Zhejiang NHU Company Ltd.2022 Semi-Annual Report
August 2022
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 informationpresented in this semi-annual report is authentic, accurate, complete and free offalse records, misleading statements or material omissions, and they will bearindividual and joint liabilities for such information.胡柏藩 (Hu Baifan), the Company’s legal representative, 石观群 (Shi Guanqun),the officer in charge of accounting, and 王晓碧 (Wang Xiaobi), the head ofaccounting department hereby declare that they guarantee the financialstatements in this semi-annual report are authentic, accurate and complete.All members of the Board of Directors have attended the meeting of the Board ofDirectors for deliberation of this semi-annual report.The future plan and other forward-looking information disclosed in this semi-annual report shall not be regarded as a commitment to investors. We kindlyremind investors of all possible risks in investments.The Company will not distribute cash dividend, distribute bonus shares, ordistribute shares from capital reserve during the current reporting period.
This Semi-Annual Report is an English translation of the Chinese Semi-Annual Report. In case the English version does notconform to the Chinese version, the Chinese version prevails.
Contents
Section I Important Notes, Contents, and Definitions ...... 1
Section II Company Profile and Key Financial Indicators ...... 5
Section III Management Discussion and Analysis ...... 9
Section IV Corporate Governance ...... 20
Section V Environmental and Social Responsibilities ...... 22
Section VI Significant Events ...... 27
Section VII Movements in Shares and Information about Shareholders ...... 35
Section VIII Preferred Shares ...... 40
Section IX Bonds ...... 41
Section X Financial Report ...... 42
Documents Available for Reference
I. Financial statements signed and sealed by the Company’s legal representative, officer in charge of accounting, and head ofaccounting department;II. Original copy of all the Company's documents and announcements published on the newspapers designated by CSRC within thereporting periodIII. Other documents for reference.
Definitions
| Abbreviations | Refers to | Contents of definitions |
| The Company, NHU | Refers to | ZHEJIANG NHU CO., LTD. |
| CSRC | Refers to | China Securities Regulatory Commission |
| PPS | Refers to | Polyphenylene sulfide |
| PPA | Refers to | Poly phthalamide |
| VOC | Refers to | Volatile organic compound |
| NH-acid | Refers to | Taurine |
| F5 | Refers to | Vitamin B5 |
| ARC | Refers to | Accelerating ratecalori meter |
| NBC | Refers to | Azabicycles |
| CLA | Refers to | Karon anhydride |
| SNCR | Refers to | Selective non-catalytic reduction |
Section II Company Profile and Key Financial IndicatorsI. Company profile
| Stock abbreviation | NHU | Stock code | 002001 |
| Stock Exchange | Shenzhen Stock Exchange | ||
| Company Name in Chinese | 浙江新和成股份有限公司 | ||
| Company Abbreviation in Chinese | 新和成 | ||
| Company name in foreign language (if any) | ZHEJIANG NHU CO., LTD. | ||
| Company Abbreviation in foreign language (if any) | NHU | ||
| Legal representative | Hu Baifan | ||
II. Contact information
| Items | Board secretary | Securities affairs representative |
| Name | Shi Guanqun | 曾淑颖 (Zeng Shuying) |
| Contact address | No.418 Xinchang Dadao West Road, Xinchang, Zhejiang, P.R.China | No.418 Xinchang Dadao West Road, Xinchang, Zhejiang, P.R.China |
| Tel. | +86 575 86017157 | +86 575 86017157 |
| Fax | +86 575 86125377 | +86 575 86125377 |
| E-mail address | sgq@cnhu.com | 002001@cnhu.com |
III. Other Information
1. Company’s Contact Information
Whether the Company’s registered address, office address, zip code, website and e-mail address has changed during the reportingperiod
□ Applicable √ Not applicable
The Company’s registered address, office address, zip code, website and e-mail address have not changed during the reporting period,which can be found in the 2021 Annual Report.
2. Information Disclosure and Location
Whether information disclosure and location has changed during the reporting period
□ Applicable √ Not applicable
The name of the Company’s selected information disclosure newspaper, the URL of the website designated by the CSRC where thesemi-annual report is posted, and the place where the Company’s semi-annual report is available have not changed during the reportingperiod, which can be found in the 2021 Annual Report.
3. Other relevant Information
Whether other relecant information has changed during the reporting period
□ Applicable √ Not applicable
IV. Key accounting data and financial indicatorsWhether the Company needs to perform retroactive adjustment or restatement on financial data of prior years
√ Yes □ No
Reason for retroactive adjustment or restatementAccounting policy changes and other reasons
| Items | The Current Reporting Period | The Same Period of the Previous Year | Increase/ Decrease at the end of the current reporting period compared with the same period of the previous year | |
| Before adjustment | After adjustment[Note2] | After adjustment | ||
| Operating revenue (yuan) | 8,215,039,277.03 | 7,254,221,638.01 | 7,340,124,310.11 | 11.92% |
| Net profit attributable to shareholders of listed company (yuan) | 2,213,877,419.25 | 2,408,499,133.50 | 2,426,979,148.42 | -8.78% |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit or loss (yuan) | 2,094,055,949.62 | 2,279,454,655.63 | 2,279,438,579.04 | -8.13% |
| Net cash flows from operating activities (yuan) | 1,242,456,738.20 | 2,271,157,481.77 | 2,289,637,496.69 | -45.74% |
| Basic EPS (yuan/share) | 0.72 | 0.78[Note1] | 0.79 | -8.86% |
| Diluted EPS (yuan/share) | 0.72 | 0.78[Note1] | 0.79 | -8.86% |
| Weighted average ROE | 9.55% | 12.02% | 11.87% | Decreased by 2.32 percentage points |
| Items | Jun. 30, 2022 | Dec. 31, 2021 | Increase/Decrease at the end of the current reporting period compared with the end of the previous year | |
| Before adjustment | After adjustment[Note2] | After adjustment | ||
| Total assets (yuan) | 37,815,015,843.65 | 34,692,165,111.88 | 34,724,025,476.79 | 8.90% |
| Net assets attributable to shareholders of listed company (yuan) | 22,113,966,711.03 | 21,799,977,645.94 | 21,831,838,010.85 | 1.29% |
[Note1] After the implementation of the Company’s 2021 profit distribution plan, its share capital was increased from 2,578,394,760shares to 3,090,907,356 shares. The above EPS of the comparative period was recalculated based on the adjusted share capital.[Note2] The company has implemented The Interpretation of Accounting Standards for Business Enterprises No. 15 since January 1,2022. The interpretation requires that if the company sells the products or by-products produced before the fixed assets reach the
expected serviceable state or during the research and development process, the income and cost related to the trial operation sales shallbe accounted for separately and included in the current profit and loss, The net amount of the revenue from trial operation sales afteroffsetting the relevant costs shall not be used to offset the cost of fixed assets or R&D expenses. The company makes retroactiveadjustment according to requirements.V. Differences in accounting data under Chinese accounting standards and overseas accountingstandards
1. Difference in net profit and net assets in financial statements disclosed respectively under IFRS Standards and Chineseaccounting standards
□ Applicable √ Not Applicable
The Company has no difference in net profit or net assets in financial statements disclosed respectively under IFRS Standards andChinese accounting standards.
2. Difference in net profit and net assets in financial statements disclosed respectively under overseas accounting standards andChinese accounting standards
□ Applicable √ Not Applicable
The Company has no difference in net profit or net assets in financial statements disclosed respectively under overseas accountingstandards and Chinese accounting standards.VI. Non-recurring profit or loss
√ Applicable □ Not Applicable
Unit: RMB Yuan
| Items | Amount |
| Gains or losses on disposal of non-current assets, including write-off of provision for impairment | 6,674,850.81 |
| Government grants included in profit or loss (excluding those closely related to operating activities of the Company, satisfying government policies and regulations, and continuously enjoyed with certain quantity or quota based on certain standards) | 85,522,179.54 |
| Gains or losses on assets consigned to the third party for investment or management | 28,841,651.61 |
| Gains or losses on changes in fair value of held-for-trading financial assets and held-for-trading financial liabilities, and investment income from disposal of held-for-trading financial assets and held-for-trading financial liabilities, excluding those arising from hedging business related to operating activities | 9,071,898.92 |
| Other non-operating revenue or expenditures | 797,805.24 |
| Less: Enterprise income tax affected | 11,046,849.16 |
| Non-controlling interest affected (after tax) | 40,067.33 |
| Total | 119,821,469.63 |
Remarks on other profit or loss satisfying the definition of non-recurring profit or loss:
□ Applicable √ Not Applicable
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss.Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria for
Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss.
□ Applicable √ Not Applicable
The Company has no situation of defining non-recurring profit or loss listed in the “Interpretation Pronouncement on InformationDisclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss.
Section III Management Discussion and AnalysisI. The main business of the Company during the reporting periodThe Company is a national high-tech company mainly engaged in the production and sales of nutrition, flavor and fragrance, newpolymer materials, and APIs. It focuses on fine chemicals, adheres to the concept of innovation-led development and competition-driven growth, and continuously develops various functional chemicals based on the two core platforms of chemical and biology,providing value-added services and solutions to customers in more than 100 countries and regions around the world. It continuouslyimproves the quality of human life with high-quality, healthy and green products, and creates sustainable value for stakeholders. Withleading technology, scientific management and sincere service, the Company has become one of the four major world vitaminmanufacturers, one of the top 100 national fine chemical companies, one of the top 10 companies in China’s light of industry fragranceand a well-known special engineering plastics manufacturer.
1. Main products and applications
Nutrition: The Company’s vitamin products, as the main business, have a substantial market share, with a prominent position in theindustry and obvious brand advantages. It is in a leading position in both domestic and overseas markets. Its main products includevitamin E, vitamin A, vitamin C, methionine, vitamin D3, biotin, coenzyme Q10, carotenoids, etc. They are mainly used in feedadditives and nutrition supplements of food, beverages, health food, etc. The Company actively implements the serialized anddifferentiated development of nutrition, and continuously improves the competitiveness of its products by optimizing the processingline and tackling key issues. In addition, through internal integration and external cooperation, it embraces the ideology of opencooperation. It actively deploys cutting-edge biotechnology, and builds the Company’s “Bio+” platform.Flavor and fragrance: At present, the main fragrance products target the global market, in which, the products are competitive, with ahigh market share and relatively stable market structure. The main products include linalool, citral, and cis-3-hexenol series, and methyldihydrojasmonate, raspberry ketone and ligustral, which are widely used in personal care, cosmetic and food fields. Relying on the twomajor technology platforms of chemical synthesis and biological fermentation, the Company continuously enriches the varieties offragrance products to meet the changing market demands.New polymer materials: The Company focuses on the development of high molecular polymers and key intermediates, andappropriately develops downstream applications of materials according to the principles of integration and serialization. The entireindustry chain of PPS from raw materials to high molecular polymers, then through modifying processing to special fibers has enabledthe Company as the only company in China that can stably produce fiber grade, injection molding grade, extrusion grade and coatinggrade PPS. The main products include PPS and PPA. They are mainly used in electronic and electrical, automotive, environmentalprotection, etc.APIs: The main products are concentrated in the series of vitamins and antibiotics. The main products include moxifloxacinhydrochloride, vitamin A, vitamin D3, etc., which are mainly used as active pharmaceutical ingredients for processing and producingpharmaceutical preparations.
2. Main business models
(1) Procurement model
The Company has always been adhering to the procurement principle of “fairness, transparency and optimal cost”, and adopts acombination of long-term strategic cooperation and open competitive procurement, and makes best use of market trend analysis, to
ensure the stable supply of the Company’s strategic materials. The Company pays attention to source procurement, and continuouslypromotes the removal of intermediate links in the supply chain to reduce procurement costs; the Company implements transparentprocurement, and launches information systems such as procurement platform, supplier and bidding management system, etc. to makethe procurement process more transparent, standardized and efficient, which promotes the healthy development of the supply chainand reduces costs and increases efficiency for the Company’s operations.
(2) Production model
The Company has always been adhering to the production strategy based on the principle of “production and sales coordination,efficient operation, excellent quality, and cost leadership”. The Company maintained a balance between production and sales throughanalysis of changes in market demands, and reasonable production plans. In addition, the Company keeps innovating the productionmodel, digging out internal potentials, and optimizing the production process, in order to promote safe, green, standardized and efficientproduction, 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 productapplication fields, and establishes a sales model that suits market needs according to market characteristics and industry practices. Mostof the Company’s sales are achieved through direct sales. By doing so, it establishes long-term and stable strategic cooperativerelationships with end customers to create greater value for them. Meanwhile, it also selects excellent agents or distributors fordistribution. By doing so, it services customers indirectly based on market and customer features.
3. Key performance drivers
The Company has built four modern industrial bases across the country. It adheres to the development strategy of integration,serialization and synergy, and insists on innovation-driven. Relying on the solid foundation of fine chemical industry, it focuses on“chemical+” and “biology+” to form NHU featured R&D models with industrial clusters, and technology and industry platformsinterdependent. Not only can its products connect basic chemical raw materials in the upstream, but also extend to special intermediates,nutrition, flavor and fragrance, new polymer materials, and APIs in the downstream. It has formed a product network structure to resistrisks and respond to market emergencies.During the reporting period, the company's original products were refined and the construction of new projects, the R&D of newproducts were carried out in an orderly manner. In the nutrition sector, the Company’s second phase of methionine 250,000 tons/yearproject, of which 100,000-ton equipment was operating smoothly, with comprehensive competition continuously improved. And ofwhich 150,000-ton equipment was constructed according to schedule and the construction is expected to be completed in June 2023.5,000 tons / year vitamin B6 and 3,000 tons / year B12 started production and sales, 30,000 tons/year NH-acid project was constructedunder schedule. In the Flavor and fragrance sector, the project with an annual output of 5,000 tons of menthol was constructed accordingto the schedule, and the project progress was controllable. In the new polymer materials sector, the commissioning of the phase III PPSproject with an annual output of 7,000 tons was progressing smoothly; The adiponitrile project was in the pilot test stage, and theproject approval process was advancing in an orderly manner. In the API sector, the 500 tons/year azabicyclo project was commissionedand the products was sold. Now the process route has been opened and the process is in the process of continuous improvement. In thefuture, the API product structure will be adjusted, transformed and upgraded, the specific project is in the process of approval.During the reporting period, in the face of the raging Covid-19 epidemic and the more complex international economic situation, theCompany coordinated the epidemic control and business development, actively responded to market changes, adjusted sales strategies,strengthened supply chain scheduling, reasonably arranged production plans to ensure its product supply, and strive to create value forcustomers and the society, and achieved good business performance.During the reporting period, the business of flavor and fragrance, new polymer materials developed steadily. The sales volume of
methionine increased, the product price was stable, and the cost advantage was provided. The sales price and sales volume of mainvitamin products decreased compared with the same period of the previous year. At the same time, affected by the domestic epidemicand the global political and economic environment, some raw materials’ price has increased, resulting in an increase in product costs.During the reporting period, the company realized an operating revenue of 8.22bn, with an increase of 11.92% over the same period ofthe previous year; The total profit was 2.62bn, with a decrease of 7.28% over the same period of the previous year; The net profitattributable to the shareholders of the listed company was 2.21bn, with a decrease of 8.78% over the same period of the previous year.Overall, in the first half of 2022, the company maintained a stable operating state, and the company's performance conformed to thedevelopment law of the industry.During the reporting period, the Company’s main business and its business model remained unchanged.
II. Core competitiveness analysis
During the reporting period, the Company’s core competitiveness remained unchanged, please refer to 2021 Annual Report of ZhejiangNHU Co., Ltd. for details.
III. Main Business AnalysisOverviewRefer to “I. The Main Business of the Company during the Reporting Period”Year-on-year changes in key financial data
Unit: RMB Yuan
| Item | The Current Reporting Period | The Same Period of the Previous Year | YoY growth rate | Reasons for Changes |
| Operating revenue | 8,215,039,277.03 | 7,340,124,310.11 | 11.92% | It was mainly due to the business growth of flavor and fragrance, and new polymer materials during the reporting period. |
| Operating Cost | 4,945,122,803.39 | 3,822,747,702.20 | 29.36% | It was mainly due to the increase in the price of main raw materials during the reporting period. |
| Sales Expenses | 57,277,897.48 | 55,479,574.90 | 3.24% | It was mainly due to the increase in salary during the reporting period. |
| Administration Expenses | 212,284,822.41 | 187,505,914.10 | 13.22% | It was mainly due to the increase in salary during the reporting period. |
| Financial Expenses | 22,231,053.96 | 144,530,139.09 | -84.62% | It was mainly due to exchange gains arising from exchange rate fluctuations during the reporting period. |
| Income Tax Expense | 400,099,923.62 | 394,709,861.22 | 1.37% | It was mainly due to the increase of deferred income tax expense. |
| R&D Expense | 440,357,252.64 | 351,532,764.55 | 25.27% | It was mainly due to the increase of material inputs and salary during the reporting period. |
| Net Cash Flows from Operating Activities | 1,242,456,738.20 | 2,289,637,496.69 | -45.74% | It was mainly due to the increase in the purchase amount of raw materials during the reporting period. |
| Net Cash Flows from Investing Activities | -1,073,929,985.26 | -1,084,929,925.41 | 1.01% | It was mainly due to the impact of the decrease in the purchase of financial products during the reporting period. |
| Item | The Current Reporting Period | The Same Period of the Previous Year | YoY growth rate | Reasons for Changes |
| Net Cash Flows from Financing Activities | 574,156,254.26 | 351,773,744.86 | 63.22% | It was mainly due to the large amount of due loans repaid in the same period of last year. |
| Net Increase in Cash and Cash Equivalents | 737,171,030.93 | 1,512,856,721.48 | -51.27% | It was mainly due to the increase in the purchase amount of raw materials during the reporting period. |
Significant changes in the composition of the Company’s profit or sources of profit during the reporting period
□ Applicable √ Not applicable
No significant changes in the composition of the Company’s profit or sources of profit during the reporting period.Operating Income Structure
Unit: RMB Yuan
| Items | The Current Reporting Period | The Same Period of the Previous Year | YoY growth rate | ||
| Amount | % to total | Amount | % to total | ||
| Total | 8,215,039,277.03 | 100% | 7,340,124,310.11 | 100% | 11.92% |
| By industry | |||||
| Pharmaceutical chemicals | 7,585,238,197.37 | 92.33% | 6,844,674,505.10 | 93.25% | 10.82% |
| Others | 629,801,079.66 | 7.67% | 495,449,805.01 | 6.75% | 27.12% |
| By product | |||||
| Nutrition | 5,768,862,111.12 | 70.22% | 5,503,992,723.67 | 74.98% | 4.81% |
| Flavor and fragrance | 1,522,994,415.83 | 18.54% | 1,161,042,438.38 | 15.82% | 31.17% |
| New polymer materials | 552,514,423.91 | 6.73% | 418,367,560.13 | 5.70% | 32.06% |
| Others | 370,668,326.17 | 4.51% | 256,721,587.93 | 3.50% | 44.39% |
| By region | |||||
| Domestic sales | 4,064,052,343.93 | 49.47% | 3,381,461,901.23 | 46.07% | 20.19% |
| Overseas sales | 4,150,986,933.10 | 50.53% | 3,958,662,408.88 | 53.93% | 4.86% |
| By sales model | |||||
| Direct sales | 6,536,368,733.62 | 79.57% | 5,750,096,413.40 | 78.34% | 13.67% |
| Agent sales | 1,678,670,543.41 | 20.43% | 1,590,027,896.71 | 21.66% | 5.57% |
Industry, product, or regions accounting for more than 10% of the Company’s operating revenue or profit
√ Applicable □ Not applicable
Unit: RMB Yuan
| Items | Operating revenue | Operating cost | Gross rate | Growth rate of operating revenue | Growth rate of operating cost | Growth rate of gross rate | |
| By industry | |||||||
| Pharmaceutical chemicals | 7,585,238,197.37 | 4,435,652,768.85 | 41.52% | 10.82% | 28.29% | Decreased by 7.96 percentage points | |
| By product | |||||||
| Nutrition | 5,768,862,111.12 | 3,430,472,272.00 | 40.53% | 4.81% | 29.06% | Decreased by11.17 percentage points | |
| Flavor and fragrance | 1,522,994,415.83 | 764,130,371.15 | 49.83% | 31.17% | 17.91% | Increased by 5.65 percentage points | |
| By region | |||||||
| Items | Operating revenue | Operating cost | Gross rate | Growth rate of operating revenue | Growth rate of operating cost | Growth rate of gross rate |
| Domestic sales | 4,064,052,343.93 | 2,739,229,159.94 | 32.60% | 20.19% | 39.34% | Decreased by 9.26 percentage points |
| Overseas sales | 4,150,986,933.10 | 2,205,893,643.45 | 46.86% | 4.86% | 18.80% | Decreased by 6.24 percentage points |
When the statistical caliber of the Company’s main business data is adjusted in the reporting period, the Company’s main businessdata in the most recent period should be subject to the one after the statistical caliber adjusted at the end of the reporting period.
□ Applicable √ Not applicable
Reasons for over 30% changes in related data on year-on-year basis
√ Applicable □ Not applicable
① By Product: Compared with the corresponding period of last year, the operating revenue of flavor and fragrance is increased by
31.17%, mainly due to the joint influence of the price rise and sales volume increase of such products.
② By Region: Compared with the corresponding period of last year, the operating cost of domestic sales is increased by 39.34%,mainly due to the increase in sales volume of nutrition products and the increase in freight costs.
IV. Non-main business analysis
√ Applicable □ Not Applicable
Unit: RMB Yuan
| Items | Amount | % to total profit before tax | Reason for balance | Whether has continuity |
| Investment income | 51,479,744.19 | 1.96% | It was mainly due to gains on financial products and profit generated by the associates during the reporting period. | No |
| Gains on changes in fair value | 11,836,700.04 | 0.45% | It was mainly due to changes in fair value of forward foreign exchange settlement during the reporting period. | No |
| Credit impairment loss(or less: losses) | -10,613,626.22 | -0.40% | It was mainly due to bad debts accrued in accounts receivable. | No |
| Assets impairment loss(or less: losses) | -7,890,179.58 | -0.30% | It was mainly due to losses arising from provision for impairment made on each asset in accordance with assets impairment principles. | No |
| Non-operating revenue | 2,024,074.84 | 0.08% | It was mainly due to indemnity income. | No |
| Non-operating expenditures | 2,330,316.96 | 0.09% | It was mainly due to donation expenditures during the reporting period. | No |
| Gains on asset disposal | 6,674,850.81 | 0.25% | It was mainly due to disposal of fixed assets. | No |
| Other income | 86,626,226.90 | 3.30% | It was mainly due to government grants received during the reporting period. | No |
V. Assets and liabilities analysis
1. Significant changes in asset composition
Unit: RMB Yuan
| Items | Jun. 30, 2022 | Dec. 31, 2021 | Percentage of change | Remarks on significant changes | ||
| Amount | % to total | Amount | % to total | |||
| Cash and bank balances | 6,590,012,908.26 | 17.43% | 5,952,909,626.94 | 17.14% | Increased by 0.29 percentage points | |
| Accounts receivable | 3,061,875,600.52 | 8.10% | 2,755,168,573.14 | 7.93% | Increased by 0.17 percentage points | |
| Inventories | 4,562,173,216.89 | 12.06% | 3,193,657,367.16 | 9.20% | Increased by 2.86 percentage points | |
| Long-term equity investments | 383,722,022.14 | 1.01% | 351,327,625.75 | 1.01% | There is no change. | |
| Fixed assets | 14,895,938,812.24 | 39.39% | 14,350,779,852.73 | 41.33% | Decreased by 1.94 percentage points | |
| Construction in progress | 3,855,244,085.78 | 10.20% | 2,984,835,072.82 | 8.60% | Increased by 1.60 percentage points | |
| Right-of-use assets | 3,055,722.33 | 0.01% | 3,123,637.11 | 0.01% | There is no change. | |
| Short-term borrowings | 2,633,945,563.46 | 6.97% | 1,403,332,827.92 | 4.04% | Increased by 2.93 percentage points | |
| Contract liabilities | 82,505,836.42 | 0.22% | 61,135,258.36 | 0.18% | Increased by 0.04 percentage points | |
| Long-term borrowings | 5,070,255,993.98 | 13.41% | 5,148,811,786.49 | 14.83% | Decreased by 1.42 percentage points | |
| Lease liabilities | 2,845,348.72 | 0.01% | 2,936,868.15 | 0.01% | There is no change. | |
2. Major overseas assets
□ Applicable √ Not applicable
3. Assets and liabilities at fair value
√ Applicable □ Not Applicable
Unit: RMB Yuan
| Items | Opening balance | Gains on changes in fair value | Accumulated changes in fair value included in equity | Provision for impairment made in the current period | Amount purchased during the reporting period | Amount sold during the reporting period | Other changes | Closing balance |
| Financial assets | ||||||||
| 1. Held-for-trading financial assets (derivative financial assets excluded) | 1,250,000,000.00 | 660,000,000.00 | 1,250,000,000.00 | 660,000,000.00 | ||||
| 2. Derivative financial assets | 736,359.24 | 8,819,105.53 | 9,555,464.77 | |||||
| Subtotal of financial assets | 1,250,736,359.24 | 8,819,105.53 | 0.00 | 0.00 | 660,000,000.00 | 1,250,000,000.00 | 0.00 | 669,555,464.77 |
| Total | 1,250,736,359.24 | 8,819,105.53 | 0.00 | 0.00 | 660,000,000.00 | 1,250,000,000.00 | 0.00 | 669,555,464.77 |
| Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Whether the Company has significant changes in measurement attributes of main assets during the reporting period
□ Yes √ No
4. Restrictions on assets as of the end of the reporting period
(1) Closing of cash and bank balances included deposits of 138,304,339.10 yuan pledged and not on demand for payments, whichwas with use restrictions.
(2) Closing balance of receivables financing included 130,363,316.90 yuan pledged for bank acceptance and not on demand forpayments, which was with use restrictions.
(3) Closing balance of notes receivable included 209,801,476.61 yuan pledged for bank acceptance and not on demand for payment,which was with use restrictions.
(4) Closing carrying amount of fixed assets included 76,487,526.23 yuan mortgaged to the bank for borrowings, which was with userestrictions.
(5) Closing carrying amount of intangible assets included 9,186,528.93 yuan mortgaged to the bank for borrowings, which was withuse restrictions.VI. Investment status analysis
1. Overall information
√ Applicable □ Not Applicable
| Investments during the reporting period (yuan) | Investments of the preceding period (yuan) | Percentage of change |
| 1,832,296,131.71 | 1,118,444,545.53 | 63.83% |
2. Significant equity investments made during the reporting period
□ Applicable √ Not Applicable
3. Significant non-equity investments in progress during the reporting period
□ Applicable √ Not Applicable
4. Investments in financial assets
(1) investments in securities
□ Applicable √ Not Applicable
There is no investment in securities during the reporting period.
(2) Investments in derivatives
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
| Counterparty | Related party relationship | Whether related party transaction | Categories of derivative investments | Initial investments | Date of commencement | Date of termination | Opening balance | Amount purchased during the reporting period | Amount sold during the reporting period | Provision for impairment (if any) | Closing balance | Proportion of investments to net assets | Profit or loss during the reporting period |
| Bank | Non-related party | No | Forward contracts | 362,525.17 | 12/09/2021 | 12/28/2022 | 15,949.55 | 340,098.07 | 234,899.32 | 121,148.30 | 5.48% | 781.28 | |
| Bank | Non-related party | No | Structured forward contracts | 56,347.80 | 11/19/2021 | 12/23/2022 | 13,400.00 | 30,077.30 | 12,702.00 | 30,775.30 | 1.39% | 125.91 | |
| Total | 418,872.97 | -- | -- | 29,349.55 | 370,175.37 | 247,601.32 | 151,923.60 | 6.87% | 907.19 | ||||
| Fund source | Self-owned fund | ||||||||||||
| Conditions of involved lawsuits (if applicable) | None | ||||||||||||
| Disclosure date of the Board of Directors announcement for the approval of derivatives investment (if any) | April 15, 2022 | ||||||||||||
| Disclosure date of the general meeting of shareholders announcement for the approval of derivatives investment (if any) | Not Applicable | ||||||||||||
| Remarks on risk analysis and control measures for holding derivative positions during the reporting period (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | In order to prevent exchange rate risks, the Company and its subsidiaries carried out derivative instrument businesses. The Company and its subsidiaries strictly implemented the Management Measures on Foreign Exchange Hedging Business. | ||||||||||||
| In the case of changes in market prices or fair value of invested derivatives during the reporting period, the analysis on fair value of derivatives shall disclose the specific methods for their uses, and the setting of relevant assumptions and parameters | Floating income from changes in fair value of the invested derivatives amounted to 37.86 million yuan at the beginning of the reporting period; floating income from changes in fair value of the invested derivatives amounted to 11.84 million yuan at the end of the reporting period. | ||||||||||||
| Remarks on whether there were significant changes in the accounting policies and specific accounting principles for the Company’s derivatives during the reporting period compared to the previous reporting period | Not Applicable | ||||||||||||
| Special opinions of independent directors on the Company’s derivatives investment and risk control | The Company has formulated the Management Measures on Foreign Exchange Hedging Business to strengthen internal control, implement risk prevention measures, improve the level of operation and management, and formulate specific operating procedures for foreign exchange hedging business. The Company has performed analysis on the feasibility of carrying out foreign exchange hedging business, which indicated that in general, it is feasible to carry out foreign exchange hedging, for it can effectively reduce the risk of exchange rate fluctuations, and help stabilize the profit level. The contents of and review procedures for the event comply with relevant laws, regulations, normative documents, the Articles of Association, etc., and would not damage the interests of the Company and other shareholders. We all agree that the Company shall carry out foreign exchange hedging business this time. | ||||||||||||
5. Use of raised funds
√ Applicable □ Not Applicable
(1) Overall use of raised funds
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
| Year of fund-raising | Way of fund-raising | Total amount raised | Amount used in the current period | Accumulated amount of raised funds used | Total raised funds with changes in uses during the reporting period | Accumulated amount of raised funds with changes in uses during the reporting period | Proportion of raised funds with changes in uses to total raised funds | Total raised funds not yet used | Purposes of raised funds not yet used and the whereabouts | Raised funds being idle for over two years |
| Year 2017 | Private placement of shares | 486,707.55 | 69,281.63 | 278,026.26 | 0 | 0 | 0.00% | 208,681.29 | Deposited in special accounts for raised funds, used to purchase bank financial products, deposited as structured deposits | 0 |
| Total | -- | 486,707.55 | 69,281.63 | 278,026.26 | 0 | 0 | 0.00% | 208,681.29 | -- | 0 |
| Remarks on overall use of raised funds | ||||||||||
| The Company’s raised funds used in previous years amounted to 2,087.45 million yuan, the net amount of interest on cash in bank received in previous years less handling charges amounted to 51.75 million yuan, gains on financial products and structured deposits received in previous years amounted to 574.66 million yuan, and the net expenditure on financial products and structured deposits purchased in previous years amounted to 2,450.00 million yuan; the raised funds actually used in the first half of 2022 amounted to 692.82 million yuan, the net amount of interest on cash in bank received in the first half of 2022 less handling charges amounted to 11.30 million yuan, gains on financial products and structured deposits received in the first half of 2022 amounted to 41.36 million yuan, and the net recovery from financial products and structured deposits purchased in the first half of 2022 amounted to 1,530.00 million yuan; the accumulated amount of the raised funds used amounted to 2,780.26 million yuan, the accumulated net amount of interest on cash in bank received less handling charges amounted to 63.05 million yuan, the accumulated amount of gains on financial products and structured deposits received amounted to 616.01 million yuan, and net expenditure on financial products and structured deposits purchased amounted to 920.00 million yuan. As of June 30, 2022, the balance of the special account for raised funds amounted to 1,845.88 million yuan (including the net amount of interest on cash in bank less handling charges, gains on financial products and structured deposits received on an accumulated basis). | ||||||||||
(2) Committed projects with raised funds
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
| Committed investment projects and over-raised funds whereabouts | Whether changed (including partial changed) | Total committed investment in raised funds | Total amount after adjustment (1) | Input during the reporting period | Accumulated input as of the period end (2) | Investment progress as of the period end (3)=(2)/(1) | Date of reaching designed usable conditions | Benefit realized in the reporting period | Whether the expected benefit is reached | Whether there was significant changes in feasibility of the project |
| Committed investment projects | ||||||||||
| Methionine project with annual output of 0.25 million tons | No | 486,707.55 | 486,707.55 | 69,281.63 | 278,026.26 | 57.12% | Partially reached the designed usable conditions | 35,194.89 | Yes | No |
| Subtotal | -- | 486,707.55 | 486,707.55 | 69,281.63 | 278,026.26 | -- | -- | 35,194.89 | -- | -- |
| Over-raised funds whereabouts | ||||||||||
| No | ||||||||||
| Total | -- | 486,707.55 | 486,707.55 | 69,281.63 | 278,026.26 | -- | -- | 35,194.89 | -- | -- |
| Conditions of and reasons for not meeting the planned schedule or estimated revenue (by specific project) | Pursuant to the results deliberated and approved by the eighth meeting of the eighth session of Board of Directors and the seventh meeting of the eighth session of the Board of Supervisors dated October 27, 2021, the Company intended to adjust the date when the methionine project with annual output of 0.25 million tons reaches the designed usable conditions from the originally planned December 2021 to June 2023, with other contents remaining unchanged. Main reasons: Due to the impact of the COVID-19 and the macro economy, the construction progress of the project’s infrastructure has been delayed, the procurement and delivery time of some equipment and materials has been extended, the installation and commissioning of equipment has been delayed, and the overall | |||||||||
| progress of the investment projects with raised funds has slowed down, which jointly resulted in the postponement of delivery of the projects. Currently, the 100,000-ton production line of the project has been completed and is in normal operation, and the 150,000-ton production line is under construction. | |
| Remarks on significant changes in feasibility of projects | None. |
| Amount, purposes and progress of use of over-raised funds | Not Applicable |
| Changes in implementation locations of investment projects with raised funds | Not Applicable |
| Adjustment on the implementation method of investment projects with raised funds | Not Applicable |
| Preliminary investment and replacement of investment projects with raised funds | Applicable |
| Preliminary investment amounted to 36.06 million yuan, and the replacement of raised funds is completed. | |
| Temporary replenishment of working capital with idle raised funds | Not Applicable |
| Amount of and reasons for the balance of raised funds in the implementation of projects | Not Applicable |
| Uses and whereabouts of unused raised funds | Deposited in special accounts for raised funds, used to purchase bank financial products, deposited as structured deposits |
| Problems or other situations in the use and disclosure of raised funds | None. |
(3) Change of projects with raised funds
□ Applicable √ Not Applicable
There is no change of projects with raised funds during the reporting period.VII. Sale of major assets and equities
1. Sale of major assets
□ Applicable √ Not Applicable
There is no sale of major assets during the reporting period.
2. Significant sale of equities
□ Applicable √ Not Applicable
VIII. Major entities controlled or invested by the Company
√ Applicable □ Not Applicable
Major subsidiaries and investees with influence on net profit of the Company over 10% (inclusive)
Unit: RMB Yuan
| Entities | Categories | Major businesses | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| 山东新和成药业有限公司(Shandong NHU Pharmaceutical | Subsidiary | Production and sales of fragrances | 586 million yuan | 3,764,384,291.53 | 3,122,293,885.52 | 1,795,208,550.81 | 674,635,047.60 | 579,387,483.37 |
| Entities | Categories | Major businesses | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Co., Ltd.*) | ||||||||
| 山东新和成氨基酸有限公司(Shandong NHU Amino-acids Co., Ltd.*) | Subsidiary | Production and sales of methionine | 930 million yuan | 6,370,967,608.24 | 5,277,619,767.93 | 1,820,189,293.19 | 619,774,650.89 | 528,677,676.98 |
| 山东新和成维生素有限公司(Shandong NHU Vitamins Co., Ltd.*) | Subsidiary | Production and sales of feed additives | 500 million yuan | 3,590,584,985.65 | 2,466,436,986.11 | 1,195,430,349.69 | 546,299,798.06 | 474,304,150.35 |
| 上虞新和成生物化工有限公司(Shangyu NHU Bio-Chem Co., Ltd.*) | Subsidiary | Production and sales of feed additives | 50 million yuan | 4,925,737,910.91 | 3,664,072,222.94 | 771,030,608.61 | 299,904,474.20 | 263,309,156.89 |
Details of acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not Applicable
| Subsidiaries | Method for acquisition and disposal of subsidiaries during the reporting period | Effect on the overall production, operation and performance |
| NHU/Chr.Olesen Latin America A/S[Note] | Acquisition | No significant effect at the beginning of the period. |
[Note] NHU/CHR.OLESEN LATIN AMERICA A/S holds two subsidiaries, respectively NHU/CHR.OLESEN BRASIL LTDA.，holding 100%, and CHR.OLESEN MEXICO SAPI DE CV, holding 88%.
IX. Structured entities controlled by the Company
□ Applicable √ Not Applicable
X. Risks and countermeasuresDuring the reporting period, the Company’s risks and countermeasures remained unchanged, please refer to 2021 Annual Report ofZhejiang NHU Co., Ltd. for details.
*The English names are for identification purpose only.
Section IV Corporate GovernanceI. Annual general meeting and extraordinary general meetings held during the reporting period
1. General meeting of shareholders
| Session | Type of meetings | Proportion of participating investors | Meeting date | Disclosure date | Resolutions |
| General meeting of shareholders of 2021 | Annual general meeting of shareholders | 52..50% | May 10, 2022 | May 11, 2022 | 11 proposals including the Annual Work Report of the Board of Directors of 2021 were deliberated and approved. Please refer to Announcement No. 2022-029 disclosed on http://www.cninfo.com.cn for details. |
2. Preference shareholders with restored voting rights request to convene an extraordinary general meeting
□ Applicable √ Not applicable
II. Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
| Name | Position | Type | Date | Reasons |
| 郑根土 (Zheng Gentu) | Vice President | Leave office upon expiration of term of office | Jan 31, 2022 | Expiration of employment |
III. Profit distribution and conversion of capital reserve into share capital
□ Applicable √ Not applicable
The Company will not distribute cash dividend, distribute bonus shares, or distribute shares from capital reserve during the currentreporting period.
IV. Implementation of equity incentive plans, employee stock ownership plans or otheremployee incentive programs
√ Applicable □ Not applicable
1. Equity incentive
Not applicable.
2. Implementation of employee stock ownership plans
√ Applicable □ Not applicable
All active employee stock ownership plans during the reporting period
| Scope of employees | Number of employees | Total shares held | Changes | Proportion to total share capital of the Company | Sources of fund to implement the plan |
| Directors, supervisors, senior executives of the Company, and regular employees | 681 | 12,157,826 | N/A | 0.39% | Legal remuneration of the employees, self-raised funds and other methods |
| Scope of employees | Number of employees | Total shares held | Changes | Proportion to total share capital of the Company | Sources of fund to implement the plan |
| of the Company and its holding subsidiaries or wholly-owned subsidiaries who meet the criteria | permitted by laws and administrative regulations |
Shareholdings of directors, supervisors and senior executives in the employee stock ownership plan during the reporting period
| Name | Position | Number of shares held at the beginning of the reporting period | Number of shares held at the end of the reporting period | Proportion to total share capital of the Company |
| Hu Baishan, Shi Guanqun, Wang Xuewen, Wang Zhengjiang, Zhou Guiyang, Yu Baijin, Shi Fangbin, Lyu Guofeng, Yu Hongwei, Yan Hongyue, Chen Zhaofeng, Zheng Gentu | Directors, supervisors and senior executives | 1,334,431 | 1,601,317 | 0.05% |
Changes in asset management agency during the reporting period
□ Applicable √ Not applicable
Changes in equity during the reporting period due to disposal of shares by holders, etc.
□ Applicable √ Not applicable
3、Other remarks
1. On May 25, 2022, the Company implemented the Annual Equity Distribution of 2021, and the shares held by the third phase ofemployee stock ownership plan were transferred from 10,131,522 shares to 12,157,826 shares after the transfer, with the proportion tototal share capital of the Company unchanged.
2. The number of shares held by directors, supervisors and senior executives in the employee stock ownership plan is measured basedon the proportion of shares of holders to the total shares of the employee stock ownership plan.
4. Other employee incentive programs
□ Applicable √ Not applicable
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 environmentalprotection administration
√ Yes □ No
COD, NH3-N, SO?, NOx, TN, VOC, PM and TP stand for chemical oxygen demand, ammonia nitrogen, sulfur dioxide, nitrogenoxides, total nitrogen, volatile organic compound, particulate matter and total phosphorus, respectively.
The English name is for identification purpose only.
| Name | Name of main pollutants and pollutant characteristics1 | Discharge method | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration | Executive pollutant discharge standard | Total amount of discharge | Total verified amount of discharge | Excessive discharge or not |
| The Company | COD | Sewer connection | 1 | Plant area | 153mg/L | 500mg/L | 12.56t | ≤189.5t/a | No |
| The Company | NH3-N | Sewer connection | 1 | Plant area | 6.6mg/L | 35mg/L | 0.1t | ≤13.28t/a | No |
| The Company | SO? | Filtered discharge | 1 | Plant area | 19mg/m? | 50mg/m? | 0.55t | ≤8.612t/a | No |
| The Company | NOx | Filtered discharge | 1 | Plant area | 38mg/m? | 50mg/m? | 0.4t | ≤28t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | COD | Sewer connection | 1 | Plant area | 288.144mg/L | 500mg/L | 144.596t | ≤447.4t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 13.958mg/L | 35mg/L | 7.004t | ≤31.318t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | TN | Sewer connection | 1 | Plant area | 24.389mg/L | 70mg/L | 12.239t | ≤62.637t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 8.557mg/m? | 200mg/m? | 1.501t | ≤12.96t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | VOC | Filtered discharge | 1 | Plant area | 4.615mg/m? | 100mg/m? | 0.883t | ≤217.182t/a | No |
| 浙江新和成药业有限公司 (Zhejiang NHU Pharmaceutical Co., Ltd.2) | COD | Sewer connection | 1 | Plant area | 288.144mg/L | 500mg/L | 94.612t | ≤292.37t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 13.958mg/L | 35mg/L | 4.583t | ≤20.467t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | TN | Sewer connection | 1 | Plant area | 24.389mg/L | 70mg/L | 8.008t | ≤40.932t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | VOC | Filtered discharge | 2 | Plant area | 3.028mg/m? | 100mg/m? | 0.538t | ≤167.91t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 3.61mg/m? | 200mg/m? | 0.256t | ≤8.64t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 87.865mg/m? | 300mg/m? | 20.49t | ≤28.08t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 3mg/m? | 50mg/m? | 1.575t | ≤65.85t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 3.521mg/m? | 50mg/m? | 0.804t | ≤37.94t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 3mg/m? | 200mg/m? | 0.394t | ≤91.42t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 3.034mg/m? | 15mg/m? | 0.207t | ≤0.304t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 3.988mg/m? | 30mg/m? | 0.914t | ≤8.42t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 3.33mg/m? | 20mg/m? | 0.194t | ≤77.597t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | PM | Filtered discharge | 2 | Plant area | 2.7mg/m? | 5mg/m? | 0.7644t | ≤17.73t/a | No |
COD, NH3-N, SO?, NOx, TN, VOC, PM and TP stand for chemical oxygen demand, ammonia nitrogen, sulfur dioxide, nitrogenoxides, total nitrogen, volatile organic compound, particulate matter and total phosphorus, respectively.
?The English name is for identification purpose only.
| Name | Name of main pollutants and pollutant characteristics3 | Discharge method | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration | Executive pollutant discharge standard | Total amount of discharge | Total verified amount of discharge | Excessive discharge or not |
| Zhejiang NHU Special Materials Co., Ltd. | SO? | Filtered discharge | 2 | Plant area | 5.8mg/m? | 35mg/m? | 1.8240t | ≤67.92t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | NOx | Filtered discharge | 2 | Plant area | 14.8mg/m? | 50mg/m? | 2.6464t | ≤83.28t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | VOC | Filtered discharge | 2 | Plant area | 16.1mg/m? | 60mg/m? | 1.8868t | ≤69.72t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | COD | Sewer connection | 1 | Plant area | 289mg/L | 500mg/L | 58.583t | ≤182.1t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 14mg/L | 35mg/L | 2.788t | ≤12.747t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | TN | Sewer connection | 1 | Plant area | 30mg/L | 70mg/L | 6.156t | ≤25.494t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | PM | Filtered discharge | 5 | Plant area | 2.96mg/m? | 10mg/m? | 0.816t | ≤5.761t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | SO? | Filtered discharge | 4 | Plant area | 2.7mg/m? | 50mg/m? | 0.210t | ≤4.006t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | NOx | Filtered discharge | 5 | Plant area | 31.4mg/m? | 100mg/m? | 13.28t | ≤75.513t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | VOC | Filtered discharge | 3 | Plant area | 28.9mg/m? | 60mg/m? | 2.388t | ≤28.481t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | COD | Sewer connection | 1 | Plant area | 523mg/L | 1000mg/L | 127t | ≤598.22t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 16.6mg/L | 100mg/L | 4.12t | ≤59.82t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | TN | Sewer connection | 1 | Plant area | 42.8mg/L | 120mg/L | 10.4t | ≤65.64t/a | No |
| 山东新和成药业有限公司热电分公司 (Thermal Power Branch of Shandong NHU Pharmaceutical Co., Ltd.?) | PM | Filtered discharge | 1 | Plant area | 1.48mg/m? | 5mg/m? | 1.79t | ≤10.51t/a | No |
| Thermal Power Branch of Shandong NHU Pharmaceutical Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 19.9mg/m? | 35mg/m? | 22.4t | ≤73.61t/a | No |
| Thermal Power Branch of Shandong NHU Pharmaceutical Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 25.6mg/m? | 50mg/m? | 32.8t | ≤105.16t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | SO? | Filtered discharge | 4 | Plant area | 7.41mg/m? | 50mg/m? | 4.8377t | ≤92.59t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | NOx | Filtered discharge | 3 | Plant area | 57.4mg/m? | 100mg/m? | 51.8716t | ≤230.77t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | PM | Filtered discharge | 5 | Plant area | 1.28mg/m? | 10mg/m? | 1.4628t | ≤21.19t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | VOC | Filtered discharge | 4 | Plant area | 2.94mg/m? | 60mg/m? | 15.9256t | ≤123.27t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | COD | Sewer connection | 1 | Plant area | 352mg/L | 1000mg/L | 69.71t | ≤592.22t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 2.1mg/L | 100mg/L | 0.4191t | ≤59.222t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | TN | Sewer connection | 1 | Plant area | 46.2mg/L | 120mg/L | 9.28t | ≤70.38t/a | No |
| Shandong NHU Vitamins Co., Ltd. | VOC | Filtered discharge | 4 | Plant area | 10mg/m? | 60mg/m? | 0.96t | ≤173.53t/a | No |
| Shandong NHU Vitamins Co., Ltd. | SO? | Filtered discharge | 2 | Plant area | 13mg/m? | 50mg/m? | 1.951t | ≤63.24t/a | No |
| Shandong NHU Vitamins Co., Ltd. | NOx | Filtered discharge | 4 | Plant area | 45mg/m? | 100mg/m? | 18.355t | ≤107.53t/a | No |
Construction and operation of pollution prevention and control facilitiesThe company has established the environmental protection concept of green development: 1. Introduce the conceptof green chemistry to develop and produce more environmentally friendly products. 2. We should change from asupport type to a responsibility type, and do a good job in source reduction, process control, and end treatment. 3.Pursue reduction, resources and harmlessness, build an ecological factory, and realize the harmonious developmentof human and nature.
COD, NH3-N, SO?, NOx, TN, VOC, PM and TP stand for chemical oxygen demand, ammonia nitrogen, sulfur dioxide, nitrogenoxides, total nitrogen, volatile organic compound, particulate matter and total phosphorus, respectively.
| Name | Name of main pollutants and pollutant characteristics4 | Discharge method | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration | Executive pollutant discharge standard | Total amount of discharge | Total verified amount of discharge | Excessive discharge or not |
| Shandong NHU Vitamins Co., Ltd. | PM | Filtered discharge | 5 | Plant area | 3mg/m? | 10mg/m? | 0.861t | ≤13.93t/a | No |
| Shandong NHU Vitamins Co., Ltd. | COD | Sewer connection | 1 | Plant area | 510mg/L | 2000mg/L | 7.333t | ≤40.51t/a | No |
| Shandong NHU Vitamins Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 20mg/L | 100mg/L | 0.734t | ≤4.05t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 8.24mg/m? | 30mg/m? | 1.47t | ≤43.812t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 92.81mg/m? | 200mg/m? | 16.54t | ≤99.11t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 77.42mg/m? | 200mg/m? | 13.80t | ≤142.33t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 26.25mg/m? | 200mg/m? | 0.22t | ≤43.812t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 98.13mg/m? | 240mg/m? | 0.82t | ≤99.11t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 111.35mg/m? | 850mg/m? | 0.93t | ≤142.33t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 20.95mg/m? | 200mg/m? | 0.17t | ≤43.812t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 97.27mg/m? | 240mg/m? | 0.80t | ≤99.11t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 111.02mg/m? | 850mg/m? | 0.91t | ≤142.33t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 19.41mg/m? | 200mg/m? | 0.15t | ≤43.812t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 76.49mg/m? | 240mg/m? | 0.61t | ≤99.11t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 110.46mg/m? | 850mg/m? | 0.88t | ≤142.33t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 28.36mg/m? | 200mg/m? | 0.21t | ≤43.812t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 68.78mg/m? | 240mg/m? | 0.51t | ≤99.11t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 127.12mg/m? | 850mg/m? | 0.94t | ≤142.33t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 8.24mg/m? | 120mg/m? | 1.05t | ≤43.812t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | VOC | Filtered discharge | 2 | Plant area | 61.64mg/m? | 150mg/m? | 6.12t | ≤118.8t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | COD | Sewer connection | 1 | Plant area | 200.23mg/L | 350mg/L | 540.67t | / | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 1.23mg/L | 35mg/m? | 3.33t | / | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | TP | Sewer connection | 1 | Plant area | 2.06mg/L | 6mg/L | 5.56t | / | No |
Wastewater treatment: the company has a complete wastewater treatment system; There are wastewater collectionsystems for production sewage, domestic sewage, initial rainwater, accident water, etc. to achieve the separation ofclean water and sewage and the separation of rain and sewage. The waste water tank is covered and sealed, and allthe waste gas generated is effectively collected and finally incinerated to effectively reduce the waste gas emission.Waste gas treatment: the company adopts nitrogen sealing system to effectively reduce waste gas emission;According to different waste gas compositions and properties, different pretreatment technologies are adopted.Meanwhile, the company introduces advanced waste gas treatment devices from abroad to strengthen the waste gastreatment capacity. The waste gas leakage detection and repair (LDAR) shall be carried out regularly every year toeffectively supervise and reduce the unorganized waste gas. The company actively upgraded the coal-fired heat-conducting oil furnace to "replace coal with gas", introduced natural gas boilers, carried out low nitrogentransformation, and added SNCR denitration facilities at the end, actively carried out nitrogen oxide treatment. Theoperation and maintenance of the odor evaluation system facilities, pay attention to the monitoring data of allmonitoring points every day, do a timely trend analysis, and basically realize the early warning, traceability andevaluation of the company's odor.Solid waste disposal: the company has built a standardized hazardous waste temporary storage warehouse andhazardous waste incineration device. The outsourced solid waste is entrusted to a qualified unit for treatment, andis transferred in strict accordance with the requirements of the management measures for five copies of hazardouswaste transfer.Noise prevention and control: low noise equipment shall be selected, and noise reduction measures of foundationvibration reduction shall be taken for equipment that does not need to be fixed. In addition to foundation vibrationreduction, sound insulation covers shall be added around the noise source for sound insulation for air compressors,blowers and various pumps.Emergency management: install on-line exhaust gas monitor around the plant boundary to monitor the plantboundary environment in real time; The VOC online monitor is introduced to monitor the exhaust emission data inreal time and upload the detection data to the monitoring platform; The online monitoring of wastewater by oneenterprise and one pipe monitors the wastewater discharge indicators in real time and uploads them to theEnvironmental Protection Bureau normally; Introduce the domestic first-class overhead flare technology to dealwith the waste gas produced abnormally in the production process; The introduction of domestic first-class LeakageStoppage Technology under pressure will reduce the abnormal leakage of pipelines, valves, flanges and tanks to theminimum, thus reducing the impact on the environment caused by a large number of leakage.
Environmental impact assessment (EIA) of construction projects and other administrative permits forenvironmental protectionThe company's annual production of 500 tons of Karon anhydride, 500 tons of azabicycles and 800 tons of sodiumsulfate, and 250,000 tons of methionine (phase II) have all obtained the EIA approval.
Environmental emergency response planZhejiang NHU special materials Co., Ltd. formulated the emergency plan for environmental emergencies of
Zhejiang NHU special materials Co., Ltd. in accordance with the administrative measures for the filing ofemergency plans for environmental emergencies of enterprises and institutions (for Trial Implementation) issuedby the state and the actual situation of the company, and reported it to the Shangyu branch of Shaoxing EcologicalEnvironment Bureau in June 2022 for filing.On May 25, 2022, Shandong NHU amino acid Co., Ltd. reapplied for the emergency plan for environmentalemergencies, with the number of 370703-2022-048-h, which is within the validity period.
Environmental self-monitoring programThe company has good pollutant emission monitoring and management ability and can timely inform theenvironmental protection administrative department and the public of the monitoring information. The companyhas developed relevant self-test plans, which cover the indicators of the company's organized waste gas, unorganizedwaste gas and groundwater. At the same time, a third-party testing company is entrusted to carry out regularmonitoring. The company implements environmental information disclosure in strict accordance with the national,provincial, municipal and county requirements on enterprise environmental information disclosure. Each subsidiaryhas made enterprise environmental protection information public on platforms such as the environmentalinformation management system of provincial and municipal key pollutant discharge units.
Administrative penalties for environmental problems during the reporting period
| Name | Reasons for punishment | Violations | Results of punishment | Impact on the production and operation of the Company | Rectification measures of the Company |
| N/A | N/A | N/A | N/A | N/A | N/A |
Other environmental information that should be disclosedNone.Measures taken to reduce carbon dioxide emissions during the reporting period and their effects
√ Applicable □ Not applicable
In the research and development of new products, the carbon emission of 10,000 yuan output value is taken as animportant indicator for the process route and environmental feasibility assessment of new products. The greendevelopment technology is applied in the research and development of new products to improve the atomicutilization rate and reduce the carbon emission generated by the consumption of raw materials from the source.Other information related to environmental protection
None.II. Social responsibilitiesNone.
Section VI Significant EventsI. Commitment performance fulfilled during the reporting period and not fulfilled as of the endof the reporting period by parties related to commitments including the actual controller of theCompany, shareholders, related parties, acquirers and the Company
√ Applicable □ Not Applicable
| Commitments | Parties making commitments | Types of commitments | Content of commitments | Time of commitment | Term of commitment | Performance |
| Commitments to shares reform | None | None | None | None | None | |
| Commitments made in reports on acquisition and changes in equity | None | None | None | None | None | |
| Commitments made in asset restructuring | None | None | None | None | None | |
| Commitments made in IPO or refinancing | NHU Holding Group Co., Ltd. and 张平一 (Zhang Pingyi), 石程 (Shi Cheng), 袁益中 (Yuan Yizhong), Hu Baishan, Shi Guanqun, Wang Xuewen, 崔欣荣 (Cui Xinrong), 王旭林 (Wang Xulin) | Commitments on horizontal competition, related party transactions and occupation of funds | The signing of Commitment on No Engagement in Horizontal Competition and commitments on no engagement in business activities result in horizontal competition with operations of the Company after listing. | June 25, 2004 | Long-term | Strictly performed |
| Hu Baifan; Hu Baishan;Shi Guanqun; Wang Xuewen; Cui Xinrong; Wang Zhengjiang; Zhou Guiyang | The Company’s directors, senior executives committed to perform their duties faithfully and diligently to safeguard the legitimate rights and interests of the Company and shareholders, and make the following commitments in accordance with the relevant provisions of the CSRC for the full performance of measures on filling immediate returns: 1. not to transfer benefits to other entities or individuals without compensation or on unfair terms, and not to use other means to harm benefits of the Company; 2. to impose restrictions on duty consumption of member of the Board of Directors and senior executives; 3. not to use assets of the Company to engage in investment or consumption activities not related to duty performance; 4. to link remuneration | January 12, 2017 | Long-term | Strictly performed |
II. Non-operating occupation of funds over listed companies by controlling shareholders andother related parties
□ Applicable √ Not Applicable
There is no non-operating occupation of funds over listed companies by controlling shareholders and other related parties during thereporting period.III. Illegal external guarantees
□ Applicable √ Not Applicable
There is no illegal external guarantee during the reporting period.IV、Engagement and dismissal of accounting firmsWhether the semi-annual report has been audited or not
| 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. | ||||||
| Hu Baifan; NHU Holding Group Co., Ltd. | Not to interfere in the Company’s business and management activities in excess of authority; not to encroach on benefits of the Company; to perform measures on filling immediate returns in a practical way. | January 12, 2017 | Long-term | Strictly performed | ||
| Commitments to equity incentive | None | None | None | None | None | |
| Other commitments to minority shareholders of the Company | NHU Holding Group Co., Ltd. | Share increase commitment | During the period of increasing the shares of the company and within the legal period, NHU Holding Group Co., Ltd. will not reduce the shares of the company and will complete the increase plan within the above implementation period. | May 18, 2022 | 6 months | Strictly performed |
| Whether commitments are performed on time | Yes | |||||
| If commitment performance is not fulfilled on time, please explain detailed reasons for it and the next work plans. | Not applicable | |||||
□ Yes √ No
The semi-annual report has not been audited.V. Statements by the Board of Directors, the Board of Supervisors on the “Modified Auditor’sReport” issued by the accounting firm during the reporting period
□ Applicable √ Not Applicable
VI. Explanations by the Board of Directors on the “Modified Auditor’s Report” issued by theaccounting firm last year
□ Applicable √ Not Applicable
VII. Matters related to bankruptcy and restructuring
□ Applicable √ Not Applicable
There are no matters related to bankruptcy and restructuring during the reporting period.VIII. LawsuitsSignificant lawsuits and arbitration
□ Applicable √ Not Applicable
There is no significant lawsuit and arbitration during the reporting period.
Other lawsuits
□ Applicable √ Not Applicable
IX. Penalties and rectification
□ Applicable √ Not Applicable
X. Integrity of the Company, its controlling shareholders and the actual controller
□ Applicable √ Not Applicable
XI. Significant related party transactions
1. Related party transactions relevant to daily operations
□ Applicable √ Not Applicable
There is no related party transaction relevant to daily operations during the reporting period.
2. Related party transactions in purchase or sale of assets or equities
□ Applicable √ Not Applicable
There is no related party transaction in purchase or sale of assets or equities during the reporting period.
3. Related party transactions in joint external investments
□ Applicable √ Not Applicable
There is no related party transaction in joint external investments during the reporting period.
4. Related party creditor’s rights and debts
□ Applicable √ Not Applicable
There is no related creditor’s rights or debts during the reporting period.
5. Transactions with related financial companies
□ Applicable √ Not Applicable
There is no business of deposits, loans, credit granting or other financial businesses between the Company and its related financialcompanies.
6. Transactions between financial companies controlled by the Company and the Company’s related parties
□ Applicable √ Not Applicable
There is no business of deposits, loans, credit granting or other financial businesses between financial companies controlled by theCompany and the Company’s related parties.
7. Other significant related party transactions
□ Applicable √ Not Applicable
There is no other significant related party transaction during the reporting period.XII. Significant contracts and performance
1. Matters of trusteeship, contracting and leases
(1) Trusteeship
□ Applicable √ Not Applicable
There is no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not Applicable
There is no contracting during the reporting period.
(3) Leases
□ Applicable √ Not Applicable
There is no lease during the reporting period.
2. Significant guarantees
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
| External guarantees by the Company and its subsidiaries to third parties (guarantees to subsidiaries are excluded) | ||||||||||
| Guaranteed parties | Announcement date of disclosure of amount guaranteed | Amount guaranteed | Actual commencement date | Actual amount guaranteed | Types of guarantees | Collaterals (if any) | Counter guarantees (if any) | Period of guarantee | Whether the guarantee is mature | Whether guarantee for related parties |
| Total amount of guarantees approved during the reporting | 0 | Total amount actually guaranteed during the reporting period (A2) | 0 | |||||||
| period (A1) | ||||||||||
| Total amount of guarantees approved at the end of the reporting period (A3) | 0 | Total amount actually guaranteed at the end of the reporting period (A4) | 0 | |||||||
| The Company’s guarantees to subsidiaries | ||||||||||
| Guaranteed parties | Announcement date of disclosure of amount guaranteed | Amount guaranteed | Actual commencement date | Actual amount guaranteed | Types of guarantees | Collaterals (if any) | Counter guarantees (if any) | Period of guarantee | Whether the guarantee is mature | Whether guarantee for related parties |
| Heilongjiang NHU Biotechnology Co., Ltd. | 12/28/2018 | 200,000.00 | 06/24/2019 | 200,000.00 | Joint and several liability guarantee | 06/24/2019-12/31/2023 | No | No | ||
| Shandong NHU Vitamins Co., Ltd. | 12/28/2018 | 90,000.00 | 11/29/2019 | 50,000.00 | Joint and several liability guarantee | 11/29/2019-12/21/2023 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 05/22/2020 | 120,000.00 | 09/7/2020 | 53,691.20 | Joint and several liability guarantee | 09/07/2020-09/07/2023 | No | No | ||
| Shandong NHU Fine Chemical Science and Technology Co., Ltd. | 05/22/2020 | 50,000.00 | 03/24/2021 | 50,000.00 | Joint and several liability guarantee | 03/24/2021-12/25/2025 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 04/22/2021 | 120,000.00 | 06/18/2021 | 7,008.38 | Joint and several liability guarantee | 06/18/2021-06/17/2022 | Yes | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 04/22/2021 | 120,000.00 | 07/16/2021 | 7,008.38 | Joint and several liability guarantee | 07/16/2021-07/14/2022 | No | No | ||
| Heilongjiang NHU Biotechnology Co., Ltd. | 04/22/2021 | 40,000.00 | 08/26/2021 | 37,000.00 | Joint and several liability guarantee | 08/26/2021-12/21/2025 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 04/22/2021 | 120,000.00 | 09/8/2021 | 82.38 | Joint and several liability guarantee | 09/08/2021-01/30/2022 | Yes | No | ||
| Zhejiang NHU Imports & Exports Co., Ltd. | 04/22/2021 | 10,000.00 | 09/22/2021 | 10,000.00 | Joint and several liability guarantee | 09/22/2021-05/31/2022 | Yes | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 04/22/2021 | 120,000.00 | 12/9/2021 | 63.93 | Joint and several liability guarantee | 12/09/2021-05/30/2022 | Yes | No | ||
| 新昌新和成维生素有限公司(Xinchang NHU Vitamins Co., Ltd.*) | 04/22/2021 | 40,000.00 | 12/16/2021 | 29,000.00 | Joint and several liability guarantee | 12/16/2021-12/25/2026 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 04/22/2021 | 120,000.00 | 03/28/2022 | 35.99 | Joint and several liability guarantee | 03/28/2022-09/08/2022 | No | No | ||
| NHU (Hong Kong) Trading | 05/11/2022 | 130,000.00 | 05/10/2022 | 5,369.12 | Joint and several | 05/10/2022-05/10/2023 | No | No | ||
*
The English name is for identification purpose only.
| Co., Ltd. | liability guarantee | |||||||||
| NHU (Hong Kong) Trading Co., Ltd. | 05/11/2022 | 130,000.00 | 05/27/2022 | 97.58 | Joint and several liability guarantee | 05/27/2022-11/01/2022 | No | No | ||
| Zhejiang NHU Imports & Exports Co., Ltd. | 05/11/2022 | 15,000.00 | 05/31/2022 | 15,000.00 | Joint and several liability guarantee | 05/31/2022-05/30/2023 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 05/11/2022 | 130,000.00 | 06/17/2022 | 7,008.38 | Joint and several liability guarantee | 06/17/2022-06/18/2023 | No | No | ||
| Zhejiang NHU Pharmaceutical Co., Ltd. | 05/11/2022 | 60,000.00 | 06/24/2022 | 55,000.00 | Joint and several liability guarantee | 06/24/2022-06/23/2027 | No | No | ||
| Total amount of guarantees approved for subsidiaries during the reporting period (B1) | 225,000 | Total amount actually guaranteed for subsidiaries during the reporting period (B2) | 82,511.07 | |||||||
| Total amount of guarantees approved for subsidiaries at the end of the reporting period (B3) | 651,735.57 | Total amount actually guaranteed for subsidiaries at the end of the reporting period (B4) | 509,210.65 | |||||||
| Guarantees by subsidiaries to subsidiaries | ||||||||||
| Guaranteed parties | Announcement date of disclosure of amount guaranteed | Amount guaranteed | Actual commencement date | Amount actually guaranteed | Types of guarantees | Collaterals (if any) | Counter guarantee (if any) | Period of guarantee | Whether the guarantee is mature | Whether guarantee for related parties |
| Total amount of guarantees approved for subsidiaries during the reporting period (C1) | 0 | Total amount actually guaranteed for subsidiaries during the reporting period (C2) | 0 | |||||||
| Total amount of guarantees approved for subsidiaries at the end of the reporting period (C3) | 0 | Total amount actually guaranteed for subsidiaries at the end of the reporting period (C4) | 0 | |||||||
| Total amount guaranteed by the Company (namely sum of the above three items) | ||||||||||
| Total amount of guarantees approved during the reporting period (A1+B1+C1) | 225,000 | Total amount actually guaranteed during the reporting period (A2+B2+C2) | 82,511.07 | |||||||
| Total amount of guarantees approved at the end of the reporting period (A3+B3+C3) | 651,735.57 | Total amount actually guaranteed at the end of the reporting period (A4+B4+C4) | 509,210.65 | |||||||
| Proportion of the amount actually guaranteed (A4+B4+C4) to net assets of the Company | 23.03% | |||||||||
| Including: | ||||||||||
| Balance of guarantees for shareholders, the actual controller and its related parties (D) | 0 | |||||||||
| Balance of debt guarantee directly or indirectly for guaranteed parties with debt to asset ratio exceeding 70% (E) | 331,000 | |||||||||
| The amount of the total amount guaranteed exceeding 50% of net assets (F) | 0 | |||||||||
| Total amount guaranteed of three items above (D+E+F) | 331,000 | |||||||||
| Remarks on unexpired guarantee contracts with guarantee liabilities incurred or evidence indicating the possibility of undertaking joint liquidation liabilities during the reporting period (if applicable) | None | |||||||||
| Remarks on external guarantee in violation of provisions (if applicable) | None | |||||||||
3. Entrusted financing
√ Applicable □ Not Applicable
Entrusted financing during the reporting period
Unit: RMB 0,000 yuan
| Types | Source of entrusted funds | Entrusted amount | Unexpired balance | Overdue and not recovered amount | Impairment amount accrued for financial products overdue and not recovered |
| Bank financial products | Raised funds | 275,000 | 92,000 | 0 | 0 |
| Total | 275,000 | 92,000 | 0 | 0 | |
High-risk entrusted financial products with individual significant amount or low security and poor liquidity
□ Applicable √ Not Applicable
When the principal of entrusted financial products is expected to be irrevocable or there are other conditions result in impairment ofentrusted financial products
□ Applicable √ Not Applicable
4. Other significant contracts
□ Applicable √ Not Applicable
There is no other significant contract during the reporting period.
XIII. Other significant events
√ Applicable □ Not Applicable
Ⅰ Progress of the Share Repurchase PlanPlease refer to “Progress of the Share Repurchase Plan” under the item “I. Movements in shares” in “Section VII Movements in Sharesand Conditions of Shareholders” for details.II Progress of the Third Employee Stock Ownership PlanThe third employee stock ownership plan of the Company was deliberated and adopted by the second extraordinary shareholders’meeting of 2020 held on November 11, 2020, the current employee stock ownership plan is managed by the Company itself, and theCompany’s shares are acquired and held by stock purchase through secondary market, the duration shall not exceed 24 months. OnFebruary 26, 2022, the number of shares held by the third employee stock ownership plan of the Company was 10,131,522, accountingfor 0.39% of the company's total share capital at that time, and the lock-up period expired. On May 25, 2022, holding shares in thethird phase of employee stock ownership plan increased to 12,157,826 shares after the Company’s annual equity distribution of 2021,accounting for 0.39% of total current shares. For more details, please refer to The Suggestive Announcement on the Expiration of Lock-up period of the Third Employee Stock Ownership plan （2022-004）published on the company's designated information disclosuremedia and cninfo（ http://www.cninfo.com.cn ）.
III Progress of shareholding increase by controlling shareholdersBased on the confidence in the sustainable and stable development of the company in the future and the recognition of the company'svalue, and to enhance investors’ confidence, the controlling shareholder of the company, NHU Holding Group Co., Ltd plans to increaseits holdings of the company's shares in the next six months through the ways allowed by the trading system of Shenzhen Stock Exchange(including but not limited to centralized bidding, block trading, etc.), and the amount of shares to be increased is not less than RMB300 mn and not more than RMB 600 mn. There is no price range in this shareholding increase plan, and the shareholding increase planwill be gradually implemented according to the fluctuation of the company's stock price and the overall trend of the capital market. Formore details, please refer to The Announcement of Controlling Shareholders’ Share Increase Plan (2022-031) published on thecompany's designated information disclosure media and cninfo（ http://www.cninfo.com.cn ）on May 18, 2022.By June 30, 2022,NHU Holding Group Co., Ltd had increased its holdings by 4,195,452 shares.IV Progress of Investment Project with Raised FundsWith the approval of [2017] No. 1684 document of China Securities Regulatory Commission, the company's lead underwriter, CSCSecurities Co., Ltd., privately issued 175 million common shares (A shares) to specific objects at an issue price of RMB 28.00/share,raising a total of RMB 4,900 million. After deducting the underwriting and recommendation fees of RMB 30 million yuan (includingtax), the raised funds amounted to RMB 4,870 million, which was remitted to the raised funds supervision account of the company bythe lead underwriter, CSC Securities Co., Ltd. on December 7, 2017. In addition, after deducting lawyer fees, audit fees, capitalverification fees and other issuance expenses of RMB 4.62 million (excluding tax), and considering the deductible VAT input tax ofRMB 1.70 million of underwriting fees and recommendation fees deducted by the lead underwriter, the net amount of funds raised wasRMB 4,867.08 million. The availability of the above raised funds has been verified by Tianjian Certified Public Accountants (specialgeneral partnership), who issued the capital verification report ([2017] No. 503).From January 1 to June 30, 2022, the actual use of the raised funds was RMB 692.82 mn, and the accumulated investment of the raisedfunds project was RMB 2,780.26 mn. By June 30, 2022, the balance of raised funds was RMB 2,765.88 mn (including financialproducts and structured deposits, the net amount of interest on cash in bank less handling charges, gains on financial products andstructured deposits received on an accumulated basis).
XIV. Significant events of subsidiaries of the Company
□ Applicable √ Not Applicable
Section VII Movements in Shares and Information about
Shareholders
I. Movements in shares
1. Details
Unit: Share
| Items | Before | Movements（+/-） | After | ||||||
| Quantity | % to total | Issue of new shares | Bonus shares | Reserve transferred to shares | Others | Subtotal | Quantity | % to total | |
| I. Restricted shares | 30,311,835 | 1.18% | 6,062,367 | 6,062,367 | 36,374,202 | 1.18% | |||
| 1. Held by other domestic parties | 30,311,835 | 1.18% | 6,062,367 | 6,062,367 | 36,374,202 | 1.18% | |||
| Including: Held by domestic natural persons | 30,311,835 | 1.18% | 6,062,367 | 6,062,367 | 36,374,202 | 1.18% | |||
| II. Unrestricted shares | 2,548,082,925 | 98.82% | 506,450,229 | 506,450,229 | 3,054,533,154 | 98.82% | |||
| 1. RMB ordinary shares | 2,548,082,925 | 98.82% | 506,450,229 | 506,450,229 | 3,054,533,154 | 98.82% | |||
| III. Total | 2,578,394,760 | 100.00% | 512,512,596 | 512,512,596 | 3,090,907,356 | 100.00% | |||
Reason for movements
√ Applicable □ Not Applicable
The 2021 annual general meeting of shareholders held on May 10, 2022 reviewed and approved the Proposal on Profit DistributionPlan of 2021, which was implemented and completed on May 25, 2022. The Annual Equity Distribution Plan for 2021: Based on2,562,562,984 shares (the total share capital of the company at that time, which was 2,578,394,760 shares, excluded 15,831,776repurchased shares), distributated cash dividends of RMB 7 (tax included) per 10 shares to all shareholders, with a total cash distributionof RMB 1,793,794,088.80 (tax included), and distributated 2 shares per 10 shares by converting capital reserve to all shareholders,with a total of 512,512,596 shares added, after the increase, the total share capital amounted to 3,090,907,356 shares.Approval on movements in shares
√ Applicable □ Not Applicable
Please refer to “Reason for movements” under the item “I. Movements in shares” in “Section VII Movements in Shares and Conditionsof Shareholders” for details.Transfer of shares
□ Applicable √ Not Applicable
Progress of the Share Repurchase Plan
√ Applicable □ Not Applicable
At the 7th Meeting of the 8th Board of Directors held on August 18, 2021, Zhejiang NHU Co., Ltd. (hereinafter referred to as “thecompany”) deliberated and adopted The Proposal on Share Repurchase Plan of the Company, agreed that the company would use itsown funds to repurchase part of the public shares of the company in the form of centralized bidding transaction. And the shares
repurchased would be used for implementing equity incentive plan or employee stock ownership plan. The total amount of repurchasewould be RMB300-600mn, and the repurchase price would be no more than RMB41/share. The specific amount of shares repurchasedand its proportion in the total share capital shall be subject to the actual amount of shares repurchased at the expiration of the repurchaseperiod. The implementation period of the share repurchase plan shall not exceed 12 months from the date when the board of directorsof the company deliberates and adopts The Proposal on Share Repurchase Plan of the Company.By May 31, 2022, the company has repurchased 17,485,676 shares in the form of centralized bidding trading through Zhejiang NHUCo., Ltd. Repurchase Securities Account, accounting for 0.5657% of the company's total share capital. The maximum transaction priceis RMB 31.88/ share, the minimum transaction price is RMB 20.20/share, and the cumulative transaction amount is RMB500,019,703.22 (excluding transaction costs). During the reporting period, 6,497,307 shares were repurchased in total with a cumulativetransaction amount of RMB 179,684,551.90 (excluding transaction costs). The actual repurchase period is from August 31, 2021 toMay 30, 2022.The share repurchase plan complies with the requirements of relevant laws and regulations and the company's establishedrepurchase plan. The Share Repurchase Plan of the Company has been implelmented. For more details, please refer to TheAnnouncement on the progress of repurchasing shares of the company and the completion of repurchasing (2022-032) published onthe company's designated information disclosure media and cninfo（ http://www.cninfo.com.cn ）. (Note: the company implementedthe 2021 annual equity distribution on May 25, 2022, and the proportion of the number of repurchased company shares in the totalcapital stock of the company has been adjusted accordingly.)Implementation progress of shareholding reduction for shares repurchased through centralized bidding
□ Applicable √ Not applicable
Effect of movements in shares on financial indicators of preceding year and preceding eriod such as basic EPS and diluted EPS, netassets per share attributable to shareholders of ordinary shares
√ Applicable □ Not Applicable
Please refer to “Company Profile and Key Financial Indicators” under the item “IV. Key accounting data and financial indicators” fordetails.Other contents the Company considered as necessary or securities regulatory institutions required disclosure
□ Applicable √ Not applicable
2. Movement in restricted shares
√ Applicable □ Not applicable
Unit: Share
| Shareholders | Number of restricted shares at the beginning of the period | Number of restricted shares unlocked during the current period | Number of restricted shares increased during the current period | Number of restricted shares at the end of the period | Reason for restriction | Date of unlocking |
| Hu Baifan | 8,701,873 | 1,740,375 | 10,442,248 | Locked up for the shares are held by the executive | 75% of total shares held by the executive are locked up on an annual basis. | |
| Hu Baishan | 9,122,455 | 1,824,491 | 10,946,946 | Locked up for the shares are held by the executive | 75% of total shares held by the executive are locked up on an annual basis. | |
| Shi Guanqun | 6,548,649 | 1,309,730 | 7,858,379 | Locked up for the shares are held by the executive | 75% of total shares held by the executive are locked up on an annual basis. | |
| Wang Xuewen | 5,548,707 | 1,109,741 | 6,658,448 | Locked up for the | 75% of total shares |
| Shareholders | Number of restricted shares at the beginning of the period | Number of restricted shares unlocked during the current period | Number of restricted shares increased during the current period | Number of restricted shares at the end of the period | Reason for restriction | Date of unlocking |
| shares are held by the executive | held by the executive are locked up on an annual basis. | |||||
| Wang Zhengjiang | 286,875 | 57,375 | 344,250 | Locked up for the shares are held by the executive | 75% of total shares held by the executive are locked up on an annual basis. | |
| Zhou Guiyang | 103,276 | 20,655 | 123,931 | Locked up for the shares are held by the executive | 75% of total shares held by the executive are locked up on an annual basis. | |
| Total | 30,311,835 | 0 | 6,062,367 | 36,374,202 | -- | -- |
II. Issuance and listing of securities
□ Applicable √ Not Applicable
III.Number of shareholders of the Company and their shareholding conditions
Unit: Share
| Total shareholders of ordinary shares at the end of the reporting period | 93,348 | Total shareholders of preferred shares with voting rights restored at the end of the reporting period | 0 | |||||
| Shareholders with holding proportion over 5% or the top 10 shareholders with largest holding proportions | ||||||||
| Shareholders | Nature of shareholders | Holding proportion | Quantity of ordinary shares at the end of the reporting period | Movements during the reporting period | Quantity of restricted shares | Quantity of unrestricted shares | Shares pledged, marked or frozen | |
| Condition | Quantity | |||||||
| NHU Holding Group Co., Ltd. | Domestic non-state-owned legal person | 48.74% | 1,506,479,825 | 254,576,181 | 0 | 1,506,479,825 | ||
| Hong Kong Securities Clearing Company Limited | Overseas legal person | 3.10% | 95,701,262 | 21,807,933 | 0 | 95,701,262 | ||
| Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Huizhi Fund | Others | 1.75% | 54,072,200 | 9,012,033 | 0 | 54,072,200 | ||
| National Social Security Fund No.503Portfolio | Others | 0.91% | 28,000,000 | 8,000,000 | 0 | 28,000,000 | ||
| Kuwait Investment Authority | Overseas legal person | 0.56% | 17,222,802 | 1,904,100 | 0 | 17,222,802 | ||
| Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Yingzhi Fund | Others | 0.53% | 16,248,559 | 1,018,422 | 0 | 16,248,559 | ||
| Hu Baishan | Domestic natural person | 0.47% | 14,595,929 | 2,432,655 | 10,946,946 | 3,648,983 | ||
| Beijing Yuanfeng Private Equity Fund Management | Others | 0.46% | 14,372,624 | 2,395,437 | 0 | 14,372,624 | ||
| Partnership (LP) － Yuanfeng Value Private Equity Investment Fund | |||||||||
| Chongyang Group Co., Ltd. | Domestic non-state-owned legal person | 0.45% | 13,962,191 | 2,327,032 | 0 | 13,962,191 | |||
| Hu Baifan | Domestic natural person | 0.45% | 13,922,998 | 2,320,500 | 10,442,248 | 3,480,750 | |||
| Strategic investors or ordinary legal persons that became one of the top 10 shareholders due to the allotment of new shares | Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Huizhi Fund became one of the top 10 shareholders with largest holding proportions due to its participation in private placement of shares in 2017. | ||||||||
| Remarks on relationships or concerted action between the top 10 shareholders with largest holding proportions | Among the above shareholders, Hu Baifan is the chairman of the board, general manager and actural controller of NHU Holding Group Co., Ltd.; Hu Baishan is the director of NHU Holding Group Co., Ltd., and Hu Baifan and Hu Baishan are brothers. The Company does not know whether other shareholders have relationships and whether they are persons acting in concert as defined in Administration of the Takeover of Listed Companies Procedures. | ||||||||
| Remarks on proxy voting and waiver of voting right of the above shareholders | None | ||||||||
| Special remarks on top 10 shareholders with special repurchase accounts | The Company’s special securities account for repurchase is attributable to the top 10 shareholders, who however did not participate in the presentation of such balances. | ||||||||
| Top 10 shareholders with unrestricted shares | |||||||||
| Shareholders | Quantity of unrestricted shares at the end of the reporting period | Category of shares | |||||||
| Category | Quantity | ||||||||
| NHU Holding Group Co., Ltd. | 1,506,479,825 | RMB ordinary shares | 1,506,479,825 | ||||||
| Hong Kong Securities Clearing Company Limited | 95,701,262 | RMB ordinary shares | 95,701,262 | ||||||
| Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Huizhi Fund | 54,072,200 | RMB ordinary shares | 54,072,200 | ||||||
| National Social Security Fund No.503Portfolio | 28,000,000 | RMB ordinary shares | 28,000,000 | ||||||
| Kuwait Investment Authority | 17,222,802 | RMB ordinary shares | 17,222,802 | ||||||
| Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Yingzhi Fund | 16,248,559 | RMB ordinary shares | 16,248,559 | ||||||
| Beijing Yuanfeng Private Equity Fund Management Partnership (LP) － Yuanfeng Value Private Equity Investment Fund | 14,372,624 | RMB ordinary shares | 14,372,624 | ||||||
| Chongyang Group Co., Ltd. | 13,962,191 | RMB ordinary shares | 13,962,191 | ||||||
| Agricultural Bank Of China Limited- Franklin Guohai deepening value hybrid securities investment fund | 13,187,519 | RMB ordinary shares | 13,187,519 | ||||||
| The Company－Employee stock ownership plan phase III | 12,157,826 | RMB ordinary shares | 12,157,826 | ||||||
| Remarks on relationships or concerted action between the top 10 shareholders with unrestricted shares, and between the top 10 shareholders with unrestricted shares and top 10 shareholders with largest holding proportions. | Among the above shareholders, Hu Baifan is the chairman of the board, general manager and actural controller of NHU Holding Group Co., Ltd.; Hu Baishan is the director of NHU Holding Group Co., Ltd., and Hu Baifan and Hu Baishan are brothers. The Company does not know whether other shareholders have relationships and whether they are persons acting in concert as defined in Administration of the Takeover of Listed Companies Procedures. | ||||||||
| Remarks on top 10 shareholders of ordinary shares participating in securities margin trading | Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Huizhi Fund holds 54,072,127 shares through client account of collateral securities for margin trading of Guotai Junan Securities Co., Ltd.; Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Yingzhi Fund holds 3,677,161 shares through client account of collateral securities for margin trading of Citic Securities Co., Ltd.; Beijing Yuanfeng Private Equity Fund Management Partnership (LP) －Yuanfeng Value Private Equity Investment Fund holds 7,186,304 shares through client account of collateral securities for margin trading of Huatai Securities Co., Ltd.; Chongyang Group Co., Ltd. holds | ||||||||
13,961,946 shares through client account of collateral securities for margin trading ofChina Merchants Securities Co., Ltd..
Note: The Company’s special securities account for repurchase is attributable to the top 10 shareholders with unrestricted shares, whohowever did not participate in the presentation of such balances.Did the top 10 shareholders of ordinary shares and the top 10 shareholders of unrestricted ordinary shares perform agreed repurchasetransaction during the reporting period?
□ Yes √ No
The top 10 shareholders of ordinary shares and the top 10 shareholders of unrestricted ordinary shares did not perform agreedrepurchase transaction during the reporting period.IV. Movement in shares of directors, supervisors and senior executives
√ Applicable □Not Applicable
| Name | Position | Status | Number of shares held at the beginning of the period (shares) | Number of shares increased during the current period (shares) | Number of shares decreased during the current period (shares) | Number of shares held at the end of the period (shares) | Number of unrestricted shares held at the beginning of the period (shares) | Number of restricted shares granted during this period (shares) | Number of restricted shares held at the end of the period (shares) |
| Hu Baifan | Chairman | Incumbent | 11,602,498 | 2,320,500 | 13,922,998 | 0 | 0 | 0 | |
| Hu Baishan | Vice Chairman, President | Incumbent | 12,163,274 | 2,432,655 | 14,595,929 | 0 | 0 | 0 | |
| Shi Guanqun | Director, Vice President, CFO, Secretary of the Board | Incumbent | 8,731,532 | 1,746,306 | 10,477,838 | 0 | 0 | 0 | |
| Wang Xuewen | Director, Vice President | Incumbent | 7,398,276 | 1,479,655 | 8,877,931 | 0 | 0 | 0 | |
| Wang Zhengjiang | Director | Incumbent | 382,500 | 76,500 | 459,000 | 0 | 0 | 0 | |
| Zhou Guiyang | Director | Incumbent | 137,702 | 27,540 | 165,242 | 0 | 0 | 0 | |
| Total | -- | -- | 40,415,782 | 8,083,156 | 0 | 48,498,938 | 0 | 0 | 0 |
V. Changes of holding shareholders or controlling shareholdersChanges of holding shareholders during the reporting period
□ Applicable √ Not applicable
The Company has no changes of holding shareholders during the reporting period.Changes of actual controller within the reporting period
□ Applicable √ Not applicable
The Company has no changes in actual controller within the reporting period.
Section VIII Preferred Shares
□ Applicable √ Not applicable
The Company has no preferred shares during the reporting period.
Section IX Bonds
□ Applicable √ Not applicable
Section X Financial ReportI. Audit ReportsHas the semi-annual report been audited
□ Yes √ No
The Company’s semi-annual report has not been audited.II. Financial Statements
The monetary unit of the financial statements is Renminbi (RMB) Yuan.
1. Consolidated balance sheet
Prepared by Zhejiang NHU Co., Ltd.
June 30, 2022
Unit: RMB Yuan
| Items | June 30, 2022 | January 1, 2022 |
| Current assets: | ||
| Cash and bank balances | 6,590,012,908.26 | 5,952,909,626.94 |
| Settlement funds | ||
| Loans to other banks | ||
| Held-for-trading financial assets | 669,555,464.77 | 1,250,736,359.24 |
| Derivative financial assets | ||
| Notes receivable | 339,143,431.45 | 349,145,316.03 |
| Accounts receivable | 3,061,875,600.52 | 2,755,168,573.14 |
| Receivables financing | 198,094,359.06 | 182,891,179.65 |
| Advances paid | 123,291,222.99 | 78,969,960.60 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance reserve receivable | ||
| Other receivables | 247,863,734.11 | 254,497,248.13 |
| Including: Interest receivable | ||
| Dividend receivable | 7,159,278.00 | |
| Financial assets under reverse repo | ||
| Inventories | 4,562,173,216.89 | 3,193,657,367.16 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 330,618,923.96 | 895,782,268.87 |
| Total current assets | 16,122,628,862.01 | 14,913,757,899.76 |
| Non-current assets: |
| Items | June 30, 2022 | January 1, 2022 |
| Loans and advances | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 383,722,022.14 | 351,327,625.75 |
| Other equity instrument investments | 22,998,147.55 | 22,998,147.55 |
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 14,895,938,812.24 | 14,350,779,852.73 |
| Construction in progress | 3,855,244,085.78 | 2,984,835,072.82 |
| Productive biological assets | ||
| Oil & gas assets | ||
| Right-of-use assets | 3,055,722.33 | 3,123,637.11 |
| Intangible assets | 1,616,112,930.87 | 1,521,729,757.66 |
| Development expenditures | ||
| Goodwill | 4,410,005.33 | |
| Long-term prepayments | 16,384,122.78 | 18,591,707.06 |
| Deferred tax assets | 67,981,760.16 | 55,805,191.95 |
| Other non-current assets | 826,539,372.46 | 501,076,584.40 |
| Total non-current assets | 21,692,386,981.64 | 19,810,267,577.03 |
| Total assets | 37,815,015,843.65 | 34,724,025,476.79 |
| Current liabilities: | ||
| Short-term borrowings | 2,633,945,563.46 | 1,403,332,827.92 |
| Central bank loans | ||
| Loans from other banks | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 930,489,306.12 | 694,124,946.73 |
| Accounts payable | 1,768,457,348.99 | 1,435,966,427.76 |
| Advances received | ||
| Contract liabilities | 82,505,836.42 | 61,135,258.36 |
| Financial liabilities under repo | ||
| Absorbing deposit and interbank deposit | ||
| Deposit for agency security transaction | ||
| Deposit for agency security underwriting | ||
| Employee benefits payable | 253,936,770.96 | 370,609,333.07 |
| Taxes and rates payable | 272,513,121.07 | 420,743,262.69 |
| Other payables | 133,386,496.99 | 56,712,103.36 |
| Including: Interest payable | ||
| Dividend payable | ||
| Handling fee and commission payable |
| Items | June 30, 2022 | January 1, 2022 |
| Reinsurance accounts payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 3,198,114,745.29 | 2,029,499,509.43 |
| Other current liabilities | 6,558,814.10 | 5,133,310.10 |
| Total current liabilities | 9,279,908,003.40 | 6,477,256,979.42 |
| Non-current liabilities: | ||
| Insurance policy reserve | ||
| Long-term borrowings | 5,070,255,993.98 | 5,148,811,786.49 |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 2,845,348.72 | 2,936,868.15 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 1,072,925,873.88 | 1,063,699,676.16 |
| Deferred tax liabilities | 201,277,061.78 | 135,751,304.31 |
| Other non-current liabilities | ||
| Total non-current liabilities | 6,347,304,278.36 | 6,351,199,635.11 |
| Total liabilities | 15,627,212,281.76 | 12,828,456,614.53 |
| Equity: | ||
| Share capital | 3,090,907,356.00 | 2,578,394,760.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 3,613,594,210.48 | 4,121,063,080.96 |
| Less: Treasury shares | 500,059,711.25 | 320,360,784.48 |
| Other comprehensive income | 30,637,305.79 | -1,614,172.31 |
| Special reserve | 17,141,311.39 | 12,692,218.51 |
| Surplus reserve | 1,289,197,380.00 | 1,289,197,380.00 |
| General risk reserve | ||
| Undistributed profit | 14,572,548,858.62 | 14,152,465,528.17 |
| Total equity attributable to the parent company | 22,113,966,711.03 | 21,831,838,010.85 |
| Non-controlling interest | 73,836,850.86 | 63,730,851.41 |
| Total equity | 22,187,803,561.89 | 21,895,568,862.26 |
| Total liabilities & equity | 37,815,015,843.65 | 34,724,025,476.79 |
Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Wang Xiaobi
2. Parent company balance sheet
Unit: RMB Yuan
| Items | June 30, 2022 | January 1, 2022 |
| Current assets: | ||
| Cash and bank balances | 4,904,862,272.30 | 4,319,521,960.26 |
| Held-for-trading financial assets | 400,000,000.00 | 200,000,000.00 |
| Derivative financial assets | ||
| Notes receivable | 309,913,802.00 | 349,145,316.03 |
| Accounts receivable | 849,054,429.84 | 746,349,980.29 |
| Receivables financing | ||
| Advances paid | 5,124,146.44 | 203,802,390.93 |
| Other receivables | 2,672,267,915.31 | 3,095,039,415.47 |
| Including: Interest receivable | ||
| Dividend receivable | 7,159,278.00 | |
| Inventories | 465,108,312.18 | 442,360,365.52 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 2,866,947.56 | 552,376,721.31 |
| Total current assets | 9,609,197,825.63 | 9,908,596,149.81 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 8,129,972,859.07 | 8,054,952,017.02 |
| Other equity instrument investments | 22,998,147.55 | 22,998,147.55 |
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 645,778,266.15 | 674,187,271.03 |
| Construction in progress | 4,279,290.33 | 1,396,104.03 |
| Productive biological assets | ||
| Oil & gas assets | ||
| Right-of-use assets | 2,872,394.68 | 2,952,929.08 |
| Intangible assets | 111,139,636.32 | 113,952,307.99 |
| Development expenditures | ||
| Goodwill | ||
| Long-term prepayments | 3,440,588.11 | 4,266,859.15 |
| Deferred tax assets | 29,808,237.08 | 33,889,948.73 |
| Other non-current assets | 8,752,356.88 | 2,311,441.46 |
| Total non-current assets | 8,959,041,776.17 | 8,910,907,026.04 |
| Total assets | 18,568,239,601.80 | 18,819,503,175.85 |
| Current liabilities: | ||
| Short-term borrowings | 1,413,346,166.66 | 582,373,105.49 |
| Held-for-trading financial liabilities |
| Items | June 30, 2022 | January 1, 2022 |
| Derivative financial liabilities | ||
| Notes payable | 648,046,083.95 | 464,150,033.90 |
| Accounts payable | 83,879,353.09 | 84,472,375.02 |
| Advances received | ||
| Contract liabilities | 12,538,596.01 | 13,839,278.19 |
| Employee benefits payable | 58,704,495.05 | 88,415,827.18 |
| Taxes and rates payable | 14,565,380.56 | 60,253,580.60 |
| Other payables | 18,739,292.29 | 15,631,151.00 |
| Including: Interest payable | ||
| Dividend payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 2,065,982,274.26 | 1,238,333,387.67 |
| Other current liabilities | 1,630,017.44 | 1,799,106.15 |
| Total current liabilities | 4,317,431,659.31 | 2,549,267,845.20 |
| Non-current liabilities: | ||
| Long-term borrowings | 2,629,531,057.76 | 2,935,717,876.76 |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 2,756,290.95 | 2,924,244.46 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 12,980,884.42 | 15,164,020.12 |
| Deferred tax liabilities | 20,079,408.57 | 20,547,468.08 |
| Other non-current liabilities | ||
| Total non-current liabilities | 2,665,347,641.70 | 2,974,353,609.42 |
| Total liabilities | 6,982,779,301.01 | 5,523,621,454.62 |
| Equity: | ||
| Share capital | 3,090,907,356.00 | 2,578,394,760.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 3,353,924,529.09 | 3,861,393,399.57 |
| Less: Treasury shares | 500,059,711.25 | 320,360,784.48 |
| Other comprehensive income | 506,954.43 | 506,954.43 |
| Special reserve | ||
| Surplus reserve | 1,289,197,380.00 | 1,289,197,380.00 |
| Undistributed profit | 4,350,983,792.52 | 5,886,750,011.71 |
| Total equity | 11,585,460,300.79 | 13,295,881,721.23 |
| Total liabilities & equity | 18,568,239,601.80 | 18,819,503,175.85 |
3. Consolidated income statement
Unit: RMB Yuan
| Items | 2022 Semi-Annual | 2021 Semi-Annual |
| I. Total operating revenue | 8,215,039,277.03 | 7,340,124,310.11 |
| Including: Operating revenue | 8,215,039,277.03 | 7,340,124,310.11 |
| Interest income | ||
| Premiums earned | ||
| Revenue from handling charges and commission | ||
| II. Total operating cost | 5,728,884,500.93 | 4,622,590,418.92 |
| Including: Operating cost | 4,945,122,803.39 | 3,822,747,702.20 |
| 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 | 51,610,671.05 | 60,794,324.08 |
| Selling expenses | 57,277,897.48 | 55,479,574.90 |
| Administrative expenses | 212,284,822.41 | 187,505,914.10 |
| R&D expenses | 440,357,252.64 | 351,532,764.55 |
| Financial expenses | 22,231,053.96 | 144,530,139.09 |
| Including: Interest expenses | 152,357,156.76 | 162,484,715.95 |
| Interest income | 76,211,850.51 | 72,107,022.92 |
| Add: Other income | 86,626,226.90 | 74,696,050.67 |
| Investment income (or less: losses) | 51,479,744.19 | 44,982,466.91 |
| Including: Investment income from associates and joint ventures | 25,402,893.70 | 15,735,226.24 |
| Gains from derecognition of financial assets at amortized cost | ||
| Gains on foreign exchange (or less: losses) | ||
| Gains on net exposure to hedging risk (or less: losses) | ||
| Gains on changes in fair value (or less: losses) | 11,836,700.04 | 23,671,758.14 |
| Credit impairment loss | -10,613,626.22 | -33,637,204.20 |
| Assets impairment loss | -7,890,179.58 | -6,714,482.90 |
| Gains on asset disposal (or less: losses) | 6,674,850.81 | 1,065,564.79 |
| III. Operating profit (or less: losses) | 2,624,268,492.24 | 2,821,598,044.60 |
| Add: Non-operating revenue | 2,024,074.84 | 10,346,441.45 |
| Less: Non-operating expenditures | 2,330,316.96 | 1,919,029.53 |
| IV. Profit before tax (or less: total loss) | 2,623,962,250.12 | 2,830,025,456.52 |
| Less: Income tax | 400,099,923.62 | 394,709,861.22 |
| V. Net profit (or less: net loss) | 2,223,862,326.50 | 2,435,315,595.30 |
| (I) Categorized by the continuity of operations |
| Items | 2022 Semi-Annual | 2021 Semi-Annual |
| 1. Net profit from continuing operations (or less: net loss) | 2,223,862,326.50 | 2,435,315,595.30 |
| 2. Net profit from discontinued operations (or less: net loss) | ||
| (II) Categorized by the portion of equity ownership | ||
| 1. Net profit attributable to owners of parent company | 2,213,877,419.25 | 2,426,979,148.42 |
| 2. Net profit attributable to non-controlling shareholders | 9,984,907.25 | 8,336,446.88 |
| VI. Other comprehensive income after tax | 32,372,570.30 | -14,379,132.25 |
| Items attributable to the owners of the parent company | 32,251,478.10 | -11,402,449.39 |
| (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 | 32,251,478.10 | -11,402,449.39 |
| 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 | 32,251,478.10 | -11,402,449.39 |
| 7. Others | ||
| Items attributable to non-controlling shareholders | 121,092.20 | -2,976,682.86 |
| VII. Total comprehensive income | 2,256,234,896.80 | 2,420,936,463.05 |
| Items attributable to the owners of the parent company | 2,246,128,897.35 | 2,415,576,699.03 |
| Items attributable to non-controlling shareholders | 10,105,999.45 | 5,359,764.02 |
| VIII. Earnings per share (EPS): | ||
| (I) Basic EPS (yuan per share) | 0.72 | 0.79 |
| (II) Diluted EPS (yuan per share) | 0.72 | 0.79 |
Net profit realized by the combined party in business combination under common control before the business combination in thecurrent period was 0.00 yuan, and net profit realized by the combined party in the previous period was 0.00 yuan.Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Wang Xiaobi
4. Parent company income statement
Unit: RMB Yuan
| Items | 2022 Semi-Annual | 2021 Semi-Annual |
| I. Operating revenue | 1,881,789,420.59 | 2,405,071,741.42 |
| Less: Operating cost | 1,484,626,689.83 | 1,649,769,660.92 |
| Items | 2022 Semi-Annual | 2021 Semi-Annual |
| Taxes and surcharges | 9,419,467.60 | 14,334,032.09 |
| Selling expenses | 13,475,826.45 | 12,902,562.24 |
| Administrative expenses | 70,457,378.58 | 68,371,878.28 |
| R&D expenses | 117,265,377.61 | 96,647,099.84 |
| Financial expenses | 19,040,753.12 | 29,735,303.93 |
| Including: Interest expenses | 86,733,082.30 | 86,481,023.12 |
| Interest income | 67,574,696.90 | 61,283,871.93 |
| Add: Other income | 22,525,397.54 | 20,317,226.28 |
| Investment income (or less: losses) | 90,072,788.02 | 1,399,890,573.23 |
| Including: Investment income from associates and joint ventures | 19,977,116.53 | 16,864,292.79 |
| 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) | 8,196,887.24 | |
| Credit impairment loss | 16,015,667.16 | 6,804,182.64 |
| Assets impairment loss | -6,715,175.00 | -6,120,461.67 |
| Gains on asset disposal (or less: losses) | -79,510.57 | -2,538,880.18 |
| II. Operating profit (or less: losses) | 289,323,094.55 | 1,959,860,731.66 |
| Add: Non-operating revenue | 56,720.00 | 4,706,210.71 |
| Less: Non-operating expenditures | 972,209.42 | 1,100,000.00 |
| III. Profit before tax (or less: total loss) | 288,407,605.13 | 1,963,466,942.37 |
| Less: Income tax | 30,379,735.52 | 86,774,613.55 |
| IV. Net profit (or less: net loss) | 258,027,869.61 | 1,876,692,328.82 |
| (I) Net profit from continuing operations (or less: net loss) | 258,027,869.61 | 1,876,692,328.82 |
| (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 |
| Items | 2022 Semi-Annual | 2021 Semi-Annual |
| 7. Others | ||
| VI. Total comprehensive income | 258,027,869.61 | 1,876,692,328.82 |
| 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 | 2022 Semi-Annual | 2021 Semi-Annual |
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods or rendering of services | 7,785,627,208.41 | 6,909,005,885.72 |
| Net increase of client deposit and interbank deposit | ||
| Net increase of central bank loans | ||
| Net increase of loans from other financial institutions | ||
| Cash receipts from original insurance contract premium | ||
| Net cash receipts from reinsurance | ||
| Net increase of policy-holder deposit and investment | ||
| Cash receipts from interest, handling charges and commission | ||
| Net increase of loans from others | ||
| Net increase of repurchase | ||
| Net cash receipts from agency security transaction | ||
| Receipts of tax refund | 696,115,463.88 | 515,274,673.62 |
| Other cash receipts related to operating activities | 181,679,924.51 | 166,303,614.38 |
| Subtotal of cash inflows from operating activities | 8,663,422,596.80 | 7,590,584,173.72 |
| Cash payments for goods purchased and services received | 5,623,412,196.31 | 3,798,790,421.03 |
| Net increase of loans and advances to clients | ||
| Net increase of central bank deposit and interbank deposit | ||
| Cash payments for insurance indemnities of original insurance contracts | ||
| Net increase of loans to others | ||
| Cash payments for interest, handling charges and commission | ||
| Cash payments for policy bonus | ||
| Cash paid to and on behalf of employees | 1,032,523,887.01 | 787,203,766.37 |
| Cash payments for taxes and rates | 618,388,114.66 | 522,757,776.92 |
| Other cash payments related to operating activities | 146,641,660.62 | 192,194,712.71 |
| Subtotal of cash outflows from operating activities | 7,420,965,858.60 | 5,300,946,677.03 |
| Net cash flows from operating activities | 1,242,456,738.20 | 2,289,637,496.69 |
| II. Cash flows from investing activities: | ||
| Cash receipts from withdrawal of investments | ||
| Cash receipts from investment income | 37,221,964.90 | 37,215,654.69 |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 4,153,451.64 | 8,502,600.00 |
| Items | 2022 Semi-Annual | 2021 Semi-Annual |
| Net cash receipts from the disposal of subsidiaries & other business units | ||
| Other cash receipts related to investing activities | 1,827,718,300.54 | 1,800,000,000.00 |
| Subtotal of cash inflows from investing activities | 1,869,093,717.08 | 1,845,718,254.69 |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 1,801,063,585.84 | 1,326,743,700.31 |
| Cash payments for investments | ||
| Net increase of pledged borrowings | ||
| Net cash payments for the acquisition of subsidiaries & other business units | 5,485,385.14 | 83,904,479.79 |
| Other cash payments related to investing activities | 1,136,474,731.36 | 1,520,000,000.00 |
| Subtotal of cash outflows from investing activities | 2,943,023,702.34 | 2,930,648,180.10 |
| Net cash flows from investing activities | -1,073,929,985.26 | -1,084,929,925.41 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | ||
| Including: Cash received by subsidiaries from non-controlling shareholders as investments | ||
| Cash receipts from borrowings | 3,790,379,237.43 | 4,130,981,309.28 |
| Other cash receipts related to financing activities | ||
| Subtotal of cash inflows from financing activities | 3,790,379,237.43 | 4,130,981,309.28 |
| Cash payments for the repayment of borrowings | 1,249,162,336.86 | 2,095,709,235.89 |
| Cash payments for distribution of dividends or profits and for interest expenses | 1,963,178,314.75 | 1,680,134,920.84 |
| Including: Cash paid by subsidiaries to non-controlling shareholders as dividend or profit | ||
| Other cash payments related to financing activities | 3,882,331.56 | 3,363,407.69 |
| Subtotal of cash outflows from financing activities | 3,216,222,983.17 | 3,779,207,564.42 |
| Net cash flows from financing activities | 574,156,254.26 | 351,773,744.86 |
| IV. Effect of foreign exchange rate changes on cash & cash equivalents | -5,511,976.27 | -43,624,594.66 |
| V. Net increase in cash and cash equivalents | 737,171,030.93 | 1,512,856,721.48 |
| Add: Opening balance of cash and cash equivalents | 5,714,537,538.23 | 4,669,306,776.09 |
| VI. Closing balance of cash and cash equivalents | 6,451,708,569.16 | 6,182,163,497.57 |
6. Parent company cash flow statement
Unit: RMB Yuan
| Items | 2022 Semi-Annual | 2021 Semi-Annual |
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods and rendering of services | 2,052,435,852.98 | 2,552,072,193.45 |
| Receipts of tax refund | 45,449,735.20 | 48,584,987.43 |
| Other cash receipts related to operating activities | 87,918,046.65 | 84,964,666.40 |
| Subtotal of cash inflows from operating activities | 2,185,803,634.83 | 2,685,621,847.28 |
| Cash payments for goods purchased and services received | 1,208,399,552.39 | 1,633,400,198.22 |
| Cash paid to and on behalf of employees | 195,470,414.48 | 149,783,536.93 |
| Cash payments for taxes and rates | 93,367,767.02 | 78,513,703.83 |
| Other cash payments related to operating activities | 55,099,073.01 | 55,045,354.56 |
| Subtotal of cash outflows from operating activities | 1,552,336,806.90 | 1,916,742,793.54 |
| Items | 2022 Semi-Annual | 2021 Semi-Annual |
| Net cash flows from operating activities | 633,466,827.93 | 768,879,053.74 |
| II. Cash flows from investing activities: | ||
| Cash receipts from withdrawal of investments | ||
| Cash receipts from investment income | 52,285,594.53 | 1,162,849,287.12 |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | ||
| Net cash receipts from the disposal of subsidiaries & other business units | ||
| Other cash receipts related to investing activities | 3,520,172,480.03 | 4,883,233,008.66 |
| Subtotal of cash inflows from investing activities | 3,572,458,074.56 | 6,046,082,295.78 |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 2,828,025.55 | 2,560,544.11 |
| Cash payments for investments | 50,000,000.00 | 660,000,000.00 |
| Net cash payments for the acquisition of subsidiaries & other business units | ||
| Other cash payments related to investing activities | 3,014,522,667.74 | 4,589,000,000.00 |
| Subtotal of cash outflows from investing activities | 3,067,350,693.29 | 5,251,560,544.11 |
| Net cash flows from investing activities | 505,107,381.27 | 794,521,751.67 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | ||
| Cash receipts from borrowings | 2,040,000,000.00 | 3,055,061,200.00 |
| Other cash receipts related to financing activities | ||
| Subtotal of cash inflows from financing activities | 2,040,000,000.00 | 3,055,061,200.00 |
| Cash payments for the repayment of borrowings | 689,759,400.00 | 1,419,380,427.30 |
| Cash payments for distribution of dividends or profits and for interest expenses | 1,878,276,172.00 | 1,588,570,689.93 |
| Other cash payments related to financing activities | 1,266,518.81 | 2,810,055.12 |
| Subtotal of cash outflows from financing activities | 2,569,302,090.81 | 3,010,761,172.35 |
| Net cash flows from financing activities | -529,302,090.81 | 44,300,027.65 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 806,094.12 | -8,249,728.64 |
| V. Net increase in cash and cash equivalents | 610,078,212.51 | 1,599,451,104.42 |
| Add: Opening balance of cash and cash equivalents | 4,191,863,033.83 | 2,593,272,980.50 |
| VI. Closing balance of cash and cash equivalents | 4,801,941,246.34 | 4,192,724,084.92 |
7. Consolidated statement of changes in equity
Current period cumulative
Unit: RMB Yuan
| Items | 2022 Semi-Annual | ||||||||||||||
| Equity attributable to parent company | |||||||||||||||
| Non-controlling interest | Total equity | ||||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Balance at the end of prior year | 2,578,394,760.00 | 4,121,063,080.96 | 320,360,784.48 | -1,614,172.31 | 12,692,218.51 | 1,289,197,380.00 | 14,152,465,528.17 | 21,831,838,010.85 | 63,730,851.41 | 21,895,568,862.26 | |||||
| Add: Cumulative changes of accounting policies | |||||||||||||||
Error correction ofprior period
| Error correction of prior period | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others |
II. Balance at thebeginning of current year
| II. Balance at the beginning of current year | 2,578,394,760.00 | 4,121,063,080.96 | 320,360,784.48 | -1,614,172.31 | 12,692,218.51 | 1,289,197,380.00 | 14,152,465,528.17 | 21,831,838,010.85 | 63,730,851.41 | 21,895,568,862.26 | |||||
| III. Current period increase (or less: decrease) | 512,512,596.00 | -507,468,870.48 | 179,698,926.77 | 32,251,478.10 | 4,449,092.88 | 420,083,330.45 | 282,128,700.18 | 10,105,999.45 | 292,234,699.63 |
(I) Total comprehensiveincome
| (I) Total comprehensive income | 32,251,478.10 | 2,213,877,419.25 | 0 | 2,246,128,897.35 | 10,105,999.45 | 2,256,234,896.80 | |||||||||
| (II) Capital contributed or withdrawn by owners | 179,698,926.77 | -179,698,926.77 | -179,698,926.77 |
1. Ordinary shares
contributed by owners
| 1. Ordinary shares contributed by owners | |||||||||||||||
| 2. Capital contributed by holders of other equity instruments |
3. Amount of share-based
payment included inequity
| 3. Amount of share-based payment included in equity | |||||||||||||||
| 4. Others | 179,698,926.77 | -179,698,926.77 | -179,698,926.77 | ||||||||||||
| (III) Profit distribution | -1,793,794,088.80 | -1,793,794,088.80 | -1,793,794,088.80 |
1. Appropriation of
surplus reserve
| 1. Appropriation of surplus reserve |
| Items | 2022 Semi-Annual | ||||||||||||||
| Equity attributable to parent company | Non-controlling interest | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
2. Appropriation of
general risk reserve
| 2. Appropriation of general risk reserve | |||||||||||||||
| 3. Appropriation of profit to owners | -1,793,794,088.80 | -1,793,794,088.80 | -1,793,794,088.80 | ||||||||||||
| 4. Others |
(IV) Internal carry-overwithin equity
| (IV) Internal carry-over within equity | 512,512,596.00 | -512,512,596.00 | |||||||||||||
| 1. Transfer of capital reserve to capital | 512,512,596.00 | -512,512,596.00 |
2. Transfer of surplus
reserve to capital
| 2. Transfer of surplus reserve to capital | |||||||||||||||
| 3. Surplus reserve to cover losses |
4. Changes in defined
benefit plan carried overto retained earnings
| 4. Changes in defined benefit plan carried over to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried over to retained earnings |
6. Others
| 6. Others | |||||||||||||||
| (V) Special reserve | 4,449,092.88 | 4,449,092.88 | 4,449,092.88 | ||||||||||||
| 1. Appropriation of current period | 13,360,150.22 | 13,360,150.22 | 13,360,150.22 | ||||||||||||
| 2. Application of current period | -8,911,057.34 | -8,911,057.34 | -8,911,057.34 |
(VI) Others
| (VI) Others | 5,043,725.52 | 5,043,725.52 | 5,043,725.52 | ||||||||||||
| IV. Balance at the end of current period | 3,090,907,356.00 | 3,613,594,210.48 | 500,059,711.25 | 30,637,305.79 | 17,141,311.39 | 1,289,197,380.00 | 14,572,548,858.62 | 22,113,966,711.03 | 73,836,850.86 | 22,187,803,561.89 |
Preceding period comparative
Unit: RMB Yuan
| Items | 2021 Semi-Annual | ||||||||||||||
| Equity attributable to parent company | Non-controlling interest | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
I. Balance at the end of prioryear
| I. Balance at the end of prior year | 2,148,662,300.00 | 4,560,522,556.84 | 27,803,829.31 | 9,550,346.85 | 1,074,331,150.00 | 11,515,384,739.95 | 19,336,254,922.95 | 67,576,527.03 | 19,403,831,449.98 | ||||||
| Add: Cumulative changes of accounting policies |
Error correction of priorperiod
| Error correction of prior period | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others |
II. Balance at the beginning ofcurrent year
| II. Balance at the beginning of current year | 2,148,662,300.00 | 4,560,522,556.84 | 27,803,829.31 | 9,550,346.85 | 1,074,331,150.00 | 11,515,384,739.95 | 19,336,254,922.95 | 67,576,527.03 | 19,403,831,449.98 | ||||||
| III. Current period increase (or less: decrease) | 429,732,460.00 | -429,732,460.00 | -11,402,449.39 | 2,092,131.78 | 922,915,538.42 | 913,605,220.81 | -7,822,068.98 | 905,783,151.83 |
(I) Total comprehensive income
| (I) Total comprehensive income | -11,402,449.39 | 2,426,979,148.42 | 2,415,576,699.03 | 5,359,764.02 | 2,420,936,463.05 | ||||||||||
| (II) Capital contributed or withdrawn by owners | |||||||||||||||
| 1. Ordinary shares contributed by owners |
2. Capital contributed by holders
of other equity instruments
| 2. Capital contributed by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payment included in equity | |||||||||||||||
| 4. Others |
(III) Profit distribution
| (III) Profit distribution | -1,504,063,610.00 | -1,504,063,610.00 | -13,181,833.00 | -1,517,245,443.00 | |||||||||||
| 1. Appropriation of surplus reserve |
2. Appropriation of general risk
reserve
| 2. Appropriation of general risk reserve | |||||||||||||||
| 3. Appropriation of profit to owners | -1,504,063,610.00 | -1,504,063,610.00 | -13,181,833.00 | -1,517,245,443.00 |
| Items | 2021 Semi-Annual | ||||||||||||||
| Equity attributable to parent company | Non-controlling interest | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
4. Others
| 4. Others | |||||||||||||||
| (IV) Internal carry-over within equity | 429,732,460.00 | -429,732,460.00 | |||||||||||||
| 1. Transfer of capital reserve to capital | 429,732,460.00 | -429,732,460.00 |
2. Transfer of surplus reserve to
capital
| 2. Transfer of surplus reserve to capital | |||||||||||||||
| 3. Surplus reserve to cover losses |
4. Changes in defined benefit
plan carried over to retainedearnings
| 4. Changes in defined benefit plan carried over to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried over to retained earnings | |||||||||||||||
| 6. Others |
(V) Special reserve
| (V) Special reserve | 2,092,131.78 | 2,092,131.78 | 2,092,131.78 | ||||||||||||
| 1. Appropriation of current period | 5,948,742.71 | 5,948,742.71 | 5,948,742.71 | ||||||||||||
| 2. Application of current period | -3,856,610.93 | -3,856,610.93 | -3,856,610.93 | ||||||||||||
| (VI) Others |
IV. Balance at the end of currentperiod
| IV. Balance at the end of current period | 2,578,394,760.00 | 4,130,790,096.84 | 16,401,379.92 | 11,642,478.63 | 1,074,331,150.00 | 12,438,300,278.37 | 20,249,860,143.76 | 59,754,458.05 | 20,309,614,601.81 |
8. Parent company statements of changes in equity
Current period cumulative
Unit: RMB Yuan
| Items | 2022 Semi-Annual | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Others | Total equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the end of prior year | 2,578,394,760.00 | 3,861,393,399.57 | 320,360,784.48 | 506,954.43 | 1,289,197,380.00 | 5,886,750,011.71 | 13,295,881,721.23 | |||||
Add: Cumulative changes ofaccounting policies
| Add: Cumulative changes of accounting policies | ||||||||||||
| Error correction of prior period |
Others
| Others | ||||||||||||
| II. Balance at the beginning of current year | 2,578,394,760.00 | 3,861,393,399.57 | 320,360,784.48 | 506,954.43 | 1,289,197,380.00 | 5,886,750,011.71 | 13,295,881,721.23 |
III. Current period increase (or less:
decrease)
| III. Current period increase (or less: decrease) | 512,512,596.00 | -507,468,870.48 | 179,698,926.77 | -1,535,766,219.19 | -1,710,421,420.44 | |||||||
| (I) Total comprehensive income | 258,027,869.61 | 258,027,869.61 |
(II) Capital contributed or withdrawnby owners
| (II) Capital contributed or withdrawn by owners | 179,698,926.77 | -179,698,926.77 |
1. Ordinary shares contributed by
owners
| 1. Ordinary shares contributed by owners |
2. Capital contributed by holders of
other equity instruments
| 2. Capital contributed by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payment included in equity |
4. Others
| 4. Others | 179,698,926.77 | -179,698,926.77 | ||||||||||
| (III) Profit distribution | -1,793,794,088.80 | -1,793,794,088.80 |
1. Appropriation of surplus reserve
| 1. Appropriation of surplus reserve | ||||||||||||
| 2. Appropriation of profit to owners | -1,793,794,088.80 | -1,793,794,088.80 |
3. Others
| 3. Others | ||||||||||||
| (IV) Internal carry-over within equity | 512,512,596.00 | -512,512,596.00 |
1. Transfer of capital reserve to capital
| 1. Transfer of capital reserve to capital | 512,512,596.00 | -512,512,596.00 |
| Items | 2022 Semi-Annual | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Others | Total equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| 2. Transfer of surplus reserve to capital | ||||||||||||
3. Surplus reserve to cover losses
| 3. Surplus reserve to cover losses | ||||||||||||
| 4. Changes in defined benefit plan carried over to retained earnings |
5. Other comprehensive income carried
over to retained earnings
| 5. Other comprehensive income carried over to retained earnings | ||||||||||||
| 6. Others |
(V) Special reserve
| (V) Special reserve | ||||||||||||
| 1. Appropriation of current period | ||||||||||||
| 2. Application of current period |
(VI) Others
| (VI) Others | 5,043,725.52 | 5,043,725.52 | ||||||||||
| IV. Balance at the end of current period | 3,090,907,356.00 | 3,353,924,529.09 | 500,059,711.25 | 506,954.43 | 1,289,197,380.00 | 4,350,983,792.52 | 11,585,460,300.79 |
Preceding period comparative
Unit: RMB Yuan
| Items | 2021 Semi-Annual | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Others | Total equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the end of prior year | 2,148,662,300.00 | 4,300,852,875.45 | 506,954.43 | 1,074,331,150.00 | 5,298,464,883.45 | 12,822,818,163.33 | ||||||
Add: Cumulative changes of accountingpolicies
| Add: Cumulative changes of accounting policies | ||||||||||||
| Error correction of prior period |
Others
| Others | ||||||||||||
| II. Balance at the beginning of current year | 2,148,662,300.00 | 4,300,852,875.45 | 506,954.43 | 1,074,331,150.00 | 5,298,464,883.45 | 12,822,818,163.33 | ||||||
| III. Current period increase (or less: decrease) | 429,732,460.00 | -429,732,460.00 | 372,628,718.82 | 372,628,718.82 |
(I) Total comprehensive income
| (I) Total comprehensive income | 1,876,692,328.82 | 1,876,692,328.82 | ||||||||||
| (II) Capital contributed or withdrawn by owners |
1. Ordinary shares contributed by owners
| 1. Ordinary shares contributed by owners |
| Items | 2021 Semi-Annual | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Others | Total equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
2. Capital contributed by holders of other
equity instruments
| 2. Capital contributed by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payment included in equity |
4. Others
| 4. Others | ||||||||||||
| (III) Profit distribution | -1,504,063,610.00 | -1,504,063,610.00 |
1. Appropriation of surplus reserve
| 1. Appropriation of surplus reserve | ||||||||||||
| 2. Appropriation of profit to owners | -1,504,063,610.00 | -1,504,063,610.00 |
3. Others
| 3. Others | ||||||||||||
| (IV) Internal carry-over within equity | 429,732,460.00 | -429,732,460.00 | ||||||||||
| 1. Transfer of capital reserve to capital | 429,732,460.00 | -429,732,460.00 |
2. Transfer of surplus reserve to capital
| 2. Transfer of surplus reserve to capital | ||||||||||||
| 3. Surplus reserve to cover losses |
4. Changes in defined benefit plan carried
over to retained earnings
| 4. Changes in defined benefit plan carried over to retained earnings |
5. Other comprehensive income carried over
to retained earnings
| 5. Other comprehensive income carried over to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve |
1. Appropriation of current period
| 1. Appropriation of current period | ||||||||||||
| 2. Application of current period | ||||||||||||
| (VI) Others |
IV. Balance at the end of current period
| IV. Balance at the end of current period | 2,578,394,760.00 | 3,871,120,415.45 | 506,954.43 | 1,074,331,150.00 | 5,671,093,602.27 | 13,195,446,882.15 |
III. Company profile
Zhejiang NHU Co., Ltd. (the “Company”) was jointly established by 新昌县合成化工厂 (Xinchang County Synthetic Chemical Plant
?,renamed as NHU Holding Group Co., Ltd. on November 17, 2009) and 9 natural persons including Zhang Pingyi, Yuan Yizhong, ShiCheng, Hu Baishan, Shi Guanqun, Wang Xuewen, 石三夫 (Shi Sanfu), Cui Xinrong, and Wang Xulin under the document of approvalnumbered 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 andCommerce on April 5, 1999. Currently, the Company holds a business license with unified social credit code of 91330000712560575G,with registered capital of 3,090,907,356.00 yuan, total share of 3,090,907,356 shares (each with par value of one yuan), of which,36,374,202 shares are restricted outstanding shares, and 3,054,533,154 shares are unrestricted outstanding shares. The Company’sshares 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, flavorand fragrance, and new polymer materials. The Company’s main products are nutrition, flavor and fragrance, new polymer materialsand API.The financial statements were approved and authorized for issue by the twelfth meeting of the eighth session of the Board of Directorsdated August 22, 2022.The Company has brought 27 subsidiaries including Xinchang NHU Vitamins Co., Ltd., Zhejiang NHU Import & Export Co., Ltd., 浙江维尔新动物营养保健品有限公司 (Zhejiang Vityesun Animal Nutrition and Health Co., Ltd.
*
), etc. into the consolidation scope.Please refer to item VIII and IX of this section for details.
IV. Preparation basis of the financial statements
1. Preparation basis
The financial statements have been prepared on the basis of going concern.
2. The ability to continue as a going concern
The Company has no events or conditions that may cast significant doubts upon the Company’s ability to continue as a going concernwithin 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 eventssuch as impairment of financial instruments, depreciation of fixed assets, depreciation of right-of-use assets, amortization of intangibleassets, and revenue recognition, etc. based on the Company’s actual production and operation features.
1. Statement of compliance
The financial statements have been prepared in accordance with the requirements of China Accounting Standards for BusinessEnterprises (CASBEs), and present truly and completely the financial position, results of operations and cash flows of the Company.
2. Accounting period
The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.
?The English names are for identification purpose only.
3. Operating cycle
Except for the real estate industry, the Company has a relatively short operating cycle for its business, an asset or a liability is classifiedas current if it is expected to be realized or due within 12 months. The operating cycle for real estate industry starts from thedevelopment of property and ends at sales, which normally extends over 12 months and is subject to specific projects, therefore, anasset or a liability is classified as current if it is expected to be realized or due within such operating cycle.
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (RMB) Yuan, while the functional currency ofsubsidiaries engaged in overseas operations including NHU (Hong Kong) Trading Co., Ltd., NHU Europe GmbH and NHU SingaporePTE. LTD. is the currency of the primary economic environment in which they operate.
5. Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined party included in theconsolidated financial statements of the ultimate controlling party at the combination date. Difference between carrying amount of theequity of the combined party included in the consolidated financial statements of the ultimate controlling party and that of thecombination consideration or total par value of shares issued is adjusted to capital reserve, if the balance of capital reserve is insufficientto offset, any excess is adjusted to retained earnings.
2. Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at the acquisition date, theexcess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities and contingent liabilities, and themeasurement of the combination cost are reviewed, then the difference is recognized in profit or loss.
6. Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidated financial statements arecompiled by the parent company according to “CASBE 33 – Consolidated Financial Statements”, based on relevant information andthe financial statements of the parent company and its subsidiaries.
7. Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash equivalents refer to short-term, highly liquid investments that can be readily converted to cash and that are subject to an insignificant risk of changes in value.
8. Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the approximate exchange rate similar to the spotexchange rate at the transaction date at initial recognition. At the balance sheet date, monetary items denominated in foreign currencyare translated at the spot exchange rate at the balance sheet date with difference, except for those arising from the principal and interestof exclusive borrowings eligible for capitalization, included in profit or loss; non-cash items carried at historical costs are translated atthe approximate exchange rate similar to the spot exchange rate at the transaction date, with the RMB amounts unchanged; non-cashitems carried at fair value in foreign currency are translated at the spot exchange rate at the date when the fair value was determined,with difference included in profit or loss or other comprehensive income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet date; the equity items, otherthan undistributed profit, are translated at the spot rate at the transaction date; the revenues and expenses in the income statement aretranslated into RMB at the approximate exchange rate similar to the spot exchange rate at the transaction date. The difference arising
from the aforementioned foreign currency translation is included in other comprehensive income.
9. Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when initially recognized: (1) financial assets at amortized cost; (2)financial assets at fair value through other comprehensive income; (3) financial assets at fair value through profit or loss.Financial liabilities are classified into the following four categories when initially recognized: (1) financial liabilities at fair valuethrough profit or loss; (2) financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or whenthe continuing involvement approach applies; (3) financial guarantee contracts not fall within the above categories (1) and (2), andcommitments to provide a loan at a below-market interest rate, which do not fall within the above category (1); (4) financial liabilitiesat amortized cost.
2. Recognition criteria, measurement method and derecognition condition of financial assets and financial liabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument, it is recognized as a financial asset or financial liability. The financialassets and financial liabilities initially recognized by the Company are measured at fair value; for the financial assets and liabilities atfair value through profit or loss, the transaction expenses thereof are directly included in profit or loss; for other categories of financialassets and financial liabilities, the transaction expenses thereof are included into the initially recognized amount. However, at initialrecognition, for accounts receivable that do not contain a significant financing component or in circumstances where the Companydoes not consider the financing components in contracts within one year, the Company measures the transaction price in accordancewith “CASBE 14 – Revenues”.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
The Company measures its financial assets at the amortized costs using effective interest method. Gains or losses on financial assetsthat are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when the financialassets are derecognized, reclassified, amortized using effective interest method or recognized with impairment loss.
2) Debt instrument investments at fair value through other comprehensive income
The Company measures its debt instrument investments at fair value. Interests, impairment gains or losses, and gains and losses onforeign exchange that calculated using effective interest method shall be included into profit or loss, while other gains or losses areincluded into other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive income shouldbe transferred out into profit or loss when the financial assets are derecognized.
3) Equity instrument investments at fair value through other comprehensive income
The Company measures its equity instrument investments at fair value. Dividends obtained (other than those as part of investment costrecovery) shall be included into profit or loss, while other gains or losses are included into other comprehensive income. Accumulatedgains or losses that initially recognized as other comprehensive income should be transferred out into retained earnings when thefinancial assets are derecognized.
4) Financial assets at fair value through profit or loss
The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value (including interests anddividends) shall be included into profit or loss, except for financial assets that are part of hedging relationships.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including derivatives that areliabilities) and financial liabilities designated as at fair value through profit or loss. The Company measures such kind of liabilities at
fair value. The amount of changes in the fair value of the financial liabilities that are attributable to changes in the Company’s owncredit risk shall be included into other comprehensive income, unless such treatment would create or enlarge accounting mismatchesin profit or loss. Other gains or losses on those financial liabilities (including interests, changes in fair value that are attributable toreasons other than changes in the Company’s own credit risk) shall be included into profit or loss, except for financial liabilities thatare part of hedging relationships. Accumulated gains or losses that originally recognized as other comprehensive income should betransferred out into retained earnings when the financial liabilities are derecognized.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuinginvolvement approach appliesThe Company measures its financial liabilities in accordance with “CASBE 23 – Transfer of Financial Assets”.
3) Financial guarantee contracts not fall within the above categories 1) and 2), and commitments to provide a loan at a below-marketinterest rate, which do not fall within the above category 1)The Company measures its financial liabilities at the higher of: a. the amount of loss allowances in accordance with impairmentrequirements of financial instruments; b. the amount initially recognized less the amount of accumulated amortization recognized inaccordance with “CASBE 14 – Revenues”.
4) Financial liabilities at amortized cost
The Company measures its financial liabilities at amortized cost using effective interest method. Gains or losses on financial liabilitiesthat are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when the financialliabilities are derecognized and amortized using effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; orb. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with “CASBE 23 – Transfer ofFinancial Assets”.
2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the financial liability bederecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the financial asset, itderecognizes the financial asset, and any right or liability arising from such transfer is recognized independently as an asset or a liability.If it retained substantially all of the risks and rewards related to the ownership of the financial asset, it continues recognizing thefinancial asset. Where the Company does not transfer or retain substantially all of the risks and rewards related to the ownership of afinancial asset, it is dealt with according to the circumstances as follows respectively: (1) if the Company does not retain its controlover the financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is recognizedindependently as an asset or a liability; (2) if the Company retains its control over the financial asset, according to the extent of itscontinuing involvement in the transferred financial asset, it recognizes the related financial asset and recognizes the relevant liabilityaccordingly.If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the amounts of the followingtwo items is included in profit or loss: (1) the carrying amount of the transferred financial asset as of the date of derecognition; (2) thesum of consideration received from the transfer of the financial asset, and the accumulative amount of the changes of the fair valueoriginally included in other comprehensive income proportionate to the transferred financial asset (financial assets transferred refer todebt instrument investments at fair value through other comprehensive income). If the transfer of financial asset partially satisfies theconditions to derecognition, the entire carrying amount of the transferred financial asset is, between the portion which is derecognized
and the portion which is not, apportioned according to their respective relative fair value, and the difference between the amounts ofthe following two items is included into profit or loss: (1) the carrying amount of the portion which is derecognized; (2) the sum ofconsideration of the portion which is derecognized, and the portion of the accumulative amount of the changes in the fair valueoriginally included in other comprehensive income which is corresponding to the portion which is derecognized (financial assetstransferred refer to debt instrument investments at fair value through other comprehensive income).
4. Fair value determination method of financial assets and liabilities
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data and information areavailable to measure fair value. The inputs to valuation techniques used to measure fair value are arranged in the following hierarchyand used accordingly:
(1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at themeasurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directlyor indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similarassets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability, for example,interest rates and yield curves observable at commonly quoted intervals; market-corroborated inputs;
(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is not observable and cannotbe corroborated by observable market data at commonly quoted intervals, historical volatility, future cash flows to be paid to fulfill thedisposal obligation assumed in business combination, financial forecast developed using the Company’s own data, etc.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at amortized cost, debt instrumentinvestments at fair value through other comprehensive income, contract assets, leases receivable, loan commitments other than financialliabilities at fair value through profit or loss, financial guarantee contracts not belong to financial liabilities at fair value through profitor loss or financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuinginvolvement approach applies.Expected credit losses refer to the weighted average of credit losses with the respective risks of a default occurring as the weights.Credit loss refers to the difference between all contractual cash flows that are due to the Company in accordance with the contract andall the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. Amongwhich, purchased or originated credit-impaired financial assets are discounted at the credit-adjusted effective interest rate.At the balance sheet date, the Company shall only recognize the cumulative changes in the lifetime expected credit losses since initialrecognition as a loss allowance for purchased or originated credit-impaired financial assets.For leases receivable, and accounts receivable and contract assets resulting from transactions regulated in “CASBE 14 – Revenues”,the Company chooses simplified approach to measure the loss allowance at an amount equal to lifetime expected credit losses.For financial assets other than the above, on each balance sheet date, the Company shall assess whether the credit risk on the financialinstrument has increased significantly since initial recognition. The Company shall measure the loss allowance for the financialinstrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increasedsignificantly since initial recognition; otherwise, the Company shall measure the loss allowance for that financial instrument at anamount equal to 12-month expected credit loss.Considering reasonable and supportable forward-looking information, the Company compares the risk of a default occurring on thefinancial instrument as at the balance sheet date with the risk of a default occurring on the financial instrument as at the date of initial
recognition, so as to assess whether the credit risk on the financial instrument has increased significantly since initial recognition.The Company may assume that the credit risk on a financial instrument has not increased significantly since initial recognition if thefinancial instrument is determined to have relatively low credit risk at the balance sheet date.The Company shall estimate expected credit risk and measure expected credit losses on an individual or a collective basis. When theCompany adopts the collective basis, financial instruments are grouped with similar credit risk features.The Company shall remeasure expected credit loss on each balance sheet date, and increased or reversed amounts of loss allowancearising therefrom shall be included into profit or loss as impairment losses or gains. For a financial asset measured at amortized cost,the loss allowance reduces the carrying amount of such financial asset presented in the balance sheet; for a debt investment measuredat fair value through other comprehensive income, the loss allowance shall be recognized in other comprehensive income and shall notreduce the carrying amount of such financial asset.
(2) Financial instruments with expected credit risk assessed and expected credit losses measured on a collective basis
| Items | Basis for determination of portfolio | Method for measuring expected credit loss |
| Other receivables – Portfolio grouped with export tax refund receivable | Nature of receivables | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate. |
| Other receivables – Portfolio grouped with VAT refund receivable | ||
| Other receivables – Portfolio grouped with land bond receivable | ||
| Other receivables – Portfolio grouped with deposits receivable from customs and tax authorities | ||
| Other receivables – Portfolio grouped with ages | Ages |
(3) Accounts receivable and contract assets with expected credit losses measured on a collective basis
1) Specific portfolios and method for measuring expected credit loss
| Items | Basis for determination of portfolio | Method for measuring expected credit loss |
| Bank acceptance receivable | Type of notes | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and lifetime expected credit loss rate. |
| Trade acceptance receivable | ||
| Accounts receivable – Portfolio grouped with ages | Ages | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company prepares the comparison table of ages and lifetime expected credit loss rate of accounts receivable, so as to calculate expected credit loss. |
2) Accounts receivable – comparison table of ages and lifetime expected credit loss rate of portfolio grouped with ages
| Ages | Expected credit loss rate (%) |
| Within 1 year (inclusive, the same hereinafter) | 5 |
| 1-2 years | 20 |
| 2-3 years | 80 |
| Over 3 years | 100 |
6. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset. However, the Company offsetsa financial asset and a financial liability and presents the net amount in the balance sheet when, and only when, the Company: (1)currently has a legally enforceable right to set off the recognized amounts; and (2) intends either to settle on a net basis, or to realizethe asset and settle the liability simultaneously.
For a transfer of a financial asset that does not qualify for derecognition, the Company does not offset the transferred asset and theassociated liability.
10. Inventories
1. Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business, work in process in the process of production,materials or supplies, etc. to be consumed in the production process or in the rendering of services.
2. Accounting method for dispatching inventories:
Inventories dispatched from storage are accounted for with weighted average method at the end of each month.
3. Basis for determining net realizable value
At the balance sheet date, inventories are measured at the lower of cost and net realizable value; provisions for inventory write-downare made on the excess of its cost over the net realizable value. The net realizable value of inventories held for sale is determined basedon the amount of the estimated selling price less the estimated selling expenses and relevant taxes and surcharges in the ordinary courseof business; the net realizable value of materials to be processed is determined based on the amount of the estimated selling price lessthe estimated costs of completion, selling expenses and relevant taxes and surcharges in the ordinary course of business; at the balancesheet date, when only part of the same item of inventories have agreed price, their net realizable value are determined separately andare compared with their costs to set the provision for inventory write-down to be made or reversed.
4. Inventory system
Perpetual inventory method is adopted.
5. Amortization method of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized with one-off method.
(2) Packages
Packages are amortized with one-off method.
11. Contract assets, contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between its performanceobligations and customers’ payments. Contract assets and contract liabilities under the same contract shall offset each other and bepresented on a net basis.The Company presents an unconditional right to consideration (i.e., only the passage of time is required before the consideration is due)as a receivable, and presents a right to consideration in exchange for goods that it has transferred to a customer (which is conditionalon something other than the passage of time) as a contract asset.The Company presents an obligation to transfer goods to a customer for which the Company has received consideration (or the amountis due) from the customer as a contract liability.
12. Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevantactivities require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the financialand operating policy decisions of the investee but is not control or joint control of these policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party is that it makes payment in cash,
transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of combination, it regards the share of thecarrying amount of the equity of the combined party included in the consolidated financial statements of the ultimate controlling partyas the initial cost of the investment. The difference between the initial cost of the long-term equity investments and the carrying amountof the combination consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve isinsufficient to offset, any excess is adjusted to retained earnings.When long-term equity investments are obtained through business combination under common control achieved in stages, the Companydetermines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as a whole are considered as one transaction inaccounting treatment. If it is not a “bundled transaction”, on the date of combination, investment cost is initially recognized at the shareof the carrying amount of net assets of the combined party included the consolidated financial statements of the ultimate controllingparty. The difference between the initial investment cost of long-term equity investments at the acquisition date and the carrying amountof the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equityis adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
(2) For business combination not under common control, investment cost is initially recognized at the acquisition-date fair value ofconsiderations paid.When long-term equity investments are obtained through business combination not under common control achieved in stages, theCompany determined whether they are stand-alone financial statements or consolidated financial statements in accounting treatment:
1) In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount of the previously heldlong-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity.
2) In the case of consolidated financial statements, the Company determines whether it is a “bundled transaction”. If it is a “bundledtransaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, thecarrying amount of the acquirer’s previously held equity interest in the acquiree is remeasured at the acquisition-date fair value, andthe difference between the fair value and the carrying amount is recognized in investment income; when the acquirer’s previously heldequity interest in the acquiree involves other comprehensive income under equity method, the related other comprehensive income isreclassified as income for the acquisition period, excluding other comprehensive income arising from changes in net liabilities or assetsfrom remeasurement of defined benefit plan of the acquiree.
(3) Long-term equity investments obtained through ways other than business combination: the initial cost of a long-term equityinvestment obtained by making payment in cash is the purchase cost which is actually paid; that obtained on the basis of issuing equitysecurities is the fair value of the equity securities issued; that obtained through debt restructuring is determined according to “CASBE12 – Debt Restructuring”; and that obtained through non-cash assets exchange is determined according to “CASBE 7 – Non-cashAssets Exchange”.
3. Subsequent measurement and recognition method of profit or loss
For long-term equity investments with control relationship, it is accounted for with cost method; for long-term equity investments withjoint control or significant influence relationship, it is accounted for with equity method.
4. Disposal of a subsidiary in stages resulting in the Company’s loss of control
(1) Stand-alone financial statements
The difference between the carrying amount of the disposed equity and the consideration obtained thereof is recognized in profit orloss. If the disposal does not result in the Company’s loss of significant influence or joint control, the remained equity is accounted forwith equity method; however, if the disposal results in the Company’s loss of control, joint control, or significant influence, theremained equity is accounted for according to “CASBE 22 – Financial Instruments: Recognition and Measurement”.
(2) Consolidated financial statements
1) Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the Company’s loss of control
Before the Company’s loss of control, the difference between the disposal consideration and the proportionate share of net assets inthe disposed subsidiary from acquisition date or combination date to the disposal date is adjusted to capital reserve (capital premium),if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.When the Company loses control, the remained equity is remeasured at the loss-of-control-date fair value. The aggregated value ofdisposal consideration and the fair value of the remained equity, less the share of net assets in the disposed subsidiary held before thedisposal from the acquisition date or combination date to the disposal date is recognized in investment income in the period when theCompany loses control over such subsidiary, and meanwhile goodwill is offset correspondingly. Other comprehensive income relatedto equity investments in former subsidiary is reclassified as investment income upon the Company’s loss of control.
2) Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s loss of controlIn case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss of control in accounting treatment.However, before the Company loses control, the difference between the disposal consideration at each stage and the proportionateshare of net assets in the disposed subsidiary is recognized as other comprehensive income at the consolidated financial statements andreclassified as profit or loss in the period when the Company loses control over such subsidiary.
13. Fixed assets
(1) Recognition principles
Fixed assets are tangible assets held for use in the production of goods or rendering of services, for rental to others, or for administrativepurposes, and expected to be used during more than one accounting year. Fixed assets are recognized if, and only if, it is probable thatfuture economic benefits associated with the assets will flow to the Company and the cost of the assets can be measured reliably.
(2) Depreciation method
| Categories | Depreciation method | Useful life (years) | Residual value proportion (%) | Annual depreciation rate (%) |
| Buildings and structures | Straight-line method | 7-35 | 5 | 13.57-2.71 |
| General equipment | Straight-line method | 5-10 | 5 | 19.00-9.50 |
| Special equipment | Straight-line method | 5-15 | 5 | 19.00-6.33 |
| Transport facilities | Straight-line method | 5-7 | 5 | 19.00-13.57 |
(3) Recognition basis, measurement and depreciation method of fixed assets leased in finance leases
None.
14. Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic benefits associated with the item will flowto the Company, and the cost of the item can be measured reliably. Construction in progress is measured at the actual cost incurred toreach its designed usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed usable conditions. When theauditing of the construction in progress was not finished while reaching the designed usable conditions, it is transferred to fixed assetsusing estimated value first, and then adjusted accordingly when the actual cost is settled, but the accumulated depreciation is not to beadjusted retrospectively.
15. Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction or production ofassets eligible for capitalization, it is capitalized and included in the costs of relevant assets; other borrowing costs are recognized asexpenses on the basis of the actual amount incurred, and are included in profit or loss.
2. Borrowing costs capitalization period
(1) The borrowing costs are not capitalized unless the following requirements are all met: 1) the asset disbursements have alreadyincurred; 2) the borrowing costs have already incurred; and 3) the acquisition and construction or production activities which arenecessary to prepare the asset for its intended use or sale have already started.
(2) Suspension of capitalization: where the acquisition and construction or production of a qualified asset is interrupted abnormallyand the interruption period lasts for more than 3 months, the capitalization of the borrowing costs is suspended; the borrowing costsincurred during such period are recognized as expenses, and are included in profit or loss, till the acquisition and construction orproduction of the asset restarts.
(3) Ceasing of capitalization: when the qualified asset under acquisition and construction or production is ready for the intended use orsale, the capitalization of the borrowing costs is ceased.
3. Capitalization rate and capitalized amount of borrowing costs
For borrowings exclusively for the acquisition and construction or production of assets eligible for capitalization, the to-be-capitalizedamount of interests is determined in light of the actual interest expenses incurred (including amortization of premium or discount basedon effective interest method) of the special borrowings in the current period less the interest income on the unused borrowings as adeposit in the bank or as a temporary investment; where a general borrowing is used for the acquisition and construction or productionof assets eligible for capitalization, the Company calculates and determines the to-be-capitalized amount of interests on the generalborrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements less the generalborrowing by the capitalization rate of the general borrowing used.
16. Intangible assets
(1) Measurement method, useful lives and impairment test
1. Intangible assets include land use right, patent right, non-patented technology, etc. The initial measurement of intangible assets isbased on its cost.
2. For intangible assets with finite useful lives, their amortization amounts are amortized within their useful lives systematically andreasonably, if it is unable to determine the expected realization pattern reliably, intangible assets are amortized by the straight-linemethod with details as follows:
| Items | Amortization period (years) |
| Land use right | 50, 70 |
| Software | 10 |
| Patent right | 10 |
| Non-patented technology | 15 |
(2) Accounting policies on internal R&D expenditures
Expenditures on the research phase of an internal project are recognized as profit or loss when they are incurred. An intangible assetarising from the development phase of an internal project is recognized if the Company can demonstrate all of the followings: (1) thetechnical feasibility of completing the intangible asset so that it will be available for use or sale; (2) its intention to complete theintangible asset and use or sell it; (3) how the intangible asset will generate probable future economic benefits, among other things, theCompany can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to beused internally, the usefulness of the intangible asset; (4) the availability of adequate technical, financial and other resources to completethe development and to use or sell the intangible asset; and (5) its ability to measure reliably the expenditure attributable to the intangibleasset during its development.
17. Impairment of part of long-term assets
For long-term assets such as long-term equity investments, fixed assets, construction in progress, right-of-use assets, intangible assetswith finite useful lives, etc., if at the balance sheet date there is indication of impairment, the recoverable amount is to be estimated.For goodwill recognized in business combination and intangible assets with indefinite useful lives, no matter whether there is indicationof impairment, impairment test is performed annually. Impairment test on goodwill is performed on related asset group or asset groupportfolio.When the recoverable amount of such long-term assets is lower than their carrying amount, the difference is recognized as provisionfor assets impairment through profit or loss.
18. Long-term prepayments
Long-term prepayments are expenses that have been recognized but with amortization period over one year (excluding one year). Theyare recorded with actual cost, and evenly amortized within the beneficiary period or stipulated period. If items of long-term prepaymentsfail to be beneficial to the following accounting periods, residual values of such items are included in profit or loss.
19. Employee benefits
(1) Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service, short-term employee benefits actuallyincurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or defined benefit plans.
(1) The Company recognizes in the accounting period in which an employee provides service the contribution payable to a definedcontribution plan as a liability, with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) Accounting treatment by the Company for defined benefit plan usually involves the following steps:
1) In accordance with the projected unit credit method, using unbiased and mutually compatible actuarial assumptions to estimaterelated demographic variables and financial variables, measure the obligations under the defined benefit plan, and determine the periodsto which the obligations are attributed. Meanwhile, the Company discounts obligations under the defined benefit plan to determine thepresent value of the defined benefit plan obligations and the current service cost;
2) When a defined benefit plan has assets, the Company recognizes the deficit or surplus by deducting the fair value of defined benefitplan assets from the present value of the defined benefit plan obligation as a net defined benefit plan liability or net defined benefitplan asset. When a defined benefit plan has a surplus, the Company measures the net defined benefit plan asset at the lower of thesurplus in the defined benefit plan and the asset ceiling;
3) At the end of the period, the Company recognizes the following components of employee benefits cost arising from defined benefitplan: a. service cost; b. net interest on the net defined benefit plan liability (asset); and c. changes as a result of remeasurement of thenet defined benefit liability (asset). Item a and item b are recognized in profit or loss or the cost of a relevant asset. Item c is recognizedin other comprehensive income and is not to be reclassified subsequently to profit or loss. However, the Company may transfer thoseamounts recognized in other comprehensive income within equity.
(3) Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability for termination benefits, with acorresponding charge to profit or loss at the earlier of the following dates: a. when the Company cannot unilaterally withdraw the offerof termination benefits because of an employment termination plan or a curtailment proposal; or b. when the Company recognizes costor expenses related to a restructuring that involves the payment of termination benefits.
(4) Other long-term employee benefits
When other long-term employee benefits provided to the employees satisfied the conditions for classifying as a defined contributionplan, those benefits are accounted for in accordance with the requirements relating to defined contribution plan, while other benefitsare accounted for in accordance with the requirements relating to defined benefit plan. The Company recognizes the cost of employeebenefits arising from other long-term employee benefits as the followings: a. service cost; b. net interest on the net liability or net assetsof other long-term employee benefits; and c. changes as a result of remeasurement of the net liability or net assets of other long-termemployee benefits. As a practical expedient, the net total of the aforesaid amounts is recognized in profit or loss or included in the costof a relevant asset.
20. Revenue
Accounting policies on revenue recognition and measurement
1. Revenue recognition principles
At contract inception, the Company shall assess the contracts and shall identify each performance obligation in the contracts, anddetermine whether the performance obligation should be satisfied over time or at a point in time.The Company satisfies a performance obligation over time if one of the following criteria is met, otherwise, the performance obligationis satisfied at a point in time: (1) the customer simultaneously receives and consumes the economic benefits provided by the Company’sperformance as the Company performs; (2) the customer can control goods as they are created by the Company’s performance; (3)goods created during the Company’s performance have irreplaceable uses and the Company has an enforceable right to the paymentsfor performance completed to date during the whole contract period.For each performance obligation satisfied over time, the Company shall recognize revenue over time by measuring the progress towardscomplete satisfaction of that performance obligation. In the circumstance that the progress cannot be measured reasonably, but thecosts incurred in satisfying the performance obligation are expected to be recovered, the Company shall recognize revenue only to theextent of the costs incurred until it can reasonably measure the progress. For each performance obligation satisfied at a point in time,the Company shall recognize revenue at the time point that the customer obtains control of relevant goods or services. To determinewhether the customer has obtained control of goods, the Company shall consider the following indications: (1) the Company has apresent right to payment for the goods, i.e., the customer is presently obliged to pay for the goods; (2) the Company has transferred thelegal title of the goods to the customer, i.e., the customer has legal title to the goods; (3) the Company has transferred physicalpossession of the goods to the customer, i.e., the customer has physically possessed the goods; (4) the Company has transferredsignificant risks and rewards of ownership of the goods to the customer, i.e., the customer has obtained significant risks and rewardsof ownership of the goods; (5) the customer has accepted the goods; (6) other evidence indicating the customer has obtained controlover the goods.
2. Revenue measurement principle
(1) Revenue is measured at the amount of the transaction price that is allocated to each performance obligation. The transaction priceis the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer,excluding amounts collected on behalf of third parties and those expected to be refunded to the customer.
(2) If the consideration promised in a contract includes a variable amount, the Company shall confirm the best estimate of variableconsideration at expected value or the most likely amount. However, the transaction price that includes the amount of variableconsideration only to the extent that it is high probable that a significant reversal in the amount of cumulative revenue recognized willnot occur when the uncertainty associated with the variable consideration is subsequently resolved.
(3) In the circumstance that the contract contains a significant financing component, the Company shall determine the transaction pricebased on the price that a customer would have paid for if the customer had paid cash for obtaining control over those goods or services.The difference between the transaction price and the amount of promised consideration is amortized under effective interest method
over contractual period. The effects of a significant financing component shall not be considered if the Company expects, at the contractinception, that the period between when the customer obtains control over goods or services and when the customer pays considerationwill be one year or less.
(4) For contracts containing two or more performance obligations, the Company shall determine the stand-alone selling price at contractinception of the distinct good underlying each performance obligation and allocate the transaction price to each performance obligationon a relative stand-alone selling price basis.
3. Revenue recognition method
(1) Revenue from sales of products
The Company’s main products are nutrition, flavor and fragrance, new polymer materials, etc. Sales of products are performanceobligations satisfied at a point in time. Revenue from domestic sales is recognized when the Company has delivered goods to thecustomer as agreed by contract and has obtained delivery note signed by the customer, and the Company has collected the paymentsor has obtained the right to the payments, and related economic benefits are highly probable to flow to the Company. Revenue fromoverseas sales is recognized when the Company has declared goods to the customs based on contractual agreements and has obtaineda bill of lading, and the Company has collected the payments or has obtained the right to the payments, and related economic benefitsare highly probable to flow to the Company.
(2) Revenue from real estate sales
Real estate sales are performance obligations satisfied at a point in time. Revenue from real estate sales is recognized when theCompany has delivered properties to the customer as agreed by contract and has obtained the client acceptance receipts signed by thecustomer, and the Company has collected the payments or has obtained the right to the payments, and related economic benefits arehighly probable to flow to the Company.Differences in accounting policies on revenue recognition due to the adoption of different business models for similar businessesNone.
21. Government grants
1. Government grants shall be recognized if, and only if, the following conditions are all met: (1) the Company will comply with theconditions attaching to the grants; (2) the grants will be received. Monetary government grants are measured at the amount received orreceivable. Non-monetary government grants are measured at fair value, and can be measured at nominal amount in the circumstancethat fair value cannot be assessed.
2. Government grants related to assets
Government grants related to assets are government grants with which the Company constructs or otherwise acquires long-term assetsunder requirements of government. In the circumstances that there is no specific government requirement, the Company shall determinebased on the primary condition to acquire the grants, and government grants related to assets are government grants whose primarycondition is to construct or otherwise acquire long-term assets. They offset carrying amount of relevant assets, or they are recognizedas deferred income. If recognized as deferred income, they are included in profit or loss on a systematic basis over the useful lives ofthe relevant assets. Those measured at notional amount are directly included into profit or loss. For assets sold, transferred, disposedor damaged within the useful lives, balance of unamortized deferred income is transferred into profit or loss of the period in which thedisposal occurred.
3. Government grants related to income
Government grants related to income are government grants other than those related to assets. For government grants that contain bothparts related to assets and parts related to income, in which those two parts are blurred, they are thus collectively classified asgovernment grants related to income. For government grants related to income used for compensating the related future cost, expensesor losses, they are recognized as deferred income and included in profit or loss or used to offset relevant cost during the period in 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 basedon business nature, while those not related to the ordinary course of business shall be included into non-operating revenue orexpenditures.
5. Policy interest subvention
(1) In the circumstance that government appropriates interest subvention to lending bank, who provides loans for the Company with apolicy subsidised interest rate, borrowings are carried at the amount received, with relevant borrowings cost computed based on theprincipal and the policy subsidised interest rate.
(2) In the circumstance that government directly appropriates interest subvention to the Company, the subsidised interest shall offsetrelevant borrowing cost.
22. Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between the carrying amount andtax base of assets and liabilities (and the difference of the carrying amount and tax base of items not recognized as assets and liabilitiesbut with their tax base being able to be determined according to tax laws) and in accordance with the tax rate applicable to the periodduring which the assets are expected to be recovered or the liabilities are expected to be settled.
2. A deferred tax asset is recognized to the extent of the amount of the taxable income, which is most likely to obtain and which canbe deducted from the deductible temporary difference. At the balance sheet date, if there is any exact evidence that it is probable thatfuture taxable income will be available against which deductible temporary differences can be utilized, the deferred tax assetsunrecognized in prior periods are recognized.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a deferred tax asset isreduced to the extent that it is no longer probable that sufficient taxable income will be available to allow the benefit of the deferredtax asset to be utilized. Such reduction is subsequently reversed to the extent that it becomes probable that sufficient taxable incomewill be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit or loss, excluding thosearising from the following circumstances: (1) business combination; and (2) the transactions or items directly recognized in equity.
23. Leases
(1) Operating lease
1. The Company as lessee
At the commencement date, the Company recognizes a lease that has a lease term of 12 months or less as a short-term lease, whichshall not contain a purchase option; the Company recognizes a lease as a lease of a low-value asset if the underlying asset is of lowvalue when it is new. If the Company subleases an asset, or expects to sublease an asset, the head lease does not qualify as a lease of alow-value asset.For all short-term leases and leases of low-value assets, lease payments are recognized as cost or profit or loss with straight-linemethod/unit-of-production method over the lease term.Apart from the above-mentioned short-term leases and leases of low-value assets with simplified approach, the Company recognizesright-of-use assets and lease liabilities at the commencement date.
(1) Right-of-use assets
The right-of-use asset is measured at cost and the cost shall comprise: 1) the amount of the initial measurement of the lease liability; 2)
any lease payments made at or before the commencement date, less any lease incentives received; 3) any initial direct costs incurredby the lessee; and 4) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring thesite on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.The Company depreciates the right-of-use asset using the straight-line method/unit-of-production method. If it is reasonable to becertain that the ownership of the underlying asset can be acquired by the end of the lease term, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates theright-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the leaseterm.
(2) Lease liability
At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid atthat date, discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the Company’s incrementalborrowing rate shall be used. Unrecognized financing expenses, calculated at the difference between the lease payment and its presentvalue, are recognized as interest expenses over the lease term using the discount rate which has been used to determine the presentvalue of lease payment and included in profit or loss. Variable lease payments not included in the measurement of lease liabilities areincluded in profit or loss in the periods in which they are incurred.After the commencement date, if there is a change in the following items: a. actual fixed payments; b. amounts expected to be payableunder residual value guarantees; c. an index or a rate used to determine lease payments; d. assessment result or exercise of purchaseoption, extension option or termination option., the Company remeasures the lease liability based on the present value of lease paymentsafter changes, and adjusts the carrying amount of the right-of-use asset accordingly. If the carrying amount of the right-of-use asset isreduced to zero but there shall be a further reduction in the lease liability, the remaining amount shall be recognized into profit or loss.
2. The Company as lessor
At the commencement date, the Company classifies a lease as a finance lease if it transfers substantially all the risks and rewardsincidental to ownership of an underlying asset. Otherwise, it is classified as an operating lease.Operating leaseLease receipts are recognized as lease income with straight-line method/unit-of-production method over the lease term. Initial directcosts incurred shall be capitalized, amortized on the same basis as the recognition of lease income, and included into profit or loss byinstallments. Variable lease payments related to operating lease which are not included in the lease payment are charged as profit orloss in the periods in which they are incurred.
24. Work safety fund
The Company accrues work safety fund in accordance with the “Circular on Management Measures on the Accrual and Use of WorkSafety Fund” numbered Cai Qi [2012] 16 by Ministry of Finance and State Administration of Work Safety. Standard work safety fundis included in the cost or current profit or loss, meanwhile accounted for under “special reserve”. When work safety fund is used as anexpense, it is to offset special reserve directly. When work safety fund is qualified to be included in the cost of fixed assets, it isaccounted for under “construction in progress” and transferred to fixed assets when related safety projects reach the designed usefulconditions; meanwhile, the cost included in fixed assets is to offset “special reserve”, and accumulated depreciation shall be recognizedat the same amount. Such fixed assets shall not be depreciated in future periods.
25. Segment reporting
Operating segments are determined based on the structure of the Company’s internal organization, management requirements andinternal reporting system. An operating segment is a component of the Company:
1. that engages in business activities from which it may earn revenues and incur expenses;
2. whose financial performance is regularly reviewed by the Management to make decisions about resource to be allocated to the
segment and to assess its performance; and
3. for which accounting information regarding financial position, financial performance and cash flows is available through analysis.
26.Accounting treatment related to share repurchase
When the Company repurchases its shares for the purpose of reducing its registered capital or rewarding its employees, if the purchasedshares are to be kept as treasury shares, the treasury shares are recorded at the cash distributed to existing shareholders for repurchase;if the purchased shares are to be retired, the difference between the total par value of shares retired and the cash distributed to existingshareholders for repurchase is to reduce capital reserve, or retained earnings when the capital reserve is not enough to reduce. If theCompany repurchases vested equity instruments in equity-settled share-based payment transactions with employees, cost of treasuryshares granted to employees and capital reserve (other capital reserve) accumulated within the vesting period are to be written off onthe payment made to employees, with a corresponding adjustment in capital reserve (share premium).
27. Significant changes in accounting policies and estimates
(1) Significant changes in accounting policies
√ Applicable □ Not Applicable
| Contents and reasons | Approval process | Remarks |
| The company will implement the revised interpretation of accounting standards for Business Enterprises No. 15 from January 1, 2022. According to the new standards, if the company sells the products or by-products produced before the fixed assets reach the expected serviceable state or during the research and development process, the income and cost related to the trial operation sales shall be accounted for separately and included in the current profit and loss. The net amount of the income related to the trial operation sales after offsetting the relevant costs shall not be used to offset the cost of the fixed assets or the research and development expenditure. | N/A | Please refer to Announcement No. 2022-026 disclosed on www.cninfo.com.cn on April 28, 2022 for details. |
The impact of the implementation of the standards on the relevant items of the company's balance sheet in 2021, profit statement andcash flow statement in the same period of last year is retroactively adjusted as follows:
Unit: RMB Yuan
| Items | Before adjustment (Jan 1,2022/ Preceding period comparative) | Effect due to revised lease standard | After adjustment (Jan 1,2022/ Preceding period comparative) |
| Fixed assets | 14,318,919,487.82 | 31,860,364.91 | 14,350,779,852.73 |
| Undistributed profit | 14,120,605,163.26 | 31,860,364.91 | 14,152,465,528.17 |
| Operating revenue | 7,254,221,638.01 | 85,902,672.10 | 7,340,124,310.11 |
| Operating cost | 3,755,325,045.02 | 67,422,657.18 | 3,822,747,702.20 |
| Cash receipts from sale of goods or rendering of services | 6,823,103,213.62 | 85,902,672.10 | 6,909,005,885.72 |
| Cash payments for goods purchased and services received | 3,731,367,763.85 | 67,422,657.18 | 3,798,790,421.03 |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 1,308,312,685.39 | 18,480,014.92 | 1,326,792,700.31 |
(2) Significant changes in accounting estimates
□ Applicable √ Not Applicable
VI. Taxes
1. Main taxes and tax rates
| Taxes | Tax bases | Tax rates |
| Value-added tax (VAT) | The output tax calculated based on the revenue from sales of goods or rendering of services in accordance with the tax law, net of the input tax that is allowed to be deducted in the current period | 13%, 9%, 6%, 5% and 19%; export goods enjoy the “exemption, credit and refund” policy and the refund rate ranges from 0% to 13%; the subsidiary Zhejiang NHU Import & Export Co., Ltd. enjoys the “refund upon collection” policy and the refund rate ranges from 0% to 13%. |
| Urban maintenance and construction tax | Turnover tax actually paid | 5%, 7% |
| Enterprise income tax | Taxable income | 15%, 17%, 22%,25% |
| Land appreciation tax | The incremental amount arising from the transfer of state-owned land use right and the buildings and structures that are constructed on the land | A four-grade progressive tax system is adopted. The rates are: 30% for appreciated value not over 50% of total deductible amount; 40% for appreciated value over 50% but not over 100% of total deductible amount; 50% for appreciated value over 100% but not over 200% of total deductible amount; and 60% for appreciated value over 200% of total deductible amount. |
| Housing property tax | For housing property levied on the basis of price, housing property tax is levied at the rate of 1.2% of the balance after deducting 30% of the cost; for housing property levied on the basis of rent, housing property tax is levied at the rate of 12% of rent revenue. | 1.2%, 12% |
| Education surcharge | Turnover tax actually paid | 3% |
| Local education surcharge | Turnover tax actually paid | 2% |
| Solidarity surcharge [Note] | Income tax payable | 5.50% |
| Trade tax [Note] | Taxable income | 13.30% |
Note: The subsidiaries NHU EUROPE GmbH, NHU PERFORMANCE MATERIALS GMBH and Bardoterminal GmbH are subjectto these rates.Different enterprise income tax rates applicable to different taxpayers:
| Taxpayers | Income tax rate |
| The Company | 15% |
| Shangyu NHU Bio-Chem Co., Ltd. | 15% |
| Zhejiang NHU Special Materials Co., Ltd. | 15% |
| Shandong NHU Pharmaceutical Co., Ltd. | 15% |
| Shandong NHU Amino-acids Co., Ltd. | 15% |
| Shandong NHU Vitamins Co., Ltd. | 15% |
| Heilongjiang NHU Biotechnology Co., Ltd. | 15% |
| NHU EUROPE GmbH | 15% |
| NHU PERFORMANCE MATERIALS GMBH | 15% |
| Bardoterminal GmbH | 15% |
| NHU/CHR.OLESEN LATIN AMERICA A/S | 22% |
| NHU Singapore PTE. LTD. | 17% |
| Taxpayers other than the above-mentioned | 25% |
2. Tax preferential policies
According to the Hi-Tech Enterprise Certificate (GR202033003531) issued by Zhejiang Provincial Department of Science andTechnology, Zhejiang Provincial Department of Finance and Zhejiang Provincial Tax Service, State Taxation Administration (STA),the Company is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2020 to 2022. It is subject to therate of 15% for enterprise income tax in 2022.According to the Hi-Tech Enterprise Certificate (GR201933005736) issued by Zhejiang Provincial Department of Science andTechnology, Zhejiang Provincial Department of Finance and Zhejiang Provincial Tax Service, STA, the subsidiary Shangyu NHU Bio-Chem Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2019 to 2021. It is temporarilysubject to the rate of 15% for enterprise income tax in 2022.According to the Hi-Tech Enterprise Certificate (GR202037001084) issued by Department of Science and Technology of ShandongProvince, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary Shandong NHUPharmaceutical Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2020 to 2022. It issubject to the rate of 15% for enterprise income tax in 2022.According to the Hi-Tech Enterprise Certificate (GR202037000197) issued by Department of Science and Technology of ShandongProvince, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary Shandong NHUVitamins Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2020 to 2022. It is subjectto the rate of 15% for enterprise income tax in 2022.According to the Hi-Tech Enterprise Certificate (GR202137000086) issued by Department of Science and Technology of ShandongProvince, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary Shandong NHUAmino-Acids Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2021 to 2023. It issubject to the rate of 15% for enterprise income tax in 2022. Amino-acids Co., Ltd.According to the Hi-Tech Enterprise Certificate (GR202133008939) issued by Zhejiang Provincial Department of Science andTechnology, Zhejiang Provincial Department of Finance and Zhejiang Provincial Tax Service, STA, the subsidiary Zhejiang NHUSpecial Materials Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2021 to 2023. It issubject to the rate of 15% for enterprise income tax in 2022.According to the Hi-Tech Enterprise Certificate (GR202123000560) issued by Heilongjiang Provincial Department of Science andTechnology, Heilongjiang Provincial Department of Finance and Heilongjiang Provincial Tax Service, STA, the subsidiaryHeilongjiang NHU Biotechnology Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from2021 to 2023. It is subject to the rate of 15% for enterprise income tax in 2022.VII. Notes to items of consolidated financial statements
1. Cash and bank balances
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Cash on hand | 9,862.96 | 14,537.85 |
| Cash in bank | 6,451,698,706.20 | 5,684,842,466.04 |
| Other cash and bank balances | 138,304,339.10 | 268,052,623.05 |
| Total | 6,590,012,908.26 | 5,952,909,626.94 |
| Including: Deposited overseas | 44,577,418.70 | 38,739,302.11 |
| Total amount of funds restricted for use due to mortgage, pledge or freezing | 0.00 | 0.00 |
(1) Other cash and bank balances
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Deposit for bank acceptance | 108,852,086.25 | 149,724,511.46 |
| Deposit for letters of credit | 27,364,565.06 | 86,212,564.30 |
| Deposit for engineering labor costs | 1,711,851.11 | 1,654,664.15 |
| Deposit for construction safety | 405,056.50 | |
| Deposit for ETC | 16,500.00 | 16,500.00 |
| Deposit for water fees | 359,336.68 | 358,792.30 |
| Deposited investment fund | 29,680,534.34 | |
| Subtotal | 138,304,339.10 | 268,052,623.05 |
2. Held-for-trading financial assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Financial assets at fair value through profit or loss | 669,555,464.77 | 1,250,736,359.24 |
| Including: Financial products with guaranteed principal and floating income | 660,000,000.00 | 1,250,000,000.00 |
| Derivative financial assets | 9,555,464.77 | 736,359.24 |
| Total | 669,555,464.77 | 1,250,736,359.24 |
3. Notes receivable
(1) Details on categories
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Bank acceptance | 303,837,602.00 | 349,145,316.03 |
| Commercial acceptance | 35,305,829.45 | |
| Total | 339,143,431.45 | 349,145,316.03 |
Unit: RMB Yuan
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion | ||
| Including: | |||||
| Notes receivable with provision for bad debts made on a collective basis | 341,001,633.00 | 100.00% | 1,858,201.55 | 0.55% | 339,143,431.45 |
| Including: | |||||
| Bank acceptance | 303,837,602.00 | 89.10% | 303,837,602.00 | ||
| Commercial acceptance | 37,164,031.00 | 10.90% | 1,858,201.55 | 5.00% | 35,305,829.45 |
| Total | 341,001,633.00 | 100.00% | 1,858,201.55 | 0.55% | 339,143,431.45 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion | ||
| Including: | |||||
| Notes receivable with provision for bad debts made on a collective basis | 349,145,316.03 | 100.00% | 349,145,316.03 | ||
| Including: | |||||
| Bank acceptance | 349,145,316.03 | 100.00% | 349,145,316.03 | ||
| Commercial acceptance | |||||
| Total | 349,145,316.03 | 100.00% | 349,145,316.03 | ||
If the provision for bad debt of notes receivable is withdrawn according to the general model of expected credit loss, please refer tothe disclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable√ Not Applicable
(2) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
| Categories | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery/ Reversal | Write-off | Others | |||
| Commercial acceptance | 1,858,201.55 | 1,858,201.55 | ||||
| Total | 1,858,201.55 | 1,858,201.55 | ||||
Including significant provision for bad debt recovered or reversed amount:
□ Applicable√ Not Applicable
(3) Pledged notes at the balance sheet date
Unit: RMB Yuan
| Items | Closing balance of pledged notes |
| Bank acceptance | 209,801,476.61 |
| Total | 209,801,476.61 |
(4) Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB Yuan
| Items | Closing balance derecognized | Closing balance not yet derecognized |
| Bank acceptance | 6,367,492.12 | |
| Total | 6,367,492.12 |
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little possibility offailure in recoverability when it is due. Based on this fact, the Company derecognized the endorsed or discounted bank acceptance.However, if any bank acceptance is not recoverable when it is due, the Company still holds joint liability on such acceptance, accordingto the China Commercial Instrument Law.
4. Accounts receivable
(1) Details on categories
Unit: RMB Yuan
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion | ||
| Including: | |||||
| Accounts receivable with provision for bad debts made on a collective basis | 3,225,123,123.09 | 100.00% | 163,247,522.57 | 5.06% | 3,061,875,600.52 |
| Total | 3,225,123,123.09 | 100.00% | 163,247,522.57 | 5.06% | 3,061,875,600.52 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion | ||
| Including: | |||||
| Accounts receivable with provision for bad debts made on a collective basis | 2,902,396,632.04 | 100.00% | 147,228,058.90 | 5.07% | 2,755,168,573.14 |
| Total | 2,902,396,632.04 | 100.00% | 147,228,058.90 | 5.07% | 2,755,168,573.14 |
Accounts receivable with provision for bad debts made on a collective basis using age analysis method
Unit: RMB Yuan
| Items | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Within 1 year | 3,222,776,842.29 | 161,138,841.77 | 5.00% |
| 1-2 years | 297,000.00 | 59,400.00 | 20.00% |
| 2-3 years | |||
| Over 3 years | 2,049,280.80 | 2,049,280.80 | 100.00% |
| Total | 3,225,123,123.09 | 163,247,522.57 | -- |
Disclose by aging
Unit: RMB Yuan
| Ages | Book balance |
| Within 1 year (inclusive) | 3,222,776,842.29 |
| 1-2 years | 297,000.00 |
| 2-3 years | |
| Over 3 years | 2,049,280.80 |
| 3-4 years | 203,200.00 |
| 4-5 years | 286,550.00 |
| Over 5 years | 1,559,530.80 |
| Total | 3,225,123,123.09 |
(2) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
| Categories | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery/ Reversal | Write-off | Others | |||
| Provision made on a collective basis | 147,228,058.90 | 16,019,463.67 | 163,247,522.57 | |||
| Categories | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery/ Reversal | Write-off | Others | |||
| Total | 147,228,058.90 | 16,019,463.67 | 163,247,522.57 | |||
(3) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
| Debtors | Closing balance | Proportion to the total balance of receivables (%) | Closing balance of provision for bad debts |
| Client A | 370,453,247.11 | 11.49% | 18,522,662.36 |
| Client B | 289,470,824.68 | 8.98% | 14,473,541.23 |
| Client C | 233,254,640.83 | 7.23% | 11,662,732.04 |
| Client D | 112,321,714.00 | 3.48% | 5,616,085.70 |
| Client E | 73,238,065.34 | 2.27% | 3,661,903.27 |
| Total | 1,078,738,491.96 | 33.45% |
5. Receivables financing
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Bank acceptance | 198,094,359.06 | 182,891,179.65 |
| Total | 198,094,359.06 | 182,891,179.65 |
Current increase/decrease and changes in fair value
□ Applicable √ Not applicable
(1) Pledged notes at the balance sheet date
Unit: RMB Yuan
| Items | Closing balance of pledged notes |
| Bank acceptance | 130,363,316.90 |
| Subtotal | 130,363,316.90 |
(2) Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB Yuan
| Items | Closing balance derecognized |
| Bank acceptance | 938,811,673.06 |
| Subtotal | 938,811,673.06 |
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little possibility offailure in recoverability when it is due. Based on this fact, the Company derecognized the endorsed or discounted bank acceptance.However, if any bank acceptance is not recoverable when it is due, the Company still holds joint liability on such acceptance,according to the China Commercial Instrument Law.
6. Advances paid
(1) Disclose by aging
Unit: RMB Yuan
| Ages | Closing balance | Opening balance | ||
| Amount | % to total | Amount | % to total | |
| Within 1 year | 115,460,768.26 | 93.65% | 78,853,695.19 | 99.85% |
| Ages | Closing balance | Opening balance | ||
| Amount | % to total | Amount | % to total | |
| 1-2 years | 7,823,254.73 | 6.34% | 109,065.41 | 0.14% |
| 2-3 years | 7,200.00 | 0.01% | ||
| Over 3 years | 7,200.00 | 0.01% | ||
| Total | 123,291,222.99 | 78,969,960.60 | ||
(2) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
| Debtors | Book balance | Proportion to the total balance of advances paid (%) |
| Supplier A | 20,812,893.84 | 16.88 |
| Supplier B | 19,554,899.89 | 15.86 |
| Supplier C | 10,211,361.96 | 8.28 |
| Supplier D | 8,106,071.73 | 6.57 |
| Supplier E | 6,461,700.00 | 5.25 |
| Subtotal | 65,146,927.42 | 52.84 |
7. Other receivables
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Dividend receivable | 7,159,278.00 | |
| Other receivables | 247,863,734.11 | 247,337,970.13 |
| Total | 247,863,734.11 | 254,497,248.13 |
(1) Dividend receivable
Unit: RMB Yuan
| Items/Investees | Closing balance | Opening balance |
| 浙江春晖环保能源股份有限公司 (Zhejiang Chunhui Environmental Protection Energy Co., Ltd.*) | 7,159,278.00 | |
| Total | 7,159,278.00 |
(2) Other receivables
1) Categorized by nature
Unit: RMB Yuan
| Nature of receivables | Closing book balance | Opening book balance |
| Security deposits | 127,093,425.64 | 136,459,247.48 |
| Export tax refund | 70,511,187.22 | 69,372,321.60 |
| Receivables of returned equipment | 874,415.57 | 45,213,200.00 |
| Refundable VAT | 3,934,130.21 | 3,310,397.40 |
| Employee petty cash | 8,771,601.89 | 5,688,937.00 |
| Temporary advance payment receivable | 2,146,851.22 | 2,456,748.36 |
| Others | 49,216,054.21 | 653,640.31 |
| Total | 262,547,665.96 | 263,154,492.15 |
*
The English name is for identification purpose only.
2) Provision for bad debts
Unit: RMB Yuan
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance | 2,915,877.46 | 716,215.08 | 12,184,429.48 | 15,816,522.02 |
| Opening balance in the current period | ||||
| --Transferred to phase II | -53,622.65 | 53,622.65 | ||
| --Transferred to phase III | -667,900.07 | 667,900.07 | ||
| Provision made in the current period | 252,433.43 | 112,552.93 | -1,497,576.53 | -1,132,590.17 |
| Closing balance | 3,114,688.24 | 214,490.59 | 11,354,753.02 | 14,683,931.85 |
Significant changes in book balance of other receivables with changes in provision for bad debts:
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB Yuan
| Ages | Book balance |
| Within 1 year (inclusive) | 149,037,459.84 |
| 1-2 years | 1,072,453.00 |
| 2-3 years | 3,339,500.36 |
| Over 3 years | 109,098,252.76 |
| 3-4 years | 7,772,795.15 |
| 4-5 years | 6,925.01 |
| Over 5 years | 101,318,532.60 |
| Total | 262,547,665.96 |
3) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
| Categories | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery/ Reversal | Write-off | Others | |||
| Provision made on a collective basis | 15,816,522.02 | 1,132,590.17 | 14,683,931.85 | |||
| Total | 15,816,522.02 | 1,132,590.17 | 14,683,931.85 | |||
4) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
| Debtors | Nature of receivables | Book balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts |
| Weifang Municipal Bureau of Land and Resource, Binhai District Branch | Security deposits | 97,900,000.00 | Over 3 years | 37.29% | |
| State Taxation Administration (Export tax refund receivable) | Export tax refund | 70,511,187.22 | Within 1 year | 26.86% | |
| Suihua Municipal Labor Security Supervision Detachment | Security deposits | 850,000.00 | 2-3 years | 0.32% | 680,000.00 |
| Security deposits | 7,428,490.53 | Over 3 years | 2.83% | 7,428,490.53 | |
| 杭州汽轮机股份有限公司 (Hangzhou Steam Turbine Co., Ltd.*) | Receivables of returned equipment | 7,440,000.00 | Within 1 year | 2.83% | 372,000.00 |
| 绍兴市上虞区财政局非税收入结算分户(Non tax income settlement branch of Shaoxing Shangyu District Finance Bureau) | Portfolio of land deposits receivable | 5,570,000.00 | Within 1 year | 2.12% | |
| Total | -- | 189,699,677.75 | -- | 72.25% | 8,480,490.53 |
8. Inventories
Whether the Company needs to comply with the disclosure requirements of the real estate industryNo
(1) Details on categories
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for inventory write-down/ Provision for impairment of cost to fulfill a contract | Carrying amount | Book balance | Provision for inventory write-down/ Provision for impairment of cost to fulfill a contract | Carrying amount | |
| Raw materials | 560,435,992.82 | 638,820.20 | 559,797,172.62 | 456,431,898.77 | 653,463.45 | 455,778,435.32 |
| Work in process | 1,500,164,208.68 | 1,500,164,208.68 | 1,008,021,313.66 | 1,008,021,313.66 | ||
| Goods on hand | 1,987,440,447.37 | 5,153,376.38 | 1,982,287,070.99 | 1,247,338,255.71 | 14,685,437.55 | 1,232,652,818.16 |
| Development cost | 222,262,216.11 | 222,262,216.11 | 197,045,414.10 | 197,045,414.10 | ||
| Developed products | 120,382,839.33 | 120,382,839.33 | 122,679,279.65 | 122,679,279.65 | ||
| Goods dispatched | 31,739,132.25 | 31,739,132.25 | 88,307,137.99 | 88,307,137.99 | ||
| Materials on consignment for further processing | 2,609,006.80 | 2,609,006.80 | 4,102,415.43 | 4,102,415.43 | ||
| Packages | 17,435,161.93 | 17,435,161.93 | 14,276,697.20 | 14,276,697.20 | ||
*
The English names are for identification purpose only.
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for inventory write-down/ Provision for impairment of cost to fulfill a contract | Carrying amount | Book balance | Provision for inventory write-down/ Provision for impairment of cost to fulfill a contract | Carrying amount | |
| Low-value consumables | 125,496,408.18 | 125,496,408.18 | 70,793,855.65 | 70,793,855.65 | ||
| Total | 4,567,965,413.47 | 5,792,196.58 | 4,562,173,216.89 | 3,208,996,268.16 | 15,338,901.00 | 3,193,657,367.16 |
(2) Inventories – Development cost
Unit: RMB Yuan
| Items | Estimated total investment | Opening balance | Closing balance |
| Boao NHU Resort | 550 million | 33,723,820.73 | 42,322,830.63 |
| Weifang NHU Town Phase II | 398.53 million | 163,321,593.67 | 179,939,385.48 |
| Subtotal | 197,045,414.40 | 222,262,216.11 |
(3) Inventories – Developed products
Unit: RMB Yuan
| Items | Date of completion | Opening balance | Increase | Decrease | Closing balance |
| Boao NHU Resort Center | Dec. 2014 | 122,679,279.65 | 2,616,624.57 | 4,913,064.89 | 120,382,839.33 |
| Subtotal | 122,679,279.65 | 2,616,624.57 | 4,913,064.89 | 120,382,839.33 |
(4) Provision for inventory write-down and provision for impairment of cost to fulfill a contract
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance | ||
| Accrual | Others | Recovery/ Reversal | Others | |||
| Raw materials | 653,463.45 | 14,643.25 | 638,820.20 | |||
| Goods on hand | 14,685,437.55 | 7,890,179.58 | 17,422,240.75 | 5,153,376.38 | ||
| Total | 15,338,901.00 | 7,890,179.58 | 17,436,884.00 | 5,792,196.58 | ||
Determination basis of net realizable value and reasons for the reversal or write-off of provision for inventory write-down
| Items | Determination basis of net realizable value | Reasons for write-off of provision for inventory write-down |
| Raw materials | Estimated selling price of relevant finished goods less cost to be incurred upon completion, estimated selling expenses, and relevant taxes and surcharges. | Inventories with provision for inventory write-down made at the beginning of period were used or sold in the current period. |
| Goods on hand | Estimated selling price of relevant finished goods less estimated selling expenses, and relevant taxes and surcharges. | Inventories with provision for inventory write-down made at the beginning of period were sold in the current period. |
9. Other current assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Bank financial products and structured deposits | 260,000,000.00 | 550,000,000.00 |
| Prepaid VAT or input VAT to be credited | 59,603,808.12 | 336,963,113.65 |
| Prepaid enterprise income tax | 5,070,275.22 | 5,070,275.22 |
| Prepaid insurance premiums | 5,442,975.30 | 3,727,306.74 |
| Items | Closing balance | Opening balance |
| Prepaid housing rents | 488,400.00 | |
| Prepaid urban maintenance and construction tax | 6,732.66 | 10,786.63 |
| Prepaid education surcharge | 4,039.43 | 6,472.01 |
| Prepaid local education surcharge | 2,693.23 | 4,314.62 |
| Total | 330,618,923.96 | 895,782,268.87 |
10. Long-term equity investments
Unit: RMB Yuan
| Investees | Opening carrying amount | Increase/Decrease | Closing carrying amount | Closing balance of provision for impairment | |||||||
| Investments increased | Investments decreased | Investment income/losses recognized under equity method | Adjustment in other comprehensive income | Changes in other equity | Cash dividend/ Profit declared for distribution | Provision for impairment | Others | ||||
| I. Joint ventures | |||||||||||
| II. Associates | |||||||||||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 208,873,174.90 | 19,977,116.53 | 5,043,725.52 | 233,894,016.95 | |||||||
| 山东滨安职业培训学校有限公司 (Shandong Bin’an Vocational Training School Co., Ltd.*) [Note] | 5,895,600.85 | -891,366.47 | 5,004,234.38 | ||||||||
| Zhejiang Saiya Chemical Materials Co., Ltd. | 103,898,217.82 | 6,450,635.49 | -233,046.23 | 110,581,899.54 | |||||||
| CysBio ApS | 32,660,632.18 | -133,491.85 | 1,714,730.94 | 34,241,871.27 | |||||||
| Subtotal | 351,327,625.75 | 25,402,893.70 | 1,714,730.94 | 5,043,725.52 | -233,046.23 | 383,722,022.14 | |||||
| Total | 351,327,625.75 | 25,402,893.70 | 1,714,730.94 | 5,043,725.52 | -233,046.23 | 383,722,022.14 | |||||
11. Other equity instrument investments
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Zhejiang Second Pharma Co., Ltd. | 7,790,147.55 | 7,790,147.55 |
| 上海联创永津股权投资企业(有限合伙) (Shanghai NewMargin Yongjin Eqiuty Enterprise (LP)*) | 15,208,000.00 | 15,208,000.00 |
| Total | 22,998,147.55 | 22,998,147.55 |
12. Fixed assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Fixed assets | 14,895,938,812.24 | 14,350,779,852.73 |
*
The English names are for identification purpose only.
| Items | Closing balance | Opening balance |
| Total | 14,895,938,812.24 | 14,350,779,852.73 |
(1) Details
Unit: RMB Yuan
| Items | Buildings and structures | Generali equipment | Special equipment | Transport facilities | Total |
| I. Cost: | |||||
| 1. Opening balance | 6,293,404,278.18 | 185,910,525.30 | 12,993,424,027.58 | 25,093,346.32 | 19,497,832,177.38 |
| 2. Increase | 307,226,885.34 | 12,513,262.41 | 875,030,168.38 | 756,287.53 | 1,195,526,603.66 |
| (1) Acquisition | 49,606,453.52 | 4,119,396.73 | 184,642,732.27 | 756,287.53 | 239,124,870.05 |
| (2) Transferred in from construction in progress | 257,620,431.82 | 8,393,865.68 | 690,387,436.11 | 956,401,733.61 | |
| 3. Decrease | 4,212,678.67 | 1,481,292.80 | 60,775,319.81 | 1,110,178.02 | 67,579,469.30 |
| (1) Disposal/ Scrapping | 4,212,678.67 | 1,481,292.80 | 60,775,319.81 | 1,110,178.02 | 67,579,469.30 |
| 4. Closing balance | 6,596,418,484.85 | 196,942,494.91 | 13,807,678,876.15 | 24,739,455.83 | 20,625,779,311.74 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 680,779,035.53 | 99,138,742.55 | 4,320,266,548.05 | 17,140,892.56 | 5,117,325,218.69 |
| 2. Increase | 88,291,408.66 | 11,645,400.65 | 522,774,833.97 | 992,225.43 | 623,703,868.71 |
| (1) Accrual | 88,291,408.66 | 11,645,400.65 | 522,774,833.97 | 992,225.43 | 623,703,868.71 |
| 3. Decrease | 1,240,249.78 | 1,361,247.27 | 36,993,866.52 | 1,054,669.12 | 40,650,032.69 |
| (1) Disposal/ Scrapping | 1,240,249.78 | 1,361,247.27 | 36,993,866.52 | 1,054,669.12 | 40,650,032.69 |
| 4. Closing balance | 767,830,194.41 | 109,422,895.93 | 4,806,047,515.50 | 17,078,448.87 | 5,700,379,054.71 |
| III. Provision for impairment | |||||
| 1. Opening balance | 20,980,481.81 | 23,560.67 | 8,706,768.47 | 16,295.01 | 29,727,105.96 |
| 2. Increase | |||||
| (1) Accrual | |||||
| 3. Decrease | 265,661.17 | 265,661.17 | |||
| (1) Disposal/ Scrapping | 265,661.17 | 265,661.17 | |||
| 4. Closing balance | 20,980,481.81 | 23,560.67 | 8,441,107.30 | 16,295.01 | 29,461,444.79 |
| IV. Carrying amount | |||||
| 1. Closing balance | 5,807,607,808.63 | 87,496,038.31 | 8,993,190,253.35 | 7,644,711.95 | 14,895,938,812.24 |
| 2. Opening balance | 5,591,644,760.84 | 86,748,222.08 | 8,664,450,711.06 | 7,936,158.75 | 14,350,779,852.73 |
(2) Fixed assets temporarily idle
Unit: RMB Yuan
| Items | Cost | Accumulated depreciation | Provision for impairment | Carrying amount | Remarks |
| Buildings and structures | 47,473,208.51 | 26,497,772.70 | 20,975,435.81 | ||
| General equipment | 3,155,144.40 | 2,503,860.84 | 19,086.19 | 632,197.37 | |
| Special equipment | 258,025,988.56 | 212,896,623.38 | 7,700,174.69 | 37,429,190.49 | |
| Subtotal | 308,654,341.47 | 241,898,256.92 | 28,694,696.69 | 38,061,387.86 |
(3) Fixed assets leased out under operating leases
Unit: RMB Yuan
| Items | Closing carrying amount |
| Buildings and structures | 37,476,964.43 |
| Subtotal | 37,476,964.43 |
(4) Fixed assets with certificate of titles being unsettled
Unit: RMB Yuan
| Items | Carrying amount | Reasons for unsettlement |
| Buildings and structures | 1,662,828,136.50 | Relevant procedures have not yet been completed. |
| Subtotal | 1,662,828,136.50 |
13. Construction in progress
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Construction in progress | 3,855,244,085.78 | 2,984,835,072.82 |
| Total | 3,855,244,085.78 | 2,984,835,072.82 |
(1) Details
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Shandong Industrial Park Project phase I | 26,161,197.41 | 26,161,197.41 | 30,856,442.13 | 30,856,442.13 | ||
| Hongweisu project | 367,528,650.61 | 367,528,650.61 | ||||
| Heilongjiang Xinhao Project phase II | 92,260,783.07 | 92,260,783.07 | 83,453,010.80 | 83,453,010.80 | ||
| Methionine project with annual output of 0.25 million tons | 583,534,561.06 | 583,534,561.06 | 90,355,454.04 | 90,355,454.04 | ||
| HA project of Shandong Industrial Park | 6,765,008.56 | 6,765,008.56 | ||||
| 616 Joint Production Project | 626,422,343.97 | 626,422,343.97 | 393,488,496.81 | 393,488,496.81 | ||
| Shandong Industrial Park 617A Project | 10,552,500.84 | 10,552,500.84 | 1,718,828.38 | 1,718,828.38 | ||
| Shandong Industrial Park 603 Project | 18,278,788.27 | 18,278,788.27 | 3,019,859.02 | 3,019,859.02 | ||
| Shangyu Industrial Park PPS Project | 548,939,962.75 | 548,939,962.75 | 341,096,363.93 | 341,096,363.93 | ||
| Shandong Industrial Park TMB Project | 1,187,152,322.30 | 1,187,152,322.30 | 1,173,527,758.16 | 1,173,527,758.16 | ||
| NBC and CLA projects of Zhejiang Pharmaceutical | 74,466,178.10 | 74,466,178.10 | ||||
| Daming Life and Health Industry Project | 1,831,723.64 | 1,831,723.64 | 228,847,778.44 | 228,847,778.44 | ||
| Expansion of hexoic | 101,202,967.66 | 101,202,967.66 | 36,844.14 | 36,844.14 | ||
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| acid production | ||||||
| F5 project | 54,789,025.29 | 54,789,025.29 | ||||
| NH acid project | 83,340,479.79 | 83,340,479.79 | 5,575,181.98 | 5,575,181.98 | ||
| Other piecemeal projects | 439,546,243.07 | 439,546,243.07 | 265,330,404.38 | 265,330,404.38 | ||
| Total | 3,855,244,085.78 | 3,855,244,085.78 | 2,984,835,072.82 | 2,984,835,072.82 | ||
(2) Changes in significant projects
Unit: RMB Yuan
| Projects | Budgets (RMB 0,000 Yuan) | Opening balance | Increase | Transferred to fixed assets | Other decrease | Closing balance | Accumulated input to budget | Completion percentage | Accumulated amount of borrowing cost capitalization | Including: Amount of borrowing cost capitalization in current period | Annual capitalization rate | Fund source |
| Shandong Industrial Park Project phase I | 311,600.00 | 30,856,442.13 | 34,536,537.10 | 39,231,781.82 | 26,161,197.41 | 85.82% | 100.00% | 87,993,003.25 | Others | |||
| Hongweisu project | 47,822.98 | 367,528,650.61 | 60,572,629.36 | 428,101,279.97 | 98.76% | 100.00% | 6,070,837.51 | 4,230,562.51 | 3.91% | Others | ||
| Expansion of hexoic acid production | 24,796.00 | 36,844.14 | 101,166,123.52 | 101,202,967.66 | 40.80% | 45.00% | Others | |||||
| Heilongjiang Xinhao Project phase II | 10,746.25 | 83,453,010.80 | 8,807,772.27 | 92,260,783.07 | 85.86% | 100.00% | Others | |||||
| Methionine project with annual output of 0.25 million tons | 536,984.22 | 90,355,454.04 | 493,179,107.02 | 583,534,561.06 | 48.04% | 55.00% | Raised funds | |||||
| HA project of Shandong Industrial Park | 97,991.14 | 0.00 | 6,765,008.56 | 6,765,008.56 | 0.69% | 0.00% | Others | |||||
| Shandong Industrial Park 617A Project | 8,500.00 | 1,718,828.38 | 8,833,672.46 | 10,552,500.84 | 96.83% | 98.00% | Others | |||||
| Shandong Industrial Park 603 Project | 8,983.60 | 3,019,859.02 | 15,258,929.25 | 18,278,788.27 | 20.35% | 25.00% | Others | |||||
| NH acid project | 73,899.28 | 5,575,181.98 | 77,765,297.81 | 83,340,479.79 | 10.52% | 20.00% | Others | |||||
| Shangyu Industrial Park PPS Project | 70,900.00 | 341,096,363.93 | 207,843,598.82 | 548,939,962.75 | 77.43% | 80.00% | Others | |||||
| Shandong Industrial Park TMB Project | 123,160.59 | 1,173,527,758.16 | 13,624,564.14 | 1,187,152,322.30 | 100.12% | 100.00% | 21,655,963.48 | 13,936,992.97 | 3.70% | Others | ||
| F5 project | 9,933.00 | 0.00 | 54,789,025.29 | 54,789,025.29 | 55.16% | 60.00% | Others | |||||
| Daming Life and Health | 45,772.07 | 228,847,778.44 | 134,259,991.75 | 361,276,046.55 | 1,831,723.64 | 93.08% | 100.00% | Others |
| Projects | Budgets (RMB 0,000 Yuan) | Opening balance | Increase | Transferred to fixed assets | Other decrease | Closing balance | Accumulated input to budget | Completion percentage | Accumulated amount of borrowing cost capitalization | Including: Amount of borrowing cost capitalization in current period | Annual capitalization rate | Fund source |
| Industry Project | ||||||||||||
| 616 Joint Production Project | 77,213.69 | 393,488,496.81 | 308,289,712.23 | 75,355,865.07 | 626,422,343.97 | 90.89% | 90.00% | Others | ||||
| Carbonic anhydride project | 15,505.00 | 74,466,178.10 | 74,466,178.10 | 48.03% | 75.00% | Others | ||||||
| Total | 1,463,807.82 | 2,719,504,668.44 | 1,600,158,147.68 | 903,964,973.41 | 3,415,697,842.71 | 115,719,804.24 | 18,167,555.48 | -- |
14. Right-of-use assets
Unit: RMB Yuan
| Items | Buildings and structures | Total |
| I. Cost | ||
| 1. Opening balance | 3,406,640.15 | 3,406,640.15 |
| 2. Increase | 589,739.18 | 589,739.18 |
| (1) Leased in | 589,739.18 | 589,739.18 |
| 3. Decrease | ||
| 4. Closing balance | 3,996,379.33 | 3,996,379.33 |
| II. Accumulated depreciation | ||
| 1. Opening balance | 283,003.04 | 283,003.04 |
| 2. Increase | 657,653.96 | 657,653.96 |
| (1) Accrual | 657,653.96 | 657,653.96 |
| 3. Decrease | ||
| 4. Closing balance | 940,657.00 | 940,657.00 |
| III. Carrying amount | ||
| 1. Closing balance | 3,055,722.33 | 3,055,722.33 |
| 2. Opening balance | 3,123,637.11 | 3,123,637.11 |
15. Intangible assets
(1) Details
Unit: RMB Yuan
| Items | Land use right | Patent right | Non-patented technology | Software | Total |
| I. Cost | |||||
| 1. Opening balance | 1,671,339,796.09 | 28,079,514.71 | 2,350,000.00 | 25,797,067.68 | 1,727,566,378.48 |
| 2. Increase | 104,041,811.43 | 3,551,460.54 | 900,000.00 | 5,015,670.48 | 113,508,942.45 |
| (1) Acquisition | 104,041,811.43 | 3,551,460.54 | 900,000.00 | 5,015,670.48 | 113,508,942.45 |
| 3. Closing balance | 1,775,381,607.52 | 31,630,975.25 | 3,250,000.00 | 30,812,738.16 | 1,841,075,320.93 |
| II. Accumulated amortization | |||||
| 1. Opening balance | 187,383,747.14 | 2,884,411.16 | 208,888.88 | 15,359,573.64 | 205,836,620.82 |
| 2. Increase | 16,941,850.31 | 1,167,744.44 | 83,333.34 | 932,841.15 | 19,125,769.24 |
| (1) Accrual | 16,941,850.31 | 1,167,744.44 | 83,333.34 | 932,841.15 | 19,125,769.24 |
| 3. Closing balance | 204,325,597.45 | 4,052,155.60 | 292,222.22 | 16,292,414.79 | 224,962,390.06 |
| Items | Land use right | Patent right | Non-patented technology | Software | Total |
| III. Carrying amount | |||||
| 1. Closing balance | 1,571,056,010.07 | 27,578,819.65 | 2,957,777.78 | 14,520,323.37 | 1,616,112,930.87 |
| 2. Opening balance | 1,483,956,048.95 | 25,195,103.55 | 2,141,111.12 | 10,437,494.04 | 1,521,729,757.66 |
At the balance sheet date, intangible assets formed through internal research and development account for 0.00% of total intangibleassets.
(2) Land use right with certificate of titles being unsettled
Unit: RMB Yuan
| Items | Carrying amount | Reasons for unsettlement |
| Land use right | 169,939,239.04 | Relevant procedures have not yet been completed. |
| Subtotal | 169,939,239.04 |
16. Goodwill
(1) Cost
Unit: RMB Yuan
| Investees or events resulting in goodwill | Opening balance | Increase | Decrease | Closing balance | ||
| Business combination | Translation reserve | Disposal | Translation reserve | |||
| Bardoterminal GmbH | 2,075,762.80 | 2,075,762.80 | ||||
| NHU/Chr.Olesen Latin America A/S | 4,410,005.33 | 4,410,005.33 | ||||
| Total | 2,075,762.80 | 4,410,005.33 | 6,485,768.13 | |||
(2) Provision for impairment
Unit: RMB Yuan
| Investees or events resulting in goodwill | Opening balance | Increase | Decrease | Closing balance | ||
| Accrual | Translation reserve | Disposal | Translation reserve | |||
| Bardoterminal GmbH | 2,075,762.80 | 2,075,762.80 | ||||
| Total | 2,075,762.80 | 2,075,762.80 | ||||
17. Long-term prepayments
Unit: RMB Yuan
| Items | Opening balance | Increase | Amortization | Other decrease | Closing balance |
| Decoration fees | 10,378,910.67 | 1,109,082.38 | 1,725,261.70 | 9,762,731.35 | |
| Site leveling fees | 32,443.20 | 8,110.80 | 24,332.40 | ||
| Catalysts | 8,180,353.19 | 1,583,294.16 | 6,597,059.03 | ||
| Total | 18,591,707.06 | 1,109,082.38 | 3,316,666.66 | 16,384,122.78 |
18. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred tax assets | Deductible temporary difference | Deferred tax assets | |
| Provision for impairment of assets | 65,981,355.91 | 10,841,412.64 | 65,402,828.30 | 11,004,917.24 |
| Unrealized profit from internal transactions | 148,892,550.32 | 21,957,449.07 | 116,662,766.83 | 17,499,415.02 |
| Deferred income | 185,344,079.25 | 31,457,737.97 | 143,266,156.26 | 21,489,923.45 |
| Difference in depreciation of fixed assets | 24,834,403.19 | 3,725,160.48 | 38,739,574.92 | 5,810,936.24 |
| Total | 425,052,388.67 | 67,981,760.16 | 364,071,326.31 | 55,805,191.95 |
(2) Deferred tax liabilities before offset
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
| Difference due to one-off pre-tax deduction of fixed assets | 715,420,690.73 | 131,400,770.44 | 513,284,381.91 | 89,042,045.24 |
| Profit before tax of NHU (Hong Kong) Trading Co., Ltd. | 465,759,650.73 | 69,863,947.61 | 311,395,060.48 | 46,709,259.07 |
| Changes in fair value of held-for-trading financial instruments, derivative financial instruments | 49,374.92 | 12,343.73 | ||
| Total | 1,181,229,716.38 | 201,277,061.78 | 824,679,442.39 | 135,751,304.31 |
(3) Deferred tax assets or liabilities after offset
Unit: RMB Yuan
| Items | Closing balance of deferred tax assets offset by deferred tax liabilities | Closing balance of deferred tax assets/ liabilities after offset | Opening balance of deferred tax assets offset by deferred tax liabilities | Opening balance of deferred tax assets/ liabilities after offset |
| Deferred tax assets | 67,981,760.16 | 55,805,191.95 | ||
| Deferred tax liabilities | 201,277,061.78 | 135,751,304.31 |
(4) Details of unrecognized deferred tax assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Deductible temporary difference | 1,089,827,798.34 | 381,427,135.81 |
| Deductible losses | 719,488,177.13 | 976,794,270.71 |
| Total | 1,809,315,975.47 | 1,358,221,406.52 |
(5) Maturity years of deductible losses of unrecognized deferred tax assets
Unit: RMB Yuan
| Maturity years | Closing balance | Opening balance | Remarks |
| Year 2026 | 3,312,384.19 | ||
| Year 2027 | 8,512,140.12 | 11,527,268.52 | |
| Year 2028 | 36,412,545.60 | 38,888,442.26 | |
| Year 2029 | 79,322,307.29 | 104,197,877.04 | |
| Year 2030 | 307,772,614.41 | 260,165,696.64 |
| Maturity years | Closing balance | Opening balance | Remarks |
| Year 2031 | 287,468,569.71 | 558,702,602.06 | |
| Total | 719,488,177.13 | 976,794,270.71 | -- |
19. Other non-current assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Pollution emission trading fees | 1,292,725.74 | 1,292,725.74 | 1,611,305.24 | 1,611,305.24 | ||
| Payments for coal quota | 64,696,000.00 | 64,696,000.00 | 65,896,000.00 | 65,896,000.00 | ||
| Prepayments for long-term assets | 760,550,646.72 | 760,550,646.72 | 433,569,279.16 | 433,569,279.16 | ||
| Total | 826,539,372.46 | 826,539,372.46 | 501,076,584.40 | 501,076,584.40 | ||
20. Short-term borrowings
(1) Details on categories
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Guaranteed borrowings | 40,657,504.12 | |
| Credit borrowings | 2,593,288,059.34 | 1,383,332,827.92 |
| Credit and guaranteed borrowings | 20,000,000.00 | |
| Total | 2,633,945,563.46 | 1,403,332,827.92 |
21. Notes payable
Unit: RMB Yuan
| Categories | Closing balance | Opening balance |
| Bank acceptance | 930,489,306.12 | 694,124,946.73 |
| Total | 930,489,306.12 | 694,124,946.73 |
22. Accounts payable
(1) Details
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Materials and labor costs | 1,040,778,914.56 | 658,235,707.69 |
| Payments for engineering and equipment | 727,678,434.43 | 777,730,720.07 |
| Total | 1,768,457,348.99 | 1,435,966,427.76 |
23. Contract liabilities
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Payments for goods received in advance | 82,505,836.42 | 61,135,258.36 |
| Total | 82,505,836.42 | 61,135,258.36 |
24. Employee benefits payable
(1) Details
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| I. Short-term employee benefits | 370,609,333.07 | 929,674,922.94 | 1,046,347,485.05 | 253,936,770.96 |
| II. Post-employment benefits – defined contribution plan | 51,883,162.78 | 51,883,162.78 | ||
| Total | 370,609,333.07 | 981,558,085.72 | 1,098,230,647.83 | 253,936,770.96 |
(2) Details of short-term employee benefits
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| 1. Wage, bonus, allowance and subsidy | 317,401,585.64 | 805,256,294.78 | 915,763,606.50 | 206,894,273.92 |
| 2. Employee welfare fund | 57,033,926.04 | 57,033,926.04 | ||
| 3. Social insurance premium | 25,723,093.08 | 25,723,093.08 | ||
| Including: Medicare premium | 22,567,820.32 | 22,567,820.32 | ||
| Occupational injuries premium | 2,247,661.85 | 2,247,661.85 | ||
| Maternity premium | 907,610.91 | 907,610.91 | ||
| 4. Housing provident fund | 38,297,393.30 | 38,297,393.30 | ||
| 5. Trade union fund and employee education fund | 53,207,747.43 | 3,364,215.74 | 9,529,466.13 | 47,042,497.04 |
| Total | 370,609,333.07 | 929,674,922.94 | 1,046,347,485.05 | 253,936,770.96 |
(3) Details of defined contribution plan
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| 1. Basic endowment insurance premium | 49,639,113.41 | 49,639,113.41 | ||
| 2. Unemployment insurance premium | 2,244,049.37 | 2,244,049.37 | ||
| Total | 51,883,162.78 | 51,883,162.78 |
25. Taxes and rates payable
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| VAT | 14,343,279.38 | 45,928,799.96 |
| Enterprise income tax | 229,423,440.36 | 324,899,257.88 |
| Individual income tax withheld for tax authorities | 2,641,901.19 | 3,749,309.86 |
| Urban maintenance and construction tax | 1,202,803.47 | 3,686,070.96 |
| Land appreciation tax | 15,304,886.02 | 15,244,826.82 |
| Housing property tax | 4,113,837.00 | 15,577,742.83 |
| Land use tax | 4,404,547.89 | 8,351,133.07 |
| Education surcharge (local education surcharge) | 1,066,402.26 | 3,273,420.39 |
| Stamp duty | 12,023.50 | 32,700.92 |
| Total | 272,513,121.07 | 420,743,262.69 |
26. Other payables
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Other payables | 133,386,496.99 | 56,712,103.36 |
| Total | 133,386,496.99 | 56,712,103.36 |
(1) Categorized by nature
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Security deposits | 25,601,693.33 | 32,961,596.12 |
| Freight premium payable | 20,823.30 | |
| Temporary receipts payable | 9,358,462.55 | 11,425,312.83 |
| Earnest money for housing purchase (Boao NHU Resort Center) | 100,000.00 | 100,000.00 |
| Call loans | 70,431,907.01 | |
| Others | 27,873,610.80 | 12,225,194.41 |
| Total | 133,386,496.99 | 56,712,103.36 |
27. Non-current liabilities due within one year
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Long-term borrowings due within one year | 3,197,922,526.64 | 2,029,254,131.97 |
| Lease liabilities due within one year | 192,218.65 | 245,377.46 |
| Total | 3,198,114,745.29 | 2,029,499,509.43 |
28. Other current liabilities
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Output VAT to be recognized | 6,558,814.10 | 5,133,310.10 |
| Total | 6,558,814.10 | 5,133,310.10 |
29. Long-term borrowings
(1) Categories
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Mortgaged borrowings | 33,196,688.28 | 37,669,008.56 |
| Guaranteed borrowings | 542,640,333.32 | 945,155,611.12 |
| Credit borrowings | 4,494,418,972.38 | 4,165,987,166.81 |
| Total | 5,070,255,993.98 | 5,148,811,786.49 |
30. Lease liabilities
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Unpaid lease payments | 4,169,914.91 | 4,331,618.17 |
| Items | Closing balance | Opening balance |
| Less: Unrealized financing expenses | 1,324,566.19 | 1,394,750.02 |
| Total | 2,845,348.72 | 2,936,868.15 |
31. Deferred income
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance | Reasons for balance |
| Government grants | 1,063,699,676.16 | 55,650,000.00 | 46,423,802.28 | 1,072,925,873.88 | The Company received government grants related to assets, which were amortized based on the depreciation progress of corresponding assets. |
| Total | 1,063,699,676.16 | 55,650,000.00 | 46,423,802.28 | 1,072,925,873.88 | -- |
Details of government grants
Unit: RMB Yuan
| Items | Opening balance | Increase | Grants included into non-operating revenue | Grants included into other income | Grants offsetting relevant cost | Other changes | Closing balance | Related to assets/income |
| Special funds for Biological Fermentation Industrial Park Project | 427,578,840.00 | 24,668,010.00 | 402,910,830.00 | Related to assets | ||||
| Special funds for enterprise development (Shandong Vitamins) | 74,962,651.55 | 4,836,300.10 | 70,126,351.45 | Related to assets | ||||
| Special funds for joint production project of Xinhao Thermal Power | 31,772,916.73 | 1,887,499.98 | 29,885,416.75 | Related to assets | ||||
| Technical renovation for green deep processing of 2019 | 34,260,000.00 | 34,260,000.00 | Related to assets | |||||
| Special funds for enterprise development (Amino Acid) | 45,804,945.12 | 572,802.18 | 45,232,142.94 | Related to assets | ||||
| Subsidies for land leveling of Shandong | 28,308,723.84 | 359,094.72 | 27,949,629.12 | Related to assets | ||||
| Enterprise development funds of Shandong | 18,847,224.88 | 218,907.06 | 18,628,317.82 | Related to assets | ||||
| PPS construction project with annual output of 10,000 tons | 11,412,499.88 | 913,000.02 | 10,499,499.86 | Related to assets | ||||
| Subsidies for PPS resin with annual output of 5,000 tons and PPS composite materials with annual output of 6,000 tons | 8,550,000.00 | 1,425,000.00 | 7,125,000.00 | Related to assets | ||||
| Enterprise development funds of Advanced Manufacturing Industrial Park | 8,491,786.07 | 99,125.88 | 8,392,660.19 | Related to assets | ||||
| Effective industrial input expansion of 2016 | 6,064,800.00 | 478,800.00 | 5,586,000.00 | Related to assets | ||||
| Funds for key thematic projects of industrial revitalization and technical renovation of 2012 | 3,924,642.86 | 713,571.43 | 3,211,071.43 | Related to assets |
| Items | Opening balance | Increase | Grants included into non-operating revenue | Grants included into other income | Grants offsetting relevant cost | Other changes | Closing balance | Related to assets/income |
| Fiscal subsidies for low-rent housing | 6,098,560.08 | 120,428.58 | 5,978,131.50 | Related to assets | ||||
| Subsidies from land transfer fees of Shandong dormitory | 4,873,021.09 | 125,115.78 | 4,747,905.31 | Related to assets | ||||
| Subsidies for inputs in biochemical infrastructure of Shangyu | 4,580,963.84 | 158,885.94 | 4,422,077.90 | Related to assets | ||||
| Construction project of public testing service platform | 3,000,000.04 | 500,000.00 | 2,500,000.04 | Related to assets | ||||
| Subsidies for infrastructure supporting fees | 7,478,250.00 | 398,812.50 | 7,079,437.50 | Related to assets | ||||
| Compensation for resource conservation and environmental protection projects of 2017 | 3,360,000.00 | 240,000.00 | 3,120,000.00 | Related to assets | ||||
| Subsidies for new materials, land and infrastructure construction | 2,432,160.00 | 405,360.00 | 2,026,800.00 | Related to assets | ||||
| Special fiscal funds for revitalization of the substantial economy (transformation of traditional industries) of 2017 | 2,140,071.30 | 269,614.29 | 1,870,457.01 | Related to assets | ||||
| Subsidies for RTO Project | 1,266,666.90 | 199,999.98 | 1,066,666.92 | Related to assets | ||||
| Special subsidies for development of marine economy of 2017 | 2,000,000.00 | 700,000.00 | 1,300,000.00 | Related to assets | ||||
| Special subsidies for high-quality development of manufacturing industry | 1,804,329.70 | 152,478.57 | 1,651,851.13 | Related to assets | ||||
| Enterprise development fund (Shandong Fine Chemical) | 52,224,561.00 | 52,224,561.00 | Related to assets | |||||
| Special funds for Taishan industry leading talents | 7,400,000.00 | 7,400,000.00 | Related to assets | |||||
| Food security control and emergency facilities project | 24,871,000.00 | 1,254,000.00 | 23,617,000.00 | Related to assets | ||||
| Policy incentives for industrial production projects of 2020 | 24,213,221.35 | 1,396,916.64 | 22,816,304.71 | Related to assets | ||||
| Special funds for Heilongjiang Biological Fermentation Industrial Park Project | 111,810,000.00 | 111,810,000.00 | Related to assets | |||||
| Incentives for enterprises settling in Industrial Collaborative Innovation Center by Hangzhou Bay Shangyu Economic and Technological Development Zone | 24,255,416.73 | 1,603,100.04 | 22,652,316.69 | Related to assets | ||||
| Subsidies for upgrading coal-fired boilers of 2017 | 222,857.12 | 18,571.43 | 204,285.69 | Related to assets | ||||
| Subsidies for low-nitrogen transformation of gas- | 465,535.75 | 35,357.13 | 430,178.62 | Related to assets |
| Items | Opening balance | Increase | Grants included into non-operating revenue | Grants included into other income | Grants offsetting relevant cost | Other changes | Closing balance | Related to assets/income |
| fired boilers of Xinchang County | ||||||||
| Subsidy for new PPS material construction project with an annual output of 15000 tons | 15,000,000.00 | 15,000,000.00 | Related to assets | |||||
| Digital (intelligent) demonstration workshop project award of 2021 | 2,000,000.00 | 78,431.36 | 1,921,568.64 | Related to assets | ||||
| Incentive policies and funds for energy-saving technological transformation projects of industrial enterprises of 2020 | 1,000,000.00 | 33,613.44 | 966,386.56 | Related to assets | ||||
| Enterprise Development Fund (amino acid) | 18,000,000.00 | 18,000,000.00 | Related to assets | |||||
| NHU general technology and product R & D and manufacturing service integration industrial chain project | 19,650,000.00 | 233,928.57 | 19,416,071.43 | Related to assets | ||||
| Special funds for technical renovation | 20,169,603.37 | 443,360.92 | 19,726,242.45 | Related to assets | ||||
| Incentives for investment promotion | 24,982,141.71 | 127,033.56 | 24,855,108.15 | Related to assets | ||||
| Special fiscal supporting funds for high-quality development (investment projects) of manufacturing industry of Xinchang County of 2021 | 4,875,100.00 | 58,036.90 | 4,817,063.10 | Related to assets | ||||
| Special funds for supporting advanced manufacturing industry and modern service industry | 19,650,000.00 | 233,928.57 | 19,416,071.43 | Related to assets | ||||
| Other piecemeal subsidies | 9,547,185.25 | 1,464,716.71 | 8,082,468.54 | Related to assets | ||||
| Total | 1,063,699,676.16 | 55,650,000.00 | 46,423,802.28 | 1,072,925,873.88 |
Note: Please refer to item VII 59 of this section for details on government grants included in profit or loss.
32. Share capital
Unit: RMB Yuan
| Items | Opening balance | Movements | Closing balance | ||||
| Issue of new shares | Bonus shares | Reserve transferred to shares | Others | Subtotal | |||
| Total shares | 2,578,394,760.00 | 512,512,596.00 | 512,512,596.00 | 3,090,907,356.00 | |||
Other remarks, including remarks on current movements and reasons for movements:
Pursuant to the 2021 profit distribution plan deliberated and approved by the general meeting of 2021, based on 2,562,562,984 shares(the total share capital of the company at that time, which was 2,578,394,760 shares, excluded 15,831,776 repurchased shares),theCompany increased shares at 2 shares per 10 shares by converting capital reserve to all shareholders. After the increase, the total sharecapital amounted to RMB 3,090,907,356. Such capital increase had been verified by Pan-China Certified Public Accountants LLP,and a Capital Verification Report numbered PCCPACVR [2022] 230 was issued thereon.
33. Capital reserve
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Share/capital premium | 3,847,505,213.92 | 0.00 | 512,512,596.00 | 3,334,992,617.92 |
| Other capital reserve | 273,557,867.04 | 5,043,725.52 | 0.00 | 278,601,592.56 |
| Total | 4,121,063,080.96 | 5,043,725.52 | 512,512,596.00 | 3,613,594,210.48 |
Other remarks, including remarks on current movements and reasons for movements:
Current decrease of capital premium (share premium) was due to conversion of capital reserve to share capital. Please refer to itemVII 32 of this section for details. Current increase of other capital reserve was due to changes in the Company’s proportionate sharein net assets of the associate Zhejiang Chunhui Environmental Protection Energy Co., Ltd. arising from capital increase made byinvestors.
34. Treasury shares
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Treasury shares | 320,360,784.48 | 179,698,926.77 | 500,059,711.25 | |
| Total | 320,360,784.48 | 179,698,926.77 | 500,059,711.25 |
Other remarks, including remarks on current movements and reasons for movements:
Current increase of treasury shares was due to the repurchase of public shares by the Company for the purpose of equity incentiveplan and employee stock ownership plan.
35 Other comprehensive income (OCI)
Unit: RMB Yuan
| Items | Opening balance | Current period cumulative | Closing balance | |||||
| Current period cumulative before income tax | Less: OCI previously recognized but transferred to profit or loss in current period | Less: OCI previously recognized but transferred to retained earnings in current period | Less: Income tax | Attributable to parent company | Attributable to non-controlling shareholders | |||
| Items not to be reclassified subsequently to profit or loss | -1,614,172.31 | 32,372,570.30 | 32,251,478.10 | 121,092.20 | 30,637,305.79 | |||
| Including: Other comprehensive income to be transferred to profit or loss under equity method | 506,954.43 | 506,954.43 | ||||||
| Translation reserves | -2,121,126.74 | 32,372,570.30 | 32,251,478.10 | 121,092.20 | 30,130,351.36 | |||
| Total | -1,614,172.31 | 32,372,570.30 | 32,251,478.10 | 121,092.20 | 30,637,305.79 | |||
36. Special reserve
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Work safety fund | 12,692,218.51 | 13,360,150.22 | 8,911,057.34 | 17,141,311.39 |
| Total | 12,692,218.51 | 13,360,150.22 | 8,911,057.34 | 17,141,311.39 |
37. Surplus reserve
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserve | 1,289,197,380.00 | 1,289,197,380.00 | ||
| Total | 1,289,197,380.00 | 1,289,197,380.00 |
38. Undistributed profit
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Opening balance before adjustment | 14,120,605,163.26 | |
| Total undistributed profits at the beginning of the adjustment period (increase +, decrease -) | 31,860,364.91 | |
| Opening balance after adjustment | 14,152,465,528.17 | 11,515,384,739.95 |
| Add: Net profit attributable to owners of the parent company | 2,213,877,419.25 | 4,324,150,263.31 |
| Less: Appropriation of statutory surplus reserve | 214,866,230.00 | |
| Dividend payable on ordinary shares | 1,793,794,088.80 | 1,504,063,610.00 |
| Closing balance | 14,572,548,858.62 | 14,120,605,163.26 |
Details of undistributed profits at the beginning of adjustment period:
Due to the retroactive adjustment of the accounting standards for business enterprises and relevant new regulations, the undistributedprofit at the beginning of the period was RMB 31,860,364.91.Other remarks:
Pursuant to the 2021 profit distribution plan deliberated and approved by the general meeting of 2021, based on 2,562,562,984 shares(the total share capital of the company at that time, which was 2,578,394,760 shares, excluded 15,831,776 repurchased shares), theCompany distributed cash dividend of 7.00 yuan (tax included) per 10 shares to all shareholders. Cash dividend distributed totaledRMB 1,793,794,088.80(tax included).
39. Operating revenue/Operating cost
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Main operations | 8,115,267,916.02 | 4,789,134,207.58 | 7,266,491,924.65 | 3,776,567,468.03 |
| Other operations | 99,771,361.01 | 155,988,595.81 | 73,632,385.46 | 46,180,234.17 |
| Total | 8,215,039,277.03 | 4,945,122,803.39 | 7,340,124,310.11 | 3,822,747,702.20 |
Details of revenue:
Unit: RMB Yuan
| Categories of contracts | Total |
| By operating region | |
| Including: Domestic | 4,064,052,343.93 |
| Overseas | 4,150,986,933.10 |
| Subtotal | 8,215,039,277.03 |
| By product | |
| Including: Nutrition | 5,768,862,111.12 |
| Flavor and fragrance | 1,522,994,415.83 |
| New materials | 552,514,423.91 |
| Others | 370,668,326.17 |
| Subtotal | 8,215,039,277.03 |
| By revenue recognition time | |
| Including: Goods (transferred at a point in time) | 8,215,039,277.03 |
| Subtotal | 8,215,039,277.03 |
| By sales channel | |
| Including: Direct sales | 6,536,368,733.62 |
| Agent sales | 1,678,670,543.41 |
| Subtotal | 8,215,039,277.03 |
Information related to performance obligations:
None.Information related to transaction price allocated to the remaining performance obligations:
As of June 30, 2022, revenue corresponding to performance obligations for which the Company has entered into contracts but not yetperformed or fulfilled amounted to RMB 3,176.65 mn, of which, RMB 3,176.65 mn is expected to be recognized as revenue in 2022.
40. Taxes and surcharges
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Urban maintenance and construction tax | 12,713,819.69 | 16,593,941.36 |
| Education surcharge (local education surcharge) | 10,775,889.86 | 15,258,637.11 |
| Housing property tax | 15,431,428.20 | 11,778,391.04 |
| Land use tax | 5,892,341.09 | 12,989,995.35 |
| Vehicle and vessel use tax | 23,132.71 | 24,675.80 |
| Stamp duty | 5,558,733.12 | 2,929,669.52 |
| Land appreciation tax | 361,871.13 | 640,367.32 |
| Environmental protection tax | 853,455.25 | 578,646.58 |
| Total | 51,610,671.05 | 60,794,324.08 |
41. Selling expenses
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Sales commission and customs declaration charges | 12,731,579.13 | 17,692,240.72 |
| Advertising and promotion expenses, | 4,600,887.46 | 3,567,586.35 |
| Items | Current period cumulative | Preceding period comparative |
| business entertainment expenses | ||
| Employee benefits | 27,765,835.78 | 23,212,723.68 |
| Office expenses, business traveling expenses | 7,801,633.19 | 5,649,153.96 |
| Insurance fees | 1,466,649.89 | |
| Others | 4,377,961.92 | 3,891,220.30 |
| Total | 57,277,897.48 | 55,479,574.90 |
42. Administrative expenses
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Employee benefits | 115,390,102.23 | 91,901,943.55 |
| Office expenses, business traveling expenses | 13,377,152.20 | 15,975,577.72 |
| Depreciation, amortization of intangible assets | 46,129,788.87 | 42,187,840.96 |
| Business entertainment expenses | 12,437,740.12 | 9,654,999.32 |
| Insurance premiums | 7,564,296.84 | 7,655,409.05 |
| Consulting fee | 9,456,199.96 | 7,393,223.96 |
| Others | 7,929,542.19 | 12,736,919.54 |
| Total | 212,284,822.41 | 187,505,914.10 |
43. R&D expenses
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Direct input | 146,667,952.04 | 126,033,421.52 |
| Employee benefits | 204,036,669.50 | 149,468,367.40 |
| Depreciation, amortization of intangible assets | 32,048,604.87 | 24,293,575.58 |
| Office expenses, business traveling expenses | 21,270,730.68 | 15,628,605.63 |
| Outsourcing expenses | 5,698,974.07 | 13,402,568.01 |
| Others | 30,634,321.48 | 22,706,226.41 |
| Total | 440,357,252.64 | 351,532,764.55 |
44. Financial expenses
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Interest expenses | 152,357,156.76 | 162,484,715.95 |
| Less: Interest income | 76,211,850.51 | 72,107,022.92 |
| Losses on foreign exchange (or less: gains) | -61,972,039.28 | 43,236,369.19 |
| Others | 8,057,786.99 | 10,916,076.87 |
| Total | 22,231,053.96 | 144,530,139.09 |
45. Other income
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Government grants related to assets [Note] | 46,423,802.28 | 40,228,500.25 |
| Government grants related to income [Note] | 39,098,377.26 | 33,328,436.43 |
| Refund of handling fees for withholding individual income tax | 1,104,047.36 | 1,139,113.99 |
| Total | 86,626,226.90 | 74,696,050.67 |
Note: Please refer to item VII 59 of this section for details on government grants included in other income.
46. Investment income
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Investment income from long-term equity investments under equity method | 25,402,893.70 | 15,735,226.24 |
| Investment income from disposal of financial instruments | -2,764,801.12 | -370,729.11 |
| Including: Financial assets classified as at fair value through profit or loss | 7,739,778.29 | 2,643,037.39 |
| Financial liabilities classified as at fair value through profit or loss | -10,504,579.41 | -3,013,766.50 |
| Investment income from bank financial products and structured deposits | 28,841,651.61 | 29,617,969.78 |
| Total | 51,479,744.19 | 44,982,466.91 |
47. Gains on changes in fair value
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Held-for-trading financial liabilities | -17,291,740.52 | -1,567,482.48 |
| Including: Gains on changes in fair value arising from financial liabilities classified as at fair value through profit or loss | -17,291,740.52 | -1,567,482.48 |
| Held-for-trading financial assets | 29,128,440.56 | 25,239,240.62 |
| Including: Gains on changes in fair value arising from financial assets classified as at fair value through profit or loss | 29,128,440.56 | 25,239,240.62 |
| Total | 11,836,700.04 | 23,671,758.14 |
48. Credit impairment loss
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Bad debts | -10,613,626.22 | -33,637,204.20 |
| Total | -10,613,626.22 | -33,637,204.20 |
49. Assets impairment loss
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Inventory write-down loss | -7,890,179.58 | -6,714,482.90 |
| Total | -7,890,179.58 | -6,714,482.90 |
50. Gains on asset disposal
Unit: RMB Yuan
| Sources | Current period cumulative | Preceding period comparative |
| Gains on disposal of non-current assets | 6,674,850.81 | 1,065,564.79 |
| Total | 6,674,850.81 | 1,065,564.79 |
51. Non-operating revenue
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Indemnity income | 949,584.99 | 9,044,364.95 | 949,584.99 |
| Others | 1,074,489.85 | 1,302,076.50 | 1,074,489.85 |
| Total | 2,024,074.84 | 10,346,441.45 | 2,024,074.84 |
52. Non-operating expenditures
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Donation expenditures | 1,416,764.60 | 877,525.00 | 1,416,764.60 |
| Others | 913,552.36 | 1,041,504.53 | 913,552.36 |
| Total | 2,330,316.96 | 1,919,029.53 | 2,330,316.96 |
53. Income tax expenses
(1) Details
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Current period income tax expenses | 346,750,734.36 | 374,095,395.38 |
| Deferred income tax expenses | 53,349,189.26 | 20,614,465.84 |
| Total | 400,099,923.62 | 394,709,861.22 |
(2) Reconciliation of accounting profit to income tax expenses
Unit: RMB Yuan
| Items | Current period cumulative |
| Profit before tax | 2,623,962,250.12 |
| Income tax expenses based on statutory/applicable tax rate | 393,594,337.52 |
| Effect of different tax rate applicable to subsidiaries | -17,190,336.70 |
| Effect of prior income tax reconciliation | 6,657,405.02 |
| Effect of non-taxable income | 5,589,023.26 |
| Effect of non-deductible costs, expenses and losses | 1,376,942.78 |
| Effect of utilization of deductible losses not previously recognized as deferred tax assets | -16,496,598.96 |
| Effect of deducible temporary differences or deductible losses not recognized as deferred tax assets in the current period | 95,527,041.59 |
| Effect of extra deduction of R&D expenses | -68,957,890.89 |
| Income tax expenses | 400,099,923.62 |
54. Other comprehensive income
Please refer to item VII 35 of this section for details.
55. Notes to items of the cash flow statement
(1) Other cash receipts related to operating activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Interest income from cash in bank | 75,485,329.15 | 72,170,716.37 |
| Receipt of government grants | 95,852,424.62 | 82,860,435.49 |
| Recovery of temporary borrowings and security deposits | 5,016,089.54 | 4,650.00 |
| Other receipts and net current accounts | 5,326,081.20 | 11,267,812.52 |
| Total | 181,679,924.51 | 166,303,614.38 |
(2) Other cash payments related to operating activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| R&D expenditures in the form of cash | 2,053,649.86 | 9,072,525.23 |
| Office expenses and business traveling expenses | 13,788,936.02 | 11,497,951.02 |
| Advertising and promotion expenses, business entertainment expenses | 8,869,953.87 | 10,942,559.78 |
| Sales commission and customs declaration charges | 13,003,888.95 | 8,641,852.83 |
| Insurance expenses | 2,327,776.16 | 5,366,502.83 |
| Other payments and net current accounts | 106,597,455.76 | 146,673,321.02 |
| Total | 146,641,660.62 | 192,194,712.71 |
(3) Other cash receipts related to investing activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Redemption of financial products | 1,800,000,000.00 | 1,800,000,000.00 |
| Recovery of borrowings | 13,423,350.06 | |
| Other receipts and net current accounts | 14,294,950.48 | |
| Total | 1,827,718,300.54 | 1,800,000,000.00 |
(4) Other cash payments related to investing activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Payments for borrowings | 36,775,804.59 | |
| Payments for purchase of financial products and structured deposits | 920,000,000.00 | 1,520,000,000.00 |
| Repurchase of treasury shares | 179,698,926.77 | |
| Total | 1,136,474,731.36 | 1,520,000,000.00 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
(5) Other cash payments related to financing activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Payments for bank financing handling charges | 3,305,539.56 | 2,069,877.48 |
| Payments of handling charges for issuing letters of guarantee for borrowings | 576,792.00 | 1,293,530.21 |
| Total | 3,882,331.56 | 3,363,407.69 |
56. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Unit: RMB Yuan
| Supplement information | Current period cumulative | Preceding period comparative |
| 1. Reconciliation of net profit to cash flows from operating activities: | -- | -- |
| Net profit | 2,223,862,326.50 | 2,435,315,595.30 |
| Add: Provision for assets impairment loss | 18,503,805.80 | 40,351,687.10 |
| Depreciation of fixed assets, oil and gas assets, productive biological assets | 623,703,868.71 | 578,809,640.58 |
| Depreciation of right-of-use assets | 657,653.96 | 448,385.93 |
| Amortization of intangible assets | 19,125,769.24 | 16,731,412.82 |
| Amortization of long-term prepayments | 3,316,666.66 | 1,942,593.41 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (Less: gains) | -6,674,850.81 | -1,065,564.79 |
| Fixed assets retirement loss (Less: gains) | 17,993.76 | |
| Losses on changes in fair value (Less: gains) | -11,836,700.04 | -23,671,758.14 |
| Financial expenses (Less: gains) | 163,843,989.92 | 209,472,718.30 |
| Investment losses (Less: gains) | -51,479,744.19 | -44,982,466.91 |
| Decrease of deferred tax assets (Less: increase) | -12,176,568.21 | -4,073,229.10 |
| Increase of deferred tax liabilities (Less: decrease) | 65,525,757.47 | 24,687,694.94 |
| Decrease of inventories (Less: increase) | -1,358,969,145.31 | -401,877,126.78 |
| Decrease of operating receivables (Less: increase) | 125,300,272.14 | -234,285,135.31 |
| Increase of operating payables (Less: decrease) | -560,246,363.64 | -308,184,944.42 |
| Others | ||
| Net cash flows from operating activities | 1,242,456,738.20 | 2,289,637,496.69 |
| 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 | 6,451,708,569.16 | 6,182,163,497.57 |
| Less: Cash at the beginning of the period | 5,714,537,538.23 | 4,669,306,776.09 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Supplement information | Current period cumulative | Preceding period comparative |
| 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 | 737,171,030.93 | 1,512,856,721.48 |
(2) Net cash paid for acquisition of subsidiaries in the current period
Unit: RMB Yuan
| Items | Amount |
| Cash or cash equivalents paid in the current period for business combination occurred in the current period | 5,406,540.13 |
| Including：NHU/Chr.Olesen Latin America A/S[Note] | 5,406,540.13 |
| Add: cash or cash equivalents paid in the current period for business combinations occurred in previous periods | 78,845.01 |
| Including：NHU/Chr.Olesen Latin America A/S | 78,845.01 |
| Net cash paid for acquisition of subsidiaries | 5,485,385.14 |
[Note] NHU/CHR.OLESEN LATIN AMERICA A/S holds two subsidiaries, respectively NHU/CHR.OLESEN BRASIL LTDA.，holding 100%, and CHR.OLESEN MEXICO SAPI DE CV, holding 88%.
(3) Composition of cash and cash equivalents
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| I. Cash | 6,451,708,569.16 | 5,714,537,538.23 |
| Including: Cash on hand | 9,862.96 | 14,537.85 |
| Cash in bank on demand for payment | 6,451,698,706.20 | 5,684,842,466.04 |
| Other cash and bank balances on demand for payment | 29,680,534.34 | |
| II. Cash and cash equivalents at the end of the period | 6,451,708,569.16 | 5,714,537,538.23 |
Other Remarks:
Closing balance of cash and bank balances amounted to 6,590,012,908.26 yuan, including deposit for bank acceptance of108,852,086.25 yuan, deposit for letters of credit of 27,364,565.06 yuan, deposit for engineering labor costs of 1,711,851.11 yuan,deposit for ETC of 16,500.00 yuan, deposit for water fees of 359,336.68 yuan, which was not cash and cash equivalents.Openning balance of cash and bank balances amounted to 5,952,909,626.94 yuan, including deposit for bank acceptance of149,724,511.46 yuan, deposit for letters of credit of 86,212,564.30 yuan, deposit for engineering labor costs of 1,654,664.15 yuan,deposit for ETC of 16,500.00 yuan, deposit for water fees of 358,792.30 yuan and deposit for construction safety of 405,056.50 yuan,which was not cash and cash equivalents.
57. Assets with title or use right restrictions
Unit: RMB Yuan
| Items | Closing carrying amount | Reasons for restrictions |
| Cash and bank balances | 138,304,339.10 | Please refer to supplement information to the cash flow statement of this section for details. |
| Notes receivable | 209,801,476.61 | It is pledged due to the issuance of bank acceptance, cannot be withdrawn freely, |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Items | Closing carrying amount | Reasons for restrictions |
| and its use is limited. | ||
| Fixed assets | 76,487,526.23 | Mortgaged for bank borrowings. |
| Intangible assets | 9,186,528.93 | Mortgaged for bank borrowings. |
| Receivables financing | 130,363,316.90 | It is pledged due to the issuance of bank acceptance, cannot be withdrawn freely, and its use is limited |
| Total | 564,143,187.77 | -- |
58. Monetary items in foreign currencies
(1) Details
Unit: RMB Yuan
| Items | Closing balance in foreign currencies | Exchange rate | RMB equivalent at the end of the period |
| Cash and bank balances | 629,151,551.17 | ||
| Including: USD | 62,634,339.30 | 6.7114 | 420,364,104.78 |
| EUR | 28,119,483.63 | 7.0084 | 197,072,589.07 |
| HKD | 1,172,063.56 | 0.8552 | 1,002,348.76 |
| JPY | 154,440,443.00 | 0.0491 | 7,583,025.75 |
| SGD | 7,785.00 | 4.8170 | 37,500.35 |
| BRL | 1,824,070.88 | 1.2813 | 2,337,182.02 |
| MXN | 618,370.72 | 0.3332 | 206,041.12 |
| DKK | 582,423.39 | 0.9422 | 548,759.32 |
| Accounts receivable | 2,199,825,187.75 | ||
| Including: USD | 285,423,531.03 | 6.7114 | 1,915,591,486.15 |
| EUR | 25,991,439.78 | 7.0084 | 182,158,406.55 |
| JPY | 32,800,000.00 | 0.0491 | 1,610,480.00 |
| GBP | 56,400.00 | 8.1365 | 458,898.60 |
| BRL | 54,610,749.91 | 1.2813 | 69,972,753.86 |
| MXN | 90,135,542.00 | 0.3332 | 30,033,162.59 |
| Other receivables | 51,386,506.35 | ||
| Including: USD | 3,779,919.03 | 6.7114 | 25,368,548.58 |
| EUR | 568,031.29 | 7.0084 | 3,980,990.49 |
| HKD | 31,700.00 | 0.8552 | 27,109.84 |
| BRL | 2,189,291.12 | 1.2813 | 2,805,138.71 |
| MXN | 57,637,211.08 | 0.3332 | 19,204,718.73 |
| Short-term borrowings | 493,033,647.49 | ||
| Including: USD | 5,935,604.38 | 6.7114 | 39,836,215.24 |
| EUR | 64,664,892.45 | 7.0084 | 453,197,432.25 |
| Accounts payable | 132,658,691.80 | ||
| Including: USD | 896,983.77 | 6.7114 | 6,020,016.87 |
| EUR | 9,785,772.00 | 7.0084 | 68,582,604.48 |
| BRL | 45,310,286.78 | 1.2813 | 58,056,070.45 |
| Other payables | 71,112,333.11 | ||
| Including: USD | 10,144,183.64 | 6.7114 | 68,081,674.08 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Items | Closing balance in foreign currencies | Exchange rate | RMB equivalent at the end of the period |
| EUR | 39,019.37 | 7.0084 | 273,463.35 |
| HKD | 23,457.00 | 0.8552 | 20,060.43 |
| MXN | 8,214,691.64 | 0.3332 | 2,737,135.25 |
| Non-current liabilities due within one year | 6,832,476.87 | ||
| Including: EUR | 961,662.00 | 7.0084 | 6,739,711.96 |
| HKD | 108,471.60 | 0.8552 | 92,764.91 |
| Long-term borrowings | 33,196,688.28 | ||
| Including: EUR | 4,736,700.00 | 7.0084 | 33,196,688.28 |
(2) Remarks on overseas operations. For significant overseas operating entities, their main operating places, functionalcurrencies and adoption basis shall be disclosed. Reasons for any changes in functional currency shall also be disclosed.
√ Applicable □ Not applicable
NHU EUROPE GmbH is a holding subsidiary of the subsidiary NHU (Hong Kong) Trading Co., Ltd. with the holding proportion of51%; NHU Performance Materials GmbH is a wholly-owned subsidiary of the subsidiary NHU (Hong Kong) Trading Co., Ltd.;Bardoterminal GmbH is a wholly-owned subsidiary of NHU EUROPE GmbH. The above three entities are all located in Luneburg,Germany, with EUR as functional currency. NHU/CHR. Olesen Latin America a / S is a holding subsidiary of the company's subsidiaryNHU (Hong Kong) Trading Co., Ltd., with a shareholding ratio of 51%, located in gentovt, Denmark, and the functional currency iseuro; NHU/CHR. Olesen Brasil LTDA. Is nhu / Chr Olesen Latin America a / s, a wholly-owned subsidiary, is located in Sao Paulo,Brazil, and its functional currency is Brazilian real; CHR. Olesen Mexico SAPI de CV is nhu / Chr Olesen Latin America a / S is aholding subsidiary of Olesen Latin America a /s, with a shareholding ratio of 88%. It is located in cretaro, Mexico, and its functionalcurrency is Mexican peso.NHU Singapore PTE. LTD. is a wholly-owned subsidiary of the Company. It is located in Singapore, withSGD as functional currency.
59. Government grants
(1) Government grants related to assets
Unit: RMB Yuan
| Items | Opening balance of deferred income | Increase | Amortization | Closing balance of deferred income | Amortization presented under | Remarks |
| Special funds for Biological Fermentation Industrial Park Project | 427,578,840.00 | 24,668,010.00 | 402,910,830.00 | Other income | Pursuant to the document numbered Sui Jing Kai Guan [2018] 55 | |
| Special funds for enterprise development (Shandong Vitamins) | 74,962,651.55 | 4,836,300.10 | 70,126,351.45 | Other income | ||
| Special funds for joint production project of Xinhao Thermal Power | 31,772,916.73 | 1,887,499.98 | 29,885,416.75 | Other income | Pursuant to the document numbered Sui Jing Kai Guan Wei Han [2018] 123 | |
| Technical renovation for green deep processing of 2019 | 34,260,000.00 | - | 34,260,000.00 | Other income | Pursuant to the document numbered Zhe Fa Gai Mi [2019] 127 | |
| Special funds for enterprise development (Amino Acid) | 45,804,945.12 | 572,802.18 | 45,232,142.94 | Other income | Pursuant to the documents numbered Wei Bin Cai Zhi Zi [2018] 40 and Wei Bin Cai Jin Yu [2021] 44 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Items | Opening balance of deferred income | Increase | Amortization | Closing balance of deferred income | Amortization presented under | Remarks |
| Subsidies for land leveling of Shandong | 28,308,723.84 | 359,094.72 | 27,949,629.12 | Other income | ||
| Enterprise development funds of Shandong | 18,847,224.88 | 218,907.06 | 18,628,317.82 | Other income | Pursuant to the documents numbered Wei Bin Cai Zhi Zi [2014] 513, Wei Bin Cai Zhi Zi [2016] 194 and Wei Bin Cai Zhi Zi [2017] 307 | |
| PPS construction project with annual output of 10,000 tons | 11,412,499.88 | 913,000.02 | 10,499,499.86 | Other income | ||
| Subsidies for PPS resin with annual output of 5,000 tons and PPS composite materials with annual output of 6,000 tons | 8,550,000.00 | 1,425,000.00 | 7,125,000.00 | Other income | ||
| Enterprise development funds of Advanced Manufacturing Industrial Park | 8,491,786.07 | 99,125.88 | 8,392,660.19 | Other income | ||
| Effective industrial input expansion of 2016 | 6,064,800.00 | 478,800.00 | 5,586,000.00 | Other income | ||
| Funds for key thematic projects of industrial revitalization and technical renovation of 2012 | 3,924,642.86 | 713,571.43 | 3,211,071.43 | Other income | Special funds for new cephalosporin antibiotics project with annual output of 10 tons according to the document numbered Zhe Cai Qi [2012] 276 issued by Department of Finance of Zhejiang Province and Economy and Informatization Commission of Zhejiang Province | |
| Fiscal subsidies for low-rent housing | 6,098,560.08 | 120,428.58 | 5,978,131.50 | Other income | ||
| Subsidies from land transfer fees of Shandong dormitory | 4,873,021.09 | 125,115.78 | 4,747,905.31 | Other income |
Subsidies for inputs inbiochemical infrastructureof Shangyu
| Subsidies for inputs in biochemical infrastructure of Shangyu | 4,580,963.84 | 158,885.94 | 4,422,077.90 | Other income | ||
| Construction project of public testing service platform | 3,000,000.04 | 500,000.00 | 2,500,000.04 | Other income | ||
| Subsidies for infrastructure supporting fees | 7,478,250.00 | 398,812.50 | 7,079,437.50 | Other income | ||
| Compensation for resource conservation and environmental protection projects of 2017 | 3,360,000.00 | 240,000.00 | 3,120,000.00 | Other income | ||
| Subsidies for new materials, land and infrastructure construction | 2,432,160.00 | 405,360.00 | 2,026,800.00 | Other income |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Items | Opening balance of deferred income | Increase | Amortization | Closing balance of deferred income | Amortization presented under | Remarks |
| Special fiscal funds for revitalization of the substantial economy (transformation of traditional industries) of 2017 | 2,140,071.30 | 269,614.29 | 1,870,457.01 | Other income | Pursuant to the document numbered Xin Cai Qi [2019] 151 | |
| Subsidies for RTO Project | 1,266,666.90 | 199,999.98 | 1,066,666.92 | Other income | Pursuant to the document numbered Wei Cai Qi Zhi [2014] 207 | |
| Special subsidies for development of marine economy of 2017 | 2,000,000.00 | 700,000.00 | 1,300,000.00 | Pursuant to the document numbered Shang Yu Cai Jian [2018] 12 | ||
| Special subsidies for high-quality development of manufacturing industry | 1,804,329.70 | 152,478.57 | 1,651,851.13 | Other income | Pursuant to the document numbered Xin Jing Xin [2020] 79 | |
| Enterprise development fund (Shandong Fine Chemical) | 52,224,561.00 | - | 52,224,561.00 | Pursuant to the document numbered Wei Bin Cai Zhi Zi [2020] 34 | ||
| Special funds for Taishan industry leading talents project | 7,400,000.00 | - | 7,400,000.00 | Pursuant to the documents numbered Lu Zheng Ban Zi [2021] 13, Lu Zu Zi [2021] 24, Wei Bin Cai Xing Zhi Zi [2021] 1, and Wei Cai Xing Zhi [2021] 16 | ||
| Food security control and emergency facilities project – investment plan within budget of the central government of 2020 | 24,871,000.00 | 1,254,000.00 | 23,617,000.00 | Other income | Pursuant to the document numbered Hei Fa Gai Tou Zi [2020] 542 | |
| Policy incentives for industrial production projects of 2020 | 24,213,221.35 | 1,396,916.64 | 22,816,304.71 | Other income | Pursuant to the document numbered Hei Cai Zhi (Chan Ye) [2020] 558 | |
| Special funds for Heilongjiang Biological Fermentation Industrial Park Project | 111,810,000.00 | - | 111,810,000.00 | |||
| Incentives for enterprises settling in Industrial Collaborative Innovation Center by Hangzhou Bay Shangyu Economic and Technological Development Zone | 24,255,416.73 | 1,603,100.04 | 22,652,316.69 | Other income | ||
| Subsidies for upgrading coal-fired boilers of 2017 | 222,857.12 | 18,571.43 | 204,285.69 | Other income | Pursuant to the document numbered Xin Cai Jian [2018] 204 | |
| Subsidies for low-nitrogen transformation of gas-fired boilers of Xinchang County | 465,535.75 | 35,357.13 | 430,178.62 | Other income | Pursuant to the document numbered Xin Huan Yu [2018] 25 | |
| Subsidy for new PPS material construction | 15,000,000.00 | - | 15,000,000.00 | Other income |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Items | Opening balance of deferred income | Increase | Amortization | Closing balance of deferred income | Amortization presented under | Remarks |
| project with an annual output of 15000 tons | ||||||
| Digital (intelligent) demonstration workshop project award of 2021 | 2,000,000.00 | 78,431.36 | 1,921,568.64 | Other income | Hgxgjf [2021] No. 196 | |
| Incentive policies and funds for energy-saving technological transformation projects of industrial enterprises of 2020 | 1,000,000.00 | 33,613.44 | 966,386.56 | Other income | Hgxgjf [2021] No. 133 | |
| Enterprise Development Fund (amino acid) | 18,000,000.00 | - | 18,000,000.00 | Other income | ||
| NHU general technology and product R & D and manufacturing service integration industrial chain project | 19,650,000.00 | 233,928.57 | 19,416,071.43 | Other income | Fgtz [2021] No. 1117 |
Special funds for technicalrenovation
| Special funds for technical renovation | 20,169,603.37 | 443,360.92 | 19,726,242.45 | Other income | ||
| Incentives for investment promotion | 24,982,141.71 | 127,033.56 | 24,855,108.15 | Other income | Pursuant to the document numbered Wei Bin Cai Gong Zhi Zi [2021] 14 | |
| Special fiscal supporting funds for high-quality development (investment projects) of manufacturing industry of Xinchang County of 2021 | 4,875,100.00 | 58,036.90 | 4,817,063.10 | Other income | Pursuant to the document numbered Xin Jing Xin [2021] 50 | |
| Special investment plan within budget of the central government for supporting advanced manufacturing industry and modern service of 2021 | 19,650,000.00 | 233,928.57 | 19,416,071.43 | Other income | Pursuant to the document numbered Fa Gai Tou Zi [2021] 1117 | |
| Other piecemeal subsidies - investment plan within budget of the central government of 2020 | 9,547,185.25 | 1,464,716.71 | 8,082,468.54 | Other income | ||
| Subtotal | 1,063,699,676.16 | 55,650,000.00 | 46,423,802.28 | 1,072,925,873.88 |
(2) Government grants related to income and used to compensate incurred relevant costs, expenses or losses
Unit: RMB Yuan
| Items | Amount | Presented under | Remarks |
| Special subsidies | 1,390,000.00 | Other income | Related to income |
| Government subsidies | 13,608,737.71 | Other income | Related to income |
Other subsidies
| Other subsidies | 24,099,639.55 | Other income | Related to income |
| Subtotal | 39,098,377.26 |
(3) In the current period, government grants included into profit or loss totaled RMB 85,522,179.54.
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
VIII. Changes in the consolidation scope
1. Business combination not under common control.
(1) Business combination not under the same control in the current period
Unit: RMB Yuan
| Companies | Equity acquisition date | Capital contribution | Capital contribution proportion (%) | Equity acquisition method | Purchase date | Basis for determining the purchase date | Income of the acquiree from the purchase date to the end of the period | Net profit of the acquiree from the purchase date to the end of the period |
| NHU/Chr.Olesen Latin America A/S[Note] | January 6, 2022 | 5,406,540.13 | 51.00% | Acquisition | January 6, 2022 | Complete industrial and commercial registration | 342,567,458.04 | 2,433,913.93 |
[Note] NHU/CHR.OLESEN LATIN AMERICA A/S holds two subsidiaries, respectively NHU/CHR.OLESEN BRASIL LTDA.，holding 100%, and CHR.OLESEN MEXICO SAPI DE CV, holding 88%.
(2) Combination cost and goodwill
Unit: RMB Yuan
| Combination cost | NHU/Chr.Olesen Latin America A/S |
| Cash | 5,406,540.13 |
| Total: | 5,406,540.13 |
| Less：Fair value share of identifiable net assets obtained | 996,534.80 |
| Amount of goodwill / combination cost less than the fair value of identifiable net assets obtained | 4,410,005.33 |
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: RMB Yuan
| Items | NHU/Chr.Olesen Latin America A/S | |
| Fair value on the purchase date | Book value on the purchase date | |
| Assets: | 142,599,323.01 | 142,599,323 .01 |
| Cash and bank balances | 20,215,114.52 | 20,215,114.52 |
| Accounts receivable | 51,260,895.20 | 51,260,895.20 |
| Inventories | 59,256,090.18 | 59,256,090.18 |
| Advances paid | 89,247.04 | 89,247.04 |
| Other receivables | 11,777,976.07 | 11,777,976.07 |
| Debt： | 140,645,333.21 | 140,645,333.21 |
| Borrowings | 9,272,894.89 | 9,272,894.89 |
| Accounts payable | 123,832,330.35 | 123,832,330.35 |
| Taxes and rates payable | 7,401,257.04 | 7,401,257.04 |
| Other payables | 138,850.93 | 138,850.93 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Items | NHU/Chr.Olesen Latin America A/S | |
| Fair value on the purchase date | Book value on the purchase date | |
| Equity: | 1,953,989.80 | 1,953,989.80 |
| Less:Non-controlling interest | ||
| Net assets acquired | 1,953,989.80 | 1,953,989.80 |
IX. Interest in other entities
1. Interest in subsidiaries
(1) Composition of the group
| Subsidiaries | Main operating place | Place of registration | Business nature | Holding proportion (%) | Acquisition method | |
| Direct | Indirect | |||||
| Shangyu NHU Bio-Chem Co., Ltd. | Shangyu, Zhejiang | Shangyu, Zhejiang | Manufacturing | 100.00% | Establishment | |
| Shandong NHU Pharmaceutical Co., Ltd. | Weifang, Shandong | Weifang, Shandong | Manufacturing | 100.00% | Establishment | |
| NHU (Hong Kong) Trading Co., Ltd. | Hong Kong, China | Hong Kong, China | Commerce | 100.00% | Establishment | |
| Zhejiang NHU Special Materials Co., Ltd. | Shangyu, Zhejiang | Shangyu, Zhejiang | Manufacturing | 100.00% | Establishment | |
| Shandong NHU Amino-acids Co., Ltd. | Weifang, Shandong | Weifang, Shandong | Manufacturing | 100.00% | Establishment | |
| NHU EUROPE GmbH | Luneburg, Germany | Luneburg, Germany | Trade | 51% [Note 1] | Establishment | |
| NHU/CHR.OLESEN LATIN AMERICA A/S | Gentovt, Denmark | Gentovt, Denmark | Trade | 51% [Note 1] | ||
| 山东新和成控股有限公司 (Shandong NHU Holdings Co., Ltd.*) | Weifang, Shandong | Weifang, Shandong | Service | 100.00% | Establishment | |
| Shandong NHU Vitamins Co., Ltd. | Weifang, Shandong | Weifang, Shandong | Manufacturing | 100.00% [Note 2] | Establishment | |
| Heilongjiang NHU Biotechnology Co., Ltd. | Suihua, Heilongjiang | Suihua, Heilongjiang | Manufacturing | 100.00% | Establishment | |
| NHU Singapore PTE. LTD. | Singapore | Singapore | Trade | 100.00% | Establishment | |
Remarks on inconsistency between holding proportion and voting rights proportion in subsidiaries:
[Note 1] The Company holds shares through NHU (Hong Kong) Trading Co., Ltd.[Note 2] The Company holds shares through Shandong NHU Holdings Co., Ltd.
(2) Significant not wholly-owned subsidiaries
Unit: RMB Yuan
| Subsidiaries | Holding proportion of non-controlling shareholders | Non-controlling shareholders’ profit or loss | Dividend declared to non-controlling shareholders | Closing balance of non-controlling interest |
| NHU EUROPE GmbH | 49.00% | 8,737,310.78 | 70,504,576.24 | |
| NHU/CHR.OLESEN LATIN AMERICA A/S[Note] | 49.00% | 1,247,596.47 | 3,332,274.62 | |
| Total | 9,984,907.25 | 73,836,850.86 |
[Note] NHU/CHR.OLESEN LATIN AMERICA A/S holds two subsidiaries, respectively NHU/CHR.OLESEN BRASIL LTDA.，holding 100%, and CHR.OLESEN MEXICO SAPI DE CV, holding 88%.
*
The English name is for identification purpose only.
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
(3) Main financial information of significant not wholly-owned subsidiaries
Unit: RMB Yuan
| Subsidiaries | Closing balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| NHU EUROPE GmbH | 847,997,714.20 | 92,274,363.04 | 940,272,077.24 | 763,188,498.68 | 33,196,688.28 | 796,385,186.96 |
| NHU/CHR.OLESEN LATIN AMERICA A/S | 425,076,866.06 | 293,387.18 | 425,370,253.24 | 419,019,146.21 | 89,057.77 | 419,108,203.98 |
| Total | 1,273,074,580.26 | 92,567,750.22 | 1,365,642,330.48 | 1,182,207,644.89 | 33,285,746.05 | 1,215,493,390.94 |
(Continued)
| Subsidiaries | Opening balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| NHU EUROPE GmbH | 860,365,259.01 | 95,891,993.02 | 956,257,252.03 | 788,525,281.39 | 37,669,008.56 | 826,194,289.95 |
| NHU/CHR.OLESEN LATIN AMERICA A/S | ||||||
| Total | 860,365,259.01 | 95,891,993.02 | 956,257,252.03 | 788,525,281.39 | 37,669,008.56 | 826,194,289.95 |
Unit: RMB Yuan
| Subsidiaries | Current period cumulative | Preceding period comparative | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| NHU EUROPE GmbH | 810,123,339.42 | 17,831,246.48 | 13,823,928.20 | -2,752,415.97 | 880,665,472.68 | 17,013,156.89 | 10,938,293.87 | 64,150,528.47 |
| NHU/CHR.OLESEN LATIN AMERICA A/S | 342,567,458.04 | 2,433,913.93 | 3,388,203.70 | -24,173,454.73 | ||||
| Total | 1,152,690,797.46 | 20,265,160.41 | 17,212,131.90 | -26,925,870.70 | 880,665,472.68 | 17,013,156.89 | 10,938,293.87 | 64,150,528.47 |
2. Interest in joint venture or associates
(1) Significant joint ventures or associates
| Joint ventures or associates | Main operating place | Place of registration | Business nature | Holding proportion (%) | Accounting treatment on investments in joint ventures or associates | |
| Direct | Indirect | |||||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | Shangyu, Zhejiang | Shangyu, Zhejiang | Manufacturing | 29.9307%[Note] | Equity method | |
| DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Shangyu, Zhejiang | Shangyu, Zhejiang | Manufacturing | 40.00% | Equity method | |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Joint ventures or associates | Main operating place | Place of registration | Business nature | Holding proportion (%) | Accounting treatment on investments in joint ventures or associates | |
| Direct | Indirect | |||||
| Zhejiang Saiya Chemical Materials Co., Ltd. | Shangyu, Zhejiang | Shangyu, Zhejiang | Manufacturing | 49.00% | Equity method | |
Explanation of the difference between the shareholding ratio in the joint venture or the associated enterprise and the voting ratio:
In the current period, the company's shareholding ratio in the associated enterprise Zhejiang Chunhui environmental protection andenergy Co., Ltd. changed, mainly due to the change in the company's share of net assets due to the capital increase of other investorsin January 2022.
(2) Main financial information of significant joint ventures
Unit: RMB Yuan
| Items | Closing balance/Current period cumulative | Opening balance/Preceding period comparative | ||||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Zhejiang Saiya Chemical Materials Co., Ltd. | Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Zhejiang Saiya Chemical Materials Co., Ltd. | |
| Current assets | 383,112,306.24 | 89,479,451.82 | 124,289,295.97 | 293,596,545.38 | 68,240,155.87 | 71,896,100.56 |
| Non-current assets | 602,750,213.70 | 18,063,832.98 | 148,614,323.72 | 559,076,086.33 | 13,956,368.94 | 157,938,616.58 |
| Total assets | 985,862,519.94 | 107,543,284.80 | 272,903,619.69 | 852,672,631.71 | 82,196,524.81 | 229,834,717.14 |
| Current liabilities | 172,268,311.38 | 116,025,007.52 | 44,595,001.38 | 199,269,854.33 | 97,736,253.17 | 15,537,056.20 |
| Non-current liabilities | 32,142,331.56 | 0.00 | 2,286,825.00 | 40,724,142.33 | 2,459,280.00 | |
| Total liabilities | 204,410,642.94 | 116,025,007.52 | 46,881,826.38 | 239,993,996.66 | 97,736,253.17 | 17,996,336.20 |
| Equity attributable to shareholders of parent company | 781,451,877.00 | -8,481,722.72 | 226,021,793.31 | 612,678,635.05 | -15,539,728.36 | 211,838,380.94 |
| Proportionate share in net assets | 233,894,016.95 | -3,392,689.09 | 110,750,678.72 | 208,873,174.90 | -6,215,891.34 | 103,800,806.66 |
| - Goodwill | 762,611.33 | 762,611.33 | ||||
| - Unrealized profit in internal trading | 931,390.51 | 665,200.17 | ||||
| Accumulated unrecognized losses | -3,392,689.09 | -6,215,891.34 | ||||
| Carrying amount of investments in associates | 233,894,016.95 | 110,581,899.54 | 208,873,174.90 | 103,898,217.82 | ||
| Operating revenue | 283,967,325.65 | 92,415,365.12 | 201,503,983.57 | 196,623,027.27 | 54,950,710.21 | 139,702,151.72 |
| Net profit | 70,472,241.95 | 7,058,005.64 | 13,640,166.75 | 49,187,541.15 | -1,052,702.41 | 5,074,966.36 |
| Total comprehensive income | 70,472,241.95 | 7,058,005.64 | 13,640,166.75 | 49,187,541.15 | -1,052,702.41 | 5,074,966.36 |
| Dividend from associates received in the current period | ||||||
(3) Aggregated financial information of insignificant joint ventures and associates
Unit: RMB Yuan
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Items | Closing balance/ Current period cumulative | Opening balance/ Preceding period comparative |
| Joint ventures: | -- | -- |
| Proportionate shares in the following items | -- | -- |
| Associates: | -- | -- |
| Total carrying amount of investments | 39,246,105.65 | 38,556,233.03 |
| Proportionate shares in the following items | ||
| -- Net profit | -911,994.44 | -656,507.53 |
| -- Total comprehensive income | -911,994.44 | -656,507.53 |
X. Risks related to financial instruments
In risk management, the Company aims to seek the appropriate balance between the risks and benefits from its use of financialinstruments and to mitigate the adverse effects that the risks of financial instruments have on the Company’s financial performance, soas to maximize the profits of shareholders and other equity investors. Based on such risk management objectives, the Company’s riskmanagement policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls,and to monitor risks and adherence to limits on a timely and reliable basis.The Company has exposure to the following risks from its use of financial instruments, which mainly include: credit risk, liquidityrisk, and market risk. The Management has deliberated and approved policies concerning such risks, and details are:
(I) Credit riskCredit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge anobligation.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each balance sheet date, the Company assesses whether the credit risk on a financial instrument has increased significantly sinceinitial recognition. When assessing whether the credit risk has increased significantly since initial recognition, the Company takes intoaccount reasonable and supportable information, which is available without undue cost or effort, including qualitative and quantitativeanalysis based on historical data, external credit risk rating, and forward-looking information. The Company determines the changesin default risk of financial instruments during the estimated lifetime through comparison of the default risk at the balance sheet dateand the initial recognition date, on an individual basis or a collective basis.The Company considers the credit risk on a financial instrument has increased significantly when one or more of the followingqualitative and quantitative standards are met:
1) Quantitative standard mainly relates to the scenario in which, at the balance sheet date, the probability of default in the remaininglifetime has risen by more than a certain percentage compared with the initial recognition;
2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial position, present or expectedchanges in technology, market, economy or legal environment that will have significant adverse impact on the debtor’s repaymentability.
(2) Definition of default and credit-impaired assets
A financial instrument is defined as defaulted when one or more following events have occurred, of which the standard is consistentwith that for credit-impairment:
1) significant financial difficulty of the debtor;
2) a breach of binding clause of contract;
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
3) it is very likely that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having granted to thedebtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default, loss rate of default, and exposure todefault risk. The Company develops a model of the probability of default, loss rate of default, and exposure to default risk on the basisof quantitative analysis of historical data (e.g. counterparty rating, guarantee measures and collateral type, payment method, etc.) andforward-looking information.
3. Please refer to item VII 3,4 and 7 of this section for details on the reconciliation table of opening balance and closing balance ofprovision for losses of financial instrument.
4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks, theCompany has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other cash and bank balances in financial institutions with relatively high credit levels,hence, its credit risk is relatively low.
(2) Receivables
The Company performs credit assessment on customers using credit settlement on a continuous basis. The Company selects credibleand well-reputed customers based on credit assessment result, and conducts ongoing monitoring on balance of receivables, to avoidsignificant risks in bad debts.As the Company only conducts business with credible and well-reputed third parties, collateral is not required from customers. TheCompany manages credit risk aggregated by customers. As of December 31, 2021, the Company has certain concentration of creditrisk, and 39.06 % (December 31, 2020: 35.19%) of the total accounts receivable was due from the five largest customers of theCompany. The Company held no collateral or other credit enhancement on balance of receivables.The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial asset at the balance sheet.(II) Liquidity riskLiquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated with cash or otherfinancial assets settlement, which is possibly attributable to failure in selling financial assets at fair value on a timely basis, or failurein collecting liabilities from counterparties of contracts, or early redemption of debts, or failure in achieving estimated cash flows.In order to control such risk, the Company comprehensively utilized financing tools such as notes settlement, bank borrowings, etc.and adopts long-term and short-term financing methods to optimize financing structures, and finally maintains a balance betweenfinancing sustainability and flexibility. The Company has obtained credit limit from several commercial banks to meet working capitalrequirements and expenditures.Financial liabilities classified based on remaining time period till maturity
Unit: RMB Yuan
| Items | Closing balance | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 10,902,124,084.08 | 11,433,900,252.24 | 6,133,118,558 .23 | 4,524,209,268.74 | 776,572,425.27 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Items | Closing balance | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
| Notes payable | 930,489,306.12 | 930,489,306.12 | 930,489,306.12 | ||
| Accounts payable | 1,768,457,348.99 | 1,768,457,348.99 | 1,768,457,348.99 | ||
| Other payables | 133,386,496.99 | 133,386,496.99 | 133,386,496.99 | ||
| Lease liabilities | 3,037,567.36 | 4,502,023.99 | 421,166.83 | 476,190.46 | 3,604,666.70 |
| Subtotal | 13,737,494,803.54 | 14,270,735,428.33 | 8,965,872,877.16 | 4,524,685,459.20 | 780,177,091.97 |
(Continued)
Unit: RMB Yuan
| Items | Opening balance | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 8,581,398,746.38 | 9,052,182,029.59 | 3,703,590,391.97 | 4,728,643,204.24 | 619,948,433.38 |
| Notes payable | 694,124,946.73 | 694,124,946.73 | 694,124,946.73 | ||
| Accounts payable | 1,435,966,427.76 | 1,435,966,427.76 | 1,435,966,427.76 | ||
| Other payables | 56,712,103.36 | 56,712,103.36 | 56,712,103.36 | ||
| Lease liabilities | 3,182,245.62 | 4,721,702.39 | 402,749.99 | 476,190.48 | 3,842,761.92 |
| Subtotal | 10,771,384,469.85 | 11,243,707,209.83 | 5,890,796,619.81 | 4,729,119,394.72 | 623,791,195.30 |
(III) Market riskMarket risk is the risk that the Company may encounter fluctuation in fair value or future cash flows of financial instruments due tochanges in market price. Market risk mainly includes interest risk and foreign currency risk.
1. Interest risk
Interest risk is the risk that an enterprise may encounter fluctuation in fair value or future cash flows of financial instruments due tochanges in market interest. The Company’s fair value interest risks arise from fixed-rate financial instruments, while the cash flowinterest risks arise from floating-rate financial instruments. The Company determines the proportion of fixed-rate financial instrumentsand floating-rate financial instruments based on the market environment, and maintains a proper financial instruments portfolio throughregular review and monitoring. The Company’s interest risk in cash flows relates mainly to bank borrowings with floating interest rate.As of June 30, 2022, balance of borrowings with interest accrued at floating interest rate totaled 10,902,124,084.08 yuan (December31, 2021: 8,581,398,746.38 yuan). If interest rates had been 50 basis points higher/lower and all other variables were held constant, theCompany’s profit before tax and equity will not be significantly affected.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial instrument resulted from changesin exchange rate. The Company’s foreign currency risk relates mainly to foreign currency monetary assets and liabilities. When short-term imbalance occurred to foreign currency assets and liabilities, the Company may trade foreign currency at market exchange ratewhen necessary, in order to maintain the net risk exposure within an acceptable level.Please refer to item VII 58 of the notes to the financial statements for details on foreign currency financial assets and liabilities at theend of the period.
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
XI. Fair value disclosure
1. Details of fair value of assets and liabilities at fair value at the balance sheet date
Unit: RMB Yuan
| Items | Fair value as at the balance sheet date | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| I. Recurring fair value measurement | -- | -- | -- | -- |
| 1. Held-for-trading financial assets and other non-current financial assets | 9,555,464.77 | 660,000,000.00 | 669,555,464.77 | |
| Financial assets classified as at fair value through profit or loss | 9,555,464.77 | 660,000,000.00 | 669,555,464.77 | |
| Financial products with guaranteed principal and floating income | 660,000,000.00 | 660,000,000.00 | ||
| Derivative financial assets | 9,555,464.77 | 9,555,464.77 | ||
| 2. Receivables financing | 198,084,359.06 | 198,084,359.06 | ||
| 3. Other equity instrument investments | 22,998,147.55 | 22,998,147.55 | ||
| Total liabilities at recurring fair value measurement | 9,555,464.77 | 881,082,506.61 | 890,637,971.38 | |
2. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 2 fair value at recurring andnon-recurring fair measurementFair value was determined at forward exchange rate published by 中国银行股份有限公司 (Bank of China Limited
*) at the balancesheet date.
3. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 3 fair value at recurring andnon-recurring fair measurement
1. Fair value of short-term financial products with guaranteed principal and floating income and structured deposits was determinedbased on their par value.
2. Fair value of bank acceptance was determined based on its par value.
3. As there is no significant change in the operating environment, operating condition and financial position of the invested entitiesZhejiang Second Pharma Co., Ltd. and Shanghai NewMargin Yongjin Eqiuty Enterprise (LP), the Company took investment cost asthe reasonable estimation of fair value.
XII. Related parties and related party transactions
1. Parent company
| Parent company | Place of registration | Business nature | Registered capital | Holding proportion over the Company | Voting right proportion over the Company |
| NHU Holding Group Co., Ltd. | Xinchang, Zhejiang | Manufacturing | 120.00 million | 48.74% | 48.74% |
Remarks on the parent companyThe Company’s ultimate controlling party is the natural person Hu Baifan.
2. Subsidiaries of the Company
Please refer to item IX 1 of the notes to the financial statements for details on the Company’s subsidiaries.
*The English name is for identification purpose only.
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
3. Joint ventures and associates of the Company
Please refer to item IX 2 of the notes to the financial statements for details on the Company’s significant joint ventures andassociates.
4. Other related parties of the Company
| Related parties | Relationships with the Company |
| 北京福元医药股份有限公司 (Beijing Winsunny Pharmaceutical Co., Ltd.*) | Controlled by NHU Holding Group Co., Ltd. |
| 浙江爱生药业有限公司 (Zhejiang Asen Pharmaceutical Co., Ltd.*) | Controlled by NHU Holding Group Co., Ltd. |
| 新昌县禾春绿化有限公司 (Xinchang County Hechun Greening Co., Ltd.*) | Controlled by NHU Holding Group Co., Ltd. |
| Zhejiang Deli Equipment Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| 福元药业有限公司 (Front Pharmaceutical PLC.*) | Controlled by NHU Holding Group Co., Ltd. |
| Xinchang County NHU Real Estate Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| 绥化和成置业有限公司 (Suihua NHU Real Estate Co., Ltd.*) | Controlled by NHU Holding Group Co., Ltd. |
| 潍坊和成置业有限公司 (Weifang NHU Real Estate Co., Ltd.*) | Controlled by NHU Holding Group Co., Ltd. |
| 琼海和悦物业服务有限公司 (Qionghai Heyue Property Services Co., Ltd.*) | Controlled by NHU Holding Group Co., Ltd. |
| 琼海博鳌和悦酒店管理有限公司 (Qionghai Boao Holliyard Hotel Management Co., Ltd.*) | Controlled by NHU Holding Group Co., Ltd. |
| 绍兴和悦物业服务有限公司 (Shaoxing Heyue Property Services Co., Ltd.*) | Controlled by NHU Holding Group Co., Ltd. |
| 绍兴上虞和成置业有限公司 (Shaoxing Shangyu 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. |
| 浙江越秀外国语学院 (Zhejiang Yuexiu University of Foreign Languages*) | Controlled by NHU Holding Group Co., Ltd. |
| 绍兴福膜新材料有限公司 (Shaoxing Formost Material Co., Ltd.*) | Its shareholder is the actual controller of the Company |
| 黑龙江昊天玉米开发有限公司 (Heilongjiang Haotian Corn Development Co., Ltd.*) | Non-controlling shareholders of subsidiaries |
Other remarksAs Client C holds 25% equity of NHU Europe GmbH, the holding subsidiary of the Company’s subsidiary NHU (Hong Kong) TradingCo., Ltd., the Company discloses transactions between Client C and NHU Europe GmbH as well as balances in related partytransactions for the sake of prudence.
5. Related party transactions
(1) Purchase and sale of goods, rendering and receiving of services
Purchase of goods and receiving of services
Unit: RMB Yuan
| Related parties | Content of transaction | Current period cumulative | Transaction limit approved | Whether exceeds transaction limit | Preceding period comparative |
| Zhejiang Deli Equipment Co., Ltd. | Purchase of goods | 55,826,474.37 | 160,000,000.00 | No | 22,406,681.48 |
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | Purchase of steam | 60,245,778.74 | 43,692,487.59 | ||
| Waste disposal service fees | 984,963.43 | 68,688.20 | |||
| Zhejiang Saiya Chemical Materials Co., Ltd. | Purchase of goods | 153,465,976.22 | 230,000,000.00 | No | 100,257,926.52 |
| Xinchang County NHU Real Estate Co., Ltd. | Catering and accommodation | 326,991.94 | 5,108,700.00 | No | 465,980.79 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Related parties | Content of transaction | Current period cumulative | Transaction limit approved | Whether exceeds transaction limit | Preceding period comparative |
| services | |||||
| Shaoxing Heyue Property Services Co., Ltd. | Property management | 11,733.62 | 187,934.15 | ||
| Xinchang County Hechun Greening Co., Ltd. | Purchase of goods | 12,472.77 | 3,981,660.62 | ||
| Zhejiang Asen Pharmaceutical Co., Ltd. | Purchase of goods | 743,954.80 | 1,255,535.33 | ||
| Qionghai Boao Holliyard Hotel Management Co., Ltd. | Catering and accommodation services | 61,979.00 | 64,855.00 | ||
| Qionghai Heyue Property Services Co., Ltd. | Property management | 470,190.62 | 375,616.74 | ||
| Shandong Bin’an Technology Co., Ltd. | Training | 23,177.36 | 185,789.16 | ||
| Heilongjiang Haotian Corn Development Co., Ltd. | Purchase of goods | 520,003.54 | |||
| Subtotal | 272,693,696.41 | 395,108,700.00 | 172,943,155.58 |
Sale of goods and rendering of services
Unit: RMB Yuan
| Related parties | Content of transaction | Current period cumulative | Preceding period comparative |
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | Sale of goods | 17,256.64 | |
| Zhejiang Asen Pharmaceutical Co., Ltd. | Pharmaceutical intermediates, test fees | 310,840.71 | 297,917.51 |
| Beijing Winsunny Pharmaceutical Co., Ltd. | Pharmaceutical intermediates, test fees | 17,699.12 | 141,509.43 |
| DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | New materials | 81,288,692.23 | 40,144,943.15 |
| Hazardous waste disposal fees | 816,229.00 | 525,305.20 | |
| Labor costs, etc. | 0.00 | 28,245.28 | |
| Shandong Bin’an Vocational Training School Co., Ltd. | Waste materials | 21,584.50 | |
| Heilongjiang Haotian Corn Development Co., Ltd. | Purchase of goods | 82,192.66 | |
| Total | 82,554,494.86 | 41,137,920.57 |
(2) Related party leases
The Company as the lessor:
Unit: RMB Yuan
| Lessees | Types of assets leased | Lease income recognized in the current period | Lease income recognized in preceding period |
| Zhejiang Deli Equipment Co., Ltd. | Land use right and buildings | 20,183.49 | |
| Qionghai Boao Holliyard Hotel Management Co., Ltd. | Land use right and buildings | 258,177.14 | |
| DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Land use right and buildings | 356,400.00 | 190,139.67 |
| Weifang NHU Real Estate Co., Ltd. | Land use right and buildings | 13,714.29 | |
| NHU Holding Group Co., Ltd. | Land use right and buildings | 16,513.76 |
The Company as the lessee:
Unit: RMB Yuan
| Lessors | Types of assets leased | Lease expenses recognized in the current period | Lease expenses recognized in preceding period |
| NHU Holding Group Co., Ltd. | Land use right and buildings | 847,107.96 | 905,906.40 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
(3) Related party guarantees
The Company as guaranteed parties
Unit: RMB Yuan
| Guarantors | Amount guaranteed | Commencement date | Maturity date | Whether the guarantee is mature |
| NHU Holding Group Co., Ltd. | 500,000,000.00 | 01/23/2019 | 12/21/2023 | No |
| 200,000,000.00 | 07/31/2020 | 07/18/2022 | No | |
| 300,000,000.00 | 11/17/2020 | 11/16/2022 | No | |
| 500,000,000.00 | 12/03/2020 | 09/21/2025 | No | |
| 200,000,000.00 | 01/20/2021 | 01/19/2023 | No | |
| 100,000,000.00 | 04/14/2021 | 04/12/2023 | No | |
| Subtotal | 1,800,000,000.00 |
(4) Key management’s emoluments
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Key management’s emoluments | 5,698,512.85 | 5,177,598.00 |
(5) Other related party transactions
(1) Owners of 博鳌度假中心公寓 (Boao Resort Center Apartment
*
) entrusted serviced apartments to Qionghai Boao Holliyard HotelManagement Co., Ltd. for operation and management.
(2) In the current period, NHU EUROPE GmbH sold products amounting to RMB26,564,889.94 to Client C. At the end of the period,balance of accounts receivable amounted to RMB8,806,935.56.
6. Balance due to or from related parties
(1) Balance due from related parties
Unit: RMB Yuan
| Items | Related parties | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | 48,754,092.34 | 2,437,704.62 | 26,166,564.42 | 1,308,328.22 | |
| Subtotal | 48,754,092.34 | 2,437,704.62 | 26,166,564.42 | 1,308,328.22 | |
| Other receivables | Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 20,000.00 | 1,000.00 | 20,000.00 | 1,000.00 |
| DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | 23,640.47 | 1,182.02 | 18,862.50 | 943.13 | |
| Subtotal | 43,640.47 | 2,182.02 | 38,862.50 | 1,943.13 | |
| Other non-current assets | Zhejiang Deli Equipment Co., Ltd. | 70,708,195.30 | 45,362,374.00 | ||
| Subtotal | 70,708,195.30 | 45,362,374.00 | |||
(2) Balance due to related parties
Unit: RMB Yuan
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Items | Related parties | Closing book balance | Opening book balance |
| Accounts payable | Zhejiang Deli Equipment Co., Ltd. | 13,923,863.54 | 29,272,703.74 |
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 11,471,654.70 | 5,185,881.68 | |
| Zhejiang Saiya Chemical Materials Co., Ltd. | 68,070,538.72 | 2,640,661.94 | |
| Zhejiang Second Pharma Co., Ltd. | 6,408.00 | 6,408.00 | |
| Qionghai Heyue Property Services Co., Ltd. | 300,000.00 | ||
| Subtotal | 93,472,464.96 | 37,405,655.36 | |
| Contract liabilities | Zhejiang Deli Equipment Co., Ltd. | 13,009.64 | 13,009.64 |
| Subtotal | 13,009.64 | 13,009.64 | |
| Other payables | Zhejiang Deli Equipment Co., Ltd. | 163,500.00 | 443,500.00 |
| Xinchang County Hechun Greening Co., Ltd. | 12,472.77 | 13,102.77 | |
| Subtotal | 175,972 .77 | 456,602.77 | |
| Other current liabilities | Zhejiang Deli Equipment Co., Ltd. | 1,691.25 | 1,691.25 |
| Subtotal | 1,691.25 | 1,691.25 |
XIII. Commitments and contingencies
1. Significant commitments
Significant commitments as at the balance sheet date(I) Significant commitments
1. Forward exchange settlement contracts
Pursuant to the “ISDA 2002 MASTER AGREEMENT” entered into between the Company and Bank of China (Hong Kong) Limited,the “ISDA 2002 MASTER AGREEMENT” entered into between the Company and DBS Bank (China) Limited, the "Global CapitalMarket Transactions" and related transaction application forms entered into between the Company and HSBC Bank (China) LimitedHangzhou Branch, the “NAFMII Master Agreement” and Supplementary agreement (No.Y161136) entered into between the Companyand Bank of China Limited Zhejiang Sub-branch*), as of June 30, 2022, details of the Company’s unsettled forward exchangesettlement contracts are as follows:
| Currencies | USD nominal amount | EUR nominal amount | Agreed exchange rate | Settlement date |
| USD/EUR | 10,000,000.00 | 6.5205 | 07/20/2022 | |
| 10,000,000.00 | 6.5506 | 07/11/2022 | ||
| 2,000,000.00 | 6.6791 | 12/28/2022 | ||
| 10,000,000.00 | 6.6075 | 07/26/2022 | ||
| 2,000,000.00 | 6.6810 | 12/18/2022 | ||
| 2,000,000.00 | 6.6850 | 12/18/2022 | ||
| 3,000,000.00 | 6.6202 | 07/18/2022 | ||
| 3,000,000.00 | 6.6174 | 07/07/2022 | ||
| 3,000,000.00 | 6.6153 | 07/18/2022 | ||
| 3,000,000.00 | 6.6802 | 12/20/2022 | ||
| 3,000,000.00 | 6.6776 | 12/05/2022 | ||
| 3,000,000.00 | 6.6780 | 12/15/2022 | ||
| 5,000,000.00 | 6.6845 | 12/12/2022 | ||
| 3,000,000.00 | 6.7220 | 09/15/2022 | ||
| 3,000,000.00 | 6.7210 | 09/15/2022 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Currencies | USD nominal amount | EUR nominal amount | Agreed exchange rate | Settlement date |
| 2,000,000.00 | 6.7200 | 09/15/2022 | ||
| 2,000,000.00 | 6.7250 | 09/15/2022 | ||
| 5,000,000.00 | 6.7280 | 10/17/2022 | ||
| 2,000,000.00 | 6.7385 | 11/15/2022 | ||
| 1,000,000.00 | 6.7705 | 11/15/2022 | ||
| 2,000,000.00 | 6.7300 | 10/17/2022 | ||
| 1,000,000.00 | 6.7605 | 11/15/2022 | ||
| 500,000.00 | 6.7770 | 08/15/2022 | ||
| 2,000,000.00 | 6.7835 | 11/15/2022 | ||
| 2,000,000.00 | 6.7870 | 11/15/2022 | ||
| 1,000,000.00 | 6.7950 | 11/15/2022 | ||
| 1,000,000.00 | 6.7955 | 11/15/2022 | ||
| 1,000,000.00 | 6.7905 | 11/15/2022 | ||
| 1,000,000.00 | 6.7970 | 11/15/2022 | ||
| 1,000,000.00 | 6.7920 | 10/17/2022 | ||
| 1,000,000.00 | 6.7950 | 10/17/2022 | ||
| 1,000,000.00 | 6.7940 | 10/17/2022 | ||
| 1,000,000.00 | 6.7980 | 10/17/2022 | ||
| 2,000,000.00 | 6.7763 | 10/25/2022 | ||
| 3,000,000.00 | 6.7815 | 10/25/2022 | ||
| 1,000,000.00 | 6.7900 | 10/25/2022 | ||
| 1,000,000.00 | 6.7935 | 10/11/2022 | ||
| 1,000,000.00 | 6.8015 | 10/11/2022 | ||
| 1,000,000.00 | 6.8090 | 10/11/2022 | ||
| 2,000,000.00 | 6.8150 | 10/17/2022 | ||
| 2,000,000.00 | 6.8200 | 10/17/2022 | ||
| 1,000,000.00 | 6.8210 | 11/08/2022 | ||
| 1,000,000.00 | 6.8270 | 11/08/2022 | ||
| 1,000,000.00 | 6.8280 | 11/08/2022 | ||
| 1,000,000.00 | 6.8290 | 11/08/2022 | ||
| 1,000,000.00 | 6.8300 | 11/08/2022 | ||
| 1,000,000.00 | 6.8350 | 09/09/2022 | ||
| 1,000,000.00 | 6.8380 | 12/12/2022 | ||
| 5,000,000.00 | 6.7780 | 10/25/2022 | ||
| 1,000,000.00 | 6.7870 | 10/25/2022 | ||
| 1,000,000.00 | 6.7960 | 10/25/2022 | ||
| 1,000,000.00 | 6.8020 | 10/11/2022 | ||
| 1,000,000.00 | 6.8140 | 10/11/2022 | ||
| 1,000,000.00 | 6.8145 | 10/11/2022 | ||
| 1,000,000.00 | 6.8170 | 11/08/2022 | ||
| 1,000,000.00 | 6.8200 | 11/08/2022 | ||
| 1,000,000.00 | 6.8220 | 11/25/2022 | ||
| 1,000,000.00 | 6.8260 | 11/08/2022 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Currencies | USD nominal amount | EUR nominal amount | Agreed exchange rate | Settlement date |
| 2,000,000.00 | 6.8270 | 11/25/2022 | ||
| 2,000,000.00 | 6.8285 | 11/25/2022 | ||
| 1,000,000.00 | 6.8360 | 11/28/2022 | ||
| 2,000,000.00 | 6.7909 | 10/25/2022 | ||
| 1,000,000.00 | 6.7979 | 11/25/2022 | ||
| 1,000,000.00 | 6.8213 | 11/08/2022 | ||
| 1,000,000.00 | 6.8250 | 11/08/2022 | ||
| 1,000,000.00 | 6.8234 | 11/25/2022 | ||
| 2,000,000.00 | 6.8302 | 11/25/2022 | ||
| 1,000,000.00 | 6.8381 | 11/21/2022 | ||
| 1,000,000.00 | 6.8388 | 11/18/2022 | ||
| 1,000,000.00 | 6.8500 | 09/09/2022 | ||
| 1,000,000.00 | 6.8450 | 09/09/2022 | ||
| 3,000,000.00 | 6.701974 | 07/08/2022 | ||
| 5,000,000.00 | 7.0910 | 07/21/2022 | ||
| 10,000,000.00 | 7.0830 | 07/21/2022 | ||
| 5,000,000.00 | 7.1037 | 08/22/2022 | ||
| 5,000,000.00 | 7.1025 | 08/22/2022 | ||
| 1,000,000.00 | 7.2130 | 09/20/2022 | ||
| 1,000,000.00 | 7.2170 | 09/20/2022 | ||
| 1,000,000.00 | 7.2280 | 09/20/2022 | ||
| 1,000,000.00 | 7.2240 | 09/20/2022 | ||
| 1,000,000.00 | 7.2135 | 09/20/2022 | ||
| 1,000,000.00 | 7.1960 | 09/20/2022 | ||
| 1,000,000.00 | 7.2050 | 09/20/2022 | ||
| Subtotal | 146,500,000.00 | 32,000,000.00 |
2. Letters of guarantee issued but undue
As of June 30, 2022, the undue letters of guarantee issued by the Company and its subsidiaries are as follows:
| Issuing banks | Applicants | Type of L/G | Amount | Conditions for issuing |
| 中国银行股份有限公司新昌支行 (Bank of China Limited Xinchang Sub-branch*) | The Company | Performance guarantee | USD53,630.00 | Occupying credit line |
| Performance guarantee | USD145,390.00 | Occupying credit line | ||
| 汇丰银行（中国）有限公司杭州分行 (HSBC Bank (China) Company Limited Hangzhou Branch*) | The Company | |||
| Financing guarantee | EUR 10,000,000.00 | Occupying credit line | ||
| Financing guarantee | EUR 10,000,000.00 | Occupying credit line |
3. Letters of credit issued but undue
As of June 30, 2022, the undue letters of credit issued by the Company and its subsidiaries are as follows:
| Issuing banks | Applicants | Balance of L/C | Conditions |
Bank of China Limited XinchangSub-branch
| Bank of China Limited Xinchang Sub-branch | The Company | USD19,764.00 | Occupying credit line |
| USD21,984.00 | Occupying credit line | ||
| USD946,240.40 | Occupying credit line |
*
The English names are for identification purpose only.
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Issuing banks | Applicants | Balance of L/C | Conditions |
| Bank of China Limited Xinchang Sub-branch | Zhejiang NHU Import & Export Co., Ltd. | EUR 294,000.00 | Occupying credit line |
| 中国建设银行股份有限公司潍坊滨海支行 (China Construction Bank Corporation Weifang Binhai Sub-branch*) | Shandong NHU Pharmaceutical Co., Ltd. | USD1,371.62 | Occupying credit line |
| 中国银行股份有限公司上虞支行 (Bank of China Limited Shangyu Sub-branch*) | Zhejiang NHU Special Materials Co., Ltd. | USD62,900.00 | Deposit of USD 62,900.00 |
| 中国银行潍坊滨海支行 (Bank of China Limited Weifang Binhai Sub-branch*) | Shandong NHU Amino-acids Co., Ltd. | EUR1,855,000.00 | Deposit of 14,942,418.00 yuan |
| EUR857,800.00 | Deposit of 12,000,000.00 yuan |
4. The “notes pool” business
Pursuant to the “Notes Pool Service Agreement on Yuntong Account of Bank of Communications” entered into between the Companyand 交通银行股份有限公司 (Bank of Communications Co., Ltd.
*), the Company pledged and endorsed bank acceptance to thedepositary bank, forming a pledged notes pool; the Company also opened a notes pool deposit account to provide guarantee for thecredit granted under the note pledge and to deposit the pledged bank acceptance for payments. The available credit line for pledge isthe sum of pledged notes and the actual balance of deposit account less pledged notes used. As stipulated in the agreement, the sum ofpledged 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., ZhejiangNHU Pharmaceutical Co., Ltd., Zhejiang NHU Special Materials Co., Ltd., 绍兴裕辰新材料有限公司 (Shaoxing Yuchen NewMaterials Co., Ltd.
*
), Shandong NHU Pharmaceutical Co., Ltd., Shandong NHU Vitamins Co., Ltd., Shandong NHU Amino-acids Co.,Ltd., Heilongjiang NHU Biotechnology Co., Ltd., Shandong NHU Fine Chemical Science and Technology Co., Ltd., 黑龙江新昊热电有限公司 (Heilongjiang Xinhao Thermal Power Co., Ltd.
*
), Xinchang NHU Vitamins Co., Ltd., Zhejiang NHU Import & ExportCo., Ltd. and 浙商银行股份有限公司 (China Zheshang Bank Co., Ltd.
*), the Company pledged assets pool or notes pool for guarantee,and opened a notes deposit account to pay deposits at a certain percentage, with no specific agreement on the amount of deposits. Asof June 30, 2022, balance of pledged bank acceptance amounted to 340,164,793.51 yuan, deposits of notes pool in China ZheshangBank Co., Ltd. amounted to 108,852,086.25 yuan.(II) As of the balance sheet date, the Company has no significant contingencies to be disclosed.
XIV. Events after the balance sheet date
1. Others
As of the date of approval for issuing the financial statements, the Company has no other significant events after the balance sheetdate to be disclosed.
XV. Other significant events
1. Segment information
(1) Identification basis and accounting policies for reportable segments
Reportable segments are identified according to the structure of the Company’s internal organization, management requirements andinternal reporting system, and based on business segments. Assets and liabilities shared by different segments are allocated amongsegments proportionate to their respective sizes.
(2) Financial information of reportable segments
Unit: RMB Yuan
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Items | Pharmaceutical chemicals | Others | Inter-segment offsetting | Total |
| Revenue from main operations | 7,556,409,496.99 | 672,406,486.70 | 113,548,067.67 | 8,115,267,916.02 |
| Cost of main operations | 4,343,627,393.24 | 559,054,882.01 | 113,548,067.67 | 4,789,134,207.58 |
| Total assets | 35,872,163,095.91 | 2,777,478,850.41 | 834,626,102.67 | 37,815,015,843.65 |
| Total liabilities | 15,067,266,244.56 | 1,394,572,139.87 | 834,626,102.67 | 15,627,212,281.76 |
XVI. Notes to main items of parent company financial statements
1. Accounts receivable
(1) Details on categories
Unit: RMB Yuan
| Categories | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | % to total | Amount | Provision proportion | Amount | % to total | Amount | Provision proportion | |||
| Including: | ||||||||||
| Receivables with provision made on a collective basis | 893,741,505.10 | 100.00% | 44,687,075.26 | 5.00% | 849,054,429.84 | 785,631,558.20 | 100.00% | 39,281,577.91 | 5.00% | 746,349,980.29 |
| Total | 893,741,505.10 | 100.00% | 44,687,075.26 | 5.00% | 849,054,429.84 | 785,631,558.20 | 100.00% | 39,281,577.91 | 5.00% | 746,349,980.29 |
Provision made on a collective basis using age analysis method
Unit: RMB Yuan
| Items | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Within 1 year | 893,741,505.10 | 44,687,075.26 | 5.00% |
| Total | 893,741,505.10 | 44,687,075.26 | -- |
Disclose by aging
Unit: RMB Yuan
| Ages | Book balance |
| Within 1 year (inclusive) | 893,741,505.10 |
| Total | 893,741,505.10 |
(2) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
| Categories | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery/ Reversal | Write-off | Others | |||
| Provision made on a collective basis | 39,281,577.91 | 5,405,497.35 | 44,687,075.26 | |||
| Total | 39,281,577.91 | 5,405,497.35 | 44,687,075.26 | |||
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
(3) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
| Debtors | Book balance | Proportion to the total balance of accounts receivable (%) | Provision for bad debts |
| Client 1 | 538,692,340.05 | 60.27% | 26,934,617.00 |
| Client 2 | 111,921,714.00 | 12.52% | 5,596,085.70 |
| Client 3 | 52,152,991.57 | 5.84% | 2,607,649.58 |
| Client 4 | 42,900,000.00 | 4.80% | 2,145,000.00 |
| Client 5 | 13,178,362.84 | 1.47% | 658,918.14 |
| Total | 758,845,408.46 | 84.90% |
2. Other receivables
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Dividend receivable | 7,159,278.00 | |
| Other receivables | 2,672,267,915.31 | 3,087,880,137.47 |
| Total | 2,672,267,915.31 | 3,095,039,415.47 |
(1) Dividend receivable
1) Details on categories
Unit: RMB Yuan
| Items/Investees | Closing balance | Opening balance |
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 7,159,278.00 | |
| Total | 7,159,278.00 |
(2) Other receivables
1) Categorized by nature
Unit: RMB Yuan
| Nature of receivables | Closing book balance | Opening book balance |
| Security deposits | 100,232,037.50 | 100,300,037.50 |
| Export tax refund | 9,689,492.75 | 10,812,822.80 |
| Employee petty cash | 3,861,937.00 | 3,148,937.00 |
| Temporary advance payment receivable | 179,078.73 | 178,933.01 |
| Call loans | 2,693,148,060.29 | 3,131,287,854.18 |
| Others | 1,760,095.29 | 495,303.74 |
| Total | 2,808,870,701.56 | 3,246,223,888.23 |
2) Provision for bad debts
Unit: RMB Yuan
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance | 156,762,592.67 | 131,654.00 | 1,449,504.09 | 158,343,750.76 |
| Opening balance in the current period | ||||
| --Transferred to phase II | -6,750.00 | 6,750.00 | ||
| --Transferred to phase III | -171,063.16 | 171,063.16 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Provision made in the current period | -21,787,455.33 | 59,659.16 | -13,168.34 | -21,740,964.51 |
| Closing balance | 134,968,387.34 | 27,000.00 | 1,607,398.91 | 136,602,786.25 |
Significant changes in book balance of other receivables with changes in provision for bad debts:
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB Yuan
| Ages | Book balance |
| Within 1 year (inclusive) | 2,709,057,239.49 |
| 1-2 years | 135,000.00 |
| 2-3 years | 855,315.82 |
| Over 3 years | 98,823,146.25 |
| 3-4 years | 144,304.62 |
| 4-5 years | 2,725.01 |
| Over 5 years | 98,676,116.62 |
| Total | 2,808,870,701.56 |
3) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
| Categories | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery/Reversal | Write-off | Others | |||
| Portfolio grouped by ages | 158,343,750.76 | 21,740,964.51 | 136,602,786.25 | |||
| Total | 158,343,750.76 | 21,740,964.51 | 136,602,786.25 | |||
4) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
| Debtors | Nature of receivables | Book balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts |
| Heilongjiang NHU Biotechnology Co., Ltd. | Call loans | 955,149,365.19 | Within 1 year | 34.00% | 47,757,468.26 |
| Shandong NHU Vitamins Co., Ltd. | Call loans | 466,265,708.33 | Within 1 year | 16.61% | 23,313,285.42 |
| Shandong NHU Amino-acids Co., Ltd. | Call loans | 360,485,020.74 | Within 1 year | 12.83% | 18,024,251.04 |
| Shandong NHU Fine Chemical Science and Technology Co., Ltd. | Call loans | 333,360,011.09 | Within 1 year | 11.87% | 16,668,000.55 |
| Heilongjiang Xinhao Thermal Power Co., Ltd. | Call loans | 230,353,116.66 | Within 1 year | 8.20% | 11,517,655.83 |
| Total | -- | 2,345,613,222.01 | -- | 83.51% | 117,280,661.10 |
3. Long-term equity investments
Unit: RMB Yuan
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investments in subsidiaries | 7,896,078,842.12 | 7,896,078,842.12 | 7,846,078,842.12 | 7,846,078,842.12 | ||
| Investments in associates and joint ventures | 233,894,015.72 | 233,894,016.95 | 208,873,174.90 | 208,873,174.90 | ||
| Total | 8,129,972,857.84 | 8,129,972,859.07 | 8,054,952,017.02 | 8,054,952,017.02 | ||
(1) Investments in subsidiaries
Unit: RMB Yuan
| Investees | Opening carrying amount | Increase/Decrease | Closing carrying amount | Closing balance of provision for impairment | |||
| Investments increased | Investments decreased | Provision for impairment | Others | ||||
| Xinchang NHU Vitamins Co., Ltd. | 149,407,990.15 | 149,407,990.15 | |||||
| Zhejiang NHU Import & Export Co., Ltd. | 13,500,000.00 | 13,500,000.00 | |||||
| 琼海博鳌丽都置业有限公司 (Qionghai Boao Lidu Real Estate Co., Ltd.*) | 54,020,492.00 | 54,020,492.00 | |||||
| Zhejiang Vityesun Animal Nutrition and Health Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Shangyu NHU Bio-Chem Co., Ltd. | 414,100,091.44 | 414,100,091.44 | |||||
| NHU (Hong Kong) Trading Co., Ltd. | 586,000,000.00 | 586,000,000.00 | |||||
| Zhejiang NHU Pharmaceutical Co., Ltd. | 16,406,160.00 | 16,406,160.00 | |||||
| Zhejiang NHU Special Materials Co., Ltd. | 480,000,000.00 | 480,000,000.00 | |||||
| Shandong NHU Amino-acids Co., Ltd. | 554,844,108.53 | 554,844,108.53 | |||||
| Shandong NHU Holdings Co., Ltd. | 3,900,000,000.00 | 3,900,000,000.00 | |||||
| Heilongjiang NHU Biotechnology Co., Ltd. | 200,000,000.00 | 200,000,000.00 | |||||
| Shandong NHU Pharmaceutical Co., Ltd. | 1,300,000,000.00 | 1,300,000,000.00 | |||||
| Shandong NHU Fine Chemical Science and Technology Co., | 160,000,000.00 | 160,000,000.00 | |||||
*
The English name is for identification purpose only.
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Investees | Opening carrying amount | Increase/Decrease | Closing carrying amount | Closing balance of provision for impairment | |||
| Investments increased | Investments decreased | Provision for impairment | Others | ||||
| Ltd. | |||||||
| NHU Singapore PTE. LTD. | 12,800,000.00 | 12,800,000.00 | |||||
| Zhejiang NHU Nylon Materials Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Total | 7,846,078,842.12 | 50,000,000.00 | 7,896,078,842.12 | ||||
(2) Investments in associates and joint ventures
Unit: RMB Yuan
| Investees | Opening carrying amount | Increase/Decrease | Closing carrying amount | Closing balance of provision for impairment | |||||||
| Investments increased | Investments decreased | Investment income recognized under equity method | Adjustment in other comprehensive income | Changes in other equity | Cash dividend/ Profit declared for distribution | Provision for impairment | Others | ||||
| I. Joint ventures | |||||||||||
| II. Associates | |||||||||||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 208,873,174.90 | 19,977,116.53 | 5,043,725.52 | 233,894,016.95 | |||||||
| Subtotal | 208,873,174.90 | 19,977,116.53 | 5,043,725.52 | 233,894,016.95 | |||||||
| Total | 208,873,174.90 | 19,977,116.53 | 5,043,725.52 | 233,894,016.95 | |||||||
4. Operating revenue/Operating cost
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Main operations | 1,850,628,697.19 | 1,460,074,892.61 | 2,385,252,517.66 | 1,634,468,165.07 |
| Other operations | 31,160,723.40 | 24,551,797.22 | 19,819,223.76 | 15,301,495.85 |
| Total | 1,881,789,420.59 | 1,484,626,689.83 | 2,405,071,741.42 | 1,649,769,660.92 |
Details of revenue
Unit: RMB Yuan
| Categories of contracts | Total |
| By product | |
| Including: Nutrition | 1,599,599,151.28 |
| Others | 251,029,545.91 |
| Subtotal | 1,881,789,420.59 |
| By operating region | 1,881,789,420.59 |
| Including: Domestic | 1,157,593,117.21 |
| Overseas | 724,196,303.38 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Subtotal | 1,881,789,420.59 |
| By revenue recognition time | |
| Including: Transferred at a point in time | 1,881,789,420.59 |
| Subtotal | 1,881,789,420.59 |
| By sales model | |
| Including: Direct sales | 1,703,984,911.80 |
| Agent sales | 177,804,508.79 |
| Subtotal | 1,881,789,420.59 |
Information related to performance obligations:
None.Information related to transaction price allocated to the remaining performance obligations:
As of June 30, 2022, revenue corresponding to performance obligations for which the Company has entered into contracts but not yetperformed or fulfilled amounted to RMB 717.84 mn, of which, RMB 717.84 mn is expected to be recognized as revenue in 2022.
5. Investment income
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Investment income from long-term equity investments under equity method | 19,977,116.53 | 16,864,292.79 |
| Investment income from long-term equity investments under cost method | -3,841,064.35 | |
| Investment income from disposal of financial instruments | -2,653,997.46 | |
| Including: Financial assets classified as at fair value through profit or loss | -1,187,066.89 | |
| Financial liabilities classified as at fair value through profit or loss | 1,289,000,000.00 | |
| Interest income from call loans | 54,876,777.72 | 74,902,773.84 |
| Investment income from bank financial products and structured deposits | 15,218,893.77 | 22,964,570.95 |
| Total | 90,072,788.02 | 1,399,890,573.23 |
XVII. Supplementary information
1. Schedule of non-recurring profit or loss
√ Applicable □ Not applicable
Unit: RMB Yuan
| Items | Amount | Remarks |
| Gains on disposal of non-current assets | 6,674,850.81 | |
| Government grants included in profit or loss (excluding those closely related to operating activities of the Company, satisfying government policies and regulations, and continuously enjoyed with certain quantity or quota based on certain standards) | 85,522,179.54 | |
| Gains on assets consigned to the third party for investment or management | 28,841,651.61 | |
| Gains or losses on changes in fair value of held-for-trading financial assets and held-for-trading financial liabilities, and investment income from disposal of held-for-trading financial assets and held-for-trading financial liabilities, excluding those arising from hedging business related to operating activities | 9,071,898.92 | |
| Other non-operating revenue or expenditures | 797,805.24 | |
| Less: Enterprise income tax affected | 11,046,849.16 | |
| Non-controlling interest affected | 40,067.33 |
2022 Semi-Annual Report of Zhejiang NHU Company Ltd.
| Total | 119,821,469.63 | -- |
Remarks on other profit or loss satisfying the definition of non-recurring profit or loss:
□ Applicable √ Not applicable
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss.Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria forPublic Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss
□ Applicable √ Not applicable
2. ROE and EPS
| Profit of the reporting period | Weighted average ROE (%) | EPS (yuan/share) | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to shareholders of ordinary shares | 9.55% | 0.72 | 0.72 |
| Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | 9.03% | 0.68 | 0.68 |
3. Differences in accounting data under Chinese accounting standards and overseas accounting standards
(1) Difference in net profit and net assets in financial statements disclosed respectively under IFRS Standards and Chineseaccounting standards
□ Applicable √ Not applicable
(2) Difference in net profit and net assets in financial statements disclosed respectively under overseas accounting standardsand Chinese accounting standards
□ Applicable √ Not applicable