2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Zhejiang NHU Company Ltd.
2023 Semi-Annual Report
August 2023
2023 Semi-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 semi-annual report is authentic, accurate, complete and free of
false records, misleading statements or material omissions, and they will bear
individual and joint liabilities for such information.
胡柏藩 (Hu Baifan), the Company’s legal representative, 石观群 (Shi Guanqun),
the officer in charge of accounting, and 张 莉 瑾 (Zhang Lijin), the head of
accounting department hereby declare that they guarantee the financial
statements in this semi-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 semi-annual report.
The future plan and other forward-looking information disclosed in this semi-
annual report shall not be regarded as a commitment to investors. We kindly
remind investors of all possible risks in investments. The company provides a
detailed description of the potential risks and countermeasures that may exist in
the company's operations in X. Risks and countermeasures under Section III
Management Discussion and Analysis section of this report. We kindly remind
investors of all possible risks in investments.
The Company will not distribute cash dividend, distribute bonus shares, or
distribute shares from capital reserve during the current reporting period.
This Semi-Annual Report is an English translation of the Chinese Semi-Annual Report. In case the English version does not
conform to the Chinese version, the Chinese version prevails.
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2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Contents
Section I Important Notes, Contents, and Definitions ......................................................................... 1
Section II Company Profile and Key Financial Indicators .................................................................. 5
Section III Management Discussion and Analysis ............................................................................... 8
Section IV Corporate Governance ..................................................................................................... 22
Section V Environmental and Social Responsibilities ....................................................................... 25
Section VI Significant Events ............................................................................................................ 30
Section VII Movements in Shares and Information about Shareholders ........................................... 38
Section VIII Preferred Shares ............................................................................................................ 42
Section IX Bonds ............................................................................................................................... 43
Section X Financial Report ................................................................................................................ 44
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2023 Semi-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. Original copy of all the Company's documents and announcements published on the newspapers designated by
CSRC within the reporting period
III. Other documents for reference.
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2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Definitions
Abbreviations Refers to Contents of definitions
The Company, NHU Refers to ZHEJIANG NHU CO., LTD.
China Securities Regulatory
CSRC Refers to
Commission
PPS Refers to Polyphenylene sulfide
PPA Refers to Poly phthalamide
HSE Refers to Health, Safety and Environment
RTO Refers to Regenerative Thermal Oxidizer
VOC Refers to Volatile organic compound
NH-acid Refers to Taurine
F5 Refers to Vitamin B5
NBC Refers to Azabicycles
CLA Refers to Karon anhydride
LDAR Refers to Leak Detection and Repair
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2023 Semi-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
II. Contact information
Items Board secretary Securities affairs representative
Name Shi Guanqun 曾淑颖 (Zeng Shuying)
No.418 Xinchang Dadao West Road, Xinchang, No.418 Xinchang Dadao West Road, Xinchang,
Contact address
Zhejiang, P.R.China Zhejiang, P.R.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. Other Information
1. Company’s Contact Information
Whether the Company’s registered address, office address, zip code, website and e-mail address has changed during the reporting
period
□ Applicable √ Not applicable
The Company’s registered address, office address, zip code, website and e-mail address have not changed during the reporting
period, which can be found in the 2022 Annual Report.
2. Information Disclosure and Location
Whether information disclosure and location has changed during the reporting period
□ Applicable √ Not applicable
The name of the Company’s selected information disclosure newspaper, the URL of the website designated by the CSRC where the
semi-annual report is posted, and the place where the Company’s semi-annual report is available have not changed during the
reporting period, which can be found in the 2022 Annual Report.
3. Other relevant Information
Whether other relecant information has changed during the reporting period
□ Applicable √ Not applicable
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2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
IV. 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
Increase/ Decrease at
the end of the current
reporting period
The Current Reporting The Same Period of the Previous Year compared with the
Items
Period same period of the
previous year
Before adjustment After adjustment[Note] After adjustment
Operating revenue
(yuan) 7,418,514,576.09 8,215,039,277.03 8,215,039,277.03 -9.70%
Net profit attributable
to shareholders of 1,483,229,236.96 2,213,877,419.25 2,213,882,215.02 -33.00%
listed company (yuan)
Net profit attributable
to shareholders of
listed company after
deducting non- 1,375,218,885.82 2,094,055,949.62 2,094,060,745.39 -34.33%
recurring profit or loss
(yuan)
Net cash flows from
operating activities 1,235,562,621.93 1,242,456,738.20 1,242,456,738.20 -0.55%
(yuan)
Basic EPS (yuan/share) 0.48 0.72 0.72 -33.33%
Diluted EPS
(yuan/share) 0.48 0.72 0.72 -33.33%
Decreased by 3.46
Weighted average ROE 6.09% 9.55% 9.55%
percentage points
Increase/Decrease at
the end of the current
Dec. 31, 2022 reporting period
Items Jun. 30, 2023 compared with the end
of the previous year
Before adjustment After adjustment[Note] After adjustment
Total assets (yuan) 37,975,841,342.92 38,267,625,155.83 38,268,063,792.50 -0.76%
Net assets attributable
to shareholders of 23,568,679,385.68 23,574,859,468.61 23,574,879,326.24 -0.03%
listed company (yuan)
Reasons for changes in accounting policies and correction of accounting errors
[Note] On November 30, 2022, the Ministry of Finance ("MOF") issued and implemented ASBE Interpretation No. 16, "Accounting
for Deferred Taxes on Assets and Liabilities Arising from Individual Transactions that are not Subject to the Ini tial Recognition
Exemption,"which became effective on January 1, 2023. If taxable temporary differences and deductible temporary differences arise
from lease liabilities and right-of-use assets recognized as a result of a single transaction to which this provision applies, as well as
projected liabilities related to abandonment obligations and related assets recognized at the beginning of the earliest period in which
the financial statements of the first-time implementation of this provision are presented, the Company will recognize taxable temporary
differences and deductible temporary differences in accordance with the provisions of this provision and Accounting Standard No. 18
- "Income Taxes". -Income Taxes, the Company adjusts the cumulative effect to opening retained earnings and other related financial
statement items in the earliest period for which the financial statements are presente.
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2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
V. 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.
VI. Non-recurring profit or loss
√ Applicable □ Not Applicable
Unit: RMB Yuan
Items Amount
Gains or losses on disposal of non-current assets, including write-off of provision
for impairment 13,545,778.16
Government grants included in profit or loss (excluding those closely related to
operating activities of the Company, satisfying government policies and
regulations, and continuously enjoyed with certain quantity or quota based on 101,321,678.10
certain standards)
Gains or losses on assets consigned to the third party for investment or management 8,894,052.73
Gains or losses on changes in fair value of held-for-trading financial assets and
held-for-trading financial liabilities, and investment income from disposal of held-
for-trading financial assets and held-for-trading financial liabilities, excluding -11,268,469.70
those arising from hedging business related to operating activities
Other non-operating revenue or expenditures 3,483,386.54
Less: Enterprise income tax affected 7,791,955.64
Non-controlling interest affected (after tax) 174,119.05
Total 108,010,351.14
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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2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Section III Management Discussion and Analysis
I. The main business of the Company during the reporting period
The Company is a national high-tech company mainly engaged in the production and sales of nutrition, flavor and
fragrance, new polymer materials, and APIs. It focuses on fine chemicals, adheres to the concept of innovation-led
development and competition-driven growth, and continuously develops various functional chemicals based on the two
core platforms of chemical and biology, providing value-added services and solutions to customers in more than 100
countries and regions around the world. It continuously improves the quality of human life with high-quality, healthy and
green products, and creates sustainable value for stakeholders. With leading technology, scientific management and
sincere service, the Company has become one of the four major world vitamin manufacturers, one of the top 100 national
fine chemical companies, one of the top 10 companies in China’s light of industry fragrance and a well-known special
engineering plastics manufacturer.
1. Main products and applications
Nutrition: The current products mainly cover vitamins, amino acids and pigments, etc. Specific products include vitamin
E, vitamin A, vitamin C, methionine, vitamin D3, biotin, coenzyme Q10, carotenoids, vitamin B5, vitamin B6, vitamin
B12, etc. They are 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 industry. 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 ingredients for processing and producing pharmaceutical preparations.
2. Main business models
(1) Procurement model
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2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
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, and industrial supplies supermarket, 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 arranges production plans
properly based on changes in market demand to achieve a balance between production and sales. In addition, the Company
keeps innovating the production model, digging out internal potentials, and optimizing the production process, reducing
energy consumption, 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 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 material s 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 new products were carried out in an orderly manner. In the nutrition sector, the Company’s second phase of methionine
250,000 ton/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 in June 2023 for test preparation. The
company and China Petroleum & Chemical Corporation planned to jointly build a 180,000-ton/year liquid methionine
(purified) project, the production plant was under construction. 30,000 tons/year NH-acid project was under test run by
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2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
schedule. 2,500 ton/year vitamin B5 project was in production and sales. In the Flavor and fragrance sector, the project
with an annual output of 5,000 tons of menthol was in production and sales. In the new polymer materials sector, the
commissioning of the phase III PPS project with an annual output of 7,000 tons was in production and sales; 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 company will upgrade product structures according to market demand, gradually developing into
manufacturers of antipyretic and analgesic medicine, nutritional medicine, and characteristic API intermediates.
During the reporting period, with of market changes in major vitamin products, the company actively took
countermeasures, innovated marketing strategies and management to improve product sales. The company overcomed
various adverse factors, promoted the sales of newly launched projects, gave full play to the advantages of sector linkage,
and achieved steady growth in revenue of flavor and fragrance sector and new polymer materials sector.
During the reporting period, the Company’s main business and its business model remained unchanged.
II. 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 competitivene ss
lies in its cooperate culture, R&D, production management, process and equipment, talent and brand.
1. Corporate culture
Adhering to the enterprise objective of “creating wealth, employee 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
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 bu ilt
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 researchinstitute 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
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2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
scientific research workstation, and national model academician and expert workstation.
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 intellige nt
operation, it promotes the continuous improvement of management efficiency. In addition, the Company is committed to the
development of green chemicals, vigorously promotes clean production, recyclable economy and 7S on-site management, and adopts
an environmental governance model that focuses on source control and final disposal. It is determined to take the road of sustainable
development.
4. Process and equipment
The Company values highly the effective combination of process and equipment. It has a process and equipment research institute, and
cooperates with famous engineering companies and scientific research institutes at home and abroad. Through the introduction,
digestion, absorption and re-innovation of advanced technologies, the Company improves the overall level of its process and equipment.
The Company is dedicated to the R&D of process and equipment towards larger scale, better airtightness, greater continuity, 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 talen t
structure. During the reporting period, the company was awarded the Xinchang "High quality development demonstration award,
valuing talents and loving talents award".
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 la
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2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
rge 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 .
During the reporting period, the company was rated as one of the "Excellent Member Unit of China Brand Construction Promotion
Association", and "Capital Brand High Value Enterprise in Zhejiang Province of 2022", "Top 100 Private Enterprises in Shaoxing City
of 2023".
III. Main Business Analysis
Overview
Refer to “I. The Main Business of the Company during the Reporting Period”
Year-on-year changes in key financial data
Unit: RMB Yuan
The Same Period
The Current
Item of the Previous YoY growth rate Reasons for Changes
Reporting Period
Year
This was mainly due to the impact of
market fluctuations in the nutritional
Operating revenue 7,418,514,576.09 8,215,039,277.03 -9.70%
products segment on selling prices
during the reporting period.
This was mainly due to the increase
Operating Cost 4,989,533,832.95 4,945,122,803.39 0.90% in sales of major products during
the reporting period.
This was mainly due to the increase
Sales Expenses 66,941,370.80 57,277,897.48 16.87% in salaries and expenses of sales staff
during the reporting period.
This was mainly due to the increase
Administration
Expenses 244,646,451.17 212,284,822.41 15.24% in personnel remuneration during
the reporting period.
This was mainly due to exchange
gains arising from exchange rate
Financial Expenses -37,162,425.39 22,231,053.96 -267.16%
fluctuations during the reporting
period.
This was mainly due to the decrease
in R&D related commissioning costs
R&D Expense 416,575,391.59 440,357,252.64 -5.40%
and other expenses during the
reporting period.
This was mainly due to the decrease
in total profit as a result of the
Income Tax Expense 251,283,197.83 400,095,127.85 -37.19%
decrease in revenue during the
reporting period.
This was mainly due to the decrease
Net Cash Flows from
Operating Activities 1,235,562,621.93 1,242,456,738.20 -0.55% in purchases of raw materials during
the reporting period.
This was mainly due to the increase
Net Cash Flows from in investment in projects under
Investing Activities -2,089,507,038.68 -1,073,929,985.26 -94.57%
construction during the reporting
period.
Net Cash Flows from This was mainly due to the
Financing Activities -865,319,516.45 574,156,254.26 -250.71%
repayment of borrowings during the
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2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
The Same Period
The Current
Item of the Previous YoY growth rate Reasons for Changes
Reporting Period
Year
reporting period.
This was mainly due to the increase
Net Increase in Cash in investment and repayment of
and Cash Equivalents -1,643,950,329.76 737,171,030.93 -323.01%
borrowings during the reporting
period.
Significant changes in the composition of the Company’s profit or sources of profit during the reporting period
□ Applicable √ Not applicable
No significant changes in the composition of the Company’s profit or sources of profit during the reporting period.
Operating Income Structure
Unit: RMB Yuan
The Current Reporting Period The Same Period of the Previous Year
Items Amount % to total Amount % to total YoY growth rate
Total 7,418,514,576.09 100% 8,215,039,277.03 100% -9.70%
By industry
Pharmaceutical
chemicals 6,771,211,341.41 91.27% 7,585,238,197.37 92.33% -10.73%
Others 647,303,234.68 8.73% 629,801,079.66 7.67% 2.78%
By product
Nutrition 4,830,212,886.75 65.10% 5,768,862,111.12 70.22% -16.27%
Flavor and
fragrance 1,631,864,728.45 22.00% 1,522,994,415.83 18.54% 7.15%
New polymer
materials 578,308,624.04 7.80% 552,514,423.91 6.73% 4.67%
Others 378,128,336.85 5.10% 370,668,326.17 4.51% 2.01%
By region
Domestic sales 3,557,426,385.63 47.95% 4,064,052,343.93 49.47% -12.47%
Overseas sales 3,861,088,190.46 52.05% 4,150,986,933.10 50.53% -6.98%
By sales model
Direct sales 5,896,114,550.44 79.48% 6,536,368,733.62 79.57% -9.80%
Agent sales 1,522,400,025.65 20.52% 1,678,670,543.41 20.43% -9.31%
Industry, product, or regions accounting for more than 10% of the Company’s operating revenue or profit
√ Applicable □ Not applicable
Unit: RMB Yuan
Growth rate of
Operating revenue Operating cost Gross rate Growth rate of Growth rate of
Items operating
operating cost gross rate
revenue
By industry
Decreased by
Pharmaceutical
6,771,211,341.41 4,533,447,871.52 33.05% -10.73% 2.20% 8.47 percentage
chemicals
points
By product
Decreased by
Nutrition 11.65
4,830,212,886.75 3,435,180,782.01 28.88% -16.27% 0.14%
percentage
points
Flavor and Increased by
fragrance 1,631,864,728.45 791,798,134.03 51.48% 7.15% 3.62%
1.65 percentage
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2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Growth rate of
Operating revenue Operating cost Gross rate Growth rate of Growth rate of
Items operating
operating cost gross rate
revenue
points
By region
Decreased by
Domestic sales 3,557,426,385.63 2,603,164,077.10 26.82% -12.47% -4.97% 5.78percentage
points
Decreased by
Overseas sales 3,861,088,190.46 2,386,369,755.85 38.19% -6.98% 8.18% 8.67 percentage
points
When the statistical caliber of the Company’s main business data is adjusted in the reporting period, the Company’s main business
data in the most recent period should be subject to the one after the statistical caliber adjusted at the end of the reporting period.
□ Applicable √ Not applicable
IV. Non-main business analysis
√ Applicable □ Not Applicable
Unit: RMB Yuan
% to total Whether has
Items Amount profit before Reason for balance
continuity
tax
This was mainly attributable to gains from
Investment income 43,899,900.63 2.51% financial products and profits realized by No
associates during the reporting period.
Mainly as a result of changes in the fair
Gains on changes in fair No
-11,268,469.70 -0.64% value of forward settlements during the
value
reporting period.
Credit impairment loss This is mainly due to the loss arising from
6,389,579.21 0.37% the provision for credit impairment of No
(Losses are shown with a "-
" sign) accounts receivables.
Impairment losses on assets This is mainly due to losses arising from
-81,296,758.10 -4.65% the provision for impairment of various No
(Losses are shown with a "-
" sign) assets.
This was mainly attributable to the
increase in revenue from the recovery of No
Gains on asset disposal 13,545,778.16 0.78%
land by the government during the
reporting period.
Non-operating revenue 3,576,842.57 0.20% This is mainly due to income from claims. No
This was mainly due to losses on assets No
Non-operating expenditures 1,619,001.38 0.09%
scrapped during the reporting period.
Other income This was mainly due to government grants No
102,847,223.45 5.88%
received during the reporting period.
V. Assets and liabilities analysis
1. Significant changes in asset composition
Unit: RMB Yuan
Items Jun. 30, 2023 Dec. 31, 2022 Percentage of Remarks
14
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
change on
% to total Amount % to total % to total significant
changes
Cash and bank Decreased by 4.34
balances 3,654,734,123.88 9.62% 5,343,851,967.72 13.96%
percentage points
Accounts Decreased by 0.07
receivable 2,428,700,767.98 6.40% 2,476,269,041.23 6.47%
percentage points
Inventories Increased by 1.23
4,578,585,468.62 12.06% 4,144,557,702.39 10.83%
percentage points
Long-term
Increased by 0.72
equity 703,117,491.00 1.85% 432,503,568.48 1.13%
investments percentage points
Fixed assets Increased by 3.74
17,819,362,500.06 46.92% 16,523,867,858.53 43.18%
percentage points
Construction in Decreased by 0.33
progress 4,927,272,645.25 12.97% 5,089,233,908.22 13.30%
percentage points
Right-of-use Increased by 0.01
assets 7,781,963.62 0.02% 2,830,136.37 0.01%
percentage points
Short-term Decreased by 0.58
borrowings 1,609,254,229.16 4.24% 1,846,373,441.01 4.82%
percentage points
Contract Increased by 0.01
liabilities 63,559,211.75 0.17% 60,660,929.75 0.16%
percentage points
Long-term Increased by 3.37
borrowings 6,512,116,382.12 17.15% 5,273,637,508.87 13.78%
percentage points
Lease liabilities Increased by 0.01
7,865,412.13 0.02% 2,822,404.07 0.01%
percentage points
2. Major overseas assets
□ Applicable √ Not applicable
3. Assets and liabilities at fair value
√ Applicable □ Not Applicable
Unit: RMB Yuan
Accumul
Provision
ated
for Amount
Gains on changes Amount sold
Opening balance impairment purchased Other Closing balance
Items changes in fair in fair during the
made in the during the changes
value value reporting period
current reporting period
included
period
in equity
Financial assets
1. Held-for-
trading financial
assets (derivative 720,000,000.00 250,000,000.00 720,000,000.00 250,000,000.00
financial assets
excluded)
2. Derivative
financial assets 314,576.43 -314,576.43
Subtotal of
financial assets 720,314,576.43 -314,576.43 250,000,000.00 720,000,000.00 250,000,000.00
Total 720,314,576.43 -314,576.43 250,000,000.00 720,000,000.00 250,000,000.00
Financial
liabilities 0.00 12,909,447.29 12,909,447.29
Whether the Company has significant changes in measurement attributes of main assets during the reporting period
□ Yes √ No
15
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
4. Restrictions on assets as of the end of the reporting period
(1) Closing of cash and bank balances included deposits of 146,842,521.78 yuan pledged and not on demand for payments, which
was with use restrictions.
(2) Closing balance of receivables financing included 84,532,028.12 yuan pledged for bank acceptance and not on demand for
payments, which was with use restrictions.
(3) Closing balance of notes receivable included 155,053,622.64 yuan pledged for bank acceptance and not on demand for payment,
which was with use restrictions.
(4) Closing carrying amount of fixed assets included 97,437,448.95 yuan mortgaged to the bank for borrowings, which was with use
restrictions.
(5) Closing carrying amount of intangible assets included 18,579,010.61 yuan mortgaged to the bank for borrowings, which was with
use restrictions.
VI. Investment status analysis
1. Overall information
√ Applicable □ Not Applicable
Investments during the reporting period (yuan) Investments of the preceding period (yuan) Percentage of change
2,011,618,396.22 1,832,296,131.71 9.79%
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
16
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Unit: RMB 0,000Yuan
Investment
amount at the
Gains or Accumul
Amount end of the
losses on ated fair Amount sold
Initial purchased End of period as a
Types of Derivatives changes in value during the
Investment during the period percentage of
Investments fair value changes reporting
Amount reporting amount the company's
for the recorded period
period net assets at the
period in equity
end of the
reporting period
Forward contracts 35,506.29 -1,126.85 0 116,359.98 83,911.32 67,954.95 2.88%
Total 35,506.29 -1,126.85 0 116,359.98 83,911.32 67,954.95 2.88%
The Company accounts for the hedging business conducted in accordance
with the relevant provisions of the Ministry of Finance's Accounting
Description of theaccounting policiesand specific
Standard for Business Enterprises (ASBE) No. 22 - Recognition and
principles of accounting for hedging operations
Measurement of Financial Instruments, ASBE No. 24 - Accounting for
during the reporting period, and whether there have
Hedges, ASBE No. 23 - Transfer of Financial Assets, ASBE No. 37 -
been any significant changes compared to the
Presentation of Financial Instruments and its guidelines. There were no
previous reporting period
significant changes in accounting policies and specific principles of
accounting from the previous reporting period.
In order to reduce the impact of exchange rate fluctuations on the Company's
operating results, the Company carried out foreign exchange hedging
business in accordance with a certain percentage of its export business, with
Description of actual profit or loss for the reporting
business varieties mainly including forward exchange settlement and other
period
foreign exchange derivative products, all of which were within the expected
scale of sales business, and the actual gain on derivatives at the end of the
reporting period was 1.93 million yuan.
The Company carries out foreign exchange hedging business based on the
principle of exchange rate risk neutrality. By carrying out foreign exchange
Description of the hedging effect hedging business, the Company reduces the impact of exchange rate
fluctuation on the Company's operation and effectively controls the
operation risk.
Derivatives Investment Funding Self-funded.
Risk analysis and description of control measures In order to prevent exchange rate risk, the Company and its subsidiaries have
for derivative positions during the reporting period carried out derivative business and the Company and its subsidiaries have
(including but not limited to market risk, liquidity strictly implemented the " oreign Exchange Hedging Business Management
risk, credit risk, operational risk, legal risk, etc.) Regulations"
Changes in market prices or product fair values of The fair value fluctuation loss on invested derivatives at the beginning of the
invested derivatives during the reporting period, and reporting period was 66.32 million Yuan, and the fair value fluctuation loss
the analysis of the fair value of derivatives should on derivatives at the end of the reporting period was 11.27 million Yuan.
disclose the specific methods used and the setting of Changes in fair value are determined at the end of each month based on
relevant assumptions and parameters quoted market prices from external financial institutions.
Litigation involved (if applicable) None
Date of disclosure of board announcement for
April 21, 2023
approval of erivative investments (if any)
Derivatives Investment Approval Shareholders'
Not Applicable
Meeting Announcement Disclosure Date (if any)
The Company has formulated the " anagement Measures for Foreign
Exchange Hedging Business" which sets out specific operational procedures
for the conduct of foreign exchange hedging business by strengthening
Special opinion of independent directors on the
internal control, implementing risk prevention measures and improving the
company's derivatives investment and risk control
level of operation and management. The Company has analyzed the
feasibility of its foreign exchange hedging business, and in general, it is
practicable for it to carry out foreign exchange hedging, which can
17
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
effectively reduce the risk of exchange rate fluctuation and is conducive to
stabilizing the profit level. The content and deliberation procedures of the
matter are in compliance with relevant laws, regulations, standardized
documents and the Articles of Association of the Company, and do not
constitute any damage to the interests of the Company and other
shareholders. We unanimously agree that the Company carries out foreign
exchange hedging business this time.
2） Investments in derivatives for speculative purposes during the reporting period
□ Applicable √ Not Applicable
The Company had no derivative investments for speculative purposes during the reporting period.
5. Use of raised funds
√ Applicable □ Not Applicable
(1) Overall use of raised funds
√ Applicable □ Not Applicable
Unit: RMB 0,000Yuan
Accumul-
Total ated
raised amount
Proportion Raised
funds of raised
Year of of raised Purposes of funds
Amount Accumulated with funds Total
Way of Total funds with raised funds not being
fund- used in the amount of changes with raised
fund- amount changes in yet used and idle for
current raised funds in uses changes funds not
raising raising raised uses to total the over
period used during in uses yet used
raised whereabouts two
the during
funds years
reporting the
period reporting
period
Deposited in
special
accounts for
raised funds,
Private used to
Year 2017 placement 486,707.55 104,143.81 481,963.60 0 0 0.00% 4,743.95 purchase bank 0
of shares financial
products,
deposited as
structured
deposits
Total -- 486,707.55 104,143.81 481,963.60 0 0 0.00% 4,743.95 -- 0
Remarks on overall use of raised funds
The Company’s raised funds used in previous years amounted to 3,778.20 million yuan, the net amount of interest on cash in bank received in previous years less
handling charges amounted to 88.12 million yuan, gains on financial products and structured deposits received in previous years amounted to 630.82 million yuan,
and the net expenditure on financial products and structured deposits purchased in previous years amounted to 720.00 million yuan; the raised funds actually used
in the first half of 2023 amounted to 1,041.44 million yuan, the net amount of interest on cash in bank received in the first half of 2023 less handling charg es
amounted to 12.77 million yuan, gains on financial products and structured deposits received in the first half of 2023 amount ed to 9.43 million yuan, and the net
recovery from financial products and structured deposits purchased in the first half of 2023 amounted to 470.00 million yuan; the accumulated amount of the
raised funds used amounted to 4,819.64 million yuan, the accumulated net amount of interest on cash in bank received less handling charges amounted to 100.89
million yuan, the accumulated amount of gains on financial products and structured deposits received amounted to 640.25 million yuan, and net expenditure on
financial products and structured deposits purchased amounted to 250.00 million yuan. As of June 30, 2023, the balance of the raised funds amounted to 788.58
million yuan (including bank financial products and structured deposits, the net amount of interest on cash in bank less handling charges and s and bank bank
financial products income).
18
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
(2) Committed projects with raised funds
√ Applicable □ Not Applicable
Unit: RMB 0,000Yuan
Whether
Whether Investment Date of Benefit Whether there was
Committed Total Total amount Accumulated
changed Input during progress as reaching realized in the significant
investment projects committed after input as of the
(including the reporting of the designed the expected changes in
and over-raised investment in adjustment period end
partial period period end usable reporting benefit is feasibility
funds whereabouts raised funds (1) (2)
changed) (3)=(2)/(1) conditions period reached of the
project
Committed investment projects
Partially
Methionine project reached the
with annual output No Yes No
486,707.55 486,707.55 104,143.81 481,963.60 99.03% designed 30,014.97
of 0.25 million tons
usable
conditions
Subtotal -- 486,707.55 486,707.55 104,143.81 481,963.60 -- -- 30,014.97 -- --
Over-raised funds whereabouts
No 0 0 0 0 0.00% 0
Total -- 486,707.55 486,707.55 104,143.81 481,963.60 -- -- 30,014.97 -- --
Pursuant to the results deliberated and approved by the eighth meeting of the eighth session of Board of Directors and the seventh
meeting of the eighth session of the Board of Supervisors dated October 27, 2021, the Company intended to adjust the date when the
methionine project with annual output of 0.25 million tons reaches the designed usable conditions from the originally planned
December 2021 to June 2023, with other contents remaining unchanged. Main reasons: Due to the impact of the macro economy, the
Conditions of and reasons for not meeting the planned
construction progress of the project’s infrastructure has been delayed, the procurement an d delivery time of some equipment and
schedule or estimated revenue (by specific project)
materials has been extended, the installation and commissioning of equipment has been delayed, and the overall progress of the
investment projects with raised funds has slowed down, which jointly resulted in the postponement of delivery of the projects.
Currently, the 100,000-ton production line of the project has been completed and is in normal operation, and the 150,000-ton
production line has been mostly completed .
Remarks on significant changes in feasibility of projects None.
Amount, purposes and progress of use of over-raised Not Applicable
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
Applicable
Preliminary investment and replacement of investment
projects with raised funds Preliminary investment amounted to 36.06 million yuan, and the replacement of raised funds is completed.
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 unused raised funds Deposited in special accounts for raised funds, used to purchase bank financial products, deposited as structured deposits
Problems or other situations in the use and disclosure of 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.
VII. 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.
19
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
2. Significant sale of equities
□ Applicable √ Not Applicable
VIII. 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
Operating
Entities Categories Major Registered Total assets Net assets Operating profit Net profit
businesses capital revenue
山东新和成维生素 Production
有限公司(Shandong Subsidiary and sales of 500
3,335,588,346.89 2,791,077,435.54 1,089,356,966.73 478,445,768.23 413,858,745.54
NHU Vitamins Co., feed million yuan
additives
Ltd.*)
山东新和成药业有
限公司(Shandong Production
Subsidiary 590
NHU and sales of 3,538,287,980.85 2,652,260,779.71 1,917,145,242.32 697,181,837.47 595,187,075.67
fragrances million yuan
Pharmaceutical Co.,
Ltd.*)
山东新和成氨基酸
Production
有限公司(Shandong Subsidiary 1,100
and sales of 9,305,318,564.14 8,295,853,645.28 1,758,421,533.32 514,388,570.12 452,688,771.27
NHU Amino-acids methionine million yuan
Co., Ltd.*)
Details of acquisition and disposal of subsidiaries during the reporting period
□Applicable √ Not Applicable
IX. Structured entities controlled by the Company
□ Applicable √ Not Applicable
X. Risks and countermeasures
1. Macroeconomic risks
The global economy is facing numerous uncertainties due to international trade frictions and possible intensification of
geopolitical 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.
* The English names are for identification purpose only.
20
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
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
improvin g theutilization rateofrawmaterials.
4. Exchange rate and trade risks
The Company’s sales revenue and profitability will be affected by trade barriers and exchange rate fluctuations caused by the
trade friction between China and US and the international political and economic instability. In the future, the Company will take
targeted measures to tackle changes in the international market, cement its position in the international market and explore new
economic growth points, so as to achieve steady growth in business performance.
5. Risks of changes in environmental protection policies
With the increased social awareness of environmental protection, the promotion of the ecological civilization construction of the
CPC Central Committee, and the strategic goal of “carbon emission peak and carbon neutrality”, the requirements for energy
conservation, emission reduction, safety and environmental protection in the chemical and pharmaceutical manufacturing industry in
which the Company operates are stricter than before. The Company will operate with higher standards and explore more
environmentally friendly ways of production to achieve sustainable development.
21
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Section IV Corporate Governance
I. Annual general meeting and extraordinary general meetings held during the reporting period
1. General meeting of shareholders
Proportion of
Disclosure
Session Type of meetings participating Meeting date Resolutions
date
investors
9 proposals including the
Annual Work Report of the
Board of Directors of 2022
General meeting Annual general were deliberated and
of shareholders of meeting of 53.46% May 19, 2023 May 20, 2023 approved. Please refer to
2022 shareholders Announcement No. 2023-
025 disclosed on
http://www.cninfo.com.cn
for details.
2 proposals including forth
phase of employee stock
The first ownership plan (draft) and
extraordinary Extraordinary general its abstract were deliberated
meeting of meeting of 55.77% June 26, 2023 June 27, 2023 and approved. Please refer
shareholders of shareholders to Announcement No. 2023-
2023 032 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
II. Changes of directors, supervisors and senior executives
□ Applicable √ Not applicable
The Company’s directors, supervisors and senior executives remains unchanged during the current reporting period,
please refer to the 2022 Annual Report for details.
III. Profit distribution and conversion of capital reserve into share capital
□ Applicable √ Not applicable
The Company will not distribute cash dividend, distribute bonus shares, or distribute shares from capital reserve during
the current reporting period.
IV. Implementation of equity incentive plans, employee stock ownership plans or other
employee incentive programs
√ Applicable □ Not applicable
1. Equity incentive
Not applicable.
22
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
2. Implementation of employee stock ownership plans
√ Applicable □ Not applicable
All active employee stock ownership plans during the reporting period
Proportion to
Number of Total total share Sources of fund to
Scope of employees Changes
employees shares held capital of the implement the plan
Company
The third phase of employee
stock ownership plan:
Legal remuneration of
directors, supervisors, senior
the employees, self-
executives of the Company,
raised funds and other
and regular employees of the 681 12,157,826 N/A 0.39%
methods permitted by
Company and its holding
laws and administrative
subsidiaries or wholly-
regulations
owned subsidiaries who
meet the criteria
The forth phase of employee
stock ownership plan:
Legal remuneration of
directors, supervisors, senior
the employees, self-
executives of the Company,
raised funds and other
and regular employees of the 627 0 N/A 0.00%
methods permitted by
Company and its holding
laws and administrative
subsidiaries or wholly-
regulations
owned subsidiaries who
meet the criteria
Shareholdings of directors, supervisors and senior executives in the employee stock ownership plan during the reporting
period
Number of shares Number of shares
Proportion to total
held at the held at the end of
Name Position share capital of the
beginning of the the reporting
Company
reporting period period
The third phase of employee
stock ownership plan: Hu
Baishan, Shi Guanqun, Wang
Directors,
Xuewen, Wang Zhengjiang,
supervisors and 1,601,317 1,601,317 0.05%
Zhou Guiyang, Yu Baijin, Shi
senior executives
Fangbin, Lyu Guofeng, Yu
Hongwei, Yan Hongyue, Chen
Zhaofeng, Zheng Gentu
The forth phase of employee
stock ownership plan: Hu
Baifan, Hu Baishan, Shi
Directors,
Guanqun, Wang Xuewen,
supervisors and 0 0 0.00%
Wang Zhengjiang, Zhou
senior executives
Guiyang, Shi Fangbin, Lyu
Guofeng, Yu Hongwei, Yan
Hongyue, Chen Zhaofeng
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
□ Applicable √ Not applicable
23
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Exercise of shareholders’ rights during the reporting period
Pursuant to the Third Phase of Employee Stock Ownership Plan (Draft) and the Forth 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 t he
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
(1) The management committee of the the third phase of employee stock ownership plan remains unchanged.
(2) The management committee of the the forth phase of employee stock ownership plan: pursuant to the first meeting of
holders of the forth phase of employee stock ownership plan in manner of voting by correspondence dated June 20, 2023,
the proposal on Election of Members of the Management Committee for the Forth Phase of Employee Stock Ownership
Plan was deliberated and approved. Miss. Xi Chun, Mr. Yu Weiguo, Mr. Chen Mengqiao, Mr. Li Huafeng and Ms. Wang
Xiaobi were elected as the member of 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 accounti ng
treatments
□ Applicable √ Not applicable
Termination of employee stock ownership plan during the reporting period
□ Applicable √ Not applicable
Other remarks
(1) Pursuant to proposals related to employee stock ownership plan including the Forth Phase of Employee Stock
Ownership Plan (Draft) of Zhejiang NHU Co., Ltd. and its Abstract were deliberated and approved by the sixteenth
meeting of the eighth session of Board of Directors and the thirteenth meeting of the eighth session of the Board of
Supervisors dated June 7, 2023 and the first extraordinary general meeting of 2023 dated June 26, 2023, the Company
was agreed to implement the forth phase of employee stock ownership plan. As of June 30, 2023, the fourth phase of
employee stock ownership plan has not yet purchased any company’s stocks.
(2) The number of shares held by directors, supervisors and senior executives in the employee stock ownership plan is
measured based on the proportion of shares of holders to the total shares of the employee stock ownership plan.
3. Other employee incentive programs
□ Applicable √ Not applicable
24
2023 Semi-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
Action Plan for Prevention and Control of Noise Pollution in the 14th Five-Year Plan Environmental Atmosphere [2023] No. 1
Announcement on Issuing Procedures for Identifying the Properties of Solid Wastes in Imported Goods Ministry of Ecology and
Environment General Administration of Customs Announcement No. 2 of 2023
Pollution Control Standards for Storage of Hazardous Wastes GB 18597-2023
Announcement on the Revision List of the Graphic Symbol of Environmental Protection-Solid Waste Storage (Disposal) Yard (GB
15562.2-1995) Environmental Standards Announcement No. 5 of 2023
Notice on Doing a Good Job in Allocating National Carbon Emission Trading Allowances for the Years 2021 and 2022 State
Environmental Regulation and Climate [2023] No. 1 Overall Implementation Program for the Construction of Major Hazardous Waste
Projects (2023-2025) State Environmental Regulation and Climate [2023] No. 1
Measures for Ecological and Environmental Administrative Punishment Decree of the Ministry of Ecology and Environment No. 30
Technical Specification for Two-dimensional Code Labeling of Pollutant Discharge Outlets of Sewage Discharging Units Standard No.
HJ 1297-2023
Notice on Further Strengthening the Work Related to the Standardized Environmental Management of Hazardous Wastes (Draft for
Opinion) Huanban Binhan [2023] No. 174
Administrative licenses for environmental protection
Heilongjiang Xinhecheng Biotechnology Co., Ltd. has completed the renewal of the expiration of the sewage discharge permit,
validity: May 18, 2023 - May 17, 2028
Industry emission standards and specifics of pollutant emissions involved in production and business
activities
Name of
Types of Executive
major Number of Distribution of Total Total verified Excessive
major and Discharge Discharge pollutant
Name pollutants and discharge discharge amount of amount of discharge
characteristic method concentration discharge
characteristic outlets outlets discharge discharge or not
pollutants standard
pollutants1
Water Sewer
1 50mg/L 500mg/L 8.63t ≤189.5t/a
T he Company pollutants COD connection Plant area No
Water Sewer
1 7.0mg/L 35mg/L 0.45t ≤13.28t/a
T he Company pollutants NH3-N connection Plant area No
Atmospheric Filtered
1 22mg/m 50mg/ m 0.52t ≤8.612t/a
T he Company pollutants SO discharge Plant area No
Atmospheric Filtered
1 23mg/ m 50mg/m 0.29t ≤28t/a
T he Company pollutants NOx discharge Plant area No
Shangyu NHU Bio- Water Sewer
1 199.103mg/L 500mg/L 91.368t ≤440.9t/a
Chem Co., Ltd. pollutants COD connection Plant area No
Shangyu NHU Bio- Water Sewer
1 5.02mg/L 35mg/L 2.29t ≤30.863t/a
Chem Co., Ltd. pollutants NH3-N connection Plant area No
Shangyu NHU Bio- Water Sewer
1 24.245mg/L 70mg/L 11.159t ≤61.726t/a
Chem Co., Ltd. pollutants TN connection Plant area No
Shangyu NHU Bio- Atmospheric Filtered
1 5.974mg/m 100mg/m 1.015t ≤207.6t/a
Chem Co., Ltd. pollutants VOC discharge Plant area No
Shangyu NHU Bio- Atmospheric Filtered
1 3.333mg/m 200mg/m 0.56t ≤12.96t/a
Chem Co., Ltd. pollutants NOx discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Water Sewer 1 199.103mg/L 500mg/L 79.09t ≤382.37t/a
Ltd. pollutants COD connection Plant area No
1COD, 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.
25
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Name of
Types of Executive
major Number of Distribution of Total Total verified Excessive
major and Discharge Discharge pollutant
Name pollutants and discharge discharge amount of amount of discharge
characteristic method concentration discharge
characteristic outlets outlets discharge discharge or not
pollutants standard
pollutants1
Zhejiang NHU
Pharmaceutical Co., Water Sewer 1 5.02mg/L 35mg/L 1.983t ≤26.766t/a
Ltd. pollutants NH3-N connection Plant area No
Zhejiang NHU
Pharmaceutical Co., Water Sewer 1 24.245mg/L 70mg/L 10.467t ≤53.532t/a
Ltd. pollutants TN connection Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 5.68mg/m 100mg/m 0.182t ≤121.833t/a
Ltd. pollutants VOC discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 0.97mg/m 100mg/m 0.16t ≤1.069t/a
Ltd. pollutants VOC discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 0.7mg/m 100mg/m 0.003t ≤0.01t/a
Ltd. pollutants VOC discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 0.7mg/m 100mg/m 0.003t ≤0.288t/a
Ltd. pollutants VOC discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 3mg/m 200mg/m 0.1t ≤19.8t/a
Ltd. pollutants NOx discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 124.43mg/m 300mg/m 18.189t ≤28.08t/a
Ltd. pollutants NOx discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 12.778mg/m 150mg/m 2.06t ≤8.44t/a
Ltd. pollutants NOx discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 3mg/m 100mg/m 0.1t ≤9.295t/a
Ltd. pollutants SO discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 2.67mg/m 100mg/m 0.405t ≤37.94t/a
Ltd. pollutants SO discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 3mg/m 50mg/m 0.191t ≤10.905t/a
Ltd. pollutants SO discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 3.961mg/m 20mg/m 0.093t ≤5.174t/a
Ltd. pollutants PM discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 4.172mg/m 30mg/m 0.591t ≤8.42t/a
Ltd. pollutants PM discharge Plant area No
Zhejiang NHU
Pharmaceutical Co., Atmospheric Filtered 1 0.065mg/m 20mg/m 0.393t ≤5.626t/a
Ltd. pollutants PM discharge Plant area No
Zhejiang NHU Special Atmospheric Filtered
1 1.3mg/m 5 mg/m 0.0505t ≤17.73t/a
Materials Co., Ltd. pollutants PM discharge Plant area No
Zhejiang NHU Special Atmospheric Filtered
1 2.4mg/m 20 mg/m 0.2745t ≤17.73t/a
Materials Co., Ltd. pollutants PM discharge Plant area No
Zhejiang NHU Special Atmospheric Filtered
1 6.8mg/m 20 mg/m 0.0239t ≤17.73t/a
Materials Co., Ltd. pollutants PM discharge Plant area No
Zhejiang NHU Special Atmospheric Filtered
1 2.8mg/m 35mg/m 0.1151t ≤67.92t/a
Materials Co., Ltd. pollutants SO discharge Plant area No
Zhejiang NHU Special Atmospheric Filtered
1 2.8mg/ m 50mg/ m 0.3059t ≤67.92t/a
Materials Co., Ltd. pollutants SO discharge Plant area No
Zhejiang NHU Special Atmospheric Filtered
1 18.3mg/m 50mg/ m 0.0650t ≤67.92t/a
Materials Co., Ltd. pollutants SO discharge Plant area No
Zhejiang NHU Special Atmospheric Filtered
1 13.3mg/m 50 mg/m 0.4922t ≤83.28t/a
Materials Co., Ltd. pollutants NOx discharge Plant area No
Zhejiang NHU Special Atmospheric Filtered
1 18.0mg/m 100mg/m 1.8905t ≤83.28t/a
Materials Co., Ltd. pollutants NOx discharge Plant area No
Zhejiang NHU Special Atmospheric Filtered
1 30.8mg/m 150 mg/m 0.1133t ≤83.28t/a
Materials Co., Ltd. pollutants NOx discharge Plant area No
Zhejiang NHU Special Atmospheric Filtered
2 1.92mg/m 60 mg/m 0.3351t ≤69.72t/a
Materials Co., Ltd. pollutants VOC discharge Plant area No
Zhejiang NHU Special Water Sewer
1 204.37mg/L 500 mg/L 38.405t ≤182.1t/a
Materials Co., Ltd. pollutants COD connection Plant area No
Zhejiang NHU Special Water Sewer
1 5.01mg/L 35 mg/L 0.941t ≤12.747t/a
Materials Co., Ltd. pollutants NH3-N connection Plant area No
Zhejiang NHU Special Water Sewer
1 25.08mg/L 70 mg/L 4.714t ≤25.494t/a
Materials Co., Ltd. pollutants TN connection Plant area No
Shandong NHU
Pharmaceutical Co., Atmospheric Filtered 5 1.82mg/m 10 mg/m 0.188t ≤5.761t/a
Ltd pollutants PM discharge Plant area No
Shandong NHU
Pharmaceutical Co., Atmospheric Filtered 4 3.86mg/m 50 mg/m 0.375t ≤4.006t/a
Ltd pollutants SO discharge Plant area No
Shandong NHU
Pharmaceutical Co., Atmospheric Filtered 5 40.2mg/m 100 mg/m 4.13t ≤75.513t/a
Ltd pollutants NOx discharge Plant area No
Shandong NHU
Pharmaceutical Co., Atmospheric Filtered 3 7.48mg/m 60 mg/m 1.15t ≤28.481t/a
Ltd pollutants VOC discharge Plant area No
Shandong NHU
Pharmaceutical Co., Water Sewer 1 309mg/L 1000mg/L 40.4t ≤598.22t/a
Ltd pollutants COD connection Plant area No
26
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Name of
Types of Executive
major Number of Distribution of Total Total verified Excessive
major and Discharge Discharge pollutant
Name pollutants and discharge discharge amount of amount of discharge
characteristic method concentration discharge
characteristic outlets outlets discharge discharge or not
pollutants standard
pollutants1
Shandong NHU
Pharmaceutical Co., Water Sewer 1 16.2mg/L 100mg/L 2.31t ≤59.82t/a
Ltd pollutants NH3-N connection Plant area No
Shandong NHU
Pharmaceutical Co., Water Sewer 1 27.5mg/L 120mg/L 3.75t ≤65.64t/a
Ltd pollutants TN connection Plant area No
Shandong NHU Atmospheric Filtered
4 10.8mg/m 50 mg/m 3.313t ≤92.59t/a
Amino-acids Co., Ltd. pollutants SO discharge Plant area No
Shandong NHU Atmospheric Filtered
4 90.1mg/m 100 mg/m 52.191t ≤230.77t/a
Amino-acids Co., Ltd. pollutants NOx discharge Plant area No
Shandong NHU Atmospheric Filtered
5 2.98mg/m 10 mg/m 1.368t ≤21.19t/a
Amino-acids Co., Ltd. pollutants PM discharge Plant area No
Shandong NHU Atmospheric Filtered
4 43.7mg/m 60 mg/m 19.414t ≤176.585t/a
Amino-acids Co., Ltd. pollutants VOC discharge Plant area No
Shandong NHU Water Sewer
1 507mg/L 1000 mg/L 109.7t ≤592.22t/a
Amino-acids Co., Ltd. pollutants COD connection Plant area No
Shandong NHU Water Sewer
1 38.9mg/L 100 mg/L 4.71t ≤59.222t/a
Amino-acids Co., Ltd. pollutants NH3-N connection Plant area No
Shandong NHU Water Sewer
1 72.3mg/L 120 mg/L 14.68t ≤70.38t/a
Amino-acids Co., Ltd. pollutants TN connection Plant area No
Shandong NHU Atmospheric organized
4 0.9mg/m 60mg/m 5.71t ≤112.31t/a
Vitamins Co., Ltd. pollutants VOC discharge Plant area No
Shandong NHU Atmospheric organized
3 4mg/m 50 mg/m 0.67t ≤21.14t/a
Vitamins Co., Ltd. pollutants SO discharge Plant area No
Shandong NHU Atmospheric organized
4 55mg/m 100mg/m 16.012t ≤65.27t/a
Vitamins Co., Ltd. pollutants NOx discharge Plant area No
Shandong NHU Atmospheric organized
5 3mg/m 10 mg/m 0.83t ≤4.8t/a
Vitamins Co., Ltd. pollutants PM discharge Plant area No
Shandong NHU water Sewer
1 241mg/L 2000 mg/L 21t ≤1189.64t/a
Vitamins Co., Ltd. contamination COD connection Plant area No
Shandong NHU water Sewer
1 8.46 mg/L 100 mg/L 0.536t ≤59.49t/a
Vitamins Co., Ltd. contamination NH3-N connection Plant area No
Shandong NHU Atmospheric organized
2 12mg/m 60 mg/m 0.6t ≤4.109t/a
Technology Co., Ltd pollutants VOC discharge Plant area No
Shandong NHU Atmospheric organized
2 30mg/m 100 mg/m 0.668t ≤20.33t/a
Technology Co., Ltd pollutants NOx discharge Plant area No
Shandong NHU Atmospheric organized
2 1.3mg/m 10 mg/m 0.1t ≤3.384t/a
Technology Co., Ltd pollutants PM discharge Plant area No
Heilongjiang NHU Plant area
Biotechnology Co., Atmospheric Filtered 1 13.87mg/m 30mg/m 3.04t ≤19.5684t/a
（RT O）
Ltd. pollutants PM discharge No
Heilongjiang NHU Plant area
Biotechnology Co., Atmospheric Filtered 1 46.33mg/m 200mg/m 10.89t ≤19.5684t/a
（RT O）
Ltd. pollutants NOx discharge No
Heilongjiang NHU Plant area
Biotechnology Co., Atmospheric Filtered 1 108.28mg/m 200mg/m 24.72t ≤129.0211t/a
（RT O）
Ltd. pollutants SO discharge No
Heilongjiang NHU
Plant area
Biotechnology Co., Atmospheric Filtered 1 1.32mg/m 150mg/m 0.23t ≤96.12t/a
（RT O）
Ltd. pollutants VOC discharge No
Plant area
Heilongjiang NHU （Heat
1 6.76mg/m 20mg/m 0.03t ≤19.5684t/a
Biotechnology Co., Atmospheric Filtered transfer oil
Ltd. pollutants PM discharge furnace） No
Plant area
Heilongjiang NHU （Heat
1 69.5mg/m 200mg/m 0.35t ≤131.604t/a
Biotechnology Co., Atmospheric Filtered transfer oil
Ltd. pollutants NOx discharge furnace） No
Plant area
Heilongjiang NHU （Heat
1 2.91mg/m 50mg/m 0.006t ≤129.0211t/a
Biotechnology Co., Atmospheric Filtered transfer oil
Ltd. pollutants SO discharge furnace） No
Heilongjiang NHU Plant area
Biotechnology Co., water Sewer 1 （Wastewater 156.88mg/m 350 mg/L 519.1t ≤2310t/a
Ltd. contamination COD connection outlet） No
Heilongjiang NHU Plant area
Biotechnology Co., water Sewer 1 （Wastewater 5.35mg/m 35 mg/m 15.71t ≤231t/a
Ltd. contamination NH3-N connection outlet） No
Heilongjiang NHU Plant area
Biotechnology Co., water Sewer 1 （Wastewater 1.28mg/m 6 mg/L 3.64t /
Ltd. contamination otal-P connection outlet） No
Treatment of contaminants
The company has established the environmental protection concept of green development: 1. Introduce the concept of green chemistry
to develop and produce more environmentally friendly products. 2. We should change from a support type to a responsibility type, and
do a good job in source reduction, process control, and end treatment. 3. Pursue reduction, resources and harmlessness, build an
ecological factory, and realize the harmonious development of human and nature.
27
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Wastewater treatment: The company has a perfect sewage treatment system; there are production sewage, domestic sewage, initia l
rainwater, accident water and other wastewater collection system, so as to achieve the clean sewage diversion, rain and sewage
diversion. The waste water pool is sealed with a cover, and all the waste gases are effectively collected and finally incinerated, which
effectively reduces the emission of waste gases.
Exhaust gas treatment: The company adopts self-developed nitrogen sealing system to effectively reduce the exhaust gas emission;
according to different exhaust gas composition and nature, different pre-treatment technologies are adopted; meanwhile, the company
introduces foreign advanced exhaust gas treatment devices to strengthen the capacity of exhaust gas treatment. Exhaust gas leakage
detection and repair (LDAR) is carried out regularly every year.
Solid Waste Disposal: The company has a standardized hazardous waste storage warehouse and hazardous waste inc ineration device,
and the company basically disposes of hazardous waste by itself. The outsourced solid waste is transferred in strict accordance with
the requirements of the "Management Measures for the Transfer of Hazardous Wastes", and entrusted to qualified units to deal with.
Noise prevention and control: the selection of low-noise equipment, while no fixed equipment using foundation damping noise
reduction measures for air compressors, blowers and various pumps in addition to taking the foundation damping, but also in the noise
source around the addition of noise enclosures for sound insulation.
Emergency management: installing exhaust gas online monitor around the plant boundary, real-time monitoring of the environment of
the plant boundary; introducing VOC online monitor, real-time monitoring of the emission of exhaust gas data, test data uploaded to
the monitoring platform; wastewater one enterprise, one pipe online monitoring of wastewater emission indexes, real-time monitoring,
normal uploading to the Environmental Protection Bureau; the introduction of domestic first-class pressure leakage plugging
technology, pipelines, valves, flanges, tanks, the emergence of abnormal leakage is reduced to the minimum amount, thereby re ducing
the impact of the large number of leaks caused by the environment.
Environmental emergency response plan
The company has developed regulatory documents for emergency response to sudden environmental events, clarifying emergency
response responsibilities, standardizing emergency response procedures, establishing an emergency response plan system, regularly
organizing training, drills, and reviews of relevant emergency plans, ensuring the effectiveness of emergency plans, and enha ncing the
emergency response capabilities of our company and its subsidiaries.
Investment in environmental treatment and protection and payment of environmental protection tax
The Company's environmental protection management and investment in the first half of 2023 amounted to RMB 236.51 million yuan,
and paid RMB 990,000 yuan in environmental protection tax.
Environmental self-monitoring program
The company has a good management capacity for pollutant discharge monitoring and is able to inform the environmental protection
administrative authorities and the public of the monitoring information in a timely manner. The company has formulated relevant self-
testing program, and the monitoring program covers all indicators of the company's organized exhaust gas, unorganized exhaust gas
and groundwater. Meanwhile, it commissions a third-party testing company to carry out regular monitoring. The company implements
environmental information disclosure in strict accordance with national, provincial, municipal and county requirements on
environmental information disclosure of enterprises. The subsidiaries have carried out enterprise environmental information disclosure
on platforms such as provincial and municipal environmental information management systems for key sewage disposal units and
sewage discharge licenses.
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2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Administrative penalties for environmental problems during the reporting period
Impact on the production Rectification
Reasons for Results of
Name Violations and operation of the measures of the
punishment punishment
Company Company
N/A N/A N/A N/A N/A N/A
Other environmental information that should be disclosed
None.
Measures taken to reduce its carbon emissions during the reporting period and their effects
√ Applicable □ Not Applicable
In the research and development of new products, carbon emission of 10,000 yuan output value is taken as an important indicator of
the process route and environmental feasibility assessment of new products, and the research and development of new products applies
green development technology, improves the utilization rate of atoms, and reduces carbon emission generated from raw material
consumption from the source.
Other information related to environmental protection
None.
II. Social responsibilities
The company integrates the concept of green and low-carbon development into the entire production process, attaches great importance
to collaborative development and intensive utilization of resources. In the product layout stage, it adheres to the development principle
of "integration, serialization, and collaboration", continuously extends the industrial chain, reduces production costs, which is
conducive to achieving sustainable clean production, leading the industry's green and low-carbon transformation.
The company continues to improve its carbon emission control system, making efforts in energy reduction, comprehensive utilizat ion
of materials, and strengthening basic energy management. The company continuously put research and development efforts on energy-
saving and consumption reduction topics; Starting from optimizing process control and improving conversion efficiency, explore
sustainable innovation in processes and equipment, and further consolidate the foundation of "green development".
The company utilizes digital technology to empower green manufacturing. Each production base introduces advanced production
management and energy management systems to detect energy consumption and three waste emissions data in time, and provides ea rly
warning for abnormal situations. LDAR is comprehensively carried out, and dedicated exhaust gas detectors and flow meters are
introduced to achieve refined management of production and operation, injecting new momentum into continuously improving the
ecological environment and promoting high-quality development.
During the reporting period, the company fulfilled its corporate purpose, took on corporate responsibility, organized a series of activities
such as caring blood donation and volunteer services, donated to village enterprise construction and charitable fund projects, held
public open days, and actively established a communication platform between enterprises and various sectors of society. The company
assists in organizing the National Green Chemistry Academic Conference, providing a multi-dimensional, valuable, and sustainable
"think tank" for the development of green economy in the chemical industry. The company has been awarded the title of "Excellen t
Unit" by the National Political Research Association. Heilongjiang NHU Biotechnology Co., Ltd. has been awarded the national "Green
Factory", marking the company's green production has reached a new level and achieved new breakthroughs.
29
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Section VI Significant Events
I. 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 shares None None None None None
reform
Commitments
made in
reports on None None None None None
acquisition and
changes in
equity
Commitments
made in asset None None None None None
restructuring
NHU Holding
Group Co., Ltd.
and 张平一 The signing of
(Zhang Pingyi), Commitment on No
Commitments
石程 (Shi Cheng), Engagement in
on horizontal
Horizontal Competition
袁益中 (Yuan competition, June 25,
and commitments on no Long-term Strictly
Yizhong), Hu related party
engagement in business 2004 performed
Baishan, Shi transactions
activities result in
Guanqun, Wang and occupation
horizontal competition
Xuewen, 崔欣荣 of funds
with operations of the
(Cui Xinrong), 王 Company after listing.
旭林 (Wang
Xulin)
Commitments The Company’s
made in IPO directors, senior
or refinancing executives committed to
perform their duties
faithfully and diligently
Hu Baifan; Hu to safeguard the
Baishan;Shi legitimate rights and
Guanqun; Wang interests of the Company
and shareholders, and January 12, Long-term Strictly
Xuewen; Cui
make the following 2017 performed
Xinrong; Wang
Zhengjiang; Zhou commitments in
Guiyang accordance with the
relevant provisions of the
CSRC for the full
performance of measures
on filling immediate
returns: 1. not to transfer
benefits to other entities
30
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
or individuals without
compensation or on
unfair terms, and not to
use other means to harm
benefits of the Company;
2. to impose restrictions
on duty consumption of
member of the Board of
Directors and senior
executives; 3. not to use
assets of the Company to
engage in investment or
consumption activities
not related to duty
performance; 4. to link
remuneration system
formulated by the Board
of Directors or
remuneration committee
to the implementation of
measures on filling
immediate returns; 5. to
link vesting conditions of
equity incentive to be
published in the future to
the implementation of
measures on filling
immediate returns.
Not to interfere in the
Company’s business and
management activities in
Hu Baifan; NHU excess of authority; not
January 12, Long-term Strictly
Holding Group to encroach on benefits
2017 performed
Co., Ltd. of the Company; to
perform measures on
filling immediate returns
in a practical way.
Commitments
to equity None None None None None
incentive
Other
commitments
to minority None None None None None
shareholders
of the
Company
Other None None None None None
commitments
Whether commitments are performed on time Yes
If commitment performance is not fulfilled on time, please explain detailed reasons for it
Not applicable
and the next work plans.
31
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
II. Non-operating occupation of funds over listed companies by controlling shareholders and
other related parties
□ Applicable √ Not Applicable
There is no non-operating occupation of funds over listed companies by controlling shareholders and other related parties
during the reporting period.
III. Illegal external guarantees
□ Applicable √ Not Applicable
There is no illegal external guarantee during the reporting period.
IV、Engagement and dismissal of accounting firms
Whether the semi-annual report has been audited or not
□ Yes √ No
The semi-annual report has not been audited.
V. Statements by the Board of Directors, the Board of Supervisors on the “Modified Auditor’s
Report” issued by the accounting firm during the reporting period
□ Applicable √ Not Applicable
VI. Explanations by the Board of Directors on the “Modified Auditor’s Report” issued by the
accounting firm last year
□ Applicable √ Not Applicable
VII. Matters related to bankruptcy and restructuring
□ Applicable √ Not Applicable
There are no matters related to bankruptcy and restructuring during the reporting period.
VIII. Lawsuits
Significant lawsuits and arbitration
□ Applicable √ Not Applicable
There is no significant lawsuit and arbitration during the reporting period.
Other lawsuits
□ Applicable √ Not Applicable
IX. Penalties and rectification
□ Applicable √ Not Applicable
32
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
X. Integrity of the Company, its controlling shareholders and the actual controller
□ Applicable √ Not Applicable
XI. 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.
XII. Significant contracts and performance
1. Matters of trusteeship, contracting and leases
(1) Trusteeship
□ Applicable √ Not Applicable
33
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
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 Whether
Actual Actual Collatera Counter
date of disclosure Amount Types of Period of the guarantee
Guaranteed parties commence- amount ls (if guarantees
of amount guaranteed guarantees guarantee guarantee for related
ment date guaranteed any) (if any)
guaranteed is mature parties
None
Total amount of external guarantees approved during the reporting period Total actual amount of external guarantees
(A1) incurred during the reporting period (A2)
Total actual amount of external guarantees
Total amount of external guarantees approved balance at the end of the
balance at the end of the reporting period
reporting period (A3)
(A4)
T he Company’s guarantees to subsidiaries
Announcement Whether Whether
Actual Actual Collatera Counter
date of disclosure Amount Types of Period of the guarantee
Guaranteed parties commence- amount ls (if guarantees
of amount guaranteed guarantees guarantee guarantee for related
ment date guaranteed any) (if any)
guaranteed is mature parties
Heilongjiang NHU Joint and
6/24/2019-
Biotechnology Co., 12/28/2018 200,000 6/24/2019 200,000 several liability No No
12/31/2023
Ltd. guarantee
Shandong NHU Joint and
11/29/2019-
VITAMIN 12/28/2018 90,000 11/29/2019 50,000 several liability Yes No
04/26/2023
CO.,LT D guarantee
Joint and
9/7/2020-
NHU (Hong Kong) 5/22/2020 120,000 9/7/2020 57,806.40 several liability No No
9/7/2023
T rading Co., Ltd. guarantee
Shandong NHU
Fine Chemical Joint and
3/24/2021-
Science and 5/22/2020 50,000 3/24/2021 50,000 several liability No No
12/25/2025
Technology Co., guarantee
Ltd.
Joint and
NHU (Hong Kong) 7/14/2022-
5/11/2022 130,000 7/14/2022 7,877.13 several liability Yes No
T rading Co., Ltd. 5/15/2023
guarantee
Joint and
NHU (Hong Kong) 6/17/2022-
5/11/2022 130,000 6/17/2022 7,877.13 several liability Yes No
T rading Co., Ltd. 6/18/2023
guarantee
Heilongjiang NHU Joint and
8/26/2021-
Biotechnology Co., 4/22/2021 40,000 8/26/2021 37,000 several liability No No
12/21/2025
Ltd. guarantee
ZhejiangNHU
Joint and
IMPORT & 5/31/2022-
5/11/2022 15,000 5/31/2022 5,000 several liability No No
EXPORT 10/23/2023
guarantee
COMPANY LT D.
ZhejiangNHU
Joint and
IMPORT & 6/16/2023-
5/20/2023 10,000 6/16/2023 10,000 several liability No No
EXPORT 6/15/2024
guarantee
COMPANY LT D.
Xinchang NHU Joint and
12/16/2021-
VITAMINS 4/22/2021 40,000 12/16/2021 29,000 several liability No No
12/25/2026
CO.,LT D. guarantee
Joint and
NHU (Hong Kong) 9/02/2022-
5/11/2022 130,000 9/2/2022 105.96 several liability Yes No
T rading Co., Ltd. 5/01/2023
guarantee
NHU (Hong Kong) Joint and 11/3/2022-
5/11/2022 130,000 11/3/2022 8.53 Yes No
T rading Co., Ltd. several liability 6/01/2023
34
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
guarantee
Joint and
12/15/2022-
NHU (Hong Kong) 5/11/2022 130,000 12/15/2022 25.06 several liability No No
8/1/2023
T rading Co., Ltd. guarantee
Joint and
3/15/2023-
NHU (Hong Kong) 5/11/2022 130,000 3/15/2023 14.73 several liability No No
11/1/2023
T rading Co., Ltd. guarantee
Joint and
5/12/2023-
NHU (Hong Kong) 5/11/2022 130,000 5/12/2023 46.76 several liability No No
12/1/2023
T rading Co., Ltd. guarantee
Joint and
6/12/2023-
NHU (Hong Kong) 5/20/2023 100,000 6/12/2023 16.19 several liability No No
3/1/2024
T rading Co., Ltd. guarantee
Zhejiang NHU Joint and
6/24/2022-
Pharmaceutical Co., 5/11/2022 60,000 6/24/2022 55,000 several liability No No
6/23/2027
Ltd. guarantee
Joint and
10/14/2022-
Xinchang NHU 5/11/2022 20,000 10/14/2022 18,000 several liability No No
10/14/2027
Vitamins Co., Ltd. guarantee
Joint and
6/12/2023-
NHU (Hong Kong) 5/20/2023 100,000 6/12/2023 7,948.38 several liability No No
6/12/2024
T rading Co., Ltd. guarantee
Shandong NHU
Fine Chemical Joint and
6/6/2023-
Science and 5/20/2023 58,600 3/30/2023 58,600 several liability No No
3/29/2028
Technology Co., guarantee
Ltd.
Total amount of guarantees approved for Total amount actually guaranteed
subsidiaries during the reporting period 215,000 for subsidiaries during the 76,626.06
(B1) reporting period (B2)
Total amount of guarantees approved for Total amount actually guaranteed
subsidiaries at the end of the reporting 666,892.95 for subsidiaries at the end of the 528,457.52
period (B3) reporting period (B4)
Guarantees by subsidiaries to subsidiaries
Announcement Whether Whether
Actual Amount Collatera Counter
date of disclosure Amount Types of Period of the guarantee
Guaranteed parties commence actually ls (if guarantee
of amount guaranteed guarantees guarantee guarantee for related
ment date guaranteed any) (if any)
guaranteed is mature parties
None
Total amount actually guaranteed for
Total amount of guarantees approved for subsidiaries during the reporting
subsidiaries during the reporting period
period (C1)
(C2)
Total amount actually guaranteed for
Total amount of guarantees approved for subsidiaries at the end of the
subsidiaries at the end of the reporting
reporting period (C 3)
period (C4)
Total amount guaranteed by the Company (namely sum of the above three items)
Total amount of guarantees approved during the reporting period Total amount actually guaranteed during the
(A1+B1+C1) 215,000 reporting period (A2+B2+C2) 76,626.06
Total amount of guarantees approved at the end of the reporting period Total amount actually guaranteed at the end
(A3+B3+C3) 666,892.95 of the reporting period (A4+B4+C4) 528,457.52
Proportion of the amount actually guaranteed (A4+B4+C4) to net assets of the Company
22.42%
Including:
Balance of guarantees for shareholders, the actual controller and its related parties (D)
407,600
Balance of debt guarantee directly or indirectly for guaranteed parties with debt to asset ratio exceeding 70% (E) 407,600
T he amount of the total amount guaranteed exceeding 50% of net assets (F)
None
Total amount guaranteed of three items above (D+E+F) None
Specification of the use of composite guarantees
None
35
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
3. Entrusted financing
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
Impairment
amount accrued
Types Source of Entrusted amount Unexpired balance Overdue and not
for financial
entrusted funds recovered amount
products overdue
and not recovered
Bank financial Raised funds
products 80,000.00 25,000.00 0.00 0.00
Total 80,000.00 25,000.00 0.00 0.00
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
4. Other significant contracts
□ Applicable √ Not Applicable
There is no other significant contract during the reporting period.
XIII. Other significant events
√ Applicable □ Not Applicable
Ⅰ 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*,account ing
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. 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). 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.
* On May 25, 2022, after the implementation of the company's 2021 annual equity distribution, the number of shares held by th e
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.
36
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
II Progress of the Forth Employee Stock Ownership Plan
The forth employee stock ownership plan of the Company was deliberated and adopted by the first extraordinary shareholders’ meeting
of 2023 held on June 26, 2023, 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. As of the end of
the reporting period, the balance of shares held by the Forth Employee Stock Ownership Plan was 0 shares, the current employe e stock
ownership plan has not yet started purchasing the company’s stocks.
III Foreign Investment and Establishment of a Joint Venture Company
At the Ninth Meeting of the Eighth Session of the Board of Directors of the Company held on December 24, 2021, the Company co nsidered and passed
the ''Proposal on Foreign Investment and Signing of a Letter o f Intent on Joint Venture Cooperation'', agreeing that the Company would sign the ''Letter
of Intent on Joint Venture Cooperation'' with China Petroleum & Chemical Corporation Zhenhai Refining Branch, and that the tw o parties would
cooperate in investing in a set of methionine production facilities, with an estimated total investment of approximately RMB3 billion for the proje ct,
which would be constructed in Ningbo City, Ningbo Zhenhai District, Ningbo. The parties will establish a joint venture compan y as the implementatio n
body of the project, which will be responsible for the production and sales of methionine products. The proposed registered c apital of the joint venture
company is RMB778.36 million, which will be contributed in cash, and the shareholding ratio between the two parties is tentatively set at 50%:50%.
The joint venture company shall have a board of directors consisting of four directors, with each party having the right to a ppoint two directors, and the
management of the joint venture company shall be composed of both parties.
On 9 March 2023, the joint venture company, Ningbo Zhenhai Refining Xinhecheng Biotechnology Co., Ltd. completed the industrial and commercial
registration procedures and obtained the Business License issued by the Market Supervision Administration of Zhenhai District , Ningbo City; as at 30
June 2023, the Company had contributed RMB233,508,000.00 to the joint venture company.
IV 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 (includ ing
tax), the raised funds amounted to RMB 4,870 million, which was remitted to the raised funds supervision account of the company 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).
From January 1 to June 30, 2023, the actual use of the raised funds was RMB 1,041.44 mn, and the accumulated investment of the
raised funds project was RMB 4,819.64 mn. By June 30, 2023, the balance of raised funds was RMB 788.58 mn (including bank
financial products and structured deposits, the net amount of interest on cash in bank less handling charges and s and bank bank
financial products income) .
XIV. Significant events of subsidiaries of the Company
□ Applicable √ Not Applicable
37
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Section VII Movements in Shares and Information about
Shareholders
I. Movements in shares
1. Details
Unit: Share
Before Movements（+/-） After
Items Issue of Reserve
Quantity % to Bonus
new transferred Others Subtotal Quantity % to total
total shares
shares to shares
I. Restricted
36,374,202 1.18% 36,374,202 1.18%
shares
1. Held by
other domestic 36,374,202 1.18% 36,374,202 1.18%
parties
Including:
Held by
36,374,202 1.18% 36,374,202 1.18%
domestic
natural persons
II. Unrestricted
3,054,533,154 98.82% 3,054,533,154 98.82%
shares
1. RMB
3,054,533,154 98.82% 3,054,533,154 98.82%
ordinary shares
III. Total 3,090,907,356 100.00% 3,090,907,356 100.00%
Reason for movements
□ Applicable √ Not Applicable
Approval on movements in shares
□ Applicable √ Not Applicable
Transfer of shares
□ Applicable √ Not Applicable
Progress of the Share Repurchase Plan
□ Applicable √ Not Applicable
Implementation progress of shareholding reduction for shares repurchased through centralized bidding
□ Applicable √ Not applicable
Effect of movements in shares on financial indicators of preceding year and preceding eriod such as basic EPS and diluted
EPS, net assets per share attributable to shareholders of ordinary shares
□ Applicable √ Not applicable
38
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Other contents the Company considered as necessary or securities regulatory institutions required disclosure
□ Applicable √ Not applicable
2. Movement in restricted shares
□ Applicable √ Not applicable
II. Issuance and listing of securities
□ Applicable √ Not Applicable
III.Number of shareholders of the Company and their shareholding conditions
Unit: Share
Total shareholders of ordinary shares at Total shareholders of preferred shares with voting
119,419 0
the end of the reporting period rights restored at the end of the reporting period
Shareholders with holding proportion over 5% or the top 10 shareholders with largest holding proportions
Quantity of Shares pledged, marked
Movements Quantity of Quantity of
Nature of Holding ordinary shares or frozen
Shareholders during the restricted unrestricted
shareholders proportion at the end of the
reporting period shares shares Condition Quantity
reporting period
Domestic non-
NHU Holding
state-owned 49.22% 1,521,362,525 0 0 1,521,362,525
Group Co., Ltd.
legal person
Hong Kong
Overseas legal
Securities Clearing 2.17% 67,107,711 -29,081 0 67,107,711
person
Company Limited
Shanghai
Chongyang
Strategic Investment
Co., Ltd. － Others 1.75% 54,072,200 0 0 54,072,200
Chongyang
Strategic Huizhi
Fund
National Social
Security Fund Others 1.20% 37,000,000 -2,000,060 0 37,000,000
No.503Portfolio
China Construction
BankCorporation -E
Fund Shanghai and
Shenzhen 300 Others 0.85% 26,374,133 10,254,000 0 26,374,133
Medical and Health
Trading Open-end
Index Fund
Shanghai
Chongyang
Strategic Investment
Co., Ltd. － Others 0.53% 16,248,559 0 0 16,248,559
Chongyang
Strategic Yingzhi
Fund
Domestic
Hu Baishan 0.47% 14,595,929 0 10,946,947 3,648,982
natural person
Domestic non-
Chongyang Group
state-owned 0.45% 13,962,191 0 0 13,962,191
Co., Ltd.
legal person
Domestic
Hu Baifan 0.45% 13,922,998 0 10,442,248 3,480,750
natural person
Domestic non-
Sanhua Holdings
state-owned 0.45% 13,772,970 0 0 13,772,970
Group Co., Ltd.
legal person
Strategic investors or ordinary legal persons that Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Huizhi Fund became
became one of the top 10 shareholders due to the one of the top 10 shareholders with largest holding proportions due to its part icipation in private
allotment of new shares placement of shares in 2017.
Remarks on relationships or concerted action between Among the above shareholders, Hu Baifan is the chairman of the board, general manager and actu ral
the top 10 shareholders with largest holding proportions controller of NHU Holding Group Co., Ltd.; Hu Baishan is the director of NHU Holding Group Co.,
39
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Ltd., and Hu Baifan and Hu Baishan are brothers. The Company does not know whether other
shareholders have relationships and whether they are persons acting in concert as defined in
Administration of the Takeover of Listed Companies Procedures.
Remarks on proxy voting and waiver of voting right of None
the above shareholders
Special remarks on top 10 shareholders with special The Company’s special securities account for repurchase is attributable to the top 10 shareholders,
repurchase accounts who however did not participate in the presentation of such balances.
Top 10 shareholders with unrestricted shares
Quantity of unrestricted shares at the end of the Category of shares
Shareholders
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 67,107,711 RMB ordinary shares 67,107,711
Shanghai Chongyang Strategic Investment Co., Ltd. － RMB ordinary shares
54,072,200 54,072,200
Chongyang Strategic Huizhi Fund
National Social Security Fund No.503 Portfolio 37,000,000 RMB ordinary shares 37,000,000
China Construction BankCorporation -E Fund Shanghai
and Shenzhen 300 Medical and Health Trading Open- 26,374,133 RMB ordinary shares 26,374,133
end Index Fund
Shanghai Chongyang Strategic Investment Co., Ltd. － RMB ordinary shares
16,248,559 16,248,559
Chongyang Strategic Yingzhi Fund
Chongyang Group Co., Ltd. 13,962,191 RMB ordinary shares 13,962,191
Sanhua Holdings Group Co., Ltd. 13,772,970 RMB ordinary shares 13,772,970
The Company－Employee stock ownership plan phase RMB ordinary shares
12,157,826 12,157,826
III
National Social Security Fund No.112 Portfolio 11,658,657 RMB ordinary shares 11,658,657
Among the above shareholders, Hu Baifan is the chairman of the board, general manager and actural
Remarks on relationships or concerted action between
controller of NHU Holding Group Co., Ltd.; Hu Baishan is the director of NHU Holding Group Co.,
the top 10 shareholders with unrestricted shares, and
Ltd., and Hu Baifan and Hu Baishan are brothers. The Company does not know whether other
between the top 10 shareholders with unrestricted shares
shareholders have relationships and whether they are persons acting in concert as defined in
and top 10 shareholders with largest holding proportions.
Administration of the Takeover of Listed Companies 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
Remarks on top 10 shareholders of ordinary shares Securities Co., Ltd.; Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic
participating in securities margin trading 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.
IV. Movement in shares of directors, supervisors and senior executives
□ Applicable √ Not applicable
The shares of the company’s directors, supervisors and senior executives remains unchanged during the current
reporting period, please refer to the 2022 Annual Report for details.
V. Changes of holding shareholders or controlling shareholders
Changes of holding shareholders during the reporting period
□ Applicable √ Not applicable
The Company has no changes of holding shareholders during the reporting period.
40
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Changes of actual controller within the reporting period
□ Applicable √ Not applicable
The Company has no changes in actual controller within the reporting period.
41
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Section VIII Preferred Shares
□ Applicable √ Not applicable
The Company has no preferred shares during the reporting period.
42
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Section IX Bonds
□ Applicable √ Not applicable
43
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Section X Financial Report
I. Audit Reports
Has the semi-annual report been audited
□ Yes √ No
The Company’s semi-annual report has not been audited.
II. Financial Statements
The monetary unit of the financial statements is Renminbi (RMB) Yuan.
1. Consolidated balance sheet
Prepared by Zhejiang NHU Co., Ltd.
June 30, 2023
Unit: RMB Yuan
Items June 30, 2023 January 1, 2023
Current assets:
Cash and bank balances 3,654,734,123.88 5,343,851,967.72
Settlement funds
Loans to other banks
Held-for-trading financial assets 250,000,000.00 720,314,576.43
Derivative financial assets
Notes receivable 214,389,084.86 372,641,835.79
Accounts receivable 2,428,700,767.98 2,476,269,041.23
Receivables financing 506,430,216.64 379,217,582.25
Advances paid 120,026,047.84 222,336,776.26
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 224,942,479.71 269,567,592.73
Including: Interest receivable
Dividend receivable 20,735,987.73
Financial assets under reverse repo
Inventories 4,578,585,468.62 4,144,557,702.39
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 46,357,304.14 182,442,976.79
Total current assets 12,024,165,493.67 14,111,200,051.59
Non-current assets:
Loans and advances
44
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Items June 30, 2023 January 1, 2023
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 703,117,491.00 432,503,568.48
Other equity instrument investments 22,998,147.55 22,998,147.55
Other non-current financial assets
Investment property
Fixed assets 17,819,362,500.06 16,523,867,858.53
Construction in progress 4,927,272,645.25 5,089,233,908.22
Productive biological assets
Oil & gas assets
Right-of-use assets 7,781,963.62 2,830,136.37
Intangible assets 2,163,238,985.57 1,738,506,246.32
Development expenditures
Goodwill 3,622,704.97 3,622,704.97
Long-term prepayments 14,202,219.63 13,179,878.45
Deferred tax assets 58,100,373.59 50,250,809.38
Other non-current assets 231,978,818.01 279,870,482.64
Total non-current assets 25,951,675,849.25 24,156,863,740.91
Total assets 37,975,841,342.92 38,268,063,792.50
Current liabilities:
Short-term borrowings 1,609,254,229.16 1,846,373,441.01
Central bank loans
Loans from other banks
Held-for-trading financial liabilities 12,909,447.29
Derivative financial liabilities
Notes payable 456,643,824.63 627,438,689.79
Accounts payable 1,803,368,804.84 2,175,458,436.49
Advances received
Contract liabilities 63,559,211.75 60,660,929.75
Financial liabilities under repo
Absorbing deposit and interbank
deposit
Deposit for agency security transaction
Deposit for agency security
underwriting
Employee benefits payable 249,028,076.00 386,391,911.86
Taxes and rates payable 225,884,100.98 208,198,951.94
Other payables 59,568,912.95 67,351,740.34
Including: Interest payable
Dividend payable
Handling fee and commission payable
Reinsurance accounts payable
45
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Items June 30, 2023 January 1, 2023
Liabilities held for sale
Non-current liabilities due within one
year 1,919,195,692.86 2,591,687,706.22
Other current liabilities 6,877,330.18 4,978,299.99
Total current liabilities 6,406,289,630.64 7,968,540,107.39
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 6,512,116,382.12 5,273,637,508.87
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 7,865,412.13 2,822,404.07
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 1,109,884,644.23 1,083,159,222.41
Deferred tax liabilities 263,498,923.13 277,735,456.67
Other non-current liabilities
Total non-current liabilities 7,893,365,361.61 6,637,354,592.02
Total liabilities 14,299,654,992.25 14,605,894,699.41
Equity:
Share capital 3,090,907,356.00 3,090,907,356.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 3,613,097,510.81 3,613,097,510.81
Less: Treasury shares 500,059,711.25 500,059,711.25
Other comprehensive income 106,229,698.18 76,577,564.17
Special reserve 43,826,423.02 26,196,894.55
Surplus reserve 1,444,413,940.89 1,444,413,940.89
General risk reserve
Undistributed profit 15,770,264,168.03 15,823,745,771.07
Total equity attributable to the parent
company 23,568,679,385.68 23,574,879,326.24
Non-controlling interest 107,506,964.99 87,289,766.85
Total equity 23,676,186,350.67 23,662,169,093.09
Total liabilities & equity 37,975,841,342.92 38,268,063,792.50
Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Zhang Lijin
46
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
2. Parent company balance sheet
Unit: RMB Yuan
Items June 30, 2023 January 1, 2023
Current assets:
Cash and bank balances 1,879,002,770.67 4,202,458,431.01
Held-for-trading financial assets 200,000,000.00
Derivative financial assets
Notes receivable 211,520,726.11 333,989,841.29
Accounts receivable 602,227,072.04 500,589,449.94
Receivables financing
Advances paid 6,665,421.84 3,906,244.57
Other receivables 3,823,227,738.70 2,496,112,121.85
Including: Interest receivable
Dividend receivable 20,735,987.73
Inventories 414,707,404.84 383,861,555.41
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 4,221,982.33 3,980,654.70
Total current assets 6,941,573,116.53 8,124,898,298.77
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 10,590,743,358.41 9,386,046,175.45
Other equity instrument investments 72,998,147.55 72,998,147.55
Other non-current financial assets
Investment property
Fixed assets 615,179,622.70 625,625,323.34
Construction in progress 6,947,851.98 2,701,423.73
Productive biological assets
Oil & gas assets
Right-of-use assets 2,711,325.88 2,791,860.28
Intangible assets 143,819,303.01 144,448,440.79
Development expenditures
Goodwill
Long-term prepayments 1,805,015.91 2,614,317.07
Deferred tax assets 37,331,940.26 26,576,591.36
Other non-current assets 27,230,752.00 21,018,962.32
Total non-current assets 11,498,767,317.70 10,284,821,241.89
Total assets 18,440,340,434.23 18,409,719,540.66
Current liabilities:
Short-term borrowings 601,427,055.54 501,525,361.11
47
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Items June 30, 2023 January 1, 2023
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 225,609,468.45 226,011,556.24
Accounts payable 89,480,977.40 107,476,196.13
Advances received
Contract liabilities 4,115,887.55 4,296,388.78
Employee benefits payable 43,553,731.57 75,342,683.87
Taxes and rates payable 2,084,719.30 7,632,017.61
Other payables 21,747,335.43 28,936,115.08
Including: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due within one
year 684,759,005.38 1,208,306,034.83
Other current liabilities 535,065.41 558,530.54
Total current liabilities 1,673,313,246.03 2,160,084,884.19
Non-current liabilities:
Long-term borrowings 4,006,414,333.32 3,336,304,155.58
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 2,890,103.02 2,822,404.07
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 11,428,646.54 11,887,665.38
Deferred tax liabilities 21,871,583.64 19,499,233.40
Other non-current liabilities
Total non-current liabilities 4,042,604,666.52 3,370,513,458.43
Total liabilities 5,715,917,912.55 5,530,598,342.62
Equity:
Share capital 3,090,907,356.00 3,090,907,356.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 3,353,427,829.42 3,353,427,829.42
Less: Treasury shares 500,059,711.25 500,059,711.25
Other comprehensive income 506,954.43 506,954.43
Special reserve
Surplus reserve 1,444,413,940.89 1,444,413,940.89
Undistributed profit 5,335,226,152.19 5,489,924,828.55
Total equity 12,724,422,521.68 12,879,121,198.04
Total liabilities & equity 18,440,340,434.23 18,409,719,540.66
48
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
3. Consolidated income statement
Unit: RMB Yuan
Items 2023 Semi-Annual 2022 Semi-Annual
I. Total operating revenue 7,418,514,576.09 8,215,039,277.03
Including: Operating revenue 7,418,514,576.09 8,215,039,277.03
Interest income
Premiums earned
Revenue from handling charges
and commission
II. Total operating cost 5,746,931,719.68 5,728,884,500.93
Including: Operating cost 4,989,533,832.95 4,945,122,803.39
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 66,397,098.56 51,610,671.05
Selling expenses 66,941,370.80 57,277,897.48
Administrative expenses 244,646,451.17 212,284,822.41
R&D expenses 416,575,391.59 440,357,252.64
Financial expenses -37,162,425.39 22,231,053.96
Including: Interest expenses 163,988,612.81 152,357,156.76
Interest income 78,203,398.06 76,211,850.51
Add: Other income 102,847,223.45 86,626,226.90
Investment income (or less:
losses) 43,899,900.63 51,479,744.19
Including: Investment income
from associates and joint 34,855,314.27 25,402,893.70
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) -11,268,469.70 11,836,700.04
Credit impairment loss 6,389,579.21 -10,613,626.22
Assets impairment loss -81,296,758.10 -7,890,179.58
49
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Items 2023 Semi-Annual 2022 Semi-Annual
Gains on asset disposal (or less:
losses) 13,545,778.16 6,674,850.81
III. Operating profit (or less: losses) 1,745,700,110.06 2,624,268,492.24
Add: Non-operating revenue 3,576,842.57 2,024,074.84
Less: Non-operating expenditures 1,619,001.38 2,330,316.96
IV. Profit before tax (or less: total loss) 1,747,657,951.25 2,623,962,250.12
Less: Income tax 251,283,197.83 400,095,127.85
V. Net profit (or less: net loss) 1,496,374,753.42 2,223,867,122.27
(I) Categorized by the continuity of
operations
1. Net profit from continuing
operations (or less: net loss) 1,496,374,753.42 2,223,867,122.27
2. Net profit from discontinued
operations (or less: net loss)
(II) Categorized by the portion of equity
ownership
1. Net profit attributable to owners of
parent company 1,483,229,236.96 2,213,882,215.02
2. Net profit attributable to non-
controlling shareholders 13,145,516.46 9,984,907.25
VI. Other comprehensive income after
tax 36,723,815.69 32,372,570.30
Items attributable to the owners of the
parent company 29,652,134.01 32,251,478.10
(I) Not to be reclassified subsequently
to profit or loss
1. Changes in remeasurement
on the net defined benefit plan
2. Items under equity method
that will not be reclassified to
profit or loss
3. Changes in fair value of other
equity instrument investments
4. Changes in fair value of own
credit risk
5. Others
(II) To be reclassified subsequently to
profit or loss 29,652,134.01 32,251,478.10
1. Items under equity method
that may be reclassified to profit
or loss
2. Changes in fair value of other
debt investments
3. Profit or loss from
reclassification of financial
assets into other comprehensive
income
4. Provision for credit
impairment of other debt
investments
5. Cash flow hedging reserve
6. Translation reserve 29,652,134.01 32,251,478.10
7. Others
50
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Items 2023 Semi-Annual 2022 Semi-Annual
Items attributable to non-controlling
shareholders 7,071,681.68 121,092.20
VII. Total comprehensive income 1,533,098,569.11 2,256,239,692.57
Items attributable to the owners of the
parent company 1,512,881,370.97 2,246,133,693.12
Items attributable to non-controlling
shareholders 20,217,198.14 10,105,999.45
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.48 0.72
(II) Diluted EPS (yuan per share) 0.48 0.72
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 2023 Semi-Annual 2022 Semi-Annual
I. Operating revenue 1,467,649,891.79 1,881,789,420.59
Less: Operating cost 1,286,663,766.90 1,484,626,689.83
Taxes and surcharges 5,272,107.65 9,419,467.60
Selling expenses 14,547,584.98 13,475,826.45
Administrative expenses 71,695,788.38 70,457,378.58
R&D expenses 105,896,011.00 117,265,377.61
Financial expenses 26,721,645.73 19,040,825.17
Including: Interest expenses 82,410,752.78 86,733,082.30
Interest income 55,944,010.36 67,574,365.85
Add: Other income 20,950,696.09 22,525,397.54
Investment income (or less:
losses) 1,460,083,688.60 90,072,788.02
Including: Investment income
from associates and joint 17,189,195.23 19,977,116.53
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)
Credit impairment loss -76,822,623.15 16,015,667.16
Assets impairment loss -1,816,889.00 -6,715,175.00
Gains on asset disposal (or less:
losses) 12,144,624.20 -79,510.57
51
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Items 2023 Semi-Annual 2022 Semi-Annual
II. Operating profit (or less: losses) 1,371,392,483.89 289,323,022.50
Add: Non-operating revenue 1,629,246.59 56,720.00
Less: Non-operating expenditures 70,000.00 972,209.42
III. Profit before tax (or less: total loss) 1,372,951,730.48 288,407,533.08
Less: Income tax -9,060,433.16 30,379,713.92
IV. Net profit (or less: net loss) 1,382,012,163.64 258,027,819.16
(I) Net profit from continuing
operations (or less: net loss) 1,382,012,163.64 258,027,819.16
(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 1,382,012,163.64 258,027,819.16
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 2023 Semi-Annual 2022 Semi-Annual
I. Cash flows from operating activities:
Cash receipts from sale of goods or rendering
of services 7,691,504,205.43 7,785,627,208.41
52
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Items 2023 Semi-Annual 2022 Semi-Annual
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 623,052,104.04 696,115,463.88
Other cash receipts related to operating
activities 211,777,249.15 181,679,924.51
Subtotal of cash inflows from operating activities 8,526,333,558.62 8,663,422,596.80
Cash payments for goods purchased and
services received 5,567,275,176.60 5,623,412,196.31
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 1,092,533,915.84 1,032,523,887.01
Cash payments for taxes and rates 447,327,818.25 618,388,114.66
Other cash payments related to operating
activities 183,634,026.00 146,641,660.62
Subtotal of cash outflows from operating
activities 7,290,770,936.69 7,420,965,858.60
Net cash flows from operating activities 1,235,562,621.93 1,242,456,738.20
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 30,163,695.90 37,221,964.90
Net cash receipts from the disposal of fixed
assets, intangible assets and other long-term 140,680.08 4,153,451.64
assets
Net cash receipts from the disposal of
subsidiaries & other business units
Other cash receipts related to investing
activities 740,938,810.13 1,827,718,300.54
53
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Items 2023 Semi-Annual 2022 Semi-Annual
Subtotal of cash inflows from investing activities 771,243,186.11 1,869,093,717.08
Cash payments for the acquisition of fixed
assets, intangible assets and other long-term 2,373,242,224.79 1,801,063,585.84
assets
Cash payments for investments 237,508,000.00
Net increase of pledged borrowings
Net cash payments for the acquisition of
subsidiaries & other business units 5,485,385.14
Other cash payments related to investing
activities 250,000,000.00 1,136,474,731.36
Subtotal of cash outflows from investing
activities 2,860,750,224.79 2,943,023,702.34
Net cash flows from investing activities -2,089,507,038.68 -1,073,929,985.26
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 3,618,534,438.57 3,790,379,237.43
Other cash receipts related to financing
activities
Subtotal of cash inflows from financing activities 3,618,534,438.57 3,790,379,237.43
Cash payments for the repayment of
borrowings 2,772,078,719.75 1,249,162,336.86
Cash payments for distribution of dividends or
profits and for interest expenses 1,710,367,614.94 1,963,178,314.75
Including: Cash paid by subsidiaries to non-
controlling shareholders as dividend or profit
Other cash payments related to financing
activities 1,407,620.33 3,882,331.56
Subtotal of cash outflows from financing
activities 4,483,853,955.02 3,216,222,983.17
Net cash flows from financing activities -865,319,516.45 574,156,254.26
IV. Effect of foreign exchange rate changes on
cash & cash equivalents 75,313,603.44 -5,511,976.27
V. Net increase in cash and cash equivalents -1,643,950,329.76 737,171,030.93
Add: Opening balance of cash and cash
equivalents 5,151,841,931.86 5,714,537,538.23
VI. Closing balance of cash and cash equivalents 3,507,891,602.10 6,451,708,569.16
6. Parent company cash flow statement
Unit: RMB Yuan
Items 2023 Semi-Annual 2022 Semi-Annual
I. Cash flows from operating activities:
Cash receipts from sale of goods and rendering
of services 1,621,333,193.57 2,052,435,852.98
Receipts of tax refund 52,307,259.26 45,449,735.20
Other cash receipts related to operating
activities 82,446,555.85 87,918,046.65
Subtotal of cash inflows from operating activities 1,756,087,008.68 2,185,803,634.83
54
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Items 2023 Semi-Annual 2022 Semi-Annual
Cash payments for goods purchased and
services received 1,423,009,942.09 1,208,399,552.39
Cash paid to and on behalf of employees 199,303,567.32 195,470,414.48
Cash payments for taxes and rates 10,958,178.21 93,367,767.02
Other cash payments related to operating
activities 62,126,529.37 55,099,073.01
Subtotal of cash outflows from operating
activities 1,695,398,216.99 1,552,336,806.90
Net cash flows from operating activities 60,688,791.69 633,466,827.93
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 1,438,665,904.66 52,285,594.53
Net cash receipts from the disposal of fixed
assets, 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 2,152,600,000.00 3,520,172,480.03
Subtotal of cash inflows from investing activities 3,591,265,904.66 3,572,458,074.56
Cash payments for the acquisition of fixed
assets, intangible assets and other long-term 12,931,959.73 2,828,025.55
assets
Cash payments for investments 1,187,508,000.00 50,000,000.00
Net cash payments for the acquisition of
subsidiaries & other business units
Other cash payments related to investing
activities 3,352,754,775.00 3,014,522,667.74
Subtotal of cash outflows from investing
activities 4,553,194,734.73 3,067,350,693.29
Net cash flows from investing activities -961,928,830.07 505,107,381.27
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Cash receipts from borrowings 1,850,000,000.00 2,040,000,000.00
Other cash receipts related to financing
activities
Subtotal of cash inflows from financing activities 1,850,000,000.00 2,040,000,000.00
Cash payments for the repayment of
borrowings 1,603,000,000.00 689,759,400.00
Cash payments for distribution of dividends or
profits and for interest expenses 1,619,589,051.11 1,878,276,172.00
Other cash payments related to financing
activities 1,126,850.43 1,266,518.81
Subtotal of cash outflows from financing
activities 3,223,715,901.54 2,569,302,090.81
Net cash flows from financing activities -1,373,715,901.54 -529,302,090.81
IV. Effect of foreign exchange rate changes on
cash and cash equivalents 969,709.78 806,094.12
55
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Items 2023 Semi-Annual 2022 Semi-Annual
V. Net increase in cash and cash equivalents -2,273,986,230.14 610,078,212.51
Add: Opening balance of cash and cash
equivalents 4,054,348,356.27 4,191,863,033.83
VI. Closing balance of cash and cash equivalents 1,780,362,126.13 4,801,941,246.34
56
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
7. Consolidated statement of changes in equity
Current period cumulative
Unit: RMB Yuan
2023 Semi-Annual
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
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
Add: Cumulative changes of accounting policies
19,857.63 19,857.63 19,857.63
Error correction of prior period
Business combination under common control
Others
II. Balance at the beginning of current year
3,090,907,356.00 3,613,097,510.81 500,059,711.25 76,577,564.17 26,196,894.55 1,444,413,940.89 15,823,745,771.07 23,574,879,326.24 87,289,766.85 23,662,169,093.09
III. Current period increase (or less: decrease)
29,652,134.01 17,629,528.47 -53,481,603.04 -6,199,940.56 20,217,198.14 14,017,257.58
(I) T otal comprehensive income
29,652,134.01 1,483,229,236.96 1,512,881,370.97 20,217,198.14 1,533,098,569.11
(II) Capital contributed or withdrawn by owners
1. Ordinary shares contributed by owners
2. Capital contributed by holders of other equity
instruments
3. Amount of share-based payment included in
equity
4. Others
(III) Profit distribution
-1,536,710,840.00 -1,536,710,840.00 -1,536,710,840.00
1. Appropriation of surplus reserve
2. Appropriation of general risk reserve
3. Appropriation of profit to owners
-1,536,710,840.00 -1,536,710,840.00 -1,536,710,840.00
4. Others
(IV) Internal carry-over within equity
1. T ransfer of capital reserve to capital
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
57
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
2023 Semi-Annual
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
6. Others
(V) Special reserve
17,629,528.47 17,629,528.47 17,629,528.47
1. Appropriation of current period
26,153,211.92 26,153,211.92 26,153,211.92
2. Application of current period
-8,523,683.45 -8,523,683.45 -8,523,683.45
(VI) Others
IV. Balance at the end of current period
3,090,907,356.00 3,613,097,510.81 500,059,711.25 106,229,698.18 43,826,423.02 1,444,413,940.89 15,770,264,168.03 23,568,679,385.68 107,506,964.99 23,676,186,350.67
Preceding period comparative
Unit: RMB Yuan
Year 2022
Equity attributable to parent company
Items Other equity instruments Other General Non-controlling
Less: Special Surplus T otal equity
Share capital Preferred Perpetual Capital reserve comprehensive risk Undistributed profit Others Subtotal interest
Others T reasury shares reserve 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 14,152,465,528.17 21,831,838,010.85 63,730,851.41 21,895,568,862.26
Add: Cumulative changes of accounting policies 4,795.77 4,795.77 4,795.77
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 14,152,470,323.94 21,831,842,806.62 63,730,851.41 21,895,573,658.03
III. Current period increase (or less: decrease) 512,512,596.00 -507,468,870.48 179,698,926.77 32,251,478.10 4,449,092.88 420,083,330.45 282,128,700.18 10,105,999.45 292,234,699.63
(I) T otal comprehensive income 32,251,478.10 2,213,877,419.25 2,246,128,897.35 10,105,999.45 2,256,234,896.80
(II) Capital contributed or withdrawn by owners 179,698,926.77 -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 -179,698,926.77
(III) Profit distribution -1,793,794,088.80 -1,793,794,088.80 -1,793,794,088.80
1. Appropriation of surplus reserve
2. Appropriation of general risk reserve
58
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Year 2022
Equity attributable to parent company
Items Other equity instruments Other General Non-controlling
Less: Special Surplus T otal equity
Share capital Preferred Perpetual Capital reserve comprehensive risk Undistributed profit Others Subtotal interest
Others T reasury shares reserve reserve
shares bonds income 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 4,449,092.88 4,449,092.88 4,449,092.88
1. Appropriation of current period 13,360,150.22 13,360,150.22 13,360,150.22
2. Application of current period -8,911,057.34 -8,911,057.34 -8,911,057.34
(VI) Others 5,043,725.52 5,043,725.52 5,043,725.52
IV. Balance at the end of current period 3,090,907,356.00 3,613,594,210.48 500,059,711.25 30,637,305.79 17,141,311.39 1,289,197,380.00 14,572,553,654.39 22,113,971,506.80 73,836,850.86 22,187,808,357.66
8. Parent company statements of changes in equity
Current period cumulative
Unit: RMB Yuan
Year 2023
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 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
Add: Cumulative changes of accounting policies 19,857.63 19,857.63
Error correction of prior period
Others
II. Balance at the beginning of current year 3,090,907,356.00 3,353,427,829.42 500,059,711.25 506,954.43 1,444,413,940.89 5,489,924,828.55 12,879,121,198.04
III. Current period increase (or less: decrease) -154,698,676.36 -154,698,676.36
59
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Year 2023
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) Total comprehensive income 1,382,012,163.64 1,382,012,163.64
(II) Capital contributed or withdrawn by owners
1. Ordinary shares contributed by owners
2. Capital contributed by holders of other equity instruments
3. Amount of share-based payment included in equity
4. Others
(III) Profit distribution -1,536,710,840.00 -1,536,710,840.00
1. Appropriation of surplus reserve
2. Appropriation of profit to owners -1,536,710,840.00 -1,536,710,840.00
3. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
3. Surplus reserve to cover losses
4. Changes in defined benefit plan carried over to retained earnings
5. Other comprehensive income carried over to retained earnings
6. Others
(V) Special reserve
1. Appropriation of current period
2. Application of current period
(VI) Others
IV. Balance at the end of current period 3,090,907,356.00 3,353,427,829.42 500,059,711.25 506,954.43 1,444,413,940.89 5,335,226,152.19 12,724,422,521.68
Preceding period comparative
Unit: RMB Yuan
60
2023 Semi-Annual Report of Zhejiang NHU Co., Ltd.
Year 2022
Other equity instruments
Items Less: Treasury Other comprehensive Special Surplus Undistributed
Share capital Preferred Perpetual Capital reserve Others Total equity
Others shares income reserve reserve profit
shares bonds
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 4,795.77 4,795.77
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 5,886,754,807.48 13,295,886,517.00
III. Current period increase (or less: decrease) 512,512,596.00 -507,468,870.48 179,698,926.77 -1,535,766,219.19 -1,710,421,420.44
(I) Total comprehensive income 258,027,869.61 258,027,869.61
(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 -1,793,794,088.80 -1,793,794,088.80
1. Appropriation of surplus reserve
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 512,512,596.00 -512,512,596.00
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 5,043,725.52 5,043,725.52
IV. Balance at the end of current period 3,090,907,356.00 3,353,924,529.09 500,059,711.25 506,954.43 1,289,197,380.00 4,350,988,588.29 11,585,465,096.56
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2023 Annual Report of Zhejiang NHU Co., Ltd.
III. Company profile
Zhejiang NHU Co., Ltd. (the “Company”) was jointly established by 新昌县合成化工厂 (Xinchang County Synthetic Chemical
Plant , renamed as NHU Holding Group Co., Ltd. on November 17, 2009) and 9 natural persons including Zhang Pingyi, Yuan Yizhong,
Shi Cheng, Hu Baishan, Shi Guanqun, Wang Xuewen, 石三夫 (Shi Sanfu), Cui Xinrong, and Wang Xulin under the document of
approval numbered Zhe Zheng Wei [1999] 9 issued by the former Securities Commission of the People’s Government of Zhejiang
Province. Headquartered in Shaoxing City, Zhejiang Province, the Company was registered at Zhejiang Administration for Industry
and Commerce on April 5, 1999. Currently, the Company holds a business license with unified social credit code of
91330000712560575G, with registered capital of 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, new polymer materials
and API.
The financial statements were approved and authorized for issue by the Seventeenth Meeting of the Eighth session of the Board of
Directorsdated August 28, 2023.
The Company has brought 28 subsidiaries including Xinchang NHU Vitamins Co., Ltd., Zhejiang NHU Import & Export Co., Ltd., 浙
江维尔新动物营养保健品有限公司 (Zhejiang Vityesun Animal Nutrition and Health Co., Ltd.*), etc. into the consolidation scope.
Please refer to item VIII and IX of this section for details.
IV. Preparation basis of the financial statements
1. Preparation basis
The financial statements have been prepared on the basis of going concern.
2. The ability to continue as a going concern
The Company has no events or conditions that may cast significant doubts upon the Company’s ability to continue as a going concern
within the 12 months after the balance sheet date.
V. Significant accounting policies and estimates
Note to specific accounting policies and estimates: The Company has set up accounting policies and estimates on transactions or events
such as impairment of financial instruments, depreciation of fixed assets, depreciation of right-of-use assets, amortization of intangible
assets, and revenue recognition, etc. based on the Company’s actual production and operation features.
1. Statement of compliance
The financial statements have been prepared in accordance with the requirements of China Accounting Standards for Business
Enterprises (CASBEs), and present truly and completely the financial position, results of operations and cash flows of the Company.
2. Accounting period
The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.
The English names are for identification purpose only.
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2023 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, the refore,
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, and the
measurement of the combination cost are reviewed, then the difference is recognized in profit or loss.
6. Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidated financial statements are
compiled by the parent company according to “CASBE 33 – Consolidated Financial Statements”, based on relevant information and
the financial statements of the parent company and its subsidiaries.
7. Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash equivalents refer to short-
term, highly liquid investments that can be readily converted to cash and that are subject to an insignificant risk of changes in value.
8. Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the approximate exchange rate similar to the spot
exchange rate at the transaction date at initial recognition. At the balance sheet date, monetary items denominated in foreign currency
are translated at the spot exchange rate at the balance sheet date with difference, except for those arising from the principal and interest
of exclusive borrowings eligible for capitalization, included in profit or loss; non-cash items carried at historical costs are translated at
the approximate exchange rate similar to the spot exchange rate at the transaction date, with the RMB amounts unchanged; non-cash
items carried at fair value in foreign currency are translated at the spot exchange rate at the date when the fair value was determined,
with difference included in profit or loss or other comprehensive income.
2. Translation of financial statements measured in foreign currency
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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
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 loss es 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. Accumulate d
gains or losses that initially recognized as other comprehensive income should be transferred out into retained earnings when the
financial assets are derecognized.
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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
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 impairment
requirements of financial instruments; b. the amount initially recognized less the amount of accumulated amortization recognized in
accordance with “CASBE 14 – Revenues”.
4) Financial liabilities at amortized cost
The Company measures its financial liabilities at amortized cost using effective interest method. Gains or losses on financia l 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 asset, it
derecognizes the financial asset, and any right or liability arising from such transfer is recognized independently as an asset or a liability.
If it retained substantially all of the risks and rewards related to the ownership of the financial asset, it continues recognizing the
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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
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 ac cess at the
measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar
assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability, for example,
interest rates and yield curves observable at commonly quoted intervals; market-corroborated inputs;
(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is not observable and cannot
be corroborated by observable market data at commonly quoted intervals, historical volatility, future cash flows to be paid to fulfill the
disposal obligation assumed in business combination, financial forecast developed using the Company’s own data, etc.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at amortized cost, debt instrument
investments at fair value through other comprehensive income, contract assets, leases receivable, loan commitments other than financial
liabilities at fair value through profit or loss, financial guarantee contracts not belong to financial liabilities at fair value through profit
or loss or financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing
involvement approach applies.
Expected credit losses refer to the weighted average of credit losses with the respective risks of a default occurring as the weights.
Credit loss refers to the difference between all contractual cash flows that are due to the Company in accordance with the contract and
all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. Among
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2023 Annual Report of Zhejiang NHU Co., Ltd.
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
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 allowance
arising therefrom shall be included into profit or loss as impairment losses or gains. For a financial asset measured at amortized cost,
the loss allowance reduces the carrying amount of such financial asset presented in the balance sheet; for a debt investment measured
at fair value through other comprehensive income, the loss allowance shall be recognized in other comprehensive income and shall not
reduce the carrying amount of such financial asset.
(2) Financial instruments with expected credit risk assessed and expected credit losses measured on a collective basis
Items Basis for determination of portfolio Method for measuring expected credit loss
Other receivables – Portfolio grouped
with export tax refund receivable
Other receivables – Portfolio grouped
with VAT refund receivable Based on historical credit loss experience, the
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
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1) Specific portfolios and method for measuring expected credit loss
Items Basis for determination of portfolio Method for measuring expected credit loss
Bank acceptance receivable Based on historical credit loss experience, the
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
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
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2023 Annual Report of Zhejiang NHU Co., Ltd.
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 reserve is
insufficient to offset, any excess is adjusted to retained earnings.
When long-term equity investments are obtained through business combination under common control achieved in stages, the Company
determines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as a whole are considered as one transaction in
accounting treatment. If it is not a “bundled transaction”, on the date of combination, investment cost is initially recognized at the share
of the carrying amount of net assets of the combined party included the consolidated financial statements of the ultimate controlling
party. The difference between the initial investment cost of long-term equity investments at the acquisition date and the carrying amount
of the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity
is adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
(2) For business combination not under common control, investment cost is initially recognized at the acquisition-date fair value of
considerations paid.
When long-term equity investments are obtained through business combination not under common control achieved in stages, the
Company determined whether they are stand-alone financial statements or consolidated financial statements in accounting treatment:
1) In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount of the previously held
long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity.
2) In the case of consolidated financial statements, the Company determines whether it is a “bundled transaction”. If it is a “bundled
transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundle d 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
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2023 Annual Report of Zhejiang NHU Co., Ltd.
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.
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 relia bly.
(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
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2023 Annual Report of Zhejiang NHU Co., Ltd.
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 which are
necessary to prepare the asset for its intended use or sale have already started.
(2) Suspension of capitalization: where the acquisition and construction or production of a qualified asset is interrupted abnormally
and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs is suspended; the borrowing costs
incurred during such period are recognized as expenses, and are included in profit or loss, till the acquisition and construc tion or
production of the asset restarts.
(3) Ceasing of capitalization: when the qualified asset under acquisition and construction or production is ready for the intended use or
sale, the capitalization of the borrowing costs is ceased.
3. Capitalization rate and capitalized amount of borrowing costs
For borrowings exclusively for the acquisition and construction or production of assets eligible for capitalization, the to-be-capitalized
amount of interests is determined in light of the actual interest expenses incurred (including amortization of premium or discount based
on effective interest method) of the special borrowings in the current period less the interest income on the unused borrowings as a
deposit in the bank or as a temporary investment; where a general borrowing is used for the acquisition and construction or production
of assets eligible for capitalization, the Company calculates and determines the to-be-capitalized amount of interests on the general
borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements less the general
borrowing by the capitalization rate of the general borrowing used.
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 systema tically 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:
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Amortization period (years)
Land use right 50, 70
Software 10
Patent right 10
Non-patented technology 15
(2) Accounting policies on internal R&D expenditures
Expenditures on the research phase of an internal project are recognized as profit or loss when they are incurred. An intangible asset
arising from the development phase of an internal project is recognized if the Company can demonstrate all of the followings: (1) the
technical feasibility of completing the intangible asset so that it will be available for use or sale; (2) its intention to complete the intangible
asset and use or sell it; (3) how the intangible asset will generate probable future economic benefits, among other things, 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.
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;
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2023 Annual Report of Zhejiang NHU Co., Ltd.
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 reme asurement 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.
The Company satisfies a performance obligation over time if one of the following criteria is met, otherwise, the performance obligation
is satisfied at a point in time: (1) the customer simultaneously receives and consumes the economic benefits provided by the Company’s
performance as the Company performs; (2) the customer can control goods as they are created by the Company’s performance; (3)
goods created during the Company’s performance have irreplaceable uses and the Company has an enforceable right to the payments
for performance completed to date during the whole contract period.
For each performance obligation satisfied over time, the Company shall recognize revenue over time by measuring the progress towards
complete satisfaction of that performance obligation. In the circumstance that the progress cannot be measured reasonably, but the
costs incurred in satisfying the performance obligation are expected to be recovered, the Company shall recognize revenue only to the
extent of the costs incurred until it can reasonably measure the progress. For each performance obligation satisfied at a point in time,
the Company shall recognize revenue at the time point that the customer obtains control of relevant goods or services. To determine
whether the customer has obtained control of goods, the Company shall consider the following indications: (1) the Company has a
present right to payment for the goods, i.e., the customer is presently obliged to pay for the goods; (2) the Company has transferred the
legal title of the goods to the customer, i.e., the customer has legal title to the goods; (3) the Company has transferred physical
possession of the goods to the customer, i.e., the customer has physically possessed the goods; (4) the Company has transferred
significant risks and rewards of ownership of the goods to the customer, i.e., the customer has obtained significant risks and rewards
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2023 Annual Report of Zhejiang NHU Co., Ltd.
of ownership of the goods; (5) the customer has accepted the goods; (6) other evidence indicating the customer has obtained control
over the goods.
2. Revenue measurement principle
(1) Revenue is measured at the amount of the transaction price that is allocated to each performance obligation. The transaction price
is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer,
excluding amounts collected on behalf of third parties and those expected to be refunded to the customer.
(2) If the consideration promised in a contract includes a variable amount, the Company shall confirm the best estimate of variable
consideration at expected value or the most likely amount. However, the transaction price that includes the amount of variable
consideration only to the extent that it is high probable that a significant reversal in the amount of cumulative revenue recognized will
not occur when the uncertainty associated with the variable consideration is subsequently resolved.
(3) In the circumstance that the contract contains a significant financing component, the Company shall determine the transaction price
based on the price that a customer would have paid for if the customer had paid cash for obtaining control over those goods or services.
The difference between the transaction price and the amount of promised consideration is amortized under effective interest method
over contractual period. The effects of a significant financing component shall not be considered if the Company expects, at the contract
inception, that the period between when the customer obtains control over goods or services and when the customer pays consideration
will be one year or less.
(4) For contracts containing two or more performance obligations, the Company shall determine the stand-alone selling price at contract
inception of the distinct good underlying each performance obligation and allocate the transaction price to each performance obligation
on a relative stand-alone selling price basis.
3. Revenue recognition method
(1) Revenue from sales of products
The Company’s main products are nutrition, flavor and fragrance, new polymer materials, etc. Sales of products are performance
obligations satisfied at a point in time. Revenue from domestic sales is recognized when the Company has delivered goods to the
customer as agreed by contract and has obtained delivery note signed by the customer, and the Company has collected the payments
or has obtained the right to the payments, and related economic benefits are highly probable to flow to the Company. Revenue from
overseas sales is recognized when the Company has declared goods to the customs based on contractual agreements and has obtain ed
a bill of lading, and the Company has collected the payments or has obtained the right to the payments, and related economic benefits
are highly probable to flow to the Company.
(2) Revenue from real estate sales
Real estate sales are performance obligations satisfied at a point in time. Revenue from real estate sales is recognized when the
Company has delivered properties to the customer as agreed by contract and has obtained the client acceptance receipts signed by the
customer, and the Company has collected the payments or has obtained the right to the payments, and related economic benefits are
highly probable to flow to the Company.
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 primary
condition is to construct or otherwise acquire long-term assets. They offset carrying amount of relevant assets, or they are recognized
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2023 Annual Report of Zhejiang NHU Co., Ltd.
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
obligations and customers’ payments. Contract assets and contract liabilit ies 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 between the carrying amount and
tax base of assets and liabilities (and the difference of the carrying amount and tax base of items not recognized as assets and 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.
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2023 Annual Report of Zhejiang NHU Co., Ltd.
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 asset, restoring the
site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.
The Company depreciates the right-of-use asset using the straight-line method/unit-of-production method. If it is reasonable to be
certain that the ownership of the underlying asset can be acquired by the end of the lease term, the Company depreciates the right-of-
use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the
right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease
term.
(2) Lease liability
At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid at
that date, discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the Company’s incremental
borrowing rate shall be used. Unrecognized financing expenses, calculated at the difference between the lease payment and its present
value, are recognized as interest expenses over the lease term using the discount rate which has been used to determine the present
value of lease payment and included in profit or loss. Variable lease payments not included in the measurement of lease liabilities are
included in profit or loss in the periods in which they are incurred.
After the commencement date, if there is a change in the following items: a. actual fixed payments; b. amounts expected to be payable
under residual value guarantees; c. an index or a rate used to determine lease payments; d. assessment result or exercise of purchase
option, extension option or termination option., the Company remeasures the lease liability based on the present value of lease payments
after changes, and adjusts the carrying amount of the right-of-use asset accordingly. If the carrying amount of the right-of-use asset is
reduced to zero but there shall be a further reduction in the lease liability, the remaining amount shall be recognized into profit or loss.
2. The Company as lessor
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2023 Annual Report of Zhejiang NHU Co., Ltd.
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.
（2） Accounting for finance leases
None
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 use ful
conditions; meanwhile, the cost included in fixed assets is to offset “special reserve”, and accumulated depreciation shall be recognized
at the same amount. Such fixed assets shall not be depreciated in future periods.
25. Segment reporting
Operating segments are determined based on the structure of the Company’s internal organization, management requirements and
internal reporting system. An operating segment is a component of the Company:
1. that engages in business activities from which it may earn revenues and incur expenses;
2. whose financial performance is regularly reviewed by the Management to make decisions about resource to be allocated to the
segment and to assess its performance; and
3. for which accounting information regarding financial position, financial performance and cash flows is available through analysis.
26.Accounting treatment related to share repurchase
When the Company repurchases its shares for the purpose of reducing its registered capital or rewarding its employees, if the purchased
shares are to be kept as treasury shares, the treasury shares are recorded at the cash distributed to existing shareholders for repurchase;
if the purchased shares are to be retired, the difference between the total par value of shares retired and the cash distributed to existing
shareholders for repurchase is to reduce capital reserve, or retained earnings when the capital reserve is not enough to reduce. If the
Company repurchases vested equity instruments in equity-settled share-based payment transactions with employees, cost of treasury
shares granted to employees and capital reserve (other capital reserve) accumulated within the vesting perio.
27. Significant changes in accounting policies and estimates
(1) Significant changes in accounting policies
√ Applicable □ Not Applicable
Contents and reasons Approval process Remarks
Ministry of Finance, "nterpretation of Enterprise N/A Please refer to Announcement No.2023-
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Contents and reasons Approval process Remarks
Accounting Standards No. 16"(Caijing [2022] No. 021 disclosed on www.cninfo.com.cn on
31) "Accounting for Deferred Income Taxes April 21, 2023 for details.
Associated with Assets and Liabilities Arising
from a Single Transaction to Which the Initial
Recognition Exemption Does Not Apply"
The impact of the implementation of the standards on the relevant items of the company's balance sheet in 2022, profit statement and
cash flow statement in the same period of last year is retroactively adjusted as follows:
Unit: RMB Yuan
Before adjustment After adjustment
Items (Jan 1,2023/ Preceding Effect due to revised lease standard (Jan 1,2023/ Preceding
period comparative) period comparative)
Consolidated balance sheet
Deferred tax assets 49,812,172.71 438,636.67 50,250,809.38
Deferred tax liabilities 277,316,677.63 418,779.04 277,735,456.67
Undistributed profit 15,823,725,913.44 19,857.63 15,823,745,771.07
Consolidated income statement
Income tax 400,099,923.62 -4,795.77 400,095,127.85
Net profit 2,223,862,326.50 4,795.77 2,223,867,122.27
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 revenue
Value-added tax “exemption, credit and refund” policy and the refund rate
from sales of goods or rendering of services in
ranges from 0% to 13%; the subsidiary Zhejiang NHU
(VAT) accordance with the tax law, net of the input tax
Import & Export Co., Ltd. enjoys the “refund upon
that is allowed to be deducted in the current
collection” policy and the refund rate ranges from 0% to
period
13%.
Urban
maintenance and Turnover tax actually paid 5%、7%
construction tax
Enterprise income
Taxable income 15%、17%、20%、22%、25%、25.5%、34%、16.5%
tax
A four-grade progressive tax system is adopted. The rates
are: 30% for appreciated value not over 50% of total
Land appreciation The incremental amount arising from the transfer deductible amount; 40% for appreciated value over 50%
of state-owned land use right and the buildings but not over 100% of total deductible amount; 50% for
tax
and structures that are constructed on the land appreciated value over 100% but 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%
Housing property
of the balance after deducting 30% of the cost;
tax for housing property levied on the basis of rent, 1.2%、12%
housing property tax is levied at the rate of 12%
of rent revenue.
Education
Turnover tax actually paid 3%
surcharge
Local education Turnover tax actually paid 2%
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Taxes Tax bases Tax rates
surcharge
Solidarity
Income tax payable 5.50%
surcharge [Note]
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%
Heilongjiang NHU Biotechnology Co., Ltd. 15%
Zhejiang NHU Pharmaceutical Co., Ltd 15%
Shandong NHU Jinghua Technology Co., Ltd 15%
NHU (Hong Kong) Trading Co., Ltd. 16.5%
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. In 2023, corporate
income tax will be temporarily calculated and paid at a tax rate of 15%.
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 2023.
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. In
2023, corporate income tax will be temporarily calculated and paid at a tax rate of 15%.
According to the Hi-Tech Enterprise Certificate (GR202037000197) issued by Department of Science and Technology of Shandong
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2023 Annual Report of Zhejiang NHU Co., Ltd.
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. In 2023,
corporate income tax will be temporarily calculated and paid at a tax rate of 15%.
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 2023.
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 2023.
According to the Hi-Tech Enterprise Certificate (GR202123000560) issued by Heilongjiang Provincial Department of Science and
Technology, Heilongjiang Provincial Department of Finance and Heilongjiang Provincial Tax Service, STA, the subsidiary
Heilongjiang NHU Biotechnology Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from
2021 to 2023. It is subject to the rate of 15% for enterprise income tax in 2023.
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 2023.
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 2022 to 2024. It
is subject to the rate of 15% for enterprise income tax in 2023.
According to the Announcement of the Ministry of Finance and the State Administration of Taxation on Preferential Policies on Income
Tax for Small and Micro Enterprises and Individual Entrepreneurs issued by the Ministry of Finance and the State Administra tion of
Taxation (Announcement of the Ministry of Finance and the State Administration of Taxation No. 6 of 2023), from January 1, 2023 to
December 31, 2024, the portion of the annual taxable income of a small and micro enterprise that does not exceed 1 million yuan will
be reduced by 25% of the annual taxable income, and will pay corporate income tax at a rate of 20%. The tax rate of 20% will be
applied to the enterprise income tax. Subsidiary Zhejiang NHU Nylon Material Co., Ltd. is subject to enterprise income tax at the
corresponding preferential tax rate..
3、Other
None
VII. Notes to items of consolidated financial statements
1. Cash and bank balances
Unit: RMB Yuan
Items Closing balance Opening balance
Cash on hand 21,036.01 16,584.59
Cash in bank 3,507,862,165.02 5,151,816,943.29
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Closing balance Opening balance
Other cash and bank balances 146,850,922.85 192,018,439.84
Total 3,654,734,123.88 5,343,851,967.72
Including: Deposited overseas 84,689,947.39 62,426,363.92
Other remarks
(1) Other cash and bank balances
Unit: RMB Yuan
Items Closing balance Opening balance
Deposit for bank acceptance 110,959,093.51 147,608,293.24
Deposit for letters of credit 33,486,505.20 42,310,180.59
Deposit for engineering labor costs 852,349.44 851,288.54
Deposit for construction safety 867,529.53 863,937.05
Deposit for water fees 660,544.10 359,836.44
Deposit for ETC 16,500.00 16,500.00
Alipay balance 8401.07 8,401.07
Deposited investment fund 2.91
Subtotal 146,850,922.85 192,018,439.84
2. Held-for-trading financial assets
Unit: RMB Yuan
Items Closing balance Opening balance
Financial assets at fair value through profit 250,000,000.00 720,314,576.43
or loss
Including: Financial products with 250,000,000.00 720,000,000.00
guaranteed principal and floating income
Derivative financial assets 314,576.43
Total 250,000,000.00 720,314,576.43
3. Notes receivable
(1) Details on categories
Unit: RMB Yuan
Items Closing balance Opening balance
Bank acceptance 207,107,417.99 321,261,741.29
Commercial Acceptance 7,281,666.87 51,380,094.50
Total 214,389,084.86 372,641,835.79
Unit: RMB Yuan
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion
Notes receivable with provision for 214,772,330.49 100.00% 383,245.63 0.18% 214,389,084.86
bad debts made on a collective basis
Bank acceptance 207,107,417.99 96.43% 207,107,417.99
Commercial Acceptance 7,664,912.50 3.57% 383,245.63 5.00% 7,281,666.87
Total 214,772,330.49 100.00% 383,245.63 0.18% 214,389,084.86
81
2023 Annual Report of Zhejiang NHU Co., Ltd.
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion
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
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
provision for bad debts made on a collective basis：383,245.63
Unit: RMB Yuan
Closing balance
Categories
Book balance Provision for bad debts Provision proportion
Commercial Acceptance 7,664,912.50 383,245.63 5.00%
Total 7,664,912.50 383,245.63
A description of the basis for determining the portfolio:
If the bad debt provision for notes receivable is based on the general model of expected credit losses, please disclose information
about the bad debt provision by referring to the disclosure for other receivables:
□Applicable Not applicable
(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 -2,320,969.87 383,245.63
collective basis
Total 2,704,215.50 -2,320,969.87 383,245.63
which the amount of bad debt provision recovered or reversed during the period is significant:
□Applicable Not applicable
(3) Pledged notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance of pledged notes
Bank acceptance 155,053,622.64
Total 155,053,622.64
(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 40,752,118.29
Total 40,752,118.29
4. Accounts receivable
(1) Details on categories
Unit: RMB Yuan
82
2023 Annual Report of Zhejiang NHU Co., Ltd.
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion
Accounts receivable with provision
for bad debts made on a collective 2,572,631,687.58 100.00% 143,930,919.60 5.59% 2,428,700,767.98
basis
Total 2,572,631,687.58 100.00% 143,930,919.60 5.59% 2,428,700,767.98
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion
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
provision for bad debts made on a collective basis：143,930,919.60
Unit: RMB Yuan
Closing balance
Categories
Book balance Provision for bad debts Provision proportion
Commercial Acceptance 2,572,631,687.58 143,930,919.60 5.59%
Total 2,572,631,687.58 143,930,919.60
A description of the basis for determining the portfolio:
If the bad debt provision for notes receivable is based on the general model of expected credit losses, please disclose information about
the bad debt provision by referring to the disclosure for other receivables:
□Applicable Not applicable
Ages analysis:
Unit: RMB Yuan
Ages Book balance
Within 1 year (inclusive) 2,482,677,830.83
1-2 years 87,681,785.95
2-3 years 57,000.00
Over 3 years 2,215,070.80
3-4 years
4-5 years 489,750.00
Over 5 years 1,725,320.80
Total 2,572,631,687.58
(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 138,773,240.37 5,397,679.23 240,000.00 143,930,919.60
collective basis
Total 138,773,240.37 5,397,679.23 240,000.00 143,930,919.60
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2023 Annual Report of Zhejiang NHU Co., Ltd.
(3) Accounts receivable actually written off in the current period
Unit: RMB Yuan
Items Write-off amount
Payment for goods 240,000.00
(4) 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 316,559,132.16 12.30% 15,827,956.61
Client B 184,341,286.74 7.17% 9,217,064.34
Client C 87,285,592.08 3.39% 4,364,279.60
Client D 36,987,720.20 1.44% 1,849,386.01
Client E 35,320,657.51 1.37% 1,766,032.88
Total 660,494,388.69 25.67%
5. Receivables financing
Unit: RMB Yuan
Items Closing balance Opening balance
Bank acceptance 506,430,216.64 379,217,582.25
Total 506,430,216.64 379,217,582.25
Changes in receivables financing during the period and changes in fair value
□Applicable Not applicable
If the provision for impairment of receivables financing is based on the general model of expected credit losses, disclose information
about the provision for impairment by referring to the disclosure for other receivables:
□Applicable Not applicable
(1) Pledged notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance of pledged notes
Bank acceptance 84,532,028.12
Subtotal 84,532,028.12
(2) Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance derecognized
Bank acceptance 579,996,213.46
Subtotal 579,996,213.46
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little possibility of
failure in recoverability when it is due. Based on this fact, the Company derecognized the endorsed or discounted bank acceptance.
However, if any bank acceptance is not recoverable when it is due, the Company still holds joint liability on such acceptance , according
to the China Commercial Instrument Law.
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2023 Annual Report of Zhejiang NHU Co., Ltd.
6. Advances paid
(1) Age analysis
Unit: RMB Yuan
Closing balance Opening balance
Ages
Amount % to total Amount % to total
Within 1 year 113,021,820.29 94.16% 215,300,317.59 96.84%
1-2 years 6,640,398.88 5.54% 7,013,257.67 3.14%
2-3 years 340,628.67 0.28% 16,001.00 0.01%
Over 3 years 23,200.00 0.02% 7,200.00 0.01%
Total 120,026,047.84 -- 222,336,776.26 --
(2) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Debtors Book balance Proportion to the total balance of
advances paid (%)
Supplier A 17,186,516.30 14.32%
Supplier B 10,380,247.17 8.65%
Supplier C 8,431,174.24 7.02%
Supplier D 8,429,722.01 7.02%
Supplier E 5,745,000.00 4.79%
Subtotal 50,172,659.72 41.80%
7. Other receivables
Unit: RMB Yuan
Items Closing balance Opening balance
Dividend receivable 20,735,987.73
Other receivables 224,942,479.71 248,831,605.00
Total 224,942,479.71 269,567,592.73
(1) Dividend receivable
Unit: RMB Yuan
Items/Investees Closing balance Opening balance
Zhejiang Chunhui Environmental 20,735,987.73
Protection Energy Co., Ltd.
Total 20,735,987.73
(2) Other receivables
1) Categorized by nature
Unit: RMB Yuan
Nature of receivables Closing book balance Opening book balance
Security deposits 116,100,494.45 120,123,425.59
85
2023 Annual Report of Zhejiang NHU Co., Ltd.
Nature of receivables Closing book balance Opening book balance
Export tax refund 72,167,345.62 62,763,834.97
Unborrowed funds 21,098,506.24
Receivables of returned equipment 95,312.91 1,041,600.00
Refundable VAT 21,109,926.49 41,890,037.74
Employee petty cash 12,558,327.06 8,050,322.00
Temporary advance payment receivable 4,228,609.89 3,839,206.82
Others 8,117,227.78 3,035,775.60
Total 234,377,244.20 261,842,708.96
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 1,760,180.53 1,062,902.90 10,188,020.53 13,011,103.96
Opening balance in the current
period
--Transferred to phase II -252,531.71 252,531.71
--Transferred to phase III -182,677.07 182,677.07
Provision made in the current -430,122.97 -122,630.70 -3,023,585.80 -3,576,339.47
period
Closing balance 1,077,525.85 1,010,126.84 7,347,111.80 9,434,764.49
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) 118,060,890.14
1-2 years 9,886,365.19
2-3 years 913,385.36
Over 3 years 105,516,603.51
3-4 years 5,406,045.90
4-5 years 300,000.00
Over 5 years 99,810,557.61
Total 234,377,244.20
3) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Nature of Proportion to the Provision for bad
Debtors Book balance Ages total balance of other
receivables debts
receivables (%)
Weifang Municipal
Bureau of Land and Security deposits 97,900,000.00 Over 3 years 41.77%
Resource, Binhai
District Branch
State Taxation Export tax refund 72,167,345.61 Within 1 year 30.79%
86
2023 Annual Report of Zhejiang NHU Co., Ltd.
Nature of Proportion to the Provision for bad
Debtors Book balance Ages total balance of other
receivables debts
receivables (%)
Administration
(Export tax refund
receivable)
State Revenue
Service (VAT AT refundable 21,109,926.50 Within 1 year 9.01%
refundable)
Weifang Binhai
Economic and
Technological
Development Zone Security deposits 4,835,731.00 1-2 years 2.06%
Finance Treasury
Centralized Payment
Center
Suihua Labor
Security Supervision Security deposits 2,950,490.53 3-4 years 1.26% 2,950,490.53
Detachment
Total -- 198,963,493.64 -- 84.89% 2,950,490.53
8. Inventories
Does the company need to comply with disclosure requirements in the real estate industry
NO
(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 404,321,979.01 1,371,035.91 402,950,943.10 512,088,438.92 1,371,035.91 510,717,403.01
Work in process 1,244,177,291.69 1,244,177,291.69 1,259,897,028.55 1,259,897,028.55
Goods on hand 2,693,983,880.45 151,230,060.62 2,542,753,819.83 2,122,998,309.26 151,579,577.92 1,971,418,731.34
Goods dispatched 59,383,998.25 59,383,998.25 96,141,207.37 96,141,207.37
Development cost 97,530,835.60 97,530,835.60 97,530,835.60 97,530,835.60
Developed
122,087,269.95 122,087,269.95 121,902,734.56 121,902,734.56
products
Materials on
consignment for 6,468,031.91 6,468,031.91 8,335,609.99 8,335,609.99
further processing
Packages 15,187,420.88 15,187,420.88 16,061,832.47 16,061,832.47
Low-value 88,045,857.41 88,045,857.41 62,552,319.50 62,552,319.50
consumables
Total 4,731,186,565.15 152,601,096.53 4,578,585,468.62 4,297,508,316.22 152,950,613.83 4,144,557,702.39
(2) Provision for inventory write-down and provision for impairment of cost to fulfill a contract
Unit: RMB Yuan
Increase Decrease
Items Opening balance Closing balance
Accrual Others Recovery/ Others
Reversal
Raw materials 1,371,035.91 1,371,035.91
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Increase Decrease
Items Opening balance Closing balance
Accrual Others Recovery/ Others
Reversal
Goods on hand 151,579,577.92 81,296,758.10 81,646,275.40 151,230,060.62
Total 152,950,613.83 81,296,758.10 81,646,275.40 152,601,096.53
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 made
Raw materials cost to be incurred upon completion, estimated selling at the beginning of period were used or sold in the current
expenses, and relevant taxes and surcharges. period.
Estimated selling price of relevant finished goods less
Goods on hand Inventories with provision for inventory write-down made
estimated selling expenses, and relevant taxes and
at the beginning of period were sold in the current period.
surcharges.
(3) Inventories – Development cost
Unit: RMB Yuan
Items Estimated total investment Opening balance Closing balance
Boao NHU Resort 550 million 42,570,355.38 42,570,355.38
Weifang NHU Town Phase II 398.53 million 54,960,480.22 54,960,480.22
Subtotal 97,530,835.60 97,530,835.60
(4) Inventories – Developed products
Unit: RMB Yuan
Items Date of Opening balance Increase Decrease Closing balance
completion
Boao NHU Resort Center Dec. 2014 121,902,734.56 737,327.12 552,791.73 122,087,269.95
Subtotal 121,902,734.56 737,327.12 552,791.73 122,087,269.95
9. Other current assets
Unit: RMB Yuan
Items Closing balance Opening balance
Prepaid VAT or input VAT to be credited 20,686,257.91 123,811,281.53
Prepaid enterprise income tax 19,249,934.46 54,251,454.46
Prepaid insurance premiums 5,502,799.65 4,330,488.27
Prepaid housing rents 891,922.42 23,362.83
Prepaid urban maintenance and 13,194.85 13,194.85
construction tax
Prepaid education surcharge 7,916.74 7,916.74
Prepaid local education surcharge 5,278.11 5,278.11
Total 46,357,304.14 182,442,976.79
10. Long-term equity investments
Unit: RMB Yuan
88
2023 Annual Report of Zhejiang NHU Co., Ltd.
Increase/Decrease Closing
Investment balance of
Investees Opening carrying Adjustment in Closing carrying provision
income/losses Cash dividend/ Provision
amount Investments Investments other Changes in Others amount for
recognized Profit declared for
increased decreased comprehensive other equity impairmen
under equity for distribution impairment
income t
method
I. Joint ventures
II. Associates
Zhejiang Chunhui
Environmental Protection 239,967,333.33 20,358,467.14 260,325,800.47
Energy Co., Ltd.
Shandong Bin’an Vocational
T raining School Co., Ltd. 5,842,851.42 -785,163.90 5,057,687.52
[Note]
Zhejiang Saiya Chemical 125,450,987.77 16,212,276.85 -960,219.61 140,703,045.01
Materials Co., Ltd
DSM NHU Engineering
Materials (Zhejiang) Co., 24,457,448.36 3,423,314.91 -2,120,785.74 25,759,977.53
Ltd.
CysBio ApS 36,784,947.60 -1,184,308.82 1,331,625.87 36,932,264.65
Anhui Yingna Weixun 4,000,000.00 4,000,000.00
Technology Co., Ltd
Ningbo Zhenhai Refining
and Chemical Xinhecheng 233,508,000.00 -3,169,284.18 230,338,715.82
Biotechnology Co., Ltd
Subtotal 432,503,568.48 237,508,000.00 34,855,302.00 1,331,625.87 -3,081,005.35 703,117,491.00
Total 432,503,568.48 237,508,000.00 34,855,302.00 1,331,625.87 -3,081,005.35 703,117,491.00
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 17,819,362,500.06 16,523,867,858.53
Total 17,819,362,500.06 16,523,867,858.53
(1) Details
Unit: RMB Yuan
Items Buildings and Generali equipment Special equipment Transport facilities Total
structures
I. Cost:
1. Opening balance 7,126,286,829.35 217,277,952.88 15,524,771,612.37 27,261,458.12 22,895,597,852.72
2. Increase 237,812,172.57 27,583,195.13 2,181,485,766.14 2,992,677.90 2,449,873,811.74
(1) Acquisition 98,370,675.72 7,642,898.98 404,802,224.29 2,986,353.56 513,802,152.55
(2) Transferred in
from construction in 139,441,496.85 19,940,296.15 1,776,683,541.85 6,324.34 1,936,071,659.19
progress
3. Decrease 24,302.75 1,115,100.03 373,539,569.72 3,770,245.45 378,449,217.95
(1) Disposal/ 24,302.75 1,115,100.03 373,539,569.72 3,770,245.45 378,449,217.95
Scrapping
4. Closing balance 7,364,074,699.17 243,746,047.98 17,332,717,808.79 26,483,890.57 24,967,022,446.51
II. Accumulated
depreciation
1. Opening balance 861,276,258.73 123,348,225.80 5,340,663,239.78 17,564,262.94 6,342,851,987.25
89
2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Buildings and Generali equipment Special equipment Transport facilities Total
structures
2. Increase 101,963,792.73 15,617,968.92 684,348,352.06 2,040,364.15 803,970,477.86
(1) Accrual 101,963,792.73 15,617,968.92 684,348,352.06 2,040,364.15 803,970,477.86
3. Decrease 1,801,604.05 22,555,055.47 3,665,804.54 28,022,464.06
(1) Disposal/ 1,801,604.05 22,555,055.47 3,665,804.54 28,022,464.06
Scrapping
4. Closing balance 963,240,051.46 137,164,590.67 6,002,456,536.37 15,938,822.55 7,118,800,001.05
III. Provision for
impairment
1. Opening balance 20,980,481.81 7,425.45 7,873,804.67 16,295.01 28,878,006.94
2. Increase
(1) Accrual
3. Decrease 1,766.53 16,295.01 18,061.54
(1) Disposal/ 1,766.53 16,295.01 18,061.54
Scrapping
4. Closing balance 20,980,481.81 7,425.45 7,872,038.14 28,859,945.40
IV. Carrying amount
1. Closing balance 6,379,854,165.90 106,574,031.86 11,322,389,234.28 10,545,068.02 17,819,362,500.06
2. Opening balance 6,244,030,088.81 93,922,301.63 10,176,234,567.92 9,680,900.17 16,523,867,858.53
(2) Fixed assets temporarily idle
Unit: RMB Yuan
Items Cost Accumulated Provision for Carrying amount Remarks
depreciation impairment
Buildings and 90,962,662.12 36,264,898.95 32,689,772.80 22,007,990.37
structures
General equipment 204,504.71 140,250.58 3,546.30 60,707.83
Special equipment 369,743,848.13 295,253,821.79 10,863,291.68 63,626,734.66
Subtotal 460,911,014.96 331,658,971.32 43,556,610.78 85,695,432.86
(3) Fixed assets leased out under operating leases
Unit: RMB Yuan
Items Closing carrying amount
Buildings and structures 26,767,138.93
Subtotal 26,767,138.93
(4) Fixed assets with certificate of titles being unsettled
Unit: RMB Yuan
Items Carrying amount Reasons for unsettlement
Buildings and structures 534,675,849.87 Relevant procedures have not yet been
completed.
Subtotal 534,675,849.87
13. Construction in progress
Unit: RMB Yuan
Items Closing balance Opening balance
Construction in progress 4,927,272,645.25 5,089,233,908.22
Total 4,927,272,645.25 5,089,233,908.22
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2023 Annual Report of Zhejiang NHU Co., Ltd.
(1) Details
Unit: RMB Yuan
Closing balance Opening balance
Items
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
impairment impairment
Methionine project with
annual output of 0.25 3,219,069,329.67 3,219,069,329.67 2,389,822,701.74 2,389,822,701.74
million tons
616 Joint Production 426,984,891.23 426,984,891.23
Project
Shandong Industrial 58,473,733.80 58,473,733.80 67,408,245.22 67,408,245.22
Park 603 Project
Shandong Industrial 424,267,448.48 424,267,448.48 94,672,989.28 94,672,989.28
Park HA Project
Shangyu Industrial Park 559,554,821.51 559,554,821.51
PPS Project
Daming Life and Health 113,110,548.03 113,110,548.03 26,065,403.64 26,065,403.64
Industry Project
NH acid project 411,013,534.11 411,013,534.11 514,155,642.52 514,155,642.52
Cogeneration Expansion 172,840,859.23 172,840,859.23 113,869,534.14 113,869,534.14
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 528,497,191.93 528,497,191.93 684,138,469.51 684,138,469.51
projects
Total 4,927,272,645.25 4,927,272,645.25 5,089,233,908.22 5,089,233,908.22
(2) Changes in significant projects
Unit: RMB Yuan
Including:
Budgets
Accumulated Completion Accumulated Amount of
Annual
Projects RMB 0000 Opening balance Increase T ransferred to amount of borrowing cost Fund
Other decrease Closing balance input to budget percentage capitalization
fixed assets borrowing cost capitalization source
Yuan （%） （%） rate
capitalization in current
period
Methionine
Raised
project with 536,984.22 2,389,822,701.74 829,246,627.93 3,219,069,329.67 97.12% 99.00%
annual output of funds
0.25 million tons
616 Joint Raised
Production 77,213.69 426,984,891.23 3,455,987.89 430,440,879.12 98.38% 100.00%
funds
Project
Shandong
Industrial Park 8,983.60 67,408,245.22 8,934,511.42 58,473,733.80 75.03% 95.00% Others
603 Project
Shandong
Industrial Park 97,991.14 94,672,989.28 330,483,701.66 889,242.46 424,267,448.48 43.71% 60.00% 811,777.78 811,777.78 2.60% Others
HA Project
Shangyu
Industrial Park 70,900.00 559,554,821.51 60,878,207.54 620,433,029.05 87.08% 100.00% Others
PPS Project
Daming Life and
Health Industry 69,314.56 26,065,403.64 87,045,144.39 113,110,548.03 77.34% 80.00% 5,560,699.99 1,256,944.44 3.79% Others
Project
NH acid project 73,899.28 514,155,642.52 37,804,682.32 140,946,790.73 411,013,534.11 74.56% 85.00% Others
Cogeneration
Expansion 33,890.43 113,869,534.14 58,971,325.09 172,840,859.23 51.00% 90.00% Others
Project
F5 project 13,563.50 91,979,706.11 46,677,427.57 138,657,133.68 102.23% 100.00% Others
NBC and CLA
projects of 13,555.00 120,581,503.32 38,141,206.81 158,722,710.13 117.10% 100.00% Others
Zhejiang
Pharmaceutical
1,492,704,311.
Total 996,295.42 4,405,095,438.71 1,490,089,785.17 8,934,511.42 4,398,775,453 .32 -- -- 6,372,477.77 2,068,722.22 --
20
91
2023 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 3,573,327.02 3,573,327.02
2. Increase 5,312,700.96 5,312,700.96
(1) Leased in 5,312,700.96 5,312,700.96
3. Decrease
4. Closing balance 8,886,027.98 8,886,027.98
II. Accumulated depreciation
1. Opening balance 743,190.65 743,190.65
2. Increase 360,873.71 360,873.71
(1) Accrual 360,873.71 360,873.71
3. Decrease
(1) Disposal
4. Closing balance 1,104,064.36 1,104,064.36
III. Carrying amount
1. Closing balance 7,781,963.62 7,781,963.62
2. Opening balance 2,830,136.37 2,830,136.37
15. Intangible assets
(1) Details
Unit: RMB Yuan
Items Land use right Patent right Non-patented Software Total
technology
I. Cost
1. Opening balance 1,854,376,892.96 31,662,062.75 38,788,324.30 62,516,135.99 1,987,343,416.00
2. Increase 423,872,121.50 3,853,885.79 19,032,964.34 1,749,989.09 448,508,960.72
(1) Acquisition 423,872,121.50 3,853,885.79 19,032,964.34 1,749,989.09 448,508,960.72
(2) Internal R&D
3. Closing balance 2,278,249,014.46 35,515,948.54 57,821,288.64 64,266,125.08 2,435,852,376.72
II. Accumulated amortization
1. Opening balance 223,213,559.07 5,344,520.66 1,628,315.26 18,650,774.69 248,837,169.68
2. Increase 20,057,624.00 2,969,177.07 368,326.76 2,975,925.67 26,371,053.50
(1) Accrual 20,057,624.00 2,969,177.07 368,326.76 2,975,925.67 26,371,053.50
3. Decrease 2,594,832.03 0.00 0.00 2,594,832.03
(1) Disposal0 2,594,832.03 0.00 0.00 2,594,832.03
4. Closing balance 240,676,351.04 8,313,697.73 1,996,642.02 21,626,700.36 272,613,391.15
III. Carrying amount -
1. Closing balance 2,037,572,663.42 27,202,250.81 55,824,646.62 42,639,424.72 2,163,238,985.57
2. Opening balance 1,631,163,333.89 26,317,542.09 37,160,009.04 43,865,361.30 1,738,506,246.32
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2023 Annual Report of Zhejiang NHU Co., Ltd.
(2) Land use right with certificate of titles being unsettled
Unit: RMB Yuan
Items Carrying amount Reasons for unsettlement
Land use right 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 2,134,185.59 2,134,185.59
GmbH
NHU/CHR.OLES
EN LATIN 3,622,704.97 3,622,704.97
AMERICA A/S
Total 5,756,890.56 5,756,890.56
(2) Provision for impairment
Unit: RMB Yuan
Investees or Increase Decrease
Opening
events Closing balance
resulting in balance Accrual Translation Disposal Translation
goodwill reserve reserve
Bardoterminal 2,134,185.59 2,134,185.59
GmbH
Total 2,134,185.59 2,134,185.59
17. Long-term prepayments
Unit: RMB Yuan
Items Opening balance Increase Amortization Other decrease Closing balance
Decoration fees 8,149,891.98 1,703,262.70 6,446,629.28
Site leveling fees 16,221.60 8,110.80 8,110.80
Catalysts 5,013,764.87 4,856,634.96 2,122,920.28 7,747,479.55
Total 13,179,878.45 4,856,634.96 3,834,293.78 14,202,219.63
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 56,657,315.88 9,051,392.83 67,822,769.65 11,068,181.53
of assets
Unrealized profit from 111,305,657.67 17,111,574.21 50,194,235.37 7,529,135.31
internal transactions
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Closing balance Opening balance
Items
Deductible temporary Deferred tax assets Deductible temporary Deferred tax assets
difference difference
Deferred income 198,964,860.87 29,844,729.13 185,235,337.49 27,785,300.63
Difference in
depreciation of fixed 10,956,796.59 1,643,519.49 22,863,701.57 3,429,555.24
assets
Lease liabilities 2,994,386.17 449,157.93 2,924,244.47 438,636.67
Total 380,879,017.18 58,100,373.59 329,040,288.55 50,250,809.38
(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 1,439,749,541.81 232,926,127.42 1,468,559,836.57 232,654,485.84
fixed assets
Profit before tax of NHU
(Hong Kong) Trading 201,107,312.20 30,166,096.83 297,747,945.27 44,662,191.79
Co., Ltd.
Right-of-use assets 2,711,325.88 406,698.88 2,791,860.27 418,779.04
Total 1,643,568,179.89 263,498,923.13 1,769,099,642.11 277,735,456.67
(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 58,100,373.59 50,250,809.38
Deferred tax liabilities 263,498,923.13 277,735,456.67
(4) Details of unrecognized deferred tax assets
Unit: RMB Yuan
Items Closing balance Opening balance
Deductible temporary difference 449,494,781.50 511,910,785.90
Deductible losses 1,730,583,954.80 2,002,071,871.11
Total 2,180,078,736.30 2,513,982,657.01
(5) Maturity years of deductible losses of unrecognized deferred tax assets
Unit: RMB Yuan
Maturity years Closing balance Opening balance Remarks
Year 2027 8,512,140.12
Year 2028 7,395,372.22 35,469,296.06
Year 2029 38,901,398.74 79,322,307.29
Year 2030 79,426,136.78 255,397,416.94
Year 2031 254,533,024.55 287,143,749.91
Year 2032 281,165,481.82 1,336,226,960.79
Year 2033 1,069,162,540.69
Total 1,730,583,954.80 2,002,071,871.11 --
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2023 Annual Report of Zhejiang NHU Co., Ltd.
19. Other non-current assets
Unit: RMB Yuan
Closing balance Opening balance
Items Provision Provision
Book balance Carrying Book balance Carrying amount
for for
amount
impairment impairment
Pollution emission trading fees 16,399,343.44 16,399,343.44 16,250,239.11 16,250,239.11
Payments for coal quota 62,296,000.00 62,296,000.00 63,496,000.00 63,496,000.00
Prepayments for long-term 153,283,474.57 153,283,474.57 200,124,243.53 200,124,243.53
assets
Total 231,978,818.01 231,978,818.01 279,870,482.64 279,870,482.64
20. Short-term borrowings
(1) Details on categories
Unit: RMB Yuan
Items Closing balance Opening balance
Guaranteed borrowings 11,404,061.84 22,643,974.95
Credit borrowings 1,597,850,167.32 1,673,729,466.06
Credit and guaranteed borrowings 150,000,000.00
Total 1,609,254,229.16 1,846,373,441.01
21. Held-for-trading financial liabilities
Unit: RMB Yuan
Categories Closing balance Opening balance
Financial liabilities designated at fair value
12,909,447.29
through profit or loss
Total 12,909,447.29
22. Notes payable
Unit: RMB Yuan
Categories Closing balance Opening balance
Bank acceptance 456,643,824.63 627,438,689.79
Total 456,643,824.63 627,438,689.79
23. Accounts payable
(1) Details
Unit: RMB Yuan
Items Closing balance Opening balance
Materials and labor costs 856,281,933.83 735,579,156.33
Payments for engineering and equipment 947,086,871.01 1,439,879,280.16
Total 1,803,368,804.84 2,175,458,436.49
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2023 Annual Report of Zhejiang NHU Co., Ltd.
24. Contract liabilities
Unit: RMB Yuan
Items Closing balance Opening balance
Payments for goods received in advance 63,559,211.75 60,660,929.75
Total 63,559,211.75 60,660,929.75
25. Employee benefits payable
(1) Details
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
I. Short-term employee benefits 386,391,911.86 1,009,716,693.28 1,147,080,529.14 249,028,076.00
II. Post-employment benefits – 56,940,894.94 56,940,894.94
defined contribution plan
Total 386,391,911.86 1,066,657,588.22 1,204,021,424.08 249,028,076.00
(2) Details of short-term employee benefits
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
1. Wage, bonus, allowance and 352,176,336.45 219,337,277.87
subsidy 867,947,427.24 1,000,786,485.82
2. Employee welfare fund 59,636,166.90 59,636,166.90
3. Social insurance premium 30,258,035.99 30,258,035.99
Including: Medicare premium 26,687,732.53 26,687,732.53
Occupational injuries 2,983,466.98 2,983,466.98
premium
Maternity premium 586,836.48 586,836.48
4. Housing provident fund 46,183,287.53 46,183,287.53
5. Trade union fund and 34,215,575.41 5,691,775.62 10,216,552.90 29,690,798.13
employee education fund
Total 386,391,911.86 1,009,716,693.28 1,147,080,529.14 249,028,076.00
(3) Details of defined contribution plan
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
1. Basic endowment insurance 54,906,640.57 54,906,640.57
premium
2. Unemployment insurance 2,034,254.37 2,034,254.37
premium
Total 56,940,894.94 56,940,894.94
26. Taxes and rates payable
Unit: RMB Yuan
Items Closing balance Opening balance
VAT 10,491,330.77 14,398,822.86
Enterprise income tax 172,254,286.01 141,076,919.30
Individual income tax withheld for tax 12,179,983.93 6,871,930.23
authorities
Urban maintenance and construction tax 2,858,413.99 3,127,594.55
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Closing balance Opening balance
Land appreciation tax 15,477,549.51 15,427,321.94
Housing property tax 4,530,579.03 16,764,793.31
Land use tax 6,118,100.19 7,963,404.79
Education surcharge (local education 1,973,857.55 2,568,164.96
surcharge)
Total 225,884,100.98 208,198,951.94
27. Other payables
Unit: RMB Yuan
Items Closing balance Opening balance
Other payables 59,568,912.95 67,351,740.34
Total 59,568,912.95 67,351,740.34
1) Categorized by nature
Unit: RMB Yuan
Items Closing balance Opening balance
Security deposits 19,362,450.86 26,917,823.16
Temporary receipts payable 10,630,190.09 15,463,590.29
Earnest money for housing purchase (Boao 100,000.00 100,000.00
NHU Resort Center)
Call loans 13,760,448.64
Others 29,476,272.00 11,109,878.25
Total 59,568,912.95 67,351,740.34
28. Non-current liabilities due within one year
Unit: RMB Yuan
Items Closing balance Opening balance
Long-term borrowings due within one year 1,919,091,409.71 2,591,558,912.13
Lease liabilities due within one year 104,283.15 128,794.09
Total 1,919,195,692.86 2,591,687,706.22
29. Other current liabilities
Unit: RMB Yuan
Items Closing balance Opening balance
Output VAT to be recognized 6,877,330.18 4,978,299.99
Total 6,877,330.18 4,978,299.99
30. Long-term borrowings
(1) Categories
Unit: RMB Yuan
Items Closing balance Opening balance
Mortgaged borrowings 29,736,351.83 31,590,890.00
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Closing balance Opening balance
Guaranteed borrowings 853,870,166.65 934,059,850.02
Credit borrowings 5,628,509,863.64 4,307,986,768.85
Total 6,512,116,382.12 5,273,637,508.87
31. Lease liabilities
Unit: RMB Yuan
Items Closing balance Opening balance
Unpaid lease payments 9,426,413.21 4,080,857.16
Less: Unrealized financing expenses 1,561,001.08 1,258,453.09
Total 7,865,412.13 2,822,404.07
32. Deferred income
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance Reasons for balance
The Company received government
Government grants 1,083,159,222.41 90,417,310.00 63,691,888.18 1,109,884,644.23 grants related to assets, which were
amortized based on the depreciation
progress of corresponding assets.
Total 1,083,159,222.41 90,417,310.00 63,691,888.18 1,109,884,644.23 --
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 378,242,820.00 24,668,010.00 353,574,810.00 Related to assets
Fermentation Industrial Park Project
Special funds for enterprise 65,290,051.35 4,836,300.10 60,453,751.25 Related to assets
development (Shandong Vitamins)
Special funds for joint production 27,997,916.77 1,887,499.98 26,110,416.79 Related to assets
project of Xinhao T hermal Power
Technical renovation for green deep 33,403,500.00 1,713,000.00 31,690,500.00 Related to assets
processing of 2019
Special funds for enterprise 62,659,340.76 572,802.18 62,086,538.58 Related to assets
development (Amino Acid)
Subsidies for land leveling of 27,590,534.40 359,094.72 27,231,439.68 Related to assets
Shandong
Enterprise development funds of 18,409,410.76 218,907.06 18,190,503.70 Related to assets
Shandong
PPS construction project with annual 9,586,499.84 913,000.02 8,673,499.82 Related to assets
output of 10,000 tons
Subsidies for PPS resin with annual
output of 5,000 tons and PPS 5,700,000.00 1,425,000.00 4,275,000.00 Related to assets
composite materials with annual output
of 6,000 tons
Enterprise development funds of
Advanced Manufacturing Industrial 8,293,534.31 99,125.88 8,194,408.43 Related to assets
Park
Effective industrial input expansion of 5,107,200.00 478,800.00 4,628,400.00 Related to assets
2016
Funds for key thematic projects of
industrial revitalization and technical 2,497,500.02 713,571.42 1,783,928.60 Related to assets
renovation of 2012
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Grants
Grants included Grants
Items Opening Increase included into Other Closing balance Related to
into other offsetting
balance non-operating changes assets/income
income relevant cost
revenue
Fiscal subsidies for low-rent housing 5,857,702.92 120,428.58 5,737,274.34 Related to assets
Subsidies from land transfer fees of 4,622,789.52 125,115.78 4,497,673.74 Related to assets
Shandong dormitory
Subsidies for inputs in biochemical 4,263,191.96 158,885.94 4,104,306.02 Related to assets
infrastructure of Shangyu
Construction project of public testing 2,000,000.08 499,999.98 1,500,000.10 Related to assets
service platform
Subsidies for infrastructure supporting 6,680,625.00 398,812.50 6,281,812.50 Related to assets
fees
Compensation for resource
conservation and environmental 2,880,000.00 240,000.00 2,640,000.00 Related to assets
protection projects of 2017
Subsidies for new materials, land and 1,621,440.00 405,360.00 1,216,080.00 Related to assets
infrastructure construction
Special fiscal funds for revitalization of
the substantial economy 1,600,842.78 269,614.26 1,331,228.52 Related to assets
(transformation of traditional
industries) of 2017
Subsidies for RT O Project 866,666.94 199,999.98 666,666.96 Related to assets
Special subsidies for development of 1,199,999.98 100,000.06 1,099,999.92 Related to assets
marine economy of 2017
Special subsidies for high-quality 1,499,372.60 152,478.60 1,346,894.00 Related to assets
development of manufacturing industry
Enterprise development fund 50,048,537.62 2,611,228.06 47,437,309.56 Related to assets
(Shandong Fine Chemical)
Special funds for Taishan industry 7,400,000.00 4,000,000.00 133,333.34 11,266,666.66 Related to assets
leading talents
Food security control and emergency 22,363,000.00 1,254,000.00 21,109,000.00 Related to assets
facilities project
Policy incentives for industrial 21,419,388.07 1,396,916.64 20,022,471.43 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 21,049,216.77 1,603,099.98 19,446,116.79 Related to assets
Economic and Technological
Development Zone
Subsidies for upgrading coal-fired 185,714.24 18,571.44 167,142.80 Related to assets
boilers of 2017
Subsidies for low-nitrogen
transformation of gas-fired boilers of 394,821.43 35,357.16 359,464.27 Related to assets
Xinchang County
Special funds for technical renovation 30,693,643.47 689,427.70 30,004,215.77 Related to assets
Incentives for investment promotion 23,012,614.08 304,037.69 22,708,576.39 Related to assets
Special fiscal supporting funds for
high-quality development (investment 4,468,841.70 348,221.40 4,120,620.30 Related to assets
projects) of manufacturing industry of
Xinchang County of 2021
Support advanced manufacturing and
modern service industry special 2021 36,025,000.02 2,807,142.84 33,217,857.18 Related to assets
central budget investment plan
Economic and Information Bureau of
technical transformation project 7,541,559.54 541,869.04 6,999,690.50 Related to assets
subsidies
2021 Enterprise Digitalization Key
15,000,000.00 500,000.00 14,500,000.00 Related to assets
Project Incentive Funds
2022 Special funds to support
advanced manufacturing and service 3,831,190.27 127,706.36 3,703,483.91 Related to assets
industries
2021 Digital (intelligent)
demonstration workshop project 1,803,921.60 117,647.04 1,686,274.56 Related to assets
incentive money
2020 industrial enterprise energy-
saving technology transformation 915,966.40 50,420.16 865,546.24 Related to assets
project incentive policy funds
Chemical industry transformation and
upgrading 2.0 intelligent
40,320,000.00 1,344,000.00 38,976,000.00 Related to assets
transformation project incentives and
service subsidies
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Grants
Grants included Grants
Items Opening Increase included into Other Closing balance Related to
into other offsetting
balance non-operating changes assets/income
income relevant cost
revenue
Second Digital Economy Financial
1,000,000.00 59,523.80 940,476.20 Related to assets
Assistance Awards
Collaborative Innovation Center Grant 30,626,900.00 7,911,949.18 22,714,950.82 Related to assets
NHU amino acid Project grants 38,640,510.00 38,640,510.00 Related to assets
Shandong Province Core Technology
Tackling Special Project (Major 11,360,000.00 11,360,000.00 Related to assets
Technical Equipment Direction)
2023 Provincial Science and
Technology Development Special 1,800,000.00 42,857.14 1,757,142.86 Related to assets
Funding Grant
Heilongjiang Bio 23-year Vitamin C
Expansion to 42,000 Tons Technical 2,989,900.00 74,747.49 2,915,152.51 Related to assets
Reform Project Government Subsidy
Other piecemeal subsidies 7,004,867.21 1,164,024.68 5,840,842.53 Related to assets
Total 1,083,159,222.41 90,417,310.00 63,691,888.18 1,109,884,644.23
Note: Please refer to item VII 60 of this section for details on government grants included in profit or loss.
33. 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 3,090,907,356.00 3,090,907,356.00
34. Capital reserve
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Share/capital premium 3,334,992,617.92 3,334,992,617.92
Other capital reserve 278,104,892.89 278,104,892.89
Total 3,613,097,510.81 3,613,097,510.81
35. Treasury shares
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Treasury shares 500,059,711.25 500,059,711.25
Total 500,059,711.25 500,059,711.25
36. Other comprehensive income (OCI)
Unit: RMB Yuan
Current period cumulative
Less: OCI Less: OCI
previously previously
Items Opening balance Current period Less: Attributable to non- Closing balance
recognized but recognized but Attributable to parent
cumulative before Income controlling
transferred to profit transferred to company
income tax tax shareholders
or loss in current retained earnings in
period current period
Items not to be
reclassified 76,577,564.17 36,723,815.69 29,652,134.01 7,071,681.68 106,229,698.18
subsequently to profit or
loss
Including: Other 506,954.43 506,954.43
comprehensive income
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Current period cumulative
Less: OCI Less: OCI
Items Opening balance previously previously
Current period Less: Attributable to non- Closing balance
recognized but recognized but Attributable to parent
cumulative before Income controlling
transferred to profit transferred to company
income tax tax shareholders
or loss in current retained earnings in
period current period
to be transferred to
profit or loss under
equity method
Translation reserves 76,070,609.74 36,723,815.69 29,652,134.01 7,071,681.68 105,722,743.75
Total 76,577,564.17 36,723,815.69 29,652,134.01 7,071,681.68 106,229,698.18
37. Special reserve
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Work safety fund 26,196,894.55 26,153,211.92 8,523,683.45 43,826,423.02
Total 26,196,894.55 26,153,211.92 8,523,683.45 43,826,423.02
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.
38. Surplus reserve
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Statutory surplus reserve 1,444,413,940.89 1,444,413,940.89
Total 1,444,413,940.89 1,444,413,940.89
39. Undistributed profit
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Unallocated earnings at the end of the previous 15,823,725,913.44 14,152,465,528.17
period before adjustment
Adjustments to total unappropriated earnings at 19,857.63 4,795.77
the beginning of the period (increase +, decrease -)
Adjustment to unappropriated earnings at the 15,823,745,771.07 14,152,470,323.94
beginning of the period
Add: Net profit attributable to owners of the 1,483,229,236.96 2,213,877,419.25
parent company
Minus: Dividend payable on ordinary shares 1,536,710,840.00 1,793,794,088.80
Closing balance 15,770,264,168.03 14,572,553,654.39
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 19,857.63. Please refer to item V 18 of this section for details on Deferred tax assets
and deferred tax liabilities.
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2023 Annual Report of Zhejiang NHU Co., Ltd.
2）Pursuant to the 2022 profit distribution plan deliberated and approved by the general meeting of 2022, based on the total shares of
3,073,421,680 shares excluding the repurchased shares of 17,485,676 shares from 3,090,907,356 shares, a cash dividend of RMB5.00
per 10 shares (tax included) will be paid to all shareholders, totaling a cash dividend of RMB1,536,710,840.00 yuan.
40. Operating revenue/Operating cost
Unit: RMB Yuan
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 7,320,741,964.94 4,925,581,429.30 8,115,267,916.02 4,789,134,207.58
Other operations 97,772,611.15 63,952,403.65 99,771,361.01 155,988,595.81
Total 7,418,514,576.09 4,989,533,832.95 8,215,039,277.03 4,945,122,803.39
Details of revenue:
Unit: RMB Yuan
Categories of contracts Total
By product
Including: Nutrition 4,830,212,886.75
Flavor and fragrance 1,631,864,728.45
New materials 578,308,624.04
Others 378,128,336.85
Subtotal 7,418,514,576.09
By operating region
Including: Domestic 3,557,426,385.63
Overseas 3,861,088,190.46
Subtotal 7,418,514,576.09
By revenue recognition time
Including: Goods (transferred at a point in time) 7,418,514,576.09
Subtotal 7,418,514,576.09
By sales channel
Including: Direct sales 5,896,114,550.44
Agent sales 1,522,400,025.65
Subtotal 7,418,514,576.09
Information related to performance obligations:
None.
Information related to transaction price allocated to the remaining performance obligations:
At the end of this report period, revenue corresponding to performance obligations for which the Company has entered into contracts
but not yet performed or fulfilled amounted to 5,371.60 million yuan, of which, 5,371.60 million yuan is expected to be recognized as
revenue in 2023.
41. Taxes and surcharges
Unit: RMB Yuan
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Current period cumulative Preceding period comparative
Urban maintenance and construction tax 16,139,986.76 12,713,819.69
Education surcharge (local education 12,568,962.34 10,775,889.86
surcharge)
Housing property tax 16,543,479.78 15,431,428.20
Land use tax 13,595,984.53 5,892,341.09
Vehicle and vessel use tax 31,354.61 23,132.71
Stamp duty 6,523,091.10 5,558,733.12
Environmental protection tax 994,239.44 853,455.25
Land appreciation tax 361,871.13
Total 66,397,098.56 51,610,671.05
42. Selling expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Employee benefits 30,266,930.02 27,765,835.78
Sales commission and customs declaration 16,644,358.83 12,731,579.13
charges
Office expenses, business traveling 9,598,115.80 7,801,633.19
expenses
Advertising and promotion expenses,
5,805,395.37 4,600,887.46
business entertainment expenses
Others 4,626,570.78 4,377,961.92
Total 66,941,370.80 57,277,897.48
43. Administrative expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Employee benefits 134,360,487.91 115,390,102.23
Depreciation, amortization of intangible 46,129,788.87
assets 55,032,882.01
Office expenses, business traveling 18,001,839.38 13,377,152.20
expenses
Business entertainment expenses 10,453,876.07 12,437,740.12
Consulting fees 9,344,412.68 9,456,199.96
Insurance premiums 7,863,383.20 7,564,296.84
Others 9,589,569.92 7,929,542.19
Total 244,646,451.17 212,284,822.41
44. R&D expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Employee benefits 199,709,646.94 204,036,669.50
Direct input 150,730,396.75 146,667,952.04
Depreciation, amortization of intangible 38,536,030.81 32,048,604.87
assets
103
2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Current period cumulative Preceding period comparative
Outsourcing expenses 3,267,672.12 5,698,974.07
Office expenses, business traveling 4,840,225.31 21,270,730.68
expenses
Others 19,491,419.66 30,634,321.48
Total 416,575,391.59 440,357,252.64
45. Financial expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Interest expenses 163,988,612.81 152,357,156.76
Less: Interest income 78,203,398.06 76,211,850.51
Losses on foreign exchange (or less: gains) -132,095,878.10 -61,972,039.28
Others 9,148,237.96 8,057,786.99
Total -37,162,425.39 22,231,053.96
46. Other income
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Government grants related to assets [Note] 63,691,888.18 46,423,802.28
Government grants related to income [Note] 37,629,789.92 39,098,377.26
Refund of handling fees for withholding 1,525,545.35 1,104,047.36
individual income tax
Total 102,847,223.45 86,626,226.90
Note: Please refer to item VII 60 of this section for details on government grants included in other income.
47. Investment income
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Investment income from long-term equity 34,855,314.27 25,402,893.70
investments under equity method
Investment income from disposal of -30,080.26 -2,764,801.12
financial instruments
Including: Financial assets classified as at 996,763.92 7,739,778.29
fair value through profit or loss
Financial liabilities classified as at fair -1,026,844.18 -10,504,579.41
value through profit or loss
Investment income from bank financial 8,894,052.73 28,841,651.61
products and structured deposits
Interest income from split loans 180,613.89
Total 43,899,900.63 51,479,744.19
48. Gains on changes in fair value
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Held-for-trading financial assets 1,735,988.41 29,128,440.56
Including: Gains on changes in fair value 1,735,988.41 29,128,440.56
arising from financial assets classified as at fair
104
2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Current period cumulative Preceding period comparative
value through profit or loss
Held-for-trading financial liabilities -13,004,458.11 -17,291,740.52
Including: Gains on changes in fair value
arising from financial liabilities classified as at -13,004,458.11 -17,291,740.52
fair value through profit or loss
Total -11,268,469.70 11,836,700.04
49. Credit impairment loss
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Bad debts 6,389,579.21 -10,613,626.22
Total 6,389,579.21 -10,613,626.22
50. Assets impairment loss
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Inventory write-down loss -81,296,758.10 -7,890,179.58
Total -81,296,758.10 -7,890,179.58
51. Gains on asset disposal
Unit: RMB Yuan
Sources Current period cumulative Preceding period comparative
Gains on disposal of non-current assets 13,545,778.16 6,674,850.81
Total 13,545,778.16 6,674,850.81
52. Non-operating revenue
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative Amount included in non-
recurring profit or loss
Indemnity income 3,394,701.03 949,584.99 3,394,701.03
Others 182,141.54 1,074,489.85 182,141.54
Total 3,576,842.57 2,024,074.84 3,576,842.57
53. Non-operating expenditures
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative Amount included in non-
recurring profit or loss
Donation expenditures 591,259.90 1,416,764.60 591,259.90
Others 1,027,741.48 913,552.36 1,027,741.48
Total 1,619,001.38 2,330,316.96 1,619,001.38
105
2023 Annual Report of Zhejiang NHU Co., Ltd.
54. Income tax expenses
(1) Details
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Current period income tax expenses 273,369,295.58 346,750,734.36
Deferred income tax expenses -22,086,097.75 53,344,393.49
Total 251,283,197.83 400,095,127.85
(2) Reconciliation of accounting profit to income tax expenses
Unit: RMB Yuan
Items Current period cumulative
Profit before tax 1,747,657,951.25
Income tax expenses based on statutory/applicable tax rate 262,148,692.69
Effect of different tax rate applicable to subsidiaries 56,214,218.40
Effect of prior income tax reconciliation -12,365,290.81
Effect of non-taxable income -451,921,887.75
Effect of non-deductible costs, expenses and losses 1,445,115.51
Effect of extra deduction of R&D expenses -63,686,107.78
Effect of utilization of deductible losses not previously recognized as deferred tax
459,448,457.57
assets
Income tax expenses 251,283,197.83
55. Other comprehensive income
Please refer to item VII 36 of this section for details.
56. Notes to items of the cash flow statement
(1) Other cash receipts related to operating activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Interest income from cash in bank 77,998,992.00 75,485,329.15
Receipt of government grants 127,517,191.82 95,852,424.62
Recovery of temporary borrowings and
security deposits 1,665,000.00 5,016,089.54
Other receipts and net current accounts 4,596,065.33 5,326,081.20
Total 211,777,249.15 181,679,924.51
(2) Other cash payments related to operating activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
R&D expenditures in the form of cash 28,971,437.79 2,053,649.86
Office expenses and business traveling
expenses 24,331,184.10 13,788,936.02
Advertising and promotion expenses,
business entertainment expenses 13,968,143.32 8,869,953.87
Sales commission and customs declaration 16,317,917.34 13,003,888.95
106
2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Current period cumulative Preceding period comparative
charges
Insurance expenses 2,686,385.45 2,327,776.16
Other payments and net current accounts 97,358,958.00 106,597,455.76
Total 183,634,026.00 146,641,660.62
(3) Other cash receipts related to investing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Redemption of financial products 720,000,000.00 1,800,000,000.00
Receipt of demobilized loans and interest 20,938,810.13 13,423,350.06
Net recovery of other and transactions 14,294,950.48
Total 740,938,810.13 1,827,718,300.54
(4) Other cash payments related to investing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Payments for purchase of financial 250,000,000.00 920,000,000.00
products and structured deposits
Unbundled principal amount 36,775,804.59
Payments for land bond 179,698,926.77
Total 250,000,000.00 1,136,474,731.36
(5) Other cash payments related to financing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Payments for bank financing handling 1,206,719.90 3,305,539.56
charges
Payments of handling charges for issuing 200,900.43 576,792.00
letters of guarantee for borrowings
Total 1,407,620.33 3,882,331.56
57. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Unit: RMB Yuan
Supplement information Current period cumulative Preceding period comparative
1. Reconciliation of net profit to cash flows
from operating activities:
Net profit 1,496,374,753.42 2,223,867,122.27
Add: Provision for assets impairment loss 74,907,178.89 18,503,805.80
Depreciation of fixed assets, oil and 803,970,477.86 623,703,868.71
gas assets, productive biological assets
Depreciation of right-of-use assets 360,873.71 657,653.96
Amortization of intangible assets 26,371,053.50 19,125,769.24
Amortization of long-term
3,834,293.78 3,316,666.66
prepayments
Losses on disposal of fixed assets, -13,545,778.16 -6,674,850.81
intangible assets and other long-term
107
2023 Annual Report of Zhejiang NHU Co., Ltd.
Supplement information Current period cumulative Preceding period comparative
assets (Less: gains)
Fixed assets retirement loss (Less:
gains)
Losses on changes in fair value (Less: 11,268,469.70 -11,836,700.04
gains)
Financial expenses (Less: gains) -36,396,626.05 163,843,989.92
Investment losses (Less: gains) -43,899,900.63 -51,479,744.19
Decrease of deferred tax assets (Less: -7,849,564.21 -12,188,648.37
increase)
Increase of deferred tax liabilities -14,236,533.54 65,533,041.86
(Less: decrease)
Decrease of inventories (Less: -433,678,248.93 -1,358,969,145.31
increase)
Decrease of operating receivables 351,542,987.52 125,300,272.14
(Less: increase)
Increase of operating payables (Less: -983,460,814.93 -560,246,363.64
decrease)
Others
Net cash flows from operating 1,235,562,621.93 1,242,456,738.20
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 3,507,891,602.10 6,451,708,569.16
Less: Cash at the beginning of the period 5,151,841,931.86 5,714,537,538.23
Add: Cash equivalents at the end of the
period
Less: Cash equivalents at the beginning of
the period
Net increase of cash and cash equivalents -1,643,950,329.76 737,171,030.93
(2) Composition of cash and cash equivalents
Unit: RMB Yuan
Items Closing balance Opening balance
I. Cash 3,507,891,602.10 5,151,841,931.86
Including: Cash on hand 21,036.01 16,584.59
Cash in bank on demand for
3,507,862,165.02 5,151,816,943.29
payment
Other cash and bank balances on 8,401.07 8,403.98
demand for payment
II. Cash and cash equivalents at the end of 3,507,891,602.10 5,151,841,931.86
the period
Remarks:
Closing balance of cash and bank balances amounted to 3,654,734,123.88 yuan, including deposit for bank acceptance of
110,959,093.51 yuan, deposit for letters of credit of 33,486,505.20yuan, deposit for engineering labor costs of 852,349.44 yuan, deposit
for construction safety of 867,529.53 yuan, deposit for ETC of 16,500.00 yuan and deposit for water fees of 660,544.10 yuan, which
was not cash and cash equivalents.
108
2023 Annual Report of Zhejiang NHU Co., Ltd.
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.
58. Assets with title or use right restrictions
Unit: RMB Yuan
Items Closing carrying amount Reasons for restrictions
Please refer to supplement information to the
Cash and bank balances 146,842,521.78 cash flow statement of this section for
details.
Notes receivable 155,053,622.64 Please refer to notes to notes receivable of
this section for details.
Fixed assets 97,437,448.95 Mortgaged for bank borrowings.
Intangible assets 18,579,010.61 Mortgaged for bank borrowings.
Receivables financing 84,532,028.12 Please refer to notes to receivables financing
of this section for details.
Total 502,444,632.10 --
59. Monetary items in foreign currencies
(1) Details
Unit: RMB Yuan
Items Closing balance in foreign Exchange rate RMB equivalent at the end of the period
currencies
Cash and bank balances -- -- 286,324,680.87
Including: USD 21,871,979.07 7.2258 158,042,546.36
EUR 15,249,133.92 7.8771 120,118,952.80
HKD 813,287.36 0.9220 749,850.95
JPY 80,552,975.00 0.0501 4,035,704.05
BRL 1,409,474.25 1.4922 2,103,217.48
PHP 1,880,313.16 0.4235 796,312.62
SGD 68,001.46 5.3442 363,413.40
PLN 64,752.53 1.7711 114,683.21
Accounts receivable - - 1,720,951,618.92
Including: USD 196,305,356.37 7.2258 1,418,463,244.16
EUR 29,742,103.99 7.8771 234,281,527.35
GBD 38,640.00 0.9220 35,626.08
BRL 45,685,043.11 1.4922 68,171,221.33
Other receivables - - 53,809,261.14
Including: EUR 1,772,947.54 7.8771 13,965,685.07
HKD 31,700.00 0.9220 29,227.40
BRL 7,751,932.61 1.4922 11,567,433.84
PHP 65,940,508.41 0.4235 27,925,805.31
SGD 60,085.61 5.3442 321,109.52
Short-term borrowings - - 134,477,770.95
Including: USD 411,070.24 7.2258 2,970,311.34
109
2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Closing balance in foreign Exchange rate RMB equivalent at the end of the period
currencies
EUR 15,884,344.60 7.8771 125,122,570.85
DKK 6,034,296.15 1.0581 6,384,888.76
Accounts payable - - 85,049,402.03
Including: USD 2,545,781.14 7.2258 18,395,305.35
EUR 6,269,284.37 7.8771 49,383,779.93
BRL 11,476,912.19 1.4922 17,125,848.37
PHP 341,129.58 0.4235 144,468.38
Other payables - - 8,796,122.02
Including: USD 914,096.30 7.2258 6,605,077.04
EUR 265,517.36 7.8771 2,091,506.80
HKD 57,878.84 0.9220 53,364.29
SGD 8,640.00 5.3442 46,173.89
Long-term borrowings - - 29,736,351.83
Including: EUR 3,775,038.00 7.8771 29,736,351.83
Non-current liabilities due within - - 7,575,107.74
one year
Including: EUR 961,662.00 7.8771 7,575,107.74
(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/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.
60. Government grants
(1) Government grants related to assets
Unit: RMB Yuan
Items Grants included into other
Closing balance Related to assets/income
income
Special funds for Biological Fermentation 353,574,810.00 24,668,010.00
Related to assets
Industrial Park Project
Special funds for enterprise development 60,453,751.25 Related to assets 4,836,300.10
(Shandong Vitamins)
Special funds for joint production project of 26,110,416.79 Related to assets 1,887,499.98
Xinhao Thermal Power
Technical renovation for green deep processing 31,690,500.00 Related to assets 1,713,000.00
of 2019
110
2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Grants included into other
Closing balance Related to assets/income
income
Special funds for enterprise development 62,086,538.58 Related to assets 572,802.18
(Amino Acid)
Subsidies for land leveling of Shandong 27,231,439.68 Related to assets 359,094.72
Enterprise development funds of Shandong 18,190,503.70 Related to assets 218,907.06
PPS construction project with annual output of 8,673,499.82 Related to assets 913,000.02
10,000 tons
Subsidies for PPS resin with annual output of
5,000 tons and PPS composite materials with 4,275,000.00 Related to assets 1,425,000.00
annual output of 6,000 tons
Enterprise development funds of Advanced 8,194,408.43 Related to assets 99,125.88
Manufacturing Industrial Park
Effective industrial input expansion of 2016 4,628,400.00 Related to assets 478,800.00
Funds for key thematic projects of industrial 1,783,928.60 Related to assets 713,571.42
revitalization and technical renovation of 2012
Fiscal subsidies for low-rent housing 5,737,274.34 Related to assets 120,428.58
Subsidies from land transfer fees of Shandong 4,497,673.74 Related to assets 125,115.78
dormitory
Subsidies for inputs in biochemical 4,104,306.02 Related to assets 158,885.94
infrastructure of Shangyu
Construction project of public testing service 1,500,000.10 Related to assets 499,999.98
platform
Subsidies for infrastructure supporting fees 6,281,812.50 Related to assets 398,812.50
Compensation for resource conservation and 2,640,000.00 Related to assets 240,000.00
environmental protection projects of 2017
Subsidies for new materials, land and 1,216,080.00 Related to assets 405,360.00
infrastructure construction
Special fiscal funds for revitalization of the
substantial economy (transformation of 1,331,228.52 Related to assets 269,614.26
traditional industries) of 2017
Subsidies for RTO Project 666,666.96 Related to assets 199,999.98
Special subsidies for development of marine 1,099,999.92 Related to assets 100,000.06
economy of 2017
Special subsidies for high-quality development 1,346,894.00 Related to assets 152,478.60
of manufacturing industry
Enterprise development fund (Shandong Fine 47,437,309.56 Related to assets 2,611,228.06
Chemical)
Special funds for Taishan industry leading 11,266,666.66 Related to assets 133,333.34
talents project
Food security control and emergency facilities
project – investment plan within budget of the 21,109,000.00 Related to assets 1,254,000.00
central government of 2020
Policy incentives for industrial production 20,022,471.43 Related to assets 1,396,916.64
projects of 2020
Special funds for Heilongjiang Biological 111,810,000.00 Related to assets
Fermentation Industrial Park Project
Incentives for enterprises settling in Industrial
Collaborative Innovation Center by Hangzhou 19,446,116.79 Related to assets 1,603,099.98
Bay Shangyu Economic and Technological
Development Zone
Subsidies for upgrading coal-fired boilers of 167,142.80 Related to assets 18,571.44
2017
111
2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Grants included into other
Closing balance Related to assets/income
income
Subsidies for low-nitrogen transformation of 359,464.27 Related to assets 35,357.16
gas-fired boilers of Xinchang County
Special funds for technical renovation 30,004,215.77 Related to assets 689,427.70
Incentives for investment promotion 22,708,576.39 Related to assets 304,037.69
Special fiscal supporting funds for high-quality
development (investment projects) of 4,120,620.30 Related to assets 348,221.40
manufacturing industry of Xinchang County of
2021
Special investment plan within budget of the
central government for supporting advanced 33,217,857.18 Related to assets 2,807,142.84
manufacturing industry and modern service of
2021
Economic and Information Bureau of technical 6,999,690.50 Related to assets 541,869.04
transformation project subsidies
2021 Enterprise Digitalization Key Project 14,500,000.00 Related to assets 500,000.00
Incentive Funds
2022 Special funds to support advanced 3,703,483.91 Related to assets 127,706.36
manufacturing and service industries
2021 Digital (intelligent) demonstration 1,686,274.56 Related to assets 117,647.04
workshop project incentive money
2020 industrial enterprise energy-saving
technology transformation project incentive 865,546.24 Related to assets 50,420.16
policy funds
Chemical industry transformation and
upgrading 2.0 intelligent transformation project 38,976,000.00 Related to assets 1,344,000.00
incentives and service subsidies
Second Digital Economy Financial Assistance
940,476.20 Related to assets 59,523.80
Awards
Collaborative Innovation Center Grant 22,714,950.82 Related to assets 7,911,949.18
NHU amino acid Project grants 38,640,510.00 Related to assets
Shandong Province Core Technology Tackling
Special Project (Major Technical Equipment 11,360,000.00 Related to assets
Direction)
2023 Provincial Science and Technology
1,757,142.86 Related to assets 42,857.14
Development Special Funding Grant
Heilongjiang Bio 23-year Vitamin C Expansion
to 42,000 Tons Technical Reform Project 2,915,152.51 Related to assets 74,747.49
Government Subsidy
Other piecemeal subsidies - investment plan
within budget of the central government of 5,840,842.53 Related to assets 1,164,024.68
2023
Subtotal 1,109,884,644.23 63,691,888.18
(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 subsidies 18,869,301.48 Other income Related to income
Other subsidies 9,404,072.44 Other income Related to income
Special subsidies 9,356,416.00 Other income Related to income
112
2023 Annual Report of Zhejiang NHU Co., Ltd.
Items Amount Presented under Remarks
Subtotal 37,629,789.92
(3) In the current period, government grants included into profit or loss totaled 101,321,678.10 yuan.
VIII. Changes in the consolidation scope
None
IX. Interest in other entities
1. Interest in subsidiaries
(1) Composition of the group
1） Significant subsidiaries
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
NHU EUROPE GmbH Luneburg, Luneburg, Trade 51% [Note 1] Establishment
Germany Germany
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% 8,666,085.23 93,309,805.67
(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 768,261,922.73 109,151,554.14 877,413,476.87 657,248,950.21 29,736,351.83 686,985,302.04
GmbH
(Continued)
113
2023 Annual Report of Zhejiang NHU Co., Ltd.
Opening balance
Subsidiaries
Current assets Non-current assets Total assets Current liabilities Non-current Total liabilities
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
Unit: RMB Yuan
Current period cumulative Preceding period comparative
Subsidiaries Cash flows
Total Total Cash flows
Operating Net profit from Operating Net profit
comprehensive comprehensive from operating
revenue operating revenue
income income activities
activities
NHU
EUROPE 856,013,524.97 17,685,888.23 28,468,930.88 45,632,953.79 810,123,339.42 17,831,246.48 13,823,928.20 -2,752,415.97
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
(2) Main financial information of significant joint ventures
Unit: RMB Yuan
Closing balance/Current period cumulative Opening balance/Preceding period comparative
DSM NHU DSM NHU
Items Zhejiang Chunhui Zhejiang Saiya Zhejiang Chunhui Zhejiang Saiya
Engineering Engineering
Environmental Chemical Environmental Chemical
Materials Materials
Protection Energy Materials Co., Protection Energy Materials Co.,
(Zhejiang) Co., (Zhejiang) Co.,
Co., Ltd. Ltd. Co., Ltd. Ltd.
Ltd. Ltd.
Current assets 396,646,413.66 111,900,748.44 204,326,091.93 460,887,337.74 109,398,305.48 144,410,128.60
Non-current assets 688,393,234.17 14,859,373.63 129,082,880.51 676,165,054.18 19,755,796.05 138,230,668.22
Total assets 1,085,039,647.83 126,760,122.07 333,408,972.44 1,137,052,391.92 129,154,101.53 282,640,796.82
Current liabilities 168,151,910.46 57,072,921.64 41,303,737.81 290,955,340.38 62,895,473.39 24,117,241.66
Non-current 47,125,878.37 1,941,915.00 44,353,913.81 2,114,370.00
liabilities
Total liabilities 215,277,788.83 57,072,921.64 43,245,652.81 335,309,254.19 62,895,473.39 26,231,611.66
Equity attributable
to shareholders of 869,761,859.00 69,687,200.43 290,163,319.63 801,743,137.73 66,258,628.14 256,409,185.16
parent company
Proportionate share 260,325,800.47 27,874,880.17 142,180,026.62 239,967,333.33 26,503,451.26 125,640,500.73
in net assets
Adjustments
- Goodwill 762,611.33 762,611.33
- Unrealized profit 2,120,785.74 740,043.41 2,046,002.90 952,124.29
114
2023 Annual Report of Zhejiang NHU Co., Ltd.
Closing balance/Current period cumulative Opening balance/Preceding period comparative
DSM NHU DSM NHU
Items Zhejiang Chunhui Zhejiang Saiya Zhejiang Chunhui Zhejiang Saiya
Engineering Engineering
Environmental Chemical Environmental Chemical
Materials Materials
Protection Energy Materials Co., Protection Energy Materials Co.,
(Zhejiang) Co., (Zhejiang) Co.,
Co., Ltd. Ltd. Co., Ltd. Ltd.
Ltd. Ltd.
in internal trading
-other
Carrying amount of
investments in 260,325,800.47 25,759,977.53 140,703,045.01 239,967,333.33 24,457,448.36 125,450,987.77
associates
Operating revenue 274,315,575.00 118,776,550.60 195,077,130.44 283,967,325.65 92,415,365.12 201,503,983.57
Net profit 95,546,122.92 10,291,286.16 33,133,116.13 70,472,241.95 7,058,005.64 13,640,166.75
Total
comprehensive 95,546,122.92 10,291,286.16 33,133,116.13 70,472,241.95 7,058,005.64 13,640,166.75
income
(3) Aggregated financial information of insignificant joint ventures and associates
Unit: RMB Yuan
Items Closing balance/ Opening balance/
Current period cumulative Preceding period comparative
Joint ventures: -- --
Total carrying amount of investments 276,328,667.99 42,627,799.02
Proportionate shares in the following items -- --
-- Net profit -2,918,914.57 -911,994.44
-- Other comprehensive income
-- Total comprehensive income -2,918,914.57 -911,994.44
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.
115
2023 Annual Report of Zhejiang NHU Co., Ltd.
The Company considers the credit risk on a financial instrument has increased significantly when one or more of the following
qualitative and quantitative standards are met:
1) Quantitative standard mainly relates to the scenario in which, at the balance sheet date, the probability of default in the remaining
lifetime has risen by more than a certain percentage compared with the initial recognition;
2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial position, present or expected
changes in technology, market, economy or legal environment that will have significant adverse impact on the debtor’s repayme nt
ability.
(2) Definition of default and credit-impaired assets
A financial instrument is defined as defaulted when one or more following events have occurred, of which the standard is consistent
with that for credit-impairment:
1) significant financial difficulty of the debtor;
2) a breach of binding clause of contract;
3) it is very likely that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having granted to the
debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default, loss rate of default, and exposure to
default risk. The Company develops a model of the probability of default, loss rate of default, and exposure to default risk on the basis
of quantitative analysis of historical data (e.g. counterparty rating, guarantee measures and collateral type, payment method, etc.) and
forward-looking information.
3. Please refer to item VII 4 and 7 of this section for details on the reconciliation table of opening balance and closing balance of
provision for losses of financial instrument.
4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks, the
Company has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other cash and bank balances in financial institutions with relatively high credit levels,
hence, its credit risk is relatively low.
(2) Receivables
The Company performs credit assessment on customers using credit settlement on a continuous basis. The Company selects credib le
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 June 30, 2023, the Company has certain concentration of credit risk,
and 25.67% (December 31, 2022: 29.31%) 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
116
2023 Annual Report of Zhejiang NHU Co., Ltd.
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
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 10,040,462,020.99 10,613,649,462.49 3,800,376,575.50 5,943,854,166.30 869,418,720.69
Notes payable 456,643,824.63 456,643,824.63 456,643,824.63
Accounts payable 1,803,368,804.84 1,803,368,804.84 1,803,368,804.84
Other payables 59,568,912.95 59,568,912.95 59,568,912.95
Lease liabilities 7,969,695.28 9,291,079.41 2,842,604.78 3,119,558.99 3,328,915.64
Subtotal 12,368,013,258.69 12,942,522,084.32 6,122,800,722.70 5,946,973,725.29 872,747,636.33
(Continued)
Unit: RMB Yuan
December 31, 2022
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
(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 intere st rate.
As of June 30, 2023, balance of borrowings with interest accrued at floating interest rate totaled 10,040.46 million yuan (December 31,
2022: 9,711.57 million yuan). If interest rates had been 50 basis points higher/lower and all other variables were held constant, the
Company’s profit before tax and equity will not be significantly affected.
117
2023 Annual Report of Zhejiang NHU Co., Ltd.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial instrument resulted from changes
in exchange rate. The Company’s foreign currency risk relates mainly to foreign currency monetary assets and liabilities. When short-
term imbalance occurred to foreign currency assets and liabilities, the Company may trade foreign currency at market exchange rate
when necessary, in order to maintain the net risk exposure within an acceptable level.
Please refer to item VII 59 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 250,000,000.00 250,000,000.00
non-current financial assets
Financial assets classified as at fair value 250,000,000.00 250,000,000.00
through profit or loss
Financial products with guaranteed principal 250,000,000.00 250,000,000.00
and floating income
2. Receivables financing 506,430,216.64 506,430,216.64
3. Other equity instrument investments 22,998,147.55 22,998,147.55
Total assets at recurring fair value 779,428,364.19 779,428,364.19
measurement
1. Held-for-trading financial liabilities and 12,909,447.29 12,909,447.29
other non-current financial liabilities
Total liabilities at recurring fair value 12,909,447.29 12,909,447.29
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.
118
2023 Annual Report of Zhejiang NHU Co., Ltd.
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.
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.
Other joint ventures or associates that had related-party transactions with the Company during the current period, or had balances
resulting from related-party transactions with the Company in prior periods, are described below:
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 Hecheng 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.
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.
Zhejiang Yuexiu University of Foreign Languages Controlled by NHU Holding Group Co., Ltd.
Heilongjiang Haotian Corn Development Co., Ltd. Minority Shareholders of Subsidiaries
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.
4. Related party transactions
(1) Purchase and sale of goods, rendering and receiving of services
Purchase of goods and receiving of services
Unit: RMB Yuan
119
2023 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 Deli Equipment Purchase of goods 83,333,232.99 176,700,000.00 No 55,826,474.37
Co., Ltd.
Zhejiang Chunhui Purchase of steam 60,694,568.26 60,245,778.74
Environmental Protection Waste disposal service
147,459.89 984,963.43
Energy Co., Ltd. fees
Zhejiang Saiya Chemical Purchase of goods 138,488,066.99 240,000,000.00 No 153,465,976.22
Materials Co., Ltd.
Heilongjiang Haotian Corn Purchase of goods 108,479.87 520,003.54
Development Co., Ltd.
Shandong Bin’an Vocational Receiving of services 2,674.53 23,177.36
Training School Co., Ltd.
Zhejiang Asen Purchase of goods 774,003.49 743,954.80
Pharmaceutical Co., Ltd.
Xinchang County Hechun Purchase of goods 12,472.77
Greening Co., Ltd.
Catering and
Qionghai Boao Holliyard 234,525.72 61,979.00
accommodation
Hotel Management Co., Ltd.
services
Catering and
Shaoxing Jinghe Hotel 831,053.37 326,991.94
accommodation 4,109,100.00 No
Management Co., Ltd
services
Qionghai Heyue Property 219,042.13 470,190.62
Property management
Services Co., Ltd.
Shaoxing Heyue Property 203,704.00 11,733.62
Property management
Services Co., Ltd.
Shaoxing Yuexiu Education 496.00
Receiving of services
Development Co., Ltd.
Zhejiang Yuexiu University 4,388.00
Receiving of services
of Foreign Languages
Subtotal 285,041,695.24 420,809,100.00 272,693,696.41
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.,
Scrapped materials 92,969.09
Ltd.
Zhejiang Chunhui Environmental Waste and scrap materials 53,097.35 17,256.64
Protection Energy Co., Ltd.
Zhejiang Asen Pharmaceutical Pharmaceutical intermediates, 6,735.85 310,840.71
Co., Ltd. test fees
Management Service Fee 23,372.54
Shandong Bin’an Vocational
Training School Co., Ltd. Waste and scrap materials 21,584.50
Heilongjiang Haotian Corn Steam charges 82,192.66
Development Co., Ltd.
Pharmaceutical intermediates,
Front Pharmaceutical PLC. 575,409.92
testing fees
Scrapped materials 71,867,299.71 81,288,692.23
DSM NHU Engineering Materials 413,070.59
Labor costs, etc.
(Zhejiang) Co., Ltd.
Utilities fees 802,824.33 816,229.00
Beijing Winsunny Pharmaceutical Pharmaceutical intermediates 47,169.81 17,699.12
Co., Ltd.
Total 73,881,949.19 82,554,494.86
(2) Related party leases
The Company as the lessor:
120
2023 Annual Report of Zhejiang NHU Co., Ltd.
Unit: RMB Yuan
Lessees Types of assets leased Lease income recognized in the Lease income recognized in
current period preceding period
DSM NHU Engineering 347,147.50 356,400.00
Land use right and buildings
Materials (Zhejiang) Co., Ltd.
Qionghai Boao Holliyard Hotel 240,000.00 258,177.14
Land use right and buildings
Management Co., Ltd.
Zhejiang Jingshi Real Estate 266,666.67
Land use right and buildings
Co., Ltd.
Zhejiang Deli Equipment Co., 20,183.49
Land use right and buildings
Ltd.
Weifang Hecheng Real Estate 5,142.86 13,714.29
Land use right and buildings
Co., Ltd.
Land use right and buildings 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 847,107.96 847,107.96
(3) Related party guarantees
The company and its subsidiaries as guaranteed parties
Unit: RMB Yuan
Guarantors Guarantee balance Commencement date Maturity date Whether the guarantee
is mature
72,000,000.00 January 23, 2019 December 21, 2023 No
NHU Holding Group Co., 470,000,000.00 December 03, 2020 September 21, 2025 No
Ltd. 300,000,000.00 September 19, 2022 September 18, 2025 No
200,000,000.00 November 17, 2022 November 14, 2025 No
Subtotal 1,042,000,000.00
(4) Key management’s emoluments
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Key management’s emoluments 5,533,632.28 5,698,512.85
(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 70,789,632.31 yuan to Client B the end of the period,
balance of accounts receivable amounted to 14,533,367.11 yuan.
5. 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 23,625.00 1,181.25
Accounts receivable
Pharmaceutical Co.,
121
2023 Annual Report of Zhejiang NHU Co., Ltd.
Closing balance Opening balance
Items Related parties
Book balance Provision for bad Book balance Provision for bad
debts debts
Ltd.
DSM NHU
Engineering Materials 35,321,127.19 1,766,032.88 42,585,814.11 2,129,290.71
(Zhejiang) Co., Ltd.
Zhejiang Deli 74,255.06 3,712.75
Equipment Co., Ltd.
Zhejiang Deli 26,410.98 1,320.55
Equipment Co., Ltd.
Subtotal 35,421,793.23 1,771,066.18 42,609,439.11 2,130,471.96
Heilongjiang Haotian
Advance paid Corn Development Co., 434,824.36 479,844.89
Ltd
Subtotal 434,824.36 479,844.89
Zhejiang Chunhui
Environmental 20,000.00 4,000.00 20,000.00 4,000.00
Protection Energy Co.,
Other receivables Ltd.
DSM NHU
Engineering Materials 1,253,616.96 62,680.85
(Zhejiang) Co., Ltd.
Subtotal 1,273,616.96 66,680.85 20,000.00 4,000.00
Other non-current
Zhejiang Deli 45,521,653.98 33,210,788.17
assets Equipment Co., Ltd.
Subtotal 45,521,653.98 33,210,788.17
(2) Balance due to related parties
Unit: RMB Yuan
Items Related parties Closing book balance Opening book balance
Zhejiang Deli Equipment Co., Ltd. 14,877,785.50 13,581,584.31
Zhejiang Chunhui Environmental 9,978,557.75 13,688,789.40
Accounts payable Protection Energy Co., Ltd.
Zhejiang Saiya Chemical Materials Co., 77,621,235.15 1,905,191.13
Ltd.
Zhejiang Second Pharma Co., Ltd. 6,408.00 6,408.00
Subtotal 102,483,986.40 29,181,972.84
Contract liabilities Zhejiang Deli Equipment Co., Ltd. 14,700.89 13,009.64
Subtotal 14,700.89 13,009.64
Zhejiang Deli Equipment Co., Ltd. 3,500.00 3,500.00
Other payables Xinchang County Hechun Greening 13,102.77
Co., Ltd.
Zhejiang Jingshi Real Estate Co., Ltd. 166,075.68
Shaoxing Jinghe Hotel Management
Co., Ltd. 9,127.85
Subtotal 12,627.85 182,678.45
Other current liabilities Zhejiang Deli Equipment Co., Ltd. 1,691.25
Subtotal 1,691.25
122
2023 Annual Report of Zhejiang NHU Co., Ltd.
XIII. Commitments and contingencies
1. Significant commitments
Significant commitments as at the balance sheet date
(I) Significant commitments
1. Forward exchange settlement contracts
According to the ISDA 2002 MASTER AGREEMENT entered into between the Company and Bank of China (Hong Kong)
Limited, the ISDA 2002 MASTER AGREEMENT entered into with DBS Bank (China) Limited, the GLOBAL CAPITAL MARKETS
TRANSACTION and the related transaction application form entered into with HSBC Bank (China) Limited Hangzhou Branch, the
NAFMII Master Agreement and Supplementary Agreement (No. Y161136) entered into with the Bank of China Limited, Zhejiang
Branch, NAFMII Master Agreement and Supplemental Agreement (No. Y161136), the details of the Company's undelivered forward
settlement contracts as of June 30, 2023 are as follows:
Currency Amount Exchang Rate Settlement Date
10,000,000.00 7.1440 2023/7/13
10,000,000.00 7.1400 2023/7/20
USD 5,000,000.00 7.1698 2023/7/13
10,000,000.00 7.1615 2023/7/27
10,000,000.00 7.1700 2023/8/15
Subtotal 45,000,000.00
3,000,000.00 7.5341 2023/7/25
3,000,000.00 7.5266 2023/8/24
2,000,000.00 7.5558 2023/7/25
2,000,000.00 7.5482 2023/8/24
3,000,000.00 7.8861 2023/7/31
3,000,000.00 7.6113 2023/7/25
3,000,000.00 7.6041 2023/8/24
EUR 3,000,000.00 7.5870 2023/7/25
3,000,000.00 7.5800 2023/8/24
2,000,000.00 7.5685 2023/7/25
2,000,000.00 7.5620 2023/8/24
5,000,000.00 7.5805 2023/7/25
5,000,000.00 7.5730 2023/8/24
5,000,000.00 7.5655 2023/9/26
3,000,000.00 7.8313 2023/9/26
Subtotal 47,000,000.00
2. Letters of guarantee issued but undue
As of June 30, 2023, the undue letters of guarantee issued by the Company and its subsidiaries are as follows:
Issuing banks Applicants Type of L/G Amount Conditions for issuing
Bank of China Limited The Company Performance guarantee USD20,380.00 Occupying credit line
123
2023 Annual Report of Zhejiang NHU Co., Ltd.
Issuing banks Applicants Type of L/G Amount Conditions for issuing
Xinchang Sub-branch Performance guarantee USD64,706.00 Occupying credit line
Performance guarantee USD22,409.00 Occupying credit line
Performance guarantee USD34,680.00 Occupying credit line
Shandong NHU Customs Duty
China Merchants Bank Co., CNY2,120,000.00 Occupying credit line
Ltd. Weifang Sub-branch Vitamin Co., Ltd. Guarantee Bond
Project Payment
Shandong NHU CNY588,000.00 Occupying credit line
Guarantee
Bank of China Limited Pharmaceutical
Weifang Binhai Sub-branch Project Payment
Co., Ltd. CNY283,780.00 Occupying credit line
Guarantee
3. Letters of credit issued but undue
As of June 30, 2023, the undue letters of credit issued by the Company and its subsidiaries are as follows:
Issuing banks Applicants Balance of L/C Conditions
USD1,848,747.00 Occupying credit line
Bank of China Limited Xinchang The Company
Sub-branch USD11,436.80 Occupying credit line
Zhejiang NHU Import &
Bank of China Limited Xinchang EUR2,597,000.00 Deposit of EUR 2,597,000.00
Sub-branch Export Company Ltd.
Shangyu New District Sub-branch Shangyu NHU Biochemical USD142,500.00 Deposit of EUR 142,500.00
of Construction Bank Co. Co., Ltd
Bank of China Limited Weifang Shandong Nhu Amino Acid EUR107,225.00 Deposit of 12,000,000.00 yuan
Binhai Sub-branch Co., Ltd.
CNY 72,000,000.00 Occupying credit line
CNY 50,000,000.00 Occupying credit line
China Merchants Bank Co., Ltd. CNY 100,000,000.00 Occupying credit line
The Company
Hangzhou Branch
CNY 235,000,000.00 Occupying credit line
CNY 150,000,000.00 Occupying credit line
CNY21,536,585.76 Occupying credit line
China Merchants Bank Co., Shandong NHU
Ltd.Weifang Branch Pharmaceutical Co., Ltd. CNY24,431,946.60 Occupying credit line
4. The “notes pool” business
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. , Zhejiang
NHU Import & Export Company 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 June 30, 2023, balance of pledged bank acceptance amounted to 239,585,650.76 yuan, deposits of notes pool in China Zheshan g
Bank Co., Ltd. amounted to 110,859,093.35 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.
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2023 Annual Report of Zhejiang NHU Co., Ltd.
2、contingency
（1）There are no material contingencies that the company is required to disclose, which should also be stated
The Company has no material contingencies that require disclosure.
XIV. Events after the balance sheet date
1. Profit distribution
As of the date of approval for issuing the financial statements, the Company has no other significant events after the balance sheet
date to be disclosed.
2. Description of other events after the balance sheet date
As of the date of approval for issuing the financial statements, the Company has no other significant events after the balance sheet
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 6,827,101,806.65 580,426,399.06 86,786,240.77 7,320,741,964.94
revenue
Operating cost 4,600,622,791.73 411,744,878.34 86,786,240.77 4,925,581,429.30
Total assets 36,071,193,496.27 2,753,884,437.14 849,236,590.49 37,975,841,342.92
Total liabilities 13,797,335,987.50 1,351,555,595.24 849,236,590.49 14,299,654,992.25
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
provision made on 633,923,233.73 100.00% 31,696,161.69 5.00% 602,227,072.04 526,936,263.09 100.00% 26,346,813.15 5.00% 500,589,449.94
a collective basis
Total 633,923,233.73 100.00% 31,696,161.69 5.00% 602,227,072.04 526,936,263.09 100.00% 26,346,813.15 5.00% 500,589,449.94
provision for bad debts made on a collective basis：
Unit: RMB Yuan
Closing balance
Categories
Book balance Provision for bad debts Provision proportion
Commercial Acceptance 633,923,233.73 31,696,161.69 5.00%
A description of the basis for determining the portfolio:
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2023 Annual Report of Zhejiang NHU Co., Ltd.
If the bad debt provision for notes receivable is based on the general model of expected credit losses, please disclose information
about the bad debt provision by referring to the disclosure for other receivables:
□Applicable Not applicable
Age analysis
Unit: RMB Yuan
Ages Book balance
Within 1 year (inclusive) 633,923,233.73
Total 633,923,233.73
(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 26,346,813.15 5,349,348.54 31,696,161.69
collective basis
Total 26,346,813.15 5,349,348.54 31,696,161.69
(3) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Debtors Book balance Proportion to the total balance Provision for bad debts
of accounts receivable
Client 1 319,039,010.16 50.33% 15,951,950.51
Client 2 59,148,876.90 9.33% 2,957,443.85
Client 3 32,800,000.00 5.17% 1,640,000.00
Client 4 27,485,943.84 4.34% 1,374,297.19
Client 5 24,734,066.71 3.90% 1,236,703.34
Total 463,207,897.61 73.07% --
2. Other receivables
Unit: RMB Yuan
Items Closing balance Opening balance
Dividend receivable 20,735,987.73
Other receivables 3,823,227,738.70 2,475,376,134.12
Total 3,823,227,738.70 2,496,112,121.85
(1) Dividend receivable
1) Details on categories
Unit: RMB Yuan
Items/Investees Closing balance Opening balance
Zhejiang Chunhui Environmental 20,735,987.73
Protection Energy Co., Ltd.
Total 20,735,987.73
(2) Other receivables
1) Categorized by nature
Unit: RMB Yuan
126
2023 Annual Report of Zhejiang NHU Co., Ltd.
Nature of receivables Closing book balance Opening book balance
loan splitting 3,904,102,993.42 2,477,800,000.00
Deposit Guarantee 98,678,496.50 100,017,996.50
Export Tax Refund 7,249,071.14 8,678,171.26
Employee reserve fund 8,853,450.45 5,953,662.00
Accounts receivable in suspense 30,442.29 461,787.32
Other 2,227,395.62 8,467,732.53
Total 4,021,141,849.42 2,601,379,349.61
2) Provision for bad debts
Unit: RMB Yuan
Phase I Phase II Phase III
Provision for bad debts Total
12month Lifetime expected credit Lifetime expected credit
expected credit losses losses (credit not impaired) losses (credit impaired)
Opening balance 124,623,172.45 230,800.00 1,149,243.04 126,003,215.49
Opening balance in the —— —— —— ——
current period
--Transferred to phase II -175,989.20 175,989.20
--Transferred to phase III -19,000.00 19,000.00
Provision made in the current 71,091,966.24 316,167.59 502,761.40 71,910,895.23
period
Closing balance 195,539,149.49 703,956.79 1,671,004.44 197,914,110.72
Significant changes in book balance of other receivables with changes in provision for bad debts:
□ Applicable √ Not applicable
Age analysis
Unit: RMB Yuan
Ages Book balance
Within 1 year (inclusive) 3,918,032,061.02
1-2 years 3,519,783.96
2-3 years 95,000.00
Over 3 years 99,495,004.44
3-4 years 716,162.81
4-5 years 100,000.00
Over 5 years 98,678,841.63
Total 4,021,141,849.42
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 126,003,215.49 71,910,895.23 197,914,110.72
Total 126,003,215.49 71,910,895.23 197,914,110.72
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2023 Annual Report of Zhejiang NHU Co., Ltd.
4) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Proportion to the total
Debtors Nature of Book balance Ages Provision for bad
balance of other
receivables debts
receivables
Heilongjiang NHU Call loans 2,088,739,518.04 Within 1 year 51.94% 104,436,975.90
Biotechnology Co., Ltd.
Shandong NHU Fine
Chemical Science and Call loans 753,305,543.80 Within 1 year 18.73% 37,665,277.19
Technology Co., Ltd.
Heilongjiang Xinhao Thermal Call loans 312,772,192.57 Within 1 year 7.78% 15,638,609.63
Power Co., Ltd
Zhejiang NHU Special Call loans 245,326,773.01 Within 1 year 6.10% 12,266,338.65
Materials Co., Ltd.
Shandong NHU Call loans 222,707,491.68 Within 1 year 5.54% 11,135,374.58
Pharmaceutical Co., Ltd.
Total -- 3,622,851,519.10 -- 90.09% 181,142,575.95
3. Long-term equity investments
Unit: RMB Yuan
Closing balance Opening balance
Items Provision
Book balance Provision for Carrying amount Book balance Carrying amount
for
impairment
impairment
Investments in 10,096,078,842.12 10,096,078,842.12 9,146,078,842.12 9,146,078,842.12
subsidiaries
Investments in associates 494,664,516.29 494,664,516.29 239,967,333.33 239,967,333.33
and joint ventures
Total 10,590,743,358.41 10,590,743,358.41 9,386,046,175.45 9,386,046,175.45
(1) Investments in subsidiaries
Unit: RMB Yuan
Increase/Decrease Closing
Investees Opening carrying Closing carrying balance of
amount Investments Investments Provision for Others amount provision for
increased decreased impairment impairment
Xinchang NHU
Vitamins Co., 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.
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2023 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
Zhejiang NHU
Special 554,844,108.53 554,844,108.53
Materials Co.,
Ltd.
Shandong NHU
Amino-acids 4,900,000,000.00 900,000,000.00 5,800,000,000.00
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 460,000,000.00 50,000,000.00 510,000,000.00
Technology Co.,
Ltd.
NHU Singapore 12,800,000.00 12,800,000.00
PTE. LTD.
Total 9,146,078,842.12 950,000,000.00 10,096,078,842.12
(2) Investments in associates and joint ventures
Unit: RMB Yuan
Increase/Decrease
Investment Closing
Opening Invest Adjustment
Investees income Cash dividend/ Closing carrying balance of
carrying Investments ments in other Changes in other Provision for Others
recognized Profit declared amount provision for
amount increased decrea comprehens equity impairment
under equity for distribution impairment
sed ive income
method
I. Associates
Zhejiang Chunhui
Environmental 239,967,333.33 20,358,467.14 260,325,800.47
Protection Energy
Co., Ltd.
Anhui Yingna
Weixun 233,508,000.00 -3,169,284.18 230,338,715.82
Technology Co.,
Ltd
Ningbo Zhenhai
Refining and
Chemical 4,000,000.00 4,000,000.00
Xinhecheng
Biotechnology Co.,
Ltd
Subtotal 239,967,333.33 237,508,000.00 17,189,182.96 494,664,516.29
Total 239,967,333.33 237,508,000.00 17,189,182.96 494,664,516.29
4. Operating revenue/Operating cost
Unit: RMB Yuan
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 1,438,268,120.92 1,261,740,406.31 1,850,628,697.19 1,460,074,892.61
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2023 Annual Report of Zhejiang NHU Co., Ltd.
Other operations 29,381,770.87 24,923,360.59 31,160,723.40 24,551,797.22
Total 1,467,649,891.79 1,286,663,766.90 1,881,789,420.59 1,484,626,689.83
Details of revenue
Unit: RMB Yuan
Categories of contracts Total
By product
Including: Nutrition 1,384,907,822.00
Others 82,742,069.79
Subtotal 1,467,649,891.79
By operating region
Including: Domestic 864,862,923.22
Overseas 602,786,968.57
Subtotal 1,467,649,891.79
By revenue recognition time
Including: Transferred at a point in time 1,467,649,891.79
Subtotal 1,467,649,891.79
By sales channel
Direct Sales 1,305,456,608.74
Resellers 162,193,283.05
Subtotal 1,467,649,891.79
Information related to performance obligations:
None.
Information related to transaction price allocated to the remaining performance obligations:
As of June 30, 2023, revenue corresponding to performance obligations for which the Company has entered into contracts but not yet
performed or fulfilled amounted to 1,035.97 million yuan, of which, 1,035.97 million yuan is expected to be recognized as revenue in
2023.
5. Investment income
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Investment income from long-term equity 17,189,195.23 19,977,116.53
investments under equity method
Investment income from long-term equity 1,390,000,000.00
investments under cost method
Interest income from call loans 50,158,644.31 54,876,777.72
Investment income from bank financial 2,735,849.06 15,218,893.77
products and structured deposits
Total 1,460,083,688.60 90,072,788.02
XVII. Supplementary information
1. Schedule of non-recurring profit or loss
√ Applicable □ Not applicable
Unit: RMB Yuan
Items Amount
130
2023 Annual Report of Zhejiang NHU Co., Ltd.
Gains on disposal of non-current assets 13,545,778.16
Government grants included in profit or loss (excluding those closely related to
operating activities of the Company, satisfying government policies and 101,321,678.10
regulations, and continuously enjoyed with certain quantity or quota based on
certain standards)
Gains on assets consigned to the third party for investment or management 8,894,052.73
Gains or losses on changes in fair value of held-for-trading financial assets and
held-for-trading financial liabilities, and investment income from disposal of -11,268,469.70
held-for-trading financial assets and held-for-trading financial liabilities,
excluding those arising from hedging business related to operating activities
Non-operating income and expenses other than those mentioned above 3,483,386.54
Less: Enterprise income tax affected 7,791,955.64
Non-controlling interest affected 174,119.05
Total 108,010,351.14
Remarks on other profit or loss satisfying the definition of non-recurring profit or loss:
□ Applicable √ Not applicable
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss.
Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria for
Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss
□ Applicable √ Not applicable
2. ROE and EPS
EPS (yuan/share)
Profit of the reporting period Weighted average ROE (%)
Basic EPS Diluted EPS
Net profit attributable to shareholders of 6.09% 0.48 0.48
ordinary shares
Net profit attributable to shareholders of
ordinary shares after deducting non- 5.65% 0.44 0.44
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
（3）Explanation of the reasons for differences in accounting data under domestic and foreign accounting
standards, and, in the case of reconciliation of differences in data that have been audited by an offshore
auditing organization, the name of the offshore organization.
□ Applicable √ Not applicable
131
