor Male 53 Incumbent 112.98 No
Chen Zhaofeng Supervisor Male 46 Incumbent 69.12 No
Zheng Gentu
Vice President Male 61 Leaving office 3.72 No
Note
Total -- -- -- -- 2,251.61 --
Note: Vice President Zheng Gentu resigned on January 31, 2022.
VI. Directors’ performance of duties during the reporting period
1. Meetings of the Board of Directors during the reporting period
Session Meeting date Disclosure date Resolutions
18 proposals including the “Annual Work Report of
the Board of Directors of 2021” were deliberated and
The tenth meeting of the eighth 4/13/2022 4/15/2022 approved. Please refer to Announcement No. 2022-
session of Board of Directors
010 disclosed on http://www.cninfo.com.cn for
details.
The eleventh meeting of the
4/26/2022 N/A The “First Quarterly Report of 2022” was
eighth session of Board of
deliberated and approved.
Directors
4 proposals including the “Semi-annual Report of
Board of Directors of 2022 and Summary” were
The twelfth meeting of the eighth 8/22/2022 8/24/2022 deliberated and approved. Please refer to
session of Board of Directors
Announcement No. 2022-035 disclosed on
http://www.cninfo.com.cn for details.
2 proposals including the “Third Quarterly Report of
The thirteenth meeting of the
10/25/2022 10/26/2022 2022” were deliberated and approved. Please refer to
eighth session of Board of
Announcement No. 2022-041 disclosed on
Directors
http://www.cninfo.com.cn for details.
“Proposal on the Extension of the Duration of the
The fourteenth meeting of the
10/31/2022 11/1/2022 Third Employee Stock Ownership Plan” were
eighth session of Board of
deliberated and approved. Please refer to
Directors
Announcement No. 2022-044 disclosed on
44
2022 Annual Report of Zhejiang NHU Co., Ltd.
Session Meeting date Disclosure date Resolutions
http://www.cninfo.com.cn for details.
2. Directors’ attendance at meetings of the Board of Directors and general meetings of shareholders
Directors’ attendance at meetings of the Board of Directors and general meetings of shareholders
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 3 2 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 0
Jin Zanfang 5 1 4 0 0 No 0
Zhu Jianmin 5 1 4 0 0 No 1
Ji Jianyang 5 1 4 0 0 No 1
Remarks on failure to attend two consecutive board meetings in person
N/A
3. Directors’ objections to relevant matters of the Company
Whether directors have raised objections to relevant matters of the Company
□ Yes √ No
Directors have not raised any objections to relevant matters of the Company during the reporting period.
4. Other remarks on directors’ performance of duties
Whether the directors’ recommendation on the Company were adopted
√ Yes □ No
Remarks on directors’ recommendation on the Company adopted or not 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 “Compensation Plan of NHU
of Remuneration Baishan, Huang 1 4/1/2022 Management Team for the Term
and Assessment Can, Zhu Jianmin, 2021 to 2023” was deliberated and
Committee Shi Guanqun approved.
45
2022 Annual Report of Zhejiang NHU Co., Ltd.
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
5 proposals including “Summary of
4/1/2022 Internal Audit for the Year 2022”,
were deliberated and approved.
3 proposals including “Summary of
Internal Audit for the First Quarter of
4/20/2022 2022 and Work Plan for the Second
Quarter of 2022” were deliberated
and approved.
The eighth session Zhu Jianmin, Jin
4 3 proposals including “Summary of
of Audit Zanfang, Shi
Internal Audit for the Half Year of
Committee Guanqun 8/16/2022 2022 and Work Plan for the Third
Quarter of 2022” were deliberated
and approved.
3 proposals including “Summary of
Internal Audit for the Third Quarter
10/18/2022 of 2022 and Work Plan for the Fourth
Quarter of 2022” were deliberated
and approved.
VIII. Work of the Board of Supervisors
Whether the Board of Supervisors found any risks in the Company during its supervisory activities in the reporting period
□ Yes √ No
The Board of Supervisors has no objection to the supervised matters during the reporting period.
IX. Employees
1. Number of employees, professional workforce and education level
Number of active employees of the parent company at the end of 1,729
the reporting period
Number of active employees of major subsidiaries at the end of 9,797
the reporting period
Total number of active employees at the end of the reporting 11,526
period
Total number of employees receiving remuneration in the current 11,526
period
Number of retired cadres and employees whose expenses borne 0
by the parent company and major subsidiaries
Professional workforce
Categories Number
Production staff 7,679
Sales staff 162
Technical staff 2,629
Finance staff 99
Administrative staff 957
Total 11,526
Education level
Categories Number
Doctoral degree 77
Master’s degree 1,006
Bachelor’s degree 3,474
Associate degree 4,701
High school education, secondary vocational school education or 2,268
below
46
2022 Annual Report of Zhejiang NHU Co., Ltd.
Total 11,526
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
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
The 2021 annual general meeting of shareholders held on May 10, 2022 reviewed and approved the Proposal on Profit Distributio n
Plan of 2021, which was implemented and completed on May 25, 2022. The Annual Equity Distribution Plan for 2021: Based on
2,562,562,984 shares (the total share capital of the company at that time, which was 2,578,394,760 shares, excluded 15,831,77 6
repurchased shares), distributated cash dividends of RMB 7 (tax included) per 10 shares to all shareholders, with a total cash distribution
of RMB 1,793,794,088.80 (tax included), and distributated 2 shares per 10 shares by converting capital reserve to all shareholders,
with a total of 512,512,596 shares added, after the increase, the total share capital amounted to 3,090,907,356 shares.
Special remarks on cash dividend policy
Whether it complies with the Articles of Association or the 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:
47
2022 Annual Report of Zhejiang NHU Co., Ltd.
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) 5.00
Number of shares increased for every 10 shares (shares) 0
Equity base for distribution proposal (shares) 3,073,421,680
Amount of cash dividends (yuan) (tax included) 1,536,710,840
Amount of cash dividends by other methods (such as share 179,684,551.90
repurchase) (yuan)
Total cash dividends (including those by other methods) (yuan) 1,716,395,391.90
Profit available for distribution (yuan) 5,489,904,970.92
Proportion of total cash dividends (including those by other methods) 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
Profit distribution proposal deliberated and approved by the meeting of the Board of Directors is as follows: Based on the
3,073,421,680 shares (total share capital of 3,090,907,356 excluding 17,485,676 repurchased share), a cash dividend of 5 yuan (tax
included) will be distributed to all shareholders for every 10 shares, and 0 bonus shares (tax included) will be distributed, and the
capital reserve will not be converted into share capital.
Note:According to the “Rules on Share Repurchase of Listed Companies”, shares in the special account for repurchase of listed
companies carry no right of profit distribution and conversion of capital reserve into share capital
If the Company’s total share capital was changed due to the conversion of convertible bonds into shares, share repurchase, equity
incentive exercise, refinancing and issuing new shares to the public before the implementation of the distribution plan, the total
distribution amount shall be adjusted with distribution proportion unchanged.
XI. Implementation of equity incentive plans, employee stock ownership plans or 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
48
2022 Annual Report of Zhejiang NHU Co., Ltd.
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
Directors, supervisors, senior Legal remuneration of
executives of the Company, and the employees, self-
regular employees of the Company 681 12,157,826 N/A 0.39% raised funds and other
and its holding subsidiaries or wholly- methods permitted by
owned subsidiaries who meet the laws and administrative
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 1,334,431 1,601,317 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 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. Qiu Jinzhuo was elected as a member of the management committee of the third phase of employee stock
ownership plan and together with Ms. Zhang Liying, Mr. Dong Xiaofang, Mr. Zhang Guangli and Ms. 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
49
2022 Annual Report of Zhejiang NHU Co., Ltd.
1. On May 25, 2022, the Company implemented the annual equity distribution of 2021, and the shares held by the third phase of
employee stock ownership plan were transferred from 10,131,522 shares to 12,157,826 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 ba sed
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 revised and improved its internal management system based on the actual work situation and
changes in the internal and external environment, including 18 new systems and 35 revised rules and regulations. Including "Carbon
Emission Management Measures", "Channel Business Management Measures", "Product Pricing Management Measures," Bidding
Management Measures, "Asset Management Basic System, Project Management System and Customer Management System, so as to
improve the company's management and business processes, and further optimize the company's internal control management.
2. Details on material deficiencies in internal control identified during the reporting period
□ Yes √ No
XIII. Management control in subsidiaries during the reporting period
Problems
Name of Integration plan Progress of Solutions adopted Progress of Follow-up
encountered in
subsidiaries integration solutions solutions
integration
NHU/CHR.OLES
EN N/A N/A N/A N/A N/A N/A
LATIN
AMERICA A/S
Wuniu
(Shandong) N/A N/A N/A N/A N/A N/A
Investment Co.,
Ltd
IV. Internal control self-assessment report or auditor’s report on internal control
1. Internal control self-assessment report
Date of report April 21, 2023
Full text of report Please refer to the “Internal Control Self-Assessment Report of 2022 of Zhejiang NHU
Co., Ltd.” disclosed on http://www.cninfo.com.cn on April 21, 2023 for details.
Proportion of the total assets of entities
included in the assessment scope to the 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
50
2022 Annual Report of Zhejiang NHU Co., Ltd.
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.
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
Audit opinion paragraph in the internal control audit report
In our opinion, Zhejiang NHU Co., Ltd maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2022, in accordance with the Basic Standard for Enterprise Internal Control and related regulations.
Disclosure of internal control audit report Disclosure
Disclosure date of full text of internal control audit report 4/21/2023
For details, please refer to Juchao Information Website
Index of Full Text Disclosure of Internal Control Audit Report http://www.cninfo.com.cn "Internal Control Audit Report of
Zhejiang NHU Co., Ltd.
Opinion Type of Internal Control Audit Report Standard Unqualified Opinion
51
2022 Annual Report of Zhejiang NHU Co., Ltd.
Whether there are major defects in the non-financial report No
Whether the accounting firm has issued an internal control audit report with non-standard opinions
□ Yes √ No
Whether the internal control audit report issued by the accounting firm is consistent with the opinion of the self-evaluation report of
the board of directors
□ Yes √ No
XV. Self-examination and rectification concerning the special action of corporate governance
Not applicable.
52
2022 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
Environmental protection-related policies and industry standards
Regulations on the Management of Compensation for Ecological and Environmental Damage (Environmental Regulations [2022] No.
31)
Action Plan for the Treatment of New Pollutants (State Office [2022] No. 15)
Notice on Good Environmental Assessment of Major Investment Projects (EIA [2022] 39)
Notice on Further Promoting Work Related to the Informationization of Hazardous Waste Environmental Management (Environment
Office Solid Letter [2022] No. 230)
Implementation Plan for Carbon Dumping in the Industrial Sector (MIIT Lianjie [2022] No. 88)
Implementation Plan for Harmless Treatment and Resourceful Utilization of Sludge (NDRC Environmental Resources [2022] No.
1453)
Special Plan for Scientific and Technological Innovation in the Field of Ecology and Environment in the Fourteenth Five-Year Plan"
(National Science and Technology Development Society [2022] No. 238)
Action Plan for the Fight against Heavy Pollution Weather, Ozone Pollution Prevention and Control and Diesel Truck Pollution Control
(Huan Atmosphere [2022] No. 68)
Notice on the Issuance of Principles for the Approval of Environmental Impact Assessment Documents for Construction Projects in
Four Industries: Steel/Coking, Modern Coal Chemicals, Petrochemicals, and Thermal Power (Huanban EIA [2022] No. 31)
Notice on Further Strengthening the Safety of Environmental Protection Equipment and Facilities" (Commission Office Mingdian
[2022] No. 17)
Measures for Supervising the Ecological Environment of the Ecological Protection Red Line (for Trial Implementation) (State
Environmental Regulations and Ecology [2022] No. 2)
Environmental impact assessment (EIA) of construction projects and other administrative permits for
environmental protection
On January 11, 2022, Zhejiang NHU Pharmaceutical Co., Ltd. obtained approval for the “taurine project” with the document numbered
Shao Shi Huan Shen [2022] No.2.
On February 25, 2022, Zhejiang NHU Pharmaceutical Co., Ltd., Ltd. “The Project of Caronic Anhydride and Azabicyclic Acid” has
been put on record, with the document number of Yu Huan Jian Bei [2022] No.7.
On May 6, 2022, the environmental of Shandong NHU Vitamins Co., Ltd. independent acceptance was completed.
On June 9, 2022, Shandong NHU Amino-acids Co., Ltd. obtained the approval of the environmental impact report for the methionine
(Phase II) project, Weihuan Shen Zi [2022] No. B40.
On June 13, 2022 and December 6, 2022, Shangyu NHU Bio-Chem Co., Ltd., passed the record for the projects of nutrition,
intermediate technology transformation and green deep processing. Document No. Yu Huan Jian Bei [2022] No.20 and No. Yu Huan
Jian Bei [2022] No.51.
On June 23, 2022 , Shandong NHU Pharmaceutical Co., Ltd., Ltd. passed the environmental impact report of the 13,000t/a synthetic
spice expansion and technical transformation project. , with the document number of Weihuan Shen Zi (2022) No. B44.
53
2022 Annual Report of Zhejiang NHU Co., Ltd.
On October 12 2022, Shandong NHU Pharmaceutical Co., Ltd. has passed the environmental impact report of the technical
transformation project of expanding the production of synthetic spices and intermediates with an annual output of 301000 tons, with
the document number of Weihuan Shen Zi [2022] No. B68.
On December 19, 2022, Shandong NHU Amino-acids Co., The Methionine Integrated Research and Development Test Platform
Project has obtained the approval of the Environmental Impact Report (Weihuan Shen Zi [2022] No. B92)
Industry emission standards and the specific circumstances of pollutant emissions involved in production
and operation activities
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 126mg/L 500mg/L 19.67t ≤189.5t/a No
connection
The Company NH3-N Sewer 1 Plant area 4.0 mg/L 35 mg/L 0.66t ≤13.28t/a No
connection
The Company SO Filtered 1 Plant area 0.17t ≤8.612 t/a No
19mg/m 50mg/ m
discharge
The Company NOx Filtered 1 Plant area 0.61t ≤28t/a No
33mg/ m 50mg/ m
discharge
Shangyu NHU Bio-Chem Co., Ltd. COD Sewer 1 Plant area 264 mg/L 500 mg/L 259.305t ≤447.4 t/a No
connection
Shangyu NHU Bio-Chem Co., Ltd. NH3-N Sewer 1 Plant area 12.69 mg/L 35 mg/L 12.741t ≤31.318 t/a No
connection
Shangyu NHU Bio-Chem Co., Ltd. TN Sewer 1 Plant area 22.687 mg/L 70 mg/L 22.071t ≤62.637 t/a No
connection
Shangyu NHU Bio-Chem Co., Ltd. VOC Filtered 1 Plant area 4.743mg/m 100mg/m 2.604t ≤217.182 t/a No
discharge
Shangyu NHU Bio-Chem Co., Ltd. NOx Filtered 1 Plant area 6.362mg/m 100mg/m 2.301t ≤12.96 t/a No
discharge
Zhejiang NHU Pharmaceutical Co., COD Sewer 1 Plant area 264 mg/L 500 mg/L 169.667t ≤382.37 t/a No
Ltd. connection
Zhejiang NHU Pharmaceutical Co., NH3-N Sewer 1 Plant area 12.69 mg/L 35 mg/L 8.338t ≤26.766 t/a No
Ltd. connection
Zhejiang NHU Pharmaceutical Co., TN Sewer 1 Plant area 22.687 mg/L 70 mg/L 14.442t ≤53.532 t/a No
Ltd. connection
Zhejiang NHU Pharmaceutical Co., VOC Filtered 1 Plant area 4.36mg/m 100mg/m 0.587t ≤121.833 t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., VOC Filtered 1 Plant area 0.405mg/m 100mg/m 0.184t ≤1.069 t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., NOx Filtered 1 Plant area 4.14mg/m 200mg/m 0.511t ≤19.8 t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., NOx Filtered 1 Plant area 62.965mg/m 300mg/m 27.861t ≤28.08 t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., NOx Filtered 1 Plant area 27.86mg/m 150mg/m 1.772t ≤8.44 t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., SO Filtered 1 Plant area 3.27mg/m 100mg/m 1.412t ≤37.94 t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., SO Filtered 1 Plant area 7.531mg/m 50mg/m 0.479t ≤10.905 t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., PM Filtered 1 Plant area 3.061mg/m 20mg/m 0.229t ≤5.174 t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., PM Filtered 1 Plant area 5.203mg/m 30mg/m 1.527t ≤8.42 t/a No
Ltd. discharge
Zhejiang NHU Pharmaceutical Co., PM Filtered 1 Plant area 3.333mg/m 20mg/m 0.212t ≤5.626 t/a No
Ltd. discharge
Zhejiang NHU Special Materials PM Filtered 1 Plant area 2.4mg/m 5 mg/m 0.1912t ≤17.73 t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials PM Filtered 1 Plant area 2.8mg/m 20 mg/m 0.5411t ≤17.73 t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials PM Filtered 1 Plant area 8.22mg/m 20 mg/m 0.1309t ≤17.73 t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials SO Filtered 1 Plant area 2.7mg/m 35mg/m 0.1801t ≤67.92t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials SO Filtered 1 Plant area 6.3mg/m 50mg/m 1.7083t ≤67.92t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials SO Filtered 1 Plant area 33.7mg/m 50mg/m 0.5464t ≤67.92t/a No
Co., Ltd. discharge
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.
54
2022 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 NOx Filtered 1 Plant area 8.4mg/m 50 mg/m 0.4426 t ≤83.28 t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials NOx Filtered 1 Plant area 22.3mg/m 100mg/m 3.6814 t ≤83.28 t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials NOx Filtered 1 Plant area 29.2mg/m 150 mg/m 0.3905t ≤83.28 t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials VOC Filtered 2 Plant area 7.93mg/m 60 mg/m 2.2784t ≤69.72 t/a No
Co., Ltd. discharge
Zhejiang NHU Special Materials COD Sewer 1 Plant area 264mg/L 500 mg/L 96.149t ≤182.1 t/a No
Co., Ltd. connection
Zhejiang NHU Special Materials NH3-N Sewer 1 Plant area 12.69mg/L 35 mg/L 4.622t ≤12.747 t/a No
Co., Ltd. connection
Zhejiang NHU Special Materials TN Sewer 1 Plant area 22.687mg/L 70 mg/L 8.263t ≤25.494 t/a No
Co., Ltd. connection
Shandong NHU Pharmaceutical PM Filtered 5 Plant area 2.44mg/m 10 mg/m 1.303t ≤5.761t/a No
Co., Ltd. discharge
Shandong NHU Pharmaceutical SO Filtered 4 Plant area 3.33mg/m 50 mg/m 0.668t ≤4.006t/a No
Co., Ltd. discharge
Shandong NHU Pharmaceutical NOx Filtered 5 Plant area 36.4mg/m 100 mg/m 23.936t ≤75.513t/a No
Co., Ltd. discharge
Shandong NHU Pharmaceutical VOC Filtered 3 Plant area 20.3mg/m 60 mg/m 3.8t ≤28.481t/a No
Co., Ltd. discharge
Shandong NHU Pharmaceutical COD Sewer 1 Plant area 509mg/L 1000mg/L 204t ≤598.22t/a No
Co., Ltd. connection
Shandong NHU Pharmaceutical NH3-N Sewer 1 Plant area 18.9mg/L 100mg/L 7.39t ≤59.82 t/a No
Co., Ltd. connection
Shandong NHU Pharmaceutical TN Sewer 1 Plant area 40.6mg/L 120mg/L 16.6t ≤65.64 t/a No
Co., Ltd. connection
Shandong NHU Amino-acids Co., SO Filtered 4 Plant area 30.9 50 mg/m 7.24t ≤92.59 t/a No
Ltd. discharge
Shandong NHU Amino-acids Co., NOx Filtered 3 Plant area 86.5 100 mg/m 96.67t ≤230.77 t/a No
Ltd. discharge
Shandong NHU Amino-acids Co., PM Filtered 5 Plant area 9.8 10 mg/m 2.01t ≤21.19 t/a No
Ltd. discharge
Shandong NHU Amino-acids Co., VOC Filtered 4 Plant area 29.4 60 mg/m 40.26t ≤123.27 t/a No
Ltd. discharge
Shandong NHU Amino-acids Co., COD Sewer 1 Plant area 358 1000 mg/L 137.85t ≤592.22 t/a No
Ltd. connection
Shandong NHU Amino-acids Co., NH3-N Sewer 1 Plant area 57.7 100 mg/L 4.26t ≤59.222t/a No
Ltd. connection
Shandong NHU Amino-acids Co., TN Sewer 1 Plant area 109 120 mg/L 22t ≤70.38t/a No
Ltd. connection
Shandong NHU Vitamins Co., Ltd. VOC Organized 4 Plant area 1.4 mg/m 60 mg/m 2.14t ≤112.31 t/a No
Shandong NHU Vitamins Co., Ltd. SO Organized 3 Plant area 9 mg/m 50 mg/m 3.23t ≤21.14 t/a No
Shandong NHU Vitamins Co., Ltd. NOx Organized 4 Plant area 45 mg/m 100 mg/m 11.19t ≤65.27 t/a No
Shandong NHU Vitamins Co., Ltd. PM Organized 5 Plant area 2 mg/m 10 mg/m 1.27t ≤4.8 t/a No
Shandong NHU Vitamins Co., Ltd. COD Sewer 1 Plant area 325 mg/L 2000 mg/L 109.1t ≤1189.64 t/a No
connection
Shandong NHU Vitamins Co., Ltd. NH3-N Sewer 1 Plant area 15.2 mg/L 100 mg/L 2.41t ≤59.49 t/a No
connection
Heilongjiang NHU Biotechnology PM Filtered 1 Plant area 2.60t ≤34.8624t/a No
6.92mg/ m 30mg/m
Co., Ltd. discharge
Heilongjiang NHU Biotechnology PM Filtered 1 Plant area 0.035t ≤34.8624t/a No
6.29mg/ m 30mg/m
Co., Ltd. discharge
Heilongjiang NHU Biotechnology PM Filtered 1 Plant area 3.05t ≤34.8624t/a No
10.97mg/ m 30mg/m
Co., Ltd. discharge
Heilongjiang NHU Biotechnology NOx Filtered 1 Plant area 37.23t ≤121.32t/a No
96.65mg/ m 200mg/m
Co., Ltd. discharge
Heilongjiang NHU Biotechnology NOx Filtered 1 Plant area 0.40t ≤121.32t/a No
62.76mg/ m 250mg/ m
Co., Ltd. discharge
Heilongjiang NHU Biotechnology SO Filtered 1 Plant area 33.75t ≤117.216t/a No
93.61mg/ m 200mg/ m
Co., Ltd. discharge
Heilongjiang NHU Biotechnology SO Filtered 1 Plant area 0.040t ≤117.216t/a No
10.71mg/ m 200mg/ m
Co., Ltd. discharge
Heilongjiang NHU Biotechnology VOC Filtered 1 Plant area 4.86t ≤162t/a No
13.52mg/ m 150mg/ m
Co., Ltd. discharge
Heilongjiang NHU Biotechnology VOC Filtered 1 Plant area 0.65t ≤162t/a No
2.39mg/ m 150mg/ m
Co., Ltd. discharge
Heilongjiang NHU Biotechnology COD Sewer 1 Plant area 834.41t / No
179.275mg/ m 350 mg/L
Co., Ltd. connection
Heilongjiang NHU Biotechnology NH3-N Sewer 1 Plant area 7.81t / No
1.58mg/ m 35 mg/ m
Co., Ltd. connection
Heilongjiang NHU Biotechnology TP Sewer 1 Plant area 8.24t / No
1.735mg/ m 6 mg/L
Co., Ltd. connection
55
2022 Annual Report of Zhejiang NHU Co., Ltd.
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. In 2022, the capacity of the sewage station will be upgraded, and the treatment capacity of the sewage station
will be increased by 10%.
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. In 2021,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. In 2022, the company
began to implement the construction of odor-free factories, comprehensively carry out waste gas treatment, and solve the problem of
odor at the factory boundary.
Solid waste disposal: the company has built a standardized hazardous waste temporary storage warehouse and a hazardous waste
incineration device, and the company basically disposes of hazardous wastes by itself. Outsourced solid wastes shall be transferred in
strict accordance with the requirements of the Management Measures for Five Forms of Hazardous Waste Transfer, and shall be
entrusted to qualified units for disposal.
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 monito ring
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.
Environmental self-monitoring program
√ Applicable □ Not applicable
The company has good pollutant emission monitoring and management ability and can timely inform the environmental protection
administrative department and the public of the monitoring information. The company has developed relevant self-test plans, which
cover the indicators of the company's organized waste gas, unorganized waste gas and groundwater. At the same time, a third-party
testing company is entrusted to carry out regular monitoring.
The company implements environmental information disclosure in strict accordance with the national, provincial, municipal and county
requirements on enterprise environmental information disclosure. Each subsidiary has made enterprise environmental protection
56
2022 Annual Report of Zhejiang NHU Co., Ltd.
information public on platforms such as the environmental information management system of provincial and municipal key pollutant
discharge units.
Environmental emergency response plan
√ Applicable □ Not applicable
The Company has completed the preparation and expert review of the environmental contingency plan of Tashan and Meizhu factories,
and has completed the filing in June 2022, with the filing number: Tashan: 330624-2022-35-M, Meizhu: 330624-2022-36-L..
On October 28, 2022, Shangyu NHU Bio-Chem Co., Ltd. has completed the contingency plan filing documents for environme ntal
emergencies, with the filing number of 330604-2022-102-H.
On October 28, 2022, Zhejiang NHU Pharmaceutical Co., Ltd. has completed the contingency plan filing documents for environmental
emergencies, with the filing number of 330604-2022-101-H.
Zhejiang NHU special materials Co., Ltd. formulated the emergency plan for environmental emergencies of Zhejiang NHU special
materials Co., Ltd. in accordance with the administrative measures for the filing of emergency plans for environmental emerge ncies of
enterprises and institutions (for Trial Implementation) issued by the state and the actual situation of the company, and reported it to the
Shangyu branch of Shaoxing Ecological Environment Bureau in June 2022 for filing. with the filing number of 330604-2022-054-H.
On May 25, 2022, Shandong NHU amino acid Co., Ltd. reapplied for the emergency plan for environmental emergencies.
Heilongjiang NHU Biotechnology Co., Ltd. completed the revision of the “Environmental Emergency Response Plan of 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 August 2022.
Investment in environmental treatment and protection and payment of environmental protection tax
During the reporting period, the company invested RMB 528.35 million in environmental protection treatment and paid environmental
protection tax of RMB 1.55 million .
Measures taken to reduce carbon dioxide emissions during the reporting period and their effects
√ Applicable □ Not applicable
In the research and development of new products, the carbon emission of 10,000 yuan output value is taken as an important indicator
for the process route and environmental feasibility assessment of new products. The green development technology is applied in the
research and development of new products to improve the atomic utilization rate and reduce the carbon emission generated by the
consumption of raw materials from the source.
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
Other environmental information that should be disclosed
None.
Other information related to environmental protection
None.
57
2022 Annual Report of Zhejiang NHU Co., Ltd.
II. Social responsibilities
Please refer to the announcement disclosed on http://www.cninfo.com.cn on April 21, 2023 for the full text of the “Social Responsibilit y
Report of 2022”.
III. Details on consolidating poverty alleviation achievements and promoting rural vitalization
None.
58
2022 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 None
shares reform
Commitments
made in reports
on acquisition None None None None None None
and changes in
equity
Commitments
made in asset None None None None None None
restructuring
NHU Holding
The signing of
Group Co., Ltd. and
Commitments “Commitment on No
Zhang Pingyi, Shi
on horizontal Engagement in Horizontal
Cheng, Yuan
competition, Competition” and
Yizhong, Hu June 25, 2004 Long-term Strictly
related party commitments on no
Baishan, Shi performed
transactions and engagement in business
Guanqun, Wang
occupation of activities result in horizontal
Xuewen, Cui
funds competition with operations
Xinrong, Wang
of the Company after listing
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,
and make the following
Commitments commitments in accordance
made in IPO or with the relevant provisions
refinancing of the CSRC for the full
performance of measures on
Hu Baifan; Hu filling immediate returns: 1.
Baishan; Guanqun; not to transfer benefits to
Wang Xuewen; Cui other entities or individuals January 12, Long-term Strictly
Xinrong; Wang without compensation or on 2017 performed
Zhengjiang; Zhou unfair terms, and not to use
Guiyang other means to harm
benefits of the Company; 2.
to impose restrictions on
duty consumption of
member of the Board of
Directors and senior
executives; 3. not to use
assets of the Company to
engage in investment or
consumption activities not
related to duty performance;
4. to link remuneration
system formulated by the
59
2022 Annual Report of Zhejiang NHU Co., Ltd.
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 None
equity incentive
Other
commitments to
small and None None None None None None
medium-sized
shareholders of
the Company
During the period of
increasing the shares of the
company and within the
legal period, NHU
Other
commitments to NHU Holding Share increase Holding Group Co., Ltd. Strictly
minority May 18, 2022 6 months
Group Co., Ltd. commitment will not reduce the shares of performed
shareholders of
the Company the company and will
complete the increase plan
within the above
implementation period.
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.
60
2022 Annual Report of Zhejiang NHU Co., Ltd.
III. Illegal external guarantees
□ Applicable √ Not Applicable
There is no illegal external guarantee during the reporting period.
IV. Explanations by the Board of Directors on the latest “Modified Auditor’s Report”
□ Applicable √ Not Applicable
V. Statements by the Board of Directors, the Board of Supervisors and independent directors
(if applicable) on the “Modified Auditor’s Report” issued by the accounting firm during 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
VII. Changes in the scope of consolidated financial statements compared to the financial reports
in the previous year
□ Applicable √ Not Applicable
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 22 years
Certified Public Accountants Teng Peibin, Jan Yanhui
Certified Public Accountants’ continuous years for audit services 3 years for Teng Peibin and 1 year for Jan Yanhui
Whether to engage another accounting firm instead in the current period
□ Yes √ No
Engagement of accounting firms, financial advisors or sponsors for audit of internal controls
□ Applicable √ Not Applicable
IX. Delisting after disclosure of the annual report
□ Applicable √ Not Applicable
X. Matters related to bankruptcy and restructuring
□ Applicable √ Not Applicable
There are no matters related to bankruptcy and restructuring during the reporting period.
61
2022 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
XIII. Integrity of the Company, its controlling shareholders and the actual controller
□ Applicable √ Not Applicable
XIV. Significant related party transactions
1. Related party transactions relevant to daily operations
□ Applicable √ Not Applicable
There is no related party transaction relevant to daily operations during the reporting period.
2. Related party transactions in purchase or sale of assets or equities
□ Applicable √ Not Applicable
There is no related party transaction in purchase or sale of assets or equities during the reporting period.
3. Related party transactions in joint external investments
□ Applicable √ Not Applicable
There is no related party transaction in joint external investments during the reporting period.
4. Related party creditor’s rights and debts
□ Applicable √ Not Applicable
There is no related creditor’s rights or debts during the reporting period.
5. Transactions with related financial companies
□ Applicable √ Not Applicable
There is no business of deposits, loans, credit granting or other financial businesses between the Company and its related 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.
62
2022 Annual Report of Zhejiang NHU Co., Ltd.
XV. Significant contracts and performance
1. Matters of truste eship, contracting and leases
(1) Trusteeship
□ Applicable √ Not Applicable
There is no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not Applicable
There is no contracting during the reporting period.
(3) Leases
□ Applicable √ Not Applicable
There is no lease during the reporting period.
2. Significant guarantees
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
External guarantees by the Company and its subsidiaries to third parties (guarantees to subsidiaries are excluded)
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
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
Vitamins Co., 12/28/2018 90,000 11/29/2019 50,000 several 11/29/2019-- No No
liability 12/21/2023
Ltd.
guarantee
Joint and
NHU (Hong
Kong) Trading 5/22/2020 120,000 9/7/2020 55,716.80 several 9/7/2020-- No No
liability 9/7/2023
Co., Ltd.
guarantee
Shandong NHU
Joint and
Fine Chemical
5/22/2020 50,000 3/24/2021 50,000 several 3/24/2021-- No No
Science and
liability 12/25/2025
Technology Co.,
guarantee
Ltd.
63
2022 Annual Report of Zhejiang NHU Co., Ltd.
Joint and
NHU (Hong
Kong) Trading 4/22/2021 120,000 6/18/2021 7,422.87 several 6/18/2021-- Yes No
liability 6/17/2022
Co., Ltd.
guarantee
Joint and
NHU (Hong
Kong) Trading 4/22/2021 120,000 7/16/2021 7,422.87 several 7/16/2021-- Yes No
liability 7/14/2022
Co., Ltd.
guarantee
Joint and
NHU (Hong
Kong) Trading 5/11/2022 130,000 6/17/2022 7,422.87 several 6/17/2022-- No No
liability 6/18/2023
Co., Ltd.
guarantee
Joint and
NHU (Hong
Kong) Trading 5/11/2022 130,000 7/14/2022 7,422.87 several 7/14/2022-- No Yes
liability 7/14/2023
Co., Ltd.
guarantee
Heilongjiang Joint and
NHU 4/22/2021 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
4/22/2021 120,000 9/8/2021 85.49 several 9/8/2021-- Yes No
Kong) Trading
liability 1/30/2022
Co., Ltd.
guarantee
Zhejiang NHU Joint and
Imports & 4/22/2021 10,000 9/22/2021 10,000 several 9/22/2021-- Yes No
Exports Co., liability 5/31/2022
Ltd. guarantee
Zhejiang NHU Joint and
Imports & 5/11/2022 15,000 5/31/2022 15,000 several 5/31/2022-- No No
Exports Co., liability 5/30/2023
Ltd. guarantee
Joint and
NHU (Hong
Kong) Trading 4/22/2021 120,000 12/9/2021 66.34 several 12/9/2021-- Yes No
liability 5/30/2022
Co., Ltd.
guarantee
Joint and
NHU Vitamins 4/22/2021 40,000 12/16/2021 29,000 several 12/16/2021-- No No
Co., Ltd. liability 12/25/2026
guarantee
Joint and
NHU (Hong
4/22/2021 120,000 3/28/2022 37.35 several 3/28/2022-- Yes No
Kong) Trading
liability 9/8/2022
Co., Ltd.
guarantee
Joint and
NHU (Hong
5/11/2022 130,000 5/27/2022 101.26 several 5/27/2022-- Yes No
Kong) Trading
liability 11/1/2022
Co., Ltd.
guarantee
Joint and
Zhejiang NHU
Pharmaceutical 5/11/2022 60,000 6/24/2022 55,000 several 6/24/2022-- No No
liability 6/23/2027
Co., Ltd
guarantee
Joint and
NHU (Hong
Kong) Trading 5/11/2022 130,000 5/10/2022 5,571.68 several 5/10/2022-- No No
liability 5/10/2023
Co., Ltd.
guarantee
Joint and
NHU (Hong
Kong) Trading 5/11/2022 130,000 8/2/2022 4.53 several 8/2/2022-- No No
liability 2/1/2023
Co., Ltd.
guarantee
Joint and
NHU (Hong
Kong) Trading 5/11/2022 130,000 9/2/2022 102.13 several 9/2/2022-- No No
liability 5/1/2023
Co., Ltd.
guarantee
NHU (Hong Joint and
5/11/2022 130,000 11/3/2022 8.22 several 11/3/2022-- No No
Kong) Trading
6/1/2023
Co., Ltd. liability
64
2022 Annual Report of Zhejiang NHU Co., Ltd.
guarantee
Joint and
NHU (Hong
Kong) Trading 5/11/2022 130,000 12/15/2022 24.15 several 12/15/2022-- No No
liability 8/1/2023
Co., Ltd.
guarantee
Joint and
Xinchang NHU 5/11/2022 20,000 10/14/2022 18,000.00 several 14/10/2022- No No
Vitamins Co. liability 14/10/2027
guarantee
Total amount of guarantees
approved for subsidiaries during 225,000 Total amount actually guaranteed for 108,695.06
subsidiaries during the reporting period (B2)
the reporting period (B1)
Total amount of guarantees Total amount actually guaranteed for
approved for subsidiaries at the 646,716.80 subsidiaries at the end of the reporting period 530,273.25
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 for subsidiaries during the reporting
the reporting period (C1) period (C2)
Total amount of guarantees Total amount actually guaranteed
approved for subsidiaries at the for subsidiaries at the end of the
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 225,000 during the reporting period 108,695.06
period (A1+B1+C1) (A2+B2+C2)
Total amount of guarantees Total amount actually guaranteed at
approved at the end of the 646,716.80 the end of the reporting period 530,273.25
reporting period (A3+B3+C3) (A4+B4+C4)
Proportion of the amount actually guaranteed (A4+B4+C4) to net assets of the Company 22.49%
Including:
Balance of guarantees for shareholders, the actual controller and its related parties (D) 0
Balance of debt guarantee directly or indirectly for guaranteed parties with debt to asset ratio exceeding 70% (E) 349,000.00
The amount of the total amount guaranteed exceeding 50% of net assets (F) 0
Total amount guaranteed of three items above (D+E+F) 349,000.00
Remarks on unexpired guarantee contracts with guarantee liabilities incurred or evidence indicating the No
possibility of undertaking joint liquidation liabilities during the reporting period (if applicable)
Remarks on external guarantee in violation of provisions (if applicable) No
3. Entrusted cash assets management
(1) Entrusted financing
√ Applicable □ Not Applicable
Entrusted financing during the reporting period
Unit: RMB 0,000 yuan
65
2022 Annual Report of Zhejiang NHU Co., Ltd.
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 275,000.00 72,000.00 0 0
products
Total 275,000.00 72,000.00 0 0
High-risk entrusted financial products with individual significant amount or low security and poor liquidity
□ Applicable √ Not Applicable
When the principal of entrusted financial products is expected to be irrevocable or there are other conditions result in impairment of
entrusted financial products
□ Applicable √ Not Applicable
(2) Entrusted loans
□ Applicable √ Not Applicable
There is no entrusted loan during the reporting period.
4. Other significant contracts
□ Applicable √ Not Applicable
There is no other significant contract during the reporting period.
XVI. Other significant events
√ Applicable □ Not Applicable
1. Progress of repurchasing company shares
Please refer to item IV. Actual implementation of share repurchase during the reporting period under Section VII Movements in Shares
and Conditions of Shareholders for details.
2. Progress of the Third Employee Stock Ownership Plan
The third employee stock ownership plan of the Company was deliberated and adopted by the second extraordinary shareholders’
meeting of 2020 held on November 11, 2020, the current employee stock ownership plan is managed by the Company itself, and the
Company’s shares are acquired and held by stock purchase through secondary market, the duration shall not exceed 24 months. On
February 26, 2021, the number of shares held by the third employee stock ownership plan of the Company was 12,157,826*, accounting
for RMB 303,710,918.74 Yuan and 0.39% of the company's total share capital. The company held the 14th meeting of the eighth board
of directors on October 31, 2022, reviewed and approved the "Proposal on the Extension of the Duration of the Third Employee Stock
Ownership Plan", and agreed that the duration of the company's employee stock ownership plan will be extended. The former duration
November 11,2020 to November 10, 2022 will be adjusted to November 11, 2020 to November 10, 2023, and other contents will not
be changed. As of the end of the reporting period, the balance of shares held by the Third Employee Stock Ownership Plan was
12,157,826 shares, accounting for 0.39% of the company's total share capital. For more details, please refer to Announcement on the
extension of the duration of the third employee stock ownership plan (2022-045) published on the company's designated information
disclosure media and cninfo (http://www.cninfo.com.cn).
*On May 25, 2022, after the implementation of the company's 2021 annual equity distribution, the number of shares held by the
company's third-phase employee stock ownership plan increased to 12,157,826 shares, accounting for 0.39% of the company's
existing total share capital.
66
2022 Annual Report of Zhejiang NHU Co., Ltd.
3. Progress of shareholding increase by controlling shareholders
Based on the confidence in the sustainable and stable development of the company in the future and the recognition of the company's
value, and to enhance investors’ confidence, the controlling shareholder of the company, NHU Holding Group Co., Ltd plans to increase
its holdings of the company's shares in the next six months through the ways allowed by the trading system of Shenzhen Stock Exchange
(including but not limited to centralized bidding, block trading, etc.), and the amount of shares to be increased is not less than RMB
300 mn and not more than RMB 600 mn. There is no price range in this shareholding increase plan, and the shareholding increase plan
will be gradually implemented according to the fluctuation of the company's stock price and the overall trend of the capital market. As
of November 18, 2022, NHU Holding Group has accumulatively increased 19,078,152 shares of the company’ stock through centralized
bidding in the Shenzhen Stock Exchange system, accounting for 387,514,579.35 yuan (excluding transaction costs) and 0.62% of the
company's total share capital, the implementation of the shareholding increase plan was completed. For more details, please refer to
Announcement on the results of the implementation of the controlling shareholder's increase in the company's shares (2022-046)
published at November 19, 2022 on the company's designated information disclosure media and cninfo (http://www.cninfo.com.cn).
4. Progress of Investment Project with Raised Funds
With the approval of [2017] No. 1684 document of China Securities Regulatory Commission, the company's lead underwriter, CSC
Securities Co., Ltd., privately issued 175 million common shares (A shares) to specific objects at an issue price of RMB 28.00/share,
raising a total of RMB 4,900 million. After deducting the underwriting and recommendation fees of RMB 30 million yuan (including
tax), the raised funds amounted to RMB 4,870 million, which was remitted to the raised funds supervision account of the compa ny by
the lead underwriter, CSC Securities Co., Ltd. on December 7, 2017. In addition, after deducting lawyer fees, audit fees, capital
verification fees and other issuance expenses of RMB 4.62 million (excluding tax), and considering the deductible VAT input tax of
RMB 1.70 million of underwriting fees and recommendation fees deducted by the lead underwriter, the net amount of funds raise d was
RMB 4,867.08 million. The availability of the above raised funds has been verified by Tianjian Certified Public Accountants (special
general partnership), who issued the capital verification report ([2017] No. 503).
For 2022, the actual use of the raised funds was RMB 1,690.75mn, and the accumulated investment of the raised funds project was
RMB 3,778.20mn. By December 31, 2022, the balance of raised funds was RMB 1,807.81 mn (including financial products and
structured deposits, the net amount of interest on cash in bank less handling charges, gains on financial products and structured deposits
received on an accumulated basis).
XVII. Significant events of subsidiaries of the Company
□ Applicable √ Not Applicable
67
2022 Annual Report of Zhejiang NHU Co., Ltd.
Section VII Movements in Shares and Conditions of Shareholders
I. Movements in shares
1. Details
Unit: Share
Before Movements After
Items Issue of Reserve
Quantity % to Bonus Others Subtotal Quantity % to total
new transferred to
total shares
shares shares
I. Restricted shares 30,311,835 1.18% 6,062,367 6,062,367 36,374,202 1.18%
1. Held by other 30,311,835 1.18% 6,062,367 6,062,367 36,374,202 1.18%
domestic parties
Including: Held by 30,311,835 1.18% 6,062,367 6,062,367 36,374,202 1.18%
domestic natural persons
II. Unrestricted shares 2,548,082,925 98.82% 506,450,229 506,450,229 3,054,533,154 98.82%
1. RMB ordinary shares 2,548,082,925 98.82% 506,450,229 506,450,229 3,054,533,154 98.82%
III. Total 2,578,394,760 100.00% 512,512,596 512,512,596 3,090,907,356 100.00%
Reason for movements
√ Applicable □ Not Applicable
The 2021 annual general meeting of shareholders held on May 10, 2022 reviewed and approved the Proposal on Profit Distribution
Plan of 2021, which was implemented and completed on May 25, 2022. The Annual Equity Distribution Plan for 2021: Based on
2,562,562,984 shares (the total share capital of the company at that time, which was 2,578,394,760 shares, excluded 15,831,776
repurchased shares), distributated cash dividends of RMB 7 (tax included) per 10 shares to all shareholders, with a total cash distribution
of RMB 1,793,794,088.80 (tax included), and distributated 2 shares per 10 shares by converting capital reserve to all shareholders,
with a total of 512,512,596 shares added, after the increase, the total share capital amounted to 3,090,907,356 shares.
Approval on movements in shares
√ Applicable □ Not Applicable
Please refer to “Reason for movements” under the item “I. Movements in shares” in “Section VII Movements in Shares and Condit ions
of Shareholders” for details.
Transfer of shares
□ Applicable √ Not Applicable
Effect of movements in shares on financial indicators of preceding year and preceding period such as basic EPS and diluted EPS, 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.
Other contents the Company considered as necessary or securities regulatory institutions required disclosure
□ Applicable √ Not applicable
2. Movement in restricted shares
√ Applicable □ Not applicable
68
2022 Annual Report of Zhejiang NHU Co., Ltd.
Unit: Share
Number of Number of Number of
Number of
restricted shares restricted shares restricted shares restricted shares
Shareholders Reason for Date of unlocking
at the beginning unlocked during increased during at the end of the restriction
the current
of the period the current period period period
75% of total shares
Locked up for the
Hu Baifan 8,701,873 1,740,375 10,442,248 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 9,122,455 1,824,491 10,946,946 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 6,548,649 1,309,730 7,858,379 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 5,548,707 1,109,741 6,658,448 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 286,875 57,375 344,250 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 103,276 20,655 123,931 shares are held by held by the executive
are locked up on an
the executive
annual basis.
Total 30,311,835 6,062,367 0 36,374,202 -- --
II. Issuance and listing of securities
1. Issuance of securities (preferred shares excluded) within the reporting period
□ Applicable √ Not Applicable
2. Movements in total shares of the Company and structure of shareholders, movements in structure of assets
and liabilities of the Company
√ Applicable □ Not Applicable
Please refer to item “IV. Actual implementation of share repurchase during the reporting period” under “Section VII Movements in
Shares and Conditions of Shareholders” for details.
3. Existing shares held by internal employees
□ Applicable √ Not Applicable
III. Shareholders and actual controllers
1. Number of shareholders of the Company and their shareholding conditions
Unit: Shares
Total number of Total number of Total number
Total number of ordinary preferred of preferred
ordinary shareholders at shareholders whose shareholders
shareholders at 109,313 the end of the 119,034 voting rights were 0 whose voting 0
the end of the previous month restored at the end rights were
reporting period prior to the date of the reporting restored at the
of disclosure of period end of the
69
2022 Annual Report of Zhejiang NHU Co., Ltd.
the annual previous
report month prior to
the date of
disclosure of
the annual
report
Shareholders with holding proportion over 5% or the top 10 shareholders with largest holding proportions
Quantity of Shares pledged,
Nature ordinary Movements marked or frozen
Quantity of Quantity of
of Holding shares at the during the
Shareholders restricted unrestricted
sharehol proportion end of the reporting
shares shares Condition Quantity
ders reporting period
period
Domesti
c non-
NHU Holding Group state-
49.22% 1,521,362,525 269,458,881 0 1,521,362,525
Co., Ltd. owned
legal
person
Hong Kong Securities Oversea
Clearing Company s legal 2.17% 67,136,792 -6,756,537 0 67,136,792
Limited person
Shanghai Chongyang
Strategic Investment
Co., Ltd.－ Others 1.75% 54,072,200 9,012,033 0 54,072,200
Chongyang Strategic
Huizhi Fund
National Social
Security Fund No.503 Others 1.26% 39,000,060 19,000,060 0 39,000,060
Portfolio
Oversea
Kuwait Investment
s legal 0.67% 20,616,665 5,297,963 0 20,616,665
Authority
person
National Social
Security Fund No.112 Others 0.57% 17,587,077 -10,199,015 0 17,587,077
Portfolio
Shanghai Chongyang
Strategic Investment
Co., Ltd. － Others 0.53% 16,248,559 10,184,220 0 16,248,559
Chongyang Strategic
Yingzhi Fund
China Construction
Bank Corporation - E
Fund Shanghai and
Shenzhen 300 Others 0.52% 16,120,133 10,895,317 0 16,120,133
Medical and Health
Trading Open-end
Index Fund
Domesti
Hu Baishan c natural 0.47% 14,595,929 2,432,655 10,946,946 3,648,983
person
Domesti
c non-
Chongyang Group state-
0.45% 13,962,191 2,327,032 0 13,962,191
Co., Ltd. owned
legal
person
Strategic investors or ordinary legal persons that Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Huizhi
became one of the top 10 shareholders due to the Fund became one of the top 10 shareholders with largest holding proportions due to its
allotment of new shares participation in private placement of shares in 2017.
70
2022 Annual Report of Zhejiang NHU Co., Ltd.
Among the above shareholders, Hu Baifan is the chairman of the board, general manager
and actural controller of NHU Holding Group Co., Ltd.; Hu Baishan is the director of NHU
Remarks on relationships or concerted action
Holding Group Co., Ltd., and Hu Baifan and Hu Baishan are brothers. The Company does
between the top 10 shareholders with largest
not know whether other shareholders have relationships and whether they are persons
holding proportions
acting in concert as defined in Administration of the Takeover of Listed Companies
Procedures.
Remarks on proxy voting and waiver of voting None
right of the above shareholders
Special remarks on top 10 shareholders with The Company’s special securities account for repurchase is attributable to the top 10
special repurchase accounts shareholders, who however did not participate in the presentation of such balances.
Top 10 shareholders with unrestricted shares
Category of shares
Quantity of unrestricted shares at the end of
Shareholders
the reporting period Category Quantity
NHU Holding Group Co., Ltd. 1,521,362,525 RMB ordinary shares 1,521,362,525
Hong Kong Securities Clearing Company Limited 67,136,792 RMB ordinary shares 67,136,792
Shanghai Chongyang Strategic Investment Co., RMB ordinary shares
54,072,200 54,072,200
Ltd. － Chongyang Strategic Huizhi Fund
National Social Security Fund No.503 Portfolio 39,000,060 RMB ordinary shares 39,000,060
Kuwait Investment Authority 20,616,665 RMB ordinary shares 20,616,665
National Social Security Fund No.112 Portfolio 17,587,077 RMB ordinary shares 17,587,077
Shanghai Chongyang Strategic Investment Co., RMB ordinary shares
16,248,559 16,248,559
Ltd. － Chongyang Strategic Yingzhi Fund
China Construction Bank Corporation - E Fund
Shanghai and Shenzhen 300 Medical and Health 16,120,133 RMB ordinary shares 16,120,133
Trading Open-end Index Fund
Chongyang Group Co., Ltd. 13,962,191 RMB ordinary shares 13,962,191
Sanhua Holding Group Co.,Ltd. 13,772,970 RMB ordinary shares 13,772,970
Among the above shareholders, Hu Baifan is the chairman of the board, general manager
Remarks on relationships or concerted action
and actural controller of NHU Holding Group Co., Ltd.; Hu Baishan is the director of NHU
between the top 10 shareholders with unrestricted
Holding Group Co., Ltd., and Hu Baifan and Hu Baishan are brothers. The Company does
shares, and between the top 10 shareholders with
not know whether other shareholders have relationships and whether they are persons
unrestricted shares and top 10 shareholders with
acting in concert as defined in Administration of the Takeover of Listed Companies
largest holding proportions.
Procedures.
Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Huizhi
Fund holds 54,072,127 shares through client account of collateral securities for margin
trading of Guotai Junan Securities Co., Ltd.; Shanghai Chongyang Strategic Investment
Remarks on top 10 shareholders of ordinary shares
participating in securities margin trading Co., Ltd. － Chongyang Strategic Yingzhi Fund holds 16,248,461 shares through client
account of collateral securities for margin trading of CITIC Securities Co., Ltd.;
Chongyang Group Co., Ltd. holds 13,961,946 shares through client account of collateral
securities for margin trading of China Merchants Securities Co., Ltd.
Note: The Company’s special securities account for repurchase is attributable to the top 10 shareholders with unrestricted shares, 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..
71
2022 Annual Report of Zhejiang NHU Co., Ltd.
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
NHU Holding Group Co., Ltd. directly holds 36.73% of the shares of Beijing Fuyuan
companies that the holding
shareholders control or Pharmaceutical Co., Ltd.
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.
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 of NHU Real Estate Holding
Main occupation and position 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
Beijing Foyou Pharma Co.,Ltd. actually controlled by Hu Baifan was listed on the main
companies once been under their
board of Shanghai Stock Exchange in 2022.
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.
Block diagram of title and control relationships between the Company and the actual controller
72
2022 Annual Report of Zhejiang NHU Co., Ltd.
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
On May 18, 2022, the Announcement of Controlling Shareholders’ Share Increase Plan (2022-031) was published on the company's
designated information disclosure media and cninfo (http://www.cninfo.com.cn). NHU Holding Group Co., Ltd plans to increase its
holdings of the company's shares in the next six months through the ways allowed by the trading system of Shenzhen Stock Exchange
73
2022 Annual Report of Zhejiang NHU Co., Ltd.
(including but not limited to centralized bidding, block trading, etc.), and the amount of shares to be increased is not less than RMB
300 mn and not more than RMB 600 mn. NHU Holding Group Co., Ltd promises not to reduce the company's shares during the period
of increasing the company's shares and within the statutory period, and will complete the shareholding increase plan within the above
implementation period. As of November 18, 2022, NHU Holding Group has accumulatively increased 19,078,152 shares of the
company’ stock through centralized bidding in the Shenzhen Stock Exchange system, accounting for 387,514,579.35 yuan (excluding
transaction costs) and 0.62% of the company's total share capital, the implementation of the shareholding increase plan was c ompleted.
For more details, please refer to Announcement on the results of the implementation of the controlling shareholder's increase in the
company's shares (2022-046) published at November 19, 2022 on the company's designated information disclosure media and cninfo
(http://www.cninfo.com.cn).
IV. Actual implementation of share repurchase during the reporting period
Actual progress of share repurchase
√ Applicable □ Not applicable
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 17,485,676 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
74
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.
75
Section IX Bonds
□ Applicable √ Not applicable
1
Section X Financial Report
I. Auditor’s Report
Audit Opinion Standard unqualified opinion
Date of Auditor’s Report April 19, 2023
Accounting Firm Pan-China Certified Public Accountants LLP
Number of Auditor’s Report PCCPAAR [2023] No. 2898
Signatory Certified Public Accountants Teng Peibin, Jan Yanhui
Auditor’s Report
To the Shareholders of Zhejiang NHU Co., Ltd.:
I. Audit 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, 2022, 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, 2022, 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 fulfille d 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 III 19, V 2 and XIII 5 of this section for details.
The Company is mainly engaged in manufacturing and sales of nutrition, flavor and fragrance, new polymer materials, etc. In 2022,
the operating revenue amounted to 15.93 billion yuan.
As operating revenue is one of the key performance indicators of the Company, there might be inherent risks that the Company’s
management (the “Management”) adopts inappropriate revenue recognition to achieve specific goals or expectations, we have
identified revenue recognition as a key audit matter.
1
2022 Annual Report of Zhejiang NHU Co., Ltd.
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, inclu ding
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;
(7) We obtained the sales return records after the balance sheet date, and checked whether there was any situation that meet the revenue
recognition conditions on the balance sheet date
(8) We checked whether information related to operating revenue had been presented appropriately in the financial statements.
(II) Existence and integrity of cash and bank balances
1. Key audit matters
Please refer to item V 1 of this section for details.
At the balance sheet date, the Company’s cash and bank balances amounted to 5,343.85 million yuan, which is one of the main 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;
(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, a nd
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;
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2022 Annual Report of Zhejiang NHU Co., Ltd.
(6) We reviewed interest income, and checked whether interest income was consistent with the amount of cash and bank balances; and
(7) We checked whether information related to cash and bank balances had been presented appropriately in the financial statements.
(III) Recognition and measurement of fixed assets and construction in progress
1. Key audit matters
Please refer to item III 12, 13, V 12 and 13 of this section for details.
As of December 31, 2022, the Company’s carrying amount of fixed assets and construction in progress totals 21,613.10 million yuan,
which is one of the major assets of the Company.
Recognition and measurement of fixed assets and construction in progress involves significant judgement of the Management 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 construc tion
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.
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
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2022 Annual Report of Zhejiang NHU Co., Ltd.
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 Acc ounting
Standards for Business Enterprises, as well as designing, implementing and maintaining internal control relevant to the prepa ration 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 Manage ment
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 attentio n
in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor ’s report. However, future events or 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 performa nce 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,
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2022 Annual Report of Zhejiang NHU Co., Ltd.
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, 2022
Unit: RMB Yuan
Items December 31, 2022 January 1, 2022
Current assets:
Cash and bank balances 5,343,851,967.72 5,952,909,626.94
Settlement funds
Loans to other banks
Held-for-trading financial assets 720,314,576.43 1,250,736,359.24
Derivative financial assets
Notes receivable 372,641,835.79 349,145,316.03
Accounts receivable 2,476,269,041.23 2,755,168,573.14
Receivables financing 379,217,582.25 182,891,179.65
Advances paid 222,336,776.26 78,969,960.60
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 269,567,592.73 254,497,248.13
Including: Interest receivable
Dividend receivable 20,735,987.73 7,159,278.00
Financial assets under reverse repo
Inventories 4,144,557,702.39 3,193,657,367.16
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 182,442,976.79 895,782,268.87
Total current assets 14,111,200,051.59 14,913,757,899.76
Non-current assets:
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2022 January 1, 2022
Loans and advances
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 432,503,568.48 351,327,625.75
Other equity instrument investments 22,998,147.55 22,998,147.55
Other non-current financial assets
Investment property
Fixed assets 16,523,867,858.53 14,350,779,852.73
Construction in progress 5,089,233,908.22 2,984,835,072.82
Productive biological assets
Oil & gas assets
Right-of-use assets 2,830,136.37 3,123,637.11
Intangible assets 1,738,506,246.32 1,521,729,757.66
Development expenditures
Goodwill 3,622,704.97
Long-term prepayments 13,179,878.45 18,591,707.06
Deferred tax assets 49,812,172.71 55,805,191.95
Other non-current assets 279,870,482.64 501,076,584.40
Total non-current assets 24,156,425,104.24 19,810,267,577.03
Total assets 38,267,625,155.83 34,724,025,476.79
Current liabilities:
Short-term borrowings 1,846,373,441.01 1,403,332,827.92
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 627,438,689.79 694,124,946.73
Accounts payable 2,175,458,436.49 1,435,966,427.76
Advances received
Contract liabilities 60,660,929.75 61,135,258.36
Financial liabilities under repo
Absorbing deposit and interbank deposit
Deposit for agency security transaction
Deposit for agency security underwriting
Employee benefits payable 386,391,911.86 370,609,333.07
Taxes and rates payable 208,198,951.94 420,743,262.69
Other payables 67,351,740.34 56,712,103.36
Including: Interest payable
Dividend payable
Handling fee and commission payable
Reinsurance accounts payable
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2022 January 1, 2022
Liabilities held for sale
Non-current liabilities due within one year 2,591,687,706.22 2,029,499,509.43
Other current liabilities 4,978,299.99 5,133,310.10
Total current liabilities 7,968,540,107.39 6,477,256,979.42
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 5,273,637,508.87 5,148,811,786.49
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 2,822,404.07 2,936,868.15
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 1,083,159,222.41 1,063,699,676.16
Deferred tax liabilities 277,316,677.63 135,751,304.31
Other non-current liabilities
Total non-current liabilities 6,636,935,812.98 6,351,199,635.11
Total liabilities 14,605,475,920.37 12,828,456,614.53
Equity:
Share capital 3,090,907,356.00 2,578,394,760.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 3,613,097,510.81 4,121,063,080.96
Less: Treasury shares 500,059,711.25 320,360,784.48
Other comprehensive income 76,577,564.17 -1,614,172.31
Special reserve 26,196,894.55 12,692,218.51
Surplus reserve 1,444,413,940.89 1,289,197,380.00
General risk reserve
Undistributed profit 15,823,725,913.44 14,152,465,528.17
Total equity attributable to the parent company 23,574,859,468.61 21,831,838,010.85
Non-controlling interest 87,289,766.85 63,730,851.41
Total equity 23,662,149,235.46 21,895,568,862.26
Total liabilities & equity 38,267,625,155.83 34,724,025,476.79
Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Zhang Lijin
2. Parent company balance sheet
Unit: RMB Yuan
Items December 31, 2022 January 1, 2022
Current assets:
Cash and bank balances 4,202,458,431.01 4,319,521,960.26
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2022 January 1, 2022
Held-for-trading financial assets 200,000,000.00 200,000,000.00
Derivative financial assets
Notes receivable 333,989,841.29 349,145,316.03
Accounts receivable 500,589,449.94 746,349,980.29
Receivables financing
Advances paid 3,906,244.57 203,802,390.93
Other receivables 2,496,112,121.85 3,095,039,415.47
Including: Interest receivable
Dividend receivable 20,735,987.73 7,159,278.00
Inventories 383,861,555.41 442,360,365.52
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 3,980,654.70 552,376,721.31
Total current assets 8,124,898,298.77 9,908,596,149.81
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 9,386,046,175.45 8,054,952,017.02
Other equity instrument investments 72,998,147.55 22,998,147.55
Other non-current financial assets
Investment property
Fixed assets 625,625,323.34 674,187,271.03
Construction in progress 2,701,423.73 1,396,104.03
Productive biological assets
Oil & gas assets
Right-of-use assets 2,791,860.28 2,952,929.08
Intangible assets 144,448,440.79 113,952,307.99
Development expenditures
Goodwill
Long-term prepayments 2,614,317.07 4,266,859.15
Deferred tax assets 26,137,954.69 33,889,948.73
Other non-current assets 21,018,962.32 2,311,441.46
Total non-current assets 10,284,382,605.22 8,910,907,026.04
Total assets 18,409,280,903.99 18,819,503,175.85
Current liabilities:
Short-term borrowings 501,525,361.11 582,373,105.49
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 226,011,556.24 464,150,033.90
Accounts payable 107,476,196.13 84,472,375.02
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items December 31, 2022 January 1, 2022
Advances received
Contract liabilities 4,296,388.78 13,839,278.19
Employee benefits payable 75,342,683.87 88,415,827.18
Taxes and rates payable 7,632,017.61 60,253,580.60
Other payables 28,936,115.08 15,631,151.00
Including: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due within one year 1,208,306,034.83 1,238,333,387.67
Other current liabilities 558,530.54 1,799,106.15
Total current liabilities 2,160,084,884.19 2,549,267,845.20
Non-current liabilities:
Long-term borrowings 3,336,304,155.58 2,935,717,876.76
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 2,822,404.07 2,924,244.46
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 11,887,665.38 15,164,020.12
Deferred tax liabilities 19,080,454.36 20,547,468.08
Other non-current liabilities
Total non-current liabilities 3,370,094,679.39 2,974,353,609.42
Total liabilities 5,530,179,563.58 5,523,621,454.62
Equity:
Share capital 3,090,907,356.00 2,578,394,760.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 3,353,427,829.42 3,861,393,399.57
Less: Treasury shares 500,059,711.25 320,360,784.48
Other comprehensive income 506,954.43 506,954.43
Special reserve
Surplus reserve 1,444,413,940.89 1,289,197,380.00
Undistributed profit 5,489,904,970.92 5,886,750,011.71
Total equity 12,879,101,340.41 13,295,881,721.23
Total liabilities & equity 18,409,280,903.99 18,819,503,175.85
3. Consolidated income statement
Unit: RMB Yuan
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Year 2022 Year 2021
I. Total operating revenue 15,933,984,403.41 14,917,101,500.91
Including: Operating revenue 15,933,984,403.41 14,917,101,500.91
Interest income
Premiums earned
Revenue from handling charges and
commission
II. Total operating cost 11,705,488,745.99 10,014,421,384.71
Including: Operating cost 10,048,300,866.94 8,299,544,991.07
Interest expenses
Handling charges and commission expenditures
Surrender value
Net payment of insurance claims
Net provision of insurance policy reserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges 126,908,344.63 131,624,828.23
Selling expenses 122,257,619.47 107,037,085.96
Administrative expenses 504,674,730.69 423,584,417.67
R&D expenses 858,945,406.13 782,661,708.54
Financial expenses 44,401,778.13 269,968,353.24
Including: Interest expenses 329,243,757.49 337,753,271.80
Interest income 153,449,422.80 164,418,967.90
Add: Other income 176,863,614.19 152,380,704.67
Investment income (or less: losses) 128,695,043.73 127,969,715.41
Including: Investment income from associates 95,616,385.10 59,304,344.04
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) -66,321,783.72 37,863,705.44
Credit impairment loss 5,165,584.15 -50,043,349.49
Assets impairment loss -162,974,265.12 -54,250,408.90
Gains on asset disposal (or less: losses) 2,726,604.77 -1,544,436.08
III. Operating profit (or less: losses) 4,312,650,455.42 5,115,056,047.25
Add: Non-operating revenue 4,985,224.34 12,287,842.84
Less: Non-operating expenditures 79,532,730.91 64,603,824.24
IV. Profit before tax (or less: total loss) 4,238,102,948.85 5,062,740,065.85
Less: Income tax 599,835,465.60 690,514,446.51
V. Net profit (or less: net loss) 3,638,267,483.25 4,372,225,619.34
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net 3,638,267,483.25 4,372,225,619.34
loss)
2. Net profit from discontinued operations (or less:
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Year 2022 Year 2021
net loss)
(II) Categorized by the portion of equity ownership
1. Net profit attributable to owners of parent company 3,620,271,034.96 4,356,010,628.22
2. Net profit attributable to non-controlling 17,996,448.29 16,214,991.12
shareholders
VI. Other comprehensive income after tax 81,425,359.82 -37,096,882.86
Items attributable to the owners of the parent company 78,191,736.48 -29,418,001.62
(I) Not to be reclassified subsequently to profit or loss
1. Changes in remeasurement on the net defined
benefit plan
2. Items under equity method that will not be
reclassified to profit or loss
3. Changes in fair value of other equity
instrument investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit or loss 78,191,736.48 -29,418,001.62
1. Items under equity method that may be
reclassified to profit or loss
2. Changes in fair value of other debt
investments
3. Profit or loss from reclassification of
financial assets into other comprehensive
income
4. Provision for credit impairment of other debt
investments
5. Cash flow hedging reserve
6. Translation reserve 78,191,736.48 -29,418,001.62
7. Others
Items attributable to non-controlling shareholders 3,233,623.34 -7,678,881.24
VII. Total comprehensive income 3,719,692,843.07 4,335,128,736.48
Items attributable to the owners of the parent
3,698,462,771.44 4,326,592,626.60
company
Items attributable to non-controlling shareholders 21,230,071.63 8,536,109.88
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 1.17 1.41
(II) Diluted EPS (yuan per share) 1.17 1.41
Net profit realized by the combined party in business combination under common control before the business combination in 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: Zang Lijin
4. Parent company income statement
Unit: RMB Yuan
Items Year 2022 Year 2021
I. Operating revenue 3,476,379,206.00 4,554,078,901.38
Less: Operating cost 2,829,191,552.87 3,235,286,634.28
Taxes and surcharges 19,574,413.26 28,779,899.07
Selling expenses 28,148,629.89 26,691,429.90
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Year 2022 Year 2021
Administrative expenses 161,807,269.66 154,022,840.72
R&D expenses 237,369,336.57 216,563,446.14
Financial expenses 45,759,173.30 45,975,949.63
Including: Interest expenses 181,258,625.13 179,393,799.37
Interest income 135,572,386.45 144,933,772.10
Add: Other income 37,002,472.86 43,875,430.64
Investment income (or less: losses) 1,358,265,851.90 1,535,436,661.17
Including: Investment income from associates 47,283,121.54 60,097,137.98
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
Credit impairment loss 44,605,400.03 58,950,663.78
Assets impairment loss -17,315,989.84 -52,176,656.64
Gains on asset disposal (or less: losses) -1,077,495.83 -1,332,803.02
II. Operating profit (or less: losses) 1,576,009,069.57 2,443,327,405.76
Add: Non-operating revenue 88,499.41 5,010,140.26
Less: Non-operating expenditures 972,209.42 1,500,375.08
III. Profit before tax (or less: total loss) 1,575,125,359.56 2,446,837,170.94
Less: Income tax 22,959,750.66 139,622,202.68
IV. Net profit (or less: net loss) 1,552,165,608.90 2,307,214,968.26
(I) Net profit from continuing operations (or less: net 1,552,165,608.90 2,307,214,968.26
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 assets into other comprehensive
income
4. Provision for credit impairment of other debt
investments
5. Cash flow hedging reserve
6. Translation reserve
7. Others
VI. Total comprehensive income 1,552,165,608.90 2,307,214,968.26
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Year 2022 Year 2021
VII. Earnings per share (EPS):
(I) Basic EPS (yuan per share)
(II) Diluted EPS (yuan per share)
5. Consolidated cash flow statement
Unit: RMB Yuan
Items Year 2022 Year 2021
I. Cash flows from operating activities:
Cash receipts from sale of goods or rendering of 15,306,568,290.22 14,128,039,148.63
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 1,027,184,301.30 917,132,022.82
Other cash receipts related to operating activities 378,248,822.12 539,965,875.07
Subtotal of cash inflows from operating activities 16,712,001,413.64 15,585,137,046.52
Cash payments for goods purchased and services 9,323,961,398.08 7,309,063,593.18
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 1,719,618,482.00 1,345,745,150.27
Cash payments for taxes and rates 1,017,074,124.15 783,199,680.00
Other cash payments related to operating activities 289,866,325.80 309,250,571.50
Subtotal of cash outflows from operating activities 12,350,520,330.03 9,747,258,994.95
Net cash flows from operating activities 4,361,481,083.61 5,837,878,051.57
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 63,324,315.46 145,185,573.83
Net cash receipts from the disposal of fixed assets, 35,976,834.82 24,510,298.30
intangible assets and other long-term assets
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Year 2022 Year 2021
Net cash receipts from the disposal of subsidiaries
& other business units
Other cash receipts related to investing activities 1,820,617,040.49 1,800,000,000.00
Subtotal of cash inflows from investing activities 1,919,918,190.77 1,969,695,872.13
Cash payments for the acquisition of fixed assets, 4,931,891,897.26 3,472,724,469.42
intangible assets and other long-term assets
Cash payments for investments 83,904,479.79
Net increase of pledged borrowings
Net cash payments for the acquisition of
subsidiaries & other business units
Other cash payments related to investing activities 827,440,207.10 1,804,835,731.00
Subtotal of cash outflows from investing activities 5,759,332,104.36 5,361,464,680.21
Net cash flows from investing activities -3,839,413,913.59 -3,391,768,808.08
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Including: Cash received by subsidiaries from non-
controlling shareholders as investments
Cash receipts from borrowings 6,843,969,570.73 7,383,209,509.05
Other cash receipts related to financing activities 11,188,800.91
Subtotal of cash inflows from financing activities 6,855,158,371.64 7,383,209,509.05
Cash payments for the repayment of borrowings 5,807,173,190.91 6,557,328,243.08
Cash payments for distribution of dividends or 2,132,962,559.97 1,841,063,211.24
profits and for interest expenses
Including: Cash paid by subsidiaries to non- 12,381,785.50
controlling shareholders as dividend or profit
Other cash payments related to financing activities 185,017,200.07 329,441,306.41
Subtotal of cash outflows from financing activities 8,125,152,950.95 8,727,832,760.73
Net cash flows from financing activities -1,269,994,579.31 -1,344,623,251.68
IV. Effect of foreign exchange rate changes on cash 185,231,802.92 -56,255,229.67
& cash equivalents
V. Net increase in cash and cash equivalents -562,695,606.37 1,045,230,762.14
Add: Opening balance of cash and cash
5,714,537,538.23 4,669,306,776.09
equivalents
VI. Closing balance of cash and cash equivalents 5,151,841,931.86 5,714,537,538.23
6. Parent company cash flow statement
Unit: RMB Yuan
Items Year 2022 Year 2021
I. Cash flows from operating activities:
Cash receipts from sale of goods and rendering of 4,244,919,158.33 5,109,886,806.38
services
Receipts of tax refund 70,396,502.88 79,006,050.97
Other cash receipts related to operating activities 184,605,407.60 196,474,615.50
Subtotal of cash inflows from operating activities 4,499,921,068.81 5,385,367,472.85
Cash payments for goods purchased and services 3,081,465,686.71 3,268,785,597.91
received
Cash paid to and on behalf of employees 339,198,320.10 281,446,896.19
Cash payments for taxes and rates 103,309,425.51 129,270,605.04
Other cash payments related to operating activities 136,806,092.80 114,356,348.57
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Year 2022 Year 2021
Subtotal of cash outflows from operating activities 3,660,779,525.12 3,793,859,447.71
Net cash flows from operating activities 839,141,543.69 1,591,508,025.14
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 1,226,726,388.76 1,382,569,901.85
Net cash receipts from the disposal of fixed assets, 6,140,487.71 2,862,302.06
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 2,059,965,789.97 2,974,222,044.69
Subtotal of cash inflows from investing activities 3,292,832,666.44 4,359,654,248.60
Cash payments for the acquisition of fixed assets, 62,571,723.93 45,427,101.23
intangible assets and other long-term assets
Cash payments for investments 1,350,000,000.00 1,672,800,000.00
Net cash payments for the acquisition of subsidiaries
& other business units
Other cash payments related to investing activities 993,285,460.92 1,286,337,315.10
Subtotal of cash outflows from investing activities 2,405,857,184.85 3,004,564,416.33
Net cash flows from investing activities 886,975,481.59 1,355,089,832.27
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Cash receipts from borrowings 4,250,000,000.00 4,449,379,400.00
Other cash receipts related to financing activities
Subtotal of cash inflows from financing activities 4,250,000,000.00 4,449,379,400.00
Cash payments for the repayment of borrowings 3,965,817,400.00 3,772,893,927.30
Cash payments for distribution of dividends or profits 1,974,363,127.13 1,686,503,402.65
and for interest expenses
Other cash payments related to financing activities 181,401,563.42 324,177,230.24
Subtotal of cash outflows from financing activities 6,121,582,090.55 5,783,574,560.19
Net cash flows from financing activities -1,871,582,090.55 -1,334,195,160.19
IV. Effect of foreign exchange rate changes on cash and 7,950,387.71 -13,812,643.89
cash equivalents
V. Net increase in cash and cash equivalents -137,514,677.56 1,598,590,053.33
Add: Opening balance of cash and cash equivalents 4,191,863,033.83 2,593,272,980.50
VI. Closing balance of cash and cash equivalents 4,054,348,356.27 4,191,863,033.83
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7. Consolidated statement of changes in equity
Current period cumulative
Unit: RMB Yuan
Year 2022
Equity attributable to parent company
Items Other equity instruments Other General Non-controlling
Less: Surplus T otal equity
Share capital Preferred Perpetual Capital reserve comprehensive Special reserve risk Undistributed profit Others Subtotal interest
Others T reasury shares reserve
shares bonds income reserve
I. Balance at the end of prior year 2,578,394,760.00 4,121,063,080.96 320,360,784.48 -1,614,172.31 12,692,218.51 1,289,197,380.00 14,120,605,163.26 21,799,977,645.94 63,730,851.41 21,863,708,497.35
Add: Cumulative changes of accounting policies 31,860,364.91 31,860,364.91 31,860,364.91
Error correction of prior period
Business combination under common control
Others
II. Balance at the beginning of current year 2,578,394,760.00 4,121,063,080.96 320,360,784.48 -1,614,172.31 12,692,218.51 1,289,197,380.00 14,152,465,528.17 21,831,838,010.85 63,730,851.41 21,895,568,862.26
III. Current period increase (or less: decrease) 512,512,596.00 -507,965,570.15 179,698,926.77 78,191,736.48 13,504,676.04 155,216,560.89 1,671,260,385.27 1,743,021,457.76 23,558,915.44 1,766,580,373.20
(I) T otal comprehensive income 78,191,736.48 3,620,271,034.96 3,698,462,771.44 21,230,071.63 3,719,692,843.07
(II) Capital contributed or withdrawn by owners 179,698,926.77 -179,698,926.77 2,328,843.81 -177,370,082.96
1. Ordinary shares contributed by owners
2. Capital contributed by holders of other equity
instruments
3. Amount of share-based payment included in
equity
4. Others 179,698,926.77 -179,698,926.77 2,328,843.81 -177,370,082.96
(III) Profit distribution 155,216,560.89 -1,949,010,649.69 -1,793,794,088.80 -1,793,794,088.80
1. Appropriation of surplus reserve 155,216,560.89 -155,216,560.89
2. Appropriation of general risk reserve
3. Appropriation of profit to owners -1,793,794,088.80 -1,793,794,088.80 -1,793,794,088.80
4. Others
(IV) Internal carry-over within equity 512,512,596.00 -512,512,596.00
1. T ransfer of capital reserve to capital 512,512,596.00 -512,512,596.00
2. T ransfer 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 13,504,676.04 13,504,676.04 13,504,676.04
1. Appropriation of current period 31,988,381.60 31,988,381.60 31,988,381.60
2. Application of current period -18,483,705.56 -18,483,705.56 -18,483,705.56
(VI) Others 4,547,025.85 4,547,025.85 4,547,025.85
IV. Balance at the end of current period 3,090,907,356.00 3,613,097,510.81 500,059,711.25 76,577,564.17 26,196,894.55 1,444,413,940.89 15,823,725,913.44 23,574,859,468.61 87,289,766.85 23,662,149,235.46
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Preceding period comparative
Unit: RMB Yuan
Year 2021
Equity attributable to parent company
Items Other equity instruments Other General Non-controlling
Less: Surplus T otal equity
Share capital Preferred Perpetual Others Capital reserve T reasury shares comprehensive Special reserve risk Undistributed profit Others Subtotal interest
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
429,732,460.00 -439,459,475.88 320,360,784.48 - 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
III. Current period increase (or less: decrease)
29,418,001.62
- 4,324,150,263.31 4,294,732,261.69 8,536,109.88 4,303,268,371.57
(I) T otal comprehensive income
29,418,001.62
(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. T ransfer of capital reserve to capital 429,732,460.00 -429,732,460.00
2. T ransfer 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
- -24,737,744.17 -24,737,744.17
2. Application of current period
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
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2022 Annual Report of Zhejiang NHU Co., Ltd.
8. Parent company statements of changes in equity
Current period cumulative
Unit: RMB Yuan
Year 2022
Other equity instruments Other
Items Less: Treasury Special Undistributed
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Others Total equity
Others shares reserve profit
shares bonds income
I. Balance at the end of prior year 2,578,394,760.00 3,861,393,399.57 320,360,784.48 506,954.43 1,289,197,380.00 5,886,750,011.71 13,295,881,721.23
Add: Cumulative changes of accounting policies
Error correction of prior period
Others
II. Balance at the beginning of current year 2,578,394,760.00 3,861,393,399.57 320,360,784.48 506,954.43 1,289,197,380.00 5,886,750,011.71 13,295,881,721.23
III. Current period increase (or less: decrease) 512,512,596.00 -507,965,570.15 179,698,926.77 155,216,560.89 -396,845,040.79 -416,780,380.82
(I) Total comprehensive income 1,552,165,608.90 1,552,165,608.90
(II) Capital contributed or withdrawn by owners 179,698,926.77 -179,698,926.77
1. Ordinary shares contributed by owners
2. Capital contributed by holders of other equity instruments
3. Amount of share-based payment included in equity
4. Others 179,698,926.77 -179,698,926.77
(III) Profit distribution 155,216,560.89 -1,949,010,649.69 -1,793,794,088.80
1. Appropriation of surplus reserve 155,216,560.89 -155,216,560.89
2. Appropriation of profit to owners -1,793,794,088.80 -1,793,794,088.80
3. Others
(IV) Internal carry-over within equity 512,512,596.00 -512,512,596.00
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital 512,512,596.00 -512,512,596.00
3. Surplus reserve to cover losses
4. Changes in defined benefit plan carried over to retained
earnings
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 4,547,025.85 4,547,025.85
IV. Balance at the end of current period 3,090,907,356.00 3,353,427,829.42 500,059,711.25 506,954.43 1,444,413,940.89 5,489,904,970.92 12,879,101,340.41
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Preceding period comparative
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
214,866,230.00 - -1,504,063,610.00
(III) Profit distribution
1,718,929,840.00
1. Appropriation of surplus reserve 214,866,230.00 -214,866,230.00
- -1,504,063,610.00
2. Appropriation of profit to owners
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
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2022 Annual Report of Zhejiang NHU Co., Ltd.
III. Company profile
Zhejiang NHU Co., Ltd. (the “Company”) was jointly established by 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, 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 capita l of
3,090,907,356.00 yuan, total share of 3,090,907,356 shares (each with par value of one yuan), of which, 36,374,202 shares are restricted
outstanding shares, and 3,054,533,154 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 fifteenth meeting of the eighth session of the Board of Directors
dated April 19 2023.
The Company has brought 28 subsidiaries including Xinchang NHU Vitamins Co., Ltd., Zhejiang NHU Import & Export Co., Ltd.,
Zhejiang Vityesun Animal Nutrition and Health Co., Ltd., etc. into the consolidation scope. Please refer to item VIII and IX of 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.
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2022 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. , NHU/CHR. OLESEN LATIN AMERICA A/S is the currency of the primary economic environment in which they operate.
5. Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined party included in 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, a nd 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
translated into RMB at the approximate exchange rate similar to the spot exchange rate at the transaction date. The differenc e arising
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2022 Annual Report of Zhejiang NHU Co., Ltd.
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 liabilit ies
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 financia l 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 intere sts 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
liabilities) and financial liabilities designated as at fair value through profit or loss. The Company measures such kind of liabilities at
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2022 Annual Report of Zhejiang NHU Co., Ltd.
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 misma tches
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 impairme nt
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 liabilit ies
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 ass et, 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 owne rship 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 liabilit y
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 asset partially satisfies the
conditions to derecognition, the entire carrying amount of the transferred financial asset is, between the portion which is derecognized
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and the portion which is not, apportioned according to their respective relative fair value, and the difference between the a mounts 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 liabilit y, 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 ins trument
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 financ ial
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.
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
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recognition, so as to assess whether the credit risk on the financial instrument has increased significantly since initial re cognition.
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 allowa nce
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 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
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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. 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 re levant
activities require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the 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 re serve 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
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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 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.
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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.
12. Fixed assets
(1) Recognition principles
Fixed assets are tangible assets held for use in the production of goods or rendering of services, for rental to others, or for 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 7-70 5 13.57-1.36
General equipment Straight-line method 5-10 5 19.00-9.50
Special equipment Straight-line method 5-15 5 19.00-6.33
Transport facilities Straight-line method 5-7 5 19.00-13.57
13. Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic benefits associated with the item will 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.
14. Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction or production 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 whic h 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.
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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.
15. Intangible assets
(1) Measurement method, useful lives and impairment test
1. Intangible assets include land use right, patent right, non-patented technology, etc. The initial measurement of intangible assets 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 c omplete the
intangible asset and use or sell it; (3) how the intangible asset will generate probable future economic benefits, among other things, 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.
16. Impairment of part of long-term assets
For long-term assets such as long-term equity investments, fixed assets, construction in progress, right-of-use assets, intangible 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.
17. 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.
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18. Employee benefits
(1) Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service, short-term employee benefits actually
incurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or defined benefit plans.
(1) The Company recognizes in the accounting period in which an employee provides service the contribution payable to a 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 Company may transfer those
amounts recognized in other comprehensive income within equity.
(3) Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability for termination benefits, with 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.
(4) 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.
19. Revenue
Accounting policies on revenue recognition and measurement
1. Revenue recognition principles
At contract inception, the Company shall assess the contracts and shall identify each performance obligation in the contracts, and
determine whether the performance obligation should be satisfied over time or at a point in time.
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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 dete rmine
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 c ontrol
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 va riable
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 payme nts
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 benefit s
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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 busine sses
None.
20. Government grants
1. Government grants shall be recognized if, and only if, the following conditions are all met: (1) the Company will comply with 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 primar y
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 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 sha ll offset
relevant borrowing cost.
21. Contract assets, contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between its performance
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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 conditiona l
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.
22. Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference betwe en 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 liabilit ies
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 a sset 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 taxa ble 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.
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 a sset, 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
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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 r ewards
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 [2022] 136 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
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.
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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 will implement the revised interpretation of
accounting standards for Business Enterprises No. 15 from
January 1, 2022. According to the new standards, if the
company sells the products or by-products produced before
the fixed assets reach the expected serviceable state or Please refer to Announcement No.
during the research and development process, the income N/A 2022-026 disclosed on
and cost related to the trial operation sales shall be www.cninfo.com.cn on April 28, 2022
accounted for separately and included in the current profit for details.
and loss. The net amount of the income related to the trial
operation sales after offsetting the relevant costs shall not
be used to offset the cost of the fixed assets or the research
and development expenditure.
The Company will implement the provisions of Accounting
The change in accounting policy had
Standard for Business Enterprises No. 15, "Judgment on N/A no impact on the Company's financial
Loss-making Contracts" issued by the Ministry of Finance
statements.
from January 1, 2022.
The Company will implement the provisions of Accounting
Standard for Business Enterprises No. 16, " Accounting for The change in accounting policy had
the income tax effects of dividends related to financial N/A no impact on the Company's financial
instruments classified as equity instruments by the issuer " statements.
issued by the Ministry of Finance from November 30, 2022.
The Company will implement the provisions of Accounting
Standard for Business Enterprises No. 16, " On the
The change in accounting policy had
accounting treatment of companies that modify cash-settled N/A no impact on the Company's financial
share-based payments to equity-settled share-based
statements.
payments " issued by the Ministry of Finance from
November 30, 2022.
The impact of the implementation of the standards on the relevant items of the company's balance sheet in 2021, profit statement and
cash flow statement in the same period of last year is retroactively adjusted as follows:
Unit: RMB Yuan
Statement Items Significantly Affected Amount of impact Remark
Consolidated balance sheet items as of
December 31, 2021
Fixed Assets 31,860,364.91
Undistributed profit 31,860,364.91
Consolidated income statement items for
fiscal 2021
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Statement Items Significantly Affected Amount of impact Remark
Revenue of main operations 119,112,409.71
Cost of main operations 87,252,044.80
(2) Significant changes in accounting estimates
□ Applicable √ Not Applicable
VI. Taxes
1. Main taxes and tax rates
Taxes Tax bases Tax rates
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%.
Urban maintenance and
construction tax Turnover tax actually paid 5%, 7%
Enterprise income tax Taxable income 15%、17%、20%、22%、25%、25.5%、34%
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.
Education surcharge Turnover tax actually paid 3%
Local education surcharge Turnover tax actually paid 2%
Solidarity surcharge [Note] Income tax payable 5.50%
Trade tax [Note] Taxable income 13.30%
Note: The subsidiaries NHU EUROPE GmbH, NHU PERFORMANCE MATERIALS GMBH and Bardoterminal GmbH are 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%
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Heilongjiang NHU Biotechnology Co., Ltd. 15%
Zhejiang NHU Pharmaceutical Co., Ltd 15%
Shandong NHU Jinghua Technology Co., Ltd 15%
NHU EUROPE GmbH 15%
NHU PERFORMANCE MATERIALS GMBH 15%
Bardoterminal GmbH 15%
NHU Singapore PTE. LTD. 17%
Zhejiang NHU Nylon Material Co., Ltd 20%
NHU/CHR.OLESEN LATIN AMERICA A/S 22%
NHU CHR. OLESEN MEXICO S.A.P.I. DE C.V. 25.5%
NHU/CHR. OLESEN BRASIL LTDA 34%
Taxpayers other than the above-mentioned 25%
2. Tax preferential policies
According to the Hi-Tech Enterprise Certificate (GR202033003531) issued by Zhejiang Provincial Department of Science 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 2022.
According to the Hi-Tech Enterprise Certificate (GR202233002530) 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 2022 to 2024. It is subject to
the rate of 15% for enterprise income tax in 2022.
According to the Hi-Tech Enterprise Certificate (GR202037001084) issued by Department of Science and Technology of 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 2022.
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 2022.
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 2022.
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 2022.
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
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2022 Annual Report of Zhejiang NHU Co., Ltd.
2021 to 2023. It is subject to the rate of 15% for enterprise income tax in 2022.
According to the Hi-Tech Enterprise Certificate (GR202233004365) issued by Zhejiang Provincial Department of Science and
Technology, Zhejiang Provincial Department of Finance and Zhejiang Provincial Tax Service, STA, the subsidiary Zhejiang NHU
Pharmaceutical Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2022 to 2024. It is
subject to the rate of 15% for enterprise income tax in 2022.
According to the Hi-Tech Enterprise Certificate (GR202237005690) issued by Department of Science and Technology of Shandong
Province, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary Shandong NHU
Jinghua Technology Co., Ltd is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2021 to 2023. It
is subject to the rate of 15% for enterprise income tax in 2022.
VII. Notes to items of consolidated financial statements
1. Cash and bank balances
Unit: RMB Yuan
Items Closing balance Opening balance
Cash on hand 16,584.59 14,537.85
Cash in bank 5,151,816,943.29 5,684,842,466.04
Other cash and bank balances 192,018,439.84 268,052,623.05
Total 5,343,851,967.72 5,952,909,626.94
Including: Deposited overseas 62,426,363.92 38,739,302.11
Other remarks
(1) Other cash and bank balances
Unit: RMB Yuan
Items Closing balance Opening balance
Deposit for bank acceptance 147,608,293.24 149,724,511.46
Deposit for letters of credit 42,310,180.59 86,212,564.30
Deposit for engineering labor costs 851,288.54 1,654,664.15
Deposit for construction safety 863,937.05 405,056.50
Deposit for water fees 359,836.44 358,792.30
Deposit for ETC 16,500.00 16,500.00
Alipay balance 8,401.07
Deposited investment fund 2.91 29,680,534.34
Subtotal 192,018,439.84 268,052,623.05
2. Held-for-trading financial assets
Unit: RMB Yuan
Items Closing balance Opening balance
Financial assets at fair value through profit 720,314,576.43 1,250,736,359.24
or loss
Including: Financial products with 720,000,000.00 1,250,000,000.00
guaranteed principal and floating income
Derivative financial assets 314,576.43 736,359.24
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Total 720,314,576.43 1,250,736,359.24
3. Notes receivable
(1) Details on categories
Unit: RMB Yuan
Items Closing balance Opening balance
Bank acceptance 321,261,741.29 349,145,316.03
Commercial Acceptance 51,380,094.50
Total 372,641,835.79 349,145,316.03
Unit: RMB Yuan
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion
Including:
Notes receivable with provision for 375,346,051.29 100.00% 2,704,215.50 0.72% 372,641,835.79
bad debts made on a collective basis
Including:
Bank acceptance 321,261,741.29 85.59% 321,261,741.29
Commercial Acceptance 54,084,310.00 14.41% 2,704,215.50 5.00% 51,380,094.50
Total 375,346,051.29 100.00% 2,704,215.50 0.72% 372,641,835.79
(Continued)
Opening 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
(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 2,704,215.50 2,704,215.50
collective basis
Total 2,704,215.50 2,704,215.50
(3) Pledged notes at the balance sheet date
Unit: RMB Yuan
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Closing balance of pledged notes
Bank acceptance 233,192,351.27
Total 233,192,351.27
(4) Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance 715,000.00
Total 715,000.00
4. Accounts receivable
(1) Details on categories
Unit: RMB Yuan
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 2,615,042,281.60 100.00% 138,773,240.37 5.31% 2,476,269,041.23
basis
Total 2,615,042,281.60 100.00% 138,773,240.37 5.31% 2,476,269,041.23
(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 2,902,396,632.04 100.00% 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
Ages analysis:
Unit: RMB Yuan
Ages Book balance
Within 1 year (inclusive) 2,573,685,603.72
1-2 years 39,010,397.08
2-3 years 297,000.00
Over 3 years 2,049,280.80
3-4 years 203,200.00
4-5 years 286,550.00
Over 5 years 1,559,530.80
Total 2,615,042,281.60
(2) Provisions made, collected or reversed in the current period
Provisions made in the current period:
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Unit: RMB Yuan
Increase/Decrease
Categories Opening balance Closing balance
Accrual Recovery/ Write-off Others
Reversal
Provision made on a 147,228,058.90 -2,876,579.70 5,578,238.83 138,773,240.37
collective basis
Total 147,228,058.90 -2,876,579.70 5,578,238.83 138,773,240.37
(3)Accounts receivable actually written off in the current period
Unit: RMB Yuan
Items Write-off amount
Payment for goods 5,578,238.83
Among the significant write-offs of accounts receivable：
Unit: RMB Yuan
Nature of Reason for write- Whether the amount arises from a
Debtors Write-off amount
receivables off related transaction
OOO Payment for Less likely to be
5,578,238.83 No
Agroconcept goods recovered
合计 5,578,238.83
(3) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Debtors Closing balance Proportion to the total balance of Closing balance of provision for
receivables (%) bad debts
Client A 356,554,932.78 13.63% 17,827,746.64
Client B 216,087,986.18 8.26% 16,655,958.88
Client C 91,025,324.97 3.48% 4,551,266.25
Client D 53,807,416.60 2.06% 2,690,370.83
Client E 49,204,200.00 1.88% 2,460,210.00
Total 766,679,860.53 29.31%
5. Receivables financing
Unit: RMB Yuan
Items Closing balance Opening balance
Bank acceptance 379,217,582.25 182,891,179.65
Total 379,217,582.25 182,891,179.65
Other remarks:
(1) Pledged notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance of pledged notes
Bank acceptance 136,554,892.05
Subtotal 136,554,892.05
(2) Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB Yuan
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Closing balance derecognized
Bank acceptance 759,401,282.99
Subtotal 759,401,282.99
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little possibility 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.
6. Advances paid
(1) Age analysis
Unit: RMB Yuan
Closing balance Opening balance
Ages
Amount % to total Amount % to total
Within 1 year 215,300,317.59 96.84% 78,853,695.19 99.85%
1-2 years 7,013,257.67 3.14% 109,065.41 0.14%
2-3 years 16,001.00 0.01% 7,200.00 0.01%
Over 3 years 7,200.00 0.01%
Total 222,336,776.26 -- 78,969,960.60 --
(2) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Debtors Book balance Proportion to the total balance of
advances paid (%)
Supplier A 58,831,237.17 26.46
Supplier B 15,535,253.38 6.99
Supplier C 14,809,809.90 6.66
Supplier D 13,693,423.91 6.16
Supplier E 13,306,684.81 5.98
Subtotal 116,176,409.17 52.25
7. Other receivables
Unit: RMB Yuan
Items Closing balance Opening balance
Dividend receivable 20,735,987.73 7,159,278.00
Other receivables 248,831,605.00 247,337,970.13
Total 269,567,592.73 254,497,248.13
(1) Dividend receivable
Unit: RMB Yuan
Items/Investees Closing balance Opening balance
Zhejiang Chunhui Environmental 20,735,987.73 7,159,278.00
Protection Energy Co., Ltd.
Total 20,735,987.73 7,159,278.00
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2022 Annual Report of Zhejiang NHU Co., Ltd.
(2) Other receivables
1) Categorized by nature
Unit: RMB Yuan
Nature of receivables Closing book balance Opening book balance
Security deposits 120,123,425.59 136,459,247.48
Export tax refund 62,763,834.97 69,372,321.60
Unborrowed funds 21,098,506.24
Receivables of returned equipment 1,041,600.00 45,213,200.00
Refundable VAT 41,890,037.74 3,310,397.40
Employee petty cash 8,050,322.00 5,688,937.00
Temporary advance payment receivable 3,839,206.82 2,456,748.36
Others 3,035,775.60 653,640.31
Total 261,842,708.96 263,154,492.15
2) Provision for bad debts
Unit: RMB Yuan
Phase I Phase II Phase III
Provision for bad debts Total
12month expected Lifetime expected credit Lifetime expected credit
credit losses losses (credit not impaired) losses (credit impaired)
Opening balance 2,915,877.46 716,215.08 12,184,429.48 15,816,522.02
Opening balance in the current
period
--Transferred to phase II -265,725.73 265,725.73
--Transferred to phase III -254,219.83 254,219.83
Provision made in the current -889,971.20 335,181.92 6,844,690.23 6,289,900.95
period
Write-off in the current period 9,095,319.01 9,095,319.01
Closing balance 1,760,180.53 1,062,902.90 10,188,020.53 13,011,103.96
Significant changes in book balance of other receivables with changes in provision for bad debts:
□ Applicable √ Not applicable
Ages analysis
Unit: RMB Yuan
Ages Book balance
Within 1 year (inclusive) 129,009,444.59
1-2 years 21,076,224.01
2-3 years 1,271,099.17
Over 3 years 110,485,941.19
3-4 years 8,243,583.58
4-5 years 3,449,067.41
Over 5 years 98,793,290.20
Total 261,842,708.96
3) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Increase/Decrease
Categories Opening balance Closing balance
Accrual Recovery/ Write-off Others
Reversal
Provision made on a 15,816,522.02 6,289,900.95 9,095,319.01 13,011,103.96
collective basis
Total 15,816,522.02 6,289,900.95 9,095,319.01 13,011,103.96
4) Actual write-off of other receivables during the period
Items Write-off amount
Temporary advance payment receivable 9,095,319.01
Among the significant write-offs of accounts receivable：
Unit: RMB Yuan
Nature of Whether the amount arises
Debtors Write-off amount Reason for write-off
receivables from a related transaction
Temporary
Hangzhou Steam Turbine advance
3,600,000.00 Less likely to be recovered No
Co., Ltd. payment
receivable
Temporary
Wuxi Huaguang
advance
Environmental Protection 2,813,962.26 Less likely to be recovered No
payment
Energy Group Co., Ltd.
receivable
Temporary
Zhangjiagang Xingang
advance
Machinery Manufacturing 1,845,000.00 Less likely to be recovered No
payment
Co., Ltd.
receivable
合计 8,258,962.26
5) 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 37.39%
Resource, Binhai
District Branch
State Taxation
Administration Export tax refund 62,763,834.97 Within 1 year 23.97%
(Export tax refund
receivable)
Chr.OlesenLatin 21,098,506.24 Within 1 year 8.06% 1,054,925.31
loan splitting
America A/S
Suihua Municipal Security deposits 400,000.00 2-3 years 0.15% 320,000.00
Labor Security
Supervision Security deposits 6,195,490.53 Over 3 years 2.37% 6,195,490.53
Detachment
Weifang Binhai
Economic and Security deposits 4,835,731.00 1-2 years 1.85% 967,146.20
Technological
120
2022 Annual Report of Zhejiang NHU Co., Ltd.
Proportion to the total
Debtors Nature of receivables Book balance Ages balance of other Provision for bad debts
receivables (%)
Development Zone
Finance Treasury
Centralized Payment
Center
Total -- 193,193,562.74 -- 73.79% 8,537,562.04
8. Inventories
(1) Details on categories
Unit: RMB Yuan
Closing balance Opening balance
Provision for Provision for
Items inventory write- inventory write-
Book balance down/ Provision Carrying amount Book balance down/ Provision Carrying amount
for impairment of for impairment of
cost to fulfill a cost to fulfill a
contract contract
Raw materials 512,088,438.92 1,371,035.91 510,717,403.01 456,431,898.77 653,463.45 455,778,435.32
Work in process 1,259,897,028.55 1,259,897,028.55 1,008,021,313.66 1,008,021,313.66
Goods on hand 2,122,998,309.26 151,579,577.92 1,971,418,731.34 1,247,338,255.71 14,685,437.55 1,232,652,818.16
Goods dispatched 96,141,207.37 96,141,207.37 88,307,137.99 88,307,137.99
Developed
121,902,734.56 121,902,734.56 122,679,279.65 122,679,279.65
products
Development cost 97,530,835.60 97,530,835.60 197,045,414.10 197,045,414.10
Materials on
consignment for 8,335,609.99 8,335,609.99 4,102,415.43 4,102,415.43
further processing
Packages 16,061,832.47 16,061,832.47 14,276,697.20 14,276,697.20
Low-value 62,552,319.50 62,552,319.50 70,793,855.65 70,793,855.65
consumables
Total 4,297,508,316.22 152,950,613.83 4,144,557,702.39 3,208,996,268.16 15,338,901.00 3,193,657,367.16
(2) Inventories – Development cost
Unit: RMB Yuan
Items Estimated total investment Opening balance Closing balance
Boao NHU Resort 550 million 33,723,820.73 42,570,355.38
Weifang NHU Town Phase II 398.53 million 163,321,593.37 54,960,480.22
Subtotal 197,045,414.10 97,530,835.60
(3) Inventories – Developed products
Unit: RMB Yuan
Items Date of Opening balance Increase Decrease Closing balance
completion
Boao NHU Resort Center Dec. 2014 122,679,279.65 3,613,295.05 4,389,840.14 121,902,734.56
Subtotal 122,679,279.65 3,613,295.05 4,389,840.14 121,902,734.56
(4) Provision for inventory write-down and provision for impairment of cost to fulfill a contract
Unit: RMB Yuan
121
2022 Annual Report of Zhejiang NHU Co., Ltd.
Increase Decrease
Items Opening balance Closing balance
Accrual Others Recovery/ Others
Reversal
Raw materials 653,463.45 975,495.23 257,922.77 1,371,035.91
Goods on hand 14,685,437.55 161,998,769.89 25,104,629.52 151,579,577.92
Total 15,338,901.00 162,974,265.12 25,362,552.29 152,950,613.83
Determination basis of net realizable value and reasons for the reversal or write-off of provision for inventory write-down
Items Determination basis of net realizable value Reasons for write-off of provision for inventory
write-down
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 in
expenses, and relevant taxes and surcharges. 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
deposits
Prepaid VAT or input VAT to be credited 123,811,281.53 336,963,113.65
Prepaid enterprise income tax 54,251,454.46 5,070,275.22
Prepaid insurance premiums 4,330,488.27 3,727,306.74
Prepaid housing rents 23,362.83
Prepaid urban maintenance and 13,194.85 10,786.63
construction tax
Prepaid education surcharge 7,916.74 6,472.01
Prepaid local education surcharge 5,278.11 4,314.62
Total 182,442,976.79 895,782,268.87
10. Long-term equity investments
Unit: RMB Yuan
Increase/Decrease Closing
balance of
Opening carrying Investment Adjustment in Closing carrying provision
Investees Cash dividend/ Provision
amount Investments Investments income/losses other Changes in Others amount for
Profit declared for
increased decreased recognized under comprehensive other equity impairmen
for distribution impairment
equity method income t
I. Joint ventures
II. Associates
Zhejiang Chunhui
Environmental Protection 208,873,174.90 47,283,121.54 4,547,025.85 20,735,988.96 239,967,333.33
Energy Co., Ltd.
Zhejiang sanbo polymer
Co., Ltd
DSM NHU Engineering
Materials (Zhejiang) Co., 26,503,451.26 -2,046,002.90 24,457,448.36
Ltd.
Zhejiang Saiya Chemical 103,898,217.82 20,812,726.54 740,043.41 125,450,987.77
Materials Co., Ltd.
Shandong Bin’an Vocational
T raining School Co., Ltd. 5,895,600.85 -52,749.43 5,842,851.42
[Note]
CysBio ApS 32,660,632.18 1,069,835.19 3,054,480.23 36,784,947.60
Subtotal 351,327,625.75 95,616,385.10 4,547,025.85 20,735,988.96 1,748,520.74 432,503,568.48
Total 351,327,625.75 95,616,385.10 4,547,025.85 20,735,988.96 1,748,520.74 432,503,568.48
122
2022 Annual Report of Zhejiang NHU Co., Ltd.
11. Other equity instrument investments
Unit: RMB Yuan
Items Closing balance Opening balance
Zhejiang Second Pharma Co., Ltd. 7,790,147.55 7,790,147.55
Shanghai NewMargin Yongjin Eqiuty 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 16,523,867,858.53 14,350,779,852.73
Total 16,523,867,858.53 14,350,779,852.73
(1) Details
Unit: RMB Yuan
Items Buildings and Generali equipment Special equipment Transport facilities Total
structures
I. Cost:
1. Opening balance 6,293,404,278.18 185,910,525.30 12,993,424,027.58 25,093,346.32 19,497,832,177.38
2. Increase 842,487,177.35 33,706,597.08 2,671,895,229.87 4,133,053.18 3,552,222,057.48
(1) Acquisition 204,653,922.53 13,968,023.46 398,956,269.44 4,133,053.18 621,711,268.61
(2) Transferred in
from construction in 637,833,254.82 19,738,573.62 2,272,938,960.43 2,930,510,788.87
progress
3. Decrease 9,604,626.18 2,339,169.50 140,547,645.08 1,964,941.38 154,456,382.14
(1) Disposal/ 9,604,626.18 2,339,169.50 140,547,645.08 1,964,941.38 154,456,382.14
Scrapping
4. Closing balance 7,126,286,829.35 217,277,952.88 15,524,771,612.37 27,261,458.12 22,895,597,852.72
II. Accumulated
depreciation
1. Opening balance 680,779,035.53 99,138,742.55 4,320,266,548.05 17,140,892.56 5,117,325,218.69
2. Increase 183,752,509.46 26,249,333.04 1,134,425,527.84 2,280,586.62 1,346,707,956.96
(1) Accrual 183,752,509.46 26,249,333.04 1,134,425,527.84 2,280,586.62 1,346,707,956.96
3. Decrease 3,255,286.26 2,039,849.79 114,028,836.11 1,857,216.24 121,181,188.40
(1) Disposal/ 3,255,286.26 2,039,849.79 114,028,836.11 1,857,216.24 121,181,188.40
Scrapping
4. Closing balance 861,276,258.73 123,348,225.80 5,340,663,239.78 17,564,262.94 6,342,851,987.25
III. Provision for
impairment
1. Opening balance 20,980,481.81 23,560.67 8,706,768.47 16,295.01 29,727,105.96
2. Increase
(1) Accrual
3. Decrease 16,135.22 832,963.80 849,099.02
(1) Disposal/ 16,135.22 832,963.80 849,099.02
Scrapping
4. Closing balance 20,980,481.81 7,425.45 7,873,804.67 16,295.01 28,878,006.94
IV. Carrying amount
1. Closing balance 6,244,030,088.81 93,922,301.63 10,176,234,567.92 9,680,900.17 16,523,867,858.53
123
2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Buildings and Generali equipment Special equipment Transport facilities Total
structures
2. Opening balance 5,591,644,760.84 86,748,222.08 8,664,450,711.06 7,936,158.75 14,350,779,852.73
(2) Fixed assets temporarily idle
Unit: RMB Yuan
Items Cost Accumulated Provision for Carrying amount Remarks
depreciation impairment
Buildings and 83,557,127.18 33,296,607.22 20,975,435.81 29,285,084.15
structures
General equipment 399,321.89 317,019.86 4,787.04 77,514.99
Special equipment 385,396,343.73 320,523,489.13 7,655,128.15 57,217,726.45
Subtotal 469,352,792.80 354,137,116.21 28,635,351.00 86,580,325.59
(3) Fixed assets leased out under operating leases
Unit: RMB Yuan
Items Closing carrying amount
Buildings and structures 32,228,814.37
Subtotal 32,228,814.37
124
2022 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 1,525,911,211.16 Relevant procedures have not yet been
completed.
Subtotal 1,525,911,211.16
13. Construction in progress
Unit: RMB Yuan
Items Closing balance Opening balance
Construction in progress 5,089,233,908.22 2,984,835,072.82
Total 5,089,233,908.22 2,984,835,072.82
(1) Details
Unit: RMB Yuan
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
Park Project phase I
Hongweisu project 367,528,650.61 367,528,650.61
Heilongjiang Xinhao 83,453,010.80 83,453,010.80
Project phase II
Methionine project with
annual output of 0.25 2,389,822,701.74 2,389,822,701.74 90,355,454.04 90,355,454.04
million tons
616 Joint Production 426,984,891.23 426,984,891.23 393,488,496.81 393,488,496.81
Project
Shandong Industrial 1,718,828.38 1,718,828.38
Park 617A Project
Shandong Industrial 67,408,245.22 67,408,245.22 3,019,859.02 3,019,859.02
Park 603 Project
Shandong Industrial 94,672,989.28 94,672,989.28 - -
Park HA Project
Shangyu Industrial Park 559,554,821.51 559,554,821.51 341,096,363.93 341,096,363.93
PPS Project
Shandong Industrial 1,173,527,758.16 1,173,527,758.16
Park TMB Project
Daming Life and Health 26,065,403.64 26,065,403.64 228,847,778.44 228,847,778.44
Industry Project
NH acid project 514,155,642.52 514,155,642.52
Cogeneration Expansion 113,869,534.14 113,869,534.14
Project
F5 project 91,979,706.11 91,979,706.11
NBC and CLA projects
of Zhejiang 120,581,503.32 120,581,503.32
Pharmaceutical
Other piecemeal 684,138,469.51 684,138,469.51 270,942,430.50 270,942,430.50
projects
Total 5,089,233,908.22 5,089,233,908.22 2,984,835,072.82 2,984,835,072.82
(2) Changes in significant projects
Unit: RMB Yuan
125
2022 Annual Report of Zhejiang NHU Co., Ltd.
Including:
Budgets Accumulated Amount of
Accumulated Completion Annual
T ransferred to amount of borrowing cost Fund
Projects RMB 0000 Opening balance Increase Other decrease Closing balance input to budget percentage capitalization
fixed assets borrowing cost capitalization source
Yuan （%） （%） rate
capitalization in current
period
Shandong
Industrial Park 311,600.00 30,856,442.13 37,951,073.39 68,807,515.52 85.93 100 87,993,003.25 Others
Project phase I
Hongweisu 47,822.98 367,528,650.61 52,256,293.80 419,784,944.41 87.78 100 6,070,837.49 4,230,562.49 4.05% Others
project
Heilongjiang
Xinhao Project 10,746.25 83,453,010.80 760,841.63 84,213,852.43 78.37 100 Others
phase II
Methionine
2,299,467,247. Raised
project with 536,984.22 90,355,454.04 2,389,822,701.74 81.68 80
annual output of 70 funds
0.25 million tons
616 Joint Raised
Production 77,213.69 393,488,496.81 362,638,341.32 240,033,075.95 89,108,870.95 426,984,891.23 97.93 95
funds
Project[Note 1]
Shandong
Industrial Park 8,500.00 1,718,828.38 5,685,874.68 7,404,703.06 93.13 95 Others
617A Project
Shandong
Industrial Park 8,983.60 3,019,859.02 64,388,386.20 67,408,245.22 75.03 80 Others
603 Project
Shandong
Industrial Park 97,991.14 97,833,840.48 3,160,851.20 94,672,989.28 9.98 10 Others
HA Project
Shangyu
Industrial Park 70,900.00 341,096,363.93 218,458,457.58 559,554,821.51 78.92 90 Others
PPS Project
Shandong
Industrial Park 123,160.59 1,173,527,758.16 133,975,865.78 1,307,503,623.94 107.49 100 19,373,668.79 11,654,698.28 4.28% Others
T MB Project
Daming Life and
Health Industry 69,314.56 228,847,778.44 157,211,279.19 359,993,653.99 26,065,403.64 64.78 70 4,303,755.55 4,303,755.55 3.79% Others
Project[Note 2]
NH acid project 73,899.28 514,155,642.52 514,155,642.52 69.58 70 Others
Cogeneration
Expansion 33,890.43 113,869,534.14 113,869,534.14 33.6 35 Others
Project
F5 project 13,563.50 115,182,269.30 23,202,563.19 91,979,706.11 84.92 85 Others
NBC and CLA
projects of 13,555.00 120,581,503.32 120,581,503.32 88.96 90 Others
Zhejiang
Pharmaceutical
149,8125.24 4,294,416,451. 117,741,265.0 20,189,016.32
Total 2,713,892,642.32 2,514,104,783.69 89,108,870.95 4,405,095,438.71 -- -- --
03 8
Note 1: Shandong Industrial Park 616 Project cannot reach the designed usable conditions due to changes of planning. In the current
period, equipment available for use amounting to 7,766,164.31 yuan was transferred into other Project, assets amounting to
5,463,076.93 yuan were disposed, and the remaining part amounting to 75,879,629.71 yuan was retired.
Note 2: Daming Life and Health Industry Project has added a second phase of investment in the current period, and the budget has
changed from RMB 457.72 million to RMB 693.15 million.
Note 3: Due to changes in F5 Project content in this period, the budget was adjusted from RMB 99.33 million to RMB 135.64million
126
2022 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 3,406,640.15 3,406,640.15
2. Increase 166,686.87 166,686.87
(1) Leased in 166,686.87 166,686.87
3. Decrease
4. Closing balance 3,573,327.02 3,573,327.02
II. Accumulated depreciation
1. Opening balance 283,003.04 283,003.04
2. Increase 460,187.61 460,187.61
(1) Accrual 460,187.61 460,187.61
3. Decrease
(1) Disposal
4. Closing balance 743,190.65 743,190.65
III. Carrying amount
1. Closing balance 2,830,136.37 2,830,136.37
2. Opening balance 3,123,637.11 3,123,637.11
15. Intangible assets
(1) Details
Unit: RMB Yuan
Items Land use right Patent right Non-patented Software Total
technology
I. Cost
1. Opening balance 1,671,339,796.09 28,079,514.71 2,350,000.00 25,797,067.68 1,727,566,378.48
2. Increase 183,037,096.87 3,582,548.04 36,438,324.30 36,719,068.31 259,777,037.52
(1) Acquisition 183,037,096.87 3,582,548.04 36,438,324.30 3,747,017.63 226,804,986.84
(2) Internal R&D 32,972,050.68 32,972,050.68
3. Closing balance 1,854,376,892.96 31,662,062.75 38,788,324.30 62,516,135.99 1,987,343,416.00
II. Accumulated amortization
1. Opening balance 187,383,747.14 2,884,411.16 208,888.88 15,359,573.64 205,836,620.82
2. Increase 35,829,811.93 2,460,109.50 1,419,426.38 3,291,201.05 43,000,548.86
(1) Accrual 35,829,811.93 2,460,109.50 1,419,426.38 3,291,201.05 43,000,548.86
3. Closing balance 223,213,559.07 5,344,520.66 1,628,315.26 18,650,774.69 248,837,169.68
III. Carrying amount -
1. Closing balance 1,631,163,333.89 26,317,542.09 37,160,009.04 43,865,361.30 1,738,506,246.32
2. Opening balance 1,483,956,048.95 25,195,103.55 2,141,111.12 10,437,494.04 1,521,729,757.66
At the balance sheet date, intangible assets formed through internal research and development account for 0.00% of total inta ngible
assets.
(2) Land use right with certificate of titles being unsettled
Unit: RMB Yuan
127
2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Carrying amount Reasons for unsettlement
Land use right 31,583,200.00 Relevant procedures have not yet been
completed.
Subtotal 31,583,200.00
16. Goodwill
(1) Cost
Unit: RMB Yuan
Investees or Increase Decrease
events resulting Opening balance Closing balance
Business Translation Disposal Translation
in goodwill combination reserve reserve
Bardoterminal 2,075,762.80 58,422.79 2,134,185.59
GmbH
NHU/CHR.OLES
EN LATIN 3,622,704.97 3,622,704.97
AMERICA A/S
Total 2,075,762.80 3,622,704.97 58,422.79 5,756,890.56
(2) Provision for impairment
Unit: RMB Yuan
Investees or Increase Decrease
events resulting Opening balance Closing balance
Accrual Translation Disposal Translation
in goodwill reserve reserve
Bardoterminal 2,075,762.80 58,422.79 2,134,185.59
GmbH
Total 2,075,762.80 58,422.79 2,134,185.59
Note: Current decrease refers to translation reserve.
17. Long-term prepayments
Unit: RMB Yuan
Items Opening balance Increase Amortization Other decrease Closing balance
Decoration fees 10,378,910.67 1,214,715.05 3,443,733.74 8,149,891.98
Site leveling fees 32,443.20 16,221.60 16,221.60
Catalysts 8,180,353.19 3,166,588.32 5,013,764.87
Total 18,591,707.06 1,214,715.05 6,626,543.66 13,179,878.45
18. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
Unit: RMB Yuan
Closing balance Opening balance
Items
Deductible temporary Deferred tax assets Deductible temporary Deferred tax assets
difference difference
Provision for impairment 67,822,769.65 11,068,181.53 65,402,828.30 11,004,917.24
of assets
Unrealized profit from 50,194,235.37 7,529,135.31 116,662,766.83 17,499,415.02
internal transactions
Deferred income 185,235,337.49 27,785,300.63 143,266,156.26 21,489,923.45
Difference in
depreciation of fixed 22,863,701.57 3,429,555.24 38,739,574.92 5,810,936.24
assets
128
2022 Annual Report of Zhejiang NHU Co., Ltd.
Closing balance Opening balance
Items
Deductible temporary Deferred tax assets Deductible temporary Deferred tax assets
difference difference
Total 326,116,044.08 49,812,172.71 364,071,326.31 55,805,191.95
(2) Deferred tax liabilities before offset
Unit: RMB Yuan
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 1,468,559,836.57 232,654,485.84 513,284,381.91 89,042,045.24
fixed assets
Profit before tax of NHU
(Hong Kong) Trading 297,747,945.27 44,662,191.79 311,395,060.48 46,709,259.07
Co., Ltd.
Total 1,766,307,781.84 277,316,677.63 824,679,442.39 135,751,304.31
(3) Deferred tax assets or liabilities after offset
Unit: RMB Yuan
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 49,812,172.71 55,805,191.95
Deferred tax liabilities 277,316,677.63 135,751,304.31
(4) Details of unrecognized deferred tax assets
Unit: RMB Yuan
Items Closing balance Opening balance
Deductible temporary difference 511,910,785.90 381,427,135.81
Deductible losses 2,002,071,871.11 976,794,270.71
Total 2,513,982,657.01 1,358,221,406.52
(5) Maturity years of deductible losses of unrecognized deferred tax assets
Unit: RMB Yuan
Maturity years Closing balance Opening balance Remarks
Year 2026 3,312,384.19
Year 2027 8,512,140.12 11,527,268.52
Year 2028 35,469,296.06 38,888,442.26
Year 2029 79,322,307.29 104,197,877.04
Year 2030 255,397,416.94 260,165,696.64
Year 2031 287,143,749.91 558,702,602.06
Year 2032 1,336,226,960.79
Total 2,002,071,871.11 976,794,270.71 --
19. Other non-current assets
Unit: RMB Yuan
129
2022 Annual Report of Zhejiang NHU Co., Ltd.
Closing balance Opening balance
Items Provision Provision
Book balance Carrying Book balance Carrying amount
for for
amount
impairment impairment
Pollution emission trading fees 16,250,239.11 16,250,239.11 1,611,305.24 1,611,305.24
Payments for coal quota 63,496,000.00 63,496,000.00 65,896,000.00 65,896,000.00
Prepayments for long-term 200,124,243.53 200,124,243.53 433,569,279.16 433,569,279.16
assets
Total 279,870,482.64 279,870,482.64 501,076,584.40 501,076,584.40
20. Short-term borrowings
(1) Details on categories
Unit: RMB Yuan
Items Closing balance Opening balance
Guaranteed borrowings 22,643,974.95
Credit borrowings 1,673,729,466.06 1,383,332,827.92
Credit and guaranteed borrowings 150,000,000.00 20,000,000.00
Total 1,846,373,441.01 1,403,332,827.92
21. Notes payable
Unit: RMB Yuan
Categories Closing balance Opening balance
Bank acceptance 627,438,689.79 694,124,946.73
Total 627,438,689.79 694,124,946.73
22. Accounts payable
(1) Details
Unit: RMB Yuan
Items Closing balance Opening balance
Materials and labor costs 735,579,156.33 658,235,707.69
Payments for engineering and equipment 1,439,879,280.16 777,730,720.07
Total 2,175,458,436.49 1,435,966,427.76
23. Contract liabilities
Unit: RMB Yuan
Items Closing balance Opening balance
Payments for goods received in advance 60,660,929.75 61,135,258.36
Total 60,660,929.75 61,135,258.36
24. Employee benefits payable
(1) Details
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
I. Short-term employee benefits 370,609,333.07 1,757,851,720.84 1,742,069,142.05 386,391,911.86
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Opening balance Increase Decrease Closing balance
II. Post-employment benefits – 106,300,697.57 106,300,697.57
defined contribution plan
Total 370,609,333.07 1,864,152,418.41 1,848,369,839.62 386,391,911.86
(2) Details of short-term employee benefits
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
1. Wage, bonus, allowance and 317,401,585.64 1,544,025,650.04 1,509,250,899.23 352,176,336.45
subsidy
2. Employee welfare fund 101,625,687.74 101,625,687.74
3. Social insurance premium 49,897,949.27 49,897,949.27
Including: Medicare premium 43,457,418.76 43,457,418.76
Occupational injuries 4,689,951.86 4,689,951.86
premium
Maternity premium 1,750,578.65 1,750,578.65
4. Housing provident fund 50,823,368.91 50,823,368.91
5. Trade union fund and 53,207,747.43 11,479,064.88 30,471,236.90 34,215,575.41
employee education fund
Total 370,609,333.07 1,757,851,720.84 1,742,069,142.05 386,391,911.86
(3) Details of defined contribution plan
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
1. Basic endowment insurance 102,580,578.97 102,580,578.97
premium
2. Unemployment insurance 3,720,118.60 3,720,118.60
premium
Total 106,300,697.57 106,300,697.57
25. Taxes and rates payable
Unit: RMB Yuan
Items Closing balance Opening balance
VAT 14,398,822.86 45,928,799.96
Enterprise income tax 141,076,919.30 324,899,257.88
Individual income tax withheld for tax 6,871,930.23 3,749,309.86
authorities
Urban maintenance and construction tax 3,127,594.55 3,686,070.96
Land appreciation tax 15,427,321.94 15,244,826.82
Housing property tax 16,764,793.31 15,577,742.83
Land use tax 7,963,404.79 8,351,133.07
Education surcharge (local education 2,568,164.96 3,273,420.39
surcharge)
Stamp duty 32,700.92
Total 208,198,951.94 420,743,262.69
26. Other payables
Unit: RMB Yuan
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Closing balance Opening balance
Other payables 67,351,740.34 56,712,103.36
Total 67,351,740.34 56,712,103.36
1) Categorized by nature
Unit: RMB Yuan
Items Closing balance Opening balance
Security deposits 26,917,823.16 32,961,596.12
Temporary receipts payable 15,463,590.29 11,425,312.83
Earnest money for housing purchase (Boao 100,000.00 100,000.00
NHU Resort Center)
Call loans 13,760,448.64
Others 11,109,878.25 12,225,194.41
Total 67,351,740.34 56,712,103.36
27. Non-current liabilities due within one year
Unit: RMB Yuan
Items Closing balance Opening balance
Long-term borrowings due within one year 2,591,558,912.13 2,029,254,131.97
Lease liabilities due within one year 128,794.09 245,377.46
Total 2,591,687,706.22 2,029,499,509.43
28. Other current liabilities
Unit: RMB Yuan
Items Closing balance Opening balance
Output VAT to be recognized 4,978,299.99 5,133,310.10
Total 4,978,299.99 5,133,310.10
29. Long-term borrowings
(1) Categories
Unit: RMB Yuan
Items Closing balance Opening balance
Mortgaged borrowings 31,590,890.00 37,669,008.56
Guaranteed borrowings 934,059,850.02 945,155,611.12
Credit borrowings 4,307,986,768.85 4,165,987,166.81
Total 5,273,637,508.87 5,148,811,786.49
30. Lease liabilities
Unit: RMB Yuan
Items Closing balance Opening balance
Unpaid lease payments 4,080,857.16 4,331,618.17
Less: Unrealized financing expenses 1,258,453.09 1,394,750.02
Total 2,822,404.07 2,936,868.15
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31. Deferred income
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance Reasons for balance
The Company received government
Government grants 1,063,699,676.16 119,460,055.87 100,000,509.62 1,083,159,222.41 grants related to assets, which were
amortized based on the depreciation
progress of corresponding assets.
Total 1,063,699,676.16 119,460,055.87 100,000,509.62 1,083,159,222.41 --
Details of government grants
Unit: RMB Yuan
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 Project
427,578,840.00 49,336,020.00 378,242,820.00 Related to assets
Special funds for enterprise
development (Shandong Vitamins)
74,962,651.55 9,672,600.20 65,290,051.35 Related to assets
Special funds for joint production
project of Xinhao T hermal Power 31,772,916.73 3,774,999.96 27,997,916.77 Related to assets
Technical renovation for green deep
processing of 2019 34,260,000.00 856,500.00 33,403,500.00 Related to assets
Special funds for enterprise
development (Amino Acid) 45,804,945.12 18,000,000.00 1,145,604.36 62,659,340.76 Related to assets
Subsidies for land leveling of
Shandong 28,308,723.84 718,189.44 27,590,534.40 Related to assets
Enterprise development funds of 18,847,224.88 437,814.12 18,409,410.76 Related to assets
Shandong
PPS construction project with annual 11,412,499.88 1,826,000.04 9,586,499.84 Related to assets
output of 10,000 tons
Subsidies for PPS resin with annual
output of 5,000 tons and PPS 8,550,000.00 2,850,000.00 5,700,000.00 Related to assets
composite materials with annual output
of 6,000 tons
Enterprise development funds of
Advanced Manufacturing Industrial 8,491,786.07 198,251.76 8,293,534.31 Related to assets
Park
Effective industrial input expansion of 6,064,800.00 957,600.00 5,107,200.00 Related to assets
2016
Funds for key thematic projects of
industrial revitalization and technical 3,924,642.86 1,427,142.84 2,497,500.02 Related to assets
renovation of 2012
Fiscal subsidies for low-rent housing 6,098,560.08 240,857.16 5,857,702.92 Related to assets
Subsidies from land transfer fees of 4,873,021.09 250,231.57 4,622,789.52 Related to assets
Shandong dormitory
Subsidies for inputs in biochemical 4,580,963.84 317,771.88 4,263,191.96 Related to assets
infrastructure of Shangyu
Construction project of public testing 3,000,000.04 999,999.96 2,000,000.08 Related to assets
service platform
Subsidies for infrastructure supporting 7,478,250.00 797,625.00 6,680,625.00 Related to assets
fees
Compensation for resource
conservation and environmental 3,360,000.00 480,000.00 2,880,000.00 Related to assets
protection projects of 2017
Subsidies for new materials, land and 2,432,160.00 810,720.00 1,621,440.00 Related to assets
infrastructure construction
Special fiscal funds for revitalization of
the substantial economy 2,140,071.30 539,228.52 1,600,842.78 Related to assets
(transformation of traditional
industries) of 2017
Subsidies for RT O Project 1,266,666.90 399,999.96 866,666.94 Related to assets
Special subsidies for development of 2,000,000.00 800,000.02 1,199,999.98 Related to assets
marine economy of 2017
Special subsidies for high-quality 1,804,329.70 304,957.10 1,499,372.60 Related to assets
development of manufacturing industry
Enterprise development fund 52,224,561.00 2,176,023.38 50,048,537.62 Related to assets
(Shandong Fine Chemical)
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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 Taishan industry 7,400,000.00 7,400,000.00 Related to assets
leading talents
Food security control and emergency 24,871,000.00 2,508,000.00 22,363,000.00 Related to assets
facilities project
Policy incentives for industrial 24,213,221.35 2,793,833.28 21,419,388.07 Related to assets
production projects of 2020
Special funds for Heilongjiang
Biological Fermentation Industrial Park 111,810,000.00 111,810,000.00 Related to assets
Project
Incentives for enterprises settling in
Industrial Collaborative Innovation
Center by Hangzhou Bay Shangyu 24,255,416.73 3,206,199.96 21,049,216.77 Related to assets
Economic and Technological
Development Zone
Subsidies for upgrading coal-fired 222,857.12 37,142.88 185,714.24 Related to assets
boilers of 2017
Subsidies for low-nitrogen
transformation of gas-fired boilers of 465,535.75 70,714.32 394,821.43 Related to assets
Xinchang County
Special funds for technical renovation 20,169,603.37 11,630,000.00 1,105,959.90 30,693,643.47 Related to assets
Incentives for investment promotion
24,982,141.71 1,969,527.63 23,012,614.08 Related to assets
Special fiscal supporting funds for
high-quality development (investment 4,875,100.00 406,258.30 4,468,841.70 Related to assets
projects) of manufacturing industry of
Xinchang County of 2021
Support advanced manufacturing and
modern service industry special 2021 19,650,000.00 19,650,000.00 3,274,999.98 36,025,000.02 Related to assets
central budget investment plan
Economic and Information Bureau of
technical transformation project 7,736,500.00 194,940.46 7,541,559.54 Related to assets
subsidies
2021 Enterprise Digitalization Key
15,000,000.00 15,000,000.00 Related to assets
Project Incentive Funds
2022 Special funds to support
advanced manufacturing and service 3,831,190.27 3,831,190.27 Related to assets
industries
2021 Digital (intelligent)
demonstration workshop project 2,000,000.00 196,078.40 1,803,921.60 Related to assets
incentive money
2020 industrial enterprise energy-
saving technology transformation 1,000,000.00 84,033.60 915,966.40 Related to assets
project incentive policy funds
Chemical industry transformation and
upgrading 2.0 intelligent
40,320,000.00 40,320,000.00 Related to assets
transformation project incentives and
service subsidies
Other piecemeal subsidies 9,547,185.25 292,365.60 2,834,683.64 7,004,867.21 Related to assets
Total 1,063,699,676.16 119,460,055.87 100,000,509.62 1,083,159,222.41
Note: Please refer to item VII 59 of this section for details on government grants included in profit or loss.
32. Share capital
Unit: RMB Yuan
Movements
Items Opening balance Closing balance
Issue of new Bonus Reserve transferred to Others Subtotal
shares shares shares
Total shares 2,578,394,760.00 512,512,596.00 512,512,596.00 3,090,907,356.00
Other remarks:
Pursuant to the 2021 profit distribution plan deliberated and approved by the general meeting of 2021, based on 2,562,562,984 shares
(the total share capital of the company at that time, which was 2,578,394,760 shares, excluded 15,831,776 repurchased share s),the
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2022 Annual Report of Zhejiang NHU Co., Ltd.
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 RMB 3,090,907,356. Such capital increase had been verified by Pan-China Certified Public Accountants LLP, and
a Capital Verification Report numbered PCCPACVR [2022] 230 was issued thereon.
33. Capital reserve
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Share/capital premium 3,847,505,213.92 512,512,596.00 3,334,992,617.92
Other capital reserve 273,557,867.04 4,547,025.85 278,104,892.89
Total 4,121,063,080.96 4,547,025.85 512,512,596.00 3,613,097,510.81
Other remarks, including remarks on current movements and reasons for movements:
Current decrease of capital premium (share premium) was due to conversion of capital reserve to share capital. Please refer to item 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 individ ua l
investors.
34. Treasury shares
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Treasury shares 320,360,784.48 179,698,926.77 500,059,711.25
Total 320,360,784.48 179,698,926.77 500,059,711.25
Other remarks, including remarks on current movements and reasons for movements:
Current increase of treasury shares was due to the repurchase of public shares by the Company for the purpose of equity incentive plan
and employee stock ownership plan.
35 Other comprehensive income (OCI)
Unit: RMB Yuan
Current period cumulative
Less: OCI Less: OCI
Items Opening balance Current period previously previously Closing
Less: Attributable to non-
recognized but recognized but Attributable to balance
cumulative before Income 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 -1,614,172.31 81,425,359.82 78,191,736.48 3,233,623.34 76,577,564.17
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 -2,121,126.74 81,425,359.82 78,191,736.48 3,233,623.34 76,070,609.74
Total -1,614,172.31 81,425,359.82 78,191,736.48 3,233,623.34 76,577,564.17
36. Special reserve
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Work safety fund 12,692,218.51 31,988,381.60 18,483,705.56 26,196,894.55
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Opening balance Increase Decrease Closing balance
Total 12,692,218.51 31,988,381.60 18,483,705.56 26,196,894.55
Other remarks, including remarks on current movements and reasons for movements:
According to the "enterprise safety production costs and the use of management practices," the production and storage of dangerous
goods enterprises based on the actual business income of the previous year, the adoption of the regressive approach to the average
monthly withdrawal in accordance with the following standards: 1) operating income of up to 10 million yuan, in accordance with
4.5%; 2) operating income of more than 10 million yuan to 100 million yuan, in accordance with 2.25% extraction; 3) 0.55% for the
part of business income exceeding 100 million to 1 billion; 4) 0.2% for the part of business income exceeding RMB 1 billion.
37. Surplus reserve
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Statutory surplus reserve 1,289,197,380.00 155,216,560.89 1,444,413,940.89
Total 1,289,197,380.00 155,216,560.89 1,444,413,940.89
Other remarks, including remarks on current movements and reasons for movements:
Current increase was due to the appropriation of statutory surplus reserve at 10% of the net profit generated by the parent company.
38. Undistributed profit
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Unallocated earnings at the end of the previous 14,120,605,163.26 11,515,384,739.95
period before adjustment
Adjustments to total unappropriated earnings at 31,860,364.91
the beginning of the period (increase +, decrease -)
Adjustment to unappropriated earnings at the 14,152,465,528.17 11,515,384,739.95
beginning of the period
Add: Net profit attributable to owners of the 3,620,271,034.96 4,324,150,263.31
parent company
Less: Appropriation of statutory surplus reserve 155,216,560.89 214,866,230.00
Dividend payable on ordinary shares 1,793,794,088.80 1,504,063,610.00
Closing balance 15,823,725,913.44 14,120,605,163.26
Details of undistributed profits at the beginning of adjustment period:
1）Due to the retroactive adjustment of the accounting standards for business enterprises and relevant new regulations, the undistributed
profit at the beginning of the period was RMB 31,860,364.91. Please refer to item V 27 of this section for details on Non-current
liabilities due within one year.
2）Pursuant to the 2021 profit distribution plan deliberated and approved by the general meeting of 2021, based on 2,562,562,984
shares (the total share capital of the company at that time, which was 2,578,394,760 shares, excluded 15,831,776 repurchased shares),
the Company distributed cash dividend of 7.00 yuan (tax included) per 10 shares to all shareholders. Cash dividend distributed totaled
RMB 1,793,794,088.80(tax included).
39. Operating revenue/Operating cost
Unit: RMB Yuan
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 15,845,200,012.28 10,001,085,469.78 14,767,093,085.62 8,212,231,352.94
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Other operations 88,784,391.13 47,215,397.16 150,008,415.29 87,313,638.13
Total 15,933,984,403.41 10,048,300,866.94 14,917,101,500.91 8,299,544,991.07
Including: Revenue
from contracts with 15,930,926,276.49 10,047,351,912.18 14,914,975,612.29 8,298,908,135.92
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 product
Including: Nutrition 10,951,828,026.72
Flavor and fragrance 2,967,080,657.65
New materials 1,166,099,937.05
Others 845,917,655.07
Subtotal 15,930,926,276.49
By operating region
Including: Domestic 8,259,620,269.29
Overseas 7,671,306,007.20
Subtotal 15,930,926,276.49
By revenue recognition time
Including: Goods (transferred at a point in time) 15,930,926,276.49
Subtotal 15,930,926,276.49
By sales channel
Including: Direct sales 11,871,471,099.85
Agent sales 4,059,455,176.64
Subtotal 15,930,926,276.49
Information related to performance obligations:
None.
Information related to transaction price allocated to the remaining performance obligations:
As of December 31, 2022 revenue corresponding to performance obligations for which the Company has entered into contracts but
not yet performed or fulfilled amounted to 4,104.68 million yuan, of which, 4,104.68 million yuan is expected to be recognized as
revenue in 2023.
40. Taxes and surcharges
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Urban maintenance and construction tax 28,607,303.93 30,312,419.65
Education surcharge (local education 23,414,216.46 27,571,975.04
surcharge)
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Current period cumulative Preceding period comparative
Housing property tax 42,350,007.42 36,023,723.71
Land use tax 23,119,509.04 29,553,065.04
Vehicle and vessel use tax 42,132.94 35,481.54
Stamp duty 7,321,346.91 5,571,964.17
Environmental protection tax 1,543,201.53 1,069,134.43
Land appreciation tax 510,626.40 1,487,064.65
Total 126,908,344.63 131,624,828.23
41. Selling expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Employee benefits 62,762,141.59 57,976,469.34
Sales commission and customs declaration 20,869,486.43 15,913,870.35
charges
Office expenses, business traveling 19,775,799.86 15,428,583.10
expenses
Advertising and promotion expenses,
9,402,072.09 8,131,154.24
business entertainment expenses
Others 9,448,119.50 9,587,008.93
Total 122,257,619.47 107,037,085.96
42. Administrative expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Employee benefits 261,083,846.67 201,712,221.78
Depreciation, amortization of intangible 100,843,402.02 88,011,620.25
assets
Office expenses, business traveling 64,191,712.29 59,903,319.54
expenses
Business entertainment expenses 25,250,585.72 21,149,038.92
Consulting fees 17,492,615.79 15,521,872.12
Insurance premiums 14,142,873.77 15,035,969.98
Disability Employment Guarantee Fund 10,343,725.70 9,628,608.33
Others 11,325,968.73 12,621,766.75
Total 504,674,730.69 423,584,417.67
43. R&D expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Employee benefits 416,805,732.59 344,464,922.47
Direct input 289,342,939.10 291,075,726.28
Depreciation, amortization of intangible 68,939,590.01 51,416,050.04
assets
Office expenses, business traveling 42,655,069.34 24,718,470.93
expenses
Outsourcing expenses 24,753,637.81 47,138,539.85
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Current period cumulative Preceding period comparative
Others 16,448,437.28 23,847,998.97
Total 858,945,406.13 782,661,708.54
44. Financial expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Interest expenses 329,243,757.49 337,753,271.80
Less: Interest income 153,449,422.80 164,418,967.90
Losses on foreign exchange (or less: gains) -140,824,825.49 86,391,384.65
Others 9,432,268.93 10,242,664.69
Total 44,401,778.13 269,968,353.24
45. Other income
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Government grants related to assets [Note] 100,000,509.62 85,165,405.18
Government grants related to income 75,760,610.32 66,054,648.19
[Note]
Refund of handling fees for withholding 1,102,494.25 1,160,651.30
individual income tax
Total 176,863,614.19 152,380,704.67
Note: Please refer to item VII 59 of this section for details on government grants included in other income.
46. Investment income
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Investment income from long-term equity 95,616,385.10 59,304,344.04
investments under equity method
Investment income from disposal of -20,658,819.12 10,887,997.40
financial instruments
Including: Financial assets classified as at 2,606,589.45 12,582,646.77
fair value through profit or loss
Financial liabilities classified as at fair -23,265,408.57 -1,694,649.37
value through profit or loss
Interest income from discounted notes -259.56
Investment income from bank financial 52,749,284.13 57,777,633.53
products and structured deposits
Interest income from split loans 988,193.62
Total 128,695,043.73 127,969,715.41
47. Gains on changes in fair value
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Held-for-trading financial assets 27,222,640.33 39,426,345.82
Including: Gains on changes in fair value 27,222,640.33 39,426,345.82
arising from financial assets classified as at fair
value through profit or loss
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Current period cumulative Preceding period comparative
Held-for-trading financial liabilities -93,544,424.05 -1,562,640.38
Including: Gains on changes in fair value -93,544,424.05 -1,562,640.38
arising from financial liabilities classified as at
fair value through profit or loss
Total -66,321,783.72 37,863,705.44
48. Credit impairment loss
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Bad debts 5,165,584.15 -50,043,349.49
Total 5,165,584.15 -50,043,349.49
49. Assets impairment loss
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Inventory write-down loss -162,974,265.12 -25,275,549.36
Impairment loss of fixed asset -28,974,859.54
Total -162,974,265.12 -54,250,408.90
50. Gains on asset disposal
Unit: RMB Yuan
Sources Current period cumulative Preceding period comparative
Gains on disposal of non-current assets 2,726,604.77 -1,544,436.08
Total 2,726,604.77 -1,544,436.08
51. Non-operating revenue
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative Amount included in non-
recurring profit or loss
Indemnity income 4,412,772.54 11,227,600.39 4,412,772.54
Gains on damage or retirement 12,775.00
of non-current assets
Others 572,451.80 1,047,467.45 572,451.80
Total 4,985,224.34 12,287,842.84 4,985,224.34
52. Non-operating expenditures
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative Amount included in non-
recurring profit or loss
Donation expenditures 1,598,510.79 2,003,374.90 1,598,510.79
Losses on damage or retirement 76,959,122.65 59,895,963.50 76,959,122.65
of non-current assets [Note]
Others 975,097.47 2,704,485.84 975,097.47
Total 79,532,730.91 64,603,824.24 79,532,730.91
Note: It included 75,879,629.71 yuan as losses on scrapping of construction in progress, as Shandong Industrial Park 616 Project cannot
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2022 Annual Report of Zhejiang NHU Co., Ltd.
reach the designed usable conditions due to changes of planning.
53. Income tax expenses
(1) Details
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Current period income tax expenses 452,277,073.04 645,264,359.60
Deferred income tax expenses 147,558,392.56 45,250,086.91
Total 599,835,465.60 690,514,446.51
(2) Reconciliation of accounting profit to income tax expenses
Unit: RMB Yuan
Items Current period cumulative
Profit before tax 4,238,102,948.85
Income tax expenses based on statutory/applicable tax rate 635,715,442.33
Effect of different tax rate applicable to subsidiaries 1,529,630.41
Effect of prior income tax reconciliation 7,705,952.65
Effect of non-taxable income -14,381,307.84
Effect of non-deductible costs, expenses and losses 7,833,048.49
Effect of utilization of deductible losses not previously recognized as deferred tax -3,674,556.59
assets
Effect of deducible temporary differences or deductible losses not recognized as 256,544,726.70
deferred tax assets in the current period
Effect of extra deduction of R&D expenses -117,395,891.13
Additional deduction for wages paid for the placement of disabled persons and other -260,948.31
employment encouraged by the state
High-tech enterprises in the fourth quarter of 2022 newly purchased equipment and -162,201,531.24
apparatus pre-tax deduction
Effect of tax rate changes on opening balance of deferred tax assets/liabilities -11,579,099.87
Income tax expenses 599,835,465.60
54. Other comprehensive income
Please refer to item VII 35 of this section for details.
55. Notes to items of the cash flow statement
(1) Other cash receipts related to operating activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Interest income from cash in bank 153,449,422.80 164,418,967.90
Receipt of government grants 195,220,666.19 335,719,965.91
Recovery of temporary borrowings and 19,779,291.72 10,265,762.72
security deposits
Receipt of temporary receipts payable 4,578,466.46 4,711,009.18
Other receipts and net current accounts 5,220,974.95 24,850,169.36
Total 378,248,822.12 539,965,875.07
(2) Other cash payments related to operating activities
Unit: RMB Yuan
141
2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Current period cumulative Preceding period comparative
R&D expenditures in the form of cash 83,857,144.43 95,705,009.75
Office expenses and business traveling 83,967,512.15 107,041,859.39
expenses
Advertising and promotion expenses, 34,652,657.81 29,280,193.16
business entertainment expenses
Sales commission and customs declaration 20,869,486.43 15,913,870.35
charges
Insurance expenses 14,769,418.13 13,706,371.25
Consulting fees 17,492,615.79 15,521,872.12
Other payments and net current accounts 34,257,491.06 32,081,395.48
Total 289,866,325.80 309,250,571.50
(3) Other cash receipts related to investing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Redemption of financial products 1,800,000,000.00 1,800,000,000.00
Cash obtained from subsidiaries on the 14,761,216.04
consolidation date
Recovery of land deposit 5,084,750.00
Recovery of land bond 771,074.45
Total 1,820,617,040.49 1,800,000,000.00
(4) Other cash payments related to investing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Payments for losses on forward foreign 86,558,820.03
exchange settlement
Payments for purchase of financial 720,000,000.00 1,800,000,000.00
products and structured deposits
Unbundled principal amount 20,881,387.07
Payments for land bond 4,835,731.00
Total 827,440,207.10 1,804,835,731.00
(5) Other cash receipts related to financing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Cash received form loans 11,188,800.91
Total 11,188,800.91
(6) Other cash payments related to financing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Payments for bank financing handling 4,010,015.77 3,786,203.45
charges
Payments of handling charges for issuing 576,792.00 1,600,495.28
letters of guarantee for borrowings
Repayments of principal and interest of 545,623.09 389,323.20
leases
142
2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Current period cumulative Preceding period comparative
Repurchase of treasury shares 179,698,926.77 320,360,784.48
Repayments of call loans and interest 185,842.44 3,304,500.00
Total 185,017,200.07 329,441,306.41
56. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Unit: RMB Yuan
Supplement information Current period cumulative Preceding period comparative
1. Reconciliation of net profit to cash flows
from operating activities:
Net profit 3,638,267,483.25 4,372,225,619.34
Add: Provision for assets impairment loss 157,808,680.97 104,293,758.39
Depreciation of fixed assets, oil and gas 1,346,707,461.57 1,187,946,509.68
assets, productive biological assets
Depreciation of right-of-use assets 460,187.61 283,003.04
Amortization of intangible assets 43,000,548.86 34,901,345.67
Amortization of long-term prepayments 6,626,543.66 5,202,615.19
Losses on disposal of fixed assets,
intangible assets and other long-term -2,726,604.77 1,544,436.08
assets (Less: gains)
Fixed assets retirement loss (Less: 76,959,122.65 59,883,188.50
gains)
Losses on changes in fair value (Less: 66,321,783.72 -37,863,705.44
gains)
Financial expenses (Less: gains) 346,183,580.90 338,987,833.23
Investment losses (Less: gains) -128,695,043.73 -127,969,715.41
Decrease of deferred tax assets (Less: 5,993,019.24 9,338,514.05
increase)
Increase of deferred tax liabilities 141,565,373.32 35,911,572.86
(Less: decrease)
Decrease of inventories (Less: -1,104,802,476.55 -358,037,685.76
increase)
Decrease of operating receivables -486,206,139.60 -553,005,953.74
(Less: increase)
Increase of operating payables (Less: 240,512,886.47 761,094,844.23
decrease)
Others 13,504,676.04 3,141,871.66
Net cash flows from operating 4,361,481,083.61 5,837,878,051.57
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 5,151,841,931.86 5,714,537,538.23
Less: Cash at the beginning of the period 5,714,537,538.23 4,669,306,776.09
Add: Cash equivalents at the end of the
period
Less: Cash equivalents at the beginning of
the period
143
2022 Annual Report of Zhejiang NHU Co., Ltd.
Supplement information Current period cumulative Preceding period comparative
Net increase of cash and cash equivalents -562,695,606.37 1,045,230,762.14
(2) Net cash paid during the period for the acquisition of subsidiaries
金额
Cash or cash equivalents paid in the period for business
5,406,525.00
combinations that occurred during the period
Including：NHU/Chr.Olesen Latin America A/S 5,406,525.00
Less：Cash and cash equivalents held by the Purchase Date 20,167,741.04
Including：NHU/Chr.Olesen Latin America A/S 20,167,741.04
Net cash paid for acquisition of subsidiaries [Note] -14,761,216.04
[Note]：Presented in Other cash receipts related to investing activities
(2) Composition of cash and cash equivalents
Unit: RMB Yuan
Items Closing balance Opening balance
I. Cash 5,151,841,931.86 5,714,537,538.23
Including: Cash on hand 16,584.59 14,537.85
Cash in bank on demand for payment 5,151,816,943.29 5,684,842,466.04
Other cash and bank balances on 8,403.98 29,680,534.34
demand for payment
II. Cash and cash equivalents at the end of 5,151,841,931.86 5,714,537,538.23
the period
Remarks:
Closing balance of cash and bank balances amounted to 5,343,851,967.72 yuan, including deposit for bank acceptance of
147,608,293.24 yuan, deposit for letters of credit of 42,310,180.59 yuan, deposit for engineering labor costs of 851,288.54yuan, deposit
for construction safety of 863,937.05 yuan, deposit for ETC of 16,500.00 yuan and deposit for water fees of 359,836.44 yuan, which
was not cash and cash equivalents.
Opening balance of cash and bank balances amounted to 5,952,909,626.94 yuan, including deposit for bank acceptance 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.
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 192,010,035.86 the cash flow statement of this section for
details.
Notes receivable 233,192,351.27 Please refer to notes to notes receivable of
this section for details.
Fixed assets 79,692,425.35 Mortgaged for bank borrowings.
Intangible assets 9,734,671.13 Mortgaged for bank borrowings.
Receivables financing 136,554,892.05 Please refer to notes to receivables
financing of this section for details.
Total 651,184,375.66 --
144
2022 Annual Report of Zhejiang NHU Co., Ltd.
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 -- -- 359,502,992.96
Including: USD 27,981,497.53 6.9646 194,879,937.70
EUR 20,059,541.38 7.4229 148,899,969.71
HKD 958,855.22 0.8933 856,545.37
JPY 268,708,651.00 0.0524 14,080,333.31
BRL 201,403.92 1.3164 265,128.12
PHP 75,302.25 0.3577 26,935.61
SGD 3,269.84 5.1831 16,947.91
DKK 305,662.66 0.9983 305,143.03
PLN 108,358.86 1.5878 172,052.20
Accounts receivable - - 1,689,653,688.10
Including: USD 197,129,772.51 6.9646 1,372,930,013.62
EUR 29,742,209.66 7.4229 220,773,448.09
GBD 2,875.00 8.3941 24,133.04
BRL 53,561,262.34 1.3164 70,508,045.74
PHP 71,059,680.21 0.3577 25,418,047.61
Other receivables - - 70,948,859.26
Including: USD 3,031,654.31 6.9646 21,114,259.61
EUR 2,756,168.97 7.4229 20,458,766.65
HKD 31,700.00 0.8933 28,317.61
BRL 4,949,716.49 1.3164 6,515,806.79
PHP 63,829,210.51 0.3577 22,831,708.60
Short-term borrowings - - 501,536,168.04
Including: USD 2,513,502.24 6.9646 17,505,537.70
EUR 65,207,753.08 7.4229 484,030,630.34
Accounts payable - - 111,265,220.07
Including: USD 1,693,864.75 6.9646 11,797,090.44
EUR 8,944,929.25 7.4229 66,397,315.33
BRL 25,087,374.97 1.3164 33,025,020.41
PHP 128,023.18 0.3577 45,793.89
Other payables - - 18,945,216.82
Including: USD 2,683,120.28 6.9646 18,686,859.50
EUR 23,755.62 7.4229 176,335.59
HKD 41,687.84 0.8933 37,239.75
SGD 8,640.00 5.1831 44,781.98
Long-term borrowings - - 31,590,890.00
Including: EUR 4,255,869.00 7.4229 31,590,890.00
Non-current liabilities due within - - 7,153,251.44
one year
145
2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Closing balance in foreign Exchange rate RMB equivalent at the end of the
currencies period
Including: EUR 961,662.00 7.4229 7,138,320.86
HKD 16,713.96 0.8933 14,930.58
(2) Remarks on overseas operations. For significant overseas operating entities, their main operating places,
functional currencies and adoption basis shall be disclosed. Reasons for any changes in functional 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.
NHU/Chr.Olesen Latin America A/S, with a shareholding ratio of 51%, located in gentovt, Denmark, and the functional currency is
euro; NHU/CHR. Olesen Brasil LTDA. Is nhu / Chr Olesen Latin America a / s, a wholly-owned subsidiary, is located in Sao Paulo,
Brazil, and its functional currency is Brazilian real; CHR. Olesen Mexico SAPI de CV is nhu / Chr Olesen Latin America a / S is a
holding subsidiary of Olesen Latin America a /s, with a shareholding ratio of 87%. It is located in cretaro, Mexico, and its functional
currency is Mexican peso.
NHU Singapore PTE. LTD. is a wholly-owned subsidiary of the Company. It is located in Singapore, with SGD as functional currency.
59. Government grants
(1) Government grants related to assets
Unit: RMB Yuan
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 Industrial Park 427,578,840.00 49,336,020.00 378,242,820.00 Other income document numbered
Project
Sui Jing Kai Guan
[2018] 55
Special funds for enterprise
development (Shandong 74,962,651.55 9,672,600.20 65,290,051.35 Other income
Vitamins)
Pursuant to the
Special funds for joint
production project of Xinhao 31,772,916.73 3,774,999.96 27,997,916.77 Other income document numbered
Thermal Power
Sui Jing Kai Guan
Wei Han [2018] 123
Pursuant to the
Technical renovation for 34,260,000.00 856,500.00 33,403,500.00 Other income document numbered
green deep processing of 2019 Zhe Fa Gai Mi
[2019] 127
Pursuant to the
documents
Special funds for enterprise 45,804,945.12 18,000,000.00 1,145,604.36 62,659,340.76 Other income numbered Wei Bin
development (Amino Acid) Cai Zhi Zi [2018] 40
and Wei Bin Cai Jin
Yu [2021] 44
Subsidies for land leveling of 28,308,723.84 718,189.44 27,590,534.40 Other income
Shandong
Pursuant to the
Enterprise development funds 18,847,224.88 437,814.12 18,409,410.76 Other income documents
of Shandong numbered Wei Bin
Cai Zhi Zi [2014]
146
2022 Annual Report of Zhejiang NHU Co., Ltd.
Opening Closing balance
Items Increase Amortization Amortization Remarks
balance of of deferred
presented under
deferred income income
513, Wei Bin Cai Zhi
Zi [2016] 194 and
Wei Bin Cai Zhi Zi
[2017] 307
PPS construction project with 11,412,499.88 1,826,000.04 9,586,499.84 Other income
annual output of 10,000 tons
Subsidies for PPS resin with
annual output of 5,000 tons
and PPS composite materials 8,550,000.00 2,850,000.00 5,700,000.00 Other income
with annual output of 6,000
tons
Enterprise development funds
of Advanced Manufacturing 8,491,786.07 198,251.76 8,293,534.31 Other income
Industrial Park
Effective industrial input 6,064,800.00 957,600.00 5,107,200.00 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 3,924,642.86 1,427,142.84 2,497,500.02 Other income Qi [2012] 276 issued
revitalization and technical
renovation of 2012 by Department of
Finance of Zhejiang
Province and
Economy and
Informatization
Commission of
Zhejiang Province
Fiscal subsidies for low-rent 6,098,560.08 240,857.16 5,857,702.92 Other income
housing
Subsidies from land transfer 4,873,021.09 250,231.57 4,622,789.52 Other income
fees of Shandong dormitory
Subsidies for inputs in
biochemical infrastructure of 4,580,963.84 317,771.88 4,263,191.96 Other income
Shangyu
Construction project of public 3,000,000.04 999,999.96 2,000,000.08 Other income
testing service platform
Subsidies for infrastructure 7,478,250.00 797,625.00 6,680,625.00 Other income
supporting fees
Compensation for resource
conservation and 3,360,000.00 480,000.00 2,880,000.00 Other income
environmental protection
projects of 2017
Subsidies for new materials,
land and infrastructure 2,432,160.00 810,720.00 1,621,440.00 Other income
construction
Special fiscal funds for Pursuant to the
revitalization of the
substantial economy 2,140,071.30 539,228.52 1,600,842.78 Other income document numbered
(transformation of traditional
Xin Cai Qi [2019]
industries) of 2017 151
Pursuant to the
Subsidies for RTO Project 1,266,666.90 399,999.96 866,666.94 Other income document numbered
Wei Cai Qi Zhi
[2014] 207
Pursuant to the
Special subsidies for
2,000,000.00 800,000.02 1,199,999.98 document numbered
development of marine
economy of 2017
Shang Yu Cai Jian
[2018] 12
147
2022 Annual Report of Zhejiang NHU Co., Ltd.
Opening Closing balance
Items Increase Amortization Amortization Remarks
balance of of deferred
presented under
deferred income income
Pursuant to the
Special subsidies for high-
quality development of 1,804,329.70 304,957.10 1,499,372.60 Other income document numbered
manufacturing industry
Xin Jing Xin [2020]
79
Pursuant to the
Enterprise development fund 52,224,561.00 2,176,023.38 50,048,537.62 document numbered
(Shandong Fine Chemical) Wei Bin Cai Zhi Zi
[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 Pursuant to the
emergency facilities project –
investment plan within budget 24,871,000.00 2,508,000.00 22,363,000.00 Other income document numbered
of the central government of
Hei Fa Gai Tou Zi
2020 [2020] 542
Pursuant to the
Policy incentives for
industrial production projects 24,213,221.35 2,793,833.28 21,419,388.07 Other income document numbered
of 2020
Hei Cai Zhi (Chan
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 24,255,416.73 3,206,199.96 21,049,216.77 Other income
Shangyu Economic and
Technological Development
Zone
Pursuant to the
Subsidies for upgrading coal- 222,857.12 37,142.88 185,714.24 Other income document numbered
fired boilers of 2017 Xin Cai Jian [2018]
204
Pursuant to the
Subsidies for low-nitrogen
transformation of gas-fired 465,535.75 70,714.32 394,821.43 Other income document numbered
boilers of Xinchang County
Xin Huan Yu [2018]
25
Special funds for technical 20,169,603.37 11,630,000.00 1,105,959.90 30,693,643.47 Other income
renovation
Pursuant to the
Incentives for investment 24,982,141.71 1,969,527.63 23,012,614.08 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 4,875,100.00 406,258.30 4,468,841.70 Other income document numbered
projects) of manufacturing Xin Jing Xin [2021]
industry of Xinchang County 50
of 2021
Special investment plan
within budget of the central Pursuant to the
government for supporting 19,650,000.00 19,650,000.00 3,274,999.98 36,025,000.02 Other income document numbered
advanced manufacturing Fa Gai Tou Zi [2021]
industry and modern service 1117
of 2021
Economic and Information 7,736,500.00 194,940.46 7,541,559.54 Other income Weibin finance and
Bureau of technical
148
2022 Annual Report of Zhejiang NHU Co., Ltd.
Opening Closing balance
Items Increase Amortization Amortization Remarks
balance of of deferred
presented under
deferred income income
transformation project industry refers to the
subsidies
word [2021] No. 14
Yu Jingxin
2021 Enterprise Digitalization 15,000,000.00 15,000,000.00 Other income Investment [2022]
Key Project Incentive Funds
No. 35
Secretariat of
Zhejiang
2022 Special funds to support
advanced manufacturing and 3,831,190.27 3,831,190.27 Other income Development and
service industries Reform Commission
[2022] No. 103
Heilongxin Planning
2021 Digital (intelligent)
demonstration workshop 2,000,000.00 196,078.40 1,803,921.60 Other income and Development
project incentive money [2022] No. 196
Black Industry and
Information
2020 industrial enterprise
energy-saving technology 1,000,000.00 84,033.60 915,966.40 Other income Planning Joint
transformation project
incentive policy funds Development [2022]
No. 133
Chemical industry
transformation and upgrading
2.0 intelligent transformation 40,320,000.00 40,320,000.00 Other income
project incentives and service
subsidies
Other piecemeal subsidies -
investment plan within budget
9,547,185.25 292,365.60 2,834,683.64 7,004,867.21 Other income
of the central government of
2022
Subtotal 1,063,699,676.16 119,460,055.87 100,000,509.62 1,083,159,222.41
(2) Government grants related to income and used to compensate incurred relevant costs, expenses or losses
Unit: RMB Yuan
Items Amount Presented under Remarks
Government reward 28,424,687.71 Other income Related to income
Other subsidies 47,104,922.61 Other income Related to income
Special subsidies 231,000.00 Other income Related to income
Subtotal 75,760,610.32
(3) In the current period, government grants included into profit or loss totaled 175,761,119.94yuan.
VIII. Changes in the consolidation scope
1. Changes in the consolidation scope due to other reasons
(1) Business combination not under the same control in the current period
Unit: RMB Yuan
Name of the Percentag Basis for Merger Basis for Revenue of the Net profit of the
149
2022 Annual Report of Zhejiang NHU Co., Ltd.
merged party e of equity constitutin Date determining the consolidated party consolidated party
acquired ga consolidation from the beginning from the beginning of
in a business date of the period of the period of
business combinati consolidation to the consolidation to the
combinati on under date of date of consolidation
on common consolidation
control
NHU/Chr.Olese Complete
nLatin Acquisitio January industrial and
51.00% 776,419,531.18 9,654,755.34
America ns 6, 2022 commercial
A/S[注] registration
[Note] NHU/CHR.OLESEN LATIN AMERICA A/S holds two subsidiaries, respectively NHU/CHR.OLESEN BRASIL LTDA.，
holding 100%, and CHR.OLESEN MEXICO SAPI DE CV, holding 87%.
(2) Combination cost and goodwill
Unit: RMB Yuan
Combination cost NHU/Chr.Olesen Latin America A/S
Cash 5,406,525.00
Other notes:
Combination cost NHU/Chr.Olesen Latin America A/S
Cash 5,406,525.00
Total: 5,406,525.00
Less：Fair value share of identifiable net assets obtained 1,783,820.03
Amount of goodwill / combination cost less than the fair value of
3,622,704.97
identifiable net assets obtained
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: RMB Yuan
Item Fair value on the purchase date Book value on the purchase date
Assets: 144,110,250.63 144,110,250.63
Cash and bank balances 20,167,741.04 20,167,741.04
Accounts receivable 64,176,200.13 64,176,200.13
Inventories 59,766,309.46 59,766,309.46
Debt： 139,997,586.79 139,997,586.79
Borrowings 6,701,245.26 6,701,245.26
Accounts payable 133,296,341.53 133,296,341.53
Equity: 4,112,663.84 4,112,663.84
Less:Non-controlling interest 614,977.51 614,977.51
Net assets acquired 3,497,686.33 3,497,686.33
2、Change in scope of consolidation for other reasons
Describe changes in the scope of consolidation due to other reasons (e.g., new subsidiaries, liquidation of subsidiaries, etc .) and the
related circumstances:
150
2022 Annual Report of Zhejiang NHU Co., Ltd.
company identification Share Acquisition Method Point of acquisition of equity
Wuniu (Shandong) Investment Co., Ltd Investment establishment April 13, 2022
IX. Interest in other entities
1. Interest in subsidiaries
(1) Composition of the group
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 Amino- Weifang, Weifang, Manufacturing 100.00% Establishment
acids Co., Ltd. Shandong Shandong
51% [Note
NHU EUROPE GmbH Luneburg, Luneburg, Trade Establishment
Germany Germany 1]
Shandong NHU Holdings Weifang, Weifang, Service 100.00% Establishment
Co., Ltd. Shandong Shandong
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
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-
non-controlling shareholders’ profit or non-controlling
controlling interest
shareholders loss shareholders
NHU EUROPE GmbH 49.00% 13,213,666.41 79,360,029.54
(3) Main financial information of significant not wholly-owned subsidiaries
Unit: RMB Yuan
Closing balance
Subsidiaries
Current assets Non-current Total assets Current liabilities Non-current Total liabilities
assets liabilities
NHU EUROPE 704,132,280.59 96,076,867.88 800,209,148.47 606,659,014.52 31,590,890.00 638,249,904.52
GmbH
(Continued)
Opening balance
Subsidiaries
Current assets Non-current assets Total assets Current liabilities Non-current Total liabilities
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
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Unit: RMB Yuan
Current period cumulative Preceding period comparative
Cash flows
Subsidiaries Total Cash flows from Total
Net profit Operating Net profit from
Operating revenue comprehensive operating comprehensive
revenue operating
income activities income
activities
NHU EUROPE 1,549,559,510.21 26,966,666.14 26,966,666.14 -18,830,534.73 1,655,950,052.91 33,091,818.61 -7,679,716.03 72,448,446.07
GmbH
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 29.9307% 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
Explanation of the difference between the shareholding ratio in the joint venture or the associated enterprise and the
voting ratio:
In the current period, the company's shareholding ratio in the associated enterprise Zhejiang Chunhui environmental
protection and energy Co., Ltd. changed, mainly due to the change in the company's share of net assets due to the
capital increase of other investors in January 2022.
(2) Main financial information of significant joint ventures
Unit: RMB Yuan
Closing balance/Current period cumulative Opening balance/Preceding period comparative
Items Zhejiang Chunhui Zhejiang Chunhui DSM NHU
DSM NHU Zhejiang Saiya Zhejiang Saiya
Environmental Environmental Engineering
Engineering Materials Chemical Materials Chemical Materials
Protection Energy Protection Energy Co., Materials (Zhejiang)
(Zhejiang) Co., Ltd. Co., Ltd. Co., Ltd.
Co., Ltd. Ltd. Co., Ltd.
Current assets 460,887,337.74 109,398,305.48 144,410,128.60 293,596,545.38 68,240,155.87 71,896,100.56
Non-current assets 676,165,054.18 19,755,796.05 138,230,668.22 559,076,086.33 13,956,368.94 157,938,616.58
Total assets 1,137,052,391.92 129,154,101.53 282,640,796.82 852,672,631.71 82,196,524.81 229,834,717.14
Current liabilities 290,955,340.38 62,895,473.39 24,117,241.66 199,269,854.33 97,736,253.17 15,537,056.20
Non-current liabilities 44,353,913.81 2,114,370.00 40,724,142.33 2,459,280.00
Total liabilities 335,309,254.19 62,895,473.39 26,231,611.66 239,993,996.66 97,736,253.17 17,996,336.20
Equity attributable to
shareholders of parent 801,743,137.73 66,258,628.14 256,409,185.16 612,678,635.05 -15,539,728.36 211,838,380.94
company
Proportionate share in 239,967,333.33 26,503,451.26 125,640,500.73 208,873,174.90 -6,215,891.34 103,800,806.66
net assets
Adjustments
- Goodwill 762,611.33 762,611.33
- Unrealized profit in 2,046,002.90 952,124.29 665,200.17
internal trading
-other -6,215,891.34
Carrying amount of
investments in 239,967,333.33 24,457,448.36 125,450,987.77 208,873,174.90 103,898,217.82
associates
Operating revenue 601,180,746.00 211,649,974.88 392,768,589.62 474,138,506.11 112,672,114.30 248,551,895.41
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Closing balance/Current period cumulative Opening balance/Preceding period comparative
Items Zhejiang Chunhui Zhejiang Chunhui DSM NHU
DSM NHU Zhejiang Saiya Zhejiang Saiya
Environmental Environmental Engineering
Engineering Materials Chemical Materials Chemical Materials
Protection Energy Protection Energy Co., Materials (Zhejiang)
(Zhejiang) Co., Ltd. Co., Ltd. Co., Ltd.
Co., Ltd. Ltd. Co., Ltd.
Net profit 174,240,888.38 76,623,722.59 44,696,229.66 163,208,658.71 -2,938,159.61 11,439,773.30
Total comprehensive 174,240,888.38 76,623,722.59 44,696,229.66 163,208,658.71 -2,938,159.61 11,439,773.30
income
Dividend from
associates received in 27,895,266.96 40,855,278.00
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: -- --
Total carrying amount of investments 42,627,799.02 38,556,233.03
Proportionate shares in the following items -- --
-- Net profit 1,017,085.76 -4,562,583.45
-- Other comprehensive income 3,054,480.23
-- Total comprehensive income 4,071,565.99 -4,562,583.45
X. Risks related to financial 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, liquidit y
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;
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2022 Annual Report of Zhejiang NHU Co., Ltd.
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 cons istent
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
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 ba lance 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, 2022, the Company has certain concentration of credit
risk, and 29.31% (December 31, 2021: 39.06%) 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 c ash 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
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2022 Annual Report of Zhejiang NHU Co., Ltd.
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 9,711,569,862.01 10,221,836,453.80 4,703,403,806.64 5,017,998,789.29 500,433,857.87
Notes payable 627,438,689.79 627,438,689.79 627,438,689.79
Accounts payable 2,175,458,436.49 2,175,458,436.49 2,175,458,436.49
Other payables 67,351,740.34 67,351,740.34 67,351,740.34
Lease liabilities 2,951,198.16 4,345,952.05 265,094.89 714,285.72 3,366,571.44
Subtotal 12,584,769,926.79 13,096,431,272.47 7,573,917,768.15 5,018,713,075.01 503,800,429.31
(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 8,581,398,746.38 9,052,182,029.59 3,703,590,391.97 4,728,643,204.24 619,948,433.38
Notes payable 694,124,946.73 694,124,946.73 694,124,946.73
Accounts payable 1,435,966,427.76 1,435,966,427.76 1,435,966,427.76
Other payables 56,712,103.36 56,712,103.36 56,712,103.36
Lease liabilities 3,182,245.62 4,721,702.39 402,749.99 476,190.48 3,842,761.92
Subtotal 10,771,384,469.85 11,243,707,209.83 5,890,796,619.81 4,729,119,394.72 623,791,195.30
(III) Market 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, 2022, balance of borrowings with interest accrued at floating interest rate totaled 9,711.57 million yuan (December
31, 2021: 8,581.40 million 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.
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2022 Annual Report of Zhejiang NHU Co., Ltd.
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 314,576.43 720,000,000.00 720,314,576.43
non-current financial assets
Financial assets classified as at fair value 314,576.43 720,000,000.00 720,314,576.43
through profit or loss
Financial products with guaranteed principal 720,000,000.00 720,000,000.00
and floating income
Derivative financial assets 314,576.43 314,576.43
2. Receivables financing 379,217,582.25 379,217,582.25
3. Other equity instrument investments 22,998,147.55 22,998,147.55
Total liabilities at recurring fair value 314,576.43 1,122,215,729.80 1,122,530,306.23
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 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 49.22% 49.22%
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.
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2022 Annual Report of Zhejiang NHU Co., Ltd.
3. Joint ventures and associates of the Company
Please refer to item IX 2 of the notes to the financial statements for details on the Company’s significant joint ventures and associates.
4. Other related parties of the Company
Related parties Relationships with the Company
Beijing Winsunny Pharmaceutical Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Zhejiang Asen Pharmaceutical Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Xinchang County Hechun Greening Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Zhejiang Deli Equipment Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Front Pharmaceutical PLC. Controlled by NHU Holding Group Co., Ltd.
Weifang NHU Real Estate Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Qionghai Heyue Property Services Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Qionghai Boao Holliyard Hotel Management Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Shaoxing Heyue Property Services Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Xinchang County NHU Real Estate Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Zhejiang Jingshi Real Estate Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Shaoxing Yuexiu Education Development Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Shaoxing Jinghe Hotel Management Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Shaoxing Shangyu NHU Real Estate Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Suihua NHU Real Estate Co., Ltd. Controlled by NHU Holding Group Co., Ltd.
Zhejiang Yuexiu University of Foreign Languages Controlled by NHU Holding Group Co., Ltd.
Changbai Mountain Protection and Development Zone Heyue
Controlled by NHU Holding Group Co., Ltd.
Hotel Management Co., Ltd
Heilongjiang Haotian Corn Development Co., Ltd. Minority Shareholders of Subsidiaries
Synchem International Co., Ltd. [Note] Its shareholder is the actual controller of the Company
Note: On November 4, 2021, the entity controlled by the actual controller of the Company withdrew from Synchem International Co.,
Ltd.
As Client B holds 25% equity of NHU Europe GmbH, the holding subsidiary of the Company’s subsidiary NHU (Hong Kong) Trading
Co., Ltd., the Company discloses transactions between Client B and NHU Europe GmbH as well as balances in related party
transactions for the sake of prudence.
Customer C holds 25% equity interest in NHU/CHR.OLESEN LATIN AMERICA A/S, a controlling subsidiary of the Company's
subsidiary, New Harmony (Hong Kong) Trading Co., Ltd. For prudence, the Company discloses the transactions and payment balance
between Customer C and the subsidiary NHU/CHR.OLESEN LATIN AMERICA A/S in the related transaction status.
5. Related party transactions
(1) Purchase and sale of goods, rendering and receiving of services
Purchase of goods and receiving of services
Unit: RMB Yuan
Related parties Content of transaction Current period Transaction limit Whether exceeds Preceding period
cumulative approved transaction limit comparative
Purchase of goods 157,701,344.20 91,325,844.40
Zhejiang Deli Equipment 160,000,000.00 No
Co., Ltd. Receiving of services 290,435.42 84,619.46
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2022 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
Zhejiang Chunhui Purchase of steam 105,647,875.05 69,512,700.69
Environmental Protection Waste disposal service 1,833,745.26 229,665.43
Energy Co., Ltd. fees
Zhejiang Saiya Chemical Purchase of goods 291,724,594.92 295,000,000.00 No 173,706,742.56
Materials Co., Ltd.
Zhejiang Asen Purchase of goods 1,085,908.02 2,035,921.32
Pharmaceutical Co., Ltd.
Xinchang County Hechun Purchase of goods 392,472.77 7,990,317.44
Greening Co., Ltd.
Catering and
Qionghai Boao Holliyard 98,294.20 123,967.00
accommodation
Hotel Management Co., Ltd.
services
Catering and
Shaoxing Jinghe Hotel 836,209.09
accommodation
Management Co., Ltd
services
Heilongjiang Haotian Corn 45,857,289.94 1,123,079.89
Purchase of goods
Development Co., Ltd.
Shaoxing Shangyu NHU 507,260.38 644,538.00
Maintenance Fund
Real Estate Co., Ltd.
Suihua NHU Real Estate 35,324.40
Receiving of services
Co., Ltd.
Zhejiang Jingshi Real Estate 156,675.16
Receiving of services
Co., Ltd.
Consulting Service 8,089,695.36
CysBio ApS
Fee
Qionghai Heyue Property 856,682.06 653,877.42
Property management
Services Co., Ltd.
Shaoxing Heyue Property 16,560.62 375,868.30
Property management
Services Co., Ltd.
Catering and
Xinchang County Hecheng 80,705.84 1,000,524.16
Accommodation
Real Estate Co., Ltd
Services
Shandong Bin’an Vocational Receiving of services 1,436,884.23 1,512,911.01
Training School Co., Ltd.
Shaoxing Yuexiu Education Receiving of services 49,943.14 4,561.63
Development Co., Ltd.
长白山保护开发区和悦酒
店管理有限公司 Catering and
(Changbai Mountain accommodation 140,000.00
Protection and Development services
Zone Heyue Hotel
Management Co., Ltd. *)
Zhejiang Yuexiu University Receiving of services 24,733.44
of Foreign Languages
Subtotal 616,697,900.06 455,000,000.00 350,489,872.15
Sale of goods and rendering of services
Unit: RMB Yuan
Related parties Content of transaction Current period cumulative Preceding period comparative
Zhejiang Deli Equipment Co., Waste and scrap materials 63,939.40 117,269.93
Ltd. Scrapped materials 109,898.23
Zhejiang Chunhui Environmental Waste and scrap materials 17,256.64
Protection Energy Co., Ltd.
Zhejiang Asen Pharmaceutical Pharmaceutical intermediates, 331,747.79 476,759.56
Co., Ltd. test fees
Scrapped materials 155,506,893.66 78,620,470.09
DSM NHU Engineering Materials
(Zhejiang) Co., Ltd. Labor costs, etc. 94,904.53 64,377.36
* The English name is for identification purpose only.
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Related parties Content of transaction Current period cumulative Preceding period comparative
Utilities fees 65,140.06 6,914.41
Utilities 1,520,978.65 1,139,072.54
Management Service Fee 226,415.09 226,415.09
Shandong Bin’an Vocational Waste and scrap materials 21,584.50 20,609.89
Training School Co., Ltd.
Glucose mother solution 1,371,282.65
Heilongjiang Haotian Corn Steam charges 82,192.66
Development Co., Ltd.
Pharmaceutical intermediates,
345,132.74 203,097.35
testing fees
Front Pharmaceutical PLC.
Beijing Winsunny Pharmaceutical Pharmaceutical intermediates,
715,227.93 141,509.43
Co., Ltd. testing fees
Pharmaceutical intermediates 164,095,134.62
Synchem International Co., Ltd.
Total 159,101,311.88 246,482,912.92
(2) Related party leases
The Company as the lessor:
Unit: RMB Yuan
Lessees Types of assets leased Lease income recognized in the Lease income recognized in
current period preceding period
DSM NHU Engineering 1,041,710.85 601,412.47
Land use right and buildings
Materials (Zhejiang) Co., Ltd.
Qionghai Boao Holliyard Hotel 429,088.57
Land use right and buildings
Management Co., Ltd.
Zhejiang Jingshi Real Estate 328,318.05 41,100.92
Land use right and buildings
Co., Ltd.
Zhejiang Deli Equipment Co., 77,064.23 77,064.23
Land use right and buildings
Ltd.
Weifang NHU Real Estate Co., 18,857.14 21,428.57
Land use right and buildings
Ltd.
Land use right and buildings 16,513.76 16,513.76
NHU Holding Group 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 1,694,215.92 1,712,675.89
(3) Related party guarantees
The company and its subsidiaries as guaranteed parties
Unit: RMB Yuan
Guarantors Amount guaranteed Commencement date Maturity date Whether the guarantee is
mature
144,000,000.00 January 23, 2019 December 21, 2023 No
500,000,000.00 December 03, 2020 September 21, 2025 No
NHU Holding Group Co., Ltd. 100,000,000.00 Apr 14, 2021 Apr 12, 2023 No
300,000,000.00 September 19, 2022 September 18, 2025 No
200,000,000.00 November 17, 2022 November 14, 2025 No
Subtotal 1,244,000,000.00
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2022 Annual Report of Zhejiang NHU Co., Ltd.
(4) Key management’s emoluments
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Key management’s emoluments 22,516,149.94 26,372,671.30
(5) Other related party transactions
(1) Owners of Boao Resort Center Apartment entrusted serviced apartments to Qionghai Boao Holliyard Hotel Management Co., Ltd.
for operation and management.
(2) In the current period, NHU EUROPE GmbH sold products amounting to 66,226,780.95 yuan to CHR.Olesen A/S. At the end of the
period, balance of accounts receivable amounted to16,958,997.49 yuan.
6. Balance due to or from related parties
(1) Balance due from related parties
Unit: RMB Yuan
Closing balance Opening balance
Items Related parties
Book balance Provision for bad Book balance Provision for bad
debts debts
Zhejiang Asen
Pharmaceutical Co., 23,625.00 1,181.25
Ltd.
DSM NHU
Accounts receivable 42,585,814.11 2,129,290.71 26,166,564.42 1,308,328.22
Engineering Materials
(Zhejiang) Co., Ltd.
Synchem International 27,012,516.04 1,350,625.80
Co., Ltd.
Subtotal 42,609,439.11 2,130,471.96 53,179,080.46 2,658,954.02
Heilongjiang Haotian
Advance paid Corn Development Co., 479,844.89
Ltd
Subtotal 479,844.89
Zhejiang Chunhui
Environmental 20,000.00 4,000.00 20,000.00 1,000.00
Protection Energy Co.,
Other receivables Ltd.
DSM NHU
Engineering Materials 18,862.50 943.13
(Zhejiang) Co., Ltd.
Subtotal 20,000.00 4,000.00 38,862.50 1,943.13
Other non-current
Zhejiang Deli 33,210,788.17 45,362,374.00
assets Equipment Co., Ltd.
Subtotal 33,210,788.17 45,362,374.00
(2) Balance due to related parties
Unit: RMB Yuan
Items Related parties Closing book balance Opening book balance
Zhejiang Deli Equipment Co., Ltd. 13,581,584.31 29,272,703.74
Zhejiang Chunhui Environmental 13,688,789.40 5,185,881.68
Accounts payable
Protection Energy Co., Ltd.
Zhejiang Saiya Chemical Materials Co., 1,905,191.13 2,640,661.94
Ltd.
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Related parties Closing book balance Opening book balance
Zhejiang Second Pharma Co., Ltd. 6,408.00 6,408.00
Qionghai Heyue Property Services Co., 300,000.00
Ltd.
Subtotal 29,181,972.84 37,405,655.36
Contract liabilities Zhejiang Deli Equipment Co., Ltd. 13,009.64 13,009.64
Subtotal 13,009.64 13,009.64
Zhejiang Deli Equipment Co., Ltd. 3,500.00 443,500.00
Other payables Xinchang County Hechun Greening 13,102.77 13,102.77
Co., Ltd.
Zhejiang Jingshi Real Estate Co., Ltd. 166,075.68
Subtotal 182,678.45 456,602.77
Other current liabilities Zhejiang Deli Equipment Co., Ltd. 1,691.25 1,691.25
Subtotal 1,691.25 1,691.25
XIII. Commitments and contingencies
1. Significant commitments
Significant commitments as at the balance sheet date
(I) Significant commitments
1. Forward exchange settlement contracts
Pursuant to “ISDA 2002 MASTER AGREEMENT” entered into between the Company and Bank of China (Hong Kong) Limited, as
of December 31, 2021, details of the Company’s unsettled forward exchange settlement contracts are as follows:
Currency Amount Exchang Rate Settlement Date
3,000,000.00 6.9700 January 5, 2023
2,000,000.00 7.0020 January 5, 2023
2,000,000.00 6.9321 January 12, 2023
2,000,000.00 6.9600 January 12, 2023
3,000,000.00 7.0051 January 12, 2023
USD 3,000,000.00 7.0050 January 12, 2023
3,000,000.00 7.0090 January 17, 2023
5,000,000.00 6.9650 January 19, 2023
5,000,000.00 7.0043 January 19, 2023
2,000,000.00 7.0125 January 19, 2023
2,000,000.00 7.0165 January 19, 2023
Subtotal 32,000,000.00
2,000,000.00 7.1039 January 17, 2023
EUR
3,000,000.00 7.1065 January 17, 2023
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Currency Amount Exchang Rate Settlement Date
1,000,000.00 7.3464 January 17, 2023
1,000,000.00 7.3118 January 19, 2023
1,000,000.00 7.3670 January 19, 2023
1,000,000.00 7.3545 February 23, 2023
2,000,000.00 7.3652 February 23, 2023
2,000,000.00 7.3640 February 23, 2023
1,000,000.00 7.3700 February 23, 2023
1,000,000.00 7.3785 February 23, 2023
1,000,000.00 7.4505 February 23, 2023
1,000,000.00 7.4323 February 23, 2023
1,000,000.00 7.4062 February 28, 2023
Subtotal 18,000,000.00
2. Letters of guarantee issued but undue
As of December 31, 2021, the undue letters of guarantee issued by the Company and its subsidiaries are as follows:
Issuing banks Applicants Type of L/G Amount Conditions for issuing
Performance guarantee USD 6,500.00 Occupying credit line
Performance guarantee USD 146,640.00 Occupying credit line
Bank of China Limited The Company
Xinchang Sub-branch Performance guarantee USD 11,800.00 Occupying credit line
Performance guarantee USD 34,680.00 Occupying credit line
Financing Guarantee EUR 10,000,000.00 Occupying credit line
HSBC Bank China Limited The Company
Hangzhou Branch Financing Guarantee EUR 10,000,000.00 Occupying credit line
3. Letters of credit issued but undue
As of December 31, 2021, the undue letters of credit issued by the Company and its subsidiaries are as follows:
Issuing banks Applicants Balance of L/C Conditions
CNY 100,000,000.00 Occupying credit line
China Merchants Bank Co., Ltd. The Company CNY 200,000,000.00 Occupying credit line
Hangzhou Branch
CNY 100,000,000.00 Occupying credit line
Bank of Communications
Company Limited Xinchang Sub- The Company CNY 150,000,000.00 Deposit of 15,000,000.00 yuan
branch
USD 1,239,606.00 Occupying credit line
Bank of China Limited Xinchang The Company USD 811,063.20 Occupying credit line
Sub-branch
USD 1,033,708.00 Occupying credit line
Shangyu New District Sub-branch Shangyu NHU Biochemical CNY 100,000,000.00 Occupying credit line
of Construction Bank Co. Co., Ltd
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Issuing banks Applicants Balance of L/C Conditions
Xinchang Sub-branch of Heilongjiang NHU CNY 80,000,000.00 Occupying credit line
Zheshang Bank Co. Biotechnology Co., Ltd
CNY17,312,427.03 Occupying credit line
China Merchants Bank Co., Ltd. Shandong NHU CNY21,536,585.76 Occupying credit line
Weifang Branch Pharmaceutical Co., Ltd
CNY24,431,946.60 Occupying credit line
EUR 1,855,000.00 Deposit of 14,942,418.00 yuan
Bank of China Limited Weifang Shandong NHU Amino-acids EUR 107,225.00 Deposit of 12,000,000.00 yuan
Binhai Sub-branch Co., Ltd.
JPY 554,922,280.00 Occupying credit line
JPY 2,900,000.00 Deposit of JPY 2,900,000.00
Bank of China Limited Shangyu Zhejiang NHU Special
Sub-branch Materials Co., Ltd. JPY 4,124,000.00 Deposit of JPY 4,124,000.00
4. The “notes pool” business
Pursuant to the “Notes Pool Service Agreement on Yuntong Account of Bank of Communications” entered into between the Company
and 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., 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., Heilongjiang Xinhao Thermal Power Co., Ltd., Xinchang NHU Vitamins Co., Ltd.,
Zhejiang Vityesun Animal Nutrition and Health Co., Ltd. and China Zheshang Bank Co., Ltd., the Company pledged assets pool 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, 2022, balance of pledged bank acceptance amounted to 369,747,243.32 yuan, deposits of
notes pool in China Zheshang Bank Co., Ltd. amounted to147,608,293.24 yuan.
5. Besides the aforementioned events and assets with title or use right restrictions as stated in this section, the Company has no 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 to be distributed 1,536,710,840
Profits or dividends announced upon review and approval 1,536,710,840
Based on the 3,073,421,680 shares (total share capital of
3,090,907,356 excluding 17,485,676 repurchased
shares[Note]), a cash dividend of 5 yuan (tax included) will
Profit or dividend planned to be distributed be distributed to all shareholders for every 10 shares, and no
bonus shares will be distributed, and the capital reserve will
not be converted into share capital.
Note: According to the Rules for Share Repurchase by Listed
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Companies, the shares in the professional account for share
repurchase by listed companies are not entitled to profit
distribution and capitalization of capital reserve.
If the total share capital of the company changes before the
implementation of the distribution plan due to the conversion
of convertible bonds, share repurchase, exercise of share
incentive, listing of new shares in refinancing, etc., the total
amount of distribution will be adjusted accordingly in
accordance with the principle that the distribution ratio
remains unchanged.
2. Description of other events after the balance sheet date
As of the date of approval for issuing the financial statements, the Company has no other significant events after the balanc e sheet date
to be disclosed.
XV. Other significant events
1. Segment information
(1) Identification basis and accounting policies for reportable segments
Reportable segments are identified according to the structure of the Company’s internal organization, management requirements 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
Pharmaceutical
Items Others Inter-segment offsetting Total
chemicals
Operating 14,841,603,430.88 1,628,068,809.34 535,687,836.81 15,933,984,403.41
revenue
Operating cost 9,233,290,169.38 1,348,349,777.17 533,339,079.61 10,048,300,866.94
Total assets 35,656,504,814.07 4,560,717,015.28 1,949,596,673.52 38,267,625,155.83
Total liabilities 13,915,614,698.07 2,303,683,173.98 1,613,821,951.68 14,605,475,920.37
2. Leases
1. The Company as lessee
(1) Please refer to item VII 14 of this section for details on right-of-use assets.
(2) Please refer to item V 23 of this section for details on the Company’s accounting policies on short-term leases and leases for 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 Preceding period comparative
Expense relating to short-term leases 1,960,380.62 1,841,763.55
Total 1,960,380.62 1,841,763.55
(3) Profit or loss and cash flows related to leases
Unit: RMB Yuan
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Items Current period cumulative Preceding period comparative
Interest expenses on lease liabilities 149,348.03 153,023.91
Total cash outflows related to leases 2,682,437.97 2,323,174.93
(4) Please refer to item X of this section for details on maturity analysis of lease payments and related liquidity risk management.
2. The Company as lessor
Operating lease
(1) Lease income
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Lease income 3,058,126.92 2,125,888.62
(2) Assets leased out under operating leases
Please refer to item VII 12 of this section for details on fixed assets leased out under operating leases.
(3) Undiscounted lease payments to be received arising from non-cancellable leases based on the lease contract signed with lessee
Unit: RMB Yuan
Remaining years Closing balance Opening balance
Within 1 year 1,642,344.00 833,000.00
1-2 years 620,000.00 696,000.00
2-3 years 310,000.00
Total 2,262,344.00 1,839,000.00
3. Others
(I) Employee stock ownership 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).
According to the "Phase III Employee Stock Ownership Plan (Draft)", before the expiration of the employee stock ownership pla n,
more than 2/3 of the shares held by the holders of the general meeting of holders agree and submit to the company After deliberation
and approval by the board of directors, the duration of the employee stock ownership plan can be extended. On October 24, 2022, the
third phase of the employee stock ownership plan was voted and approved at the third holders' meeting, agreeing to extend the duration
of the employee stock ownership plan for 12 months and submit it to the company's board of directors for consideration. The c ompany
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2022 Annual Report of Zhejiang NHU Co., Ltd.
held the 14th meeting of the eighth board of directors on October 31, 2022, reviewed and approved the "Proposal on the Extension of
the Duration of the Third Employee Stock Ownership Plan", and agreed that the duration of the company's employee stock ownership
plan will be extended. The former duration November 11,2020 to November 10, 2022 will be adjusted to November 11, 2020 to
November 10, 2023, and other contents will not be changed.
(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, 2022, the Company repurchased a total of 17,485,676 shares of the Company's stock, accounting for 0.5657% of
the Company's total share capital, through a special securities account for repurchase by means of centralized competitive bidding
transactions, with the highest transaction price of RMB31.88 per share and the lowest transaction price of RMB20.20 per share, for a
cumulative transaction amount of RMB500,019,703.22 (excluding transaction fees) The actual repurchase period for this repurchase
is from August 31, 2021 to May 30, 2022. The repurchase is in line with the established share repurchase program of the Company and
the share repurchase program has been implemented and completed.
(III) Foreign investments and signing of letters of intent on cooperative joint venture
At the ninth meeting of the eighth session of the board of directors held on December 24, 2021, the company considered and passed
the "Proposal on Foreign Investment and Signing the Letter of Intent on Joint Venture Cooperation", agreeing to the signing of the
Letter of Intent on Joint Venture Cooperation between the company and Zhenhai Refining and Chemical Branch of China Petroleum
and Chemical Corporation, in which both parties will cooperate to invest in a set of methionine production facilities, with the total
estimated investment of the project being about RMB 3 billion, to be built in Ningbo Zhenhai District, Ningbo. Both parties will
establish a joint venture company as the main body of the project, which will be responsible for the production and sales of methionine
products. The proposed registered capital of the joint venture company is RMB 778.36 million, to be funded in cash, with a tentative
50%:50% shareholding ratio between the two parties. The joint venture company will have a board of directors consisting of four
directors, with each party having the right to appoint two directors, and the management of the joint venture company will be jointly
composed of both parties.
As of March 9, 2023, the joint venture company Ningbo Zhenhai Refining and Chemical NHU Biotechnology Co., Ltd. has completed
the industrial and commercial registration procedures and obtained the Business License issued by the Ningbo Zhenhai District
Market Supervision Administration; as of April 11, 2023 , the company has contributed 116,754,000.00 yuan to the joint venture.
(IV) Purchase of financial products using raised funds
The Company held the tenth meeting of the eighth session of the Board of Directors on April 13, 2022, and considered and passed the
"Proposal on the use of part of the idle fund-raising funds for cash management", agreeing that the Company and its wholly-owned
subsidiary Shandong Xinhecheng Amino Acid Company Limited shall use the idle fund-raising funds of not more than 2.6 billion yuan
(including 2.6 billion yuan) for cash management on the premise of ensuring that the investment projects of the fund-raising funds will
not be affected normally. Ltd. will use the idle proceeds of up to RMB 2.600 billion (including RMB 2.600 billion) for cash management
and purchase short-term financial products with high security, good liquidity and low risk for a period of not more than 12 months. The
funds can be used within the above-mentioned quota on a rolling basis. As of December 31, 2022, the actual balance of wealth
management products and structured deposits purchased with temporarily idle fund raised by the Company was RMB 720 million.
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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
Receivables with 26,346,813. 500,589,449. 785,631,558. 39,281,577. 746,349,980.2
provision made on 526,936,263.09 100.00% 5.00% 100.00% 5.00%
a collective basis 15 94 20 91 9
26,346,813. 500,589,449. 785,631,558. 39,281,577. 746,349,980.2
Total 526,936,263.09 100.00% 5.00% 100.00% 5.00%
15 94 20 91 9
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 526,936,263.09 26,346,813.15 5.00%
Total 526,936,263.09 26,346,813.15 --
Age analysis
Unit: RMB Yuan
Ages Book balance
Within 1 year (inclusive) 526,936,263.09
Total 526,936,263.09
(2) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
Increase/Decrease
Categories Opening balance Closing balance
Accrual Recovery/ Write-off Others
Reversal
Provision made on a 39,281,577.91 -12,934,764.76 26,346,813.15
collective basis
Total 39,281,577.91 -12,934,764.76 26,346,813.15
(3) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Debtors Book balance Proportion to the total balance of Provision for bad debts
accounts receivable (%)
Client 1 188,847,440.39 35.84% 9,442,372.02
Client 2 63,451,682.04 12.04% 3,172,584.10
Client 3 49,204,200.00 9.34% 2,460,210.00
Client 4 28,780,551.86 5.46% 1,439,027.59
Client 5 27,476,150.00 5.21% 1,373,807.50
Total 357,760,024.29 67.89% --
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2022 Annual Report of Zhejiang NHU Co., Ltd.
2. Other receivables
Unit: RMB Yuan
Items Closing balance Opening balance
Dividend receivable 20,735,987.73 7,159,278.00
Other receivables 2,475,376,134.12 3,087,880,137.47
Total 2,496,112,121.85 3,095,039,415.47
(1) Dividend receivable
1) Details on categories
Unit: RMB Yuan
Items/Investees Closing balance Opening balance
Zhejiang Chunhui Environmental 20,735,987.73 7,159,278.00
Protection Energy Co., Ltd.
Total 20,735,987.73 7,159,278.00
(2) Other receivables
1) Categorized by nature
Unit: RMB Yuan
Nature of receivables Closing book balance Opening book balance
loan splitting 2,477,800,000.00 3,131,287,854.18
Deposit Guarantee 100,017,996.50 100,300,037.50
Export Tax Refund 8,678,171.26 10,812,822.80
Employee reserve fund 5,953,662.00 3,148,937.00
Accounts receivable in suspense 461,787.32 178,933.01
Other 8,467,732.53 495,303.74
Total 2,601,379,349.61 3,246,223,888.23
2) Provision for bad debts
Unit: RMB Yuan
Phase I Phase II Phase III
Provision for bad debts Total
12month expected Lifetime expected credit Lifetime expected credit
credit losses losses (credit not impaired) losses (credit impaired)
Opening balance 156,762,592.67 131,654.00 1,449,504.09 158,343,750.76
Opening balance in the —— —— —— ——
current period
--Transferred to phase II -57,700.00 57,700.00
--Transferred to phase III -34,486.40 34,486.40
Provision made in the current -32,081,720.22 75,932.40 -334,747.45 -32,340,535.27
period
Closing balance 124,623,172.45 230,800.00 1,149,243.04 126,003,215.49
Significant changes in book balance of other receivables with changes in provision for bad debts:
□ Applicable √ Not applicable
Age analysis
Unit: RMB Yuan
Ages Book balance
Within 1 year (inclusive) 2,501,141,620.17
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2022 Annual Report of Zhejiang NHU Co., Ltd.
Ages Book balance
1-2 years 1,154,000.00
2-3 years 172,432.00
Over 3 years 98,911,297.44
3-4 years 182,455.81
4-5 years 50,067.41
Over 5 years 98,678,774.22
Total 2,601,379,349.61
3) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
Increase/Decrease
Categories Opening balance Closing balance
Accrual Recovery/Reversal Write-off Others
Portfolio grouped by ages 158,343,750.76 -32,340,535.27 126,003,215.49
Total 158,343,750.76 -32,340,535.27 126,003,215.49
4) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Proportion to the total
Debtors Nature of Book balance Ages Provision for bad
balance of other
receivables debts
receivables (%)
Heilongjiang NHU Call loans 1,126,000,000.00 Within 1 year 43.28% 56,300,000.00
Biotechnology Co., Ltd.
Shandong NHU Fine
Chemical Science and Call loans 339,000,000.00 Within 1 year 13.03% 16,950,000.00
Technology Co., Ltd.
Shandong NHU Fine
Chemical Science and Others 2,553,383.24 Within 1 year 0.10% 127,669.16
Technology Co., Ltd.
Heilongjiang Xinhao Thermal Call loans 303,700,000.00 Within 1 year 11.67% 15,185,000.00
Power Co., Ltd
Zhejiang NHU Call loans 244,000,000.00 Within 1 year 9.38% 12,200,000.00
Pharmaceutical Co., Ltd
Zhejiang NHU Special Call loans 225,100,000.00 Within 1 year 8.65% 11,255,000.00
Materials Co., Ltd.
Total -- 2,240,353,383.24 -- 86.11% 112,017,669.16
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 9,146,078,842.12 9,146,078,842.12 7,846,078,842.12 7,846,078,842.12
subsidiaries
Investments in associates 239,967,333.33 239,967,333.33 208,873,174.90 208,873,174.90
and joint ventures
Total 9,386,046,175.45 9,386,046,175.45 8,054,952,017.02 8,054,952,017.02
(1) Investments in subsidiaries
Unit: RMB Yuan
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2022 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
Xinchang NHU
Vitamins Co., 149,407,990.15 149,407,990.15
Ltd.
Zhejiang NHU
Import & Export 13,500,000.00 13,500,000.00
Co., Ltd.
Qionghai Boao
Lidu Real Estate 54,020,492.00 54,020,492.00
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.
Shandong NHU
Amino-acids 3,900,000,000.00 1,000,000,000.00 4,900,000,000.00
Co., Ltd.
Shandong NHU
Holdings Co., 200,000,000.00 200,000,000.00
Ltd.
Heilongjiang
NHU 1,300,000,000.00 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 160,000,000.00 300,000,000.00 460,000,000.00
Technology Co.,
Ltd.
Zhejiang NHU 50,000,
Nylon Materials 50,000,000.00
000.00
Co., Ltd.
NHU Singapore 12,800,000.00 12,800,000.00
PTE. LTD.
50,000,
Total 7,846,078,842.12 1,350,000,000.00 9,146,078,842.12
000.00
(2) Investments in associates and joint ventures
Unit: RMB Yuan
Increase/Decrease Closing
Investees Opening carrying Investment Adjustment Cash dividend/ Closing carrying balance of
amount Investments Investments Changes in Provision for Others amount provision for
income in other Profit declared
increased decreased other equity impairment impairment
recognized comprehens for distribution
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2022 Annual Report of Zhejiang NHU Co., Ltd.
under equity ive income
method
I. Associates
Zhejiang
Chunhui
Environmental 208,873,174.90 47,283,121.54 4,547,025.85 20,735,988.96 239,967,333.33
Protection
Energy Co.,
Ltd.
Subtotal 208,873,174.90 47,283,121.54 4,547,025.85 20,735,988.96 239,967,333.33
Total 208,873,174.90 47,283,121.54 4,547,025.85 20,735,988.96 239,967,333.33
4. Operating revenue/Operating cost
Unit: RMB Yuan
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 3,413,299,237.28 2,778,374,702.33 4,490,464,824.38 3,190,769,298.95
Other operations 63,079,968.72 50,816,850.54 63,614,077.00 44,517,335.33
Total 3,476,379,206.00 2,829,191,552.87 4,554,078,901.38 3,235,286,634.28
Including: Revenue from 3,472,854,161.65 2,827,759,903.86 4,550,933,427.10 3,233,713,897.14
contracts with customers
Details of revenue
Unit: RMB Yuan
Categories of contracts Total
By product
Including: Nutrition 3,413,299,237.28
Others 59,554,924.37
Subtotal 3,472,854,161.65
By operating region
Including: Domestic 2,210,806,407.19
Overseas 1,262,047,754.46
Subtotal 3,472,854,161.65
By revenue recognition time
Including: Transferred at a point in time 3,472,854,161.65
Subtotal 3,472,854,161.65
By sales channel
Direct Sales 1,542,579,083.70
Resellers 1,930,275,077.95
Subtotal 3,472,854,161.65
Information related to performance obligations:
None.
Information related to transaction price allocated to the remaining performance obligations:
As of December 31, 2022, revenue corresponding to performance obligations for which the Company has entered into contracts but
not yet performed or fulfilled amounted to 483.98 million yuan, of which, 483.98 million yuan is expected to be recognized as revenue
in 2023.
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2022 Annual Report of Zhejiang NHU Co., Ltd.
5. Investment income
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Investment income from long-term equity 47,283,121.54 60,097,137.98
investments under equity method
Investment income from long-term equity 1,186,000,000.00 1,289,000,000.00
investments under cost method
Investment income from disposal of 384,955.72
financial instruments
Interest income from call loans 93,315,645.90 142,819,103.02
Investment income from bank financial 31,667,084.46 43,135,464.45
products and structured deposits
Total 1,358,265,851.90 1,535,436,661.17
XVII. Supplementary information
1. Schedule of non-recurring profit or loss
√ Applicable □ Not applicable
Unit: RMB Yuan
Items Amount Remarks
Gains on disposal of non-current assets -74,232,517.88
Tax rebates and exemptions that are approved beyond authority or 8,476,745.63
without official approval documents
Government grants included in profit or loss (excluding those closely
related to operating activities of the Company, satisfying government 175,761,119.94
policies and regulations, and continuously enjoyed with certain quantity
or quota based on certain standards)
Fees charged to non-financial enterprises for fund occupancy included in 988,193.62
current profit or loss
Gains on assets consigned to the third party for investment or 52,749,284.13
management
Gains or losses on changes in fair value of held-for-trading financial Mainly due to changes in
assets and held-for-trading financial liabilities, and investment income
from disposal of held-for-trading financial assets and held-for-trading -86,980,602.84 the fair value of forward
financial liabilities, excluding those arising from hedging business related during the reporting period.
to operating activities
Non-operating income and expenses other than those mentioned above 2,411,616.08
Other non-operating revenue or expenditures 1,102,494.25
Less: Enterprise income tax affected 46,826,444.91
Non-controlling interest affected 51,953.28
Total 33,397,934.74 --
Remarks on other profit or loss satisfying the definition of non-recurring profit or loss:
□ Applicable √ Not applicable
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss.
Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria for
Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss
□ Applicable √ Not applicable
172
2022 Annual Report of Zhejiang NHU Co., Ltd.
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 16.08% 1.17 1.17
ordinary shares
Net profit attributable to shareholders of
ordinary shares after deducting non- 15.93% 1.16 1.16
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
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