2023 Annual Report of Zhejiang NHU Co. Ltd.
Zhejiang NHU Co. Ltd.2023Annual Report
April 20232023 Annual Report of Zhejiang NHU Co. Ltd.Section I Important Notes Contents and Definitions
The Board of Directors and its members Board of Supervisors and its members
and senior executives of the Company hereby guarantee that the information
presented in this annual report is authentic accurate complete and free of false
records misleading statements or material omissions and they will bear
individual and joint liabilities for such information.Hu Baifan the Company’s legal representative Shi Guanqun the officer in
charge of accounting and Zhang Lijin the head of accounting department hereby
declare that they guarantee the financial statements in this annual report are
authentic accurate and complete. All members of the Board of Directors have
attended the meeting of the Board of Directors for deliberation of this annual
report.The future plan and other forward-looking information disclosed in this annual
report shall not be regarded as a commitment to investors. We kindly remind
investors of all possible risks in investments.We draw your attention to item “XI. Outlook for the future development of theCompany” under “Section III Management Discussion and Analysis” which
explicitly states the possible risks in business operation and countermeasures
thereon.Profit distribution proposal deliberated and approved by the meeting of the Board
of Directors is as follows: Based on the 3073421680 shares (total share capital of
3090907356 excluding 17485676 repurchased shares[Note]) a cash dividend of
4.50 yuan (tax included) will be distributed to all shareholders for every 10 shares
and no bonus shares will be distributed and the capital reserve will not be
converted into share capital.Note: According to the “Rules on Share Repurchase of Listed Companies” shares in the special
12023 Annual Report of Zhejiang NHU Co. Ltd.
account for repurchase of listed companies carry no right of profit distribution and conversion
of capital reserve into share capital.If the Company’s total share capital changes due to the conversion of convertible
bonds share repurchase exercise of equity incentives refinancing and listing of
new shares etc. before the implementation of the profit distribution proposal the
total distribution will be adjusted accordingly based on the same distribution ratio.This Annual Report is an English translation of the Chinese Annual Report. In case the English version does not
conform to the Chinese version the Chinese version prevails.
22023 Annual Report of Zhejiang NHU Co. Ltd.
Contents
Section I Important Notes Contents and Definitions... 1
Section II Company Profile and Key Financial Indic... 6
Section III Management Discussion and Analysis ......11
Section IV Corporate Governance .................... 36
Section V Environmental and Social Responsibilitie.. 54
Section VI Significant Events ...................... 61
Section VII Movements in Shares and Conditions of .. 70
Section VIII Preferred Shares ...................... 77
Section IX Bonds ................................... 78
Section X Financial Report.......................... 79
32023 Annual Report of Zhejiang NHU Co. Ltd.
Documents Available for Reference
I. Financial statements signed and sealed by the Company’s legal representative officer in charge of accounting
and head of accounting department;
II. The original auditor’s report with the seal of the accounting firm and the signature and seal of the certified
public accountants;
III. Originals of all the Company’s documents and announcements published on newspapers designated by the
China Securities Regulatory Commission during the reporting period;
IV. Other documents for reference.
42023 Annual Report of Zhejiang NHU Co. Ltd.
Definitions
Abbreviations Refers to Contents of definitions
The Company NHU Refers to ZHEJIANG NHU CO. LTD.CSRC Refers to China Securities Regulatory Commission
CSRC Zhejiang Office Refers to China Securities Regulatory Commission Zhejiang Office
PPS Refers to Polyphenylene Sulfide
PPA Refers to Poly Phthalamide
PSU Refers to Polysulfone
PEEK Refers to Polyetheretherketone
PEI Refers to Polyetherimide
VOC Refers to Volatile Organic Compound
NH-acid Refers to Taurine
HSE Refers to Healthy And Safe Environment
F5 Refers to Vitamin B5
CNAS Refers to China National Accreditation Service For Conformity Assessment
DSC Refers to Differential Scanning Calorimetry
ARC Refers to Accelerating Ratecalori Meter
RC1e Refers to Reaction Calorimeter
PF Refers to Lupin
CEP Refers to European Pharmacopoeia Applicability Certification
Pd catalyzer Refers to Palladium Catalyst
IPDA Refers to Isophorone Diamine
NBC Refers to Azabicycles
CLA Refers to Karon anhydride
AM ester Refers to Methyl Methacrylate
ADI Refers to Aliphatic Isocyanates
HDI Refers to Hexamethylene Diisocyanate|
52023 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
No.418 Xinchang Dadao West Road Qixing Sub-district Xinchang County Zhejiang
Registered address
Province China
Postal code of registered
312500
address
On May 28 2020the Company’s registered address was changed from No.4 Jiangbei
Historical changes of registered Road Yulin Sub-district Xinchang County Zhejiang Province China to No.418
address Xinchang Dadao West Road Qixing Sub-district Xinchang County Zhejiang
Province China
No.418 Xinchang Dadao West Road Qixing Sub-district Xinchang County Zhejiang
Office address
Province China
Postal code of office address 312500
Official website http://www.cnhu.com
E-mail 002001@cnhu.com
II. Contact information
Items Board secretary Securities affairs representative
Name Shi Guanqun Zeng Shuying
No.418 Xinchang Dadao West Road Qixing No.418 Xinchang Dadao West Road Qixing
Contact address Sub-district Xinchang County Zhejiang Sub-district Xinchang County Zhejiang
Province China Province China
Tel. +86 575 86017157 +86 575 86017157
Fax +86 575 86125377 +86 575 86125377
E-mail address sgq@cnhu.com 002001@cnhu.com
III. Information disclosure and location
Stock exchange website where the Company discloses the Shenzhen Stock Exchange: http://www.szse.cn
annual report
Securities Times Shanghai Securities News China
Medias and websites with which the Company discloses the Securities Journal
annual report Giant Tide Information Network: www.cninfo.com.cn
Site where the annual report was prepared and completed Securities Department of the Company
62023 Annual Report of Zhejiang NHU Co. Ltd.
IV. Change of registration
Unified social credit code 91330000712560575G
Changes of main business scope since listing (if any) None
Changes of holding shareholders (if any) None
V. Other relevant information
Accounting firm engaged by the Company
Name Pan-China Certified Public Accountants LLP
Office address Resources Building 1366 Qianjiang Road Shangcheng
District Hangzhou 310020 China
Certified Public Accountants Teng Peibin Jian Yanhui
The sponsor institution engaged by the Company which performed the duty of continuous guidance and supervision during the
reporting period
□ Applicable √ Not Applicable
The financial advisor engaged by the Company who performed the duty of continuous guidance and supervision during the reporting
period
□ Applicable √ Not Applicable
VI. Key accounting data and financial indicators
Whether the Company needs to perform retroactive adjustment or restatement on financial data of prior years
√ Yes □ No
Reason for retroactive adjustment or restatement
Accounting policy changes
YoY
Year 2022 Year 2021
growth rate
Items Year 2023
After
Before adjustment After adjustment[Note ] Before adjustment After adjustment t[Note ]
adjustment
Operating revenue (yuan) 15116537003.30 15933984403.41 15933984403.41 -5.13% 14917101500.91 14917101500.91
Net profit attributable to
shareholders of listed 2704238767.54 3620271034.96 3620280626.51 -25.30% 4356010628.22 4356020894.30
company (yuan)
Net profit attributable to
shareholders of listed
company after deducting 2614210640.58 3586873100.22 3586882691.77 -27.12% 4179793729.75 4179803995.83
non-recurring profit or
loss (yuan)
Net cash flows from
5119370863.324361481083.614361481083.6117.38%5837878051.575837878051.57
operating activities (yuan)
Basic EPS (yuan/share) 0.87 1.17 1.17 -25.64% 1.41 1.41
Diluted EPS (yuan/share) 0.87 1.17 1.17 -25.64% 1.41 1.41
Decreased
by 4.84
Weighted average ROE 11.24% 16.08% 16.08% 21.21% 21.21%
percentage
points
72023 Annual Report of Zhejiang NHU Co. Ltd.
After
Dec. 31 2022 Dec. 31 2021
adjustment
Items Dec. 31 2023
After
Before adjustment After adjustment[Note ] Before adjustment After adjustment t[Note ]
adjustment
Total assets (yuan) 39156246864.67 38267625155.83 38267645013.46 2.32% 34724025476.79 34724035742.87
Net assets attributable to
shareholders of listed 24804662320.99 23574859468.61 23574879326.24 5.22% 21831838010.85 21831848276.93
company (yuan)
Reasons for changes in accounting policies and correction of accounting errors
[Note ] Effective January 1 2023 the Company implemented Accounting Standards Interpretation No. 16 issued by the Ministry of
Finance (MOF) . The "Accounting for deferred income taxes not subject to the initial recognition exemption for assets and liabilit ies
arising from individual transactions" requires that adjustments be made for individual transactions to which the provision applies that
occur between the beginning of the earliest period for which the financial statements are presented in the period in which the provision
is first implemented and the date of first implementation. If taxable temporary differences and deductible temporary differences arise
from lease liabilities and right-of-use assets recognized as a result of a single transaction to which this provision applies at the beginning
of the earliest period for which the financial statements are presented for the first time and if projected liabilities related to abandonment
obligations and related assets are recognized the taxable temporary differences and deductible temporary differences shall be adjusted
in accordance with the provisions of this provision and Accounting Standard No. 18 - "Income Taxes". -Income Taxes the cumulative
effect is adjusted to opening retained earnings and other related financial statement items in the earliest period for which the financial
statements are presented.The company's net profit before and after deducting non-recurring gains and losses in the last three fiscal years whichever is lower is
negative and the audit report of the latest year shows that the company's ability of continuing operation is uncertain.□ Yes √ No
The lower of the net profit before and after deducting extraordinary gains and losses is a negative value.□ Yes √ No
VII. Differences in accounting data under Chinese accounting standards and overseas
accounting standards
1、Difference in net profit and net assets in financial statements disclosed respectively under IFRS
Standards and Chinese accounting standards
□ Applicable √ Not Applicable
The Company has no difference in net profit or net assets in financial statements disclosed respectively under IFRS Standards and
Chinese accounting standards.
2、Difference in net profit and net assets in financial statements disclosed respectively under overseas
accounting standards and Chinese accounting standards
□ Applicable √ Not Applicable
The Company has no difference in net profit or net assets in financial statements disclosed respectively under overseas accounting
standards and Chinese accounting standards.VIII. Key financial indicators by quarter
82023 Annual Report of Zhejiang NHU Co. Ltd.
Unit: RMB Yuan
Items First quarter Second quarter Third quarter Fourth quarter
Operating revenue 3612227625.99 3806286950.10 3593667828.40 4104354598.81
Net profit attributable to shareholders of
643158260.22840070976.74617979827.61603029702.97
listed company
Net profit attributable to shareholders of
listed company after deducting non- 586422083.91 788796801.91 575353203.63 663638551.13
recurring profit or loss
Net cash flows from operating activities 390927539.55 844635082.38 1389793155.77 2494015085.62
Is there any significant difference between the above financial indicators or their totals and the correspondent financial indicators
disclosed in quarterly or semi-annual reports
□ Yes √ No
IX. Non-recurring profit or loss
√ Applicable □ Not Applicable
Unit: RMB Yuan
Items Year 2023 Year 2022 Year 2021 Remarks
Gains or losses on disposal of non-
current assets including write-off of 5426533.21 -74232517.88 -61427624.58
provision for impairment
Government grants included in profit or
loss (excluding those closely related to
operating activities of the Company
satisfying government policies and 63050565.94 175761119.94 151398630.02
regulations and continuously enjoyed
with certain quantity or quota based on
certain standards)
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
34458488.77-86980602.8448751702.84
held-for-trading financial assets and
held-for-trading financial liabilities
excluding those arising from hedging
business related to operating activities
Fees charged to non-financial
enterprises for fund occupancy included 465887.82 988193.62
in current profit or loss
Gains or losses on assets consigned to
the third party for investment or 12715401.91 52749284.13 57777633.53
management
Debt restructuring gains and losses -847442.05
Other non-operating revenue or
4406027.432411616.088727858.40
expenditures
Other profit and loss items that meet the
9579239.88
definition of non-recurring profit or loss
Less: Enterprise income tax affected 29488260.00 46826444.91 28969203.00
Non-controlling interest affected
159076.0751953.2842098.74
(after tax)
Total 90028126.96 33397934.74 176216898.47 --
92023 Annual Report of Zhejiang NHU Co. Ltd.
Remarks on other profit or loss satisfying the definition of non-recurring profit or loss:
□ Applicable √ Not Applicable
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss.Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria forPublic Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss
√ Applicable □Not Applicable
Items Amount involved(yuan) Reason
Net profit attributable to shareholders of
listed company after deducting non- 33397934.74
recurring profit or loss in fiscal 2022
Net profit attributable to shareholders of
listed company after deducting non-
recurring profit or loss calculated inaccordance with the “Interpretation-69074749.77
Pronouncement on Information Disclosure
Criteria for Public Companies No. 1 –
Non-Recurring Profit or Loss (Revised in
2023)” for fiscal year 2022.
discrepancy 102472684.51
102023 Annual Report of Zhejiang NHU Co. Ltd.
Section III Management Discussion and Analysis
I. The industry in which the Company operates during the reporting period
Based on the fine chemical industry the company takes "Chemical+" and "Bio+" as its core technology platform to produce various
functional chemicals around nutrition flavors and fragrances new materials and APIs.Nutrition:
The overall trend of global population growth remains unchanged with the degree of aging continuously deepening. As people pursue
a healthy life and quality living the demand for products in the large health sector such as health supplements pharmaceuticals and
infant health will always be maintained and continue to grow. The United Nations PRB and others predict that by 2050 the global
population will approach 10 billion1.Vitamins and methionine are the representatives of the nutritional products market. Vitamins are trace organic substances essential to
humans and animals. The market demand mainly comes from the downstream feed food medicine and other fields. The overall demand
is growing steadily at a low speed. The supply concentration is high and the market price has long-term cyclical fluctuations. As the
largest producer of vitamins China produced about 0.43 million tons of vitamins in 2022 accounting for 84.40% of the global
production. In 2023 the production capacity of the vitamin industry is released by inertia the oversupply situation is intensified and
the industry competition is fierce2.Methionine is the only amino acid containing sulfur among essential amino acids and is the first limiting amino acid in poultry high-
yield dairy cows and fish. The industrial production of methionine is mainly used as a feed additive which has two advantages:
economy and availability. At present the main production process of methionine is chemical synthesis the production process and
engineering technology are complex the safety and environmental protection requirements are high and there are high capital barriers
and technical barriers.The methionine industry has a high concentration of production with the majority of the capacity focused on 8 major manufacturers:
Evonik Adisseo NHU Novus Sumitomo Chemical CHINA UNIS CHEMICAL CJ and Sichuan Hebang. The global market demand
is growing steadily and the effective supply and demand are relatively balanced in the short term. The global methionine increase in
2023 mainly comes from China and the methionine production adjustment and supply reduction of most international enterprises in
the second half of 2023. It is expected that China's methionine production in 2023 will be 0.58 billion tons an increase of 31.20% year-
on-year accounting for 34.60% of global production and an increase of 7.9% compared with 20223.Flavor and fragrance:
Flavor and fragrance industry is a complementary industry of the national economy and the independent high-level flavor and fragrance
industry is crucial to the independent high-level food industry tobacco industry and daily chemical industry. Fragrances include
fragrances (synthetic fragrances natural fragrances) and fragrances (daily chemical fragrances food fragrances tobacco fragrances
etc.) which are used in personal care home care food beverage and other daily life scenarios. In 2022 the global flavor and fragrance
market will reach 196.4 billion yuan and China's market will reach 56 billion yuan accounting for 28.50% of the world's total4.New polymer materials:
As a strategic and fundamental industry new polymer materials has become an important symbol for measuring the economic and
1 https://www.prb.org/articles/highlights-from-the-2023-world-population-data-sheet/
2 The “2023 Vitamin Market Annual Analysis Report” by BOYAR
3 The “2023 Amino Acid Market Annual Analysis Report” by BOYAR
4 Xinhua reported December 2023 "Fragrance industry fragrance"
112023 Annual Report of Zhejiang NHU Co. Ltd.
technological strength of a country or region. The “Guidelines under 14th Five-Year Plan and Vision for 2035” pointed out that it is
necessary to vigorously develop strategic emerging industries including new generation information technology biotechnology new
energy high-end equipment and other fields. These fields have huge demand for new materials. New polymer materials include general-
purpose plastics engineering plastics and special engineering plastics and downstream processing forms include modified composite
materials films fibers foams coatings etc. which are widely used in traditional fields such as automobiles electronic appliances as
well as new energy 5G communication artificial intelligence and other emerging fields. With the upgrading of consumption and the
high-quality development of the manufacturing industry the future market growth space of the polymer material industry is huge.Specialty engineering plastics refer to a class of engineering plastics with superior comprehensive performance and a long-term service
temperature above 150°C. They combine advantages such as high heat resistance insulation corrosion resistance and high mechanical
strength and are widely used. In the aerospace field materials like PPS PEEK and PEI are partially replacing metals and thermosetting
plastics due to their heat resistance flame retardancy and processability. In the automotive sector lightweight and electrification are
the main factors driving the growth of demand for specialty engineering plastics. In the electronic and electrical field the increase in
the assembly temperature of electronic components and the increase in the communication transmission frequency are the main factors
driving the growth of the demand for special engineering plastics.5
API industry:
API is the pillar industry of the domestic pharmaceutical industry and one of the key industries supported by the state. China and India
are the main source countries of API production. The advantages of API production are concentrated in emerging countries such as
China and China has become a large production and export country of bulk API and the production technology has reached the
international leading level. According to the production data of chemical raw materials and chemical preparations collected by the
Statistical Information Professional Committee of China Chemical Pharmaceutical Industry Association in 2022 the production of
chemical raw materials basically remained stable and among the major categories the output of anti-infective drugs in 2022 increased
by 3% over the previous year; The output of antipyretic and analgesic drugs will increase by 16.1% in 2022; Vitamin production
increased by 10.6% in 2022.6
II. The main business of the Company during the reporting period
The Company is a national high-tech company mainly engaged in the production and sales of nutrition flavor and fragrance new
polymer materials and APIs. It focuses on fine chemicals adheres to the concept of innovation-led development and competition-
driven growth and continuously develops various functional chemicals based on the two core platforms of chemical and biology
providing value-added services and solutions to customers in more than 100 countries and regions around the world. It continuously
improves the quality of human life with high-quality healthy and green products and creates sustainable value for stakeholders. With
leading technology scientific management and sincere service the Company has become one of the four major world vitamin
manufacturers one of the top 100 national fine chemical companies one of the top 10 companies in China’s light of industry fragrance
and a well-known special engineering plastics manufacturer.
1. Main products and applications
Nutrition: The 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
5 China Huaxin "The demand for special engineering plastics continues to increase and the application status and future trend of
various products are viewed by consumer areas"
6 China Chemical and Pharmaceutical Industry Association "China Chemical and Pharmaceutical Industry Economic Operation
Report 2022"
122023 Annual Report of Zhejiang NHU Co. Ltd.
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.Polymer materials: The company focuses on the development of high-performance polymers and key intermediates moderate
development of downstream applications of materials the main products include polyphenyl sulfide (PPS) high temperature nylon
(PPA) HDI IPDA downstream applications include automotive electronic appliances environmental protection industrial
applications and other fields. At present the company has created a whole industry chain of PPS from basic raw materials to high
polymer then to modified processing to special fibers becoming the only domestic enterprise that can stably produce fiber grade
injection grade extrusion grade coating grade PPS and is developing new material projects in the whole industry chain.APIs: The main products are concentrated in the series of vitamins and antibiotics. The main products include moxifloxacin
hydrochloride vitamin A vitamin D3 etc. which are mainly used as active pharmaceutical ingredients for processing and producing
pharmaceutical preparations.
2. Main business models
(1) Procurement model
The company has always adhered to the procurement principle of “fairness transparency and optimal cost” adopted the dual strategy
of long-term strategic cooperation and open competitive procurement deepened the market trend and market analysis and ensured the
steady supply of strategic materials. Pay attention to source procurement reduce intermediate links reduce procurement costs. Promote
sunshine procurement establish an information system and make the procurement process transparent standardized and efficient.Select suppliers with good reputation and quality products and sign quality assurance agreements to ensure stable and reliab le
performance of purchased items. We will give priority to environmentally friendly energy-saving and sustainable products and services
encourage suppliers to achieve green production and operation and gradually promote carbon emission reduction and carbon neutrality
plans. Select suppliers with a good sense of social responsibility pay attention to their social responsibility performance establish long-
term cooperative relations and achieve sustainable development of procurement activities.
(2) Production modelThe Company has always been adhering to the production strategy based on the principle of “production and sales coordinationefficient operation excellent quality and cost leadership”. The Company maintained a balance between production and sales through
analysis of changes in market demands effective response to repeated epidemic waves and dual-control power cuts and reasonable
production plans. In addition the Company keeps innovating the production model digging out internal potentials and optimizing the
production process in order to promote safe green standardized and efficient production and continuously improve the
competitiveness of its products.
(3) Sales model
The Company has always been adhering to the “customer-centric market-oriented” sales strategy. It divides business lines by product
application fields and establishes a sales model that suits market needs according to market characteristics and industry practices. Most
of the Company’s sales are achieved through direct sales. By doing so it establishes long-term and stable strategic cooperative
relationships with end customers to create greater value for them. Meanwhile it also selects excellent agents or distributors for
distribution. By doing so it services customers indirectly based on market and customer features. At the same time through measures
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.
132023 Annual Report of Zhejiang NHU Co. Ltd.
3. Key performance drivers
The Company has built four modern industrial bases across the country. It adheres to the development strategy of integration
serialization and synergy and insists on innovation-driven. Relying on the solid foundation of fine chemical industry it focuses on
“chemical+” and “biology+” to form NHU featured R&D models with industrial clusters and technology and industry platforms
interdependent. Not only can its products connect basic chemical raw materials in the upstream but also extend to special intermediates
nutrition flavor and fragrance new polymer materials and APIs in the downstream. It has formed a product network structure to resist
risks and respond to market emergencies.During the reporting period the company's original products were operated in fine detail and the development and construction of new
projects and new products were carried out in an orderly manner. Of the 250000 tons/year methionine phase II project in the nutrition
sector 100000 tons of equipment ran smoothly 150000 tons of equipment with its process route successfully established in one go
continues to enhance its comprehensive competitive advantage.; The 180000 tons/year liquid methionine (conversion) project of the
company and China Petroleum & Chemical Corporation was put into construction; 4000 tons/year cystine project started construction;
30000 tons/year taurine project started normal production and sales; 2500 tons/year vitamin B5 project started normal production and
sales. In the Flavor and fragrance sector 5000 tons/year menthol project started normal production and sales. In the new polymer
materials sector 7000 tons/year PPS Phase III project started normal production and sales; The pilot test of the adiponitrile project
was successful and the project approval is progressing in an orderly manner. The HA project has commenced with material inpu t
testing and the project is advancing smoothly. In the API sector Pharmaceutical-grade Coenzyme Q10 was listed and the product
structure was upgraded according to market demand and gradually developed into a manufacturer of antipyretic and analgesic drugs
nutritional drugs and characteristic API intermediates.During the reporting period the price of major vitamin products was under downward pressure and the company actively took
countermeasures innovative marketing management gave play to the advantages of sector linkage and made efforts to overcome
various unfavorable factors and achieved steady growth in product sales year-on-year. During the reporting period the company
promoted the normal sales of newly put into production projects and achieved steady revenue growth in the flavors and fragrances
segment and the new materials segment. At the same time through innovation to reduce costs fully tap the potential strengthen the
analysis and prediction of the procurement market and reasonably reduce operating costs maintaining the overall steady development
of the company.During the reporting period the Company’s main business and its business model remained unchanged.III. Core competitiveness analysis
Since its establishment the Company has focused on fine chemicals and adhered to innovation-driven development. Through decades
of development it has gradually formed an industrial system with nutrition flavor and fragrance new polymer materials and APIs as
its main business. The market share of its main products is among the top tier in the world market. The Company’s core competitiveness
lies in its cooperate culture R&D management talent and brand.
1. Corporate culture
Adhering to the enterprise objective of “creating wealth employees’ success and benefit the society” core values of “new harmonyunion” business philosophy of “create wealth balanced and sustainable” and enterprise spirit of “realism innovation high-qualit yand 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 as well as the "Woodpecker" management behavior correction actions
promoting the improvement of management capabilities.
142023 Annual Report of Zhejiang NHU Co. Ltd.
2. R&D
The company adheres to the research and development concept of "demand-oriented internal and external integration" and has
invested more than 5% of its operating income in research and development for many consecutive years. Through the establishment of
an innovative organizational structure at three levels of science technology and application the company has formed a three-level
innovative research and development system of scientific research technology transformation and technology application and formed
a research and development model with the General research Institute as the core research branches four production bases
Xinhecheng-Zhejiang University joint research and development center and external scientific research cooperation institutions. The
company cooperates closely with well-known research institutes and universities at home and abroad such as Zhejiang University
Chinese Academy of Sciences Jiangnan University China Agricultural University Zhejiang University of Technology and CysBio
Biotechnology Co. LTD. organizing and utilizing global basic science research resources to jointly carry out prospective and applied
research in chemistry. As the core of enterprise technology innovation the research institute of the company has set up biomedical
laboratory supercritical reaction laboratory engineering equipment research center and other laboratories equipped with 600M ultra-
low temperature probe nuclear magnetic resonance instrument and other world advanced scientific research equipment master the
supercritical reaction high vacuum distillation high pressure hydrogenation continuous peroxide and continuous crystallization and
other leading technologies at home and abroad. It has been rated as a national enterprise technology center a national postdoctoral
research workstation and a national model academician expert workstation. During the reporting period the company was awarded
the "Zhejiang Science and Technology Leading Enterprise" and the New Materials Research Institute was awarded the Key Enterprise
Research Institute of high-performance engineering Materials in Zhejiang Province.
3. Production managementThe Company has always been adhering to the production strategy based on the principle of “production and sales coordinationefficient operation excellent quality and cost leadership” and the HSE guideline of “safety first green development full participationand 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 and 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.
152023 Annual Report of Zhejiang NHU Co. Ltd.
5. Talent
The company has always adhered to the management concept of "standardized and efficient" and the employment concept of "both
virtue and talent people and posts matching" and has shaped a pioneering and innovative pragmatic and efficient talent team and a
long-term stable and excellent management team with a high sense of responsibility to promote the sustainable healthy and rapid
development of the company. The company continues to strengthen the construction of talent supply chain constantly improve the
talent training system strengthen the training of "management talents skilled talents international talents core technical talents and
leadership talents" systematically train and reserve college students introduce various professional talents continue to promote the
training of reserve cadres such as the sailing class and the departure class and promote the cross-sequence rotation training of the font
type. Promote the improvement of management and professional ability and build a balanced talent structure. During the reporting
period the company has been honored with the "2022 High-Quality Development Demonstration Award for Valuing and Cherishing
Talents".
6. Brand
The company adheres to the "integrity-based" and has always adhered to serving customers and creating industry value with customers
as the goal pursued by enterprises over the years. Through technological innovation the company continues to provide customers with
safe and high-quality products and efficient and satisfactory services. After years of development and accumulation the company has
won many honorary titles in the global fine chemical industry such as one of China's top ten feed additive brands one of the country's
large vitamin feed additive enterprises and won the list of China's top 500 petroleum and chemical enterprises (comprehensive) and
China's top 100 basic chemical raw material manufacturing enterprises. Good market reputation has laid a solid foundation for the
healthy and long-term development of the company. In addition the company has repeatedly won the top 30 best internal control in
Zhejiang Province the mainstream media listed companies "Best Investor relations Award" "Best Board of Directors award" and other
awards widely favored by the market and investors. During the reporting period the company was rated as "Top 100 Private Enterprises
in Shaoxing City in 2023" "Leading Scientific Enterprise in Zhejiang Province" "Top 10 Innovation and Development Enterprises in
China's Fine Chemical Industry in 2023" "Top 100 Enterprises in China's Fine Chemical Industry in 2023" and "Top 100 Enterprises
in China in 2023" and the company ranked No. 1 in the "Independent Innovation" group of China Brand Value Evaluation informa tion
in 2023.
7. Globalization
Globally oriented the company has set up overseas sales companies in Hong Kong Singapore Germany Mexico Brazil and other
regions or countries and built overseas research institutes in Singapore to connect global innovation resources providing
comprehensive solutions in the fields of nutrition and health daily care transportation environmental protection energy and other
fields for customers in more than 100 countries and regions around the world. We will strive to optimize the allocation of resources at
home and abroad help expand overseas markets and provide localized services and continue to move toward "Global NHU".
8. Intelligent Manufacturing
The company establishes the "one headquarters and multiple bases" management and control mode builds a large-middle desk
technical route with new and successful characteristics and strengthens the awareness of data management and the management
platform support system by building the business center data center and technology center so as to realize the smooth management
process of the headquarters and production base the same source of business data and supports the efficient business decision-making
of enterprises. The company constantly promotes automation informatization and digitalization strives to create a new and
characteristic intelligent manufacturing system build smart factories promote intelligent operation management achieve efficient
flexible punctual lean production of high-quality products better meet and serve customers and shape new advantages of industrial
competition.
162023 Annual Report of Zhejiang NHU Co. Ltd.
IV. Main business analysis
1．Introduction
Please refer to item “II. The main business of the Company during the reporting period” under “Section III Management Discuss ionand Analysis” for details.
2．Revenue and cost
(1) Operating revenue
Unit: RMB Yuan
Year 2023 Year 2022
Items YoY growth rate
Amount % to total Amount % to total
Total 15116537003.30 100% 15933984403.41 100% -5.13%
By industry
Pharmaceutical
13797766058.0091.28%14672567397.2992.08%-5.96%
chemicals
Others 1318770945.30 8.72% 1261417006.12 7.92% 4.55%
By produc
Nutrition 9866822612.52 65.27% 10951828026.72 68.73% -9.91%
Flavor and 3273948378.45 21.66%
2967080657.6518.62%10.34%
fragrance
New polymer 1201509242.06 7.95%
1166099937.057.32%3.04%
materials
Others 774256770.27 5.12% 848975781.99 5.33% -8.80%
By region
Domestic sales 7318678736.77 48.42% 8262678396.21 51.86% -11.42%
Overseas sales 7797858266.53 51.58% 7671306007.20 48.14% 1.65%
By sales model
Direct sales 10976755778.18 72.61% 11874529226.77 74.52% -7.56%
Agent sales 4139781225.12 27.39% 4059455176.64 25.48% 1.98%
(2) Industries products and regions that account for more than 10% of the total operating revenue or
operating profi
√ Applicable □ Not Applicable
Unit: RMB Yuan
Growth rate of Growth rate
Gross Growth rate of
Items Operating revenue Operating cost operating of operating
rate gross rate
revenue cost
By industry
Pharmaceutical Decreased by 4.61
13797766058.009143852194.6433.73%-5.96%1.07%
chemicals percentage points
By product
Decreased by 6.68
Nutrition 9866822612.52 6915666865.62 29.91% -9.91% -0.42%
percentage points
Flavor and Increased by 1.54
3273948378.451620160495.1950.51%10.34%7.01%
fragrance percentage points
By region
Decreased by 5.00
Domestic sales 7318678736.77 5238007215.82 28.43% -11.42% -4.78%
percentage points
Decreased by 3.47
Overseas sales 7797858266.53 4893483159.63 37.25% 1.65% 7.61%
percentage points
172023 Annual Report of Zhejiang NHU Co. Ltd.
In case the statistical caliber of the Company’s main business data was adjusted during the reporting period the Company’s main
business data of the preceding period adjusted according to the caliber at the end of the period shall be indicated
□ Applicable √ Not Applicable
(3) Whether the Company’s goods sales income is greater than service income
√ Yes □ No
By industry Items Unit Year 2023 Year 2022 YoY growth rate
Sales Ton 789182.83 655683.43 20.36%
Pharmaceutical
Production Ton 789677.52 669038.97 18.03%
chemicals
Stock Ton 68991.71 68497.02 0.72%
Sales Ton 26584.02 24551.07 8.28%
Others Production Ton 29056.26 25496.03 13.96%
Stock Ton 6265.53 3793.29 65.17%
Remarks on reason for relevant data with absolute growth rate over 30%
√ Applicable □ Not Applicable
The YoY growth rate of stock of others was up 30% mainly due to the increase of PPS products due tothe completion of the third
phase of PPS construction and the impact of capacity enhancement.
(4) The performance of major sales contracts and major purchas e contracts signed by the Company during the reporting
period
□ Applicable √ Not Applicable
(5) Composition of operating cost
Unit: RMB Yuan
Year 2023 Year 2022 YoY growth
By industry Items
Amount % to total Amount % to total rate
Chemical Cost of main
9113248621.4889.95%9001010480.6089.58%1.25%
industry operations
Cost of main
Others 921775209.45 9.10% 1000074989.18 9.95% -7.83%
operations
Unit: RMB Yuan
Year 2023 Year 2022 YoY growth
By product Items
Amount % to total Amount % to total rate
Cost of main
Nutrition 6885063292.46 67.96% 6913932973.18 68.81% -0.42%
operations
Flavor and Cost of main
1555075302.1715.35%1498519852.0614.91%3.77%
fragrance operations
Cost of main
New materials 867516786.30 8.56% 901961435.46 8.98% -3.82%
operations
Cost of main
Others 727368450.00 7.18% 686671209.08 6.83% 5.93%
operations
(6) Whether the consolidation scope has changed during the reporting period
√ Yes □ No
182023 Annual Report of Zhejiang NHU Co. Ltd.
Entities Equity acquisition method
Shandong New Shuang'an Biotechnology Co. Ltd Acquisitions
(7) Significant changes or adjustments to the Company’s business products or services during the reporting
period
□ Applicable √ Not Applicable
(8) Major customers and major suppliers
Major customers
Total sales amount (yuan) of top 5 customers
1550108168.56
Proportion to the total balance of annual sales amount (%)
10.26%
Proportion of related party transaction to the total balance of
annual sales amount (%) 0.00%
Top 5 customers
Proportion to the total balance
No. Customers Sales amount (yuan)
of sales amount (%)
1 Client A 750800479.63 4.97%
2 Client B 230652896.19 1.53%
3 Client C 202836523.66 1.34%
4 Client D 199473773.22 1.32%
5 Client E 166344495.86 1.10%
Total -- 1550108168.56 10.26%
Remarks on other information of major customers
□ Applicable √ Not Applicable
Major suppliers
Total purchase amount (yuan) of top 5 suppliers
1328514889.44
Proportion to the total balance of annual purchase amount (%)
13.86%
Proportion of related party transaction to the total balance of
annual purchase amount (%) 0%
Top 5 suppliers
Proportion to the total balance
No. Suppliers Purchase amount (yuan)
of purchase amount (%)
1 Supplier A 355051158.40 3.71%
2 Supplier B 263706804.58 2.75%
3 Supplier C 261989468.29 2.73%
4 Supplier D 237630811.43 2.48%
5 Supplier E 210136646.74 2.19%
Total -- 1328514889.44 13.86%
Remarks on other information of major suppliers
□ Applicable √ Not Applicable
192023 Annual Report of Zhejiang NHU Co. Ltd.
3. Expenses
Unit: RMB Yuan
Remarks on significant
Items Year 2023 Year 2022 YoY growth rate
changes
This was mainly due to the
increase in personnel
Selling expenses 158316813.86 122257619.47 29.49% remuneration commission
and office expenses during
the reporting period.Administrative
551072291.99504674730.699.19%
expenses
This was mainly due to the
decrease in interest income
Financial expenses 65450512.95 44401778.13 47.41% and foreign exchange
gains.during the reporting
period.R&D expenses 887801475.02 858945406.13 3.36%
4. R&D input
√ Applicable □ Not Applicable
Expected effect on the
Main R&D
Purposes Progress Targets to be fulfilled Company’s future
projects
development
Research on some of the
existing unit operations Formation of different scale
and equipment that are Kettle and pipeline multi-kettle tandem
commonly used by the continuous reaction continuous reaction model
Research on company and facilitate model test platform test platform pipeline
continuous continuous operation so continuous reactor model test platform
process that each production site extraction and falling film evaporator basic Enhance our industry
equipment can form a mature continuous data verification device position in the API industry
technology continuous reaction crystallization continuous crystallization Enhance the comprehensive
development and continuous model platform model test platform competitiveness of products
application chromatography have been built， continuous extraction modelresearch continuous washing and is undergoing test platform membrane
continuous crystallization application separation model test
continuous extraction and debugging platform microchemical
other continuous platform
production lines
Process research and quality
research on several PF
Develop new products in R&D completed
Development of products forming
PF category and obtain some products are Enrichment of API product
PF product independent R&D
official license and being promoted for lines
technology technology and quality
customer approval projectization
standards and launched
new categories of APIs.Formation of a set of
Completion of
Research on new commissioning equipment
Development of new emulsification new
dosage suitable for the Develop new products of
dosage forms for vitamin process vitamin A
formulations and development of powder nutrient preparations to
products such as granules dry crosslinking
process tablet drop and capsule improve the product range
tablets drops emulsions process small pilot
technology of type formulation products of our nutritional products
and gels. research and
nutrient products with a batch output of about
development
50Kg
202023 Annual Report of Zhejiang NHU Co. Ltd.
Expected effect on the
Main R&D
Purposes Progress Targets to be fulfilled Company’s future
projects
development
To research on the
application effect of newly
developed ethoxyquinoline-
3 products for large
free vitamin and carotenoid
To develop high- safety production It is expected to improve
preparation products in
fat-soluble vitamin and applications; the the Company’s independent
Research on the premix and feeds and their
carotenoid preparations platform has research and development
development and bioutilization effect in
and research on the effect completed level in the
application of different animal fields.and mechanism of their construction and developmentcontinue to
high-safety Establish feed processing
application in downstream started normal provide effective and
nutrient products platform and breeding test
premix feeds and animals operation and sustainable solutions for
base for pilot-scale
(in vitro and in vivo). application customers.experiments so as to
debugging
evaluate the application
effect of high-safety vitamin
and carotenoid.The company continues to
Research and innovate the existing The company continues to
Development of development of synthetic VB6 available vitamin product process; improve the vitamin series
Vitamin product process innovation for others still in continues to research and products to improve the
technology new and old products of development develop the synthesis company's overall
vitamin series process for new vitamin competitiveness
products.Key Technology
To study the design
Development and
synthesis and catalytic
Application Improve the synthesis
mechanism of metal The precise design
Demonstration for technology of related
catalysts as the primary synthesis development and
Equivalent Pilot stage products such as useful to
task and explore the application of our new and
Reduction of Pd commissioning Pd catalysts to reduce costs
industrial development old products involving Pd
Catalyst for and improve
and application of high catalysts etc.Vitamin and competitiveness
performance metal
Antibiotic
catalysts
Synthesis
Continuously promoting Application of chemical
Breaking the monopoly of
AM ester the chemical synthesis of Mold testing and synthesis of new AM ester
foreign technology and
synthesis process new AM ester products further scaling up of products and promotion of
promoting industrial
development and scaling up design and the design phase scale-up design and
upgrading
industrialization industrialization
Realize the green vitamin
bio-manufacturing and then
Construction of
Enhanced production of Vitamin B5 B12 upgrade China's
biologically
engineered strains through have been in the fermentation level to the
synthesized
multi-parameter company's internal Green synthesis of existing world's leading level and
strains of typical
optimization of the test run running vitamins by constructing play a key role for the
B vitamins
fermentation process to well other B high-level strains and company to seize the high
development and
accelerate the substitution products amplifying fermentation point of international
industrialization
of chemical synthesis by fermentation technology and build a new
of fermentation
biofermentation process research pillar of green
process
environmental protection
industry system in China.Adiponitrile
Break through the technical
synthesis process Research on technology
Pilot testing of new barriers of adiponitrile
innovation and Chemical synthesis and development of adiponitrile
processes and break the monopoly of
industrialization industrialization of products and localization of
design of further foreign companies and
technology adiponitrile production technology of
scale-ups promote the development of
application adiponitrile products
domestic related industries
research
212023 Annual Report of Zhejiang NHU Co. Ltd.
Expected effect on the
Main R&D
Purposes Progress Targets to be fulfilled Company’s future
projects
development
Completed research
on pharmaceutical
grade products such
as Coenzyme Q10
and Moxifloxacin
Completed the development
Hydrochloride of
Further promote the and research of
which Q10 has
company's R & D of API pharmaceutical-grade pilot Enhance our company's
obtained the
products especially processes for more than 5 industry position in the API
High-specification domestic
vitamin API product products such as vitamin industry especially in the
API product registration number
research and development VB6 and the process has competitiveness of the high-
development and Moxifloxacin
work reduce production the value and feasibility of specification vitamin
Hydrochloride has
costs improve API scaling up and guided and market
obtained the CEP
product specifications optimized the establishment
certificate; and is
of the scaling-up process.promoting the
research on 6
pharmaceutical
grade products such
as Vitamin B6.Passed CNAS
National Laboratory
Establishing relevant Accreditation
standards and testing Qualification Provide a full range of
Provide analytical
Research and methods for synthetic Periodic analysis and testing services
technology services for
Application of intermediates; carrying Supervisory Review for the company's product
enterprises establish
Fine Chemical out research on the and Expansion Re- technology innovation and
analytical technology
Analysis and preparation separation accreditation and is assist in solving key
development and assist in
Testing and purification of trace able to carry out technical problems in the
the company's product
Technology impurities and analytical production and R&D
development
determining the structure technology research process.of impurities etc. support both inside
and outside the
company.Crystallization
extraction
Systematically study the
simulated moving
influencing factors of the
bed separation
company's products in the Through the innovation and
technology
separation process development of the
Development and development is
optimize the best Systematic research on the separation process the
Application of basically
parameters of the separation process of the company realizes the
Highly Efficient standardized and
separation process company's existing and improvement of the
Separation applied in a number
achieve controllable developing products to separation process and
Processes and of products;
separation process and support the solution of quality of the products
Coupling distillation and
quality of the products practical production meets the needs of different
Enhancement membrane
and solve the actual problems. customers and enhances the
Technology separation
production problems competitiveness of the
technology
through production products in the market.development is in
debugging in the
the process of
workshop.further
standardization
Research on the The company has set up a The safety and The research and This research and
improvement of safety and environmental environmental development to improve the development improves the
safety and protection assessment protection company's safety and enterprise's essential safety
environmental laboratory equipped with assessment security technology in the level and effectively
protection calorimetric equipment laboratory has been chemical production and prevents accidents from
222023 Annual Report of Zhejiang NHU Co. Ltd.
Expected effect on the
Main R&D
Purposes Progress Targets to be fulfilled Company’s future
projects
development
technology of fine such as DSC ARC and completed and is storage process to carry out occurring
chemical industry RC1e and analysts to capable of issuing process optimization of the
carry out kinetic and process safety more dangerous process
thermodynamic analysis assessment reports from the essence of the
and research on related that meet the reaction process to reduce
materials and chemical requirements the risk of danger.reaction processes and to
amplify the debugging of
the corresponding
processes when necessary.New type of emulsified
Research on the
New emulsified starch starch replaces waxy corn
development of modified
Development and replaces waxy corn starch to starch to ensure timely
starches with excellent Pilot process
industrialization improve the stability of supply of raw materials
emulsifying properties development in
of new emulsified modified starch supply and avoiding the risk of supply
based on tapioca starch progress
starch corresponding product cut-off and meeting the
instead of waxy corn
quality company's production
starch.needs.This research can stabilize HA-related products are
the production of ketone nationally encouraged
R&D aimed at stabilizing IPDA ADI and polymers projects with good
Project under
HA Project the production of ketone providing customers with application growth in the
construction
IPDA ADI and polymers high-quality products and fields of curing agents
enhancing the company's polyurethane plastic fibers
efficiency and water-based coatings.The company has
provided technical
The research can meet the support for the
According to the target
company's product separation and
products and impurities
production and R & D production of five
select the appropriate filler
needs continuous small pilot
process conditions
research on research and development separations and This research can help
parameters etc. mother
Simulation of and improvement of three production companies build core
liquor recovery product
moving bed chromatographic projects and is now innovative competencies
purification so as to
technology and separation technology continuing to carry and provide better products
achieve the goal of
application enhance the production out technical to their customers
improving the separation
process level of the research and solve
yield improve product
company's products and separation problems
quality and enhance the
enhance the company's in the workshop and
level of process automation.market competitiveness R&D process
according to
demand
Carbonylation Carbonylation technology is
catalysts have been Optimize the carbonylation atomically economical and
Preparation and
Development and applied in the synthesis unit technology in has wider applications in
application technology
application of synthesis process of the company's product the synthesis of aldehydes
development of catalysts
high efficiency 2 products and the process route prepare the acids and esters and in the
involving carbonylation
multiphase related catalyst corresponding catalysts and future it can be utilized to
synthesis unit in the
carbonylation preparation improve the activity develop more and better
synthesis of new and old
catalysts technology is in the selectivity and stability of products by combining
products of the company
process of further the carbonylation reaction. carbonylation technology
optimization with market demand.
232023 Annual Report of Zhejiang NHU Co. Ltd.
Details of R&D personnel
Items Year 2023 Year 2022 Percentage of change
Number of R&D personnel (persons) 2803 2629 6.62%
% to total employees 23.85% 22.81% Increased by 1.04 percentage points
Educational background structure
Technical secondary school high
135139-2.88%
school and below
Junior college 373 370 0.81%
Bachelor 1388 1345 3.20%
Master 828 700 18.29%
Doctor 79 75 5.33%
Total 2803 2629 6.62%
Age structure
Below 30 years old 1353 1293 4.64%
30-40 years old 1045 947 10.35%
Over 40 years old 405 389 4.11%
Total 2803 2629 6.62%
Details of R&D input
Items Year 2023 Year 2022 Percentage of change
R&D input amount (yuan) 887801475.02 858945406.13 3.36%
% to total operating revenue 5.87% 5.39% Increased by 0.48 percentage points
Capitalized amount (yuan) 0.00 0.00 0.00%
% to total R&D input 0.00% 0.00% 0.00%
Reason for significant changes in structure of the Company’s R&D personnel and the effect
□ Applicable √ Not Applicable
Reason for significant changes in the proportion of total R&D input to operating revenue compared to the preceding period
□ Applicable √ Not Applicable
Reason for significant changes in capitalization rate of R&D input and remarks on the reasonability
□ Applicable √ Not Applicable
5. Cash flows
Unit: RMB Yuan
Items Year 2023 Year 2022 YoY growth rate
Subtotal of cash inflows from operating activities 16264139030.71 16712001413.64 -2.68%
Subtotal of cash outflows from operating activities 11144768167.39 12350520330.03 -9.76%
Net cash flows from operating activities 5119370863.32 4361481083.61 17.38%
Subtotal of cash inflows from investing activities 950343311.05 1919918190.77 -50.50%
Subtotal of cash outflows from investing activities 4828029671.75 5759332104.36 -16.17%
Net cash flows from investing activities -3877686360.70 -3839413913.59 -1.00%
Subtotal of cash inflows from financing activities 5996318716.61 6855158371.64 -12.53%
Subtotal of cash outflows from financing activities 8049329843.78 8125152950.95 -0.93%
Net cash flows from financing activities -2053011127.17 -1269994579.31 -61.66%
Net increase of cash and cash equivalents -705271516.56 -562695606.37 -25.34%
Remarks on main factors leading to the significant changes in growth rates of relevant data
√ Applicable □ Not Applicable
242023 Annual Report of Zhejiang NHU Co. Ltd.
The YoY growth rate of net cash flows from operating activities was 17.38% which was mainly due to the decrease in procurement
of raw materials during this reporting period.The YoY growth rate of Subtotal of cash inflows from investing activities was -50.50% which was mainly due to the decrease in
redemption of financial products during the reporting period.The YoY growth rate of Subtotal of cash outflows from investing activities was -16.17%，which was mainly due to the decrease inthe purchase of property management products and the decrease in investment of construction work in process during the reporting
period.The YoY growth rate of Net cash flows from financing activities was -61.66% which was mainly due to the decrease in new
borrowings during the reporting period.The YoY growth rate of Net increase of cash and cash equivalents was -25.34% which was mainly due to the decrease in new
borrowings during the reporting period.Remarks on reason for significant difference between net cash flows from operating activities during the reporting period and net profit
of the current period
√ Applicable □Not Applicable
The large difference between net cash flow from operating activities and net profit of the Company is mainly due to the turnaround of
construction in progress (Methionine project with annual output of 0.25 million tons Shangyu Industrial Park PPS Project NH acid
projec etc.) during the period under review which affects the increase in accumulated depreciation of fixed assets and leads to a large
impact of non-payment cost in the net profit of the current year.V. Non-main business analysis
√ Applicable □ Not Applicable
Unit: RMB Yuan
% to total
Whether has
Items Amount profit before Reason for balance
continuity
tax
It was mainly due to realized profits and
Investment income 83054284.94 2.55% dividend income from associates during No
the reporting period.Gains on changes in It was mainly due to changes in the fair
fair value 29932484.98 0.92% value of forward settlements during the No
("-" means loss) reporting period.It was mainly due to losses arising from
Assets impairment loss the decrease in prices of vitamin series
-227048860.06 -6.98% No
("-" means loss) products and the provision for inventory
depreciation
It was mainly due to government grants
Other income 202088522.53 6.21% No
received during the reporting period.Gains on asset disposal It was mainly due to the disposal of
16404163.69 0.50% No
(or less: losses) fixed assets.It was mainly due to income from
Non-operating revenue 7931135.56 0.24% No
claims.Non-operating It was mainly due to losses on assets
14502738.61 0.45% No
expenditures scrapped during the reporting period.
252023 Annual Report of Zhejiang NHU Co. Ltd.
VI. Assets and liabilities analysis
1. Significant changes in asset composition
Unit: RMB Yuan
Dec. 31 2022 Jan. 1 2022 Percent
Remarks on significant
Items age of
Amount % to total Amount % to total changes
change
Cash and bank
4543361146.9811.60%5343851967.7213.96%-2.36%
balances
Accounts
2483266952.886.34%2476269041.236.47%-0.13%
receivable
Inventories 4318878875.34 11.03% 4144557702.39 10.83% 0.20%
Long-term equity
697145200.081.78%432503568.481.13%0.65%
investments
It was mainly due to the
conversion of Methionine
Fixed assets 21860082637.13 55.83% 16523867858.53 43.18% 12.65% project with annual output
of 0.25 million tons during
the reporting period.Construction in
1621882507.564.14%5089233908.2213.30%-9.16%
progress
Right-of-use
6603631.560.02%2830136.370.01%0.01%
assets
Short-term
1235688062.903.16%1846373441.014.82%-1.66%
borrowings
Contract liabilities 251008240.97 0.64% 60660929.75 0.16% 0.48%
Long-term
6821643194.5817.42%5273637508.8713.78%3.64%
borrowings
Lease liabilities 5240136.43 0.01% 2822404.07 0.01% 0.00%
Proportion of foreign assets to total assets is comparatively high
□ Applicable √ Not Applicable
2. Assets and liabilities at fair value
√ Applicable □ Not Applicable
Unit: RMB Yuan
Accumulated Provision for Amount Amount sold
Gains on
Opening changes in fair impairment purchased during the Other Closing
Items changes in
balance value included made in the during the reporting changes balance
fair value
in equity current period reporting period period
Financial assets
1. Held-for-
trading
financial assets
720000000.00145000000.00720000000.00145000000.00
(derivative
financial assets
excluded)
2. Derivative
314576.4327741474.5228056050.95
financial assets
Subtotal of
720314576.4327741474.52145000000.00720000000.00173056050.95
financial assets
Financial
0.000.000.000.000.00
liabilities
Remarks on other changes
262023 Annual Report of Zhejiang NHU Co. Ltd.
No
Whether the Company has significant changes in measurement attributes of main assets during the reporting period
□ Yes √ No
3. Restrictions on assets as of the end of the reporting period
Unit: RMB Yuan
Type of Restrictions
Items Book balance Carrying amount
restriction
77905369.24 77905369.24 pledged Banker's acceptance deposit
12048779.84 12048779.84 pledged Letter of Credit Deposit
3929600.00 3929600.00 pledged customs Deposit
Cash and bank 870050.56 870050.56 pledged Safety Construction deposit
balances 853216.21 853216.21 pledged Project works labor wage deposit
661215.83 661215.83 pledged Water deposit
500000.00 500000.00 pledged Letter of Guarantee Deposit
22500.00 22500.00 pledged ETC Deposit
Notes Opening a pledge of banker's
94097743.14 94097743.14 pledged
receivable acceptances
Receivables Opening a pledge of banker's
143872489.15 143872489.15 pledged
financing acceptances
Mortgage to a bank for the purpose
Fixed assets 97257595.52 81371634.23 mortgaged
of obtaining a loan
Intangible Mortgage to a bank for the purpose 10301747.64 10301747.64 mortgaged
assets of obtaining a loan
Total 442320307.13 426434345.84
VII. Investment status analysis
1. Overall information
√ Applicable □ Not Applicable
Investments during the reporting period (yuan) Investments of the preceding period (yuan) Percentage of change
3377423672.725034909624.27-32.92%
2. Significant equity investments made during the reporting period
□ Applicable √ Not Applicable
3. Significant non-equity investments in progress during the reporting period
□ Applicable √ Not Applicable
4. Investments in financial assets
(1) investments in securities
□ Applicable √ Not Applicable
There is no investment in securities during the reporting period.
(2) Investments in derivatives
√ Applicable □ Not Applicable
272023 Annual Report of Zhejiang NHU Co. Ltd.
1） Derivative investments for hedging purposes during the reporting period
√ Applicable □ Not Applicable
Unit: RMB 0000 yuan
Investment amount
Gains or at the end of the
Accumulated Amount
losses on Amount sold period as a
Types of Initial fair value purchased
Opening changes in during the End of period percentage of the
Derivatives Investment changes during the
amount fair value reporting amount company's net
Investments Amount recorded in reporting
for the period assets at the end of
equity period
period the reporting
period
Forward
35506.2935506.292993.250454255.58294114.67195647.207.85%
contracts
Total 35506.29 35506.29 2993.25 0 454255.58 294114.67 195647.20 7.85%
The Company accounts for the hedging business conducted in accordance with
description of the accounting policies and specific
the relevant provisions of the Ministry of Finance's AS 22 - Recognition and
principles of accounting for hedging operations during
AS 23 - Transfer of Financial Assets and AS 37 - Presentation of Financial
the reporting period and whether there have been any
Instruments and its guidance. There were no significant changes in accounting
significant changes compared to the previous reporting
policies and specific principles of accounting compared with the previous
period
reporting period.In order to reduce the impact of exchange rate fluctuations on the Company's
operating results the Company carried out foreign exchange hedging business
in accordance with a certain percentage of its export business with business
Description of actual profit or loss for the reporting
varieties mainly including forward exchange settlement and other foreign
period
exchange derivative products all of which were within the expected scale of
sales business and the actual gain or loss on derivatives at the end of the
reporting period was 6.72 million yuan.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 for In order to prevent exchange rate risk the Company and its subsidiaries have
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 risk strictly implemented the "Foreign Exchange Hedging Business Management
credit risk operational risk legal risk etc.) Regulations".Changes in market prices or product fair values of
invested derivatives during the reporting period and the Tht floating loss on fair value of derivatives during the reporting period was
analysis of the fair value of derivatives should disclose 29.93 million Yuan. Changes in fair value are determined at the end of each
the specific methods used and the setting of relevant month based on quoted market prices from external financial institutions.assumptions and parameters
Litigation involved (if applicable) No
Date of disclosure of board announcement for approval of
April 21 2023
derivative investments (if any)
The Company has formulated the "Management Measures for Foreign
Exchange Hedging Business" which sets out specific operating procedures for
conducting foreign exchange hedging business by strengthening internal
controls implementing risk prevention measures and improving management.The Company has analyzed the feasibility of its foreign exchange hedging
business and in general it is practical and feasible for it to carry out foreign
Special opinion of independent directors on the
exchange hedging which can effectively reduce the risk of exchange rate
company's derivatives investment and risk control
fluctuations and is conducive to stabilizing the profit level. The content and
consideration procedures of the matter are in compliance with the relevant
laws regulations regulatory documents and the Articles of Association and
do not constitute any damage to the interests of the Company and other
shareholders. We unanimously agree with the Company to carry out foreign
exchange hedging business this time.
282023 Annual Report of Zhejiang NHU Co. Ltd.
2） Investments in derivatives for speculative purposes during the reporting period
□ Applicable √ Not Applicable
The Company had no derivative investments for speculative purposes during the reporting period.
5. Use of raised funds
√ Applicable □ Not Applicable
(1) Overall use of raised funds
√ Applicable □ Not Applicable
Unit: RMB 0000 yuan
Total raised
Accumulated Proportion of
Year of funds with Accumulated amount of raised raised funds
Way of Amount used changes in Total raised Purposes of raised Raised funds
fund- Total amount Net amount amount of funds with with changes fund- in the current uses during funds not funds not yet used and being idle for
raised raised raised funds changes in uses in uses to
raising raising period the yet used the whereabouts over two years used during the total raised
reporting
reporting period funds
period
Deposited in special
accounts for raised
Year Private
funds used to purchase
placement 486707.55 486707.55 134059.96 511879.75 0 0 0.00% 49826.89 0
2017 bank financial
of shares
products deposited as
structured deposits
Total -- 486707.55 486707.55 134059.96 511879.75 0 0 0.00% 49826.89 -- 0
Remarks on overall use of raised funds
The Company’s raised funds used in previous years amounted to3778.20 million yuan the net amount of interest on cash in bank received in
previous years less handling charges amounted to 88.12 million yuan gains on financial products and structured deposits received in previous
years amounted to 630.82 million yuan and the net expenditure on financial products and structured deposits purchased in previous years
amounted to 720.00 million yuan; the raised funds actually used in 2023 amounted to 1340.60 million yuan the net amount of interest on cash
in bank received in 2023 less handling charges amounted to 17.58 million yuan gains on financial products and structured deposits received in
2023 amounted to 13.48 million yuan and the net recovery from financial products and structured deposits purchased in 2023 amounted to
575.00 million yuan; the accumulated amount of the raised funds used amounted to 5118.80 million yuan the accumulated net amount of interest
on cash in bank received less handling charges amounted to 105.69 million yuan the accumulated amount of gains on financial products and
structured deposits received amounted to 644.30 million yuan and net expenditure on financial products and structured deposits purchased
amounted to 145.00million yuan.As of December 31 2023 the balance of raised funds was 498.27 million yuan of which the balance in the special account was 353.27 million
yuan (including the net amount of interest on cash in bank less handling charges gains on financial products and structured deposits received on
an accumulated basis).
(2) Committed projects with raised funds
√ Applicable □ Not Applicable
Unit: RMB 0000 yuan
Committed Whether Total Accumulate Investment Date of Benefit Whether Whether there
Total
investment changed committed Input during d input as of progress as reaching realized in the was significant
amount after
projects and (including investment the reporting the period of the designed the expected changes in
adjustment
over-raised funds partial in raised period end period end usable reporting benefit is feasibility of
(1)
whereabouts changed) funds (2) (3)=(2)/(1) conditions period reached the project
Committed investment projects
Methionine
project with December
No 486707.55 486707.55 134059.96 511879.75 105.17% 71084.98 Yes No
annual output of 31 2023
0.25 million tons
Subtotal -- 486707.55 486707.55 134059.96 511879.75 -- -- 71084.98 -- --
292023 Annual Report of Zhejiang NHU Co. Ltd.
Over-raised funds whereabouts
No
Total -- 486707.55 486707.55 134059.96 511879.75 -- -- 71084.98 -- --
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
Conditions of and reasons for not meeting the planned contents remaining unchanged. Main reasons: Due to the impact of the macro economy the construction
schedule or estimated revenue (by specific project) progress of the project’s infrastructure has been delayed the procurement and delivery time of some
equipment and materials has been extended the installation and commissioning of equipment has been
delayed and the overall progress of the investment projects with raised funds has slowed down which jointly
resulted in the postponement of delivery of the projects. Currently The project's 0.25million tons production
line has now met the capitalization conditions and has been transferred to fixed assets.Remarks on significant changes in feasibility of projects None.Amount purposes and progress of use of over-raised funds Not Applicable
Changes in implementation locations of investment projects
Not Applicable
with raised funds
Adjustment on the implementation method of investment
Not Applicable
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 raised
Not Applicable
funds
Amount of and reasons for the balance of raised funds in the
Not Applicable
implementation of projects
Deposited in special accounts for raised funds used to purchase bank financial products deposited as
Uses and whereabouts of unused raised funds
structured deposits
Problems or other situations in the use and disclosure of raised
None.funds
(3) Change of projects with raised funds
□ Applicable √ Not Applicable
There is no change of projects with raised funds during the reporting period.VIII. Sale of major assets and equities
1. Sale of major assets
□ Applicable √ Not Applicable
There is no sale of major assets during the reporting period.
2. Significant sale of equities
□ Applicable √ Not Applicable
IX. Major entities controlled or invested by the Company
√ Applicable □ Not Applicable
Major subsidiaries and investees with influence on net profit of the Company over 10% (inclusive)
Unit: RMB Yuan
302023 Annual Report of Zhejiang NHU Co. Ltd.
Registered Operating Operating
Entities Categories Major businesses Total assets Net assets Net profit
capital revenue profit
Shandong NHU Production and 590 million
Subsidiary 396158.64 321785.69 358508.59 135460.24 116438.69
Pharmaceutical Co. Ltd. sales of fragrances yuan
Shandong NHU Amino- Production and 1100 1025647.0
Subsidiary 890171.17 386200.41 119846.82 105539.03
acids Co. Ltd. sales of methionine million yuan 7
Production and
Shandong NHU Vitamins 500 million
Subsidiary sales of feed 371167.68 319164.68 220763.57 94135.47 81652.19
Co. Ltd. yuan
additives
Heilongjiang NHU Production and 700 million
Subsidiary 668766.81 5118.34 184534.83 -58822.29 -59118.17
Biotechnology Co. Ltd. sales of fragrances yuan
Remarks on major holding investees
Details of acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not Applicable
Method for acquisition and disposal of Effect on the overall production
Subsidiaries
subsidiaries during the reporting period operation and performance
Shandong New Shuang'an No significant effect at the beginning of
Acquisition
Biotechnology Co. Ltd the period.X. Structured entities controlled by the Company
□ Applicable √ Not Applicable
XI. Outlook for the future development of the Company
1. The Company’s development strategy
The company will consistently adhere to the development strategy of integration serialization and synergy adhere to the strategic main
channel of "chemical +" and "biological +" improve the ability of applied research and application services focus on the business of
nutrition products flavors and spices polymer new materials and apis adhere to innovation-driven development of various functiona l
chemicals and strengthen the construction of technology and industrial platforms. Strengthen the introduction and cooperation of
advanced equipment relying on the four modern production bases of Xinchang Zhejiang Shangyu Shandong Weifang Heilongjian g
Suihua etc. to realize the extension of the industrial chain deepen the global marketing network and promote the sustainable and
high-quality development of the company. At the same time the company actively pays attention to and cultivates functional chemical
opportunities related to strategic emerging industries such as plant protection industry new energy industry energy conservation and
environmental protection industry and information industry.
(1) It will continue to expand and strengthen the nutrition business. On the basis of integration and market coordination lean operation
and continuously improve the comprehensive competitiveness of existing products; At the same time the rapid development of strategic
products ensure the implementation of key projects constantly enrich product categories and improve the comprehensive
competitiveness of products; Continue to deepen the global marketing network layout improve product application service capabilities.
(2) It will develop wider and deeper in flavor and fragrance business. From the current product structure mainly based on citral series
linalool series and leaf alcohol series we will gradually diversify promote the landing of new projects constantly introduce integrated
serialized and coordinated new flavor varieties realize the functionalization and differentiation of products and continue to improve
the core competitiveness of products through internal and external integration technological innovation and research and development
and lean management.
(3) It will continue its development in new material business. The company based on "chemical + biological +" the new material
industry into an important pillar industry of the company become a new material industry. Guided by cost leadership we adhere to
integration and serialization development ideas integrate resources open cooperation focus on polymer and key intermediates make
312023 Annual Report of Zhejiang NHU Co. Ltd.
large products and coordinate the development of downstream applications; Accurately grasp marketing strategies improve
application service capabilities deploy future product market development in advance and improve the profitability of existing
products.
(4) It will focus on making more special and refined APIs. With "leading technology quality first proficient in regulations and
industrial collaboration." In order to guide the idea we will make use of the company's existing industrial supporting advantages
integrate the company's resources plan and build a professional base increase the research and application of new products new
technologies and new equipment in the field of apis achieve differentiated development and actively promote the core competitiveness
of existing products and the expansion of emerging markets.
2. Business plan of the Company
In 2024 the company will focus on the business guiding ideology of "expanding the market seeking development strong management
and preventing risks" strengthen confidence adhere to the strategic main channel of "chemical +" and "biological +" seize
opportunities practice internal skills and achieve high-quality development. It mainly focuses on the following aspects:
(1) Go all out collaborating production and sales to expand the market. First we will take multiple measures to expand market share.
Flexible use of sales strategies through product differentiation development to accelerate market development optimize customer
service to strengthen cooperation through effective channels to do value marketing to enhance brand influence. Second we will
strengthen sales support through multi-party linkage. Strengthen production and marketing coordination do a good job in efficient and
low-cost production scheduling ensure supply chain security around key raw materials do a good job in customer-centric quality
support and continue to optimize production costs to enhance product competitiveness. Third more efforts will be made to promote
sales layout. Promote marketing digitalization and information upgrading optimize the "sales + service" model to do a good job of
differentiated marketing strengthen the introduction and training of marketing talents strengthen the construction of global sales
network to improve global sales coordination.
(2) Innovation-driven concentrating efforts for development. First we will focus on key products and improve innovation efficiency.
To improve research and development efficiency through management process optimization information technology and other methods
focus on key product research and development focus on old product technology improvement and effectively undertake market
demand to complete product downstream application research. Second we will deepen cooperation with other countries and speed up
the process of internationalization. It is necessary to improve the international development plan expand the coverage of innovation
cooperation integrate high-quality global resources and deepen strategic cooperation with upstream and downstream industrial chain
enterprises. Third accelerate the platform construction strengthen innovation support and efficiently promote the construction of
modular technology platforms with the help of internal and external resources; Focus on the needs of the industry and give play to the
value of innovative technology in industrial practice. Fourth we will promote key projects and ensure the implementation of the strategy.Focus on strategic objectives allocate resources and promote the construction progress and test acceptance of projects under
construction; Complete the production test of the put into production; Evaluate the maturity of uninitiated projects and accelerate the
implementation; Strengthen the demonstration and control of technical transformation and overhaul projects to ensure the effectiveness
of projects.
(3) Excellence chasing enhancing professionalism and strengthen management. First digital transformation has made a new leap.
Enhance the application value of business and data deepen the construction of smart factories optimize chemical models with mature
experience and improve the intelligent manufacturing system. Second we need to improve the production and operation system.Strengthen the daily supervision and risk control of the quality management system optimize the customer support process; Strengthen
the target management of the energy management system and measures for energy conservation and carbon reduction and explore the
transformation of the energy structure. Third new actions should be taken in ESG management. To undertake customer carbon
reduction requirements plan carbon emission reduction routes accelerate the construction of comprehensive management and social
responsibility management mechanisms and continue to promote cleaner production. Fourth the integrity of assets should be improved.Comprehensively promote asset integrity system to improve equipment management level; Promote the information construction of
322023 Annual Report of Zhejiang NHU Co. Ltd.
equipment and improve the level of automation. New breakthroughs have been made in building a high talent base. Optimize
organizational structure and job responsibilities strengthen employer brand building and improve recruitment quality; Improve the
construction of talent echelon and training course system and promote management improvement. Sixth we must make new
achievements in the construction of corporate culture. Give play to the leading role of culture and create a "culture +" communication
model. Strengthen the role of "cultural service management" build cultural brand activities and enhance the corporate image.
(4) Consistent keeping stable operation to preventing risks. First we need to strengthen management and control of business risks.
Strengthen industry and policy research and judgment strive for policy resources and do a good job in project compliance approval;
Refine the overall budget management optimize cost control improve the credit rating system and prevent bad debt risks; Control the
scale and pace of investment do a good job in exchange rate analysis and ensure operating cash flow; Assess tax risks establish early
warning mechanisms and consolidate corporate governance and internal control. Second we need to strengthen operational risk
management. Adhere to the red line of production safety upgrade the HSE management system and strengthen the construction of
professional safety teams; Establish a risk assessment mechanism sort out compliance risks and strengthen regulation learning;
Establish a foreign-related compliance committee to guide the code of conduct for employees. Third we will strengthen protection of
intellectual property rights. Optimize secret-related management requirements realize the protection of trade secrets in the whole
process comprehensively carry out patent risk assessment layout key technologies in advance and safeguard the rights and interests
of the company.
3. Possible risks
(1) Macroeconomic risks
The global economy is facing numerous uncertainties due to international trade frictions and possible intensification of geopolitica l
conflicts. The company will accelerate the pace of globalization speed up the global strategic layout continuously improve the
construction of global innovation sales and information centers establish a diversified innovation chain supply chain and customer
base to promote the company's steady development.
(2) Industry and market competition risks
The Company is facing peer competition in both domestic and international markets. The development of new technologies by its
competitors will not only impact the market but also challenge the Company’s market position in the industry. In the future the
Company will continuously enhance its R&D and innovation capabilities improve its technology strengthen cost control and improve
the competitiveness in the industry.
(3) Risks of raw material price fluctuation
As cost of raw materials accounts for a relatively high proportion of the total cost the price fluctuations caused by the supply-demand
imbalance of raw material will have an impact on the Company’s profit. In the future the Company will reduce the adverse impact of
raw material price fluctuations through market research and judgment establishing strategic partnership with suppliers and improving
the utilization rate of raw materials.
(4) Exchange rate and trade risks
The company provides products and services to customers in more than 100 countries and regions around the world. Political risks
trade obstacles and exchange rate fluctuations caused by Sino-US trade frictions international political and economic instability will
have a certain impact on the company's sales revenue and profitability. In the future the company will take targeted measures to actively
respond to changes in the international market strive to stabilize its international market position and actively explore new economic
growth points to maintain the steady growth of the company's performance.
(5) Risks of changes in environmental protection policies
With the increased social awareness of environmental protection the promotion of the ecological civilization construction of the CPC
332023 Annual Report of Zhejiang NHU Co. Ltd.
Central Committee and the strategic goal of “carbon emission peak and carbon neutrality” the requirements for energy conservation
emission reduction safety and environmental protection in the chemical and pharmaceutical manufacturing industry in which the
Company operates are stricter than before. The Company will operate with higher standards and explore more environmentally friendly
ways of production to achieve sustainable development.XII. Researches communications and interviews received by the Company during the
reporting period
√ Applicable □ Not Applicable
Major contents of
Index for basic
Date of Reception site Way of Type of visitor Visitors conversation and information of the
reception reception information
investigation
provided
Please refer to the
"Investor Network Investor Relations
Introduce the
Relations platform Activities Record operating
Interactive Sheet of April 26
April 26 2023 online Others Investors who attended the Company’s online conditions of the Platform" of 2023 which published
annual performance presentation of 2022 Company and
Shenzhen communicat at the website answer questions
Panorama http://irm.cninfo.com.c
from investors
Network ion n/ssessgs/S002001 for
details.Please refer to the
Shanghai Investor Relations
Introduce the
office of Activities Record
operating
October 19 SZSE and Investors who attended the "Industry Benchmark Sheet of October 19
Field
online Others
conditions of the
Laying the Foundation-Collective Exchange 2023 which published
2023 research Company and
communicatio Activity" organized by SZSE. at the website
answer questions
n platform of http://irm.cninfo.com.c
from investors
SZSE n/ssessgs/S002001 for
details.
1. Zheshang Securities 2. Guotai Asset
Management 3. Merchants Securities 4. China
Universal Asset Management 5. Aegon-industrial
Fund Management 6. CIB fund Management 7.Greenwoods Asset 8. Rongsheng Fund 9. Lord Please refer to the
Abbett China Asset Management 10. Fulin Assets Investor Relations
Introduce the
11. United Advance Capital 12. Shanghai Shifeng Activities Record
Grand operating
December 26 Assets 13. CITIC-Prudential Fund Management 14. Sheet of December 26
Kempinski Field Institution conditions of the Zhonghai Fund Management 15. Vanfon funds 16. 2023 which published
2023 Hotel research Company and
BOC Investment Management 17. Shanghai Wudi at the website
Shanghai answer questions
Funds 18. Bank Of Communications Schroder http://irm.cninfo.com.c
from investors
Fund Management 19. Bosera Asset Management n/ssessgs/S002001 for
20. Shanghai Cubetrade Investment Management details.
21. Yinhua Fund Management 22. Ashmore-CCSC
Fund Management 23. Taiping Asset Management
24. JPMorgan Funds 25. Western Leadbank Fund
Management 26. Shanghai Elegant Investment
XIII. Implementation of the "Quality-Return dual improvement" action plan
Whether the company disclosed the "quality-return dual improvement" action plan.√Yes □ no
In order to implement the guiding ideology of "to activate the capital market and boost investor confidence" proposed by the Politica l
Bureau meeting of the CPC Central Committee and "to vigorously improve the quality and investment value of listed companies to
take more effective and effective measures to stabilize the market and stabilize confidence" safeguard the rights and interests of all
shareholders enhance investor confidence and promote the long-term sustainable development of the company. The Company
published the "Announcement on the Action Plan of" Double Improvement of Quality and Return "(2024-002) on designated
information disclosure media and http://www.cninfo.com.cn on March 9 2024 The main content of the action plan includes four
aspects: "Innovation-driven development excellence and specialization" "Contributor-based sharing of the company's development
results" "deepening corporate governance and improving the standard operation level" and "compliance information disclosure and
sincere two-way communication".During the reporting period the company continued to actively return shareholders with relatively stable profit distribution policies
342023 Annual Report of Zhejiang NHU Co. Ltd.
and cash dividend programs allowing investors to share the results of the company's business development. In addition in order to
boost market confidence promote employees to create share share and co-enrich with enterprises improve employees' enthusiasm
creativity and responsibility and enhance the company's cohesion and competitiveness. The company launched the fourth phase of the
employee stock ownership plan and completed the stock purchase in September 2023 with the purchase amount of 480 million yuan.The controlling shareholder NHU Holding Group Co. Ltd. proposed the plan to increase its holdings in 2023 with the amount for
increasing the shares not less than 200 million yuan and not more than 300 million yuan and the implementation was completed in
March 2024 with the purchase amount of 300 million yuan. When the secondary market was in turmoil in 2023 the Company disclosed
the "Announcement on the Commitment of the Controlling Shareholders the actual controller and the Board Supervisor not to reduce
the shares of the Company" and NHU Holding Group Co. Ltd. and Mr. Hu Baifan the actual controller together with other directors
and senior management personnel who hold the company’s shares promised not to reduce their shares in the next six months.The company will continue to develop functional chemicals through technology development and product innovation enrich the
product line of the fine "chemical +" and "biological +" platform do the best and specialize in the main fine chemical industr y
constantly improve the core competitiveness and achieve steady and sustainable development of enterprises. In the future under the
premise of ensuring normal operation the company insists on providing investors with continuous and stable cash dividends and
combines the company's operating status and business development goals to bring long-term investment returns to shareholders. At the
same time the company continues to deepen corporate governance improve the standard operation level take the initiative to convey
value concepts to investors understand investors' views and suggestions on the company's operation and development guide investors
to take the initiative to pay attention to the company's announcement news and other official channel information and constantly
improve the two-way communication mechanism between the company and investors.
352023 Annual Report of Zhejiang NHU Co. Ltd.
Section IV Corporate Governance
I. Basic information
During the reporting period the Company further improved its corporate governance structure and internal control system strengthened
its information disclosure management actively carried out investor relations management and constantly promoted its corporate
governance in strict accordance with the “Company Law of the People’s Republic of China” the “Securities Law of the People’sRepublic of China” and relevant laws regulations and regulatory documents of CSRC and the Shenzhen Stock Exchange.
1. About shareholders and general meetings: The Company convenes and holds general meetings in accordance with the requiremen ts
of the “Rules for General Meetings of Listed Companies” and its “Rules of Procedure of General Meetings” treats all shareholders
equally ensures that all shareholders especially small and medium-sized shareholders have equal status and fully exercise their rights
and ensures that all shareholders have the legal rights to information participation and voting on significant events.
2. About relationship between the controlling shareholder and the Company: The Company has independent business and self-
management ability. The Company’s controlling shareholder strictly regulates its own behavior exercises the rights of investor through
general meetings and does not directly or indirectly interfere with the decision-making and operation activities of the Company beyond
the general meetings. The related party transactions between the Company and the controlling shareholder are on an arm’s length basis
while these two are independent of each other in personnel property finance organization and business and the Company’s Board of
Directors Board of Supervisors and internal organizations can operate independently.
3. About directors and the Board of Directors: The Company elects directors and engages independent directors in strict accordance
with the selection and appointment procedures as stipulated in the “Company Law” and the “Articles of Association”. The board size
and composition meet the requirements of laws and regulations. In accordance with the “Rules of Procedure of the Board of Directors”
and other rules all directors can seriously attend board meetings faithfully perform their duties for the interests of the Company and
all shareholders actively participate in relevant training learn relevant laws and regulations and promote the standardized operation
and scientific decision-making of the Board of Directors. The meeting procedures of the Board of Directors comply with legal
requirements the minutes are complete and true and the disclosure of information related to the meetings is timely accurate and
sufficient.
4. About supervisors and the Board of Supervisors: The Company’s Board of Supervisors strictly implements relevant provisions of
the “Company Law” and the “Articles of Association” and its size and composition meet the requirements of laws and regulatio ns.Under the principle of being responsible to all shareholders especially small and medium-sized shareholders the Board of Supervisors
perform their duties conscientiously conducts supervision on the Company’s financial position significant events related party
transactions as well as the legality and compliance of directors and other senior executives in the performance of their duties and
expresses opinions independently in accordance with the “Rules of Procedure of the Board of Supervisors” and other rules.
5. About performance evaluation and incentive and restraint mechanism: The Company’s performance evaluation and incentive
mechanism is fair and transparent and the emoluments of directors supervisors and senior executives are based on the Company’s
performance and individual performance; the appointment of senior executives strictly follows the “Articles of Association” and
relevant laws and regulations.
6. About information disclosure and transparency: The Company designates the secretary of the Board of Directors to be responsible
for information disclosure and receiving visits and inquiries from shareholders and designates Securities Times Shanghai Securities
News China Securities Journal and Cninfo (http://www.cninfo .com.cn) as the designated newspapers and websites for the Company’sinformation disclosure; Complying with relevant laws and regulations and the requirements of the Company’s “Information DisclosureManagement System” the Company discloses relevant information in a true accurate complete and timely manner to ensure that all
shareholders have equal access to information.
362023 Annual Report of Zhejiang NHU Co. Ltd.
7. About stakeholders: the Company can fully respect and safeguard the legitimate rights and interests of stakeholders realize the
coordination and balance of interests among shareholders employees society and other parties and jointly promote the sustainable
and healthy development of the Company.Whether there is a significant difference between the actual situation of corporate governance and laws administrative regulations and
rules on the governance of listed companies issued by the CSRC
□ Yes √ No
There is no significant difference between the actual situation of corporate governance and laws administrative regulations and rules
on the governance of listed companies issued by the CSRC.II. The Company’s efforts in ensuring the independence of its assets personnel finance
organization business etc. from the controlling shareholder and actual controller
During the reporting period the Company and the controlling shareholder were completely separated in terms of business personnel
assets finance organization etc. With stable production and operation complete internal organization the Company was able to
operate independently and in a standardized manner.
1. Independence of business
The Company operates independently under a complete business structure and has no business in horizontal competition with that of
the controlling shareholder. The controlling shareholder does not directly or indirectly interfere with the Company’s business operations.
2. Independence of personnel
The Company’s labor personnel and remuneration management are completely independent. The Company has entered into labor
contracts with employees and formulated a strict labor system such as employment assessment promotion training etc. All
employees are paid by the Company. All senior executives work full-time and receive emoluments from the Company and do not hold
any administrative positions concurrently in the controlling shareholder and its subordinate entities.
3. Independence of assets
The Company has an independent and complete production supply sales system and supporting facilities and has independent
industrial property rights trademarks non-patented technologies and other intangible assets.
4. Independence of finance
The Company has an independent financial and accounting department and has established an independent accounting system and
financial management system to makes financial decisions independently. The Company opens bank accounts and pays taxes
independently.
5. Independence of organization
The Company’s organization is independent from the controlling shareholder. The Company has established a relatively sound
organizational structure and has established decision-making and supervision institutions such as the general meeting of shareholders
the Board of Directors the Board of Supervisors etc. The Company set up the Board Office Audit Department Financial Department
Securities Department President’s Office Human Resources Department Production and Operation Department HSE Management
Department Engineering Equipment Management Department Logistics Department Marketing Service Department Science and
Technology Cooperation Department Intellectual Property Department Research Institute and other functional departments. The
aforementioned institutions and functional departments operate independently and there is no situation where the controlling
shareholder’s institutions act on behalf of the Company.III. Horizontal competition
□ Applicable √ Not applicable
372023 Annual Report of Zhejiang NHU Co. Ltd.
IV. Annual general meeting and extraordinary general meetings held during the reporting
period
1. General meeting of shareholders
Proportion of
Session Type of meetings participating Meeting date Disclosure date Resolutions
investors
9 proposals including the
Annual Work Report of the
Board of Directors of 2022
General meeting of were deliberated and
Annual general meeting
shareholders of 52.95% May 19 2023 May 20 2023 approved. Please refer to
of shareholders
2022 Announcement No. 2023-025
disclosed on
http://www.cninfo.com.cn for
details.
2 proposals including the
Forth Phase of Employee
Stock Ownership Plan (Draft)
The first
of Zhejiang NHU Co. Ltd.extraordinary
Extraordinary general and Summary were
general meeting of 55.24% June 26 2023 June 27 2023
meeting of shareholders deliberated and approved.shareholders in
Please refer to Announcement
2023
No. 2023-032 disclosed on
http://www.cninfo.com.cn for
details.
4 proposals including the
proposal regarding the
election of non-independent
The second
directors during the board of
extraordinary September 19 September 20
Extraordinary general 54.36% directors' reshuffle were general meeting of
meeting of shareholders 2023 2023 deliberated and approved.shareholders in
Please refer to Announcement
2023
No. 2023-056 disclosed on
http://www.cninfo.com.cn for
details.
2. Preference shareholders with restored voting rights request to convene an extraordinary general meeting
□ Applicable √ Not applicable
V. Directors supervisors and senior executives
1. Basic information
number of number of
Number of Number of
shares shares Other
Commencem Termination shares held at shares held Reasons for
increased in decreased in increase/
Name Gender Age Position Status ent date of date of the beginning at the end of increase or
the current the current decrease
service service of the period the period decrease
period period (shares)
(shares) (shares)
(shares) (shares)
Hu Baifan Male 62 Chairman Incumbent 2/26/1999 9/19/2026 13922998 13922998
Vice Chairman
Hu Baishan Male 57 Incumbent 2/26/1999 9/19/2026 14595929 14595929
President
Director Vice
President
Shi Guanqun Male 53 Incumbent 2/26/1999 9/19/2026 10477838 10477838
Secretary of the
Board CFO
Director Vice
Wang Xuewen Male 55 Incumbent 2/26/1999 9/19/2026 8877931 8877931
President
Wang Zhengjiang Male 55 Director Incumbent 4/12/2008 9/19/2026 459000 459000
Zhou Guiyang Male 49 Director Incumbent 4/20/2011 9/19/2026 165242 165242
Yu Hongwei Male 53 Director Incumbent 9/19/2023 9/19/2026
Yu Baijin Male 57 Director Leave office 9/15/2020 9/19/2023
Independent
Ji Jianyang Male 45 Incumbent 9/15/2020 9/19/2026
Director
382023 Annual Report of Zhejiang NHU Co. Ltd.
number of number of
Number of Number of
shares shares Other
Commencem Termination shares held at shares held Reasons for
increased in decreased in increase/
Name Gender Age Position Status ent date of date of the beginning at the end of increase or
the current the current decrease
service service of the period the period decrease
period period (shares)
(shares) (shares)
(shares) (shares)
Independent
Shen Yuping Male 67 Incumbent 9/19/2023 9/19/2026
Director
Independent
Wang Feng Male 48 Incumbent 9/19/2023 9/19/2026
Director
Independent
Wang Yang Male 45 Incumbent 9/19/2023 9/19/2026
Director
Independent
Huang Can Male 45 Leave office 7/12/2017 9/19/2023
Director
Independent
Jin Zanfang Female 48 Leave office 7/12/2017 9/19/2023
Director
Independent
Zhu Jianmin Female 60 Leave office 7/12/2017 9/19/2023
Director
Chairman of the
Lyu Guofeng Male 52 Board of Incumbent 9/15/2020 9/19/2026
Supervisors
Zhao Jia Female 43 Supervisor Incumbent 9/19/2023 9/19/2026
Wang Xiaobi Female 42 Supervisor Incumbent 9/19/2023 9/19/2026
Yan Hongyue Male 54 Supervisor Incumbent 9/15/2020 9/19/2026
Li Huafeng Male 41 Supervisor Incumbent 9/19/2023 9/19/2026
Chairman of the
Shi Fangbin Female 48 Board of Leave office 9/15/2020 9/19/2023
Supervisors
Yu Hongwei Male 53 Supervisor Leave office 9/15/2020 9/19/2023
Chen Zhaofeng Male 47 Supervisor Leave office 9/15/2020 9/19/2023
Zhang Liying Female 47 Vice President Incumbent 9/19/2023 9/19/2026 47400 47400
Total -- -- -- -- -- 48546338 48546338 --
Whether there was any resignation of directors and supervisors and dismissal of senior executives during the reporting period
√ Yes □ No
1. The Company held the second extraordinary general meeting of shareholders of 2023 on September 19 to complete the re-election
election and elected non-independent directors Hu Baifan Hu Baishan Shi Guanqun Wang Xuewen Wang Zhengjiang Zhou Guiyang
and Yu Hongwei and elected independent directors Ji Jianyang Shen Yuping Wan Feng and Wang Yang to form the ninth Board of
Directors of the Company. Elected non-employee representative supervisors Lvu Guofeng Zhao Jia Wang Xiaobi and employee
representative supervisors Yan Hongyue and Li Huafeng elected by the company's employee congress to form the ninth Board of
Supervisors of the company. The eighth director Yu Baijin the eighth independent director Huang Can Jin Zanfang and Zhu Jianmin
and the eighth supervisor Shi Fangbin Yu Hongwei and Chen Zhaofeng left office after their terms of office expired.
2. The company held the first meeting of the ninth board of directors on September 19 2023 elected Hu Baifan as the chairman Hu
Bai-Shan as the vice chairman hired Hu Bai-Shan as the president of the company Shi Guanqun as the secretary of the board hired
Shi Guanqun Wang Xuewen Zhang Liying as the vice president of the company and Shi Guanqun as the financial director of the
company. On the same day the company held the first meeting of the ninth Board of Supervisors and elected Lvu Guofeng as the
chairman of the Board of Supervisors.For details please refer to the Announcement on the Completion of the Election of the Board of Directors and the Board of Supervisors
and the Appointment of Senior Management Personnel Securities Affairs Representative and Head of Internal Audit (2023-059)
published by the Company on designated information disclosure media and http://www.cninfo.com.cn.Changes of directors supervisors and senior executives
√ Applicable □ Not applicable
Name Position Type Date Reasons
Expiration of
Yu Baijin Director Sept. 19 2023 Expiration of employment
employment
Expiration of
Huang Can Independent Director Sept. 19 2023 Expiration of employment
employment
392023 Annual Report of Zhejiang NHU Co. Ltd.
Name Position Type Date Reasons
Expiration of
Jin Zanfang Independent Director Sept. 19 2023 Expiration of employment
employment
Expiration of
Zhu Jianmin Independent Director Sept. 19 2023 Expiration of employment
employment
Chairman of the Board Expiration of
Shi Fangbin Sept. 19 2023 Expiration of employment
of Supervisors employment
Expiration of
Chen Zhaofeng Supervisor Sept. 19 2023 Expiration of employment
employment
Expiration of employment as a supervisor
Yu Hongwei Director Appointed Sept. 19 2023 Elected as a director on the second extraordinary
general meeting of shareholders in 2023
Elected on the second extraordinary general
Shen Yuping Independent Director Elected Sept. 19 2023
meeting of shareholders in 2023
Elected on the second extraordinary general
Wang Feng Independent Director Elected Sept. 19 2023
meeting of shareholders in 2023
Elected on the second extraordinary general
Wang Yang Independent Director Elected Sept. 19 2023
meeting of shareholders in 2023
Chairman of the Board Elected on the first meeting of the Ninth
Lyu Guofeng Elected Sept. 19 2023
of Supervisors Supervisory Board
Elected on the second extraordinary general
Zhao Jia Supervisor Elected Sept. 19 2023
meeting of shareholders in 2023
Elected on the second extraordinary general
Wang Xiaobi Supervisor Elected Sept. 19 2023
meeting of shareholders in 2023
Elected on the Employee Representative
Li Huafeng Supervisor Elected Sept. 19 2023
Congress
Appointed on the first meeting of the Ninth Board
Zhang Liying Vice President Appointed Sept. 19 2023
of Directors
Remarks on other information
□ Applicable √ Not Applicable
2. Profiles of directors supervisors and senior executives
Professional background main work experience and main responsibilities of current directors supervisors and senior managers of the
company
Hu Baifan (Graduate Senior Economist) currently serves as the Chairman of the Company. He used to work in Xinchang Dashiju
Vocational Middle School.Hu Baishan (EMBA of Zhejiang University Senior Engineer) currently serves as the Vice Chairman and President of the Company.He used to be the Deputy General Manager of the Company.Shi Guanqun (Accountant) currently serves as the Director Vice President Secretary of the Board of Directors and CFO of the
Company. He used to be the manager of the Financial Department of the Company.Wang Xuewen (majoring in business management at Donghua University) currently serves as the Director and Vice President of the
Company and the General Manager of the Nutrition Business Department. He used to be the manager of the Company’s supply and
marketing company.Wang Zhengjiang (Master’s degree Senior Engineer) currently serves as the Director of the Company General Manager of Methionine
Business Department and the General Manager of Shandong NHU Amino-acids Co. Ltd. He used to be the manager of Shangyu NHU
Bio-Chem Co. Ltd.Zhou Guiyang (Bachelor’s degree) currently serves as the Director of the Company and General Manager of Zhejiang NHU Special
Materials Co. Ltd. and General Manager of Zhejiang Xinhecheng Nylon Material Co. Ltd. and General Manager of Shangyu Base.He
used to be the Deputy General Manager of Shangyu NHU Bio-Chem Co. Ltd.Yu Hongwei (Bachelor’s degree) currently serves as the Supervisor of the Company General Manager of Shandong Industrial Park
and General Manager of Shandong NHU Vitamins Co. Ltd. and Shandong NHU Fine Chemical Science and Technology Co. Ltd. He
used to be the Deputy Chief Engineer of Zhejiang Juhua Group Co. Ltd.
402023 Annual Report of Zhejiang NHU Co. Ltd.
Ji Jianyang (Master’s degree) independent director has been a partner of Beijing Guantao Zhongmao (Hangzhou) Law Firm since
2014 and a practice tutor of Zhejiang University Law School and served as independent director of Jingu Stock (002488) and Fengli
Intelligence (301368).Shen Yuping (PhD in Economics) independent director has served as professor and dean of Zhejiang University of Finance and
Economics and is currently a professor of Zhejiang University of Finance and Economics a master's supervisor a famous teacher in
Zhejiang Province a registered tax agent a talent of "151 Talent Project" and vice president of Zhejiang Tax Society. He is also the
independent director of Hongxun Technology (603015) and Jiaao Environmental Protection (603822).Wan Feng Ph.D. independent Director has served as senior software Engineer of Oracle Software Company (China) Assistant
Professor of Business and Management School of Beijing Normal University and Associate Professor of University of East Anglia.Since 2021 he has been an associate professor of International Business School of Zhejiang University.Wang Yang (Doctor of Accounting) independent director has successively served as senior manager of Ping An Securities Co. LTD.Post-doctoral workstation of Shenzhen Stock Exchange senior manager of Beijing Working Group senior manager of National Small
and Medium Enterprises Share Transfer System Co. LTD. senior manager of Zhongguancun Innovative and Entrepreneurial
Enterprises Listing Training Base of Shenzhen Stock Exchange. Since 2018 he has been the director of risk control and the person in
charge of compliance risk control of Beijing Zhiming Haojin Investment Management Co. LTD. He is also the independent director
of Intech Medical (300677).Lv Guofeng (Master’s degree) Chairman of the Board of Supervisors of the Company is currently the general manager of Heilongjiang
Xinhecheng Biotechnology Co. LTD. and used to be the general manager of Fragrance Division general manager of Shandong
Xinhecheng Pharmaceutical Co. LTD. and general manager of Shangyu Production Area of Nutrition Division.Zhao Jia (Master’s degree) Supervisor of the company currently serves as the director of Risk Control Department of Xinhecheng
Holding Group Co. LTD. He is also the chairman of the Board of Supervisors of Beijing Fuyuan Pharmaceutical Co. LTD. and the
supervisor of Shaoxing Yuexiu Education Development Co. LTD. Zhejiang Jingshi Real Estate Co. LTD. Shaoxing Heyue Property
Services Co. LTD. He served as the legal secretary of Xinhecheng Holding Group Co. LTD. the secretary of the board of Fuyuan
Pharmaceutical Co. LTD. and the director of the Supervision Department of Xinhecheng Holding Group Co. LTD.Wang Xiaobi (Bachelor’s degree) senior accountant Supervisor of the Company currently Assistant Vice President of the company
and head of the Securities Department and also serves as the supervisor of Shandong Xinhecheng Holding Co. LTD. Heilongjia ng
Xinhecheng Biological Chemical Co. LTD. Zhejiang Saiya Chemical Co. LTD. He was the head of the fund Department and the
Minister of Finance of the company.Yan Hongyue (Bachelor’s degree) currently serves as the Supervisor of the Company and General Manager of Xinchang Base. He
used to be the General Manager of Shandong NHU Vitamins Co. Ltd. Assistant to General Manager and Deputy General Manager of
Shandong NHU Pharmaceutical Co. Ltd.Li Huafeng (Master’s degree) currently serves as the Supervisor of the Company the assistant vice president and deputy General
manager of Animal Nutrition Division of the company. He used to be the head of the Spice Sales Department assistant general manager
and sales manager deputy general manager of the Spice Department Sales manager Deputy general manager and marketing manager
of the Nutrition Department.Zhang Liying (Bachelor’s degree) senior economist current Vice president of the company has served as Deputy Chief of the Quality
Control Section director of the company Certification Office Assistant Minister of Enterprise Management Assistant director of the
President's Office Deputy Minister of Enterprise Management (presiding) Deputy Minister of Human Resources (presiding) Minister
of Human Resources and assistant to Vice President.Directors supervisors and senior executives that serve in shareholders
√ Applicable □ Not applicable
412023 Annual Report of Zhejiang NHU Co. Ltd.
Whether receive
Commenceme
Name of persons Name of shareholders
Termination emoluments and
Position in shareholders nt date of
date of service allowances from
service
shareholders
Hu Baifan NHU Holding Group Co. Ltd. Chairman CEO 11/11/2011 12/27/2026 No
Hu Baishan NHU Holding Group Co. Ltd. Director 11/11/2011 12/27/2026 No
Shi Guanqun NHU Holding Group Co. Ltd. Director 11/11/2011 12/27/2026 No
Wang Xuewen NHU Holding Group Co. Ltd. Director 11/11/2011 12/27/2026 No
Wang Zhengjiang NHU Holding Group Co. Ltd. Director 12/28/2023 12/27/2026 No
Chairman of the Board of
Zhou Guiyang NHU Holding Group Co. Ltd. 12/28/2023 12/27/2026 No
Supervisors
Head of Risk Control
Zhao Jia NHU Holding Group Co. Ltd. 4/1/2019 To date Yes
Department
Explanation of employment at shareholder units None
Directors supervisors and senior executives that serve in other entities
√ Applicable □ Not applicable
Whether receive
Name of Position in other Commencement Termination emoluments and
Name of other entities
persons entities date of service date of service allowances from
other entities
Executive Director
Hu Baifan Zhejiang Gengdu Investment Co. Ltd. 9/4/2012 To date No
and CEO
Hu Baifan Xinchang Heli Investment Co. Ltd. Director 1/3/2017 To date No
Hu Baifan Safe & Rich Venture Capital Co. Ltd. Director 12/5/2008 To date No
THE Investment Management Co.Hu Baifan Director 9/21/2015 To date No
Ltd.Hu Baifan Xinchang Qinjin Investment Co. Ltd. Chairman 6/10/2015 To date No
Hu Baifan Xinchang Qinjin Investment Co. Ltd. CEO 5/30/2019 To date No
Xinchang Rural Commercial Bank
Hu Baifan Director 1/26/2005 To date No
Co. Ltd.Hangzhou Foremost Material
Hu Baifan Director 8/2/2010 8/31/2023 No
Technology Co. Ltd.Hu Baifan Beijing Foyou Pharma CO.LTD. Director 5/16/2019 5/27/2025 No
Shaoxing Yuexiu Education
Hu Baifan Chairman and CEO 12/5/2016 7/25/2026 No
Development Co. Ltd.Zhejiang Huixian Venture Capital Co. Executive Director
Hu Baifan 3/16/2017 To date No
Ltd. and CEO
Hu Baifan Zhejiang Hefeng Investment Co. Ltd. Executive Director 4/20/2018 To date No
Hu Baifan Zhejiang Hefeng Investment Co. Ltd. CEO 7/21/2022 To date No
Hu Baifan NHU Real Estate Holding Co. Ltd. Director 12/2/2010 To date No
Xinchang County NHU Real Estate
Hu Baifan Director 3/20/2017 To date No
Co. Ltd.Hu Baishan Zhejiang Second Pharma Co. Ltd. Director 9/15/2017 12/20/2024 No
Shaoxing Yuexiu Education
Hu Baishan Director 12/5/2016 7/25/2026 No
Development Co. Ltd.Shi Guanqun Xinchang Heli Investment Co. Ltd. Chairman 11/30/2012 To date No
Shi Guanqun Xinchang Qinjin Investment Co. Ltd. Director 6/10/2015 To date No
Shaoxing Yuexiu Education
Shi Guanqun Director 12/5/2016 7/25/2026 No
Development Co. Ltd.Shi Guanqun NHU Real Estate Holding Co. Ltd. Director 12/2/2010 To date No
Shi Guanqun Zhejiang Jingshi Real Estate Co. Ltd. Director 9/22/2020 To date No
Shi Guanqun Zhejiang Deli Equipment Co. Ltd. Director 10/24/2016 10/27/2024 No
Shi Guanqun Beijing Foyou Pharma CO.LTD. Director 5/16/2019 5/27/2025 No
Xinchang County NHU Real Estate
Shi Guanqun Director 3/20/2017 To date No
Co. Ltd.Envalior NHU Engineering Materials
Zhou Guiyang Vice Chairman 1/7/2016 To date No
(Zhejiang) Co.Ltd.
422023 Annual Report of Zhejiang NHU Co. Ltd.
Whether receive
Name of Position in other Commencement Termination emoluments and
Name of other entities
persons entities date of service date of service allowances from
other entities
Zhejiang Saiya Chemical Materials
Zhou Guiyang Director 1/3/2017 3/28/2026 No
Co. Ltd.Beijing Guantao Zhongmao
Ji Jianyang Partner 1/9/2014 To date Yes
(Hangzhou) Law Firm
Ji Jianyang Zhejiang Jingu Co. Ltd. Independent Director 11/7/2023 11/6/2026 Yes
Zhejiang Fore Intelligent Technology
Ji Jianyang Independent Director 12/12/2023 12/11/2026 Yes
Co. Ltd.Hangzhou Quantum Fanyu Film and
Ji Jianyang Director 5/28/2021 5/27/2024 Yes
Television Culture Media Co. Ltd
Ji Jianyang Zhejiang International Trade Group Outside director 12/18/2021 12/17/2024 Yes
Zhejiang University of Finance &
Shen Yuping Professor 8/6/1980 To date Yes
Economics
Shen Yuping Ningbo Techmation Co. Ltd. Independent Director 1/15/2021 1/15/2027 Yes
Zhejiang Jiaao Enprotech Stock Co.Shen Yuping Independent Director 9/5/2022 3/14/2024 Yes
Ltd.Xianheng International
Shen Yuping Independent Director 8/18/2017 9/5/2023 Yes
Science&Technology Co. Ltd.Shen Yuping Tax Institute of Zhejiang Provincial Vice Chairman 4/26/2014 4/27/2024 No
Liangzhi Zhongcheng Certified Public
Shen Yuping Consultant 5/16/2022 4/16/2024 Yes
Accountants
Zhejiang University International
Wang Feng Associate Professor 12/1/2021 12/31/2027 Yes
Business School
Risk Control Director
Beijing Zhiming Haojin Investment Compliance Risk
Wang Yang 1/1/2018 To date Yes
Management Co. Ltd. Control Responsible
Person
Wang Yang Pacific Securities Co. Ltd Investment Advisor 12/1/2018 To date Yes
Henan Pingmei Shenma Private
Wang Yang Director 3/1/2021 To date No
Equity Fund Management Co. Ltd
Guangdong Yikang Health Industry
Wang Yang Independent Director 1/1/2021 To date Yes
Group Co. Ltd.Wang Yang Intco Medical Technology Co. Ltd. Independent Director 3/14/2022 To date Yes
Chairman of the
Zhao Jia Beijing Foyou Pharma CO.LTD. 5/28/2022 5/27/2025 No
Board of Supervisors
Shaoxing Yuexiu Education
Zhao Jia Supervisor 12/5/2016 7/25/2023 No
Development Co. Ltd.Zhao Jia Zhejiang Jingshi Real Estate Co. Ltd. Supervisor 9/22/2020 To date No
Shaoxing Heyue Property Service
Zhao Jia Supervisor 8/10/2020 To date No
Co. Ltd.Chairman of the
Wang Xiaobi Zhejiang Saiya Chemical Co. Ltd. 7/23/2023 3/28/2026 No
Board of Supervisors
Wang Xiaobi Xinchang Heli Investment Co. Ltd. Director 12/29/2016 To date No
Penalties imposed by securities regulators on current and outgoing directors supervisors and senior executives of the Company in the
past three years
√ Applicable □ Not applicable
On October 18 2021 Zhejiang Securities Regulatory Bureau issued the "Administrative Penalty Decision" ([2021] No. 19) believing
that Li Li then the manager of the data enhancement Department of the Internet service business group of Daily Interactive Co. LTD.fabricated multiple sales contracts and related settlement documents between the company and customers by forging seals and other
means. Daily Interactive did not find the above contract and business falsehood in time confirmed the relevant sales revenue and
prepared financial statements accordingly resulting in false records in the three quarterly reports of 2019 annual reports of 2019
quarterly reports of 2020 semi-annual reports of 2020 and three quarterly reports of 2020 disclosed by Daily Interactive. The above
conduct of Daily Interactive violates Article 63 of the Securities Act of 2005 and Article 78 paragraph 2 of the Securities Act of 2019
and constitutes an information disclosure violation described in Article 197 paragraph 2 of the Securities Act of 2019.
432023 Annual Report of Zhejiang NHU Co. Ltd.
Zhu Jianmin (who left office during the reporting period) was the independent director of the Company and the deputy general manager
and Chief financial officer of DailyInteractive at that time and was in charge of financial work. He failed to ensure the truth accuracy
and completeness of the information disclosure of DailyInteractive Co. LTD. and was directly responsible for the illegal information
disclosure. According to the provisions of the second paragraph of Article 197 of the Securities Law of 2019 the Zhejiang Securities
Regulatory Bureau decided to give Zhu Jianmin a warning and impose a fine of 800000 yuan. On February 24 2022 the Shenzhen
Stock Exchange issued the Decision on giving Notice and Criticism to DailyInteractive Co. Ltd. and relevant parties giving notice
and criticism to Zhu Jianmin on the above matters.3. Emoluments of directors supervisors and senior executives.
3. Remuneration of directors supervisors and senior managers
Decision-making procedure basis for determination and actual payment of emoluments of directors supervisors and senior executives
Decision-making procedure: According to the standards stipulated by the Company’s unified remuneration management system the
emoluments of the Company’s directors supervisors and senior executives are determined based on the result of the regular assessment
under the Company’s performance appraisal mechanism. The allowance standard for independent directors shall be deliberated and
decided by the general meeting of shareholders.Basis for determination: Emoluments of directors supervisors and senior executives are determined based on the Company’s results
of operations and performance appraisal indicators.Emoluments of directors supervisors and senior executives during the reporting period
Unit: RMB 0000 yuan
Whether receive
emoluments from
Name Gender Age Position Status 2023 emoluments
related parties of
the Company
Hu Baifan Male 62 Chairman Incumbent 450.47 No
Hu Baishan Male 57 Vice Chairman President Incumbent 299.37 No
Director Vice President
Shi Guanqun Male 53 Incumbent 170.04 No
Secretary of the Board CFO
Wang Xuewen Male 55 Director Vice President Incumbent 125.46 No
Wang Zhengjiang Male 55 Director Incumbent 262.26 No
Zhou Guiyang Male 49 Director Incumbent 75.16 No
Yu Hongwei Male 53 Director Incumbent 140.16 No
Yu Baijin Male 57 Director Leaving office 10.45 No
Ji Jianyang Male 45 Independent Director Incumbent 10.60 No
Shen Yuping Male 67 Independent Director Incumbent 3.00 No
Wang Feng Male 48 Independent Director Incumbent 3.00 No
Wang Yang Male 45 Independent Director Incumbent 3.00 No
Huang Can Male 45 Independent Director Leaving office 7.60 No
Jin Zanfang Female 48 Independent Director Leaving office 7.60 No
Zhu Jianmin Female 60 Independent Director Leaving office 7.60 No
Chairman of the Board of
Lyu Guofeng Male 52 Incumbent 152.36 No
Supervisor
Zhao Jia Female 43 Supervisor Incumbent 0.00 Yes
Wang Xiaobi Female 42 Supervisor Incumbent 26.17 No
Yan Hongyue Male 54 Supervisor Incumbent 91.23 No
Li Huafeng Male 41 Supervisor Incumbent 34.02 No
Chairman of the Board of
Shi Fangbin Female 48 Leaving office 0.00 Yes
Supervisor
Chen Zhaofeng Male 47 Supervisor Leaving office 17.51 No
Zhang Liying Female 47 Vice President Incumbent 49.71 No
Total -- -- -- -- 1946.77 --
442023 Annual Report of Zhejiang NHU Co. Ltd.
Other information note
√Applicable □ Not applicable
During the reporting period the compensation for the company's key management personnel was 26.52 million yuan including 19.47
million yuan for the salaries of directors supervisors and senior management personnel in 2023 4.35 million yuan for the settlement
in 2021 and 2.70 million yuan for the settlement in 2022.VI. Directors’ performance of duties during the reporting period
1. Meetings of the Board of Directors during the reporting period
Session Meeting date Disclosure date Resolutions
18 proposals including the “Annual Work Report of theThe fifteenth meeting of theBoard of Directors of 2022” were deliberated and
eighth session of Board of 4/19/2023 4/21/2023
approved. Please refer to Announcement No. 2023-005
Directors
disclosed on http://www.cninfo.com.cn for details.
3 proposals including the “the Forth Phase ofThe sixteenth meeting of the Employee Stock Ownership Plan (Draft) of Zhejiangeighth session of Board of 6/7/2023 6/8/2023 NHU Co. Ltd. and Summary” were deliberated and
Directors approved. Please refer to Announcement No. 2023-027
disclosed on http://www.cninfo.com.cn for details.
7 proposals including the “Semi-annual Report ofThe seventeenth meeting of the Board of Directors of 2023 and Summary” were
eighth session of Board of 8/28/2023 8/30/2023 deliberated and approved. Please refer to
Directors Announcement No. 2023-039 disclosed on
http://www.cninfo.com.cn for details.
6 proposals including the “Proposal regarding theelection of the Chairman and Vice Chairman of theThe first meeting of the ninth 9/19/2023 9/20/2023 ninth board of directors of the company.” were
session of Board of Directors deliberated and approved. Please refer to
Announcement No. 2023-058 disclosed on
http://www.cninfo.com.cn for details.
2 proposals including the “Third Quarterly Report ofThe second meeting of the ninth 10/25/2023 10/27/2023 2023” were deliberated and approved. Please refer to
session of Board of Directors Announcement No. 2023-061 disclosed on
http://www.cninfo.com.cn for details.
2. Directors’ attendance at meetings of the Board of Directors and general meetings of shareholders
Directors’ attendance at meetings of the Board of Directors and general meetings of shareholders
Number of Number of Number of Whether directors
Number of Number of Number of
board meetings board board meetings failed to attend
board meetings absences general
Name of directors to be present meetings attended two consecutive
attended by from board meetings
during the attended on through audio board meetings in
proxy meetings attended
reporting period site visual means person
Hu Baifan 5 5 0 0 0 No 3
Hu Baishan 5 5 0 0 0 No 3
Shi Guanqun 5 5 0 0 0 No 3
Wang Xuewen 5 5 0 0 0 No 3
Wang Zhengjiang 5 2 3 0 0 No 2
Zhou Guiyang 5 2 3 0 0 No 2
Yu Hongwei 2 1 1 0 0 No 0
Yu Baijin 3 0 2 1 0 No 1
Ji Jianyang 5 2 3 0 0 No 3
Shen Yuping 2 1 1 0 0 No 0
Wang Feng 2 1 1 0 0 No 0
Wang Yang 2 1 1 0 0 No 0
Huang Can 3 1 2 0 0 No 1
Jin Zanfang 3 1 2 0 0 No 2
Zhu Jianmin 3 1 2 0 0 No 1
452023 Annual Report of Zhejiang NHU Co. Ltd.
Remarks on failure to attend two consecutive board meetings in person：N/A
3. Directors’ objections to relevant matters of the Company
Whether directors have raised objections to relevant matters of the Company
□ Yes √ No
Directors have not raised any objections to relevant matters of the Company during the reporting period.
4. Other remarks on directors’ performance of duties
Whether the directors’ recommendation on the Company were adopted
√ Yes □ No
Remarks on directors’ recommendation on the Company adopted or not adopted
During the reporting period the directors in strict accordance with the “Articles of Association” “Rules of Procedures of the Boardof Directors” and relevant laws and regulations actively attended board meetings and general meetings performed their duties with
diligence put forward relevant opinions on significant governance and operation decisions in accordance with the actual situation of
the Company formed unanimous opinions after full communication and discussion and resolutely supervised and promoted the
implementation of the resolutions made by the Board of Directors to ensure scientific timely and efficient decision-making and
safeguard the legitimate rights and interests of the Company and all shareholders.VII. Special committees under the Board of Directors during the reporting period
Important
Other Details of
Name of Members Number of Meeting date Content of meeting comments and performance dispute (if
committees meetings held suggestions
of duties any)
made
5 proposals including “Summary of
4/19/2023 Internal Audit for the Year 2022 and
2023 Work Plan” were deliberated and
The eighth session
Zhu Jianmin Jin approved.of Remuneration
Zanfang Shi 2
and AssessmentGuanqun 3 proposals including “Summary ofCommittee
8/18/2023 Internal Audit for the Half Year of 2023
and Work Plan for the Third Quarter of
2023” were deliberated and approved.
2 proposals including “The nomination
9/19/2023 of the company's CFO” were deliberated
The ninth session and approved.Shen Yuping Ji
of RemunerationJiangyang Wang 2 3 proposals including “Summary ofand Assessment
Yang Internal Audit for the Third Quarter of
Committee 10/20/2023 2022 and Work Plan for the FourthQuarter of 2022” were deliberated and
approved."The fourth phase of the employee stock
6/2/2023 ownership plan (draft) and its summary"
The eighth session Ji Jianyang Hu was deliberated and approved.of Remuneration Baishan Huang 2
and Assessment Can Zhu Jianmin
Committee Shi Guanqun "The proposal regarding the standard of
8/18/2023 work allowances for independent
directors" was deliberated and approved.
2 proposals including “The election ofThe eighth session
Hu Baifan Huang non-independent directors for the board
of Nomination 1 8/18/2023Can Ji Jiangyang of directors' reshuffle” were deliberated
Committee
and approved.The eighth session Hu Baifan Ji "The proposal on the nomination of the
of Nomination Jiangyang Wang 1 9/19/2023 company's CEO and Secretary of the
Committee Yang Board" was deliberated and approved.VIII. Work of the Board of Supervisors
Whether the Board of Supervisors found any risks in the Company during its supervisory activities in the reporting period
□ Yes √ No
The Board of Supervisors has no objection to the supervised matters during the reporting period.
462023 Annual Report of Zhejiang NHU Co. Ltd.
IX. Employees
1. Number of employees professional workforce and education level
Number of active employees of the parent company at the end of the
579
reporting period
Number of active employees of major subsidiaries at the end of the
11178
reporting period
Total number of active employees at the end of the reporting period 11757
Total number of employees receiving remuneration in the current period 11757
Number of retired cadres and employees whose expenses borne by the
7
parent company and major subsidiaries
Professional workforce
Categories Number
Production staff 7619
Sales staff 186
Technical staff 2803
Finance staff 104
Administrative staff 1045
Total 11757
Education level
Categories Number
Doctoral degree 81
Master’s degree 1169
Bachelor’s degree 3751
Associate degree 4248
High school education secondary vocational school education or below 2508
Total 11757
2. Remuneration policy
The Company formulates the “Remuneration Management System” in accordance with the “Labor Law of the People’s Republic ofChina” and relevant laws and regulations to provide competitive remunerations. A remuneration package is mainly composed of base
salary performance-based pay and benefits. The Company also offers employee incentives including incremental rewards special
contribution rewards incentives during the tenure and additional rewards for high performance beyond expectations. The Company
pays five insurances and a housing fund and continuously improves employee satisfaction and loyalty.
3. Training program
With the strategic goal of “building a highland of talents” the Company takes supporting business development as the starting point
and job-based talent standards as the direction to promote various types of talent training in an orderly manner. It launches leadership
training courses for middle level high level and grassroots management cadres to effectively improve the management ability and
quality of management cadres. It also launches professional ability development classes related to equipment HSE and R&D to
strengthen technical staff skills. For new staff the Company offers induction training to enhance their cultural identities and
professional abilities. It organizes on-the-job training skill level training certification training for special equipment and special type
of work to ensure that employees meet all regulations and skill requirements. The Company makes efforts to cultivate 5 types of talents:
international talents leadership talents management talents core technical talents and core skill talents. On the one hand it further
improves the development and utilization of internal lecturer resources and absorbs internal excellent experiences and practices for a
472023 Annual Report of Zhejiang NHU Co. Ltd.
better enterprise succession; On the other hand it combines “inviting in” and “going out” to establish a cooperation mechanism for
training talents at different levels and expand their thinking and vision through external training exchange with advanced enterprises
study tours etc. The Company aims to make each employee get the opportunity to learn and the platform to grow so that they can
fulfill themselves and achieve personal growth along with the Company. Talents are the most valuable sustainable and competitive
strategic resources of the Company.
4. Labor outsourcing
□ Applicable √ Not applicable
X. Profit distribution and conversion of capital reserve into share capital
Profit distribution policy during the reporting period especially the establishment implementation or adjustment of cash dividend
policy
√ Applicable □ Not applicable
The 2022 Annual General meeting of shareholders held on May 19 2023 reviewed and approved the 2022 Annual Profit Distributio n
Plan which was implemented and completed on June 14 2023. The Annual Equity Distribution Plan for 2022: Based on 3073421680
shares (3090907356 shares the total share capital of the company at that time excluded 17485676 repurchased shares) the cash
dividend of RMB5 (including tax) was distributed to all shareholders for every 10 shares and the total cash distribution was
RMB1536710840.00 (including tax).Special remarks on cash dividend policy
Whether it complies with the Articles of Association or the resolution Yes
of the general meeting:
Whether the criteria and proportion of dividends are clear and Yes
unambiguous:
Whether relevant decision-making procedures and mechanisms are Yes
complete:
Whether the independent directors have performed their duties and Yes
responsibilities and played their due roles:
Specific reasons and the next steps it intends to take to enhance the N/A
investor return level if the Company did not pay cash dividend:
Whether small and medium-sized shareholders have adequate
opportunities to express their opinions and demands and whether Yes
their legitimate rights and interests are adequately protected:
In case of changes or adjustments of the cash dividend policy N/A
whether the conditions and procedures are compliant and transparent:
The Company is profitable during the reporting period and the parent company’s profit available for distribution is positive but no
cash dividend distribution plan has been proposed
□ Applicable √ Not applicable
Profit distribution and conversion of capital reserve into share capital during the reporting period
√ Applicable □ Not applicable
Number of bonus shares for every 10 shares (shares) 0
Dividends for every 10 shares (yuan) (tax included) 4.50
Number of shares increased for every 10 shares (shares) 0
Equity base for distribution proposal (shares) 3073421680
Amount of cash dividends (yuan) (tax included) 1383039756
Amount of cash dividends by other methods (such as share
0
repurchase) (yuan)
Total cash dividends (including those by other methods) (yuan) 1383039756
Profit available for distribution (yuan) 5137599917.63
Proportion of total cash dividends (including those by other methods)
100%
to total profit distribution
482023 Annual Report of Zhejiang NHU Co. Ltd.
Details on cash dividend
If the Company is in growth stage and there are major capital expenditure arrangements the proportion of cash dividends in this
profit distribution shall be at least 20%.Details on proposals on profit distribution or conversion of capital reserve into share capital
Profit distribution proposal deliberated and approved by the meeting of the Board of Directors is as follows:
Based on the 3073421680 shares (total share capital of 3090907356 excluding 17485676 repurchased shares[Note]) a cash
dividend of 4.50 yuan (tax included) will be distributed to all shareholders for every 10 shares and no bonus shares will be distributed
and the capital reserve will not be converted into share capital.Note: According to the “Rules on Share Repurchase of Listed Companies” shares in the special account for repurchase of listed
companies carry no right of profit distribution and conversion of capital reserve into share capital
If the Company’s total share capital was changed due to the conversion of convertible bonds into shares share repurchase equity
incentive exercise refinancing and issuing new shares to the public before the implementation of the distribution plan the total
distribution amount shall be adjusted with distribution proportion unchanged.XI. Implementation of equity incentive plans employee stock ownership plans or other
employee incentive programs
√ Applicable □ Not applicable
1. Equity incentive
Not applicable.Equity incentives received by directors and senior executives of the Company
□ Applicable √ Not applicable
Assessment mechanism and incentives for senior executives
Not applicable.
2. Implementation of employee stock ownership plans
√ Applicable □ Not applicable
All active employee stock ownership plans during the reporting period
Scope of employees Number of Total shares Changes Proportion to total share Sources of fund to
employees held capital of the Company implement the plan
The third phase of employee stock
Legal remuneration of
ownership plan: directors
the employees self-
supervisors senior executives of the
Company and regular employees of 681 12157826 N/A 0.39%
raised funds and other
methods permitted by
the Company and its holding
laws and administrative
subsidiaries or wholly-owned
regulations
subsidiaries who meet the criteria
The fourth phase of employee stock
Legal remuneration of
ownership plan: directors
the employees self-
supervisors senior executives of the
raised funds and other
Company and regular employees of 627 29528181 N/A 0.96%
methods permitted by
the Company and its holding
laws and administrative
subsidiaries or wholly-owned
regulations
subsidiaries who meet the criteria
Shareholdings of directors supervisors and senior executives in the employee stock ownership plan during the reporting period
492023 Annual Report of Zhejiang NHU Co. Ltd.
Number of shares held Number of shares held Proportion to total
Name Position at the beginning of the at the end of the share capital of the
reporting period reporting period Company
The third phase of employee stock
ownership plan: Hu Baishan Shi
Guanqun Wang Xuewen Wang
Directors supervisors
Zhengjiang Zhou Guiyang Yu Baijin 1601317 0 0.00%
and senior executives
Shi Fangbin Lyu Guofeng Yu
Hongwei Yan Hongyue Chen
Zhaofeng Zheng Gentu
The fourth phase of employee stock
ownership plan:Hu Baifan Hu
Baishan Shi Guanqun Wang Xuewen
Directors supervisors
Wang Zhengjiang Zhou Guiyang Shi 0 8664835 0.28%
and senior executives
Fangbin Lyu Guofeng Yu Hongwei
Yan Hongyue Chen Zhaofeng Wang
Xiaobi Li Huafeng Zhang Liying
Changes in asset management agency during the reporting period
□ Applicable √ Not applicable
Changes in equity during the reporting period due to disposal of shares by holders etc.□ Applicable √ Not applicable
Exercise of shareholders’ rights during the reporting periodPursuant to the “Third Phase of Employee Stock Ownership Plan (Draft) and the Fourth Phase of Employee Stock Ownership Plan
(Draft)” the plans voluntarily waives the voting rights of holding shares in the general meeting of the Company while shares acquired
through the employee stock ownership plan carry no voting rights in the general meeting. During the reporting period the employee
stock ownership plan did not exercise the voting rights of holding shares in the general meeting but still enjoyed the right to profit
distribution.Other relevant situations and remarks of the employee stock ownership plan during the reporting period
□ Applicable √ Not applicable
Change in membership of the management committee of employee stock ownership plan
√ Applicable □ Not applicable
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. Ms.Xi Chun Mr. Yu Weiguo Mr. Chen Mengqiao Mr. Li Huafeng and Ms. Wang Xiaobi were elected as the member of the management
committee. The term is the duration of the Company's fourth employee stock ownership plan.Financial impact of employee stock ownership plan on the Company in the reporting period and related accounting treatments
□ Applicable √ Not applicable
Termination of employee stock ownership plan during the reporting period
√ Applicable□ Not applicable
As of November 11 2023 all shares of the Company held under the third phase of the Employee Stock Ownership Plan have been
sold. According to the relevant regulations the implementation of the third phase of the employee stock ownership Plan has been
completed and terminated. For details please refer to the "Announcement on Completion and Termination of the Sale of the Third
Phase of the Employee Stock Ownership Plan" (Announcement No. 2023-065) published by the Company on designated information
disclosure media and http://www.cninfo.com.cn on November 11 2023.
502023 Annual Report of Zhejiang NHU Co. Ltd.
Other remarks
1. The Company held the 16th meeting of the eighth Board of Directors and the 13th meeting of the eighth Board of Supervisors on
June 7 2023 and the first extraordinary general meeting of shareholders in 2023 on June 26 2023 to review and pass the employee
stock ownership Plan related proposals such as the fourth Employee Stock Ownership Plan (Draft) and its summary of Zhejiang NHU
Co. LTD. The fourth phase of the employee stock ownership plan was agreed to be implemented. As of September 25 2023 a total of
29528181 shares of the Company have been purchased under the fourth phase of the employee stock ownership Plan through the
secondary market bidding transaction accounting for 0.9553% of the Company's existing total share capital with a total transaction
amount of 479442157.08 yuan (excluding transaction costs). The average transaction price was about 16.2368 yuan per share and
the company completed the target stock purchase of the fourth phase of the employee stock ownership plan. The lock-up period of the
underlying shares acquired under the fourth Employee Stock Ownership Plan is 12 months calculated from the date of the Company's
announcement of the transfer of the last underlying shares to the plan.The number of shares held by directors supervisors and senior managers in the employee stock ownership plan is calculated
according to the proportion of the holder's share in the total share of the employee stock ownership plan.
3. Other employee incentive programs
□ Applicable √ Not applicable
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control system
The Company has established a sound internal control system under continuous improvement and enhancement in accordance with the
“Basic Standard for Enterprise Internal Control” and its accompanying guidelines to adapt to the dynamic external environment and
internal management requirements. The Company’s internal controls can cover the major aspects of operation and management and
the design of these controls is sound and reasonable. The internal controls are effectively executed and there is no material omission.During the reporting period the company revised and improved its internal management system based on the actual work situation and
changes in the internal and external environment including 18 new systems and 35 revised rules and regulations. Including "Carbon
Emission Management Measures" "Channel Business Management Measures" "Product Pricing Management Measures" Bidding
Management Measures "Asset Management Basic System Project Management System and Customer Management System so as to
improve the company's management and business processes and further optimize the company's internal control management.
2. Details on material deficiencies in internal control identified during the reporting period
□ Yes √ No
XIII. Management control in subsidiaries during the reporting period
Problems
Integration Progress of Solutions Progress of Follow-up
Name of subsidiaries encountered in
plan integration adopted solutions solutions
integration
Shandong New Shuang'an
N/A N/A N/A N/A N/A N/A
Biotechnology Co. Ltd
512023 Annual Report of Zhejiang NHU Co. Ltd.
IV. Internal control self-assessment report or auditor’s report on internal control
1. Internal control self-assessment report
Date of report April 23 2024Please refer to the “Internal Control Self-Assessment Report of 2023 of Zhejiang NHUFull text of reportCo. Ltd.” disclosed on http://www.cninfo.com.cn on April 23 2024 for details.Proportion of the total assets of entities
included in the assessment scope to the
100.00%
total assets in the Company’s
consolidated financial statements
Proportion of the operating revenue of
entities included in the assessment
scope to the operating revenue in the 100.00%
Company’s consolidated financial
statements
Criteria for identifying deficiencies
Categories Categories Categories
Indicators of material deficiencies in
financial reporting include: 1) fraud by
directors supervisors and senior
The following circumstances are
executives; 2) correction of published
identified as indicators of material
financial reports by the Company; 3)
deficiencies while others are
discovery by the auditor of a material
respectively identified as indicators of
misstatement in the current financial
significant deficiencies or general
report that was not detected by internal
deficiencies according to the degree of
control in the course of operation; and 4)
impact: 1) lack of democratic or
ineffective monitoring of internal control
scientific decision-making procedures
by the Company. Indicators of significant
leading to decision-making errors; 2)
deficiencies in financial reporting include:
Qualitative criteria violation of laws and regulations such as
1) failure to select and apply accounting
environmental pollution failure to report
policies in accordance with CASBEs; 2)
or disclose information in accordance
failure to establish anti-fraud procedures
with regulations; 3) loss of executives or
and controls; and 3) individual or multiple
technical personnel in key positions; 4)
deficiencies in the financial reporting
internal control evaluation stating that
process that although not meeting the
material or significant deficiencies have
criteria for determining a significant
not been rectified; 5) lack of system
deficiency affect the objective of integrity
control or systemic failure in important
and accuracy. General deficiencies in
businesses.financial reporting are control deficiencies
other than the above-mentioned material
and significant deficiencies.The Company uses 5% of profit before The Company uses 5% of profit before
tax as the overall materiality of the tax as the overall materiality of the
financial statements. A material financial statements. A material
deficiency is identified when the potential deficiency is identified when the
misstatement is greater than or equal to potential misstatement is greater than or
the overall materiality. A significant equal to the overall materiality. A
Quantitative criteria deficiency is identified when the potential significant deficiency is identified when
misstatement is less than the overall the potential misstatement is less than the
materiality but greater than or equal to overall materiality but greater than or
20% of the overall materiality. A general equal to 20% of the overall materiality. A
deficiency is identified When the general deficiency is identified when the
potential misstatement is less than 20% of potential misstatement is less than 20%
the overall materiality. of the overall materiality.Number of material deficiencies in
0
internal control over financial reporting
522023 Annual Report of Zhejiang NHU Co. Ltd.
Number of material deficiencies in
internal control over non-financial 0
reporting
Number of significant deficiencies in
0
internal control over financial reporting
Number of significant deficiencies in
internal control over non-financial 0
reporting
2. Auditor’s report on internal control
√ Applicable □ Not applicable
Audit opinion paragraph in the internal control audit report
In our opinion Zhejiang NHU Co. Ltd maintained in all material respects effective internal control over financial reporting as of
December 31 2023 in accordance with the Basic Standard for Enterprise Internal Control and related regulations.Disclosure of internal control audit report Disclosure
Disclosure date of full text of internal control audit report 4/23/2024
For details please refer to Juchao Information Website
Index of Full Text Disclosure of Internal Control Audit Report http://www.cninfo.com.cn "Internal Control Audit Report of
Zhejiang NHU Co. Ltd.Opinion Type of Internal Control Audit Report Standard Unqualified Opinion
Whether there are major defects in the non-financial report No
Whether the accounting firm has issued an internal control audit report with non-standard opinions
□ Yes √ No
Whether the internal control audit report issued by the accounting firm is consistent with the opinion of the self-evaluation report of
the board of directors
? Yes □ No
XV. Self-examination and rectification concerning the special action of corporate governance
Not applicable
532023 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 standardsMeasures for the Management of the List of Priority Units for Environmental Supervision（Decree No. 27 of the Ministry of Ecologyand Environment）
Ecological and environmental administrative penalties（Decree of the Ministry of Ecology and Environment No. 30）Measures for the Management of Voluntary Greenhouse Gas Emission Reduction Trading (Trial)（Decree of the Ministry of Ecologyand Environment No. 31）Graphic Signs for Environmental Protection -- Solid Waste Storage (Disposal) Sites (GB 15562.2-1995)（Environmental StandardsBulletin [2023] No. 5）
Pollution Control Standards for the Storage of Hazardous Wastes（Environmental Standards Bulletin [2023] No. 6）
Technical Specification for the Marking of Pollutant Discharge Outlets of Sewage Discharging Units with Two-dimensional Codes
（Environmental Standards Bulletin [2023] No. 16）
Notice on Doing the Work Related to the Allocation of National Carbon Emission Trading Allowances for the Years 2021 and 2022（ National Environmental Regulation Climate [2023] No. 1）
Methane Emission Control Action Program (National Environmental Regulation Climate [2023] No. 67)
Circular on the Administration of Industrial Noise Emission Permits (UNEO EIA [2023] No. 14)
Circular on Further Strengthening Work Related to the Regulated Environmental Management of Hazardous Wastes (Environmental
Office Solid [2023] No.17)
Administrative permits for environmental protection
On April 18 2023 Shangyu NHU Bio-Chem Co. Ltd. reacquired a discharge permit valid until April 17 2028.On March 15 2023，Shandong NHU Pharmaceutical Co. Ltd. reacquired a discharge permit valid until March 14 2028.On July 25 2023，Shandong NHU Amino-acids Co. Ltd. reacquired a discharge permit valid until July 24 2028.On July 21 2023，Shandong NHU Vitamins Co. Ltd. reacquired a discharge permit valid until July 20 2028.On August 4 2023，Shandong NHU Fine ChemicalScience and Technology Co. reacquired a discharge permit valid until August 3
2028.
On December 6 2023，Heilongjiang NHU Biotechnology Co. Ltd. reacquired a discharge permit valid until May 17 2028.
542023 Annual Report of Zhejiang NHU Co. Ltd.
Industry emission standards and the specific circumstances of pollutant emissions involved in production
and operation activities
Number Distribu Total Excessi
Name of main Executive
Types of major of tion of Discharge amount Total verified ve
pollutants and Discharge pollutant
Name and characteristic dischar dischar concentrat of amount of dischar
pollutant method discharge
pollutants ge ge ion discharg discharge ge or
characteristics standard
outlets outlets e not
water Sewer Plant 126mg/
The Company COD 1 500mg/L 20.70t ≤189.5t/a No
pollution connection area L
water Sewer Plant
The Company NH3-N 1 4.0mg/L 35mg/L 0.61t ≤13.28t/a No
pollution connection area
Atmospheric Filtered Plant 19mg/m
The Company SO? 1 50mg/m3 0.80t ≤8.612 t/a No
pollutants discharge area 3
Atmospheric Filtered Plant 33mg/
The Company NOx 1 50mg/m3 0.48t ≤28t/a No
pollutants discharge area m3
Shangyu NHU Bio- water Sewer Plant 197.793 162.35
COD 1 500mg/L ≤440.9 t/a No
Chem Co. Ltd. pollution connection area mg/L 4t
Shangyu NHU Bio- water Sewer Plant 6.138m
NH3-N 1 35mg/L 5.038t ≤30.863 t/a No
Chem Co. Ltd. pollution connection area g/L
Shangyu NHU Bio- water Sewer Plant 23.31m
TN 1 70mg/L 19.133t ≤61.726 t/a No
Chem Co. Ltd. pollution connection area g/L
Shangyu NHU Bio- Atmospheric Filtered Plant 5.047m
VOC 1 100mg/m3 1.581t ≤207.6 t/a No
Chem Co. Ltd. pollutants discharge area g/m3
Shangyu NHU Bio- Atmospheric Filtered Plant 3.361m
NOx 1 200mg/m3 0.975t ≤12.96 t/a No
Chem Co. Ltd. pollutants discharge area g/m3
Zhejiang NHU
Atmospheric Filtered Plant 5.098m ≤121.833
Pharmaceutical Co. VOC 1 100mg/m3 0.349t No
pollutants discharge area g/m3 t/a
Ltd.Zhejiang NHU
Atmospheric Filtered Plant 0.927m
Pharmaceutical Co. VOC 1 100mg/m3 0.21t ≤1.069 t/a No
pollutants discharge area g/m3
Ltd.Zhejiang NHU
Atmospheric Filtered Plant 0.915m
Pharmaceutical Co. VOC 1 100mg/m3 0.007t ≤0.288 t/a No
pollutants discharge area g/m3
Ltd.Zhejiang NHU
Atmospheric Filtered Plant 9.575m
Pharmaceutical Co. VOC 1 100mg/m3 0.003t ≤0.01 t/a No
pollutants discharge area g/m3
Ltd.Zhejiang NHU
Atmospheric Filtered Plant 4.625m
Pharmaceutical Co. NOx 1 200mg/m3 0.321t ≤19.8 t/a No
pollutants discharge area g/m3
Ltd.Zhejiang NHU
Atmospheric Filtered Plant 142.998
Pharmaceutical Co. NOx 1 300mg/m3 27.811t ≤28.08 t/a No
pollutants discharge area mg/m3
Ltd.Zhejiang NHU
Atmospheric Filtered Plant 18.233
Pharmaceutical Co. NOx 1 150mg/m3 1.285t ≤8.44 t/a No
pollutants discharge area mg/m3
Ltd.Zhejiang NHU
Atmospheric Filtered Plant
Pharmaceutical Co. SO? 1 3mg/m3 100mg/m3 0.204t ≤9.295 t/a No
pollutants discharge area
Ltd.Zhejiang NHU
Atmospheric Filtered Plant 3.36mg/
Pharmaceutical Co. SO? 1 100mg/m3 0.644t ≤37.94 t/a No
pollutants discharge area m3
Ltd.Zhejiang NHU
Atmospheric Filtered Plant 3.36mg/
Pharmaceutical Co. SO? 1 50mg/m3 0.178t ≤10.905 t/a No
pollutants discharge area m3
Ltd.
552023 Annual Report of Zhejiang NHU Co. Ltd.
Number Distribu Total Excessi
Name of main Executive
Types of major of tion of Discharge amount Total verified ve
pollutants and Discharge pollutant
Name and characteristic dischar dischar concentrat of amount of dischar
pollutant method discharge
pollutants ge ge ion discharg discharge ge or
characteristics standard
outlets outlets e not
Zhejiang NHU
Atmospheric Filtered Plant 4.017m
Phar-maceutical PM 1 20mg/m3 0.268t ≤5.174 t/a No
pollutants discharge area g/m3
Co. Ltd.Zhejiang NHU
Atmospheric Filtered Plant 3.978m
Pharmaceutical Co. PM 1 30mg/m3 0.776t ≤8.42 t/a No
pollutants discharge area g/m3
Ltd.Zhejiang NHU
Atmospheric Filtered Plant 8.453m
Pharmaceutical Co. PM 1 20mg/m3 0.507t ≤5.626 t/a No
pollutants discharge area g/m3
Ltd.Zhejiang NHU
water Sewer Plant 197.793 140.53
Pharmaceutical Co. COD 1 500mg/L ≤382.37 t/a No
pollution connection area mg/L 4t
Ltd.Zhejiang NHU
water Sewer Plant 6.138m
Pharmaceutical Co. NH3-N 1 35mg/L 4.361t ≤26.766 t/a No
pollution connection area g/L
Ltd.Zhejiang NHU
water Sewer Plant 23.31m
Pharmaceutical Co. TN 1 70mg/L 16.561t ≤53.532t/a No
pollution connection area g/L
Ltd.Zhejiang NHU
Atmospheric Filtered Plant 1.72mg/
Special Materials PM 1 5 mg/m3 0.1809t ≤17.73 t/a No
pollutants discharge area m3
Co. Ltd.Zhejiang NHU
Atmospheric Filtered Plant 2.13mg/
Special Materials PM 1 20 mg/m3 0.4468t ≤17.73 t/a No
pollutants discharge area m3
Co. Ltd.Zhejiang NHU
Atmospheric Filtered Plant 6.90mg/
Special Materials PM 1 20 mg/m3 0.1390t ≤17.73 t/a No
pollutants discharge area m3
Co. Ltd.Zhejiang NHU
Atmospheric Filtered Plant 3.22mg/
Special Materials SO? 1 35mg/m3 0.3147t ≤67.92t/a No
pollutants discharge area m3
Co. Ltd.Zhejiang NHU
Atmospheric Filtered Plant 2.76mg/
Special Materials SO? 1 50mg/m3 0.5842t ≤67.92t/a No
pollutants discharge area m3
Co. Ltd.Zhejiang NHU
Atmospheric Filtered Plant 18.18m
Special Materials SO? 1 50mg/m3 0.3550t ≤67.92t/a No
pollutants discharge area g/m3
Co. Ltd.Zhejiang NHU
Atmospheric Filtered Plant 17.56m
Special Materials NOx 1 50 mg/m3 2.0869t ≤83.28 t/a No
pollutants discharge area g/m3
Co. Ltd.Zhejiang NHU
Atmospheric Filtered Plant 15.92m
Special Materials NOx 1 100mg/m3 3.1469t ≤83.28 t/a No
pollutants discharge area g/m3
Co. Ltd.Zhejiang NHU
Atmospheric Filtered Plant 45.45m 150 1.1409
Special Materials NOx 1 ≤83.28 t/a No
pollutants discharge area g/m3 mg/m3 t
Co. Ltd.Zhejiang NHU
Atmospheric Filtered Plant 2.35mg/
Special Materials VOC 2 60 mg/m3 0.9006t ≤69.72 t/a No
pollutants discharge area m3
Co. Ltd.Zhejiang NHU
water Sewer Plant 195.36 67.573
Special Materials COD 1 500 mg/L ≤182.1 t/a No
pollution connection area mg/L 7t
Co. Ltd.Zhejiang NHU
water Sewer Plant 6.72mg/
Special Materials NH3-N 1 35 mg/L 2.2140t ≤12.747 t/a No
pollution connection area L
Co. Ltd.
562023 Annual Report of Zhejiang NHU Co. Ltd.
Number Distribu Total Excessi
Name of main Executive
Types of major of tion of Discharge amount Total verified ve
pollutants and Discharge pollutant
Name and characteristic dischar dischar concentrat of amount of dischar
pollutant method discharge
pollutants ge ge ion discharg discharge ge or
characteristics standard
outlets outlets e not
Zhejiang NHU
water Sewer Plant 24.14m
Special Materials TN 1 70 mg/L 7.7592t ≤25.494 t/a No
pollution connection area g/L
Co. Ltd.Shandong NHU
Atmospheric Filtered Plant 1.59mg/
Pharmaceutical Co. PM 5 10 mg/m3 0.35t ≤10.766t/a No
pollutants discharge area m3
Ltd.Shandong NHU
Atmospheric Filtered Plant 3.63mg/
Pharmaceutical Co. SO? 4 50 mg/m3 0.79t ≤4.006t/a No
pollutants discharge area m3
Ltd.Shandong NHU
Atmospheric Filtered Plant 37.92m 100
Pharmaceutical Co. NOx 5 12.36t ≤66.49t/a No
pollutants discharge area g/m3 mg/m3
Ltd.Shandong NHU
Atmospheric Filtered Plant 8.98mg/
Pharmaceutical Co. VOC 3 60 mg/m3 14.15t ≤80.4t/a No
pollutants discharge area m3
Ltd.Shandong NHU
Atmospheric Plant 1.9mg/ ≤73.9572t/
Pharmaceutical Co. VOC unorganized / 2mg/m3 / No
pollutants area m3 a
Ltd.Shandong NHU
water Sewer Plant 335mg/
Pharmaceutical Co. COD 1 1000mg/L 71.29t ≤720.98t/a No
pollution connection area L
Ltd.Shandong NHU
water Sewer Plant 11.41mg
Pharmaceutical Co. NH3-N 1 100mg/L 2.69t ≤72.10 t/a No
pollution connection area /L
Ltd.Shandong NHU
water Sewer Plant 26.94m
Pharmaceutical Co. TN 1 120mg/L 5.91t ≤86.86 t/a No
pollution connection area g/L
Ltd.Shandong NHU
Atmospheric Filtered Plant 48.8mg/ ≤162.472
Amino-acids Co. SO? 4 50mg/m3 7.56t No
pollutants discharge area m3 t/a
Ltd.Shandong NHU
Atmospheric Filtered Plant 95.1mg/
Amino-acids Co. NOx 4 100mg/m3 73.1t ≤415.75 t/a No
pollutants discharge area m3
Ltd.Shandong NHU
Atmospheric Filtered Plant 9.84mg/
Amino-acids Co. PM 5 10mg/m3 2.189t ≤29.314 t/a No
pollutants discharge area m3
Ltd.Shandong NHU
Atmospheric Filtered Plant 51.2mg/
Amino-acids Co. VOC 3 60mg/m3 11.33t ≤379.63 t/a No
pollutants discharge area m3
Ltd.Shandong NHU
water Sewer Plant 842mg/
Amino-acids Co. COD 1 1000mg/L 264t ≤839.2 t/a No
pollution connection area L
Ltd.Shandong NHU
water Sewer Plant 79.9mg/
Amino-acids Co. NH3-N 1 100mg/L 4.71t ≤83.92 t/a No
pollution connection area L
Ltd.Shandong NHU
water Sewer Plant 119mg/ ≤100.704
Amino-acids Co. TN 1 120mg/L 29.4t No
pollution connection area L t/a
Ltd.Shandong NHU Atmospheric Filtered Plant 1.54mg/
VOC 4 60 mg/m3 7.01t ≤85.67 t/a No
Vitamins Co. Ltd. pollutants discharge area m3
Shandong NHU Atmospheric Filtered Plant 4.8
SO? 3 50 mg/m3 1.65t ≤21.14 t/a No
Vitamins Co. Ltd. pollutants discharge area mg/m3
572023 Annual Report of Zhejiang NHU Co. Ltd.
Number Distribu Total Excessi
Name of main Executive
Types of major of tion of Discharge amount Total verified ve
pollutants and Discharge pollutant
Name and characteristic dischar dischar concentrat of amount of dischar
pollutant method discharge
pollutants ge ge ion discharg discharge ge or
characteristics standard
outlets outlets e not
Shandong NHU Atmospheric Filtered Plant 45mg/m 100
NOx 4 33.575t ≤65.27 t/a No
Vitamins Co. Ltd. pollutants discharge area 3 mg/m3
Shandong NHU Atmospheric Filtered Plant 2.61
PM 5 10 mg/m3 1.34t ≤4.8 t/a No
Vitamins Co. Ltd. pollutants discharge area mg/m3
Shandong NHU water Sewer Plant 248 2000 ≤1376.56t/
COD 1 42.4t No
Vitamins Co. Ltd. pollution connection area mg/L mg/L a
Shandong NHU water Sewer Plant 10.4
NH3-N 1 100 mg/L 1.76t ≤68.61 t/a No
Vitamins Co. Ltd. pollution connection area mg/L
Shandong NHU water Sewer Plant 58.4mg/
TN 1 120 mg/L 10t ≤93.21t/a No
Vitamins Co. Ltd. pollution connection area L
Shandong NHU
Fine Atmospheric Filtered Plant 20.5mg/
VOC 2 60 mg/m3 1.82t ≤18.031 t/a No
ChemicalScience pollutants discharge area m3
and Technology Co.Shandong NHU
Fine Atmospheric Filtered Plant 30mg/m 100
NOx 2 1.28t ≤37.61 t/a No
ChemicalScience pollutants discharge area 3 mg/m3
and Technology Co.Heilongjiang NHU
Atmospheric Filtered Plant 16.73m
Biotechnology Co. PM 1 30mg/m3 7.45t ≤19.224t/a No
pollutants discharge area g/m3
Ltd.Heilongjiang NHU
Atmospheric Filtered Plant 10.52m 0.0009
Biotechnology Co. PM 1 30mg/m3 ≤0.68 t/a No
pollutants discharge area g/m3 85t
Ltd.Heilongjiang NHU
Atmospheric Filtered Plant 6.85mg/ 0.0015
Biotechnology Co. PM 1 30mg/m3 ≤0.55t/a No
pollutants discharge area m3 14t
Ltd.Heilongjiang NHU
Atmospheric Filtered Plant 32.64m
Biotechnology Co. NOx 1 200mg/m3 13.63t ≤128.16 t/a No
pollutants discharge area g/m3
Ltd.Heilongjiang NHU
Atmospheric Filtered Plant 96.78m
Biotechnology Co. SO? 1 200mg/m3 43.07t ≤128.16 t/a No
pollutants discharge area g/m3
Ltd.Heilongjiang NHU
Atmospheric Filtered Plant 1.29mg/
Biotechnology Co. VOC 1 150mg/m3 0.58t ≤96.12 t/a No
pollutants discharge area m3
Ltd.Heilongjiang NHU
Atmospheric Filtered Plant 15.73m 0.0015
Biotechnology Co. VOC 1 150mg/m3 ≤3.38 t/a No
pollutants discharge area g/m3 29t
Ltd.Heilongjiang NHU
Atmospheric Filtered Plant 15.23m 0.0098
Biotechnology Co. VOC 1 150mg/m3 ≤2.77 t/a No
pollutants discharge area g/m3 81t
Ltd.Heilongjiang NHU
Atmospheric Filtered Plant 5.7mg/ 0.0051
Biotechnology Co. VOC 1 150mg/m3 ≤2.80 t/a No
pollutants discharge area m33 9t
Ltd.Heilongjiang NHU
water Sewer Plant 136.74
Biotechnology Co. COD 1 300mg/L 699.25t ≤1980t/a No
pollution connection area mg/m3
Ltd.Heilongjiang NHU
water Sewer Plant 4.61mg/
Biotechnology Co. NH3-N 1 35mg/L 20.34t ≤231t/a No
pollution connection area m3
Ltd.
582023 Annual Report of Zhejiang NHU Co. Ltd.
Construction and operation of pollution prevention and control facilities
The Company has established the environmental protection concept of green development: 1. Introducing the concept of green
chemistry developing and producing products that are more environment-friendly. 2. Transferring from support-orientation to
responsibility-orientation to conduct source reduction process control and end-of-pipe treatment properly. 3. Pursuing reduction
recycling and harmlessness to create ecological factories and realize the harmonious development of man and nature.Wastewater treatment: The Company has a complete sewage treatment system with a wastewater collection system for production
sewage domestic sewage initial rainwater and accident water to separate the clean water and rainwater from the sewage. The waste
pool is sealed with a cover and all the waste gases are effectively collected and eventually incinerated which effectively reduces the
emission of waste gas. In 2022 the capacity of the sewage station will be upgraded and the treatment capacity of the sewage station
will be increased by 10%.Waste gas treatment: The Company adopts the self-developed nitrogen sealing system to effectively reduce the waste gas emission; it
uses different pretreatment technologies according to the composition and nature of different waste gases and introduces advanced
foreign waste gas treatment devices to strengthen its waste gas treatment capacity. The Company carries out regular waste gas leak
detection and repair (LDAR) every year to effectively supervise and reduce unorganized waste gases. In 2021The Company actively
upgrades coal-fired thermal oil furnaces via the “coal to gas” conversion introduces natural gas boilers carries out low-NOx
transformation and adds SNCR denitrification facilities to the terminal to actively carry out NOx treatment. In 2022 the company
began to implement the construction of odor-free factories comprehensively carry out waste gas treatment and solve the problem of
odor at the factory boundary.Solid waste disposal: the company has built a standardized hazardous waste temporary storage warehouse and a hazardous waste
incineration device and the company basically disposes of hazardous wastes by itself. Outsourced solid wastes shall be transferred in
strict accordance with the requirements of the Management Measures for Five Forms of Hazardous Waste Transfer and shall be
entrusted to qualified units for disposal.Noise prevention and control: The Company chooses low-noise equipment and adopts the noise reduction measures of foundation
damping for the equipment that does not need to be fixed. In addition to taking foundation damping for air compressors blowers and
various pumps the Company also installs additional soundproof covers around the noise sources for sound insulation.Emergency management: The Company installs online waste gas monitors around the plant boundary to monitor the environment of
the plant boundary in real time. It introduces VOC online monitors to monitor the gas emission data in real time and uploads the
detection data to the monitoring platform. It monitors the waste water emission index in real time by waste water online monitoring
system of “one enterprise one pipe” and upload it to the Bureau of Ecology and Environment. It introduces domestic first-class elevated
flare technology to specifically deal with abnormal waste gas in the production process. It also introduces domestic first-class leak
stoppage technology under pressure to reduce the abnormal leakage of pipelines valves flanges and tanks to the minimum thus
reducing the environmental impact caused by a large number of leaks.Environmental self-monitoring program
The company has good pollutant emission monitoring and management ability and can timely inform the environmental protection
administrative department and the public of the monitoring information. The company has developed relevant self-test plans which
cover the indicators of the company's organized waste gas unorganized waste gas and groundwater. At the same time a third-party
testing company is entrusted to carry out regular monitoring.The company implements environmental information disclosure in strict accordance with the national provincial municipal and county
requirements on enterprise environmental information disclosure. Each subsidiary has made enterprise environmental protection
information public on platforms such as the environmental information management system of provincial and municipal key pollu tant
discharge units.
592023 Annual Report of Zhejiang NHU Co. Ltd.
Environmental emergency response plan
On August 3 2023 Shandong NHU Amino-acids Co. Ltd. re-filed the emergency response plan for environmental emergencies.On August 25 2023 Shandong NHU Vitamins Co. Ltd. re-filed its emergency response plan for environmental emergencies.On August 30 2023 Shandong NHU Fine ChemicalScience and Technology Co. re-filed the emergency response plan for
environmental emergencies.Investment in environmental treatment and protection and payment of environmental protection tax
During the reporting period the company invested RMB 628.81 million in environmental protection treatment and paid environme ntal
protection tax of RMB 1.81 million.Measures taken to reduce carbon dioxide emissions during the reporting period and their effects
√ Applicable □ Not applicable
In the research and development of new products the carbon emission of 10000 yuan output value is taken as an important indicator
for the process route and environmental feasibility assessment of new products. The green development technology is applied in the
research and development of new products to improve the atomic utilization rate and reduce the carbon emission generated by the
consumption of raw materials from the source. （The photovoltaic power generation project of Shandong NHU Vitamins Co. Ltd.）
Administrative penalties for environmental problems during the reporting period
Results of Impact on the production and Rectification measures of
Name Reasons for punishment Violations
punishment operation of the Company the Company
N/A N/A N/A N/A N/A N/A
Other environmental information that should be disclosed
None.Other information related to environmental protection
None.II. Social responsibilitiesPlease refer to the announcement disclosed on http://www.cninfo.com.cn on April 23 2024 for the full text of the “SocialResponsibility Report of 2023”.III. Details on consolidating poverty alleviation achievements and promoting rural vitalization
None.
602023 Annual Report of Zhejiang NHU Co. Ltd.
Section VI Significant Events
I. Commitment performance
1. Commitment performance fulfilled during the reporting period and not fulfilled as of the end of the reporting period by
parties related to commitments including the actual controller of the Company shareholders related parties acquirers and
the Company
√ Applicable □ Not Applicable
Commitments Parties making Types of Content of commitments Time of Term of Performance
commitments commitments commitment commitment
Commitments to None None None None None None
shares reform
Commitments
made in reports
on acquisition None None None None None None
and changes in
equity
Commitments
made in asset None None None None None None
restructuring
NHU Holding
Group Co. Ltd. andCommitments The signing of “Commitment onZhang Pingyi Shi
on horizontal No Engagement in Horizontal
Cheng Yuancompetition Competition” and commitments June 25
Yizhong Hu Strictly
related party on no engagement in business Long-term
Baishan Shi 2004 performed
transactions and activities result in horizontal
Guanqun Wang
occupation of competition with operations of the
Xuewen Cui
funds Company after listing
Xinrong Wang
Xulin
The Company’s directors senior
executives committed to perform
their duties faithfully and
diligently to safeguard the
legitimate rights and interests of
the Company and shareholders
and make the following
commitments in accordance with
the relevant provisions of the
CSRC for the full performance of
measures on filling immediate
Commitments
returns: 1. not to transfer benefits
made in IPO or
to other entities or individuals
refinancing
without compensation or on unfair
Hu Baifan; Hu terms and not to use other means
Baishan; Guanqun; to harm benefits of the Company;
Wang Xuewen; Cui 2. to impose restrictions on duty January 12 Long-term Strictly
Xinrong; Wang consumption of member of the 2017 performed
Zhengjiang; Zhou Board of Directors and senior
Guiyang 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.
612023 Annual Report of Zhejiang NHU Co. Ltd.
Not to interfere in the Company’s
business and management
Hu Baifan; NHU activities in excess of authority;
January 12 Strictly
Holding Group Co. not to encroach on benefits of the Long-term
2017 performed
Ltd. Company; to perform measures
on filling immediate returns in a
practical way.Commitments to None None None None None None
equity incentive
Other
commitments to
small and None None None None None None
medium-sized
shareholders of
the Company
During the period of increasing
the shares of the company and
Other
within the legal period NHU
commitments to NHU Holding Share increase October 27 Strictly
Holding Group Co. Ltd. will not
minority 6 months
Group Co. Ltd. commitment reduce the shares of the company 2023 performed
shareholders of
and will complete the increase
the Company
plan within the above
implementation period.Whether commitments are performed on time Yes
If commitment performance is not fulfilled on time please
Not applicable
explain detailed reasons for it and the next work plans.
2. Realization of profit forecasts for the Company’s assets or projects and its reasons if there are profit forecasts for ass ets or
projects and the reporting period is still in the profit forecast period
□ Applicable √ Not Applicable
II. Non-operating occupation of funds over listed companies by controlling shareholders and
other related parties
□ Applicable √ Not Applicable
There is no non-operating occupation of funds over listed companies by controlling shareholders and other related parties during the
reporting period.III. Illegal external guarantees
□ Applicable √ Not Applicable
There is no illegal external guarantee during the reporting period.IV. Explanations by the Board of Directors on the latest “Modified Auditor’s Report”
□ Applicable √ Not Applicable
V. Statements by the Board of Directors the Board of Supervisors and independent directors
(if applicable) on the “Modified Auditor’s Report” issued by the accounting firm during the
reporting period
□ Applicable √ Not Applicable
VI. Changes of accounting policies and estimates or significant accounting error correction
compared to the financial reports in the previous year
□ Applicable √ Not Applicable
The company did not have any changes in accounting policies accounting estimates or corrections of significant accounting errors
622023 Annual Report of Zhejiang NHU Co. Ltd.
during the reporting period.VII. Changes in the scope of consolidated financial statements compared to the financial
reports in the previous year
√ Applicable □ Not Applicable
Name Equity acquisition method Time of equity acquisition
Shandong New Shuang'an Biotechnology
Acquisition September 20 2023 Co. Ltd
VIII. Engagement and dismissal of accounting firms
Domestic accounting firms engaged currently
Name Pan-China Certified Public Accountants LLP
Remuneration (thousand yuan) 2100.00 (tax included)
Continuous years for audit services 23 years
Certified Public Accountants Teng Peibin Jan Yanhui
Certified Public Accountants’ continuous years for audit services 4 years for Teng Peibin and 2 year for Jan Yanhui
Whether to engage another accounting firm instead in the current period
□ Yes √ No
Engagement of accounting firms financial advisors or sponsors for audit of internal controls
□ Applicable √ Not Applicable
IX. Delisting after disclosure of the annual report
□ Applicable √ Not Applicable
X. Matters related to bankruptcy and restructuring
□ Applicable √ Not Applicable
There are no matters related to bankruptcy and restructuring during the reporting period.XI. Significant lawsuits and arbitration
□ Applicable √ Not Applicable
There is no significant lawsuit and arbitration during the reporting period.XII. Penalties and rectification
□ Applicable √ Not Applicable
XIII. Integrity of the Company its controlling shareholders and the actual controller
□ Applicable √ Not Applicable
XIV. Significant related party transactions
1. Related party transactions relevant to daily operations
□ Applicable √ Not Applicable
There is no related party transaction relevant to daily operations during the reporting period.
2. Related party transactions in purchase or sale of assets or equities
□ Applicable √ Not Applicable
632023 Annual Report of Zhejiang NHU Co. Ltd.
There is no related party transaction in purchase or sale of assets or equities during the reporting period.
3. Related party transactions in joint external investments
□ Applicable √ Not Applicable
There is no related party transaction in joint external investments during the reporting period.
4. Related party creditor’s rights and debts
□ Applicable √ Not Applicable
There is no related creditor’s rights or debts during the reporting period.
5. Transactions with related financial companies
□ Applicable √ Not Applicable
There is no business of deposits loans credit granting or other financial businesses between the Company and its related financial
companies.
6. Transactions between financial companies controlled by the Company and the Company’s related
parties
□ Applicable √ Not Applicable
There is no business of deposits loans credit granting or other financial businesses between financial companies controlled by the
Company and the Company’s related parties.
7. Other significant related party transactions
□ Applicable √ Not Applicable
There is no other significant related party transaction during the reporting period.XV. Significant contracts and performance
1. Matters of trusteeship contracting and leases
(1) Trusteeship
□ Applicable √ Not Applicable
There is no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not Applicable
There is no contracting during the reporting period.
(3) Leases
□ Applicable √ Not Applicable
There is no lease during the reporting period.
2. Significant guarantees
√ Applicable □ Not Applicable
Unit: RMB 0000 yuan
642023 Annual Report of Zhejiang NHU Co. Ltd.
External guarantees by the Company and its subsidiaries to third parties (guarantees to subsidiaries are excluded)
Announcem Whether Whether
Amou Actual
ent date of Actual Types of Counter the guarante
Guaranteed nt commen Collaterals (if Period of
disclosure amount guarante guarantees guarante e for
parties guaran cement any) guarantee
of amount guaranteed es (if any) e is related
teed date
guaranteed mature parties
No
Total amount actually
Total amount of guarantees approved
0 guaranteed during the 0
during the reporting period (A1)
reporting period (A2)
Total amount actually
Total amount of guarantees approved
0 guaranteed at the end of 0
at the end of the reporting period (A3)
the reporting period (A4)
The Company’s guarantees to subsidiaries
Announcem Counte Whether Whether
Actual Actual Collat
ent date of Amount Types of r the guarante
commenc amount erals Period of
Guaranteed parties disclosure guarantee guarante guaran guarante e for
ement guarante (if guarantee
of amount d es tees (if e is related
date ed any)
guaranteed any) mature parties
Heilongjiang NHU Joint and
several 6/24/2019-
Biotechnology Co. 12/28/2018 200000 6/24/2019 200000 Yes No
liability 12/31/2023
Ltd. guarantee
Joint and
Shandong NHU 11/29/201 several 11/29/2019-
12/28/2018 90000 50000 Yes No
Vitamins Co. Ltd. 9 liability 4/26/2023
guarantee
Joint and
NHU (Hong Kong) several 9/7/2020-
5/22/2020 120000 9/7/2020 56661.6 Yes No
Trading Co. Ltd. liability 9/7/2023
guarantee
Shandong NHU Fine Joint and
several 3/24/2021-
ChemicalScience and 5/22/2020 50000 3/24/2021 50000 No No
liability 12/25/2025
Technology Co. guarantee
Joint and
NHU (Hong Kong) several 6/17/2022-
5/11/2022 130000 6/17/2022 7859.18 Yes No
Trading Co. Ltd. liability 6/18/2023
guarantee
Joint and
NHU (Hong Kong) several 7/14/2022-
5/11/2022 130000 7/14/2022 7859.18 Yes No
Trading Co. Ltd. liability 5/15/2023
guarantee
Heilongjiang NHU Joint and
several 8/26/2021-
Biotechnology Co. 4/22/2021 40000 8/26/2021 37000 No No
liability 12/21/2025
Ltd. guarantee
Zhejiang NHU Joint and
several 5/31/2022-
Imports & Exports 5/11/2022 15000 5/31/2022 15000 Yes No
liability 10/23/2023
Co. Ltd. guarantee
Zhejiang NHU Joint and
several 6/16/2023-
Imports & Exports 5/20/2023 25000 6/16/2023 10000 No No
liability 6/15/2024
Co. Ltd. guarantee
Joint and
Xinchang NHU 12/16/202 several 12/16/2021-
4/22/2021 40000 29000 No No
Vitamins Co. 1 liability 12/25/2026
guarantee
Joint and
NHU (Hong Kong) several 9/2/2022-
5/11/2022 130000 9/2/2022 103.86 Yes No
Trading Co. Ltd. liability 5/1/2023
guarantee
652023 Annual Report of Zhejiang NHU Co. Ltd.
Joint and
NHU (Hong Kong) several 11/3/2022-
5/11/2022 130000 11/3/2022 8.36 Yes No
Trading Co. Ltd. liability 6/1/2023
guarantee
Joint and
NHU (Hong Kong) 12/15/202 several 12/15/2022-
5/11/2022 130000 24.56 Yes No
Trading Co. Ltd. 2 liability 8/1/2023
guarantee
Joint and
NHU (Hong Kong) several 3/15/2023-
5/11/2022 130000 3/15/2023 14.43 Yes No
Trading Co. Ltd. liability 11/1/2023
guarantee
Joint and
NHU (Hong Kong) several 5/12/2023-
5/11/2022 130000 5/12/2023 45.83 Yes No
Trading Co. Ltd. liability 12/1/2023
guarantee
Joint and
NHU (Hong Kong) several 6/12/2023-
5/20/2023 100000 6/12/2023 15.87 No No
Trading Co. Ltd. liability 3/1/2024
guarantee
Joint and
NHU (Hong Kong) several 8/4/2023-
5/20/2023 100000 8/4/2023 97.31 No No
Trading Co. Ltd. liability 5/1/2024
guarantee
Joint and
NHU (Hong Kong) several 9/26/2023-
5/20/2023 100000 9/26/2023 26.69 No No
Trading Co. Ltd. liability 6/1/2024
guarantee
Joint and
NHU (Hong Kong) several 12/5/2023-
5/20/2023 100000 12/5/2023 4.01 No No
Trading Co. Ltd. liability 9/1/2024
guarantee
Zhejiang NHU Joint and
several 6/24/2022-
Pharmaceutical Co. 5/11/2022 60000 6/24/2022 55000 No No
liability 6/23/2027
Ltd guarantee
Joint and
Xinchang NHU 10/14/202 several 10/14/2022-
5/11/2022 20000 18000 No No
Vitamins Co. 2 liability 10/14/2027
guarantee
Joint and
NHU (Hong Kong) several 6/12/2023-
5/20/2023 100000 6/12/2023 7790.97 No No
Trading Co. Ltd. liability 6/12/2024
guarantee
Shandong NHU Fine Joint and
several 6/6/2023-
ChemicalScience and 5/20/2023 58600 6/6/2023 58600 No No
liability 3/29/2028
Technology Co. guarantee
Joint and
NHU (Hong Kong) 11/20/202 several 11/20/2023-
5/20/2023 100000 56661.6 No No
Trading Co. Ltd. 3 liability 11/8/2026
guarantee
Total amount actually
Total amount of guarantees approved
guaranteed for subsidiaries
for subsidiaries during the reporting 215000 133256.71
during the reporting period
period (B1)
(B2)
Total amount actually
Total amount of guarantees approved
guaranteed for subsidiaries
for subsidiaries at the end of the 404000 322196.45
at the end of the reporting
reporting period (B3)
period (B4)
Guarantees by subsidiaries to subsidiaries
Announcem Counte Whether Whether
Actual Amount Collat
ent date of Amount Types of r the guarante
commenc actually erals Period of
Guaranteed parties disclosure guarantee guarante guaran guarante e for
ement guarante (if guarantee
of amount d es tee (if e is related
date ed any)
guaranteed any) mature parties
No
Total amount of guarantees approved for Total amount actually guaranteed for sub-
00
subsidiaries during the reporting period (C1) sidiaries during the reporting period (C2)
662023 Annual Report of Zhejiang NHU Co. Ltd.
Total amount actually guaranteed for
Total amount of guarantees approved for
0 subsidiaries at the end of the reporting 0
subsidiaries at the end of the reporting period (C3)
period (C4)
Total amount guaranteed by the Company (namely sum of the above three items)
Total amount of guarantees approved during the Total amount actually guaranteed during the
215000133256.71
reporting period (A1+B1+C1) reporting period (A2+B2+C2)
Total amount of guarantees approved at the end of Total amount actually guaranteed at the end
404000322196.45
the reporting period (A3+B3+C3) of the reporting period (A4+B4+C4)
Proportion of the amount actually guaranteed (A4+B4+C4) to net assets of
12.99%
the Company
Including:
Balance of guarantees for shareholders the actual controller and its related
0
parties (D)
Balance of debt guarantee directly or indirectly for guaranteed parties with 202600.00
debt to asset ratio exceeding 70% (E)
The amount of the total amount guaranteed exceeding 50% of net assets (F) 0
Total amount guaranteed of three items above (D+E+F) 202600.00
Remarks on unexpired guarantee contracts with guarantee liabilities incurred
or evidence indicating the possibility of undertaking joint liquidation No
liabilities during the reporting period (if applicable)
Remarks on external guarantee in violation of provisions (if applicable) No
Specific description of the use of composite guarantees:
None
3. Entrusted cash assets management
(1) Entrusted financing
√ Applicable □ Not Applicable
Entrusted financing during the reporting period
Unit: RMB 0000 yuan
Impairment amount
Amount
Source of accrued for financial
Types Entrusted amount Unexpired balance overdue and not
entrusted funds products overdue and
recovered
not recovered
Bank financial
Raised funds 80000 14500 0 0
products
Total 80000 14500 0 0
High-risk entrusted financial products with individual significant amount or low security and poor liquidity
□ Applicable √ Not Applicable
When the principal of entrusted financial products is expected to be irrevocable or there are other conditions result in impairment of
entrusted financial products
□ Applicable √ Not Applicable
(2) Entrusted loans
□ Applicable √ Not Applicable
There is no entrusted loan during the reporting period.
672023 Annual Report of Zhejiang NHU Co. Ltd.
4. Other significant contracts
□ Applicable √ Not Applicable
There is no other significant contract during the reporting period.XVI. Other significant events
√ Applicable □ Not Applicable
1. Progress of the third phase of employee stock ownership plan
The third employee stock ownership plan of the Company was deliberated and adopted by the second extraordinary shareholders’
meeting of 2020 held on November 11 2020 the current employee stock ownership plan is managed by the Company itself and 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 12157826* accounting
for RMB 303710918.74 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 112020 to November 10 2022 will be adjusted to November 11 2020 to November 10 2023. Other contents will not be
changed. As of November 11 2023 the third phase of the Employee Stock Ownership Plan was sold.For details please refer to the "Announcement on Completion and Termination of the Sale of the Third Phase of the Employee Stock
Ownership Plan" (Announcement No. 2023-065) published by the Company on designated information disclosure media and
http://www.cninfo.com.cn on November 11 2023.* On May 25 2022 after the implementation of the company's 2021 annual equity distribution the number of shares held by the
company's third-phase employee stock ownership plan increased to 12157826 shares accounting for 0.39% of the company's existing
total share capital.
2. Progress of the fourth employee stock ownership plan
The fourth phase of the Employee stock ownership Plan of the Company was reviewed and approved by the first extraordinary General
meeting of shareholders in 2023 held on June 26 2023. The current employee stock ownership plan is managed by the Company itself
acquired and held by the Company through the secondary market purchase with a duration of not more than 24 months. As of
September 25 2023 a total of 29528181 shares of the Company have been purchased under the fourth phase of the employee stock
ownership Plan through the secondary market bidding transaction accounting for 0.9553% of the Company's existing total share capital
with a total transaction amount of 479442157.08 yuan (excluding transaction costs). The average transaction price was about 16.2368
yuan per share and the company completed the target stock purchase of the fourth phase of the employee stock ownership plan. The
lock-up period of the underlying shares acquired under the fourth Employee Stock Ownership Plan is 12 months calculated from the
date of the Company's announcement of the transfer of the last underlying shares to the plan. For details please refer to the
Announcement on the Implementation Progress of the Fourth Employee Stock Ownership Plan and Completion of Stock Purchase
(2023-060) published by the Company on designated information disclosure media and http://www.cninfo.com.cn.
3. Progress of the controlling shareholder in increasing the company's shares
Based on the confidence of the company's future sustainable and stable development and the recognition of the company's value to
enhance investor confidence the company's controlling shareholder NHU Holding Group Co. Ltd. plans to increase its shares of the
Company in the next six months from October 26 2023 through the means permitted by the trading system of Shenzhen Stock
Exchange (including but not limited to centralized bidding block trading etc.). The amount of shares to be increased shall not be less
than RMB 200 million and shall not exceed RMB 300 million. There is no price range for this plan and the plan will be gradually
implemented according to the volatility of the company's stock price and the overall trend of the capital market. As of the end of the
682023 Annual Report of Zhejiang NHU Co. Ltd.
reporting period NHU Holding Company has accumulated 15046826 shares of the Company accounting for 0.4868% of the total
share capital of the Company and accumulated additional holdings of 250325523.96 yuan (excluding transaction fees).
4. Progress of investment projects with raised funds
With the approval of [2017] No. 1684 document of China Securities Regulatory Commission the company's lead underwriter 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 4900 million. After deducting the underwriting and recommendation fees of RMB 30 million yuan (including
tax) the raised funds amounted to RMB 4870 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 raised was
RMB 4867.08 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 to December 2023 the actual use of the raised funds was RMB 1340.60 mn and the accumulated investment of the
raised funds project was RMB 5118.80 mn. As of December 31 2023 The balance of raised funds is RMB 498.27 mn (including
financial management and structured deposits the net amount of accumulated bank deposit interest less bank fees etc. and bank
financial management income).
5 the company's board of directors the board of supervisors to complete the election and appointment of
senior management securities affairs representatives and internal audit head
The Company held the second extraordinary general meeting of 2023 on September 19 2023 and elected non-independent directors
Hu Baifan Hu Ba-shan Shi Guanqun Wang Xuowen Wang Zhengjiang Zhou Guiyang and Yu Hongwei and elected independent
directors Ji Jianyang Shen Yuping Wan Feng and Wang Yang to form the ninth Board of Directors of the Company. Elected non-
employee representative supervisors Lv Guofeng Zhao Jia Wang Xiaobi and employee representative supervisors Yan Hongyue and
Li Huafeng elected by the company's employee congress to form the ninth Board of Supervisors of the company. On the same day the
company held the first meeting of the ninth Board of Directors elected Hu Baifan as chairman Hu Bai-shan as vice chairman and
elected members of the ninth Board of Directors of the special committee appointed Hu Bai-Shan as president of the company Shi
Guanqun as secretary of the board Zeng Shuying as representative of securities affairs Shi Guanqun Wang Xuowen and Zhang Liying
were appointed as vice presidents of the company Shi Guanqun as Chief financial officer of the company and Chen Boxiang as head
of internal audit of the company; On the same day the company held the first meeting of the ninth Board of Supervisors and e lected
Lv Guofeng as the chairman of the Board of Supervisors. For details please refer to the Announcement on the Completion of the
Election of the Board of Directors and the Board of Supervisors and the Appointment of Senior Management Personnel Securitie s
Affairs Representative and Head of Internal Audit (2023-059) published by the Company on designated information disclosure media
and http://www.cninfo.com.cn.XVII. Significant events of subsidiaries of the Company
□ Applicable √ Not Applicable
692023 Annual Report of Zhejiang NHU Co. Ltd.
Section VII Movements in Shares and Conditions of Shareholders
I. Movements in shares
1. Details
Unit: Share
Before Movements After
Items Issue of Reserve
Quantity % to Bonus new transferred to Others Subtotal Quantity % to total
total shares
shares shares
I. Restricted shares 36374202 1.18% 35550 35550 36409752 1.18%
1. Held by other
363742021.18%3555035550364097521.18%
domestic parties
Including: Held by
363742021.18%3555035550364097521.18%
domestic natural persons
II. Unrestricted shares
305453315498.82%-35550-35550305449760498.82%
1. RMB ordinary shares
305453315498.82%-35550-35550305449760498.82%
III. Total
3090907356100.00%003090907356100.00%
Reason for movements
√ Applicable □ Not Applicable
On September 19 2023 the Company held the second extraordinary General meeting of 2023 the first meeting of the ninth Board
of Supervisors and the first meeting of the ninth Board of Directors in the company's conference room to review and
approve the relevant motions on the election of the Board of Directors and the Board of Supervisors and the appointment of senior
managers securities affairs representatives and internal audit leaders. Ms. Zhang Liying was elected as the vice President of the
company her original 47400 shares were locked up at 75% ratio and 35550 new restricted shares were added.Approval on movements in shares
□ Applicable √ Not Applicable
Transfer of shares
□ Applicable √ Not Applicable
Effect of movements in shares on financial indicators of preceding year and preceding period such as basic EPS and diluted EP S net
assets per share attributable to shareholders of ordinary shares
□ Applicable √Not Applicable
Other contents the Company considered as necessary or securities regulatory institutions required disclosure
□ Applicable √ Not applicable
2. Movement in restricted shares
√ Applicable □ Not applicable
Unit: Share
Number of
Number of Number of Number of
restricted shares
restricted shares restricted shares restricted shares Reason for
Shareholders unlocked during Date of unlocking
at the beginning increased during at the end of the restriction
the current
of the period the current period period
period
75% of total shares
Locked up for the
Zhang Liying 0 35550 35550 held by the executive shares are held by
are locked up on an
the executive
annual basis.Total 0 35550 0 35550 -- --
702023 Annual Report of Zhejiang NHU Co. Ltd.
II. Issuance and listing of securities
1. Issuance of securities (preferred shares excluded) within the reporting period
□ Applicable √ Not Applicable
2. Movements in total shares of the Company and structure of shareholders movements in structure of assets
and liabilities of the Company
□ Applicable √ Not Applicable
3. Existing shares held by internal employees
□ Applicable √ Not Applicable
III. Shareholders and actual controllers
1. Number of shareholders of the Company and their shareholding conditions
Unit: Share
Total number of
Total number of
preferred shareholders
ordinary shareholders Total number of
Total number of whose voting rights
at the end of the preferred shareholders
ordinary shareholders were restored at the end
107247 previous month prior 98469 whose voting rights 0 0
at the end of the of the previous month
to the date of were restored at the end
reporting period prior to the date of
disclosure of the of the reporting period
disclosure of the annual
annual report
report
Shareholders with holding proportion over 5% or the top 10 shareholders with largest holding proportions
Quantity of Shares pledged
ordinary Movements marked or frozen
Nature of Quantity of Quantity of
Holding shares at the during the
Shareholders shareholde restricted unrestricted
proportion end of the reporting Qua
rs shares shares Condition
reporting period ntity
period
Domestic
non-state-
NHU Holding Group
owned 49.71% 1536409351 15046826 0 1536409351 N/A
Co. Ltd.legal
person
Hong Kong Securities Overseas
Clearing Company legal 3.22% 99482997 32346205 0 99482997 N/A
Limited person
Shanghai Chongyang
Strategic Investment
Co. Ltd.－ Others 1.75% 54072200 0 0 54072200 N/A
Chongyang Strategic
Huizhi Fund
National Social
Security Fund No.503 Others 1.33% 41000100 2000040 0 41000100 N/A
Portfolio
The Company－
Employee stock
Others 0.96% 29528181 2952818 0 29528181 N/A
ownership plan phase
IV
China Construction
Bank Corporation - E
Fund Shanghai and
Shenzhen 300 Others 0.74% 22999677 6879544 0 22999677 N/A
Medical and Health
Trading Open-end
Index Fund
712023 Annual Report of Zhejiang NHU Co. Ltd.
National Social
Security Fund No.117 Others 0.58% 18019748 9799838 0 18019748 N/A
Portfolio
China Life Insurance
Company Limited-
Traditional-General Others 0.53% 16516386 3251002 0 16516386 N/A
Insurance Products-
005L-ShanghaiCT001
Shanghai Chongyang
Strategic Investment
Co. Ltd. － Others 0.53% 16248559 0 0 16248559 N/A
Chongyang Strategic
Yingzhi Fund
Domestic
Hu Baishan natural 0.47% 14595929 0 10946947 14595929 N/A
person
Strategic investors or ordinary legal persons that Shanghai Chongyang Strategic Investment Co. Ltd. － Chongyang Strategic Huizhi
became one of the top 10 shareholders due to the Fund became one of the top 10 shareholders with largest holding proportions due to its
allotment of new shares participation in private placement of shares in 2017.Among the above shareholders Hu Baishan is the director of NHU Holding Group Co.Ltd. Due to participating in Employee stock ownership plan phase IV Hu Baishan
Remarks on relationships or concerted action
formed an association relationship with The Company－Employee stock ownership plan
between the top 10 shareholders with largest
phase IV. The Company does not know whether other shareholders have relationships
holding proportions
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 None
right of 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
repurchase accounts shareholders 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 Category of shares
Shareholders
the reporting period Category Quantity
NHU Holding Group Co. Ltd. 1536409351 RMB ordinary shares 1536409351
Hong Kong Securities Clearing Company Limited 99482997 RMB ordinary shares 99482997
Shanghai Chongyang Strategic Investment Co.
54072200 RMB ordinary shares 54072200
Ltd. － Chongyang Strategic Huizhi Fund
National Social Security Fund No.503 Portfolio 41000100 RMB ordinary shares 41000100
The Company－Employee stock ownership plan
29528181 RMB ordinary shares 29528181
phase IV
China Construction Bank Corporation - E Fund
Shanghai and Shenzhen 300 Medical and Health 22999677 RMB ordinary shares 22999677
Trading Open-end Index Fund
National Social Security Fund No.117 Portfolio 18019748 RMB ordinary shares 18019748
China Life Insurance Company Limited-
Traditional-General Insurance Products-005L- 16516386 RMB ordinary shares 16516386
ShanghaiCT001
Shanghai Chongyang Strategic Investment Co.
16248559 RMB ordinary shares 16248559
Ltd. － Chongyang Strategic Yingzhi Fund
Chongyang Group Co. Ltd. 13962191 RMB ordinary shares 13962191
Among the above shareholders Hu Baishan is the director of NHU Holding Group Co.Remarks on relationships or concerted action
Ltd. Due to participating in Employee stock ownership plan phase IV Hu Baishan
between the top 10 shareholders with unrestricted
formed an association relationship with The Company－Employee stock ownership plan
shares and between the top 10 shareholders with
phase IV. The Company does not know whether other shareholders have relationships
unrestricted shares and top 10 shareholders with
and whether they are persons acting in concert as defined in Administration of the
largest holding proportions.Takeover of Listed Companies Procedures.Shanghai Chongyang Strategic Investment Co. Ltd. － Chongyang Strategic Huizhi
Fund holds 54072127 shares through client account of collateral securities for margin
trading of Guotai Junan Securities Co. Ltd.; Shanghai Chongyang Strategic Investment
Remarks on top 10 shareholders of ordinary shares
Co. Ltd. － Chongyang Strategic Yingzhi Fund holds 16248461 shares through client
participating in securities margin trading
account of collateral securities for margin trading of CITIC Securities Co. Ltd.;
Chongyang Group Co. Ltd. holds 13961946 shares through client account of collateral
securities for margin trading of China Merchants Securities Co. Ltd.
722023 Annual Report of Zhejiang NHU Co. Ltd.
The lending of shares by the top 10 shareholders in the refinancing business
√Applicable □ Not applicable
Unit: Share
The status of the top ten shareholders' participation in securities lending and borrowing transactions
Shares borrowed for
Holdings in ordinary Shares borrowed for
securities lending at the Holdings in ordinary
account and credit securities lending at the
beginning of the period account and credit account
account at the beginning end of the period and have
Shareholder name and have not yet been at the end of the period
of the period not yet been returned
(full name) returned
Ratio to Ratio to Ratio to Ratio to
Total Total Total Total
total share total share total share total share
quantity quantity quantity quantity
capital capital capital capital
China Construction
Bank Corporation -
E Fund Shanghai
and Shenzhen 300 16120133 0.52% 206500 0.01% 22999677 0.74% 252800 0.01%
Medical and Health
Trading Open-end
Index Fund
Changes in the top 10 shareholders compared with the previous period
√Applicable □ Not applicable
Unit: Share
Changes in the top 10 shareholders compared with the end of the previous period
Number of shares held in shareholders'
Entrant Number of shares lent through
general accounts and credit accounts and
/Exit refinancing and not yet returned at
Shareholder name shares lent through refinancing and not yet
during the the end of the period
(full name) returned at the end of the period
reporting
Total Ratio to total Ratio to total share
period Total quantity
quantity share capital capital
The Company－Employee
Entrant 0 0.00% 29528181 0.96%
stock ownership plan phase IV
National Social Security Fund
Entrant 0 0.00% 18019748 0.58%
No.117 Portfolio
China Life Insurance Company
Limited-Traditional-General
Entrant 0 0.00% 16516386 0.53%
Insurance Products-005L-
ShanghaiCT001
Kuwait Investment Authority Exit 0 0.00% 1035565 0.03%
National Social Security Fund
Exit 0 0.00% 11888657 0.38%
No.112 Portfolio
Chongyang Group Co. Ltd. Exit 0 0.00% 13962191 0.45%
Whether the Company's top 10 ordinary shareholders and the top 10 ordinary shareholders without selling restrictions conducted
agreed repurchase transactions during the reporting period
□Applicable √Not applicable
The the Company's top 10 ordinary shareholders and the top 10 ordinary shareholders without selling restrictions did not engage in
any agreed repurchase transactions during the reporting period.
2. Controlling shareholders
Nature of shareholders: Natural person holding
Category of shareholders: Legal person
732023 Annual Report of Zhejiang NHU Co. Ltd.
Holding shareholders Legal representative/ Date of establishment Unified social credit Main business scope
Head of the entity code
Industrial investments
goods import and export;
NHU Holding Group Co. production and sales of
Hu Baifan 2/14/1989 91330624146424869T chemical products
Ltd.pharmaceutical
intermediates chemical
materials
Equity conditions of other
domestic and overseas listed
NHU Holding Group Co. Ltd. directly holds 36.73% of the shares of Beijing Fuyuan
companies that the holding
shareholders control or Pharmaceutical Co. Ltd.participate in during the
reporting period
Changes of holding shareholders during the reporting period
□ Applicable √ Not applicable
The Company has no changes of holding shareholders during the reporting period.
3. Actual controllers and persons acting in concert
Nature of actual controller: Domestic natural persons
Category of actual controller: Natural persons
Actual controller Relationship with the Nationality Whether has permanent residence in other
actual controller countries or regions
Hu Baifan Self China No
Person acting in
concert (including the
Hu Baishan following forms: China No
agreement relatives
common control)
Mr. Hu Baifan Chairman of the Board is a Chinese born in 1962 who has no permanent
residence in foreign countries or regions. He has a master’s degree in Business
Administration of Zhejiang University and he is Senior Economist Member of the
Communist Party of China. He also serves as the Chairman of NHU Holding Group Co. Ltd.and its holding subsidiary Shaoxing Yuexiu Education Development Co. Ltd. and Director
Main occupation and position of NHU Real Estate Holding Co. Ltd.Mr. Hu Baishan Vice Chairman and President is a Chinese born in 1967 who has no
permanent residence in foreign countries or regions. He has a master’s degree in EMBA
program of Zhejiang University and he is Senior Engineer Member of the Communist Party
of China. He also serves as the Director of NHU Holding Group Co. Ltd. and Shaoxing
Yuexiu Education Development Co. Ltd.Domestic and oversea listed
Beijing Foyou Pharma Co. Ltd. actually controlled by Hu Baifan was listed on the main
companies once been under their
board of Shanghai Stock Exchange in 2022.control within a decade
Changes of actual controller within the reporting period
□ Applicable √ Not applicable
The Company has no changes in actual controller within the reporting period.Block diagram of title and control relationships between the Company and the actual controller
742023 Annual Report of Zhejiang NHU Co. Ltd.
Whether the actual controller controls the Company through trust or other asset management methods
□ Applicable √ Not applicable
4. Whether the quantity of accumulated pledged shares of the Company held by the controlling shareholders
or the largest shareholder and his person acting in concert accounts for over 80% of total shares of the
Company held by them
□ Applicable √ Not applicable
5. Other legal person shareholders with holding proportion over 10%
□ Applicable √ Not applicable
6. Decrease in holding proportion of restricted shares of controlling shareholders actual controllers
reorganizing parties and other undertaking entities
√ Applicable □Not applicable
On August 24 2023 the Company published the "Announcement on the Commitment of the Controlling Shareholders Actual
Controllers and Directors of the Company Not to Reduce Their Shares of the Company" (2023-037) on designated information
disclosure media and http://www.cninfo.com.cn. NHU Holding Group Co. LTD. the controlling shareholder Mr. Hu Baifan the actual
752023 Annual Report of Zhejiang NHU Co. Ltd.
controller Mr. Hu Baishan the acting party and other directors and senior management personnel holding shares of the Company (Mr.Shi Guanqun Mr. Wang Xuowen Mr. Wang Zhengjiang and Mr. Zhou Guiyang) declare not to reduce their holdings of the Company' s
shares within six months from the date of signing the commitment letter. It includes the new shares arising from the conversion of
capital reserves distribution of stock dividends rights issues additional issues and other matters during the commitment period.The Company published the "Announcement on Controlling Shareholders' Plan to Increase the Company's Shares" (2023-064) on
designated information disclosure media and http://www.cninfo.com.cn on October 27 2023 the controlling shareholder NHU Holding
Group Co. Ltd. plans to increase its shares of the company in the next 6 months through the means permitted by the trading system of
the Shenzhen Stock Exchange (including but not limited to centralized bidding block trading etc.). The amount of shares to be
increased is not less than 200 million yuan and not more than 300 million yuan and there is no price range for this increase plan. New
Harmony Holdings Group Limited undertakes not to reduce its shares during the period of increase and the statutory period.IV. Actual implementation of share repurchase during the reporting period
Actual progress of share repurchase
□Applicable √ Not applicable
Implementation progress of shareholding reduction for shares repurchased through centralized bidding
□ Applicable √ Not applicable
762023 Annual Report of Zhejiang NHU Co. Ltd.
Section VIII Preferred Shares
□ Applicable √ Not applicable
The Company has no preferred shares during the reporting period.
772023 Annual Report of Zhejiang NHU Co. Ltd.
Section IX Bonds
□ Applicable √ Not applicable
782023 Annual Report of Zhejiang NHU Co. Ltd.
Section X Financial Report
I. Auditor’s Report
Audit Opinion Standard unqualified opinion
Date of Auditor’s Report April 19 2024
Accounting Firm Pan-China Certified Public Accountants LLP
Number of Auditor’s Report PCCPAAR [2024] No. 2809
Signatory Certified Public Accountants Teng Peibin Jan Yanhui
Auditor’s Report
To the Shareholders of Zhejiang NHU Co. Ltd.:
I. Audit Opinion
We have audited the accompanying financial statements of Zhejiang NHU Co. Ltd. (the “Company”) which comprise the consolida ted
and parent company balance sheets as at December 31 2023 the consolidated and parent company income statements the consolidated
and parent company cash flow statements and the consolidated and parent company statements of changes in equity for the year then
ended as well as notes to financial statements.In our opinion the attached financial statements present fairly in all material respects the financial position of the Company as at
December 31 2023 and of its financial performance and its cash flows for the year then ended in accordance with China Accounting
Standards for Business Enterprises.II. Basis for Audit Opinion
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those standards are further
described in the Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the China Code of Ethics for Certified Public Accountants and we have fulfilled other
ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.III. Key Audit Matters
Key audit matters are those matters that in our professional judgment were of most significance in our audit of the financial statements
of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming
our opinion thereon and we do not express a separate opinion on these matters.(I) Revenue recognition
1. Key audit matters
Please refer to item V 23、VII 40 and XVII.1of this section for details.The Company is mainly engaged in manufacturing and sales of nutrition flavor and fragrance new polymer materials etc. In 2023
the operating revenue amounted to 15.12 billion yuan.
792023 Annual Report of Zhejiang NHU Co. Ltd.
As operating revenue is one of the key performance indicators of the Company there might be inherent risks that the Company’s
management (the “Management”) adopts inappropriate revenue recognition to achieve specific goals or expectations we have
identified revenue recognition as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for revenue recognition are as follows:
(1) We obtained understandings of key internal controls related to revenue recognition assessed the design of these controls determined
whether they had been executed and tested the effectiveness of the operation;
(2) We checked sale contracts obtained understandings of main contractual terms or conditions and assessed whether the revenue
recognition method was appropriate;
(3) We performed analysis procedure on operating revenue and gross margin by month product client etc. so as to identify whether
there are significant or abnormal fluctuations and find out the reason of fluctuations;
(4) For revenue from domestic sales we checked supporting documents related to revenue recognition by sampling method including
sales contracts sales invoices delivery lists shipping documents client acceptance receipts etc.; for revenue from overseas sales we
obtained information from Electron Port and checked it with accounting records and checked supporting documents including sales
contracts bills of clearance waybills sales invoices etc. by sampling method;
(5) We performed confirmation procedures on current sales amount by sampling method in combination with confirmation procedure
of accounts receivable;
(6) We performed cut-off tests on the operating revenue recognized around the balance sheet date and assessed whether the operating
revenue was recognized in the appropriate period;
(7) We obtained the sales return records after the balance sheet date and checked whether there was any situation that meet the revenue
recognition conditions on the balance sheet date
(8) We checked whether information related to operating revenue had been presented appropriately in the financial statements.
(II) Existence and integrity of cash and bank balances
1. Key audit matters
Please refer to item V 1 of this section for details.At the balance sheet date the Company’s cash and bank balances amounted to4543.36 million yuan which is one of the main assets
of the Company. As the amount of cash and bank balances is significant the existence and integrity of cash and bank balances have
significant influence on financial statements we have identified existence and integrity of cash and bank balances as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for existence and integrity of cash and bank balances are as follows:
(1) We obtained understandings of key internal controls related to management of cash and bank balances assessed the design of these
controls determined whether they had been executed and tested the effectiveness of the operation;
(2) We checked integrity of bank accounts in combination with detail tests based on “List of Opened Bank Settlement Accounts”
obtained;
(3) We obtained and checked bank statements and bank reconciliation statements and performed confirmation procedures on balance
of bank accounts;
802023 Annual Report of Zhejiang NHU Co. Ltd.
(4) We checked bank statements and bank journals performed bidirectional tests on bank statements of significant accounts and
checked the transactions with large amounts;
(5) We checked the original documents of time deposit and checked whether cash and bank balances have been pledged in combination
with enterprise credit reports;
(6) We reviewed interest income and checked whether interest income was consistent with the amount of cash and bank balances; and
(7) We checked whether information related to cash and bank balances had been presented appropriately in the financial statements.
(III) Recognition and measurement of fixed assets and construction in progress
1. Key audit matters
Please refer to item V 15、16 and VII 12、 13 of this section for details.As of December 31 2023 the Company’s carrying amount of fixed assets and construction in progress totals 23481.97 million yuan
which is one of the major assets of the Company.Recognition and measurement of fixed assets and construction in progress involves significant judgement of the Management including
the determination of capitalization criteria for expenditures time point of construction in progress transferred to fixed assets and the
beginning of depreciation estimation on economic useful lives and residual value of fixed assets etc
As the amount of carrying amount of fixed assets and construction in progress is significant and reasonableness of judgement
mentioned above has significant influence on financial statements we have identified recognition and measurement of fixed assets and
construction in progress as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for recognition and measurement of fixed assets and construction in progress are as follows:
(1) We obtained understandings of key internal controls related to fixed assets and construction in progress assessed the design of
these controls determined whether they had been executed and tested the effectiveness of the operation;
(2) We checked the accuracy of capitalization amount in combination with the audit of bank borrowings;
(3) We checked acceptance reports related to construction projects or project progress reports payment documents of construction
schedule payments etc. by sampling method and decided whether the time point of construction in progress transferred to fixed assets
was reasonable;
(4) We checked information such as acceptance reports or project progress reports related to important construction projects and
payment vouchers for construction progress to determine whether the point in time when construction in progress is transferred to fixed
assets is reasonable;
(5) We checked purchase invoices insurance policy of sales contracts delivery lists etc. of fixed assets such as outsourcing machinery
and reviewed the accuracy of their costs;
(6) We obtained supporting documents related to construction in progress increased in the current period including project application
construction loan contracts construction contracts invoices purchase application for construction materials payment bills
manufacturing agreements etc. and checked whether their costs and accounting treatment were correct;
(7) We assessed the reasonableness of economic useful lives and residual value of fixed assets estimated by the Management in
combination with conditions of the industry;
812023 Annual Report of Zhejiang NHU Co. Ltd.
(8) We checked whether information related to fixed assets and construction in progress had been presented appropriately in the
financial statements.IV. Other Information
The Management is responsible for the other information. The other information comprises the information included in the Company’s
annual report but does not include the financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion
thereon.In connection with our audit of the financial statements our responsibility is to read the other information and in doing so consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatement of the other information we are required
to report that fact. We have nothing to report in this regard
V. Responsibilities of the Management and Those Charged with Governance for the Financial Statements
The Management is responsible for preparing and presenting fairly the financial statements in accordance with China Accounting
Standards for Business Enterprises as well as designing implementing and maintaining internal control relevant to the preparation of
financial statements that are free from material misstatement whether due to fraud or error.In preparing the financial statements the Management is responsible for assessing the Company’s ability to continue as a going concern
disclosing as applicable matters related to going concern and using the going concern basis of accounting unless the Management
either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting process.VI. Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material missta tement
whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with China Standards on Auditing will always detect a material
misstatement when it exists. Misstatement can arise from fraud or error and are considered material if individua lly or in the aggregate
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.We exercise professional judgment and maintain professional skepticism throughout the audit performed in accordance with China
Standards on Auditing. We also:
(I) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform
audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve
collusion forgery intentional omissions misrepresentations or the override of internal control.(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the Management.(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and based on the audit
evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
822023 Annual Report of Zhejiang NHU Co. Ltd.
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention
in our auditor’s report to the related disclosures in the financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However future events or conditions
may cause the Company to cease to continue as a going concern.(V) Evaluate the overall presentation structure and content of the financial statements and whether the financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within
the Company to express an opinion on the financial statements. We are responsible for the direction supervision and performance of
the group audit. We remain sole responsibility for our audit opinion.We communicate with those charged with governance regarding the planned audit scope time schedule and significant audit findings
including any deficiencies in internal control of concern that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence and where applicable related safeguards.From the matters communicated with those charged with governance we determine those matters that were of most significance in the
audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we determine
that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.II. Financial statements
The monetary unit of the financial statements is Renminbi (RMB) Yuan.
1. Consolidated balance sheet
Prepared by Zhejiang NHU Co. Ltd.December 31 2023
Unit: RMB Yuan
Items December 31 2023 January 1 2023
Current assets:
Cash and bank balances 4543361146.98 5343851967.72
Settlement funds
Loans to other banks
Held-for-trading financial assets 173056050.95 720314576.43
Derivative financial assets
Notes receivable 116125267.70 372641835.79
Accounts receivable 2483266952.88 2476269041.23
Receivables financing 331634090.61 379217582.25
Advances paid 209274602.05 222336776.26
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 142060705.67 269567592.73
832023 Annual Report of Zhejiang NHU Co. Ltd.
Items December 31 2023 January 1 2023
Including: Interest receivable
Dividend receivable 20735987.73
Financial assets under reverse repo
Inventories 4318878875.34 4144557702.39
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 68232745.03 182442976.79
Total current assets 12385890437.21 14111200051.59
Non-current assets:
Loans and advances
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 697145200.08 432503568.48
Other equity instrument investments 22998147.55 22998147.55
Other non-current financial assets
Investment property
Fixed assets 21860082637.13 16523867858.53
Construction in progress 1621882507.56 5089233908.22
Productive biological assets
Oil & gas assets
Right-of-use assets 6603631.56 2830136.37
Intangible assets 2407560753.82 1738506246.32
Development expenditures
Goodwill 3622704.97 3622704.97
Long-term prepayments 11697961.72 13179878.45
Deferred tax assets 650079.18 49832030.34
Other non-current assets 138112803.89 279870482.64
Total non-current assets 26770356427.46 24156444961.87
Total assets 39156246864.67 38267645013.46
Current liabilities:
Short-term borrowings 1235688062.90 1846373441.01
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 349347472.36 627438689.79
Accounts payable 1930958598.05 2175458436.49
Advances received
Contract liabilities 251008240.97 60660929.75
Financial liabilities under repo
842023 Annual Report of Zhejiang NHU Co. Ltd.
Items December 31 2023 January 1 2023
Absorbing deposit and interbank
deposit
Deposit for agency security
transaction
Deposit for agency security
underwriting
Employee benefits payable 418273203.88 386391911.86
Taxes and rates payable 301794080.40 208198951.94
Other payables 53671773.90 67351740.34
Including: Interest payable
Dividend payable
Handling fee and commission
payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one
1564392458.672591687706.22
year
Other current liabilities 17260124.76 4978299.99
Total current liabilities 6122394015.89 7968540107.39
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 6821643194.58 5273637508.87
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 5240136.43 2822404.07
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 1065586274.49 1083159222.41
Deferred tax liabilities 221675090.41 277316677.63
Other non-current liabilities
Total non-current liabilities 8114144695.91 6636935812.98
Total liabilities 14236538711.80 14605475920.37
Equity:
Share capital 3090907356.00 3090907356.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 3613345485.13 3613097510.81
Less: Treasury shares 500059711.25 500059711.25
Other comprehensive income 103920732.85 76577564.17
Special reserve 60860818.76 26196894.55
Surplus reserve 1545453678.00 1444414900.05
General risk reserve
Undistributed profit 16890233961.50 15823744811.91
852023 Annual Report of Zhejiang NHU Co. Ltd.
Items December 31 2023 January 1 2023
Total equity attributable to the parent
24804662320.9923574879326.24
company
Non-controlling interest 115045831.88 87289766.85
Total equity 24919708152.87 23662169093.09
Total liabilities & equity 39156246864.67 38267645013.46
Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Zhang Lijin
2. Parent company balance sheet
Unit: RMB Yuan
Items December 31 2023 January 1 2023
Current assets:
Cash and bank balances 2944073209.24 4202458431.01
Held-for-trading financial assets 200000000.00
Derivative financial assets
Notes receivable 116657645.60 333989841.29
Accounts receivable 626644050.39 500589449.94
Receivables financing
Advances paid 4143777.83 3906244.57
Other receivables 2908050463.81 2496112121.85
Including: Interest receivable
Dividend receivable 20735987.73
Inventories 295102427.23 383861555.41
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 1925459.39 3980654.70
Total current assets 6896597033.49 8124898298.77
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 10678236147.42 9386046175.45
Other equity instrument investments 72998147.55 72998147.55
Other non-current financial assets
Investment property
Fixed assets 612700666.98 625625323.34
Construction in progress 71331975.01 2701423.73
Productive biological assets
Oil & gas assets
Right-of-use assets 2630791.48 2791860.28
Intangible assets 145613180.34 144448440.79
Development expenditures
Goodwill
862023 Annual Report of Zhejiang NHU Co. Ltd.
Items December 31 2023 January 1 2023
Long-term prepayments 1165411.93 2614317.07
Deferred tax assets 10794527.34 26157812.32
Other non-current assets 29165952.28 21018962.32
Total non-current assets 11624636800.33 10284402462.85
Total assets 18521233833.82 18409300761.62
Current liabilities:
Short-term borrowings 496760409.72 501525361.11
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 109519196.45 226011556.24
Accounts payable 115590089.62 107476196.13
Advances received
Contract liabilities 3836737.57 4296388.78
Employee benefits payable 74330678.60 75342683.87
Taxes and rates payable 13608334.34 7632017.61
Other payables 16876789.87 28936115.08
Including: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due within one
687277786.061208306034.83
year
Other current liabilities 494804.24 558530.54
Total current liabilities 1518294826.47 2160084884.19
Non-current liabilities:
Long-term borrowings 4350488292.95 3336304155.58
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 2715619.54 2822404.07
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 11067751.34 11887665.38
Deferred tax liabilities 19080454.36
Other non-current liabilities
Total non-current liabilities 4364271663.83 3370094679.39
Total liabilities 5882566490.30 5530179563.58
Equity:
Share capital 3090907356.00 3090907356.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 3353675803.74 3353427829.42
Less: Treasury shares 500059711.25 500059711.25
872023 Annual Report of Zhejiang NHU Co. Ltd.
Items December 31 2023 January 1 2023
Other comprehensive income 506954.43 506954.43
Special reserve 10583344.97
Surplus reserve 1545453678.00 1444414900.05
Undistributed profit 5137599917.63 5489923869.39
Total equity 12638667343.52 12879121198.04
Total liabilities & equity 18521233833.82 18409300761.62
Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Zhang Lijin
3. Consolidated income statement
Unit: RMB Yuan
Items Year 2023 Year 2022
I. Total operating revenue 15116537003.30 15933984403.41
Including: Operating revenue 15116537003.30 15933984403.41
Interest income
Premiums earned
Revenue from handling
charges and commission
II. Total operating cost 11960861457.05 11705488745.99
Including: Operating cost 10131490375.45 10048300866.94
Interest expenses
Handling charges and
commission expenditures
Surrender value
Net payment of insurance
claims
Net provision of insurance
policy reserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges 166729987.78 126908344.63
Selling expenses 158316813.86 122257619.47
Administrative expenses 551072291.99 504674730.69
R&D expenses 887801475.02 858945406.13
Financial expenses 65450512.95 44401778.13
Including: Interest expenses 319906196.30 329243757.49
Interest income 133145750.15 153449422.80
Add: Other income 202088522.53 176863614.19
Investment income (or less:
83054284.94128695043.73
losses)
Including: Investment
income from associates and joint 44130854.54 95616385.10
ventures
Gains from derecognition of
financial assets at amortized cost
Gains on foreign exchange (or
less: losses)
882023 Annual Report of Zhejiang NHU Co. Ltd.
Items Year 2023 Year 2022
Gains on net exposure to hedging
risk (or less: losses)
Gains on changes in fair value (or
29932484.98-66321783.72
less: losses)
Credit impairment loss 3551588.16 5165584.15
Assets impairment loss -230600448.22 -162974265.12
Gains on asset disposal (or less:
16404163.692726604.77
losses)
III. Operating profit (or less: losses) 3260106142.33 4312650455.42
Add: Non-operating revenue 7931135.56 4985224.34
Less: Non-operating expenditures 14502738.61 79532730.91
IV. Profit before tax (or less: total loss) 3253534539.28 4238102948.85
Less: Income tax 528125637.05 599825874.05
V. Net profit (or less: net loss) 2725408902.23 3638277074.80
(I) Categorized by the continuity of
operations
1. Net profit from continuing
2725408902.233638277074.80
operations (or less: net loss)
2. Net profit from discontinued
operations (or less: net loss)
(II) Categorized by the portion of
equity ownership
1. Net profit attributable to owners
2704238767.543620280626.51
of parent company
2. Net profit attributable to non-
21170134.6917996448.29
controlling shareholders
VI. Other comprehensive income after
33929099.0181425359.82
tax
Items attributable to the owners of the
27343168.6878191736.48
parent company
(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
27343168.6878191736.48
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 27343168.68 78191736.48
892023 Annual Report of Zhejiang NHU Co. Ltd.
Items Year 2023 Year 2022
7. Others
Items attributable to non-controlling
6585930.333233623.34
shareholders
VII. Total comprehensive income 2759338001.24 3719702434.62
Items attributable to the owners of the
2731581936.223698472362.99
parent company
Items attributable to non-controlling
27756065.0221230071.63
shareholders
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.87 1.17
(II) Diluted EPS (yuan per share) 0.87 1.17
Net profit realized by the combined party in business combination under common control before the business combination in the
current period was 0.00 yuan and net profit realized by the combined party in the previous period was 0.00 yuan.Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Zang Lijin
4. Parent company income statement
Unit: RMB Yuan
Items Year 2023 Year 2022
I. Operating revenue 2800974043.80 3476379206.00
Less: Operating cost 2516550050.27 2829191552.87
Taxes and surcharges 17900647.81 19574413.26
Selling expenses 36688214.04 28148629.89
Administrative expenses 168615260.60 161807269.66
R&D expenses 249169737.63 237369336.57
Financial expenses 74811854.41 45759173.30
Including: Interest expenses 168273675.71 181258625.13
Interest income 95067720.22 135572386.45
Add: Other income 34542333.84 37002472.86
Investment income (or less: losses) 1549382083.45 1358265851.90
Including: Investment income from
24434009.9247283121.54
associates and joint ventures
Gains from derecognition of
financial assets at amortized cost
Gains on net exposure to hedging risk
(or less: losses)
Gains on changes in fair value (or
less: losses)
Credit impairment loss -33430454.86 44605400.03
Assets impairment loss -22771080.59 -17315989.84
Gains on asset disposal (or less:
14085495.86-1077495.83
losses)
II. Operating profit (or less: losses) 1279046656.74 1576009069.57
Add: Non-operating revenue 2729472.22 88499.41
Less: Non-operating expenditures 735574.35 972209.42
III. Profit before tax (or less: total loss) 1281040554.61 1575125359.56
Less: Income tax -4385111.58 22950159.11
902023 Annual Report of Zhejiang NHU Co. Ltd.
Items Year 2023 Year 2022
IV. Net profit (or less: net loss) 1285425666.19 1552175200.45
(I) Net profit from continuing operations
1285425666.191552175200.45
(or less: net loss)
(II) Net profit from discontinued operations
(or less: net loss)
V. Other comprehensive income after tax
(I) Not to be reclassified subsequently to
profit or loss
1. Changes in remeasurement on the
net defined benefit plan
2. Items under equity method that will
not be reclassified to profit or loss
3. Changes in fair value of other
equity instrument investments
4. Changes in fair value of own credit
risk
5. Others
(II) To be reclassified subsequently to
profit or loss
1. Items under equity method that may
be reclassified to profit or loss
2. Changes in fair value of other debt
investments
3. Profit or loss from reclassification
of financial assets into other comprehensive
income
4. Provision for credit impairment of
other debt investments
5. Cash flow hedging reserve
6. Translation reserve
7. Others
VI. Total comprehensive income 1285425666.19 1552175200.45
VII. Earnings per share (EPS):
(I) Basic EPS (yuan per share)
(II) Diluted EPS (yuan per share)
5. Consolidated cash flow statement
Unit: RMB Yuan
Items Year 2023 Year 2022
I. Cash flows from operating activities:
Cash receipts from sale of goods or
15114302982.0515306568290.22
rendering of services
Net increase of client deposit and interbank
deposit
Net increase of central bank loans
Net increase of loans from other financial
institutions
Cash receipts from original insurance
contract premium
Net cash receipts from reinsurance
Net increase of policy-holder deposit and
investment
Cash receipts from interest handling
912023 Annual Report of Zhejiang NHU Co. Ltd.
charges and commission
Net increase of loans from others
Net increase of repurchase
Net cash receipts from agency security
transaction
Receipts of tax refund 809452548.86 1027184301.30
Other cash receipts related to operating
340383499.80378248822.12
activities
Subtotal of cash inflows from operating
16264139030.7116712001413.64
activities
Cash payments for goods purchased and
8199010919.399323961398.08
services received
Net increase of loans and advances to
clients
Net increase of central bank deposit and
interbank deposit
Cash payments for insurance indemnities
of original insurance contracts
Net increase of loans to others
Cash payments for interest handling
charges and commission
Cash payments for policy bonus
Cash paid to and on behalf of employees 1857883629.25 1719618482.00
Cash payments for taxes and rates 772137083.65 1017074124.15
Other cash payments related to operating
315736535.10289866325.80
activities
Subtotal of cash outflows from operating 11144768167.39
12350520330.03
activities
Net cash flows from operating activities 5119370863.32 4361481083.61
II. Cash flows from investing activities:
Cash receipts from withdrawal of
investments
Cash receipts from investment income 80104340.27 63324315.46
Net cash receipts from the disposal of fixed
assets intangible assets and other long-term 39486013.26 35976834.82
assets
Net cash receipts from the disposal of
subsidiaries & other business units
Other cash receipts related to investing
830752957.521820617040.49
activities
Subtotal of cash inflows from investing
950343311.051919918190.77
activities
Cash payments for the acquisition of fixed
assets intangible assets and other long-term 4445521671.75 4931891897.26
assets
Cash payments for investments 237508000.00
Net increase of pledged borrowings
Net cash payments for the acquisition of
subsidiaries & other business units
Other cash payments related to investing
145000000.00827440207.10
activities
Subtotal of cash outflows from investing
4828029671.755759332104.36
activities
Net cash flows from investing activities -3877686360.70 -3839413913.59
III. Cash flows from financing activities:
Cash receipts from absorbing investments
922023 Annual Report of Zhejiang NHU Co. Ltd.
Including: Cash received by subsidiaries
from non-controlling shareholders as
investments
Cash receipts from borrowings 5996318716.61 6843969570.73
Other cash receipts related to financing
11188800.91
activities
Subtotal of cash inflows from financing
5996318716.616855158371.64
activities
Cash payments for the repayment of
6198516255.005807173190.91
borrowings
Cash payments for distribution of
1833426559.712132962559.97
dividends or profits and for interest expenses
Including: Cash paid by subsidiaries to
non-controlling shareholders as dividend or
profit
Other cash payments related to financing
17387029.07185017200.07
activities
Subtotal of cash outflows from financing
8049329843.788125152950.95
activities
Net cash flows from financing activities -2053011127.17 -1269994579.31
IV. Effect of foreign exchange rate changes
106055107.99185231802.92
on cash & cash equivalents
V. Net increase in cash and cash equivalents -705271516.56 -562695606.37
Add: Opening balance of cash and cash
5151841931.865714537538.23
equivalents
VI. Closing balance of cash and cash
4446570415.305151841931.86
equivalents
Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Zang Lijin
6. Parent company cash flow statement
Unit: RMB Yuan
Items Year 2023 Year 2022
I. Cash flows from operating activities:
Cash receipts from sale of goods and
2986881221.914244919158.33
rendering of services
Receipts of tax refund 95053714.28 70396502.88
Other cash receipts related to operating
141034122.88184605407.60
activities
Subtotal of cash inflows from operating
3222969059.074499921068.81
activities
Cash payments for goods purchased and
2542919770.853081465686.71
services received
Cash paid to and on behalf of employees 346310819.49 339198320.10
Cash payments for taxes and rates 13418034.19 103309425.51
Other cash payments related to operating
149457603.83136806092.80
activities
Subtotal of cash outflows from operating
3052106228.363660779525.12
activities
Net cash flows from operating activities 170862830.71 839141543.69
II. Cash flows from investing activities:
Cash receipts from withdrawal of
investments
Cash receipts from investment income 1438109000.00 1226726388.76
Net cash receipts from the disposal of fixed
assets intangible assets and other long-term 30696077.98 6140487.71
assets
932023 Annual Report of Zhejiang NHU Co. Ltd.
Items Year 2023 Year 2022
Net cash receipts from the disposal of
subsidiaries & other business units
Other cash receipts related to investing
1260748671.652059965789.97
activities
Subtotal of cash inflows from investing
2729553749.633292832666.44
activities
Cash payments for the acquisition of fixed
assets intangible assets and other long-term 144285480.21 62571723.93
assets
Cash payments for investments 1267508000.00 1350000000.00
Net cash payments for the acquisition of
subsidiaries & other business units
Other cash payments related to investing
1422350000.01993285460.92
activities
Subtotal of cash outflows from investing
2834143480.222405857184.85
activities
Net cash flows from investing activities -104589730.59 886975481.59
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Cash receipts from borrowings 2995000000.00 4250000000.00
Other cash receipts related to financing
activities
Subtotal of cash inflows from financing
2995000000.004250000000.00
activities
Cash payments for the repayment of
2507000000.003965817400.00
borrowings
Cash payments for distribution of
1704462267.781974363127.13
dividends or profits and for interest expenses
Other cash payments related to financing
1690292.10181401563.42
activities
Subtotal of cash outflows from financing
4213152559.886121582090.55
activities
Net cash flows from financing activities -1218152559.88 -1871582090.55
IV. Effect of foreign exchange rate changes
848445.347950387.71
on cash and cash equivalents
V. Net increase in cash and cash equivalents -1151031014.42 -137514677.56
Add: Opening balance of cash and cash
4054348356.274191863033.83
equivalents
VI. Closing balance of cash and cash
2903317341.854054348356.27
equivalents
942023 Annual Report of Zhejiang NHU Co. Ltd.
7. Consolidated statement of changes in equity
Current period cumulative
Unit: RMB Yuan
Year 2023
Equity attributable to parent company
Items Other equity instruments Other General Non-controlling
Less: Surplus Total equity
Share capital Preferred Perpetual Capital reserve comprehensive Special reserve risk Undistributed profit Others Subtotal interest
Others Treasury shares reserve
shares bonds income reserve
I. Balance at the end of prior
3090907356.003613097510.81500059711.2576577564.1726196894.551444414900.0515823744811.9123574879326.2487289766.8523662169093.09
year
Add: Cumulative changes of
accounting policies
Error correction of prior
period
Others
II. Balance at the beginning of
3090907356.003613097510.81500059711.2576577564.1726196894.551444414900.0515823744811.9123574879326.2487289766.8523662169093.09
current year
III. Current period increase
247974.3227343168.6834663924.21101038777.951066489149.591229782994.7527756065.031257539059.78
(or less: decrease)
(I) Total comprehensive
27343168.68 2704238767.54 2731581936.22 27756065.03 2759338001.25 income
(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 101038777.95 -1637749617.95 -1536710840.00 -1536710840.00
1. Appropriation of surplus
101038777.95-101038777.95
reserve
2. Appropriation of general
risk reserve
3. Appropriation of profit to
-1536710840.00-1536710840.00-1536710840.00
owners
4. Others
(IV) Internal carry-over
within equity
1. Transfer of capital reserve
to capital
2. Transfer of surplus reserve
to capital
952023 Annual Report of Zhejiang NHU Co. Ltd.
Year 2023
Equity attributable to parent company
Items Other equity instruments Other General Non-controlling
Less: Surplus Total equity
Share capital Preferred Perpetual Capital reserve comprehensive Special reserve risk Undistributed profit Others Subtotal interest
Others Treasury shares reserve
shares bonds income reserve
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 34663924.21 34663924.21 34663924.21
1. Appropriation of current
85571248.5385571248.5385571248.53
period
2. Application of current
-50907324.32-50907324.32-50907324.32
period
(VI) Others 247974.32 247974.32 247974.32
IV. Balance at the end of
3090907356.003613345485.13500059711.25103920732.8560860818.761545453678.0016890233961.5024804662320.99115045831.8824919708152.87
current period
Preceding period comparative
Unit: RMB Yuan
Year 2022
Equity attributable to parent company
Items Other equity instruments Other General Non-controlling
Less: Surplus Total equity
Share capital Preferred Perpetual Capital reserve comprehensive Special reserve risk Undistributed profit Others Subtotal interest
Others Treasury shares reserve
shares bonds income reserve
I. Balance at the end of prior year 2578394760.00 4121063080.96 320360784.48 -1614172.31 12692218.51 1289197380.00 14152465528.17 21831838010.85 63730851.41 21895568862.26
Add: Cumulative changes of accounting
10266.0810266.0810266.08
policies
Error correction of prior period
Others
II. Balance at the beginning of current year 2578394760.00 4121063080.96 320360784.48 -1614172.31 12692218.51 1289197380.00 14152475794.25 21831848276.93 63730851.41 21895579128.34
III. Current period increase (or less:
512512596.00-507965570.15179698926.7778191736.4813504676.04155217520.051671269017.661743031049.3123558915.441766589964.75
decrease)
(I) Total comprehensive income 78191736.48 3620280626.51 3698472362.99 21230071.63 3719702434.62
(II) Capital contributed or withdrawn by
179698926.77-179698926.772328843.81-177370082.96
owners
1. Ordinary shares contributed by owners
2. Capital contributed by holders of other
equity instruments
962023 Annual Report of Zhejiang NHU Co. Ltd.
Year 2022
Equity attributable to parent company
Items Other equity instruments Other General Non-controlling
Less: Surplus Total equity
Share capital Preferred Perpetual Capital reserve comprehensive Special reserve risk Undistributed profit Others Subtotal interest
Others Treasury shares reserve
shares bonds income reserve
3. Amount of share-based payment
included in equity
4. Others 179698926.77 -179698926.77 2328843.81 -177370082.96
(III) Profit distribution 155217520.05 -1949011608.85 -1793794088.80 -1793794088.80
1. Appropriation of surplus reserve 155217520.05 -155217520.05
2. Appropriation of general risk reserve
3. Appropriation of profit to owners -1793794088.80 -1793794088.80 -1793794088.80
4. Others
(IV) Internal carry-over within equity 512512596.00 -512512596.00
1. Transfer of capital reserve to capital 512512596.00 -512512596.00
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 13504676.04 13504676.04 13504676.04
1. Appropriation of current period 31988381.60 31988381.60 31988381.60
-
2. Application of current period -18483705.56 -18483705.56
18483705.56
(VI) Others 4547025.85 4547025.85 4547025.85
IV. Balance at the end of current period 3090907356.00 3613097510.81 500059711.25 76577564.17 26196894.55 1444414900.05 15823744811.91 23574879326.24 87289766.85 23662169093.09
972023 Annual Report of Zhejiang NHU Co. Ltd.
8. Parent company statements of changes in equity
Current period cumulative
Unit: RMB Yuan
Year 2023
Other equity instruments Other
Items Less: Treasury Undistributed
Share capital Preferred Perpetual Capital reserve comprehensive Special reserve Surplus reserve Others Total equity
Others shares profit
shares bonds income
I. Balance at the end of prior year 3090907356.00 3353427829.42 500059711.25 506954.43 1444414900.05 5489923869.39 12879121198.04
Add: Cumulative changes of accounting policies
Error correction of prior period
Others
II. Balance at the beginning of current year 3090907356.00 3353427829.42 500059711.25 506954.43 1444414900.05 5489923869.39 12879121198.04
III. Current period increase (or less: decrease) 247974.32 10583344.97 101038777.95 -352323951.76 -240453854.52
(I) Total comprehensive income 1285425666.19 1285425666.19
(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 101038777.95 -1536710840.00
1637749617.95
1. Appropriation of surplus reserve 101038777.95 -101038777.95
-
2. Appropriation of profit to owners -1536710840.00
1536710840.00
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 10583344.97 10583344.97
1. Appropriation of current period 12377758.42 12377758.42
2. Application of current period -1794413.45 -1794413.45
(VI) Others 247974.32 247974.32
IV. Balance at the end of current period 3090907356.00 3353675803.74 500059711.25 506954.43 10583344.97 1545453678.00 5137599917.63 12638667343.52
982023 Annual Report of Zhejiang NHU Co. Ltd.
Preceding period comparative
Unit: RMB Yuan
Year 2022
Other equity instruments
Items Other 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 2578394760.00 3861393399.57 320360784.48 506954.43 1289197380.00 5886750011.71 13295881721.23
Add: Cumulative changes of accounting policies 10266.08 10266.08
Error correction of prior period
Others
II. Balance at the beginning of current year 2578394760.00 3861393399.57 320360784.48 506954.43 1289197380.00 5886760277.79 13295891987.31
III. Current period increase (or less: decrease) 512512596.00 -507965570.15 179698926.77 155217520.05 -396836408.40 -416770789.27
(I) Total comprehensive income 1552175200.45 1552175200.45
(II) Capital contributed or withdrawn by owners 179698926.77 -179698926.77
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 179698926.77 -179698926.77
-
(III) Profit distribution 155217520.05 -1793794088.80
1949011608.85
1. Appropriation of surplus reserve 155217520.05 -155217520.05
-
2. Appropriation of profit to owners -1793794088.80
1793794088.80
3. Others
(IV) Internal carry-over within equity 512512596.00 -512512596.00
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital 512512596.00 -512512596.00
3. Surplus reserve to cover losses
4. Changes in defined benefit plan carried over to retained
earnings
5. Other comprehensive income carried over to retained
earnings
6. Others
(V) Special reserve
1. Appropriation of current period
2. Application of current period
(VI) Others 4547025.85 4547025.85
IV. Balance at the end of current period 3090907356.00 3353427829.42 500059711.25 506954.43 1444414900.05 5489923869.39 12879121198.04
992023 Annual Report of Zhejiang NHU Co. Ltd.
III. Company profile
Zhejiang NHU Co. Ltd. (the “Company”) was jointly established by Xinchang County Synthetic Chemical Plant renamed as NHU
Holding Group Co. Ltd. on November 17 2009) and 9 natural persons including Zhang Pingyi Yuan Yizhong Shi Cheng Hu Baishan
Shi Guanqun Wang Xuewen Shi Sanfu Cui Xinrong and Wang Xulin under the document of approval numbered Zhe Zheng Wei
[1999] 9 issued by the former Securities Commission of the People’s Government of Zhejiang Province. Headquartered in Shaoxing
City Zhejiang Province the Company was registered at Zhejiang Administration for Industry and Commerce on April 5 1999.Currently the Company holds a business license with unified social credit code of 91330000712560575G with registered capita l of
3090907356.00 yuan total share of 3090907356 shares (each with par value of one yuan) of which 36374202 shares are restricted
outstanding shares and 3054533154 shares are unrestricted outstanding shares. The Company’s shares were listed on Shenzhen Stock
Exchange on June 25 2004.The Company belongs to pharmaceutical manufacturing industry and is mainly engaged in manufacturing and sales of nutrition flavor
and fragrance and new polymer materials. The Company’s main products are nutrition flavor and fragrance and new polymer
materials.The financial statements were approved and authorized for issue by the Third meeting of the Ninth session of the Board of Directors
dated April 19 2024.IV. Preparation basis of the financial statements
1. Preparation basis
The financial statements have been prepared on the basis of going concern.
2. The ability to continue as a going concern
The Company has no events or conditions that may cast significant doubts upon the Company’s ability to continue as a going 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.
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
1002023 Annual Report of Zhejiang NHU Co. Ltd.
as current if it is expected to be realized or due within 12 months. The operating cycle for real estate industry starts from the
development of property and ends at sales which normally extends over 12 months and is subject to specific projects therefore an
asset or a liability is classified as current if it is expected to be realized or due within such operating cycle.
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (RMB) Yuan while the functional currency of
subsidiaries engaged in overseas operations including NHU (Hong Kong) Trading Co. Ltd. NHU Europe GmbH and NHU Singapore
PTE. LTD. NHU/CHR. OLESEN LATIN AMERICA A/S is the currency of the primary economic environment in which they operate.
5. Methodology for determining materiality criteria and basis for selection
□applicable □Not applicable
Items Importance Criteria
Significant write-offs of receivables 0.5% of total assets
Significant prepayments aged over 1 year 0.5% of total assets
Significant construction projects in progress 0.5% of total assets
Significant accounts payable aged over 1 year 0.5% of total assets
Significant other accounts payable aged over 1 year 0.5% of total assets
Significant contractual liabilities older than 1 year 0.5% of total assets
Significant cash flows from investing activities 10.00% of total assets
The Company identifies overseas operating entities whose total
assets/total revenues/total profits exceed 15% of the Group's total
Significant offshore operating entities
assets/total revenues/total profits as significant overseas operating
entities
Significant capitalized R&D projects outsourced R&D
0.5% of total assets
projects
The Company identifies subsidiaries with total assets/total
revenues/total profits exceeding 15% of the Group's total assets/total
Significant subsidiaries non-wholly owned subsidiaries
revenues/total profits as important subsidiaries important non-wholly
owned subsidiaries
The company identifies joint ventures associates and joint operations
whose total assets/total revenues/total profits exceed 15% of the
Significant Joint Ventures Associates Co-Operations
group's total assets/total revenues/total profits as significant joint
ventures associates and joint operations
6、Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined party included in 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.
1012023 Annual Report of Zhejiang NHU Co. Ltd.
7. Criteria for judging control and preparation of consolidated financial statements
1. Controlled judgment
A parent company is recognized as controlling if it has power over the investee enjoys variable returns through participation in the
investee's relevant activities and has the ability to use its power over the investee to affect the amount of its variable returns.
2. Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidated financial statements 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.
8. Classification of joint venture arrangements and accounting treatment of joint operations
1. Joint arrangements are categorized as joint operations and joint ventures.
2. When the company is a joint venture partner in a joint operation the following items related to the share of interest in the joint
operation are recognized:
(1) Recognize assets held separately and assets held jointly in proportion to the share held;
(2) Recognize liabilities assumed individually and liabilities assumed jointly in proportion to the share held;
(3) Recognize revenues from the sale of the company's share of joint operating outputs;
(4) Recognize income from joint operations arising from the sale of assets based on the company's share of ownership;
(5) Recognition of expenses incurred individually as well as expenses incurred by the joint operation based on the company's share of
ownership.
9. Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash equivalents refer to short-
term highly liquid investments that can be readily converted to cash and that are subject to an insignificant risk of changes in value.
10. Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the approximate exchange rate similar to the spot
exchange rate at the transaction date at initial recognition. At the balance sheet date monetary items denominated in foreign currency
are translated at the spot exchange rate at the balance sheet date with difference except for those arising from the principal and interest
of exclusive borrowings eligible for capitalization included in profit or loss; non-cash items carried at historical costs are translated at
the approximate exchange rate similar to the spot exchange rate at the transaction date with the RMB amounts unchanged; non-cash
items carried at fair value in foreign currency are translated at the spot exchange rate at the date when the fair value was determined
with difference included in profit or loss or other comprehensive income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet date; the equity items other
than undistributed profit are translated at the spot rate at the transaction date; the revenues and expenses in the income statement are
1022023 Annual Report of Zhejiang NHU Co. Ltd.
translated into RMB at the approximate exchange rate similar to the spot exchange rate at the transaction date. The difference arising
from the aforementioned foreign currency translation is included in other comprehensive income.
11. Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when initially recognized: (1) financial assets at amortized cost; (2)
financial assets at fair value through other comprehensive income; (3) financial assets at fair value through profit or loss.Financial liabilities are classified into the following four categories when initially recognized: (1) financial liabilities at fair value
through profit or loss; (2) financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when
the continuing involvement approach applies; (3) financial guarantee contracts not fall within the above categories (1) and (2) and
commitments to provide a loan at a below-market interest rate which do not fall within the above category (1); (4) financial liabilit ies
at amortized cost.
2. Recognition criteria measurement method and derecognition condition of financial assets and financial liabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument it is recognized as a financial asset or financial liability. The financial
assets and financial liabilities initially recognized by the Company are measured at fair value; for the financial assets and liabilities at
fair value through profit or loss the transaction expenses thereof are directly included in profit or loss; for other categories of financial
assets and financial liabilities the transaction expenses thereof are included into the initially recognized amount. However at initial
recognition for accounts receivable that do not contain a significant financing component or in circumstances where the Company
does not consider the financing components in contracts within one year the Company measures the transaction price in accordance
with “CASBE 14 – Revenues”.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
The Company measures its financial assets at the amortized costs using effective interest method. Gains or losses on financia l assets
that are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when the financial
assets are derecognized reclassified amortized using effective interest method or recognized with impairment loss.
2) Debt instrument investments at fair value through other comprehensive income
The Company measures its debt instrument investments at fair value. Interests impairment gains or losses and gains and losses on
foreign exchange that calculated using effective interest method shall be included into profit or loss while other gains or losses are
included into other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive income should
be transferred out into profit or loss when the financial assets are derecognized.
3) Equity instrument investments at fair value through other comprehensive income
The Company measures its equity instrument investments at fair value. Dividends obtained (other than those as part of investment cost
recovery) shall be included into profit or loss while other gains or losses are included into other comprehensive income. Accumulated
1032023 Annual Report of Zhejiang NHU Co. Ltd.
gains or losses that initially recognized as other comprehensive income should be transferred out into retained earnings when the
financial assets are derecognized.
4) Financial assets at fair value through profit or loss
The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value (including interests and
dividends) shall be included into profit or loss except for financial assets that are part of hedging relationships.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including derivatives that are
liabilities) and financial liabilities designated as at fair value through profit or loss. The Company measures such kind of liabilities at
fair value. The amount of changes in the fair value of the financial liabilities that are attributable to changes in the Company’s own
credit risk shall be included into other comprehensive income unless such treatment would create or enlarge accounting mismatches
in profit or loss. Other gains or losses on those financial liabilities (including interests changes in fair value that are attributable to
reasons other than changes in the Company’s own credit risk) shall be included into profit or loss except for financial liabilities that
are part of hedging relationships. Accumulated gains or losses that originally recognized as other comprehensive income should be
transferred out into retained earnings when the financial liabilities are derecognized.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing
involvement approach applies
The Company measures its financial liabilities in accordance with “CASBE 23 – Transfer of Financial Assets”.
3) Financial guarantee contracts not fall within the above categories 1) and 2) and commitments to provide a loan at a below-market
interest rate which do not fall within the above category 1)
The Company measures its financial liabilities at the higher of: a. the amount of loss allowances in accordance with impairme nt
requirements of financial instruments; b. the amount initially recognized less the amount of accumulated amortization recognized in
accordance with “CASBE 14 – Revenues”.
4) Financial liabilities at amortized cost
The Company measures its financial liabilities at amortized cost using effective interest method. Gains or losses on financial liabilit ies
that are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when the financial
liabilities are derecognized and amortized using effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; orb. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with “CASBE 23 – Transfer ofFinancial Assets”.
1042023 Annual Report of Zhejiang NHU Co. Ltd.
2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the financial liability be
derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the financial asset it
derecognizes the financial asset and any right or liability arising from such transfer is recognized independently as an asset or a liability.If it retained substantially all of the risks and rewards related to the ownership of the financial asset it continues recognizing the
financial asset. Where the Company does not transfer or retain substantially all of the risks and rewards related to the ownership of a
financial asset it is dealt with according to the circumstances as follows respectively: (1) if the Company does not retain its control
over the financial asset it derecognizes the financial asset and any right or liability arising from such transfer is recognized
independently as an asset or a liability; (2) if the Company retains its control over the financial asset according to the extent of its
continuing involvement in the transferred financial asset it recognizes the related financial asset and recognizes the relevant 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 amounts of
the following two items is included into profit or loss: (1) the carrying amount of the portion which is derecognized; (2) the sum of
consideration of the portion which is derecognized and the portion of the accumulative amount of the changes in the fair value
originally included in other comprehensive income which is corresponding to the portion which is derecognized (financial assets
transferred refer to debt instrument investments at fair value through other comprehensive income).
4. Fair value determination method of financial assets and liabilities
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data and information are
available to measure fair value. The inputs to valuation techniques used to measure fair value are arranged in the following hierarchy
and used accordingly:
(1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the
measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly
or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar
assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability for example
interest rates and yield curves observable at commonly quoted intervals; market-corroborated inputs;
1052023 Annual Report of Zhejiang NHU Co. Ltd.
(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is not observable and cannot
be corroborated by observable market data at commonly quoted intervals historical volatility future cash flows to be paid to fulfill the
disposal obligation assumed in business combination financial forecast developed using the Company’s own data etc.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company on the basis of expected credit loss recognizes loss allowances of financial assets at amortized cost debt instrument
investments at fair value through other comprehensive income contract assets leases receivable loan commitments other than financial
liabilities at fair value through profit or loss financial guarantee contracts not belong to financial liabilities at fair value through profit
or loss or financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing
involvement approach applies.Expected credit losses refer to the weighted average of credit losses with the respective risks of a default occurring as the weights.Credit loss refers to the difference between all contractual cash flows that are due to the Company in accordance with the contract and
all the cash flows that the Company expects to receive (i.e. all cash shortfalls) discounted at the original effective interest rate. Among
which purchased or originated credit-impaired financial assets are discounted at the credit-adjusted effective interest rate.At the balance sheet date the Company shall only recognize the cumulative changes in the lifetime expected credit losses since initial
recognition as a loss allowance for purchased or originated credit-impaired financial assets.For leases receivable and accounts receivable and contract assets resulting from transactions regulated in “CASBE 14 – Revenues”
the Company chooses simplified approach to measure the loss allowance at an amount equal to lifetime expected credit losses.For financial assets other than the above on each balance sheet date the Company shall assess whether the credit risk on the financial
instrument has increased significantly since initial recognition. The Company shall measure the loss allowance for the 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 recognition.The Company may assume that the credit risk on a financial instrument has not increased significantly since initial recognition if the
financial instrument is determined to have relatively low credit risk at the balance sheet date.The Company shall estimate expected credit risk and measure expected credit losses on an individual or a collective basis. When the
Company adopts the collective basis financial instruments are grouped with similar credit risk features.The Company shall remeasure expected credit loss on each balance sheet date and increased or reversed amounts of loss allowance
arising therefrom shall be included into profit or loss as impairment losses or gains. For a financial asset measured at amortized cost
the loss allowance reduces the carrying amount of such financial asset presented in the balance sheet; for a debt investment measured
1062023 Annual Report of Zhejiang NHU Co. Ltd.
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.
6. Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset against each other. However
the company presents them in the balance sheet at the net amount after offsetting each other if the following conditions are
simultaneously met: (1) the company has a legal right to offset the recognized amount and such legal right is currently enforceable; (2)
the company plans to settle the net amount or to realize the financial asset and settle the financial liability at the same time.For transfers of financial assets that do not meet the conditions for derecognition the company does not offset the transferred financial
assets and related liabilities.
12．Criteria for recognizing and providing for expected credit losses on receivables
1. Receivables with expected credit losses based on a combination of credit risk characteristics
Basis for
Portfolio Type determining the Methodology for measuring expected credit losses
portfolio
Expected credit losses are calculated by reference to
Bankers' acceptances receivable historical credit loss experience taking into account
Type of notes current conditions and projections of future economic
Commercial acceptances receivable conditions through default exposures and expected credit
loss rates over the entire duration
Prepare a table of accounts receivable aging versus
expected credit loss rates to calculate expected credit
Accounts receivable – Portfolio grouped
Age of accounts losses taking into account historical credit loss
with ages
experience current conditions and projections of future
economic conditions
Other receivables - export tax refund
receivable portfolio
Expected credit losses are calculated by reference to
Other receivables - VAT refund
historical credit loss experience taking into account receivable portfolio
current conditions as well as projections of future Other receivables - land bond receivable Nature of receivables
economic conditions through default exposures and
portfolio
expected credit loss rates within the next 12 months or
Other receivables - portfolio of security
over the entire life span
deposits receivable from customs and tax
authorities
Calculate expected credit losses by reference to historical
credit loss experience and by preparing a table of the
Other receivables - ageing portfolio Age of accounts ageing of other receivables against the expected credit
loss rate taking into account current conditions and
projections of future economic conditions
2. Accounts receivable – comparison table of ages and lifetime expected credit loss rate of portfolio grouped with ages
Ages Accounts Receivable Expected credit Other receivables Expected credit loss
loss ratio (%) ratio (%)
Within 1 year (inclusive the same
5.005.00
hereinafter)
1-2 years 20.00 20.00
2-3 years 80.00 80.00
Over 3 years 100.00 100.00
The ageing of accounts receivable/other receivables is calculated from the month in which the amounts are actually incurred.
1072023 Annual Report of Zhejiang NHU Co. Ltd.
3. Criteria for identifying receivables for which expected credit losses are provided on an individual basis
For receivables and contract assets with credit risk significantly different from that of the portfolio the Company accrues expected
credit losses on an individual basis.
13．Inventories
1. Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business work in process in the process of production
materials or supplies etc. to be consumed in the production process or in the rendering of services.
2. Accounting method for dispatching inventories:
(1) Inventories other than development products are issued using the month-end lump-sum weighted-average method.
(2) When a project is developed the land used for development is included in the development cost of the project by calculating the
apportionment based on the floor area of the development products.
(3) Issuance of similar development products is accounted for by the average floor area method.
(4) If the public ancillary facilities are completed earlier than the relevant development products after the public ancillary facilities are
completed and finalized they are allocated to the development costs of the relevant development projects according to the budgeted
costs of the relevant development projects; if the public ancillary facilities are completed later than the relevant development products
the public ancillary facilities fees are first withheld from the relevant development products and then adjusted according to the
difference between the actual number of fees incurred and the number of fees withdrawn after the completion and finalization of the
public ancillary facilities. If the public facilities are later than the completion of the relevant development products the public facilities
fees will be withheld by the relevant development products first and the difference between the actual amount incurred and the amount
withheld will be adjusted according to the final account after the completion of the public facilities.
3. Inventory system
Perpetual inventory method is adopted.
4. Amortization method of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized with one-off method.
(2) Packages
Packages are amortized with one-off method.
5. Criteria for recognizing and providing for provision for decline in value of inventories
At the balance sheet date inventories are measured at the lower of cost or net realizable value and provision for decline in value of
inventories is made for the difference between cost and net realizable value. The net realizable value of inventories used directly for
sale is determined in the normal course of production and operation by the estimated selling price of the inventories less estimated
selling expenses and related taxes; the net realizable value of inventories requiring processing is determined in the normal course of
production and operation by the estimated selling price of the finished goods produced less estimated costs to be incurred up to the
time of completion estimated selling expenses and related taxes; At the balance sheet date if there is a contract price agreed for one
1082023 Annual Report of Zhejiang NHU Co. Ltd.
part of the same inventory and no contract price exists for the other part the net realizable value is determined separately and compared
with its corresponding cost and the amount of provision or reversal of allowance for decline in value of inventories is determined
separately.
14 .Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement which exists only when decisions about the relevant
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 “bundledtransaction” stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction” the
carrying amount of the acquirer’s previously held equity interest in the acquiree is remeasured at the acquisition-date fair value and
the difference between the fair value and the carrying amount is recognized in investment income; when the acquirer’s previously held
equity interest in the acquiree involves other comprehensive income under equity method the related other comprehensive income is
reclassified as income for the acquisition period excluding other comprehensive income arising from changes in net liabilities or assets
from remeasurement of defined benefit plan of the acquiree.
1092023 Annual Report of Zhejiang NHU Co. Ltd.
(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 equitysecurities 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-cashAssets Exchange”
3. Subsequent measurement and recognition method of profit or loss
For long-term equity investments with control relationship it is accounted for with cost method; for long-term equity investments
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) Principles for determining whether or not a transaction is a "package deal"
In the case of a step-by-step disposal of equity investments in subsidiaries through multiple transactions until loss of control the
Company determines whether a step-by-step transaction is a "package deal" by taking into account the terms and conditions of the
transaction agreement for each step of the step-by-step transaction the respective disposal consideration the target of the disposal the
method of disposal and the point of time of the disposal among other information. If the terms conditions and economic impacts of
each transaction meet one or more of the following conditions it is generally recognized that multiple transactions are "package deals":
1) The transactions are entered into at the same time or in consideration of the effects of each other;
2) The transactions as a whole achieve a complete business result;
3) the occurrence of one transaction is dependent on the occurrence of at least one other transaction;
4) a transaction is uneconomic when viewed in isolation but is economic when considered in conjunction with other transactions.
(2) Accounting treatment for transactions that are not "package deals"
1) Individual financial statements
For equity interests disposed of the difference between the book value and the actual acquisition price is recognized in profit or loss
for the current period. For the remaining equity interest if it still has significant influence over the investee unit or exercises joint
control with other parties it is transferred to the equity method of accounting; if it can no longer exercise control joint control or
significant influence over the investee unit it is accounted for in accordance with the relevant provisions of "Accounting Standard for
Business Enterprises (ASBE) No. 22 - Recognition and Measurement of Financial Instruments".
2) Consolidated financial statements
Prior to the loss of control the difference between the disposal price and the disposal long-term equity investment's corresponding
share of the subsidiary's net assets calculated on a continuous basis from the date of purchase or the date of consolidation is adjusted
to capital surplus (capital premium) and if capital premium is not sufficient to be eliminated it is eliminated to retained earnings.Upon loss of control over Atomics the remaining equity interest is remeasured at its fair value at the date of loss of control. The
difference between the sum of the consideration obtained from the disposal of the equity interest and the fair value of the remaining
equity interest less the share of the original subsidiary's net assets continuously measured from the date of purchase or the date of
consolidation based on the original shareholding ratio is recognized as investment income in the period in which control is lost and
goodwill is also eliminated. Other comprehensive income such as other comprehensive income related to equity investments in the
original subsidiaries should be transferred to investment income in the current period when control is lost.。
(3) Accounting treatment of "package transactions
1) Individual financial statements
1102023 Annual Report of Zhejiang NHU Co. Ltd.
Each transaction is accounted for as a disposal of a subsidiary and loss of control. However the difference between the disposal price
and the carrying value of the long-term equity investment corresponding to the disposal of the investment in each case before the loss
of control is recognized as other comprehensive income in the individual financial statements and transferred to profit or loss in the
period of the loss of control when the loss of control occurs.
2) Consolidated financial statements
Each transaction is accounted for as a disposal of a subsidiary and loss of control. However the difference between the disposal price
and the share of the net assets of the subsidiary corresponding to the disposal of the investment in each case before the loss of control
is recognized as other comprehensive income in the consolidated financial statements and transferred to profit or loss in the period of
loss of control when the control is lost.
15. Fixed assets
(1) Recognition principles
Fixed assets are tangible assets held for use in the production of goods or rendering of services for rental to others or for administrative
purposes and expected to be used during more than one accounting year. Fixed assets are recognized if and only if it is probable that
future economic benefits associated with the assets will flow to the Company and the cost of the assets can be measured reliably.
(2) Depreciation method
Residual value Annual depreciation
Categories Depreciation method Useful life (years)
proportion (%) rate (%)
Buildings and structures Straight-line method 7-70 5 13.57-1.36
General equipment Straight-line method 5-10 5 19.00-9.50
Special equipment Straight-line method 5-15 5 19.00-6.33
Transport facilities Straight-line method 5-7 5 19.00-13.57
16. Construction in progress
1. Construction in progress is recognized if and only if it is probable that future economic benefits associated with the item will 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 deprecia tion is not to be
adjusted retrospectively.Categories Standards and timing for transferring construction in progress to fixed assets
Buildings and structures Construction works reach the state of intended use from the date of reaching the state of intended use
General equipment After installation and commissioning to meet the design requirements or contractual standards
Special equipment After installation and commissioning to meet the design requirements or contractual standards
17、Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction or production 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.
1112023 Annual Report of Zhejiang NHU Co. Ltd.
2. Borrowing costs capitalization period
(1) The borrowing costs are not capitalized unless the following requirements are all met: 1) the asset disbursements have already
incurred; 2) the borrowing costs have already incurred; and 3) the acquisition and construction or production activities which are
necessary to prepare the asset for its intended use or sale have already started.
(2) Suspension of capitalization: where the acquisition and construction or production of a qualified asset is interrupted abnormally
and the interruption period lasts for more than 3 months the capitalization of the borrowing costs is suspended; the borrowing costs
incurred during such period are recognized as expenses and are included in profit or loss till the acquisition and construction or
production of the asset restarts.
(3) Ceasing of capitalization: when the qualified asset under acquisition and construction or production is ready for the intended use or
sale the capitalization of the borrowing costs is ceased.
3. Capitalization rate and capitalized amount of borrowing costs
For borrowings exclusively for the acquisition and construction or production of assets eligible for capitalization the to-be-capitalized
amount of interests is determined in light of the actual interest expenses incurred (including amortization of premium or discount based
on effective interest method) of the special borrowings in the current period less the interest income on the unused borrowings as a
deposit in the bank or as a temporary investment; where a general borrowing is used for the acquisition and construction or production
of assets eligible for capitalization the Company calculates and determines the to-be-capitalized amount of interests on the general
borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements less the general
borrowing by the capitalization rate of the general borrowing used.
18. Intangible assets
(1) Measurement method useful lives and impairment test
1. Intangible assets include land use right patent right non-patented technology etc. The initial measurement of intangible assets is
based on its cost.
2. For intangible assets with finite useful lives their amortization amounts are amortized within their useful lives systematically and
reasonably if it is unable to determine the expected realization pattern reliably intangible assets are amortized by the straight-line
method with details as follows:
Items Useful life and the basis for its determination Amortization method
Land use right 5070(Based on the number of years contained in the warrants) linear method
Software 10(Based on projected years of benefit) linear method
Patent right 10 (Based on projected years of benefit) linear method
Non-patented technology 15 (Based on projected years of benefit) linear method
(2) Accounting policies on internal R&D expenditures
(1) Personnel labor costs
Personnel labor costs include salaries and wages basic pension insurance premiums basic medical insurance premiums unemployment
insurance premiums work-related injury insurance premiums maternity insurance premiums and housing fund of the Company's
research and development personnel as well as labor costs of external research and development personnel.
1122023 Annual Report of Zhejiang NHU Co. Ltd.
Where research and development personnel serve on multiple research and development projects at the same time the recognition of
labor costs is based on the records of hours worked by the research and development personnel of each research and developmen t
project provided by the management of the Company which are allocated proportionately among the different research and
development projects.Where personnel directly engaged in research and development activities and external research and development personnel are
simultaneously engaged in non-research and development activities the Company allocates the personnel labor costs actually incurred
by the research and development personnel between research and development expenses and production and operating expenses based
on the records of their working hours in different positions in accordance with the proportion of their actual working hours and other
reasonable methods.
(2) Direct input costs
Direct input costs refer to the relevant expenditures actually incurred by the Company for the implementation of research and
development activities. It includes: 1) directly consumed materials fuel and power costs; 2) the development and manufacturing costs
of molds and process equipment used for intermediate tests and product trial production the purchase costs of samples prototypes and
general testing means that do not constitute fixed assets and the inspection costs of trial products; and 3) the costs of operating and
maintaining adjusting inspecting testing and repairing instruments and equipment used for research and development activities.
(3) Depreciation expense and long-term amortization expense
Depreciation expense refers to the depreciation of instruments equipment and buildings in use used in research and developme nt
activities.If instruments equipment and buildings in use are used for research and development activities and are also used for non-research and
development activities necessary records are kept of the use of such instruments equipment and buildings in use and the depreciation
expense actually incurred is allocated between research and development expenses and production and operating expenses using a
reasonable method based on factors such as actual man-hours worked and square footage of space utilized.Long-term amortized expenses are long-term amortized expenses incurred in the course of alteration modification renovation and
repair of research and development facilities which are summarized on the basis of actual expenditures and amortized equally over a
specified period of time.
(4) Amortization expense of intangible assets
Amortization expense of intangible assets is the amortization expense of software intellectual property and non-patented technologies
(know-how licenses designs and calculation methods etc.) used in research and development activities.
(5) Design costs
Design expenses are expenses incurred for the conception development and manufacture of new products and processes design of
processes technical specifications formulation of protocols operational characteristics etc. including expenses related to creative
design activities for obtaining innovative creative and breakthrough products.
(6) Equipment debugging costs and test costs
1132023 Annual Report of Zhejiang NHU Co. Ltd.
Equipment debugging costs are costs incurred for research and development activities in the process of preparing workpieces including
costs incurred for activities such as the development of special specialized production machines changes in production and quality
control procedures or the development of new methods and standards.Costs incurred for routine tooling preparation and industrial engineering for mass production and commercialization are not included
in the scope of collection.
(7) Commissioned external research and development costs
Entrusted external research and development expenses are expenses incurred by the Company for research and development activities
entrusted to other organizations or individuals inside or outside the country (the results of the research and development activities are
owned by the Company and are closely related to the Company's main business operations).
(8) Other expenses
Other expenses refer to expenses other than those mentioned above that are directly related to research and development activities
including technical library and data fees data translation fees expert consultation fees insurance fees for high-tech research and
development search demonstration evaluation appraisal and acceptance fees for research and development results application fees
registration fees and agency fees for intellectual property rights meeting fees travel fees and communication fees.
4. Expenditures on the research phase of an internal project are recognized as profit or loss when they are incurred. An intangible 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.
19. Impairment of part of long-term assets
For long-term assets such as long-term equity investments fixed assets construction in progress right-of-use assets intangible 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.
1142023 Annual Report of Zhejiang NHU Co. Ltd.
20. 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.
21. Employee benefits
(1) Short-term employee benefits
The Company recognizes in the accounting period in which an employee provides service short-term employee benefits actually
incurred as liabilities with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or defined benefit plans.
(1) The Company recognizes in the accounting period in which an employee provides service the contribution payable to a defined
contribution plan as a liability with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) Accounting treatment by the Company for defined benefit plan usually involves the following steps:
1) In accordance with the projected unit credit method using unbiased and mutually compatible actuarial assumptions to estimate
related demographic variables and financial variables measure the obligations under the defined benefit plan and determine the periods
to which the obligations are attributed. Meanwhile the Company discounts obligations under the defined benefit plan to determine the
present value of the defined benefit plan obligations and the current service cost;
2) When a defined benefit plan has assets the Company recognizes the deficit or surplus by deducting the fair value of defined benefit
plan assets from the present value of the defined benefit plan obligation as a net defined benefit plan liability or net defined benefit
plan asset. When a defined benefit plan has a surplus the Company measures the net defined benefit plan asset at the lower of the
surplus in the defined benefit plan and the asset ceiling;
3) At the end of the period the Company recognizes the following components of employee benefits cost arising from defined benefit
plan: a. service cost; b. net interest on the net defined benefit plan liability (asset); and c. changes as a result of remeasurement of the
net defined benefit liability (asset). Item a and item b are recognized in profit or loss or the cost of a relevant asset. Item c is recognized
in other comprehensive income and is not to be reclassified subsequently to profit or loss. However the Company may transfer those
amounts recognized in other comprehensive income within equity.
(3) Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability for termination benefits with a
corresponding charge to profit or loss at the earlier of the following dates: a. when the Company cannot unilaterally withdraw the offer
of termination benefits because of an employment termination plan or a curtailment proposal; or b. when the Company recognizes cost
or expenses related to a restructuring that involves the payment of termination benefits.
(4) Other long-term employee benefits
When other long-term employee benefits provided to the employees satisfied the conditions for classifying as a defined contribution
plan those benefits are accounted for in accordance with the requirements relating to defined contribution plan while other benefits
are accounted for in accordance with the requirements relating to defined benefit plan. The Company recognizes the cost of employee
benefits arising from other long-term employee benefits as the followings: a. service cost; b. net interest on the net liability or net assets
of other long-term employee benefits; and c. changes as a result of remeasurement of the net liability or net assets of other long-term
1152023 Annual Report of Zhejiang NHU Co. Ltd.
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.
22. projected liability
1. When an obligation arising from contingencies such as guarantees given to others litigation matters product quality assurance loss
contracts etc. becomes a present obligation of the company and it is probable that the performance of the obligation will result in an
outflow of economic benefits to the company and the amount of the obligation can be measured reliably the company recognizes the
obligation as a projected liability.
2. The company initially measures a projected liability on the basis of the best estimate of the expenditure required to settle the relevant
present obligation and reviews the carrying amount of the projected liability at the balance sheet date.
23. Revenue
Accounting policies on revenue recognition and measurement
1. Revenue recognition principles
At contract inception the Company shall assess the contracts and shall identify each performance obligation in the contracts and
determine whether the performance obligation should be satisfied over time or at a point in time.The Company satisfies a performance obligation over time if one of the following criteria is met otherwise the performance obligation
is satisfied at a point in time: (1) the customer simultaneously receives and consumes the economic benefits provided by the Company’s
performance as the Company performs; (2) the customer can control goods as they are created by the Company’s performance; (3)
goods created during the Company’s performance have irreplaceable uses and the Company has an enforceable right to the payments
for performance completed to date during the whole contract period.For each performance obligation satisfied over time the Company shall recognize revenue over time by measuring the progress towards
complete satisfaction of that performance obligation. In the circumstance that the progress cannot be measured reasonably but the
costs incurred in satisfying the performance obligation are expected to be recovered the Company shall recognize revenue only to the
extent of the costs incurred until it can reasonably measure the progress. For each performance obligation satisfied at a point in time
the Company shall recognize revenue at the time point that the customer obtains control of relevant goods or services. To determine
whether the customer has obtained control of goods the Company shall consider the following indications: (1) the Company has a
present right to payment for the goods i.e. the customer is presently obliged to pay for the goods; (2) the Company has transferred the
legal title of the goods to the customer i.e. the customer has legal title to the goods; (3) the Company has transferred physical
possession of the goods to the customer i.e. the customer has physically possessed the goods; (4) the Company has transferred
significant risks and rewards of ownership of the goods to the customer i.e. the customer has obtained significant risks and rewards
of ownership of the goods; (5) the customer has accepted the goods; (6) other evidence indicating the customer has obtained control
over the goods.
2. Revenue measurement principle
(1) Revenue is measured at the amount of the transaction price that is allocated to each performance obligation. The transaction price
is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer
excluding amounts collected on behalf of third parties and those expected to be refunded to the customer.
(2) If the consideration promised in a contract includes a variable amount the Company shall confirm the best estimate of variable
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
1162023 Annual Report of Zhejiang NHU Co. Ltd.
not occur when the uncertainty associated with the variable consideration is subsequently resolved.
(3) In the circumstance that the contract contains a significant financing component the Company shall determine the transaction price
based on the price that a customer would have paid for if the customer had paid cash for obtaining control over those goods or services.The difference between the transaction price and the amount of promised consideration is amortized under effective interest method
over contractual period. The effects of a significant financing component shall not be considered if the Company expects at the contract
inception that the period between when the customer obtains control over goods or services and when the customer pays consideration
will be one year or less.
(4) For contracts containing two or more performance obligations the Company shall determine the stand-alone selling price at contract
inception of the distinct good underlying each performance obligation and allocate the transaction price to each performance obligation
on a relative stand-alone selling price basis.
3. Revenue recognition method
(1) Revenue from sales of products
The Company’s main products are nutrition flavor and fragrance new polymer materials etc. Sales of products are performance
obligations satisfied at a point in time. Revenue from domestic sales is recognized when the Company has delivered goods to the
customer as agreed by contract and has obtained delivery note signed by the customer and the Company has collected the payments
or has obtained the right to the payments and related economic benefits are highly probable to flow to the Company. Revenue from
overseas sales is recognized when the Company has declared goods to the customs based on contractual agreements and has obtained
a bill of lading and the Company has collected the payments or has obtained the right to the payments and related economic benefits
are highly probable to flow to the Company.
(2) Revenue from real estate sales
Real estate sales are performance obligations satisfied at a point in time. Revenue from real estate sales is recognized when the
Company has delivered properties to the customer as agreed by contract and has obtained the client acceptance receipts signed by the
customer and the Company has collected the payments or has obtained the right to the payments and related economic benefits are
highly probable to flow to the Company.
24. Contract assets contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between its performance
obligations and customers’ payments. Contract assets and contract liabilities under the same contract shall offset each other and be
presented on a net basis.The Company presents an unconditional right to consideration (i.e. only the passage of time is required before the consideration is due)
as a receivable and presents a right to consideration in exchange for goods that it has transferred to a customer (which is 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.
25．Government grants
1. Government grants shall be recognized if and only if the following conditions are all met: (1) the Company will comply with 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.
1172023 Annual Report of Zhejiang NHU Co. Ltd.
2. Government grants related to assets
Government grants related to assets are government grants with which the Company constructs or otherwise acquires long-term assets
under requirements of government. In the circumstances that there is no specific government requirement the Company shall determine
based on the primary condition to acquire the grants and government grants related to assets are government grants whose primary
condition is to construct or otherwise acquire long-term assets. They offset carrying amount of relevant assets or they are recognized
as deferred income. If recognized as deferred income they are included in profit or loss on a systematic basis over the useful lives of
the relevant assets. Those measured at notional amount are directly included into profit or loss. For assets sold transferred disposed
or damaged within the useful lives balance of unamortized deferred income is transferred into profit or loss of the period in which the
disposal occurred.
3. Government grants related to income
Government grants related to income are government grants other than those related to assets. For government grants that contain both
parts related to assets and parts related to income in which those two parts are blurred they are thus collectively classified as
government grants related to income. For government grants related to income used for compensating the related future cost expenses
or losses they are recognized as deferred income and included in profit or loss or used to offset relevant cost during the period in which
the relevant cost expenses or losses are recognized; for government grants related to income used for compensating the related cost
expenses or losses incurred to the Company they are directly included in profit or loss or used to offset relevant cost.
4. Government grants related to the ordinary course of business shall be included into other income or used to offset relevant cost based
on business nature while those not related to the ordinary course of business shall be included into non-operating revenue or
expenditures.
5. Policy interest subvention
(1) In the circumstance that government appropriates interest subvention to lending bank who provides loans for the Company with a
policy subsidised interest rate borrowings are carried at the amount received with relevant borrowings cost computed based on the
principal and the policy subsidised interest rate.
(2) In the circumstance that government directly appropriates interest subvention to the Company the subsidised interest shall offset
relevant borrowing cost.
26. Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between the carrying amount 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 asse ts
unrecognized in prior periods are recognized.
3. At the balance sheet date the carrying amount of deferred tax assets is reviewed. The carrying amount of a deferred tax asset is
reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow the benefit of the deferred
tax asset to be utilized. Such reduction is subsequently reversed to the extent that it becomes probable that sufficient taxable income
will be available.
1182023 Annual Report of Zhejiang NHU Co. Ltd.
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.
5. Deferred income tax assets and deferred income tax liabilities are stated at net amounts after offsetting when the following conditions
are simultaneously met: (1) there is a legal right to settle current income tax assets and current income tax liabilities on a net basis; (2)
the deferred income tax assets and deferred income tax liabilities relate to income taxes levied by the same tax authority on the same
taxpaying entity or relate to different taxpaying entities but are not realized or settled during each significant future period in which
the deferred income tax assets and deferred income tax liabilities are reversed. each future period in which the deferred income tax
assets and deferred income tax liabilities are reversed to the extent that the taxable entity involved intends to either settle the current
income tax assets and current income tax liabilities on a net basis or to acquire the assets and settle the liabilities at the same time.
27. Leases
（1）Operating lease
1. Accounting treatment of leases as les see
At the commencement date the Company recognizes a lease that has a lease term of 12 months or less as a short-term lease 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 pa id 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
1192023 Annual Report of Zhejiang NHU Co. Ltd.
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） Accounting for leases as lessor
At the inception date of a lease the Company classifies leases that transfer substantially all the risks and rewards associated with
ownership of the leased asset as finance leases and all other leases as operating leases.
1) Operating leases
The Company recognizes lease receipts as rental income on a straight-line basis in each period of the lease term. Initial direct costs
incurred are capitalized and amortized on the same basis as rental income and recognized in profit or loss in the current period. Variable
lease payments related to operating leases that are not recognized as lease receipts are recognized in profit or loss when they are actually
incurred.
2) Finance leases
At the commencement date of the lease term the Company recognizes a finance lease receivable based on the net investment in the
lease (the sum of the unguaranteed residual value and the present value of the lease receipts not yet received at the commencement
date of the lease term discounted at the interest rate embedded in the lease) and derecognizes the asset under a finance lease. During
each period of the lease term the Company calculates and recognizes interest income based on the interest rate embedded in the lease.Variable lease payments acquired by the Company that are not included in the measurement of the net investment in the lease a re
recognized in profit or loss when they are actually incurred.
（3） Sale and leaseback
1) Company as lessee
The Company evaluates to determine whether the transfer of assets in a sale and leaseback transaction is a sale in accordance with the
provisions of ASBE No. 14 "Revenue".If the transfer of an asset in a sale and leaseback transaction is a sale the Company measures the right-of-use asset resulting from the
sale and leaseback at the portion of the original asset's carrying value that relates to the right-of-use acquired by leasing it back and
recognizes the related gain or loss only on the transfer of the right to the lessor.If the transfer of an asset in a sale-leaseback transaction is not a sale the Company continues to recognize the transferred asset and at
the same time recognizes a financial liability equal to the amount of the transfer proceeds and accounts for the financial liability in
accordance with Accounting Standard for Business Enterprises (ASBE) No. 22 "Recognition and Measurement of Financial
Instruments".
2) The Company as Lessor
The Company evaluates to determine whether the transfer of assets in a sale-and-leaseback transaction is a sale in accordance with
ASBE No. 14 "Revenue".
1202023 Annual Report of Zhejiang NHU Co. Ltd.
If the transfer of assets in a sale-leaseback transaction is a sale the Company accounts for the purchase of assets in accordance with
other applicable corporate accounting standards and for the lease of assets in accordance with ASBE No. 21 - Leasing.If the transfer of assets in a sale-leaseback transaction is not a sale the company does not recognize the transferred assets but recognizes
a financial asset equal to the transfer proceeds and accounts for the financial asset in accordance with ASBE No. 22 "Recognition and
Measurement of Financial Instruments".
28. Work safety fund
Safety production fees extracted by the Company in accordance with the Administrative Measures for the Extraction and Use of
Enterprise Production Safety Expenses (Cai Zi [2022] No. 136) issued by the Ministry of Finance and the Ministry of Emergency
Response are included in the cost of the relevant products or in current profit or loss and are also recorded in the account of "special
reserve". When the safety production fee is used if it is an expense it is directly deducted from the special reserve. If a fixed asset is
formed the expenditure incurred is summarized under the "construction in progress" account and recognized as a fixed asset when the
safety project is completed and reaches the intended state of use; at the same time the special reserve is deducted in accordance with
the cost of forming the fixed asset and accumulated depreciation of the same amount is recognized and no depreciation will be provided
for the fixed asset in the subsequent period.
29. Segment reporting
Operating segments are determined based on the structure of the Company’s internal organization management requirements 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.
30.Accounting treatment related to share repurchase
When the Company repurchases its shares for the purpose of reducing its registered capital or rewarding its employees if the purchased
shares are to be kept as treasury shares the treasury shares are recorded at the cash distributed to existing shareholders for repurchase;
if the purchased shares are to be retired the difference between the total par value of shares retired and the cash distributed to existing
shareholders for repurchase is to reduce capital reserve or retained earnings when the capital reserve is not enough to reduce. If the
Company repurchases vested equity instruments in equity-settled share-based payment transactions with employees cost of treasury
shares granted to employees and capital reserve (other capital reserve) accumulated within the vesting period are to be written off on
the payment made to employees with a corresponding adjustment in capital reserve (share premium).
31.Significant changes in accounting policies and estimates
(1) Significant changes in accounting policies
√ Applicable □ Not Applicable
1212023 Annual Report of Zhejiang NHU Co. Ltd.
Unit: RMB Yuan
Statement Items
Contents and reasons Amount of impact
Significantly Affected
Effective January 1 2023 the Company implemented Accounting
Standards Interpretation No. 16 issued by the Ministry of Finance Balance sheet items at December 31 2022
(MOF) . The "Accounting for deferred income taxes not subject to the
initial recognition exemption for assets and liabilities arising from
Deferred tax assets 19857.63
individual transactions" requires that adjustments be made for individua l
transactions to which the provision applies that occur between the Surplus reserve 959.16
beginning of the earliest period for which the financial statements are
presented in the period in which the provision is first implemented and Undistributed profit 18898.47
the date of first implementation. If taxable temporary differences and
deductible temporary differences arise from lease liabilities and right-of- Income statement items for fiscal year 2022
use assets recognized as a result of a single transaction to which this
provision applies at the beginning of the earliest period for which the
financial statements are presented for the first time and if projected
liabilities related to abandonment obligations and related assets are
recognized the taxable temporary differences and deductible temporary
differences shall be adjusted in accordance with the provisions of this Income tax -9591.55
provision and Accounting Standard No. 18 - "Income Taxes". -Income
Taxes the cumulative effect is adjusted to opening retained earnings and
other related financial statement items in the earliest period for which
the financial statements are presented.
(2) Significant changes in accounting estimates
□ Applicable √ Not Applicable
（3）Adjustments to items related to financial statements at the beginning of the year of first-time
implementation of new accounting standards from 2023 onwards
□ Applicable √ Not Applicable
VI. Taxes
1. Main taxes and tax rates
Taxes Tax bases Tax rates
13% 9% 8% 6% 5% and 19%; export goods enjoy
The output tax calculated based on the
the “exemption credit and refund” policy and the
revenue from sales of goods or rendering
refund rate ranges from 0% to 13%; the subsidiary
Value-added tax (VAT) of services in accordance with the tax
Zhejiang NHU Import & Export Co. Ltd. enjoys the
law net of the input tax that is allowed to
“refund upon collection” policy and the refund rate
be deducted in the current period
ranges from 0% to 13%.Urban maintenance and
Turnover tax actually paid 5% 7%
construction tax
15%、16.5%、17%、20%、22%、25%、25.5%、Enterprise income tax Taxable income
34%
A four-grade progressive tax system is adopted. The
The incremental amount arising from the rates are: 30% for appreciated value not over 50% of
transfer of state-owned land use right and total deductible amount; 40% for appreciated value
Land appreciation tax
the buildings and structures that are over 50% but not over 100% of total deductible
constructed on the land amount; 50% for appreciated value over 100% but
not over 200% of total deductible amount; and 60%
1222023 Annual Report of Zhejiang NHU Co. Ltd.
Taxes Tax bases Tax rates
for appreciated value over 200% of total deductible
amount.For housing property levied on the basis
of price housing property tax is levied at
the rate of 1.2% of the balance after
Housing property tax deducting 30% of the cost; for housing 1.2% 12%
property levied on the basis of rent
housing property tax is levied at the rate
of 12% of rent revenue.Education surcharge Turnover tax actually paid 3%
Local education surcharge Turnover tax actually paid 2%
Solidarity surcharge [Note] Income tax payable 5.50%
Trade tax [Note] Taxable income 13.30%
Note: The subsidiaries NHU EUROPE GmbH NHU PERFORMANCE MATERIALS GMBH and Bardoterminal GmbH are subject
to these rates.Different enterprise income tax rates applicable to different taxpayers:
Taxpayers Income tax rate
The Company 15%
Shangyu NHU Bio-Chem Co. Ltd. 15%
Shandong NHU Pharmaceutical Co. Ltd. 15%
Shandong NHU Vitamins Co. Ltd. 15%
Shandong NHU Amino-acids Co. Ltd. 15%
Zhejiang NHU Special Materials Co. Ltd. 15%
Heilongjiang NHU Biotechnology Co. Ltd. 15%
Zhejiang NHU Pharmaceutical Co. Ltd 15%
Shandong NHU Fine ChemicalScience and Technology Co. 15%
Adoption of the territorial source principle of
taxation with profits tax rate of 8.25% for the first
HK$2 million of Hong Kong-sourced profits and
NHU (Hong Kong) Trading Co. Ltd.
16.5% for the subsequent Hong Kong-sourced
profits while profits sourced elsewhere are not
subject to Hong Kong profits tax
NHU EUROPE GmbH 15%
NHU PERFORMANCE MATERIALS GMBH 15%
Bardoterminal GmbH 15%
NHU Singapore PTE. LTD. 17%
Shandong New Shuang'an Biotechnology Co. Ltd 20%
NHU/CHR.OLESEN LATIN AMERICA A/S 22%
NHU CHR.OLESEN MEXICO S.A.P.I. DE C.V. 25.5%
NHU/CHR.OLESEN BRASIL LTDA 34%
Other tax paying entities other than the above 25%
2. Tax preferential policies
1. Enterprise income tax
(1) Tax incentives for high-tech enterprises
1) According to the Hi-Tech Enterprise Certificate (GR202333009429) issued by Zhejiang Provincial Department of Science 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 2023 to 2025. It is subject to the
rate of 15% for enterprise income tax in 2023.
1232023 Annual Report of Zhejiang NHU Co. Ltd.
2) 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.
3) According to the Hi-Tech Enterprise Certificate (GR202337003609) 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 2023 to 2025.It is subject to the rate of 15% for enterprise income tax in 2023.
4) According to the Hi-Tech Enterprise Certificate (GR202337002254) issued by Department of Science and Technology of
Shandong Province Shandong Provincial Department of Finance and Shandong Provincial Tax Service STA the grandson Shandong
NHU Vitamins Co. Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2023 to 2025. It is
subject to the rate of 15% for enterprise income tax in 2023.
5) 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.
6) 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.
7) 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.
8) 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.
9) 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 Fine ChemicalScience and Technology Co. 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.
(2) Tax incentives for micro and small enterprises
According to the Announcement of the Ministry of Finance and the State Administration of Taxation on Preferential Policies on
Income Tax for Small and Micro Enterprises and Individual Entrepreneurs (Announcement of the Ministry of Finance and the State
Administration of Taxation No. 6 of 2023) and the Announcement on Further Implementation of Preferential Policies on the Income
Tax for Small and Micro Enterprises (Announcement of the Ministry of Finance and the State Administration of Taxation No. 13 of
2022) from 1 January 2023 to 31 December 2024 small and micro enterprises are entitled to a reduction of 25% of their annual taxable
income and a tax rate of 20%. taxable income of small micro-profit enterprises not exceeding 1 million yuan shall be reduced by 25%
1242023 Annual Report of Zhejiang NHU Co. Ltd.
of the taxable income and subject to enterprise income tax at a rate of 20%. From January 1 2022 to December 31 2024 the portion
of the annual taxable income of small micro-profit enterprises exceeding 1 million yuan but not exceeding 3 million yuan shall be
reduced by 25% of the taxable income and subject to enterprise income tax at a rate of 20%. The grandson company Shandong New
Shuang'an Biotechnology Co. Ltd is subject to enterprise income tax at the corresponding preferential tax rate.
(3) Tax Benefits for Foreign Enterprises
According to Section 14 of the Inland Revenue Ordinance Chapter 112 of the Laws of Hong Kong Hong Kong adopts the territorial
source principle of taxation i.e. only profits derived from Hong Kong are subject to Hong Kong tax whereas profits derived from
elsewhere are not subject to Hong Kong profits tax. The subsidiary Sun Woo Shing (Hong Kong) Trading Company Limited is subject
to enterprise income tax at the corresponding preferential tax rate.
2. VAT
(1) According to the Announcement of the Ministry of Finance and the State Administration of Taxation on the Policy of Value-added
Tax Credits for Enterprises in the Advanced Manufacturing Industry (Announcement of the Ministry of Finance and the State
Administration of Taxation No. 43 of 2023) from 1 January 2023 to 31 December 2027 enterprises in the advanced manufacturing
industry are allowed to offset the payable value-added tax by adding 5% to the current period's creditable input tax amount. Subsidiaries
Shangyu NHU Bio-Chem Co. Ltd. Shandong NHU Pharmaceutical Co. Ltd. Shandong NHU Amino-acids Co. Ltd.and Zhejiang
NHU Special Materials Co. Ltd. and grandson Shandong NHU Vitamins Co. Ltd. enjoy the preferential policy of adding 5% to the
input tax credits.
(2) According to the Announcement of the Ministry of Finance and the State Administration of Taxation and the General
Administration of Customs on Policies Related to Deepening Value-added Tax Reform (Announcement of the Ministry of Finance and
the State Administration of Taxation and the General Administration of Customs No. 39 of 2019) taxpayers in the production and
living service industries are permitted to offset their tax payable in accordance with the current period's creditable input tax by adding
up to 10 percent from April 1 2019 to December 31 2021; and according to the State Administration of Taxation's Announcement on
Matters Relating to the Levy and Administration of VAT Reduction and Exemption Policies for Small-scale Taxpayers and Other
Policies" (Announcement No. 1 of the State Administration of Taxation of the People's Republic of China for the Year 2023) the
implementation period of the aforesaid policy of VAT deduction and credit was extended to December 31 2023. Weifang Jinghe Real
Estate Co. Ltd Ltd. the Grandson Company is in compliance with the above provisions and enjoys the corresponding tax benefits.VII. Notes to items of consolidated financial statements
1. Cash and bank balances
Unit: RMB Yuan
Items Closing balance Opening balance
Cash on hand 21747.98 16584.59
Cash in bank 4445046788.85 5151816943.29
Other cash and bank balances 97192582.33 192018439.84
Digital Currency - RMB 1100027.82
Total 4543361146.98 5343851967.72
Including: Deposited overseas 89207212.60 62426363.92
Other remarks
1252023 Annual Report of Zhejiang NHU Co. Ltd.
Other cash and bank balances
Unit: RMB Yuan
Items Closing balance Opening balance
Deposit for bank acceptance 77905369.24 147608293.24
Deposit for letters of credit 12048779.84 42310180.59
Customs Margin 3929600.00
Deposit for construction safety 870050.56 863937.05
Deposit for engineering labor costs 853216.21 851288.54
Deposit for water fees 661215.83 359836.44
Letter of Guarantee Deposit 500000.00
Deposited investment fund 393449.58 2.91
Deposit for ETC 22500.00 16500.00
Alipay balance 8401.07 8401.07
Total 97192582.33 192018439.84
2. Held-for-trading financial assets
Unit: RMB Yuan
Items Closing balance Opening balance
Financial assets at fair value through
173056050.95720314576.43
profit or loss
Including: Financial products with
145000000.00720000000.00
guaranteed principal and floating income
Derivative financial assets 28056050.95 314576.43
Total 173056050.95 720314576.43
3. Notes receivable
(1) Details on categories
Unit: RMB Yuan
Items Closing balance Opening balance
Bank acceptance 116125267.70 321261741.29
Commercial Acceptance 51380094.50
Total 116125267.70 372641835.79
（2） Classified disclosure by bad debt provision method
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 116125267.70 100.00% 116125267.70
bad debts made on a collective basis
Bank acceptance 116125267.70 100.00% 116125267.70
Commercial Acceptance
Total 116125267.70 100.00% 116125267.70
1262023 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
375346051.29100.00%2704215.500.72%372641835.79
bad debts made on a collective basis
Bank acceptance 321261741.29 85.59% 321261741.29
Commercial acceptance 54084310.00 14.41% 2704215.50 5.00% 51380094.50
Total 375346051.29 100.00% 2704215.50 0.72% 372641835.79
Unit: RMB Yuan
Closing balance
Categories
Book balance Provision for bad debts Provision proportion
Bankers' acceptances
116125267.70
portfolio
Total 116125267.70
If the allowance for bad debts on notes receivable is based on a general model of expected credit losses:
□ Applicable √ Not Applicable
（3）Provision for bad debts made recovered or reversed during the period
Provision for bad debts in the current period:
Unit: RMB Yuan
Increase/Decrease
Opening
Categories Recovery/ Closing balance
balance Accrual Write-off Others
Reversal
Provision made
on a collective 2704215.50 -2704215.50
basis
Total 2704215.50 -2704215.50
of which the amount of bad debt provision recovered or reversed during the period is significant:
□ Applicable √ Not Applicable
1272023 Annual Report of Zhejiang NHU Co. Ltd.
（4） Pledged notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance of pledged notes
Bank acceptance 94097743.14
Total 94097743.14
（5）Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance
35000866.20
Total
35000866.20
The acceptors of these bankers' acceptances are commercial banks with high creditworthiness and the probability of non-payment of
bankers' acceptances accepted by them at maturity is relatively low therefore the Company will derecognize these bankers' acceptances
that have been endorsed or discounted. However if the notes are not paid when due the Company will still be jointly and severally
liable to the bearer in accordance with the provisions of the Bills of Exchange Act.
4. Accounts receivable
（1） Age analysis
Unit: RMB Yuan
Ages Closing balance Opening balance
Within 1 year (inclusive) 2540372908.81 2573685603.72
1-2 years 87390861.85 39010397.08
2-3 years 297000.00
Over 3 years 2106280.80 2049280.80
3-4 years 57000.00 203200.00
4-5 years 203200.00 286550.00
Over 5 years 1846080.80 1559530.80
Total 2629870051.46 2615042281.60
（2） Details on categories
Unit: RMB Yuan
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion
Including:
Accounts receivable with provision
for bad debts made on a collective 2629870051.46 100.00% 146603098.58 5.57% 2483266952.88
basis
Total
2629870051.46100.00%146603098.585.57%2483266952.88
1282023 Annual Report of Zhejiang NHU Co. Ltd.
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion
Including:
Accounts receivable with provision
for bad debts made on a collective 2615042281.60 100.00% 138773240.37 5.31% 2476269041.23
basis
Total
2615042281.60100.00%138773240.375.31%2476269041.23
Accounts receivable with provision for bad debts made on a collective basis：146603098.58
Unit: RMB Yuan
Closing balance
Ages Closing balance of provision Proportion to the total balance
Closing balance
for bad debts of receivables (%)
Within 1 year (inclusive) 2540372908.81 127018645.41 5.00%
1-2 years 87390861.85 17478172.37 20.00%
2-3 years 2106280.80 2106280.80 100.00%
Total 2629870051.46 146603098.58
A description of the basis for determining the portfolio:
Provision for bad debts using an ageing portfolio
If the allowance for bad debts for accounts receivable is based on the general model of expected credit losses:
□ Applicable √ Not Applicable
（3） Provisions made collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
Increase/Decrease
Categories Opening balance Closing balance
Accrual Recovery/ Write-off Others
Reversal
Provision made on a
138773240.378404850.21574992.00146603098.58
collective basis
Total 138773240.37 8404850.21 574992.00 146603098.58
（4） Accounts receivable actually written off in the current period
Unit: RMB Yuan
Items Write-off amount
Payment for goods 574992.00
（5）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
258627362.379.83%12931368.12
Client B
153899998.715.85%7694999.94
1292023 Annual Report of Zhejiang NHU Co. Ltd.
Debtors Closing balance Proportion to the total balance of Closing balance of provision for
receivables (%) bad debts
Client C
85556985.113.25%17111397.02
Client D
57015735.002.17%2850786.75
Client E
48661266.691.85%2433063.33
Total
603761347.8822.95%43021615.16
5、Receivables financing
（1） Presentation of receivable financing classifications
Unit: RMB Yuan
Items Closing balance Opening balance
Bank acceptance 331634090.61 379217582.25
Total 331634090.61 379217582.25
（2） Pledged notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance of pledged notes
Bank acceptance 143872489.15
Subtotal 143872489.15
（3） Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB Yuan
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance 813990160.58
Total 813990160.58
（4） Other remarks:
Due to the fact that the acceptor of bank acceptance is commercial bank which is of high credit level there is very little possibility of
failure in recoverability when it is due. Based on this fact the Company derecognized the endorsed or discounted bank acceptance.However if any bank acceptance is not recoverable when it is due the Company still holds joint liability on such acceptance according
to the China Commercial Instrument Law.
6、Advances paid
(1) Age analysis
Unit: RMB Yuan
Closing balance Opening balance
Ages
Amount % to total Amount % to total
Within 1 year
206538373.9498.69%215300317.5996.84%
1-2 years
2623068.381.25%7013257.673.14%
2-3 years
97159.730.05%16001.000.01%
1302023 Annual Report of Zhejiang NHU Co. Ltd.
Closing balance Opening balance
Ages
Amount % to total Amount % to total
Over 3 years
16000.000.01%7200.000.01%
Total
209274602.05222336776.26
(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 45926357.35 21.95%
Supplier B 26130000.00 12.49%
Supplier C 18544352.45 8.86%
Supplier D 16932930.71 8.09%
Supplier E 9045984.53 4.32%
Subtotal 116579625.04 55.71%
7．Other receivables
Unit: RMB Yuan
Items Closing balance Opening balance
Dividend receivable 20735987.73
Other receivables 142060705.67 248831605.00
Total 142060705.67 269567592.73
（1） Dividend receivable
1） Classification of dividends receivable
Unit: RMB Yuan
Items/Investees Closing balance Opening balance
Zhejiang Chunhui Environmental
20735987.73
Protection Energy Co. Ltd.Total 20735987.73
（2） Other receivables
1） Categorized by nature
Unit: RMB Yuan
Nature of receivables Closing book balance Opening book balance
Export tax refund 59999917.27 62763834.97
Security deposits 26223295.23 120123425.59
Refundable VAT 49708056.90 41890037.74
Employee petty cash 5892932.02 8050322.00
Temporary advance payment receivable 5105463.95 3839206.82
Others 2290423.97 3035775.60
1312023 Annual Report of Zhejiang NHU Co. Ltd.
Nature of receivables Closing book balance Opening book balance
Unborrowed funds 21098506.24
Receivables of returned equipment 1041600.00
Total 149220089.34 261842708.96
2） Ages analysis
Unit: RMB Yuan
Ages Closing book balance Opening book balance
Within 1 year (inclusive) 121257098.80 129009444.59
1-2 years 4774411.02 21076224.01
2-3 years 5220071.25 1271099.17
Over 3 years 17968508.27 110485941.19
3-4 years 1111491.23 8243583.58
4-5 years 3390964.34 3449067.41
Over 5 years 13466052.70 98793290.20
Total 149220089.34 261842708.96
3） Classified disclosure by bad debt provision method
□ Applicable √ Not Applicable
Unit: RMB Yuan
Closing balance
Book balance Provision for bad debts
Categories
Provision Carrying amount
Amount % to total Amount
proportion
Including:
Provision for bad
149220089.34100.00%7159383.674.80%142060705.67
debts by portfolio
Total 149220089.34 100.00% 7159383.67 4.80% 142060705.67
(Continued)
Opening balance
Book balance Provision for bad debts
Categories
Provision Carrying amount
Amount % to total Amount
proportion
Including:
Provision for bad
261842708.96100.00%13011103.964.97%248831605.00
debts by portfolio
Total 261842708.96 100.00% 13011103.96 4.97% 248831605.00
Number of bad debt provision categories by portfolio:1
Provision for bad debts is made on a portfolio basis:7159383.67
Unit: RMB Yuan
1322023 Annual Report of Zhejiang NHU Co. Ltd.
Closing balance
Ages
Amount Carrying amount % to total
Export tax refund receivable
59999917.270.000.00%
portfolio
VAT refund receivable
49708056.900.000.00%
portfolio
Land bond receivable
17354493.500.000.00%
portfolio
Portfolio of deposits
receivable from customs and 266701.95 0.00 0.00%
tax authorities
Ages 21890919.72 7159383.67 32.70%
Within 1 year (inclusive) 12061340.14 603066.99 5.00%
1-2 years 3995493.56 799098.71 20.00%
2-3 years 384340.25 307472.20 80.00%
Over 3 years 5449745.77 5449745.77 100.00%
Total 149220089.34 7159383.67
Provision for bad debts is made on the basis of a general model of expected credit losses:
Unit: RMB Yuan
Phase I Phase II Phase III
Provision for bad debts Total
12?month expected Lifetime expected credit Lifetime expected credit
credit losses losses (credit not impaired) losses (credit impaired)
Opening balance
1760180.531062902.9010188020.5313011103.96
Opening balance in the current
period
--Transferred to phase II
-199774.68199774.68
--Transferred to phase III
-76868.0576868.05
Provision made in the current
-957338.86-386710.82-4507670.61-5851720.29
period
Closing balance
603066.99799098.715757217.977159383.67
Classification of stages and bad debt provisioning ratio
The basis of classification by stages: Accounts aged less than one year are classified as stage I accounts aged 1 to 2 years are
classified as stage II and accounts aged more than 2 years are classified as stage III.Changes in carrying amounts for which the amount of change in the provision for losses during the period is material.□Applicable □ Not applicable
4） Provisions made collected or reversed in the current 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
13011103.96-5851720.297159383.67
collective basis
Total
13011103.96-5851720.297159383.67
5） Details of the top 5 debtors with largest balances
Unit: RMB Yuan
1332023 Annual Report of Zhejiang NHU Co. Ltd.
Proportion to the
Provision
Nature of total balance of
Debtors Book balance Ages for bad
receivables other receivables
debts
(%)
National Revenue Service Within 1 year
Export tax refund 59999917.27 40.21%
(export tax refunds receivable) (inclusive)
Servicio de Administración Within 1 year
Refundable VAT 22199235.58 14.88%
Tributaria (inclusive)
Weifang Municipal Bureau of Security deposits 4835731.00 2-3 years 3.24%
Land and Resource Binhai
District Branch Security deposits 12518762.50 Over 3 years 8.39%
Within 1 year
Bundeskasse Refundable VAT 12505403.98 8.38%
(inclusive)
Within 1 year
Secretaria da Fazenda do Estado Refundable VAT 10613802.56 7.11%
(inclusive)
Total 122672852.89 82.21%
8.Inventories
Is the company subject to disclosure requirements for the real estate industry
No
(1) Inventory classification
Unit: RMB Yuan
Closing balance Opening balance
Provision for Provision for
inventory write- inventory write-
Items down/ Provision down/ Provision
Book balance Carrying amount Book balance Carrying amount
for impairment for impairment
of cost to fulfill of cost to fulfill
a contract a contract
Raw materials 527624081.09 6293242.29 521330838.80 512088438.92 1371035.91 510717403.01
Work in process 1178294229.77 6519042.73 1171775187.04 1259897028.55 1259897028.55
Goods on hand 2417138791.32 216472992.13 2200665799.19 2122998309.26 151579577.92 1971418731.34
Goods dispatched 108180564.86 108180564.86 96141207.37 96141207.37
Development cost 98068949.58 98068949.58 97530835.60 97530835.60
Developed
122563022.12122563022.12121902734.56121902734.56
products
Materials on
consignment for 5430259.53 5430259.53 8335609.99 8335609.99
further processing
Packages 17397177.94 17397177.94 16061832.47 16061832.47
Low-value
73467076.2873467076.2862552319.5062552319.50
consumables
Total 4548164152.49 229285277.15 4318878875.34 4297508316.22 152950613.83 4144557702.39
(2) Inventories – Development cost
Unit: RMB Yuan
1342023 Annual Report of Zhejiang NHU Co. Ltd.
Estimated total
Items Opening balance Closing balance
investment
Boao NHU Resort 550 million 42570355.38 43108469.36
Weifang NHU Town Phase II 398.53 million 54960480.22 54960480.22
Subtotal 97530835.60 98068949.58
(3) Inventories – Developed products
Unit: RMB Yuan
Date of
Items Opening balance Increase Decrease Closing balance
completion
Boao NHU Resort Center December
121902734.56660287.56122563022.12
2014
Subtotal 121902734.56 660287.56 122563022.12
（4）Provision for inventory write-down and provision for impairment of cost to fulfill a contract
Unit: RMB Yuan
Increase Decrease
Items Opening balance Closing balance
Accrual Others Recovery/ Others
Reversal
Raw materials 1371035.91 4922206.38 6293242.29
Work in process 6519042.73 6519042.73
Goods on hand 151579577.92 219159199.11 154265784.90 216472992.13
Total 152950613.83 230600448.22 154265784.90 229285277.15
Reasons for write-off of Reasons for reversal of provision
Determination basis of net realizable
Items provision for inventory write- for decline in value of
value
down inventories
Net realizable value is determined as the Increase in net realizable value
Consumption of inventories for
estimated selling price of the relevant of inventories for which
Raw which provision for decline in
finished goods less costs estimated to be provision for decline in value of
materials value of inventories has been
incurred to completion estimated selling inventories was made in prior
made during the period
expenses and related taxes. periods
Net realizable value is determined as the Increase in net realizable value Inventories for which provision
estimated selling price of the relevant of inventories for which for inventory write-downs was
Work in
finished goods less costs estimated to be provision for decline in value of made at the beginning of the
process
incurred to completion estimated selling inventories was made in prior period were depleted during the
expenses and related taxes. periods period.Increase in net realizable value Inventories for which provision
Net realizable value is determined as the
of inventories for which for decline in value of inventories
Goods on estimated selling price of the relevant
provision for decline in value of was made at the beginning of the
hand finished goods less estimated selling
inventories was made in prior period were sold during the
expenses and related taxes.periods period
9. Other current assets
Unit: RMB Yuan
Items Closing balance Opening balance
Prepaid VAT or input VAT to be credited 47538826.76 123811281.53
Prepaid enterprise income tax 5070275.22 54251454.46
Prepaid insurance premiums 4738519.69 4330488.27
Prepaid housing rents 23362.83
Prepaid urban maintenance and 13194.85 13194.85
1352023 Annual Report of Zhejiang NHU Co. Ltd.
Items Closing balance Opening balance
construction tax
Prepaid education surcharge 7916.74 7916.74
Prepaid local education surcharge 5278.11 5278.11
Amortized catalyst costs 10858733.66
Total 68232745.03 182442976.79
10. Long-term equity investments
Unit: RMB Yuan
Increase/Decrease Closing
balance
Closing Investment Adjustmen Cash of
Investees Opening carrying
Invest Provision Closing carrying
carrying income/losses t in other dividend/ Investments ments Changes in for provision amount
amount recognized comprehen Profit
Others amount
increased decrea other equity impairmen for
under equity sive declared for
sed t impairme
method income distribution nt
I. Joint ventures
233508000.0
Ningbo ZRCC NHU -17341021.51 216166978.49
Biotechnology Co. Ltd. 0
233508000.0
Subtotal -17341021.51 216166978.49
0
II. Associates
Zhejiang Chunhui Environmental 239967333.33 41180429.16 50707.22 12.27 197267.10 281395724.54
Protection Energy Co. Ltd.Zhejiang sanbo polymer
Co. Ltd
-
Envalior NHU Engineering 24457448.36 5388244.54 27298340.00
Materials (Zhejiang) Co.Ltd. 2547352.90
14700000.0
Zhejiang Saiya Chemical 125450987.77 21443548.34 -591335.07 131603201.04
Materials Co. Ltd. 0
CysBio ApS 36784947.60 -6349672.37 593502.98 31028778.21
Shandong Bin’an Vocational
Training School Co. Ltd. 5842851.42 -785275.89 5057575.53
[Note1]]
Anhui Innovation Technology
4000000.00594602.274594602.27
Co. Ltd
14700012.2-
Subtotal 432503568.48 4000000.00 61471876.05 50707.22 480978221.59
7[Note2] 2347917.89
237508000.014700012.2-
Total 432503568.48 44130854.54 50707.22 697145200.08
072347917.89
[Note1] Envalior NHU Engineering Materials (Zhejiang) Co.Ltd. was renamed as DSM NHU Engineering Materials (Zhejiang)
Co. Ltd. in August 2023
[Note2] The Company received cash dividends of RMB 20736000.00 yuan in the current period and the difference of RMB 12.27
yuan from the dividend receivable accrued in the previous period was recognized in the current period.Recoverable amount determined as fair value less costs of disposal net
□Applicable □ Not applicable
Recoverable amount is determined as the present value of the expected future cash flows
□Applicable □ Not applicable
11、Other equity instrument investments
Unit: RMB Yuan
Loss for Profit Losses
Profit Reasons for
the period accumulated accumulated
recognized in designation as at
charged to in other in other Dividend income
other fair value
Items Closing balance Opening balance other comprehensiv comprehensiv recognized during comprehensiv through other
comprehe e income at e income at the period
e income for comprehensive
nsive the end of the the end of the
the period income
income period period
Zhejiang Second
7790147.557790147.5517973000.00
Pharma Co. Ltd.
1362023 Annual Report of Zhejiang NHU Co. Ltd.
Loss for Profit Losses
Profit Reasons for
the period accumulated accumulated
recognized in designation as at
charged to in other in other Dividend income
other fair value
Items Closing balance Opening balance other comprehensiv comprehensiv recognized during
comprehensiv through other
comprehe e income at e income at the period
e income for comprehensive
nsive the end of the the end of the
the period income
income period period
Shanghai
NewMargin
15208000.0015208000.006500000.00
Yongjin Eqiuty
Enterprise (LP)
Total 22998147.55 22998147.55 24473000.00
12. Fixed assets
Unit: RMB Yuan
Items Closing balance Opening balance
Fixed assets 21860082637.13 16523867858.53
Total 21860082637.13 16523867858.53
(1) Details
Unit: RMB Yuan
Items Buildings and Generali equipment Special equipment Transport Total
structures facilities
I. Cost:
1. Opening balance 7126286829.35 217277952.88 15524771612.37 27261458.12 22895597852.72
2. Increase 1095803550.76 33374868.35 5861089885.32 8705604.68 6998973909.11
(1) Acquisition 114457965.89 13959051.51 259474019.74 8705604.68 396596641.82
(2) Transferred in
from construction in 981345584.87 19415816.84 5601615865.58 6602377267.29
progress
3. Decrease 1936936.77 4144731.15 31331376.27 4003894.72 41416938.91
(1) Disposal/
1936936.774144731.1531331376.274003894.7241416938.91
Scrapping
4. Closing balance 8220153443.34 246508090.08 21354530121.42 31963168.08 29853154822.92
II. Accumulated
depreciation
1. Opening balance 861276258.73 123348225.80 5340663239.78 17564262.94 6342851987.25
2. Increase 210696050.95 36824921.08 1394773951.15 2542784.62 1644837707.80
(1) Accrual 210696050.95 36824921.08 1394773951.15 2542784.62 1644837707.80
3. Decrease 737981.59 3757688.86 15685273.01 3194319.82 23375263.28
(1) Disposal/
737981.593757688.8615685273.013194319.8223375263.28
Scrapping
4. Closing balance 1071234328.09 156415458.02 6719751917.92 16912727.74 7964314431.77
III. Provision for
impairment
1. Opening balance 20980481.81 7425.45 7873804.67 16295.01 28878006.94
2. Increase
(1) Accrual
3. Decrease 312.71 103645.20 16295.01 120252.92
1372023 Annual Report of Zhejiang NHU Co. Ltd.
Items Buildings and Generali equipment Special equipment Transport Total
structures facilities
(1) Disposal/
312.71103645.2016295.01120252.92
Scrapping
4. Closing balance 20980481.81 7112.74 7770159.47 28757754.02
IV. Carrying amount
1. Closing balance 7127938633.44 90085519.32 14627008044.03 15050440.34 21860082637.13
2. Opening balance 6244030088.81 93922301.63 10176234567.92 9680900.17 16523867858.53
(2) Fixed assets temporarily idle
Unit: RMB Yuan
Items Cost Accumulated Provision for Carrying amount Remarks
depreciation impairment
Buildings and 189734007.10 49821436.38 20975435.81 118937134.91
structures
General equipment 141344.56 120253.14 2420.51 18670.91
Special equipment 444193028.21 367833612.52 6562447.84 69796967.85
Subtotal 634068379.87 417775302.04 27540304.16 188752773.67
(3) Fixed assets leased out under operating leases
Unit: RMB Yuan
Items Closing carrying amount
Buildings and structures 31057650.27
Subtotal 31057650.27
(4) Fixed assets with certificate of titles being unsettled
Unit: RMB Yuan
Items Carrying amount Reasons for unsettlement
Buildings and structures 804229721.63 Relevant procedures have not yet been
completed.Subtotal 804229721.63
（5）Impairment testing of fixed assets
□Applicable √Not applicable
13. Construction in progress
Unit: RMB Yuan
Items Closing balance Opening balance
Construction in progress 1621882507.56 5089233908.22
Total 1621882507.56 5089233908.22
(1) Details
Unit: RMB Yuan
1382023 Annual Report of Zhejiang NHU Co. Ltd.
Closing balance Opening balance
Items Book balance Provision Carrying amount Book balance Provision Carrying amount
for for
impairment impairme
nt
Methionine project
with annual output of 2389822701.74 2389822701.74
0.25 million tons
Shangyu Industrial
559554821.51559554821.51
Park PPS Project
NH acid project 514155642.52 514155642.52
616 Joint Production
426984891.23426984891.23
Project
NBC and CLA projects
of Zhejiang 120581503.32 120581503.32
Pharmaceutical
Cogeneration
113869534.14113869534.14
Expansion Project
Shandong Industrial
601552381.89601552381.8994672989.2894672989.28
Park HA Project
F5 project 91979706.11 91979706.11
Shandong Industrial
67408245.2267408245.22
Park 603 Project
Daming Life and
180316245.04180316245.0426065403.6426065403.64
Health Industry Project
Workshop 617 West
40846076.5040846076.50
Project
Series Aldehyde
Switching Production
41051446.9641051446.96
Project of 1500 tons in
Workshop 615
Project A4 232798676.59 232798676.59
Annual production
capacity of 300 tons of
ketone technology 30141232.47 30141232.47
reform and production
expansion project
Process and legitimacy
project with annual
production capacity of
29410485.1329410485.13
0.02 million of
glufosinate ammonium
chloride
311 Workshop Phase II
21645004.5321645004.53
VA Expansion Project
Public Multifunctional
Productive Services
37345453.8937345453.89
Integrated Platform
Construction Project
Project with an annual
production capacity of 43287282.66 43287282.66
30 tons of Apolyester
1392023 Annual Report of Zhejiang NHU Co. Ltd.
Closing balance Opening balance
Items Book balance Provision Carrying amount Book balance Provision Carrying amount
for for
impairment impairme
nt
Multi-functional
production workshop 65875103.23 65875103.23
construction project
Other piecemeal
297613118.67297613118.67684138469.51684138469.51
projects
Total 1621882507.56 1621882507.56 5089233908.22 5089233908.22
(2) Changes in significant projects
Unit: RMB Yuan
Including:
Budgets Accumulated Amount of
Completion Annual
Projects RMB 0000 Opening balance Increase Transferred to Accumulated input amount of borrowing cost Fund Other decrease Closing balance percentage capitalization
fixed assets to budget（%） borrowing cost capitalization source
Yuan （%） rate capitalization in current
period
Methionine
Raised
project with 536984.22 2389822701.74 1226623212.33 3616445914.07 104.54 100
annual output of funds
0.25 million ton
Shangyu
Industrial Park 70900.00 559554821.51 57817679.52 617372501.03 87.07 100 Others
PPS Project
NH acid project 73899.28 514155642.52 162724345.82 676879988.34 91.60 100 Others
616 Joint Others
Production 77213.69 426984891.23 426098091.74 886799.49 97.93 100
Project [Note 1]
Shandong Others
Industrial Park 8983.60 67408245.22 65792108.48 1616136.74 75.03 80
603 Project [Note
2]
NBC and CLA Others
projects of
Zhejiang 15871.76 120581503.32 38136093.18 158717596.50 100.00 100
Pharmaceutical
[Note 3]
Cogeneration Others
Expansion 33890.43 113869534.14 91967857.14 205837391.28 60.74 100
Project
Shandong
Industrial Park 97991.14 94672989.28 507768635.07 889242.46 601552381.89 61.80 60 Others
HA Project
F5 project 13563.50 91979706.11 42125728.27 134105434.38 115.98 100 Others
Daming Life and
Health Industry 76203.56 26065403.64 154250841.40 180316245.04 79.17 79 4394033.27 90277.72 2.50% Others
Project [Note 4]
Project A4 40067.95 232798676.59 232798676.59 58.10 58 Others
Total 1045569.13 4405095438.71 2514213069.32 5902138268.28 2502936.23 1014667303.52 -- -- 4394033.27 90277.72 --
Note 1 :616 Joint Production Project was terminated due to a change in sub-project planning and n the current period metal
hardware (nuts and bolts) for use amounting to 886799.49 yuan.Note 2: Shandong Industrial Park 603 Project was terminated due to a change in sub-project planning and n the current period
metal hardware (nuts and bolts) for use amounting to 1616136.74 yuan.Note 3: NBC and CLA projects of Zhejiang Pharmaceutical due to the change of the project content in the current period and the
budget has changed from RMB 135.55 million to RMB 158.72 million.Note 3: Daming Life and Health Industry Project due to the change in the investment budget for the second phase of the current
period and the budget has changed from RMB 693.15 million to RMB 762.04million.
（3） Impairment testing of construction in progress
□Applicable □Not applicable
1402023 Annual Report of Zhejiang NHU Co. Ltd.
14. Right-of-use assets
(1) Details
Unit: RMB Yuan
Items Buildings and structures Total
I. Cost
1.Opening balance 3573327.02 3573327.02
2. Increase 5007666.62 5007666.62
(1) Leased in 5007666.62 5007666.62
3. Decrease 150148.85 150148.85
(1) Disposal 150148.85 150148.85
4.Closing balance 8430844.79 8430844.79
II. Accumulated depreciation
1. Opening balance 743190.65 743190.65
2. Increase 1234171.43 1234171.43
(1) Accrual 1234171.43 1234171.43
3. Decrease 150148.85 150148.85
(1) Disposal 150148.85 150148.85
4.Closing balance 1827213.23 1827213.23
III. Carrying amount
1. Closing balance 6603631.56 6603631.56
2. Opening balance 2830136.37 2830136.37
(2) Impairment testing of right-of-use assets
□Applicable □Not applicable
15. Intangible assets
(1) Details
Unit: RMB Yuan
Non-patented
Items Land use right Patent right Software Total
technology
I. Cost
1. Opening
1854376892.9631662062.7538788324.3062516135.991987343416.00
balance
2. Increase 692186861.45 5648472.50 26580133.95 7298816.60 731714284.50
(1) Acquisition 692186861.45 5648472.50 26580133.95 2409010.51 726824478.41
(2) Internal R&D 4889806.09 4889806.09
3. Closing balance 7351154.19 7351154.19
(1) Disposal 7351154.19 7351154.19
4.Closing balance 2539212600.22 37310535.25 65368458.25 69814952.59 2711706546.31
II. Accumulated
1412023 Annual Report of Zhejiang NHU Co. Ltd.
Non-patented
Items Land use right Patent right Software Total
technology
amortization
1. Opening balance 223213559.07 5344520.66 1628315.26 18650774.69 248837169.68
2. Increase 44667680.56 2812295.98 4670723.90 5752754.40 57903454.84
(1) Accrual 44667680.56 2812295.98 4670723.90 5752754.40 57903454.84
II. Accumulated
2594832.032594832.03
amortization
4.Closing balance 2594832.03 2594832.03
4.Closing balance 265286407.60 8156816.64 6299039.16 24403529.09 304145792.49
III. Carrying amount
1. Closing balance 2273926192.62 29153718.61 59069419.09 45411423.50 2407560753.82
2. Opening balance 1631163333.89 26317542.09 37160009.04 43865361.30 1738506246.32
At the balance sheet date intangible assets formed through internal research and development account for 0.00% of total intangible
assets.
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 2134185.59 125442.24 2259627.83
GmbH
NHU/CHR.OLES
EN LATIN 3622704.97 3622704.97
AMERICA A/S
Total 5756890.56 125442.24 5882332.80
(2) Provision for impairment
Unit: RMB Yuan
Investees or Increase Decrease
events resulting Opening balance Closing balance
Accrual Translation Disposal Translation
in goodwill reserve reserve
Bardoterminal 2134185.59 125442.24 2259627.83
GmbH
Total 2134185.59 125442.24 2259627.83
17. Long-term prepayments
Unit: RMB Yuan
Items Opening balance Increase Amortization Other decrease Closing balance
Decoration fees 8149891.98 1519112.24 3325788.71 6343215.51
Site leveling fees 16221.60 16221.60
Catalysts 5013764.87 4856634.96 4515653.62 5354746.21
Total 13179878.45 6375747.20 7857663.93 11697961.72
1422023 Annual Report of Zhejiang NHU Co. Ltd.
18. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
Unit: RMB Yuan
Closing balance Opening balance
Items
Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
difference difference
Provision for
71881471.4811135696.6867822769.6511068181.53
impairment of assets
Unrealized profit from
71231525.3910684728.8550194235.377529135.31
internal transactions
Deferred income 193224271.51 28983640.72 185235337.49 27785300.63
Difference in
depreciation of fixed 287023.76 43053.56 22863701.57 3429555.24
assets
Lease liabilities 2822404.05 423360.61 2924244.46 438636.67
Total 339446696.19 51270480.42 329040288.54 50250809.38
(2) Deferred tax liabilities before offset
Unit: RMB Yuan
Closing balance Opening balance
Items Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
difference difference
Difference due to one-
off pre-tax deduction of 1575781538.31 247043712.25 1468559836.57 232654485.84
fixed assets
Profit before tax of
NHU (Hong Kong) 164156999.23 24623549.88 297747945.27 44662191.79
Trading Co. Ltd.usufructuary assets 2630791.48 394618.72 2791860.28 418779.04
Changes in fair value of
trading financial
934443.21233610.80
instruments derivative
financial instruments
Total 1743503772.23 272295491.65 1769099642.12 277735456.67
(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 50620401.24 650079.18 418779.04 49832030.34
Deferred tax liabilities 50620401.24 221675090.41 418779.04 277316677.63
(4) Details of unrecognized deferred tax assets
Unit: RMB Yuan
Items Closing balance Opening balance
Deductible temporary difference 436744796.84 511910785.90
Deductible losses 3044096175.08 2002071871.11
Total 3480840971.92 2513982657.01
1432023 Annual Report of Zhejiang NHU Co. Ltd.
(5) Maturity years of deductible losses of unrecognized deferred tax assets
Unit: RMB Yuan
Maturity years Closing balance Opening balance Remarks
Year 2027 4380243.82 8512140.12
Year 2028 34126279.57 35469296.06
Year 2029 68271533.21 79322307.29
Year 2030 232539024.92 255397416.94
Year 2031 284461823.88 287143749.91
Year 2032 1081974270.06 1336226960.79
Year 2033 1338342999.62
Total 3044096175.08 2002071871.11
19. Other non-current assets
Unit: RMB Yuan
Closing balance Opening balance
Items Provision Provision for Carrying Carrying
Book balance Book balance for
impairment amount amount
impairment
Pollution emission
15360572.7015360572.7016250239.1116250239.11
trading fees
Payments for coal quota 78962800.00 78962800.00 63496000.00 63496000.00
Prepayments for long-
43789431.1943789431.19200124243.53200124243.53
term assets
Total 138112803.89 138112803.89 279870482.64 279870482.64
20. Restrictions on assets as of the end of the reporting period
Unit: RMB Yuan
Closing balance Opening balance
Items Carrying Type of Carrying Type of
Book balance Restrictions Book balance Restrictions
amount restriction amount restriction
Cash and Banker's Banker's
bank 96790731.68 96790731.68 pledges acceptance 192010035.86 192010035.86 pledges acceptance
balances deposit deposit
Opening a Opening a
Notes pledge of pledge of
94097743.14 94097743.14 pledges 233192351.27 233192351.27 pledges
receivable banker's banker's
acceptances acceptances
Mortgage to Mortgage to
a bank for a bank for
Fixed assets 97257595.52 81371634.23 collateral the purpose 91819126.30 79692425.35 collateral the purpose
of obtaining of obtaining
a loan a loan
Mortgage to Mortgage to
a bank for a bank for
Intangible
10301747.64 10301747.64 collateral the purpose 9734671.13 9734671.13 collateral the purpose
assets of obtaining of obtaining
a loan a loan
Opening a Opening a
Receivables pledge of pledge of
143872489.15 143872489.15 pledges 136554892.05 136554892.05 pledges
financing banker's banker's
acceptances acceptances
Total 442320307.13 426434345.84 663311076.61 651184375.66
1442023 Annual Report of Zhejiang NHU Co. Ltd.
21. Short-term borrowings
(1) Details on categories
Unit: RMB Yuan
Items Closing balance Opening balance
Guaranteed borrowings 12686706.84 22643974.95
Credit borrowings 1223001356.06 1673729466.06
Credit and guaranteed borrowings 150000000.00
Total 1235688062.90 1846373441.01
22. Notes payable
Unit: RMB Yuan
Categories Closing balance Opening balance
Bank acceptance 349347472.36 627438689.79
Total 349347472.36 627438689.79
23. Accounts payable
(1) Details
Unit: RMB Yuan
Items Closing balance Opening balance
Materials and labor costs 692476954.09 735579156.33
Payments for engineering and equipment 1238481643.96 1439879280.16
Total 1930958598.05 2175458436.49
24. Contract liabilities
Unit: RMB Yuan
Items Closing balance Opening balance
Payments for goods received in advance 251008240.97 60660929.75
Total 251008240.97 60660929.75
25. Employee benefits payable
(1) Details
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
I. Short-term employee benefits 386391911.86 1875062996.26 1843181704.24 418273203.88
II. Post-employment benefits – 116365404.68 116365404.68
defined contribution plan
Total 386391911.86 1991428400.94 1959547108.92 418273203.88
(2) Details of short-term employee benefits
Unit: RMB Yuan
1452023 Annual Report of Zhejiang NHU Co. Ltd.
Items Opening balance Increase Decrease Closing balance
1. Wage bonus allowance and 352176336.45 1649716561.81 1608632988.86 393259909.40
subsidy
2. Employee welfare fund 91748297.85 91748297.85
3. Social insurance premium 58451937.48 58451937.48
Including: Medicare premium 52084723.85 52084723.85
Occupational injuries 5540945.24 5540945.24
premium
Maternity premium 826268.39 826268.39
4. Housing provident fund 58157341.48 58157341.48
5. Trade union fund and 34215575.41 16988857.64 26191138.57 25013294.48
employee education fund
Total 386391911.86 1875062996.26 1843181704.24 418273203.88
(3) Details of defined contribution plan
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
1. Basic endowment insurance 112372063.48 112372063.48
premium
2. Unemployment insurance 3993341.20 3993341.20
premium
Total 116365404.68 116365404.68
26. Taxes and rates payable
Unit: RMB Yuan
Items Closing balance Opening balance
VAT 25412719.25 14398822.86
Enterprise income tax 205149607.58 141076919.30
Individual income tax withheld for tax
12600229.276871930.23
authorities
Urban maintenance and construction tax 2768413.70 3127594.55
Land appreciation tax 19557360.54 7963404.79
Housing property tax 18825864.81 16764793.31
Land use tax 15427321.94 15427321.94
Education surcharge (local education
2052563.312568164.96
surcharge)
Total 301794080.40 208198951.94
27. Other payables
Unit: RMB Yuan
Items Closing balance Opening balance
Other payables 53671773.90 67351740.34
Total 53671773.90 67351740.34
1) Categorized by nature
Unit: RMB Yuan
1462023 Annual Report of Zhejiang NHU Co. Ltd.
Items Closing balance Opening balance
Security deposits 22235033.12 26917823.16
Unpaid expenses payable 12568235.33 8378360.48
Temporary receipts payable 13765955.47 15463590.29
Earnest money for housing purchase (Boao 600000.00 100000.00
NHU Resort Center)
Call loans 13760448.64
Others 4502549.98 2731517.77
Total 53671773.90 67351740.34
28. Non-current liabilities due within one year
Unit: RMB Yuan
Items Closing balance Opening balance
Long-term borrowings due within one year 1562730340.48 2591558912.13
Lease liabilities due within one year 1662118.19 128794.09
Total 1564392458.67 2591687706.22
29. Other current liabilities
Unit: RMB Yuan
Items Closing balance Opening balance
Output VAT to be recognized 17260124.76 4978299.99
Total 17260124.76 4978299.99
30. Long-term borrowings
(1) Categories
Unit: RMB Yuan
Items Closing balance Opening balance
Mortgaged borrowings 26217293.08 31590890.00
Guaranteed borrowings 748822433.32 934059850.02
Credit borrowings 6046603468.18 4307986768.85
Total 6821643194.58 5273637508.87
31. Lease liabilities
Unit: RMB Yuan
Items Closing balance Opening balance
Unpaid lease payments 6464449.62 4080857.16
Add: Unrealized financing expenses -1224313.19 -1258453.09
Total 5240136.43 2822404.07
1472023 Annual Report of Zhejiang NHU Co. Ltd.
32. Deferred income
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance Reasons for balance
The Company received government
Government grants 1083159222.41 106142187.78 123715135.70 1065586274.49 grants related to assets which were
amortized based on the depreciation
progress of corresponding assets.Total 1083159222.41 106142187.78 123715135.70 1065586274.49 --
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 3090907356.00 3090907356.00
34. Capital reserve
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Share/capital premium 3334992617.92 3334992617.92
Other capital reserve 278104892.89 247974.32 278352867.21
Total 3613097510.81 247974.32 3613345485.13
Other remarks including remarks on current movements and reasons for movements:
The increase in other capital surplus during the period was due to the change in the Company's share of net assets as a result of
the increase in share-based payment and special reserve recognized by the Company's associate Zhejiang Chunhui Environmental
Protection Energy Co.
35. Treasury shares
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Treasury shares 500059711.25 500059711.25
Total 500059711.25 500059711.25
35 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
recognized but recognized but Attributable to parent
cumulative before Income controlling balance
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 76577564.17 33929099.01 27343168.68 6585930.33 103920732.85
subsequently to profit or
loss
Including: Other
comprehensive income
to be transferred to 506954.43 506954.43
profit or loss under
equity method
1482023 Annual Report of Zhejiang NHU Co. Ltd.
Current period cumulative
Less: OCI Less: OCI
previously previously
Items Opening balance Current period Less: Attributable to non- Closing
recognized but recognized but Attributable to parent
cumulative before Income controlling balance
transferred to profit transferred to company
income tax tax shareholders
or loss in current retained earnings in
period current period
Translation reserves 76070609.74 33929099.01 27343168.68 6585930.33 103413778.42
Total 76577564.17 33929099.01 27343168.68 6585930.33 103920732.85
37. Special reserve
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Work safety fund 26196894.55 85571248.53 50907324.32 60860818.76
Total 26196894.55 85571248.53 50907324.32 60860818.76
Other remarks including remarks on current movements and reasons for movements:
According to the "enterprise safety production costs and the use of management practices" the production and storage of 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) operating
income of more 100 million to 1 billion yuan in accordance with 0.55% extraction; 4) 0.2% for the part of business income exceeding
RMB 1 billion.According to the " Electricity production and supply enterprises" 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 3%; 2) operating income
of more than 10 million yuan to 100 million yuan in accordance with 1.5% extraction; 3) 0.8% for the part of business income
exceeding 100 million to 1 billion; 4) 0.6% for the part of business income exceeding RMB 1 billion.
38. Surplus reserve
Unit: RMB Yuan
Items Opening balance Increase Decrease Closing balance
Statutory surplus reserve 1444414900.05 101038777.95 1545453678.00
Total 1444414900.05 101038777.95 1545453678.00
Other remarks including remarks on current movements and reasons for movements:
In accordance with the Company Law of the People's Republic of China and the Company's Articles of Incorporation the
Company is required to set aside 10% of the net profit of the parent company as legal reserve which may be discontinued when the
accumulated legal reserve reaches 50% of the registered capital.
39. Undistributed profit
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Unallocated earnings at the end of the previous 15823725913.44 14152465528.17
period before adjustment
Adjustments to total unappropriated earnings at 18898.47 10266.08
the beginning of the period (increase + decrease -)
Adjustment to unappropriated earnings at the 15823744811.91 14152475794.25
beginning of the period
1492023 Annual Report of Zhejiang NHU Co. Ltd.
Items Current period cumulative Preceding period comparative
Add: Net profit attributable to owners of the 2704238767.54 3620280626.51
parent company
Less: Appropriation of statutory surplus reserve 101038777.95 155217520.05
Dividend payable on ordinary shares 1536710840.00 1793794088.80
Closing balance 16890233961.50 15823744811.91
Details of undistributed profits at the beginning of adjustment period:
(1) Undistributed earnings at the beginning of the period increased by 18898.47 yuan due to a change in accounting policy.
40. Operating revenue/Operating cost
Unit: RMB Yuan
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 14959309948.92 10035023830.93 15845200012.28 10001085469.78
Other operations 157227054.38 96466544.52 88784391.13 47215397.16
Total 15116537003.30 10131490375.45 15933984403.41 10048300866.94
Including: Revenue
from contracts with 15113068097.55 10130630010.13 15930926276.49 10047351912.18
customers
Whether the lower of audited net profit before deducting non-recurring profit or loss and that after deducting non-recurring profit or
loss is negative
□ Yes √ No
Details of revenue:
Unit: RMB Yuan
Categories of contracts Revenue Cost
By product
Including:
Nutrition 9866822612.52 6915666865.62
Flavor and fragrance 3273948378.45 1620160495.19
New materials 1201509242.06 868294564.64
Others 770787864.52 726508084.68
Subtotal 15113068097.55 10130630010.13
By operating region
Including:
Domestic 7315209831.02 5237146850.50
Overseas 7797858266.53 4893483159.63
Subtotal 15113068097.55 10130630010.13
By revenue recognition time
Including:
Goods (transferred at a point in
15113068097.5510130630010.13
time)
By sales channel
Including:
Direct sales 4139781225.12 2816367295.07
Agent sales 10973286872.43 7314262715.06
Subtotal 15113068097.55 10130630010.13
1502023 Annual Report of Zhejiang NHU Co. Ltd.
Information related to performance obligations:
None.Information related to transaction price allocated to the remaining performance obligations:
As of December 31 2023 revenue corresponding to performance obligations for which the Company has entered into contracts but
not yet performed or fulfilled amounted to 3302.66 million yuan of which 3302.66 million yuan is expected to be recognized as
revenue in 2024.
41. Taxes and surcharges
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Urban maintenance and construction tax 36193464.64 28607303.93
Education surcharge (local education 28181033.35 23414216.46
surcharge)
Housing property tax 46262946.80 42350007.42
Land use tax 42541470.88 23119509.04
Vehicle and vessel use tax 59709.62 42132.94
Stamp duty 11682808.90 7321346.91
Environmental protection tax 1808553.59 1543201.53
Land appreciation tax 510626.40
Total 166729987.78 126908344.63
42. Selling expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Employee benefits 78293653.26 62762141.59
Office expenses business traveling 32438096.50 19775799.86
expenses
Sales commission and customs declaration 26768204.05 20869486.43
charges
Advertising and promotion expenses
10599777.159402072.09
business entertainment expenses
Others 10217082.90 9448119.50
Total 158316813.86 122257619.47
43. Administrative expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Employee benefits 289396666.51 261083846.67
Depreciation amortization of intangible 112070187.88 100843402.02
assets
Office expenses business traveling 59651384.82 64191712.29
expenses
Business entertainment expenses 21812291.14 25250585.72
Consulting fees 16308436.60 17492615.79
Insurance premiums 15294561.41 14142873.77
1512023 Annual Report of Zhejiang NHU Co. Ltd.
Items Current period cumulative Preceding period comparative
Disability Employment Guarantee Fund 15189147.67 10343725.70
Others 21349615.96 11325968.73
Total 551072291.99 504674730.69
44. R&D expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Employee benefits 400415932.53 416805732.59
Direct input 321079990.14 289342939.10
Depreciation amortization of intangible 80744547.58 68939590.01
assets
Outsourcing expenses 55869894.26 42655069.34
Office expenses business traveling 14660221.42 24753637.81
expenses
Others 15030889.09 16448437.28
Total 887801475.02 858945406.13
44. Financial expenses
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Interest expenses 319906196.30 329243757.49
Less: Interest income 133145750.15 153449422.80
Losses on foreign exchange (or less: gains) -128139758.40 -140824825.49
Others 6829825.20 9432268.93
Total 65450512.95 44401778.13
46. Other income
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Government grants related to assets 123715135.70 100000509.62
Government grants related to income 64789047.78 75760610.32
Value-added tax credits 12067795.91
Refund of handling fees for withholding 1516543.14 1102494.25
individual income tax
Total 202088522.53 176863614.19
47. Investment income
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Investment income from long-term equity 44130854.54 95616385.10
investments under equity method
Investment income from disposal of 4526003.79 -20658819.12
financial instruments
Dividend income earned on investments in
other equity instruments during the 24473000.00
holding period
1522023 Annual Report of Zhejiang NHU Co. Ltd.
Items Current period cumulative Preceding period comparative
Gain on debt restructuring -847442.05
Interest on discounted bills -2409421.07
Investment income from bank financial 12715401.91 52749284.13
products and structured deposits
Interest income from split loans 465887.82 988193.62
Total 83054284.94 128695043.73
48. Gains on changes in fair value
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Held-for-trading financial assets 44460570.82 27222640.33
Including: Gains on changes in fair value
arising from financial assets classified as at fair 44460570.82 27222640.33
value through profit or loss
Held-for-trading financial liabilities -14528085.84 -93544424.05
Including: Gains on changes in fair value
arising from financial liabilities classified as at -14528085.84 -93544424.05
fair value through profit or loss
Total 29932484.98 -66321783.72
49. Credit impairment loss
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Bad debts 3551588.16 5165584.15
Total 3551588.16 5165584.15
50. Assets impairment loss
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Inventory write-down loss -230600448.22 -162974265.12
Total -230600448.22 -162974265.12
51. Gains on asset disposal
Unit: RMB Yuan
Sources Current period cumulative Preceding period comparative
Gains on disposal of non-current assets 16404163.69 2726604.77
Total 16404163.69 2726604.77
52. Non-operating revenue
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative Amount included in non-
recurring profit or loss
Indemnity income 6995674.96 4412772.54 6995674.96
Gains on damage or retirement 433987.27 433987.27
of non-current assets
1532023 Annual Report of Zhejiang NHU Co. Ltd.
Items Current period cumulative Preceding period comparative Amount included in non-
recurring profit or loss
Others 501473.33 572451.80 501473.33
Total 7931135.56 4985224.34 7931135.56
53. Non-operating expenditures
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative Amount included in non-
recurring profit or loss
Losses on damage or retirement
10977630.4876959122.6510977630.48
of non-current assets
Donation expenditures 1709683.40 1598510.79 1709683.40
Others 1815424.73 975097.47 1815424.73
Total 14502738.61 79532730.91 14502738.61
54. Income tax expenses
(1) Details
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Current period income tax expenses 534585273.11 452277073.04
Deferred income tax expenses -6459636.06 147548801.01
Total 528125637.05 599825874.05
(2) Reconciliation of accounting profit to income tax expenses
Unit: RMB Yuan
Items Current period cumulative
Profit before tax 3253534539.28
Income tax expenses based on statutory/applicable tax rate 488030180.89
Effect of different tax rate applicable to subsidiaries 76435219.99
Effect of prior income tax reconciliation -3844619.95
Effect of non-taxable income -11419236.74
Effect of non-deductible costs expenses and losses 1970798.64
Effect of utilization of deductible losses not previously recognized as deferred tax -3245917.71
assets
Effect of deducible temporary differences or deductible losses not recognized as 124744929.03
deferred tax assets in the current period
Effect of extra deduction of R&D expenses -133428470.46
Additional deduction for wages paid for the placement of disabled persons and other -304786.42
employment encouraged by the state
Reduction of taxable amount for specialized equipment for environmental protection -10812460.22
energy and water conservation and safe production
Income tax expenses 528125637.05
55. Other comprehensive income
Please refer to item VII 36 of this section for details.
1542023 Annual Report of Zhejiang NHU Co. Ltd.
56. Notes to items of the cash flow statement
(1) Cash related to operating activities
Other cash receipts related to operating activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Interest income from cash in bank 133145750.15 153449422.80
Receipt of government grants 171654889.48 195220666.19
Recovery of temporary borrowings and
19497545.6619779291.72
security deposits
Receipt of temporary receipts payable 1440627.59 4578466.46
Other receipts and net current accounts 14644686.92 5220974.95
Total 340383499.80 378248822.12
Other cash payments related to operating activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
R&D expenditures in the form of cash 78682491.15 83857144.43
Office expenses and business traveling
83191829.1983967512.15
expenses
Advertising and promotion expenses 32412068.29
34652657.81
business entertainment expenses
Sales commission and customs 26768204.05
20869486.43
declaration charges
Insurance expenses 15702592.83 14769418.13
Consulting fees 16308436.60 17492615.79
Other payments and net current accounts 62670912.99 34257491.06
Total 315736535.10 289866325.80
(2) Cash related to investing activities
Other cash receipts related to investing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Redemption of financial products 720000000.00 1800000000.00
Cash obtained from subsidiaries on the
14761216.04
consolidation date
Receipt of demobilized loans and interest 21564394.06 771074.45
Recovery of land deposit 88796037.50 5084750.00
Redemption of financial assets for
392525.96
trading
Total 830752957.52 1820617040.49
Other cash payments related to investing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Payments for losses on forward foreign
86558820.03
exchange settlement
Payments for purchase of financial
145000000.00720000000.00
products and structured deposits
Debit and credit principal (finance) 20881387.07
Total 145000000.00 827440207.10
1552023 Annual Report of Zhejiang NHU Co. Ltd.
(3) Cash related to financing activities
Other cash receipts related to financing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Cash received form loans 11188800.91
Total 11188800.91
Other cash payments related to financing activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Payments for bank financing handling
2048045.724010015.77
charges
Payments of handling charges for issuing
200900.43576792.00
letters of guarantee for borrowings
Repayments of principal and interest of
1377634.28545623.09
leases
Repurchase of treasury shares 179698926.77
Repayments of call loans and interest 13760448.64 185842.44
Total 17387029.07 185017200.07
Changes in liabilities arising from financing activities
□Applicable √ Not applicable
57. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Unit: RMB Yuan
Supplement information Current period cumulative Preceding period comparative
1. Reconciliation of net profit to cash flows
from operating activities:
Net profit 2725408902.23 3638277074.80
Add: Provision for assets impairment loss 227048860.06 157808680.97
Depreciation of fixed assets oil and 1644749644.57 1346707461.57
gas assets productive biological assets
Depreciation of right-of-use assets 1234171.43 460187.61
Amortization of intangible assets 57903454.84 43000548.86
Amortization of long-term 7857663.93 6626543.66
prepayments
Losses on disposal of fixed assets
intangible assets and other long-term -16404163.69 -2726604.77
assets (Less: gains)
Fixed assets retirement loss (Less: 10977630.48 76959122.65
gains)
Losses on changes in fair value (Less: -29932484.98 66321783.72
gains)
Financial expenses (Less: gains) 260056823.19 346183580.90
Investment losses (Less: gains) -83054284.94 -128695043.73
Decrease of deferred tax assets (Less: 49181951.16 5983427.69
increase)
Increase of deferred tax liabilities -55641587.22 141565373.32
(Less: decrease)
Decrease of inventories (Less: -401782933.20 -1104802476.55
1562023 Annual Report of Zhejiang NHU Co. Ltd.
Supplement information Current period cumulative Preceding period comparative
increase)
Decrease of operating receivables 112781434.03 -486206139.60
(Less: increase)
Increase of operating payables (Less: 574321857.22 240512886.47
decrease)
Others 34663924.21 13504676.04
Net cash flows from operating 5119370863.32 4361481083.61
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 4446570415.30 5151841931.86
Less: Cash at the beginning of the period 5151841931.86 5714537538.23
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 -705271516.56 -562695606.37
(2) Composition of cash and cash equivalents
Unit: RMB Yuan
Items Closing balance Opening balance
I. Cash 4446570415.30 5151841931.86
Including: Cash on hand 21747.98 16584.59
Cash in bank on demand for payment 4445046788.85 5151816943.29
Other cash and bank balances on 1501878.47 8403.98
demand for payment
II. Cash and cash equivalents at the end of the 4446570415.30 5151841931.86
period
(3) Restricted use but still cash and cash equivalents presentation
Unit: RMB Yuan
Reasons for remaining cash
Items Current period cumulative Preceding period comparative
and cash equivalents
89207212.60 62426363.92 Currency funds held abroad
Cash and bank balances
353268853.53 1087813736.45 raise funds
Total 442476066.13 1150240100.37
(4) Monetary funds other than cash and cash equivalents
Unit: RMB Yuan
Reasons for not being cash and
Items Current period cumulative Preceding period comparative
cash equivalents
77905369.24 147608293.24 Banker's acceptance deposit
Cash and bank balances
12048779.84 42310180.59 Letter of Credit Deposit
1572023 Annual Report of Zhejiang NHU Co. Ltd.
Reasons for not being cash and
Items Current period cumulative Preceding period comparative
cash equivalents
3929600.00 customs Deposit
853216.21 851288.54 Project works labor wage deposit
870050.56 863937.05 Safety Construction deposit
661215.83 359836.44 Water deposit
500000.00 Letter of Guarantee Deposit
22500.00 16500.00 ETC Deposit
Total 96790731.68 192010035.86
(5) Changes in liabilities related to financing activities
Unit: RMB Yuan
Increase Decrease
Items Opening balance Non-cash Closing balance
Cash movements Non-cash changes Cash movements
changes
Short-term
1846373441.012524318716.61180714509.333315718604.051235688062.90
borrowings
Long-term
borrowings(including
7865196421.003472000000.00226690484.723179513370.668384373535.06
long-term loans due
within one year)
Lease
liabilities(including
2951198.165316785.991365729.536902254.62
lease liabilities due
within one year)
dividend payable 1536710840.00 1536710840.00
Other accounts
13760448.6417119783.6816021299.5414858932.78
payable
Total 9728281508.81 5996318716.61 1966552403.72 8049329843.78 9641822785.36
(6) Net presentation of cash flows
The cash flows related to the Company's investment business are the cash inflows and outflows of fast-turnover large-amount
and short-term projects and the presentation of the above cash flows on a net basis is more indicative of their impact on the Company' s
ability to pay and solvency and is more useful for evaluating the Company's ability to pay and solvency and for analyzing the
Company's future cash flows therefore the Company has presented the relevant cash flows generated from the above business on a net
basis. If the cash flows related to the above operations were presented in gross amount it would have the following effects on the
Company's statement of cash flows:
Unit: RMB Yuan
Items Current period Increase Preceding period Decrease
Other cash receipts related to investing activities 780000000.00 2360000000.00
Other cash payments related to investing activities 780000000.00 2360000000.00
58. Monetary items in foreign currencies
(1) Details
Unit: RMB Yuan
1582023 Annual Report of Zhejiang NHU Co. Ltd.
Closing balance in foreign RMB equivalent at the end of
Items Exchange rate
currencies the period
Cash and bank balances 261440683.90
Including: USD 23461576.73 7.082700 166171309.51
EUR 10000174.05 7.859200 78593367.89
HKD 1158588.73 0.906220 1049936.28
JPY 114143704.00 0.050213 5731497.81
GBD 52800.00 9.041100 477370.08
BRL 3678729.59 1.465800 5392281.83
MXN 5642451.26 0.418150 2359390.99
PLN 63869.83 1.810700 115649.10
SGD 288231.87 5.377200 1549880.41
Accounts receivable 1636224261.82
Including: USD 195098102.35 7.082700 1381821329.51
EUR 23097400.95 7.859200 181527093.55
HKD
GBD 135840.00 9.041100 1228143.02
BRL 48879585.03 1.465800 71647695.74
Long-term borrowings 26217293.08
Including: USD
EUR 3335873.00 7.859200 26217293.08
HKD
Other receivables 55989930.15
Including: EUR 2824911.31 7.859200 22201542.97
HKD 31700.00 0.906220 28727.17
BRL 7521444.45 1.465800 11024933.27
MXN 53092424.90 0.418150 22200597.47
SGD 99332.23 5.377200 534129.27
Short-term borrowings 37653068.50
Including: EUR 3882267.31 7.859200 30511515.24
DKK 6778239.62 1.053600 7141553.26
Accounts payable 57094927.48
Including: USD 1837294.71 7.082700 13013007.24
EUR 5245715.20 7.859200 41227124.90
BRL 1298365.36 1.465800 1903143.94
MXN 2275861.30 0.418150 951651.40
Other payables 13002300.00
Including: USD 703115.11 7.082700 4979953.39
EUR 1006433.38 7.859200 7909761.22
HKD 28430.00 0.906220 25763.83
DKK 12990.00 1.053600 13686.26
SGD 13601.00 5.377200 73135.30
Non-current liabilities due
7946786.52
within one year
Including: EUR 961662.00 7.859200 7557893.99
BRL 265310.77 1.465800 388892.53
Lease liabilities 838658.99
ncluding: BRL 572151.04 1.465800 838658.99
1592023 Annual Report of Zhejiang NHU Co. Ltd.
59. Leasing
(1) The Company as a les see
□Applicable □ Not applicable
Variable lease payments not included in the measurement of lease liabilities
□Applicable □ Not applicable
Lease costs for short-term leases or low-value assets with simplified treatment
□Applicable □ Not applicable
Situations involving sale and leaseback transactions
1) Information on right-to-use assets Please refer to item VII 14 of this section for details
2) The Company's accounting policies for short-term leases and leases of low-value assets Please refer to item V 27 of this section
for details. The amounts of short-term lease charges and lease charges for low-value assets recognized in profit or loss are as follows:
Unit: RMB Yuan
Items Current period Increase Preceding period Decrease
Short-term rental costs 6542273.66 1960380.62
Total 6542273.66 1960380.62
3) Current profit or loss and cash flows related to leases
Unit: RMB Yuan
Items Current period Increase Preceding period Decrease
Interest expense on lease liabilities 270011.27 149348.03
Total cash outflows related to leases 8312444.36 2682437.97
4) The maturity analysis of lease liabilities and the corresponding liquidity risk management Please refer to item XII 1 of this
section for details.
(2) The Company as lessor
Operating leases as lessor
□Applicable □ Not applicable
Unit: RMB Yuan
Of which: Income related to variable
Items Rental income lease payments not included in lease
receipts
Rental income 3468905.75
Total 3468905.75
Financial leases as lessor
□Applicable □ Not applicable
Undiscounted lease receipts for each of the next five years
□Applicable □ Not applicable
Unit: RMB Yuan
Annual undiscounted lease receipts
Items
Closing balance Opening balance
First year 349330.00 1642344.00
second year 41520.00 620000.00
Total undiscounted lease receipts after
390850.002262344.00
five years
1602023 Annual Report of Zhejiang NHU Co. Ltd.
VIII. R&D expenses
Unit: RMB Yuan
Items Current period Increase Preceding period Decrease
Employee benefits 400415932.53 416805732.59
Direct input 321079990.14 289342939.10
Depreciation amortization of intangible
80744547.5868939590.01
assets
Outsourcing expenses 55869894.26 42655069.34
Office expenses business traveling
14660221.4224753637.81
expense
Others 15030889.09 16448437.28
Employee benefits 887801475.02 858945406.13
Of which: Expensed research and
887801475.02858945406.13
development expenditure
IX. Changes in the scope of consolidation
1. Business combinations not under the same control
(1) Non-common control business combinations occurring during the period
Unit: RMB Yuan
Net profit of the
Revenue of
Metho purchased party
Basis for the purchased Cash flows of the purchased
Percentage of ds of at the end of the
Point of Cost of equity determining party from the party at the end of the period
Name of the purchased party equity equity purchase date period from the
acquisition acquisition the purchase purchase date from the purchase date to the
acquisition acquis date of purchase
date to the end of end of the period
it ion to the end of the
the period
period
Completion of
Shandong New Shuang'an September acquir September 20
100000.00 100.00% business 0.00 82.35 86.68
Biotechnology Co. Ltd 20 2023 e 2023
registration
Other remarks：
Pursuant to the Equity Transfer Agreement entered into between the subsidiary Shandong NHU Amino Acid Co. Ltd and Chenhui
Environmental Protection Technology Co. Ltd on September 12 2023 the Company acquired 100% equity interest in Shandong
Shandong New Shuang'an Biotechnology Co. Ltd held by Chenhui Environmental Protection Technology Co. Ltd at a consideration
of RMB100000.00. Shandong New Shuangan Biotechnology Co. Ltd. completed its business registration on September 20 2023 so
it was included in the scope of the consolidated financial statements from September 2023 onwards.
(2) Merger costs and goodwill
Unit: RMB Yuan
Combination cost Shandong New Shuangan Biotechnology Co. Ltd.Cash 100000.00
-- Fair value of non-cash assets
-- Fair value of debt issued or assumed
-- Fair value of equity securities issued
-- Fair value of contingent consideration
- - Fair value at the date of purchase of equity interests held
prior to the date of purchase
1612023 Annual Report of Zhejiang NHU Co. Ltd.
Combination cost Shandong New Shuangan Biotechnology Co. Ltd.--Other
Total consolidated costs 100000.00
Less: Share of fair value of net identifiable assets acquired 100000.00
Amount by which goodwill/cost of consolidation is less than
share of fair value of identifiable net assets acquired
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: RMB Yuan
Shandong New Shuangan Biotechnology Co. Ltd.Item
Fair value on the purchase date Book value on the purchase date
assets 100000.00 100000.00
Cash and bank balances 100000.00 100000.00
Accounts receivable
Inventories
Fixed assets
Intangible assets
Debt：
Borrowings
Accounts payable
Deferred income tax liabilities
Equity: 100000.00 100000.00
Less:Non-controlling interest
Net assets acquired 100000.00 100000.00
X. Interest in other entities
1. Interest in subsidiaries
(1) Composition of the group
registered Main operating Place of Business Holding proportion (%) Acquisition
Subsidiaries
capital place registration nature Direct Indirect method
NHU (Hong Kong) US2.40mi Hong Kong Hong Kong
Commerce 100.00% 0.00% Establishment
Trading Co. Ltd. llions China China
Shandong NHU
1100milli Weifang Weifang Manufacturin
Amino-acids Co. 100.00% 0.00% Establishment
on(yuan) Shandong Shandong g
Ltd.Heilongjiang NHU
700millio Suihua Suihua Manufacturin
Biotechnology Co. 100.00% 0.00% Establishment
ns(yuan) Heilongjiang Heilongjiang g
Ltd.
2. Interests in joint arrangements or associates
(1) Aggregated financial information of insignificant joint ventures and associates
Unit: RMB Yuan
1622023 Annual Report of Zhejiang NHU Co. Ltd.
Closing balance/ Opening balance/
Item
Current period cumulative Preceding period comparative
Joint ventures:
Total carrying amount of investments 216166978.49
Total of the following by percentage of
shareholding
-- Net profit -17341021.51
-- Other comprehensive income
-- Total comprehensive income -17341021.51
Associates:
Total carrying value of investments 480978221.59 432503568.48
Total of the following by percentage of
shareholding
-- Net profit 43633175.81 73574436.65
-- Other comprehensive income 841477.30 7601506.08
-- Total comprehensive income 44474653.11 81175942.73
XI. Government grants
1. Government grants recognized at the end of the reporting period at the amount receivable
□Applicable □ Not applicable
Reasons for not receiving the projected amount of government grants at the projected point in time
□Applicable □ Not applicable
2. New government subsidies during the period
Unit: RMB Yuan
Item Amount of new grants for the period
Government grants related to assets 106142187.78
includng: charged to deferred income 106142187.78
Government grants related to income 64806739.10
includng:charged to other gains 64806739.10
fiscal subsidy 2444444.44
ncludng: Elimination of construction in
2444444.44 progress
Total 173393371.32
3. Government grants related to assets
□ Applicable □Not applicable
Unit: RMB Yuan
non- Asset/re
Opening
Item Increase operating Decrease other Closing balance venue
balance
income related
1083159222.4 106142187.7 Asset-
Deferred income 123715135.70 1065586274.49
1 8 related
4. Government grants related to income
□ Applicable □Not applicable
1632023 Annual Report of Zhejiang NHU Co. Ltd.
Unit: RMB Yuan
Item Current period Increase Preceding period Decrease
Government grants related to income 188504183.48 175761119.94
5. Government grants returned
Unit: RMB Yuan
Item refund Reason for return
Chemical Industry Transformation and
Upgrading 2.0 Intelligent Transformation 16191.32 Government duplicate encashment returned
Project Incentives
stable employment subsidy 1500.00 Ineligible for grants
Tota 17691.32
XII. Risks related to financial instruments
1. Various types of risks arising from financial instruments
In risk management the Company aims to seek the appropriate balance between the risks and benefits from its use of financial
instruments and to mitigate the adverse effects that the risks of financial instruments have on the Company’s financial performance so
as to maximize the profits of shareholders and other equity investors. Based on such risk management objectives the Company’s risk
management policies are established to identify and analyze the risks faced by the Company to set appropriate risk limits and controls
and to monitor risks and adherence to limits on a timely and reliable basis.The Company has exposure to the following risks from its use of financial instruments which mainly include: credit risk liquidity
risk and market risk. The Management has deliberated and approved policies concerning such risks and details are:。
(I) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge
an obligation.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each balance sheet date the Company assesses whether the credit risk on a financial instrument has increased significantly
since initial recognition. When assessing whether the credit risk has increased significantly since initial recognition the Company takes
into account reasonable and supportable information which is available without undue cost or effort including qualitative and
quantitative analysis based on historical data external credit risk rating and forward-looking information. The Company determines
the changes in default risk of financial instruments during the estimated lifetime through comparison of the default risk at the balance
sheet date and the initial recognition date on an individual basis or a collective basis.The Company considers the credit risk on a financial instrument has increased significantly when one or more of the following
qualitative and quantitative standards are met:
1) Quantitative standard mainly relates to the scenario in which at the balance sheet date the probability of default in the
remaining lifetime has risen by more than a certain percentage compared with the initial recognition;
2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial position present or
expected changes in technology market economy or legal environment that will have significant adverse impact on the debtor’s
repayment ability.
1642023 Annual Report of Zhejiang NHU Co. Ltd.
(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 3、4、5、 and 7 of this section for details on the reconciliation table of opening balance and closing
balance of provision for losses of financial instrument.
4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks the
Company has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other cash and bank balances in financial institutions with relatively high credit
levels hence its credit risk is relatively low.
(2) Receivables
The Company performs credit assessment on customers using credit settlement on a continuous basis. The Company selects
credible and well-reputed customers based on credit assessment result and conducts ongoing monitoring on balance of receivables to
avoid significant risks in bad debts.As the Company only conducts business with credible and well-reputed third parties collateral is not required from customers.The Company manages credit risk aggregated by customers. As of December 31 2023 the Company has certain concentration of
credit risk and 22.95% (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
Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated with cash or
other financial assets settlement which is possibly attributable to failure in selling financial assets at fair value on a timely basis or
failure in collecting liabilities from counterparties of contracts or early redemption of debts or failure in achieving estimated cash
flows.In order to control such risk the Company comprehensively utilized financing tools such as notes settlement bank borrowings
etc. and adopts long-term and short-term financing methods to optimize financing structures and finally maintains a balance between
financing sustainability and flexibility. The Company has obtained credit limit from several commercial banks to meet working
1652023 Annual Report of Zhejiang NHU Co. Ltd.
capital requirements and expenditures.Financial liabilities classified based on remaining time period till maturity
Unit: RMB Yuan
December 31 2023
Items Carrying amount Contract amount not yet Within 1 year 1-3 years Over 3 years
discounted
Bank 10115809381.27 3052860592.80
9620061597.966305307508.57757641279.90
borrowings
Notes
349347472.36349347472.36349347472.36
payable
Accounts
1930958598.051930958598.051930958598.05
payable
Other
53671773.9053671773.9053671773.90
payables
Lease
6902254.628401587.431937137.813097878.183366571.44
liabilities
Subtotal 11960941696.89 12458188813.01 5388775574.92 6308405386.75 761007851.34
(Continued)
Unit: RMB Yuan
December 31 2022
Items Carrying amount Contract amount not yet Within 1 year 1-3 years Over 3 years
discounted
Bank
9711569862.0110221836453.804703403806.645017998789.29500433857.87
borrowings
Notes
627438689.79627438689.79627438689.79
payable
Accounts
2175458436.492175458436.492175458436.49
payable
Other
67351740.3467351740.3467351740.34
payables
Lease
2951198.164345952.05265094.89714285.723366571.44
liabilities
Subtotal 12584769926.79 13096431272.47 7573917768.15 5018713075.01 503800429.31
(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 inte rest rate.As of December 31 2023 balance of borrowings with interest accrued at floating interest rate totaled 9620.06 million yuan
(December 31 2022: 9711.57 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.
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.
1662023 Annual Report of Zhejiang NHU Co. Ltd.
When short-term imbalance occurred to foreign currency assets and liabilities the Company may trade foreign currency at market
exchange rate when necessary in order to maintain the net risk exposure within an acceptable level.Please refer to item VII 58(1) of the notes to the financial statements for details on foreign currency financial assets and liabilit ies
at the end of the period.
2. Hedging
(1) The Company conducts hedging business for risk management.
□Applicable □Not applicable
1) During the period under review the Company carried out foreign exchange hedging business using forward settlement and
other derivative contracts as hedging instruments and some of the expected purchases and sales transactions involving foreign
exchange cash flows as hedged items as a means of hedging the risk of fluctuations in expected future cash flows arising from
expected purchases and sales borne by the Company as the prices in the foreign exchange market fluctuate.
2) During the period under review the Company conducted foreign exchange hedging business using forward settlement and
other derivative contracts as hedging instruments and certain foreign exchange deposits as hedged items as a means of hedging the
Company's exposure to the risk of fluctuations in existing foreign exchange deposits in response to fluctuations in foreign exchange
market prices.
(2) The Company conducts eligible hedging operations and applies hedge accounting
□Applicable □ Not applicable
(3) The Company conducts hedging operations for risk management and expects to achieve its risk management objectives
but does not apply hedge accounting
□ Applicable □Not applicable
Items Reasons for not applying hedge accounting Effect on the financial statements
The Company extensively uses foreign exchange
forward contracts and other tools for foreign exchange
risk management between USD EUR CNY and JPY Derivative financial assets:28056050.95yuan
foreign exchange on a global scale; because there is a certain offsetting Investment income:4525080.17yuan
swap (FX) contract relationship between the exchange rate changes Gains on changes in fair
between different currencies which can to a certain value:29932484.98yuan
extent have the same effect as that of hedge
accounting hedge accounting has not been applied.
3. Financial assets
(1) Classification of transfer methods
□ Applicable □Not applicable
Unit: RMB Yuan
Nature of financial Amount of financial Status of Basis for determining
Items
assets transferred assets transferred derecognition derecognition
The main risks and rewards
such as the related interest
Full
endorsements Receivables financing 1611058204.23 rate risk and credit risk have
derecognition
been transferred to banks and
third parties
1672023 Annual Report of Zhejiang NHU Co. Ltd.
Nature of financial Amount of financial Status of Basis for determining
Items
assets transferred assets transferred derecognition derecognition
The main risks and rewards
such as the related interest
Full
discounted Receivables financing 572883974.83 rate risk and credit risk have
derecognition
been transferred to banks and
third parties
total 2183942179.06
(2) Financial assets derecognized due to transfers
□ Applicable □Not applicable
Unit: RMB Yuan
Modalities for the transfer of Amount of financial assets Gains or losses related to
Items
financial assets derecognized derecognition
Receivables financing Endorsements/ discounted 2183942179.06 -2409421.07
total 2183942179.06 -2409421.07
XIII. Fair value disclosure
1. Details of fair value of assets and liabilities at fair value at the balance sheet date
Unit: RMB Yuan
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 non-current 28056050.95 145000000.00 173056050.95
financial assets
Capital Protected Floating
145000000.00145000000.00
Income Financial Products
derivative financial asset 28056050.95 28056050.95
Receivables financing 331634090.61 331634090.61
Other equity instrument
22998147.5522998147.55
investments
Total liabilities at recurring
28056050.95499632238.16527688289.11
fair value measurement
II. Discontinued fair value
--------
measurements
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
1682023 Annual Report of Zhejiang NHU Co. Ltd.
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.XIV Related parties and related party transactions
1. Parent company
Holding Voting right
Parent company Place of registration Business nature Registered capital proportion over the proportion over the
Company Company
NHU Holding
Xinchang Zhejiang Manufacturing 120.00 million 49.71% 49.71%
Group 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(1) of the notes to the financial statements for details on the Company’s subsidiaries.
3. Joint ventures and associates of the Company
Please refer to item VII 10 of the notes to the financial statements for details on the Company’s significant joint ventures and
associates.
4. Other related parties of the Company
Related parties Relationships with the Company
Beijing Foyou Pharma Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Zhejiang Asen Pharmaceutical Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Xinchang County Hechun Greening Co. Ltd. [Note] Controlled by NHU Holding Group Co. Ltd.Zhejiang Deli Equipment Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Front Pharmaceutical PLC. Controlled by NHU Holding Group Co. Ltd.Weifang NHU Real Estate Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Qionghai Heyue Property Services Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Qionghai Boao Holliyard Hotel Management Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Shaoxing Heyue Property Services Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Xinchang County NHU Real Estate Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Zhejiang Jingshi Real Estate Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Shaoxing Yuexiu Education Development Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Shaoxing Jinghe Hotel Management Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Shaoxing Shangyu NHU Real Estate Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Suihua NHU Real Estate Co. Ltd. Controlled by NHU Holding Group Co. Ltd.Zhejiang Yuexiu University of Foreign Languages Controlled by NHU Holding Group Co. Ltd.Heilongjiang Haotian Corn Development Co. Ltd. Minority Shareholders of Subsidiaries
CHR.OLESEN A/S Minority Shareholders of Subsidiaries
Shaoxing Heyue Property Service Co. Ltd. Shangyu Branch Branch of Xinchang County NHU Real Estate Co. Ltd.[Note] Xinchang County Hechun Greening Co. Ltd. Written off in June 2023.Other remarks：
1692023 Annual Report of Zhejiang NHU Co. Ltd.
As Client B holds 25% equity of NHU Europe GmbH the holding subsidiary of the Company’s subsidiary NHU (Hong Kong)
Trading Co. Ltd. the Company discloses transactions between Client B and NHU Europe GmbH as well as balances in related party
transactions for the sake of prudence.
5. Related party transactions
(1) Purchase and sale of goods rendering and receiving of services
Purchase of goods and receiving of services
Unit: RMB Yuan
Content of Current period Transaction limit Whether exceeds Preceding period
Related parties
transaction cumulative approved transaction limit comparative
Qionghai Boao Holliyard Catering and
Hotel Management Co. accommodati 278019.64 98294.20
Ltd. on services
Qionghai Heyue Property Property
615003.21856682.06
Services Co. Ltd. management
Shaoxing Heyue Property Property
203704.0016560.62
Services Co. Ltd. management
Shaoxing Heyue Property
Property
Service Co. Ltd. Shangyu 1027168.03
management
Branch
Catering and
Shaoxing Jinghe Hotel
accommodati 1502395.50 836209.09
Management Co. Ltd.on services
Shaoxing Yuexiu
Receiving of
Education Development 21473.58 49943.14
services
Co. Ltd.
4109100.00 YES
Xinchang County Hechun Purchase of
392472.77
Greening Co. Ltd. goods
Zhejiang Asen Purchase of
851758.271085908.02
Pharmaceutical Co. Ltd. goods
Zhejiang Yuexiu
Receiving of
University of Foreign 7780.00
services
Languages
Shaoxing Shangyu NHU Maintenance
507260.38
Real Estate Co. Ltd. Fund
Suihua NHU Real Estate Maintenance
35324.40
Co. Ltd. Fund
Zhejiang Jingshi Real Receiving of
156675.16
Estate Co. Ltd. services
Xinchang County Catering and
Hecheng Real Estate Co. accommodati 80705.84
Ltd on services
Anhui Innovation Consulting
4716980.95
Technology Co. Ltd Service Fee
Purchase of
Heilongjiang Haotian 209059.75 45857289.94
goods
Corn Development Co.Purchase of
Ltd. 1251926.61
steam
Receiving of
Shandong Bin’an 36698.11
services
Vocational Training
School Co. Ltd. training fee 1083870.86 1436884.23
Purchase of
Zhejiang Chunhui 98139205.41 105647875.05
steam
Environmental Protection
Receiving of
Energy Co. Ltd. 353052.42
services
1702023 Annual Report of Zhejiang NHU Co. Ltd.
Waste
disposal 1833745.26
service fees
Purchase of
197047387.05157701344.20
Zhejiang Deli Equipment goods
200700000.00 YES
Co. Ltd. Receiving of
5332882.32290435.42
services
Zhejiang Saiya Chemical Purchase of
243288750.67 240000000.00 YES 291724594.92
Materials Co. Ltd. goods
Consulting
CysBio ApS 7899201.50 8089695.36
Service Fee
total 563866317.88 444809100.00 616697900.06
Sale of goods and rendering of services
Unit: RMB Yuan
Related parties Content of transaction Current period cumulative Preceding period comparative
Pharmaceutical
Beijing Foyou Pharma Co. Ltd. intermediates testing 47169.81 715227.93
fees
Labor costs etc. 6735.85 94904.53
Envalior NHU Engineering Utilities 1629290.16 1520978.65
Materials (Zhejiang) Co.Ltd. Utilities fees 43789.59 65140.06
Scrapped materials 139102756.74 155506893.66
Pharmaceutical
Front Pharmaceutical PLC. intermediates testing 1150631.16 345132.74
fees
Waste and scrap
23372.5421584.50
Shandong Bin’an Vocational materials
Training School Co. Ltd. Management Service
226415.10226415.09
Fee
Shaoxing Heyue Property Services
waste materials 16880.73
Co. Ltd.Heilongjiang Haotian Corn
training fee 46317.42
Development Co. Ltd.Zhejiang Asen Pharmaceutical Co. Pharmaceutical
6735.85331747.79
Ltd. intermediates test fees
Zhejiang Chunhui Environmental Pharmaceutical
53097.3517256.64
Protection Energy Co. Ltd. intermediates
training fee 20895.92
installations 42477.88
Zhejiang Deli Equipment Co. Ltd. new material 424663.96 109898.23
Management Service
63939.40
Fee
Pharmaceutical
Zhejiang Second Pharma Co. Ltd. 1415.09
intermediates test fees
Heilongjiang Haotian Corn
steam fee 82192.66
Development Co. Ltd.total 142842645.15 159101311.88
(2) Related party leases
The Company as the lessor:
Unit: RMB Yuan
Lease income recognized in Lease income recognized in
Lessees Types of assets leased
the current period preceding period
1712023 Annual Report of Zhejiang NHU Co. Ltd.
Envalior NHU Engineering Land use right and
1053619.111041710.85
Materials (Zhejiang) Co.Ltd. buildings
Qionghai Boao Holliyard Hotel Land use right and
480000.00429088.57
Management Co. Ltd. buildings
Zhejiang Jingshi Real Estate Co. Land use right and
336024.47328318.05
Ltd. buildings
Land use right and
77064.2377064.23
Zhejiang Deli Equipment Co. Ltd. buildings
Land use right and
16513.7616513.76
NHU Holding Group Co. Ltd. buildings
Land use right and
10285.7218857.14
Weifang NHU Real Estate Co. Ltd. buildings
The Company as the lessee:
Unit: RMB Yuan
Rental costs for short-term leases and leases of low-value
assets with simplified treatment (if applicable)
Lessors Types of assets leased
Lease expenses recognized Lease expenses recognized
in the current period in preceding period
NHU Holding Group Co. Ltd. Land use right and buildings 1206513.24 1694215.92
(3) Related party guarantees
The Company as a guaranteed party
Unit: RMB Yuan
Amount Whether the guarantee
Guarantors Commencement date Maturity date
guaranteed is mature
433000000.00 December 03 2020 September 21 2025 No
NHU Holding Group Co.
300000000.00 September 19 2022 September 18 2025 No
Ltd.
200000000.00 November 17 2022 November 14 2025 No
total 933000000.00
(4) Key management’s emoluments
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Key management’s emoluments 26515745.04 22516149.94
(5) Other related party transactions
(1) In the current period NHU EUROPE GmbH sold products amounting to 138.23 million yuan to CHR.Olesen A/S. At the end of
the period balance of accounts receivable amounted to 10.89 million yuan.
(2) According to the patent technology licensing agreement and the related equipment sales contract signed between the company and
Ningbo Zhenhai Refining NHU Biotechnology Co. Ltd. the Company provides Ningbo Zhenhai Refining NHU Biotechnology Co.Ltd. with mature and reliable liquid methionine production technology developed owned or controlled by the company including the
technical implementation license related to patents and proprietary technologies and sells related equipment which is produced and
supplied by Zhejiang Deli Equipment Co. Ltd. The total contract amount is agreed to be 442917139.59 yuan. As of December 31
2023 the company has received 240230676.36 yuan. At the end of the period the company will offset the equipment payment of
48191778.76 yuan prepaid to Zhejiang Deli Equipment Co. Ltd. against the aforementioned received funds and the net amount will
be included in the liabilities for contracts and other current liabilities.
1722023 Annual Report of Zhejiang NHU Co. Ltd.
6. Balance due to or from related parties
(1) Balance due from related parties
Unit: RMB Yuan
Closing balance Opening balance
Items Related parties Provision for bad Provision for bad
Book balance Book balance
debts debts
Envalior NHU
Engineering
41837233.162091861.6642585814.112129290.71
Materials
Accounts
(Zhejiang) Co.Ltd.receivable Zhejiang Asen
Pharmaceutical Co. 23625.00 1181.25
Ltd.Subtotal 41837233.16 2091861.66 42609439.11 2130471.96
Zhejiang Deli
Equipment Co. 45926357.35
Ltd.Advance paid Heilongjiang
Haotian Corn
479844.89
Development Co.Ltd
Subtotal 45926357.35 479844.89
Shaoxing Heyue
Property Services 18400.00 920.00
Co. Ltd.Zhejiang Chunhui
Environmental
20000.0016000.0020000.004000.00
Other receivables Protection Energy
Co. Ltd.Envalior NHU
Engineering
711.0835.55
Materials
(Zhejiang) Co.Ltd.Subtotal 39111.08 16955.55 20000.00 4000.00
Zhejiang Deli
Other non-current
Equipment Co. 33210788.17
assets Ltd.Subtotal 33210788.17
(2) Balance due to related parties
Unit: RMB Yuan
Items Related parties Closing book balance Opening book balance
Zhejiang Deli Equipment Co. Ltd. 13573871.90 13581584.31
Zhejiang Saiya Chemical Materials Co. Ltd. 199699.11 1905191.13
Zhejiang Second Pharma Co. Ltd. 6408.00 6408.00
Accounts
Heilongjiang Haotian Corn Development
payable 110873.46
Co. Ltd.Zhejiang Chunhui Environmental Protection
12040573.6013688789.40
Energy Co. Ltd.Subtotal 25931426.07 29181972.84
Contract Zhejiang Deli Equipment Co. Ltd. 13009.64 13009.64
liabilities Ningbo ZRCC NHU Biotechnology Co. Ltd. 178858243.73
Subtotal 178871253.37 13009.64
Zhejiang Deli Equipment Co. Ltd. 3740.00 3500.00
Ningbo ZRCC NHU Biotechnology Co. Ltd. 12750.00
Other payables
Xinchang County Hechun Greening Co. Ltd. 13102.77
Zhejiang Jingshi Real Estate Co. Ltd. 166075.68
1732023 Annual Report of Zhejiang NHU Co. Ltd.
Items Related parties Closing book balance Opening book balance
Subtotal 16490.00 182678.45
Other current Zhejiang Deli Equipment Co. Ltd. 1691.25 1691.25
liabilities Ningbo ZRCC NHU Biotechnology Co. Ltd. 13180653.87
Subtotal 13182345.12 1691.25
XV. Commitments and contingencies
1. Significant commitments
Significant commitments as at the balance sheet date
(I) Significant commitments
1. Forward exchange settlement contracts
Pursuant to “ISDA 2002 MASTER AGREEMENT” entered into between the Company and Bank of China (Hong Kong) Limited
“ISDA 2002 MASTER AGREEMENT” entered into with DBS Bank (China) Limited the GLOBAL CAPITAL MARKETS
TRANSACTION and the related transaction application form entered into with HSBC Bank (China) Limited Hangzhou Branch the
NAFMII Master Agreement and Supplemental Agreement (No. Y161136) with the Bank of China Limited Zhejiang Branch NAFMII
Master Agreement and Supplemental Agreement (No. Y161136) as of December 31 2023 the details of the Company's undelivered
forward settlement contracts are as follows:
Currency Amount Exchang Rate Settlement Date
10000000.007.30021/3/2024
10000000.007.30001/9/2024
10000000.007.26051/12/2024
10000000.007.26351/16/2024
10000000.007.26051/23/2024
10000000.007.26751/19/2024
10000000.007.26151/29/2024
10000000.007.25752/5/2024
10000000.007.26152/2/2024
10000000.007.25802/8/2024
10000000.007.11502/20/2024
USD
10000000.007.11132/27/2024
10000000.007.10793/5/2024
10000000.007.10353/12/2024
10000000.007.12822/20/2024
10000000.007.12302/27/2024
10000000.007.11323/19/2024
10000000.007.10633/28/2024
10000000.007.12001/25/2024
10000000.007.10002/27/2024
10000000.007.11651/29/2024
10000000.007.09423/7/2024
Subtotal 220000000.00
10000000.007.89343/12/2024
EUR
10000000.007.88404/15/2024
Subtotal 20000000.00
2. Letters of guarantee issued but undue
As of December 31 2023 the undue letters of guarantee issued by the Company and its subsidiaries are as follows:
1742023 Annual Report of Zhejiang NHU Co. Ltd.
Issuing banks Applicants Type of L/G Amount Conditions for issuing
Performance Occupying credit line
USD 22409.00
guarantee
Performance Occupying credit line
USD 137390.00
Bank of China Limited Xinchang guarantee
The Company
Sub-branch Performance Occupying credit line
USD 37681.00
guarantee
Performance Occupying credit line
USD 5660.00
guarantee
China Merchants Bank Co. Ltd. Shandong NHU Vitamins Financing Occupying credit line
CNY 2120000.00
Weifang Branch Co. Ltd. Guarantee
Bank of China Limited Weifang Shandong NHU Amino- Performance
CNY 500000.00
Deposit of 500000.00 yuan
Binhai Branch acids Co. Ltd. guarantee
3. Letters of credit issued but undue
As of December 31 2023 the undue letters of credit issued by the Company and its subsidiaries are as follows:
Issuing banks Applicants Balance of L/C Conditions
The Company CNY 235000000.00 Occupying credit line
China Merchants Bank Hangzhou Jiefang
CNY 150000000.00 Occupying credit line
Branch
CNY 50000000.00 Occupying credit line
Bank of China Limited Xinchang Branch The Company USD 681849.70 Occupying credit line
Zhejiang NHU Imports & Exports Deposits in the amount of
Bank of China Limited Xinchang Branch EUR 1484000.00
Co. Ltd. Euro1484000.00
Bank of China Limited Weifang Binhai Shandong NHU Amino-acids Co.JPY 343541408.00 Occupying credit line
Branch Ltd.China Merchants Bank Co. Ltd. Weifang Shandong NHU Vitamins Co.CNY 9726000.00 Occupying credit line
Branch Ltd.CNY 25000000.00 Occupying credit line
China Merchants Bank Co. Ltd. Weifang Shandong NHU Pharmaceutical CNY 26224348.26 Occupying credit line
Branch Co. Ltd. CNY 20895878.61 Occupying credit line
CNY 21643085.00 Occupying credit line
China Merchants Bank Hangzhou Jiefang Shangyu NHU Bio-Chem Co.CNY 150000000.00 Occupying credit line
Branch Ltd.Bank of China Limited Shangyu Sub- Zhejiang NHU Special Materials
JPY 6946000.00 Deposit of 385500.00 yuan
branch Co. Ltd.
4. The “notes pool” business
Pursuant to the “Notes Pool Service Agreement on Yuntong Account of Bank of Communications” entered into between the Company
and Bank of Communications Co. Ltd. the Company pledged and endorsed bank acceptance to the depositary bank forming a pledged
notes pool; the Company also opened a notes pool deposit account to provide guarantee for the credit granted under the note pledge
and to deposit the pledged bank acceptance for payments. The available credit line for pledge is the sum of pledged notes and the actual
balance of deposit account less pledged notes used. As stipulated in the agreement the sum of pledged notes and the balance of deposit
account shall not be less than the pledged amount used for issuing notes. Pursuant to the “Notes Pool Cooperation Agreement” entered
into among the Company its subsidiaries Shangyu NHU Bio-Chem Co. Ltd. Zhejiang NHU Pharmaceutical Co. Ltd. Zhejiang NHU
Special Materials Co. Ltd. Shaoxing Yuchen New Materials Co. Ltd. Shandong NHU Pharmaceutical Co. Ltd. Shandong NHU
Vitamins Co. Ltd. Shandong NHU Amino-acids Co. Ltd. Heilongjiang NHU Biotechnology Co. Ltd. Shandong NHU Fine
Chemical Science and Technology Co. Ltd. Heilongjiang Xinhao Thermal Power Co. Ltd. Xinchang NHU Vitamins Co. Ltd.Zhejiang Vityesun Animal Nutrition and Health Co. Ltd Zhejiang NHU Imports & Exports Co. Ltd.. and China Zheshang Bank Co.Ltd. the Company pledged assets pool or notes pool for guarantee and opened a notes deposit account to pay deposits at a certain
1752023 Annual Report of Zhejiang NHU Co. Ltd.
percentage with no specific agreement on the amount of deposits. As of December 31 2023 balance of pledged bank acceptance
amounted to 237970232.29 yuan deposits of notes pool in China Zheshang Bank Co. Ltd. amounted to77905369.24 yuan.
5. Besides the aforementioned events and assets with title or use right restrictions as stated in this section the Company has no other
significant commitments to be disclosed as of the balance sheet date.
2. Contingencies
(1) There are no material contingencies that the Company is required to disclose which should also be
explained
The Company has no material contingencies that require disclosure.XVI. Events after the balance sheet date
1. Profit distribution
Unit: RMB Yuan
Dividend to be distributed for every 10 shares (RMB) 4.50
Bonus shares to be distributed for every 10 shares (share) 0
Additional shares to be converted from capital reserve for
0
every 10 shares (share)
Dividend for every 10 shares (RMB) declared after review
4.50
and approval
Bonus shares to be distributed for every 10 shares (share)
0
declared after review and approval
Additional shares to be converted from capital reserve for
0
every 10 shares (share) declared after review and approval
Based on the 3073421680 shares (total share capital of 3090907356
excluding 17485676 repurchased shares[Note]) a cash dividend of
4.50 yuan (tax included) will be distributed to all shareholders for every
10 shares and no bonus shares will be distributed and the capital reserve
will not be converted into share capital.Note: According to the Rules for Share Repurchase by Listed
Companies the shares in the professional account for share repurchase
Profit or dividend planned to be distributed by listed companies are not entitled to profit distribution and
capitalization of capital reserve.If the total share capital of the company changes before the
implementation of the distribution plan due to the conversion of
convertible bonds share repurchase exercise of share incentive listing
of new shares in refinancing etc. the total amount of distribution will
be adjusted accordingly in accordance with the principle that the
distribution ratio remains unchanged.
2. Description of other events after the balance sheet date
As of the date of approval for issuing the financial statements the Company has no other significant events after the balance sheet
date to be disclosed.
1762023 Annual Report of Zhejiang NHU Co. Ltd.
XVII. Other significant events
1. Segment information
(1) Identification basis and accounting policies for reportable segments
Reportable segments are identified according to the structure of the Company’s internal organization management requirements 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 Inter-segment
Items Others Total
chemicals offsetting
Operating revenue 13987850435.98 2036242196.44 907555629.12 15116537003.30
Including: Revenue
from contracts with 13986117534.65 2020279909.58 893329346.68 15113068097.55
customers
Operating cost 9412806626.65 1626239377.92 907555629.12 10131490375.45
Total assets 36039123285.51 4250189705.50 1133066126.34 39156246864.67
Total liabilities 12329395909.93 2233464186.01 326321384.14 14236538711.80
2. Employee Stock Purchase Plan Related Plans
The Company held the 16th meeting of the eighth Board of Directors and the 13th meeting of the eighth Board of Supervisors on June
7 2023 and the first extraordinary general meeting of shareholders in 2023 on June 26 2023 to review and adopt the fourth employee
Stock Ownership Plan of Zhejiang Xinhexheng Co. LTD. (Draft) and its Abstract) and other employee stock ownership plan related
motions. Agreed to implement the fourth phase of the employee stock ownership plan.As of September 25 2023 a total of 29528181 shares of the Company have been purchased through the secondary market bidding
transaction accounting for 0.9553% of the company's existing total share capital with a total transaction amount of 479442157.08
yuan (excluding transaction fees) and the average transaction price is about 16.2368 yuan/share. The fourth phase of the company's
employee stock ownership plan completed the purchase of the target stock. The lock-up period of the underlying shares acquired under
the fourth ESOP is 12 months calculated from the date of the Company's announcement of the transfer of the last underlying shares to
the plan.
3. Raise funds to purchase financial information
The 15th meeting of the eighth session of the Board of Directors of the Company was held on April 19 2023 at which the "Motion on
the Use of Part of the idle Raised Funds for Cash Management" was reviewed and approved and it was agreed that the Company and
its wholly-owned subsidiary Shandong Xinhe Cheng Amino Acid Co. Ltd. would use the idle raised funds not exceeding RMB 10100
million (including RMB 10100 million) for cash management. The purchase of short-term financial products with high security good
liquidity and low risk with a term of no more than 12 months can be used on a rolling cycle from the date of deliberation and adoption
at the 15th meeting of the Eighth Board of Directors to the effective period before April 30 2024. As of December 31 2023 the actual
balance of the Company's temporary idle raised funds to purchase financial products was 145 million yuan.
1772023 Annual Report of Zhejiang NHU Co. Ltd.
XVIII. Notes to the main items of the parent company's financial statements
1. Accounts receivable
(1) Age analysis
Unit: RMB Yuan
Ages Closing balance Opening balance
Within 1 year 659625316.20 526936263.09
Total 659625316.20 526936263.09
(2) Details on categories
Unit: RMB Yuan
Closing balance Opening balance
Book balance Provision for bad debts Book balance Provision for bad debts
Categories Carrying Carrying
Provision Provision
Amount % to total Amount amount Amount % to total Amount amount
proportion proportion
Receivables
with provision
659625329812626644526936263468500589
made on a 100.00% 5.00% 100.00% 5.00%
316.2065.81050.39263.0913.15449.94
collective
basis
659625329812626644526936263468500589
Total 100.00% 5.00% 100.00% 5.00%
316.2065.81050.39263.0913.15449.94
Provision made on a collective basis using age analysis method:
Unit: RMB Yuan
Closing balance
Items
Book balance Provision for bad debts Provision proportion
Within 1 year 659625316.20 32981265.81 5.00%
Total 659625316.20 32981265.81
Provision for bad debts on accounts receivable is made in accordance with the general model of expected credit losses if any:
□Applicable □ Not applicable
(3) Provisions made collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
Increase/Decrease
Opening
Categories Recovery/ Closing balance
balance Accrual Write-off Others
Reversal
Provision made
on a collective 26346813.15 6919784.66 285332.00 32981265.81
basis
Total 26346813.15 6919784.66 285332.00 32981265.81
1782023 Annual Report of Zhejiang NHU Co. Ltd.
(4) Accounts receivable actually written off during the period
Unit: RMB Yuan
Items Amount written off
Accounts receivable actually written off 285332.00
(5) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Proportion to the total balance
Debtors Book balance Provision for bad debts
of accounts receivable (%)
Client 1 426662005.52 64.68% 21333100.28
Client 2 65924965.96 9.99% 3296248.30
Client 3 12940667.00 1.96% 647033.35
Client 4 8234403.02 1.25% 411720.15
Client 5 7717400.00 1.17% 385870.00
Total 521479441.50 79.05% 26073972.08
2. Other receivables
Unit: RMB Yuan
Items Closing balance Opening balance
Dividend receivable 20735987.73
Other receivables 2908050463.81 2475376134.12
Total 2908050463.81 2496112121.85
(1) Dividend receivable
1) Details on categories
Unit: RMB Yuan
Items/Investees Closing balance Opening balance
Zhejiang Chunhui Environmental
20735987.73
Protection Energy Co. Ltd.Total 20735987.73
(2) Other receivables
1) Categorized by nature
Unit: RMB Yuan
Nature of receivables Closing book balance Opening book balance
loan splitting 3038350000.01 2477800000.00
Deposit Guarantee 13376459.00 100017996.50
Export Tax Refund 5735604.80 8678171.26
Employee reserve fund 2436000.00 5953662.00
Other 1336185.69 8467732.53
Accounts receivable in suspense 461787.32
Total 3061234249.50 2601379349.61
1792023 Annual Report of Zhejiang NHU Co. Ltd.
2) Age analysis
Unit: RMB Yuan
Ages Closing book balance Opening book balance
Within 1 year (inclusive) 3047240876.60 2501141620.17
1-2 years 457610.37 1154000.00
2-3 years 172432.00
Over 3 years 13535762.53 98911297.44
3-4 years 25770.00 182455.81
4-5 years 162455.81 50067.41
Over 5 years 13347536.72 98678774.22
Total 3061234249.50 2601379349.61
3) Disclosure by bad debt accrual method
Unit: RMB Yuan
Closing balance Opening balance
Provision for bad
Book balance Book balance Provision for bad debts
debts Carryi
Categories Provisio Carrying ng
% to n amount % to Provision amou
Amount Amount Amount Amount
total proporti total proportion nt
on
Receivables with 2475
30612341531837290805026013791260032
provision made on a 100.00% 5.00% 100.00% 4.84% 37613
249.5085.69463.81349.6115.49
collective basis 4.12
2475
30612341531837290805026013791260032
Total 100.00% 5.00% 100.00% 4.84% 37613
249.5085.69463.81349.6115.49
4.12
Provision for bad debts is made on a portfolio basis:
Unit: RMB Yuan
Closing balance
Items
Book balance Provision for bad debts Provision proportion
Land bond receivable
12518762.50
portfolio
Export tax refund receivable
5735604.80
portfolio
Ageing portfolio 3042979882.20 153183785.69 5.03%
Including:1-2 years 3041505271.80 152075263.59 5.00%
2-3 years 457610.37 91522.07 20.00%
Over 3 years 1017000.03 1017000.03 100.00%
Total 3061234249.50 153183785.69
Provision for bad debts is made on the basis of a general model of expected credit losses:
Unit: RMB Yuan
Phase I Phase II Phase III
Provision for bad debts Lifetime expected Lifetime expected 12?month expected Total
credit losses (credit not credit losses (credit
credit losses
impaired) impaired)
Opening balance 124623172.45 230800.00 1149243.04 126003215.49
Opening balance in the
current period
--Transferred to phase II -22880.52 22880.52 0.00
1802023 Annual Report of Zhejiang NHU Co. Ltd.
Phase I Phase II Phase III
Provision for bad debts Lifetime expected Lifetime expected 12?month expected Total
credit losses (credit not credit losses (credit
credit losses
impaired) impaired)
Provision made in the
27474971.66-162158.45-132243.0127180570.20
current period
Closing balance 152075263.59 91522.07 1017000.03 153183785.69
The basis for the classification of each stage and the percentage of provision for bad debts:
Accounts aged less than one year are classified as stage I those aged 1-2 years are classified as stage II and those aged more than 2
years are classified as stage III.Changes in the carrying amount of the provision for losses that are significant in terms of the amount of change during the period.□Applicable □Not Applicable
4) Provisions made collected or reversed in the current period
Provision for bad debts in the current period:
Unit: RMB Yuan
Increase/Decrease
Opening
Categories Recovery/Reve Closing balance balance Accrual Write-off Others
rsal
Portfolio grouped
126003215.4927180570.20153183785.69
by ages
Total 126003215.49 27180570.20 153183785.69
5) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
Proportion to the
Nature of total balance of Provision for bad
Debtors Book balance Ages
receivables other receivables debts
(%)
Heilongjiang NHU
Biotechnology Co. Call loans 1956000000.00 Within 1 year 63.90% 97800000.00
Ltd.Shandong NHU Fine
Chemical Science and Call loans 823850000.00 Within 1 year 26.91% 41192500.00
Technology Co. Ltd.Xinchang NHU Call loans 99000000.01 Within 1 year 3.23% 4950000.00
Vitamins Co. Others 6287.28 Within 1 year 0.00% 314.36
Zhejiang NHU Within 1 year
Special Materials Co. Call loans 85000000.00 2.78% 4250000.00
Ltd.Shandong NHU Within 1 year
Call loans 67500000.00 2.20% 3375000.00
Holdings Co. Ltd
Total 3031356287.29 99.02% 151567814.36
3. Long-term equity investments
Unit: RMB Yuan
1812023 Annual Report of Zhejiang NHU Co. Ltd.
Closing balance Opening balance
Provision Provisio
Items for n for
Book balance Carrying amount Book balance Carrying amount
impairme impairm
nt ent
Investments in
10176078842.1210176078842.129146078842.129146078842.12
subsidiaries
Investments in
associates and joint 502157305.30 502157305.30 239967333.33 239967333.33
ventures
Total 10678236147.42 10678236147.42 9386046175.45 9386046175.45
(1) Investments in subsidiaries
Unit: RMB Yuan
Increase/Decrease
Opening Closing
Invest
Opening balance of balance of
Investees ments Provision for Closing carrying amount
carrying amount provision for Investments increased Others provision for
decre impairment
impairment impairment
ased
Xinchang NHU Vitamins
149407990.15149407990.15
Co. Ltd.Zhejiang NHU Import &
13500000.0013500000.00
Export Co. Ltd.Qionghai Boao Lidu Real
54020492.0054020492.00
Estate Co. Ltd.Zhejiang Vityesun Animal
Nutrition and Health Co. 5000000.00 5000000.00
Ltd.Shangyu NHU Bio-Chem
414100091.44414100091.44
Co. Ltd.NHU (Hong Kong)
16406160.0016406160.00
Trading Co. Ltd.Zhejiang NHU
480000000.00480000000.00
Pharmaceutical Co. Ltd.Zhejiang NHU Special
554844108.53554844108.53
Materials Co. Ltd.Shandong NHU Amino- 4900000000.0
900000000.005800000000.00
acids Co. Ltd. 0
Shandong NHU Holdings
200000000.00200000000.00
Co. Ltd.Heilongjiang NHU 1300000000.0
1300000000.00
Biotechnology Co. Ltd. 0
Shandong NHU
586000000.00586000000.00
Pharmaceutical Co. Ltd.Shandong NHU Fine
Chemical Science and 460000000.00 130000000.00 590000000.00
Technology Co. Ltd.NHU Singapore PTE.
12800000.0012800000.00
LTD.
9146078842.1
Total 1030000000.00 10176078842.12
2
1822023 Annual Report of Zhejiang NHU Co. Ltd.
(2) Investments in associates and joint ventures
Unit: RMB Yuan
Increase/Decrease Closing
Opening balance
Investment Cash
Opening balance of Adjustment in of
income Changes in dividend/ Provision Closing carrying
Investees carrying provision Investments Investments other Others provision recognized other Profit for amount
amount for increased decreased comprehensive for
under equity equity declared for impairment
impairment income impairme
method distribution
nt
I. joint venture
Ningbo
Zhenhai
Refining and
Chemical 233508000.00 -17341021.51 216166978.49
Xinhecheng
Biotechnology
Co. Ltd
Subtotal 233508000.00 -17341021.51 216166978.49
II. Associates
Zhejiang
Chunhui
Environmental 239967333.33 41180429.16 5 0707.22 12.27 197267.10 281395724.54
Protection
Energy Co.Ltd.Zhejiang Sanbo
Polymer Co.Ltd
Anhui Yingna
Weixun 4000000.00 594602.27 4594602.27
Technology
Co. Ltd
Subtotal 239967333.33 4000000.00 41775031.43 5 0707.22 12.27 197267.10 285990326.81
Total 239967333.33 237508000.00 24434009.92 5 0707.22 12.27 197267.10 502157305.30
The recoverable amount is determined as the net of fair value less costs of disposal
□Applicable □Not applicable
Recoverable amount is determined as the present value of the expected future cash flows
□Applicable □Not applicable
4. Operating revenue/Operating cost
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Revenue Cost Revenue Cost
Main operations 2746466236.75 2473248472.64 3413299237.28 2778374702.33
Other operations 54507807.05 43301577.63 63079968.72 50816850.54
Total 2800974043.80 2516550050.27 3476379206.00 2829191552.87
Including: Revenue
from contracts with 2797508880.19 2515058317.60 3472854161.65 2827759903.86
customers
Details of revenue
Unit: RMB Yuan
Current period cumulative
Categories of contracts
Revenue Cost
By product
Including:
Nutrition 2746466236.75 2473248472.64
1832023 Annual Report of Zhejiang NHU Co. Ltd.
Current period cumulative
Categories of contracts
Revenue Cost
Others 51042643.44 41809844.96
Subtotal 2797508880.19 2515058317.60
By operating region
Including:
Domestic 1663363430.94 1462228504.87
Overseas 1134145449.25 1052829812.73
Subtotal 2797508880.19 2515058317.60
By revenue recognition time
Including:
Transferred at a point in time 2797508880.19 2515058317.60
Subtotal 2797508880.19 2515058317.60
Information related to transaction price allocated to the remaining performance obligations:
As of December 31 2023 revenue corresponding to performance obligations for which the Company has entered into contracts
but not yet performed or fulfilled amounted to 326.03 million yuan of which 326.03 million yuan is expected to be recognized as
revenue in 2024.
5. R&D expenses
Unit: RMB YuanItems Current period cumulative Preceding period comparative
Employee benefits 137202860.17 140037624.41
Outsourcing expenses 44232422.63 23553318.16
Depreciation amortization of intangible
28647554.9927624080.30
assets
Direct input 27154541.33 28398681.97
Office expenses business traveling
5717143.5113476908.28
expenses
Others 6215215.00 4278723.45
Total 249169737.63 237369336.57
6. Investment income
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Investment income from long-term
1390000000.001186000000.00
equity investments under cost method
Investment income from long-term
24434009.9247283121.54
equity investments under equity method
Investment income from disposal of
41.56
financial assets held for trading
Dividend income earned on investments
in other equity instruments during the 24473000.00
holding period
1842023 Annual Report of Zhejiang NHU Co. Ltd.
Items Current period cumulative Preceding period comparative
Interest on discounted bills -186142.03
Interest income from call loans 108635176.65 93315645.90
Investment income from bank financial
2735849.0631667084.46
products and structured deposits
Investment income from debt
-709851.71
restructuring
Total 1549382083.45 1358265851.90
XIX. Supplementary information
1. Schedule of non-recurring profit or loss
√ Applicable □ Not applicable
Unit: RMB Yuan
Items Amount Remarks
Gains or losses on disposal of non-current assets
5426533.21
including write-off of provision for impairment
Government grants included in profit or loss
(excluding those closely related to operating activities
of the Company satisfying government policies and 63050565.94
regulations and continuously enjoyed with certain
quantity or quota based on certain standards)
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
34458488.77
held-for-trading financial assets and held-for-trading
financial liabilities excluding those arising from
hedging business related to operating activities
Fees charged to non-financial enterprises for fund
465887.82
occupancy included in current profit or loss
Gains or losses on assets consigned to the third party
12715401.91
for investment or management
Debt restructuring gains and losses -847442.05
Other non-operating revenue or expenditures 4406027.43
Less: Enterprise income tax affected 29488260.00
Non-controlling interest affected (after tax) 159076.07
Total 90028126.96 --
Remarks on other profit or loss satisfying the definition of non-recurring profit or loss:
□ Applicable √ Not applicable
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss.Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria forPublic Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss
√Applicable □ Not applicable
1852023 Annual Report of Zhejiang NHU Co. Ltd.
Unit: RMB Yuan
Items Amount involved(yuan) Reason
Net profit attributable to shareholders of
listed company after deducting non- 33397934.74
recurring profit or loss in fiscal 2022
Net profit attributable to shareholders of
listed company after deducting non-
recurring profit or loss calculated inaccordance with the “Interpretation-69074749.77
Pronouncement on Information
Disclosure Criteria for Public Companies
No. 1 – Non-Recurring Profit or Loss(Revised in 2023)” for fiscal year 2022.discrepancy 102472684.51
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 11.24% 0.87 0.87
ordinary shares
Net profit attributable to shareholders of
ordinary shares after deducting non- 10.86% 0.85 0.85
recurring profit or loss
3. Calculation process for weighted average return on net assets
Unit: RMB Yuan
Current period
Items Serial number
cumulative
Net profit attributable to shareholders of listed company A 2704238767.54
Non-recurring profit or loss B 90028126.96
Net profit attributable to shareholders of listed company after
C=A-B 2614210640.58
deducting non-recurring profit or loss
Opening net assets attributable to the Company's ordinary
D 23574879326.24
shareholders
Net assets attributable to the Company's common shareholders added
E
by the issuance of new shares or conversion of debt to shares etc.Cumulative number of months from the month following the addition
F
of net assets to the end of the reporting period
Decrease in net assets attributable to the Company's common
G 1536710840.00
shareholders as a result of repurchases or cash dividends etc.Cumulative number of months from the month following the month
H 7
in which net assets were reduced to the end of the reporting period
Translation differences in foreign currency statements I1 27343168.68
Cumulative number of months from the month
following the month of increase or decrease in net J1 6
assets to the end of the reporting period
Special reserve I2 34663924.21
Cumulative number of months from the month
other following the month of increase or decrease in net J2 6
assets to the end of the reporting period
Other changes in capital surplus I3 197267.10
Cumulative number of months from the month
following the month of increase or decrease in net J3 6
assets to the end of the reporting period
Other changes in capital surplus I3 50707.22
1862023 Annual Report of Zhejiang NHU Co. Ltd.
Current period Items Serial number
cumulative
Cumulative number of months from the month
following the month of increase or decrease in net J3 11
assets to the end of the reporting period
Number of months in the reporting period K 12
L= D+A/2+ E×F/K-
Weighted average net assets 24061732714.96
G×H/K±I×J/K
Weighted average ROE M=A/L 11.24%
Weighted average ROE after extraordinary gains and losses N=C/L 10.86%
4. Calculation process of basic earnings per share and diluted earnings per share
(1) Basic earnings per share calculation process
Unit: RMB Yuan
Items Serial number Current period cumulative
Net profit attributable to shareholders of listed company A 2704238767.54
Non-recurring profit or loss B 90028126.96
Net profit attributable to shareholders of listed company after
C=A-B 2614210640.58
deducting non-recurring profit or loss
Total number of shares at the beginning of the period D 3090907356.00
Increase in number of shares due to capitalization of provident fund
E
or distribution of stock dividends etc.Increase in the number of shares by issuing new shares or converting
F
debt to equity etc.Cumulative number of months from the month following the increase
G
in shares to the end of the reporting period
Reduction in the number of shares due to buybacks etc. H
Cumulative number of months from the month following the
I
reduction of shares to the end of the reporting period
Number of drawdowns during the reporting period J
Number of months in the reporting period K 12
Weighted average number of ordinary shares outstanding L=D+E+F×G/K-H×I/K-J 3090907356.00
Basic EPS M=A/L 0.87
Basic EPS after extraordinary gains and losses N=C/L 0.85
(2) Calculation of diluted earnings per share
The process of calculating diluted earnings per share is the same as that for basic earnings per share.
5. Differences in accounting data under Chinese accounting standards and 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. If adjusting
for differences in data already audited by overseas auditing institutions the name of the overseas institution should be indicated
□ Applicable √ Not Applicable
187
