ZhejiangNHUCompanyLtd.

2025Semi-AnnualReport

August2025

SectionIImportantNotes,Contents,andDefinitionsTheBoardofDirectorsanditsmembers,BoardofSupervisorsanditsmembers,andseniorexecutivesoftheCompanyherebyguaranteethattheinformationpresentedinthissemi-annualreportisauthentic,accurate,completeandfreeoffalserecords,misleadingstatementsormaterialomissions,andtheywillbearindividualandjointliabilitiesforsuchinformation.胡柏藩（HuBaifan）,theCompany’slegalrepresentative,石观群（ShiGuanqun）,theofficerinchargeofaccounting,and刘芳露（LiuFanglu）,theheadofaccountingdepartmentherebydeclarethattheyguaranteethefinancialstatementsinthissemi-annualreportareauthentic,accurateandcomplete.AllmembersoftheBoardofDirectorshaveattendedthemeetingoftheBoardofDirectorsfordeliberationofthissemi-annualreport.Thefutureplanandotherforward-lookinginformationdisclosedinthissemi-annualreportshallnotberegardedasacommitmenttoinvestors.Wekindlyremindinvestorsofallpossiblerisksininvestments.Thecompanyprovidesadetaileddescriptionofthepotentialrisksandcountermeasuresthatmayexistinthecompany'soperationsinX.RisksandcountermeasuresunderSectionIIIManagementDiscussionandAnalysissectionofthisreport.Wekindlyremindinvestorsofallpossiblerisksininvestments.ProfitdistributionproposaldeliberatedandapprovedbythemeetingoftheBoardofDirectorsisasfollows:Basedon3,059,121,988shares[Note](calculatedbyexcluding14,299,692repurchasedsharesfromthetotalsharecapitalof3,073,421,680sharesasofJuly31,2025),theCompanyintendstodistributecashdividendof2yuan(taxincluded)andnobonusshareswillbedistributed,andthecapitalreservewillnotbeconvertedintosharecapital.

Note:AsofJuly31,2025,theCompany’ssharecapitaltotaled3,073,421,680shares,including

repurchasedshareof14,299,692shares.Accordingtothe“RulesonShareRepurchaseofListedCompanies”,sharesinthespecialaccountforrepurchaseoflistedcompaniescarrynorightofprofitdistributionandconversionofcapitalreserveintosharecapital.IftheCompany’stotalsharecapitalchangesduetotheconversionofconvertiblebonds,sharerepurchase,exerciseofequityincentives,refinancingandlistingofnewshares,etc.beforetheimplementationoftheprofitdistributionproposal,thetotaldistributionwillbeadjustedaccordinglybasedonthesamedistributionratio.ThisSemi-AnnualReportisanEnglishtranslationoftheChineseSemi-AnnualReport.IncasetheEnglishversiondoesnotconformtotheChineseversion,theChineseversionprevails.

Contents

SectionIImportantNotes,Contents,andDefinitions ...... 1

SectionIICompanyProfileandKeyFinancialIndicators ...... 6

SectionIIIManagementDiscussionandAnalysis ...... 9

SectionIVCorporateGovernance、EnvironmentalandSociety ...... 19

SectionVSignificantEvents ...... 22

SectionVIChangesinShareCapitalandShareholders ...... 31

SectionVIIBonds ...... 37

SectionVIIIFinancialReport ...... 38

SectionIXOtherSubmittedData ...... 143

DocumentsAvailableforReference

I.FinancialstatementssignedandsealedbytheCompany’slegalrepresentative,officerinchargeofaccounting,andheadofaccountingdepartment;II.OriginalcopyofalltheCompany'sdocumentsandannouncementspublishedonthenewspapersdesignatedbyCSRCwithinthereportingperiod;III.Otherdocumentsforreference.

Definitions

Abbreviations

SectionIICompanyProfileandKeyFinancialIndicatorsI.Companyprofile

Stockabbreviation

II.Contactinformation

III.OtherInformation

1.Company’sContactInformationWhethertheCompany’sregisteredaddress,officeaddress,zipcode,websiteande-mailaddresshaschangedduringthereportingperiod

□Applicable√NotapplicableTheCompany’sregisteredaddress,officeaddress,zipcode,websiteande-mailaddresshavenotchangedduringthereportingperiod,whichcanbefoundinthe2024AnnualReport.

2.InformationDisclosureandLocationofDocumentsforPublicInspectionWhetherinformationdisclosureandlocationofdocumentsforpublicinspectionhaschangedduringthereportingperiod

□Applicable√NotapplicableThenameoftheCompany’sselectedinformationdisclosurenewspaper,theURLofthewebsitedesignatedbytheCSRCwherethesemi-annualreportisposted,andtheplacewheretheCompany’ssemi-annualreportisavailablehavenotchangedduringthereportingperiod,whichcanbefoundinthe2024AnnualReport.

3.OtherrelevantInformationWhetherotherrelevantinformationhaschangedduringthereportingperiod

□Applicable√Notapplicable

IV.Keyaccountingdataandfinancialindicators

WhethertheCompanyneedstoperformretroactiveadjustmentorrestatementonfinancialdataofprioryears

□Yes√No

Items

V.DifferencesinaccountingdataunderChineseaccountingstandardsandoverseasaccountingstandards

1.DifferenceinnetprofitandnetassetsinfinancialstatementsdisclosedrespectivelyunderIFRSStandardsandChineseaccountingstandards

□Applicable√NotApplicableTheCompanyhasnodifferenceinnetprofitornetassetsinfinancialstatementsdisclosedrespectivelyunderIFRSStandardsandChineseaccountingstandards.

2.DifferenceinnetprofitandnetassetsinfinancialstatementsdisclosedrespectivelyunderoverseasaccountingstandardsandChineseaccountingstandards

□Applicable√NotApplicableTheCompanyhasnodifferenceinnetprofitornetassetsinfinancialstatementsdisclosedrespectivelyunderoverseasaccountingstandardsandChineseaccountingstandards.VI.Non-recurringprofitorloss

√Applicable□NotApplicable

Unit:RMBYuan

Items

Remarksonotherprofitorlosssatisfyingthedefinitionofnon-recurringprofitorloss:

□Applicable√NotApplicableTheCompanyhasnootherprofitorlosssatisfyingthedefinitionofnon-recurringprofitorloss.Remarksondefiningnon-recurringprofitorlosslistedinthe“InterpretationPronouncementonInformationDisclosureCriteriaforPublicCompaniesNo.1–Non-RecurringProfitorLoss”asrecurringprofitorloss.

□Applicable√NotApplicableTheCompanyhasnosituationofdefiningnon-recurringprofitorlosslistedinthe“InterpretationPronouncementonInformationDisclosureCriteriaforPublicCompaniesNo.1–Non-RecurringProfitorLoss”asrecurringprofitorloss.

SectionIIIManagementDiscussionandAnalysisI.PrincipalBusinessActivitiesDuringtheReportingPeriod

TherewerenomaterialchangestotheCompany'scorebusinessoperationsduringthereportingperiod...Fordetails,pleaserefertothecompany's2024annualreport.II.CoreCompetitivenessanalysis

Thecorecompetitivenessofthecompanyhasnotundergoneanymaterialchangeduringthereportingperiod.Fordetails,pleaserefertothecompany's2024annualreport.III.PrincipalBusinessActivitiesAnalysis

OverviewIsitconsistentwiththedisclosureofthecompany'sprincipalbusinessactivitiesduringthereportingperiod

√Yes□NoInthefirsthalfof2025,centeringontheannualobjectivesof"acceleratingglobalmarketexpansion,enhancinginnovationfordevelopment,improvingcapabilitiesandmanagement,andensuringstableoperationstopreventrisks",thecompanyproactivelyrespondedtothecomplexandchangingdomesticandinternationalenvironmentandachievedsteadygrowthinitskeyoperationalindicators.Duringthereportingperiod,thecompanyrecordedoperatingrevenueof11,100,632,836.78yuan,anincreaseof

12.76%comparedtothesameperiodlastyear.Thetotalprofitreached4,229,402,341.10yuan,anincreaseof56.68%comparedtothesameperiodlastyear.Thenetprofitattributabletoshareholdersofthelistedcompanywas3,603,323,979.16yuan,anincreaseof63.46%comparedtothesameperiodlastyear.

1.Production-SalesCoordinationforMarketExpansionDuringthereportingperiod,thesalesteamseizedmarketopportunitiesinkeysectorssuchasnutritionalproducts,newmaterials,andfragrances.Whileconsolidatingthemarketadvantagesofexistingproducts,theyactivelydrovethemarketexpansionofnewproductsincludingtheHAseriesandtryptophan.OntheProductionfront,thefocusremainedoncostreductionandefficiencyimprovement.Operationscontinuouslyoptimizedproductioncapacityutilization,maintaininghighlyefficientpipelineperformancethroughstrategieslikeco-productionlines,centralizedstart-stopprocedures,andhigh-outputlow-consumptionoperations.

2.OrderlyAdvancementofProjectConstructionDuringthereportingperiod,themajorityofthecompany'sprojectsprogressedsteadily,withoverallschedulesremainingstableandundercontrol.The180,000-ton/yearliquidmethionine(convertedpure)project,ajointventurewithSinopecZhenhaiRefining&Chemical,commencedtrialproductionoperations.TheTianjinnylonnewMaterialsprojecthascompletedthecomplianceapprovalsforresourcessuchasenergyandlanduse.Othertechnicalupgradeandmanagementenhancementinitiativescontinuedtoadvancesteadily,whilereserveprojectsandnewprojectplanningproceededinanorderlymanner.

3.InnovationInitiativesEnhanceEndogenousGrowthMomentumDuringthereportingperiod,theCompanyconsistentlyadheredtoinnovation-drivendevelopment,maintainingrobustR&Dinvestmenttostrengthenitsendogenousgrowthmomentum.BycategorizingandprioritizingvariousR&Dandtechnicalupgrade

initiatives,theCompanyachievedpreciseresourceallocationforstrategicprojects.Ononehand,itcontinuedtodeepennewproductdevelopmentandexpandtheproductportfolio;ontheotherhand,itsystematicallyorganizedspecializedprojectsaimedatenhancingthecompetitivenessofexistingproducts,drivingcontinuousimprovementandinnovationtosteadilyboostproductcompetitiveness.Throughtheestablishmentofatechnicalresourcelibraryandamodulartechnologydatabase,theCompanyenabled"verticalknowledgeinheritanceandhorizontaltechnologycross-reference,"layingasolidfoundationfortechnologicalinnovation.

4.SteadyProgressinGlobalExpansionDuringthereportingperiod,theCompanyactivelyexpandeditsoverseasdigitalfootprint,withglobaloperationsinsalesandR&Dacceleratingtheirlocalimplementation..Atthesametime,thecompanyestablishedoverseasmanagementsystems,pilotedrecruitmentininternationaluniversities,systematicallyreviewedandoptimizedtheinternationalemployeetrainingprogram,andcontinuouslyimprovedtheglobalmanagementframework,layingasolidfoundationforthecompany'sinternationalizationstrategy.

5.RiskPreventionEnhancesManagementEfficiencyDuringthereportingperiod,theCompanyimplementedtargetedmeasurestoaddressvariouspotentialrisks.Bythoroughlystudyingandaccuratelyinterpretingnewlypromulgatednationalstandardsandpolicydirectives,whileextensivelyincorporatingvaluableinsightsfrompastpracticesandindustrypeers,thecompanyadvancedtheupgradeofitsmanagementsystemframework,strengthenedriskpreventionandprocessmanagement,ensuredcomprehensiveprotectionforcompliantandefficientoperations,therebyestablishingarobustfoundationforsustainablelong-termdevelopment.Year-on-yearChangesinKeyFinancialData

Unit:RMBYuan

Item

Item

SignificantchangesinthecompositionoftheCompany’sprofitorsourcesofprofitduringthereportingperiod

□Applicable√NotapplicableNosignificantchangesinthecompositionoftheCompany’sprofitorsourcesofprofitduringthereportingperiod.OperatingRevenueBreakdown

Unit:RMBYuan

Industry,product,orregionsaccountingformorethan10%oftheCompany’soperatingrevenueorprofit

√Applicable□Notapplicable

Unit:RMBYuan

Items

Thecompany'sstatisticalmethodologyforcorebusinessdatawasadjustedduringthereportingperiod.Themostrecentdatahasbeenretroactivelyadjustedbasedontherevisedmethodologyattheendofthereportingperiod.

□Applicable√Notapplicable

IV.Non-CoreBusinessActivitiesAnalysis

√Applicable□NotApplicable

Unit:RMBYuan

Items

V.AssetsandLiabilitiesAnalysis

1.Significantchangesinassetcomposition

Unit:RMBYuan

2.Majoroverseasassets

□Applicable√Notapplicable

3.Assetsandliabilitiesatfairvalue

√Applicable□NotApplicableUnit:RMBYuan

Items

WhethertheCompanyhassignificantchangesinmeasurementattributesofmainassetsduringthereportingperiod

□Yes√No

4.Restrictionsonassetsasoftheendofthereportingperiod

Unit:RMBYuan

Items

VI.InvestmentActivitiesAnalysis

1.Overallinformation√Applicable□NotApplicable

2.Significantequityinvestmentsmadeduringthereportingperiod

□Applicable√NotApplicable

3.Significantnon-equityinvestmentsinprogressduringthereportingperiod

□Applicable√NotApplicable

4.Investmentsinfinancialassets

(1)investmentsinsecurities

□Applicable√NotApplicableThereisnoinvestmentinsecuritiesduringthereportingperiod.

(2)Investmentsinderivatives

√Applicable□NotApplicable1）Derivativeinvestmentsforhedgingpurposesduringthereportingperiod√Applicable□NotApplicable

Unit:RMB0,000yuan

PresentationofFinancialInstrumentsanditsguidance.Therewerenosignificantchangesinaccountingpoliciesandspecificprinciplesofaccountingcomparedwiththepreviousreportingperiod.

2）Investmentsinderivativesforspeculativepurposesduringthereportingperiod

□Applicable√NotApplicableTheCompanydidnotengageinanyderivativeinvestmentsforspeculativepurposesduringthereportingperiod.

5.UseofProceedsfromFundraising

□Applicable√NotApplicableTheCompanydidnotutilizeanyproceedsfromfundraisingactivitiesduringthereportingperiod.

VII.Saleofmajorassetsandequities

1.Saleofmajorassets

□Applicable√NotApplicableThereisnosaleofmajorassetsduringthereportingperiod.

2.SaleofMajorEquityInterests

□Applicable√NotApplicable

VIII.AnalysisofMajorSubsidiariesandAssociates

√Applicable□NotApplicableDetailsofprincipalsubsidiariesandassociateswhosecontributiontotheCompany’snetprofitreached10%ormore.

Unit:RMB0,000yuan

Entities

Detailsofacquisitionanddisposalofsubsidiariesduringthereportingperiod

√Applicable□NotApplicable

DescriptionofmajorholdingandparticipatingcompaniesNotapplicable

IX.StructuredentitiescontrolledbytheCompany

□Applicable√NotApplicable

X.TherisksfacedbytheCompanyandthecountermeasures

Therisksfacedbythecompanyandtheresponsemeasureshavenotundergonesignificantchangesduringthereportingperiod.Forspecificdetails,pleaserefertothecompany's2024annualreport.XI.DevelopmentandimplementationofmarketvaluemanagementsystemandvaluationenhancementplanWhethertheCompanyhasformulatedamarketvaluemanagementsystem.

√Yes□noWhethertheCompanyhasdisclosedthevaluationenhancementplan.

□Yes√noTheCompanyconsideredandpassedtheMarketValueManagementSystemattheEleventhMeetingoftheNinthSessionoftheBoardofDirectorsoftheCompanyheldonApril11,2025,whichspecifiestheinstitutionsandresponsibilitiesofmarketvaluemanagement,themainmethodsofmarketvaluemanagement,themonitoringandearlywarningmechanismandthecontingencymeasures,etc.,asdetailedintheannouncementoftheCompanypublishedontheJuchaoInformationNetwork(http://www.cninfo.com.cn)onApril15,2025.XII.Implementationofthe“Quality-Returndualimprovement”actionplan

WhethertheCompanydisclosedthe“quality-returndualimprovement”actionplan.

√Yes□noInalignmentwiththeguidingprinciplesproposedbytheCentralPoliticalBureauMeetingto"activatecapitalmarketsandboostinvestorconfidence,"andtheStateCouncilExecutiveMeeting'sdirectiveto"significantlyenhancethequalityandinvestmentvalueoflistedcompaniesthroughmorerobustandeffectivemeasurestostabilizemarketsandconfidence,"theCompanyiscommittedtosafeguardingshareholderrights,strengtheninginvestorconfidence,andpromotingtheCompany'slong-termsustainabledevelopment.TheCompanypublishedthe"AnnouncementontheActionPlanof"DoubleImprovementofQualityandReturn"(2024-002)on9March2024ondesignatedinformationdisclosuremediaandtheNetwork(http://www.cninfo.com.cn).Themaincontentsoftheactionplaninclude:

‘Innovation-drivendevelopmenttoexcelandspecializeincorebusinesses,’‘PuttingContributorsFirstandSharingtheCompany'sDevelopmentAchievements,’‘DeepeningCorporateGovernanceandEnhancingOperationalStandards,’and‘CompliantInformationDisclosureandSincereTwo-WayCommunication.’Duringthereportingperiod,basedonconfidenceinthecompany'sfuturesustainedandstabledevelopmentandrecognitionofitsvalue,thecompanyactivelyimplementedthe‘QualityandReturnsDualImprovement’actionplantoboostinvestorconfidenceandmaintainmarketstability.Mr.ShiGuanqun,director,boardsecretary,vicepresident,andchieffinancialofficerofthecompanyincreasedhisshareholdingby200,000throughsecondarymarkettrading,representing0.0065%ofthecompany'stotalissuedsharecapital.Additionally,toeffectivelyprotecttheinterestsofallinvestorsandenhanceinvestorconfidence,thecompanyissueda‘ShareRepurchasePlan’on15April2025,announcingitsintentiontorepurchaseaportionofthecompany'spubliclytradedsharesthroughcentralizedbiddinwithatotalvaluebetweenRMB300milliontoRMB600million.Asof30June2025,thecompanyhadrepurchased14,299,692shares,atatotalcostofRMB309,114,666.59(excludingtransactionfees).Forfurtherdetails,pleaserefertothe‘AnnouncementontheProgressofShareRepurchase’(2025-035)publishedbythecompanyon1July2025ondesignatedinformationdisclosuremediaandtheChinaSecuritiesInformationNetwork(http://www.cninfo.com.cn).Duringthereportingperiod,inordertobetterrewardshareholdersandsharethecompany'sdevelopmentachievementswiththem,thecompanyimplementedaspecialdividendand2024annualequitydistribution,distributingatotalof2,150,761,326yuan(includingtax)incash.TheCompanywillcontinuetofocusontechnologicaldevelopmentandproductinnovation,continuouslyresearchinganddevelopingfunctionalchemicalstoenrichtheproductlinesofits‘Chemical+’and‘Biotech+’platforms,enhancingitscorespecialtychemicalsbusiness,andcontinuouslyimprovingitscorecompetitivenesstoachievesteadyandsustainablecorporatedevelopment.

SectionIVCorporateGovernance、EnvironmentalandSocietyI.Changesofdirectors,supervisorsandseniorexecutives

□Applicable√NotapplicableTheCompany’sdirectors,supervisorsandseniorexecutivesremainsunchangedduringthecurrentreportingperiod,pleaserefertothe2024AnnualReportfordetails.II.Profitdistributionandconversionofcapitalreserveintosharecapital

√Applicable□Notapplicable

BonusSharesper10shares(shares)

III.Implementationofequityincentiveplans,employeestockownershipplansorotheremployeeincentiveprograms

√Applicable□Notapplicable

1.EquityincentiveNotapplicable.

2.Implementationofemployeestockownershipplans

√Applicable□NotapplicableAllactiveemployeestockownershipplansduringthereportingperiod

Scopeofemployees

Shareholdingsofdirectors,supervisorsandseniorexecutivesintheemployeestockownershipplanduringthereportingperiod

Changesinassetmanagementagencyduringthereportingperiod

□Applicable√NotapplicableChangesinequityduringthereportingperiodduetodisposalofsharesbyholders

□Applicable√NotapplicableExerciseofshareholders’rightsduringthereportingperiodPursuanttotheForthPhaseofEmployeeStockOwnershipPlan(Draft),suchplanvoluntarilywaivesthevotingrightsofholdingsharesinthegeneralmeetingoftheCompany,whilesharesacquiredthroughtheemployeestockownershipplancarrynovotingrightsinthegeneralmeeting.Duringthereportingperiod,theemployeestockownershipplandidnotexercisethevotingrightsofholdingsharesinthegeneralmeeting,butstillenjoyedtherighttoprofitdistribution.Otherrelevantsituationsandremarksoftheemployeestockownershipplanduringthereportingperiod

□Applicable√NotapplicableChangeinmembershipofthemanagementcommitteeofemployeestockownershipplan

□Applicable√NotapplicableFinancialimpactofemployeestockownershipplanontheCompanyinthereportingperiodandrelatedaccountingtreatments

□Applicable√NotapplicableTerminationofemployeestockownershipplanduringthereportingperiod

√Applicable□NotapplicableAsofJune26,2025,thecompanyhasfullydisposedofallsharesheldunderitsfourth-phaseEmployeeStockOwnershipPlan.Fordetails,pleaserefertotheAnnouncementontheCompletionofDisposalandTerminationoftheFourth-phaseEmployeeStockOwnershipPlan(AnnouncementNo.2025-034)publishedonthedesignatedinformationdisclosuremediaandtheCninfowebsite(http://www.cninfo.com.cn)

3.Otheremployeeincentiveprograms

□Applicable√NotapplicableIV.EnvironmentalInformationDisclosureStatus

WhetherlistedcompaniesandtheirmajorsubsidiariesareincludedintheListofEnterprisesSubjecttoMandatoryEnvironmentalInformationDisclosure

√Applicable□NotApplicable

NumberofenterprisesincludedintheListofEnterprisesSubjecttoMandatoryEnvironmentalInformationDisclosure(units)

V.Socialresponsibilities

Notapplicable

SectionVSignificantMatters

1.CommitmentperformancefulfilledduringthereportingperiodandoverduecommitmentsasoftheendofthereportingperiodbypartiesrelatedtocommitmentsincludingtheactualcontrolleroftheCompany,shareholders,relatedparties,acquirersandtheCompanyitself.

√Applicable□NotApplicable

Commitments

Commitments

II.Non-operatingoccupationoffundsoverlistedcompaniesbycontrollingshareholdersandotherrelatedparties

□Applicable√NotApplicableThereisnonon-operatingoccupationoffundsoverlistedcompaniesbycontrollingshareholdersandotherrelatedpartiesduringthereportingperiod.III.Illegalexternalguarantees

□Applicable√NotApplicableThereisnoillegalexternalguaranteeduringthereportingperiod.IV、Engagementanddismissalofaccountingfirms

Whetherthesemi-annualreporthasbeenauditedornot

□Yes√NoThesemi-annualreporthasnotbeenaudited.

V.StatementsbytheBoardofDirectors,theBoardofSupervisorsonthe“ModifiedAuditor’sReport”issuedbytheaccountingfirmduringthereportingperiod

□Applicable√NotApplicable

VI.ExplanationsbytheBoardofDirectorsonthe“ModifiedAuditor’sReport”issuedbytheaccountingfirmlastyear

□Applicable√NotApplicable

VII.Mattersrelatedtobankruptcyandrestructuring

□Applicable√NotApplicableTherearenomattersrelatedtobankruptcyandrestructuringduringthereportingperiod.

VIII.LawsuitsSignificantlawsuitsandarbitration

□Applicable√NotApplicableThereisnosignificantlawsuitandarbitrationduringthereportingperiod.Otherlawsuits

□Applicable√NotApplicable

IX.Penaltiesandrectification

□Applicable√NotApplicable

X.IntegrityoftheCompany,itscontrollingshareholdersandtheactualcontroller

□Applicable√NotApplicableXI.Significantrelatedpartytransactions

1.Relatedpartytransactionsrelevanttodailyoperations

□Applicable√NotApplicable

Thereisnorelatedpartytransactionrelevanttodailyoperationsduringthereportingperiod.

2.Relatedpartytransactionsinpurchaseorsaleofassetsorequities

□Applicable√NotApplicableThereisnorelatedpartytransactioninpurchaseorsaleofassetsorequitiesduringthereportingperiod.

3.Relatedpartytransactionsinjointexternalinvestments

□Applicable√NotApplicable

Thereisnorelatedpartytransactioninjointexternalinvestmentsduringthereportingperiod.

4.Relatedpartycreditor’srightsanddebts

□Applicable√NotApplicable

Thereisnorelatedcreditor’srightsordebtsduringthereportingperiod.

5.Transactionswithrelatedfinancialcompanies

□Applicable√NotApplicable

Thereisnobusinessofdeposits,loans,creditgrantingorotherfinancialbusinessesbetweentheCompanyanditsrelatedfinancialcompanies.

6.TransactionsbetweenfinancialcompaniescontrolledbytheCompanyandtheCompany’srelatedparties

□Applicable√NotApplicable

Thereisnobusinessofdeposits,loans,creditgrantingorotherfinancialbusinessesbetweenfinancialcompaniescontrolledbytheCompanyandtheCompany’srelatedparties.

7.Othersignificantrelatedpartytransactions

□Applicable√NotApplicable

Thereisnoothermaterialconnectedtransactionsduringthereportingperiod.

XV.Significantcontractsandperformance

1.Mattersoftrusteeship,contractingandleases

(1)Trusteeship

□Applicable√NotApplicableThereisnotrusteeshipduringthereportingperiod.

(2)Contracting

□Applicable√NotApplicableThereisnocontractingduringthereportingperiod.

(3)Leases

□Applicable√NotApplicableThereisnoleaseduringthereportingperiod.

2.Significantguarantees

√Applicable□NotApplicable

Unit:RMB0,000yuan

ExternalguaranteesbytheCompanyanditssubsidiariestothirdparties(guaranteestosubsidiariesareexcluded)

XinchangNHUVitaminsCo.,Ltd.

ofthereportingperiod(C4)

Specificdescriptionoftheuseofcompositeguarantees:

None

3.EntrustedWealthManagement

√Applicable□NotApplicable

Unit:RMB0,000yuan

High-riskentrustedfinancialproductswithindividualsignificantamountorlowsecurityandpoorliquidity

□Applicable√NotApplicableWhentheprincipalofentrustedfinancialproductsisexpectedtobeirrevocableorthereareotherconditionsresultinimpairmentofentrustedfinancialproducts

□Applicable√NotApplicable

4.Othersignificantcontracts

□Applicable√NotApplicableThereisnoothersignificantcontractduringthereportingperiod.

XIII.Othersignificantmatters

√Applicable□NotApplicable

1.ProgressofthefourthemployeestockownershipplanThefourthEmployeestockownershipPlanoftheCompanywasreviewedandapprovedbythefirstShareholdederGeneralmeetingheldonJune26,2023.ThisplanismanagedbytheCompanyitself,acquiredandheldbytheCompanythroughthesecondarymarkettrading,withadurationofnotmorethan24months.AsofSeptember25,2023,atotalof29,528,181sharesoftheCompanyhavebeenpurchasedunderthefourthphaseoftheemployeestockownershipplanthroughthesecondarymarketbiddingtransaction,accountingfor0.9553%oftheCompany'stotalsharecapitalatthattime,withatotaltransactionamountof479,442,157.08yuan(excludingtransactioncosts).Theaveragetransactionpricewasabout16.2368yuanpershare,andthecompanycompletedthetargetstockpurchaseofthefourthphaseoftheemployeestockownershipplan.Thelock-upperiodoftheunderlyingsharesacquiredunderthefourthEmployeeStockOwnershipPlanis12months,calculatedfromthedateoftheCompany'sannouncementofthetransferofthelastunderlyingsharestotheplan.AsofJune26,2025,allsharesofthecompanyheldunderthefourthphaseoftheEmployeeStockOwnershipPlanhavebeensoldout.Fordetails,pleaserefertothe"AnnouncementontheCompletionofSaleandTerminationoftheFourthPhaseoftheEmployeeStockOwnershipPlan"(2025-034)publishedbythecompanyondesignatedinformationdisclosuremediaandonhttp://www.cninfo.com.cn.(Note:OnDecember13,2024,theCompanycompletedthecancellationof17,485,676repurchasedshares,reducingthetotalnumberofsharesoutstandingfrom3,090,907,356to3,073,421,680.Theproportionofsharesheldunderthefourth-phaseemployeestockownershipplanwasadjustedto0.9607%ofthecurrenttotalsharesoutstanding.)

2.ProgressofsharerepurchaseOnApril11,2025,the11thmeetingofthe9thBoardofDirectorsheldbythecompanydeliberatedandapprovedthe"ProposalonthePlanofRepurchasingtheCompany'sShares",agreeingtothecompany'suseofitsownfundsorspecialloansforsharerepurchasestorepurchaseaportionofthecompany'spublicsharesthroughcentralizedbiddingtransactions,fortheimplementationofequityincentiveplansoremployeestockownershipplans.TherepurchaseamountrangesfromRMB300milliontoRMB600million,withtherepurchasepricenotexceedingRMB32pershare.Thespecificnumberofsharesrepurchasedanditsproportiontothetotalsharecapitalshallbebasedontheactualnumberofsharesrepurchasedupontheexpirationoftherepurchaseperiod.OnMay21,2025,thecompanyimplementedtheannualequitydistributionfor2024,withtherepurchasepriceadjustedfromnomorethanRMB32persharetonomorethanRMB31.5pershare.Theimplementationperiodforthissharerepurchaseisnottoexceed12monthsfromthedatethecompany'sBoardofDirectorsdeliberatesandapprovesthesharerepurchaseplan.AsofJune30,2025,thecompanyhasrepurchased14,299,692sharesthroughadedicatedsecuritiesaccountforsharerepurchasesthroughcentralizedbiddingtransactions,accountingfor0.4653%ofthecompany'stotalsharecapital.ThehighesttransactionpricewasRMB22.23pershare,andthelowesttransactionpricewasRMB21.25pershare,withatotaltransactionamountofRMB309,114,666.59(excludingtransactioncosts).Thisrepurchaseisincompliancewiththecompany'sestablishedsharerepurchaseplanandrelevantlawsandregulations.Forspecificdetails,pleaserefertothe"AnnouncementontheProgressofShareRepurchases"(2025-035)publishedbythecompanyondesignatedinformationdisclosuremediaandonhttp://www.cninfo.com.cn.

XIV.SignificantmattersofthesubsidiariesoftheCompany

√Applicable□NotApplicableTheCompany’swhollyownedsubsidiary,ShandongNHUFineChemicalScienceandTechnologyCo.,Ltd.,hascompletedtheabsorptionandmergerofanotherwhollyownedsubsidiary,ShandongNHUVitaminsCo.,Ltd.Post-merger,ShandongNHUFine

ChemicalScienceandTechnologyCo.,Ltd.continuesoperationswithitsregisteredcapitalincreasedfromRMB400milliontoRMB900million,whileShandongNHUVitaminsCo.,Ltd.hasbeendissolved,withallitsassets,liabilities,andobligationstransferredtothesurvivingentity.TherelevantindustrialandcommercialregistrationprocedureswerefinalizedinFebruary2025.ThistransactiondoesnotconstituteaconnectedtransactionundertheAdministrativeMeasuresforMajorAssetRestructuringofListedCompaniesnoramaterialassetreorganization.PursuanttotherelevantprovisionsoftheShenzhenStockExchangeListingRules,thisabsorptionmergerqualifiesforexemptionfromstandardproceduralrequirementsasitconstitutesatransactionbetweenentitiesundertheCompany'sconsolidatedfinancialreportingscope.

SectionVIChangesinShareCapitalandShareholders

I.ChangesinShareCapital

1.Details

Unit:Share

Items

Reasonformovements

√Applicable□NotApplicableBasedonconfidenceinthecompany'ssustainedandstablefuturedevelopmentandrecognitionofitsvalue,andinactiveimplementationofthe‘QualityandReturnsDualImprovement’actionplantoboostinvestorconfidenceandmaintainmarketstability,Mr.ShiGuanqun,Director,BoardSecretary,VicePresident,andChiefFinancialOfficerofthecompany,purchasedanadditional200,000sharesofthecompany'sstockthroughsecondarymarkettradingon17June2025,representing0.0065%ofthecompany'stotalissuedsharecapital.Priortothispurchase,Mr.ShiGuanqundirectlyheld10,477,838sharesofthecompany,representing0.34%ofthecompany'stotalissuedsharecapital.Afterthecompletionofthispurchase,Mr.ShiGuanqundirectlyholds10,677,838sharesofthecompany,representing0.35%ofthecompany'stotalissuedsharecapital.Approvalonmovementsinshares

□Applicable√NotApplicableTransferofshares

□Applicable√NotApplicableActualprogressofsharerepurchase

√Applicable□NotApplicable

Atits11thmeetingofthe9thBoardofDirectorsheldon11April2025,theCompanyapprovedthe‘ProposalontheShareRepurchasePlan,’agreeingtouseitsownfundsoraspecialloanforsharerepurchasestorepurchaseaportionofitspubliclytradedsharesthroughcentralizedauctiontradingforthepurposeofimplementinganequityincentiveplanoremployeestockownershipplan.TherepurchaseamountisexpectedtorangefromRMB300milliontoRMB600million.Asof30June2025,theCompanyrepurchasedsharesthroughadedicatedsecuritiesaccountforsharerepurchasesviacentralizedauctiontrading,repurchasingatotalof14,299,692shares,representing0.4653%oftheCompany'stotalissuedsharecapital.Thehighest

transactionpricewasRMB22.23pershare,andthelowesttransactionpricewasRMB21.25pershare.ThetotaltransactionamountwasRMB309,114,666.59(excludingtransactionfees).ThisrepurchasecomplieswiththeCompany'sestablishedsharerepurchaseplanandrelevantlawsandregulations.Forfurtherdetails,pleaserefertotheCompany'sannouncementtitled‘NoticeontheProgressofShareRepurchase’(2025-035)publishedonthedesignatedinformationdisclosuremediaandCNINFOwebsite(http://www.cninfo.com.cn).Implementationprogressofshareholdingreductionforsharesrepurchasedthroughcentralizedbidding

□Applicable√NotapplicableEffectofchangesinsharesonfinancialindicatorsofprecedingyearandprecedingperiodsuchasbasicEPSanddilutedEPS,netassetspershareattributabletoshareholdersofordinaryshares

□Applicable√NotApplicableOthercontentstheCompanyconsideredasnecessaryorsecuritiesregulatoryinstitutionsrequireddisclosure

□Applicable√Notapplicable

2、Changesinrestrictedshares

√Applicable□NotApplicable

Unit:Share

Shareholders

II.Issuanceandlistingofsecurities

□Applicable√Notapplicable

III.NumberofshareholdersoftheCompanyandtheirshareholdingconditions

Unit:Share

Totalnumberofordinaryshareholdersattheendofthereportingperiod

LPLC.

InitiatedFund

Theparticipationofshareholdersholdingmorethan5%ofshares,thetop10shareholdersandthetop10shareholderswithunlimitedsharesincirculationinlendingofsharesinthetransferandfinancingbusiness

□Applicable√NotapplicableTop10shareholdersandtop10shareholderswithunlimitedsharesoutstandingChangefromthepreviousperiodduetolending/returningofconvertiblebonds

□Applicable√NotapplicableDidthetop10commonshareholdersandthetop10unrestrictedcommonshareholdersofthecompanyengageinanyagreedrepurchasetransactionsduringthereportingperiod

□Yes√NoThetop10commonshareholdersandthetop10unrestrictedcommonshareholdersofthecompanydidnotengageinanyagreedrepurchasetransactionsduringthereportingperiod.IV.Changesinshareholdingsofdirectors,supervisorsandseniormanagement

√Applicable□NotApplicable

Name

V.Changesincontrollingshareholdersoractualcontrollers

Changesofholdingshareholdersduringthereportingperiod

□Applicable√NotapplicableTheCompanyhasnochangesofholdingshareholdersduringthereportingperiod.Changesofactualcontrollerwithinthereportingperiod

□Applicable√NotapplicableTheCompanyhasnochangesinactualcontrollerwithinthereportingperiod.BlockdiagramoftitleandcontrolrelationshipsbetweentheCompanyandtheactualcontrollerVI.DetailsofPreferredStock

□Applicable√NotApplicableTheCompanyhasnopreferredsharesduringthereportingperiod.

SectionVIIBonds

□Applicable√Notapplicable

SectionVIIIFinancialReportI.AuditReports

Hasthesemi-annualreportbeenaudited

□Yes√NoTheCompany’ssemi-annualreporthasnotbeenaudited.II.FinancialStatementsThemonetaryunitofthefinancialstatementsisRenminbi(RMB)Yuan.

1.ConsolidatedbalancesheetPreparedbyZhejiangNHUCo.,Ltd.

June30,2025

Unit:RMBYuan

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Legalrepresentative:HuBaifanOfficerinchargeofaccounting:ShiGuanqunHeadofaccountingdepartment:LiuFanglu

2.Parentcompanybalancesheet

Unit:RMBYuan

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Legalrepresentative:HuBaifanOfficerinchargeofaccounting:ShiGuanqunHeadofaccountingdepartment:LiuFanglu

3.Consolidatedincomestatement

Unit:RMBYuan

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Legalrepresentative:HuBaifanOfficerinchargeofaccounting:ShiGuanqunHeadofaccountingdepartment:LiuFangluThenetprofitrealizedbythemergedentitybeforethecombinationinthecurrentperiodwhereasame-controlbusinesscombinationoccurredis:RMB0.00,andthenetprofitrealizedinthepriorperiodis:RMB0.00.

4.Parentcompanyincomestatement

Unit:RMBYuan

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Legalrepresentative:HuBaifanOfficerinchargeofaccounting:ShiGuanqunHeadofaccountingdepartment:LiuFanglu

5.Consolidatedcashflowstatement

Unit:RMBYuan

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Legalrepresentative:HuBaifanOfficerinchargeofaccounting:ShiGuanqunHeadofaccountingdepartment:LiuFanglu

6.Parentcompanycashflowstatement

Unit:RMBYuan

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Items

Legalrepresentative:HuBaifanOfficerinchargeofaccounting:ShiGuanqunHeadofaccountingdepartment:LiuFanglu

7.Consolidatedstatementofchangesinequity

Currentperiod

Unit:RMBYuan

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Precedingperiodcomparative

Unit:RMBYuan

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8.Parentcompanystatementsofchangesinequity

Currentperiod

Unit:RMBYuan

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Precedingperiodcomparative

Unit:RMBYuan

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III.CompanyprofileZhejiangNHUCo.,Ltd.(the“Company”)wasjointlyestablishedbyXinchangCountySyntheticChemicalPlant,renamedasNHUHoldingGroupCo.,Ltd.onNovember17,2009)and9naturalpersonsincludingZhangPingyi,YuanYizhong,ShiCheng,HuBaishan,ShiGuanqun,WangXuewen,ShiSanfu,CuiXinrong,andWangXulinunderthedocumentofapprovalnumberedZheZhengWei[1999]9issuedbytheformerSecuritiesCommissionofthePeople’sGovernmentofZhejiangProvince.HeadquarteredinShaoxingCity,ZhejiangProvince,theCompanywasregisteredatZhejiangAdministrationforIndustryandCommerceonApril5,1999.Currently,theCompanyholdsabusinesslicensewithunifiedsocialcreditcodeof91330000712560575G,withregisteredcapitalof3,073,421,680.00yuan,totalshareof3,073,421,680shares(eachwithparvalueofoneyuan),ofwhich,36,559,752sharesarerestrictedoutstandingshares,and3,036,861,928sharesareunrestrictedoutstandingshares.TheCompany’sshareswerelistedonShenzhenStockExchangeonJune25,2004.TheCompanybelongstopharmaceuticalmanufacturingindustryandismainlyengagedinmanufacturingandsalesofnutritionproducts,flavorandfragrance,andnewpolymermaterials.ThisfinancialstatementhasbeenapprovedforexternalreleasebytheBoardofDirectorsatitsFourteenthMeetingonAugust26,2025.IV.Preparationbasisofthefinancialstatements

1.PreparationbasisThefinancialstatementshavebeenpreparedonthebasisofgoingconcern.

2.GoingconcernTheCompanyhasnoeventsorconditionsthatmaycastsignificantdoubtsupontheCompany’sabilitytocontinueasagoingconcernwithinthe12monthsafterthereportingperiod.V.Significantaccountingpoliciesandestimates

Notetospecificaccountingpoliciesandestimates:Basedonitsactualproductionandoperatingcharacteristics,theCompanyhasformulatedspecificaccountingpoliciesandestimatesfortransactionsandeventssuchasimpairmentoffinancialinstruments,inventory,depreciationoffixedassets,constructioninprogress,intangibleassets,andrevenuerecognition.

1.Statementofcompliance

ThefinancialstatementshavebeenpreparedinaccordancewiththerequirementsofChinaAccountingStandardsforBusinessEnterprises(CASBEs),andpresenttrulyandcompletelythefinancialposition,resultsofoperationsandcashflowsoftheCompany.

2.AccountingperiodTheaccountingyearoftheCompanyrunsfromJanuary1toDecember31undertheGregoriancalendar.

3.OperatingcycleExceptfortherealestateindustry,theCompanyhasarelativelyshortoperatingcycleforitsbusiness,anassetoraliabilityisclassifiedascurrentifitisexpectedtoberealizedorduewithin12months.Theoperatingcycleforrealestateindustrystartsfromthedevelopmentofpropertyandendsatsales,whichnormallyextendsover12monthsandissubjecttospecificprojects,therefore,anassetoraliabilityisclassifiedascurrentifitisexpectedtoberealizedorduewithinsuchoperatingcycle.

4.Functionalcurrency

ThefunctionalcurrencyoftheCompanyanditsdomesticsubsidiariesisRenminbi(RMB)Yuan,whilethefunctionalcurrencyofsubsidiariesengagedinoverseasoperationsincludingNHU(HongKong)TradingCo.,Ltd.,NHUEuropeGmbHandNHUSingaporePTE.LTD.,NHU/CHR.OLESENLATINAMERICAA/S,NHULIFESCIENCEGmbH,CONGTYTNHHNHUVIETNAM,NHUJAPANCO.LTD.,NHUBESLENMEGIDASANAYiVETiCARETLiMiTEDSIRKETI,NHUNorthAmericaLLCisthecurrencyoftheprimaryeconomicenvironmentinwhichtheyoperate.

5.Methodologyfordeterminingmaterialitythresholdandbasisforselection√applicable□Notapplicable

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6.Accountingtreatmentsofbusinesscombinationunderandnotundercommoncontrol

(1)AccountingtreatmentofbusinesscombinationundercommoncontrolAssetsandliabilitiesarisingfrombusinesscombinationaremeasuredatcarryingamountofthecombinedpartyincludedintheconsolidatedfinancialstatementsoftheultimatecontrollingpartyatthecombinationdate.Differencebetweencarryingamountoftheequityofthecombinedpartyincludedintheconsolidatedfinancialstatementsoftheultimatecontrollingpartyandthatofthecombinationconsiderationortotalparvalueofsharesissuedisadjustedtocapitalreserve,ifthebalanceofcapitalreserveisinsufficienttooffset,anyexcessisadjustedtoretainedearnings.

(2)AccountingtreatmentofbusinesscombinationnotundercommoncontrolWhencombinationcostisinexcessofthefairvalueofidentifiablenetassetsobtainedfromtheacquireeattheacquisitiondate,theexcessisrecognizedasgoodwill;otherwise,thefairvalueofidentifiableassets,liabilitiesandcontingentliabilities,andthemeasurementofthecombinationcostarereviewed,thenthedifferenceisrecognizedinprofitorloss.

7.Criteriafordeterminingcontrolandpreparationmethodofconsolidatedfinancialstatements

(1)CriteriafordeterminecontrolAparentcompanyisrecognizedascontrollingifithaspowerovertheinvestee,enjoysvariablereturnsthroughparticipationintheinvestee'srelevantactivities,andhastheabilitytouseitspowerovertheinvesteetoaffecttheamountofitsvariablereturns.

(2)Compilationmethodofconsolidatedfinancialstatements

Theparentcompanybringsallitscontrolledsubsidiariesintotheconsolidationscope.Theconsolidatedfinancialstatementsarecompiledbytheparentcompanyaccordingto“CASBE33–ConsolidatedFinancialStatements”,basedonrelevantinformationandthefinancialstatementsoftheparentcompanyanditssubsidiaries.

8.Classificationofjointventurearrangementsandaccountingtreatmentofjointoperations

(1)Jointarrangementsarecategorizedasjointoperationsandjointventures.

(2)Whenthecompanyisajointventurepartnerinajointoperation,thefollowingitemsrelatedtotheshareofinterestinthejointoperationarerecognized:

1)Recognizeassetsheldseparatelyandassetsheldjointlyinproportiontotheshareheld;

2)Recognizeliabilitiesassumedindividually,andliabilitiesassumedjointlyinproportiontotheshareheld;

3)Recognizerevenuesfromthesaleofthecompany'sshareofjointoperatingoutputs;

4)Recognizeincomefromjointoperationsarisingfromthesaleofassetsbasedonthecompany'sshareofownership;

5)Recognitionofexpensesincurredindividually,aswellasexpensesincurredbythejointoperationbasedonthecompany'sshareofownership.

9.Recognitioncriteriaofcashandcashequivalents

Cashaspresentedincashflowstatementreferstocashonhandanddepositondemandforpayment.Cashequivalentsrefertoshort-term,highlyliquidinvestmentsthatcanbereadilyconvertedtocashandthataresubjecttoaninsignificantriskofchangesinvalue.

10.Foreigncurrencytranslation

(1)TranslationoftransactionsdenominatedinforeigncurrencyTransactionsdenominatedinforeigncurrencyaretranslatedintoRMByuanattheapproximateexchangeratesimilartothespotexchangerateatthetransactiondateatinitialrecognition.Atthebalancesheetdate,monetaryitemsdenominatedinforeigncurrencyaretranslatedatthespotexchangerateatthebalancesheetdatewithdifference,exceptforthosearisingfromtheprincipalandinterestofexclusiveborrowingseligibleforcapitalization,includedinprofitorloss;non-cashitemscarriedathistoricalcostsaretranslatedattheapproximateexchangeratesimilartothespotexchangerateatthetransactiondate,withtheRMBamountsunchanged;non-cashitemscarriedatfairvalueinforeigncurrencyaretranslatedatthespotexchangerateatthedatewhenthefairvaluewasdetermined,withdifferenceincludedinprofitorlossorothercomprehensiveincome.

(2)TranslationoffinancialstatementsmeasuredinforeigncurrencyTheassetsandliabilitiesinthebalancesheetaretranslatedintoRMBatthespotrateatthebalancesheetdate;theequityitems,otherthanundistributedprofit,aretranslatedatthespotrateatthetransactiondate;therevenuesandexpensesintheincomestatementaretranslatedintoRMBattheapproximateexchangeratesimilartothespotexchangerateatthetransactiondate.Thedifferencearisingfromtheaforementionedforeigncurrencytranslationisincludedinothercomprehensiveincome.

11.Financialinstruments

(1)ClassificationoffinancialassetsandfinancialliabilitiesFinancialassetsareclassifiedintothefollowingthreecategorieswheninitiallyrecognized:1)financialassetsatamortizedcost;2)financialassetsatfairvaluethroughothercomprehensiveincome;3)financialassetsatfairvaluethroughprofitorloss.

Financialliabilitiesareclassifiedintothefollowingfourcategorieswheninitiallyrecognized:1)financialliabilitiesatfairvaluethroughprofitorloss;2)financialliabilitiesthatarisewhenatransferofafinancialassetdoesnotqualifyforderecognitionorwhenthecontinuinginvolvementapproachapplies;3)financialguaranteecontractsnotfallwithintheabovecategories1)and2),andcommitmentstoprovidealoanatabelow-marketinterestrate,whichdonotfallwithintheabovecategory1);4)financialliabilitiesatamortizedcost.

(2)Recognitioncriteria,measurementmethodandderecognitionconditionoffinancialassetsandfinancialliabilities

1)RecognitioncriteriaandmeasurementmethodoffinancialassetsandfinancialliabilitiesWhentheCompanybecomesapartytoafinancialinstrument,itisrecognizedasafinancialassetorfinancialliability.ThefinancialassetsandfinancialliabilitiesinitiallyrecognizedbytheCompanyaremeasuredatfairvalue;forthefinancialassetsandliabilitiesatfairvaluethroughprofitorloss,thetransactionexpensesthereofaredirectlyincludedinprofitorloss;forothercategoriesoffinancialassetsandfinancialliabilities,thetransactionexpensesthereofareincludedintotheinitiallyrecognizedamount.However,atinitialrecognition,foraccountsreceivablethatdonotcontainasignificantfinancingcomponentorincircumstanceswheretheCompanydoesnotconsiderthefinancingcomponentsincontractswithinoneyear,theCompanymeasuresthetransactionpriceinaccordancewith“CASBE14–Revenues”.

2)Subsequentmeasurementoffinancialassets①FinancialassetsmeasuredatamortizedcostTheCompanymeasuresitsfinancialassetsattheamortizedcostsusingeffectiveinterestmethod.Gainsorlossesonfinancialassetsthataremeasuredatamortizedcostandarenotpartofhedgingrelationshipsshallbeincludedintoprofitorlosswhenthefinancialassetsarederecognized,reclassified,amortizedusingeffectiveinterestmethodorrecognizedwithimpairmentloss.②DebtinstrumentinvestmentsatfairvaluethroughothercomprehensiveincomeTheCompanymeasuresitsdebtinstrumentinvestmentsatfairvalue.Interests,impairmentgainsorlosses,andgainsandlossesonforeignexchangethatcalculatedusingeffectiveinterestmethodshallbeincludedintoprofitorloss,whileothergainsorlossesareincludedintoothercomprehensiveincome.Accumulatedgainsorlossesthatinitiallyrecognizedasothercomprehensiveincomeshouldbetransferredoutintoprofitorlosswhenthefinancialassetsarederecognized.③EquityinstrumentinvestmentsatfairvaluethroughothercomprehensiveincomeTheCompanymeasuresitsequityinstrumentinvestmentsatfairvalue.Dividendsobtained(otherthanthoseaspartofinvestmentcostrecovery)shallbeincludedintoprofitorloss,whileothergainsorlossesareincludedintoothercomprehensiveincome.Accumulatedgainsorlossesthatinitiallyrecognizedasothercomprehensiveincomeshouldbetransferredoutintoretainedearningswhenthefinancialassetsarederecognized.④FinancialassetsatfairvaluethroughprofitorlossTheCompanymeasuresitsfinancialassetsatfairvalue.Gainsorlossesarisingfromchangesinfairvalue(includinginterestsanddividends)shallbeincludedintoprofitorloss,exceptforfinancialassetsthatarepartofhedgingrelationships.

3)Subsequentmeasurementoffinancialliabilities①FinancialliabilitiesatfairvaluethroughprofitorlossFinancialliabilitiesatfairvaluethroughprofitorlossincludeheld-for-tradingfinancialliabilities(includingderivativesthatareliabilities)andfinancialliabilitiesdesignatedasatfairvaluethroughprofitorloss.TheCompanymeasuressuchkindofliabilitiesatfairvalue.TheamountofchangesinthefairvalueofthefinancialliabilitiesthatareattributabletochangesintheCompany’s

owncreditriskshallbeincludedintoothercomprehensiveincome,unlesssuchtreatmentwouldcreateorenlargeaccountingmismatchesinprofitorloss.Othergainsorlossesonthosefinancialliabilities(includinginterests,changesinfairvaluethatareattributabletoreasonsotherthanchangesintheCompany’sowncreditrisk)shallbeincludedintoprofitorloss,exceptforfinancialliabilitiesthatarepartofhedgingrelationships.Accumulatedgainsorlossesthatoriginallyrecognizedasothercomprehensiveincomeshouldbetransferredoutintoretainedearningswhenthefinancialliabilitiesarederecognized.②FinancialliabilitiesthatarisewhenatransferofafinancialassetdoesnotqualifyforderecognitionorwhenthecontinuinginvolvementapproachappliesTheCompanymeasuresitsfinancialliabilitiesinaccordancewith“CASBE23–TransferofFinancialAssets”.③Financialguaranteecontractsnotfallwithintheabovecategories1)and2),andcommitmentstoprovidealoanatabelow-marketinterestrate,whichdonotfallwithintheabovecategory1)TheCompanymeasuresitsfinancialliabilitiesatthehigherof:a.theamountoflossallowancesinaccordancewithimpairmentrequirementsoffinancialinstruments;b.theamountinitiallyrecognizedlesstheamountofaccumulatedamortizationrecognizedinaccordancewith“CASBE14–Revenues”.④FinancialliabilitiesatamortizedcostTheCompanymeasuresitsfinancialliabilitiesatamortizedcostusingeffectiveinterestmethod.Gainsorlossesonfinancialliabilitiesthataremeasuredatamortizedcostandarenotpartofhedgingrelationshipsshallbeincludedintoprofitorlosswhenthefinancialliabilitiesarederecognizedandamortizedusingeffectiveinterestmethod.

4)Derecognitionoffinancialassetsandfinancialliabilities①Financialassetsarederecognizedwhen:

a.thecontractualrightstothecashflowsfromthefinancialassetsexpire;orb.thefinancialassetshavebeentransferredandthetransferqualifiesforderecognitioninaccordancewith“CASBE23–TransferofFinancialAssets”.②Onlywhentheunderlyingpresentobligationsofafinancialliabilityarerelievedtotallyorpartlymaythefinancialliabilitybederecognizedaccordingly.

(3)RecognitioncriteriaandmeasurementmethodoffinancialassetstransferWheretheCompanyhastransferredsubstantiallyalloftherisksandrewardsrelatedtotheownershipofthefinancialasset,itderecognizesthefinancialasset,andanyrightorliabilityarisingfromsuchtransferisrecognizedindependentlyasanassetoraliability.Ifitretainedsubstantiallyalloftherisksandrewardsrelatedtotheownershipofthefinancialasset,itcontinuesrecognizingthefinancialasset.WheretheCompanydoesnottransferorretainsubstantiallyalloftherisksandrewardsrelatedtotheownershipofafinancialasset,itisdealtwithaccordingtothecircumstancesasfollowsrespectively:1)iftheCompanydoesnotretainitscontroloverthefinancialasset,itderecognizesthefinancialasset,andanyrightorliabilityarisingfromsuchtransferisrecognizedindependentlyasanassetoraliability;2)iftheCompanyretainsitscontroloverthefinancialasset,accordingtotheextentofitscontinuinginvolvementinthetransferredfinancialasset,itrecognizestherelatedfinancialassetandrecognizestherelevantliabilityaccordingly.Ifthetransferofanentirefinancialassetsatisfiestheconditionsforderecognition,thedifferencebetweentheamountsofthefollowingtwoitemsisincludedinprofitorloss:1)thecarryingamountofthetransferredfinancialassetasofthedateofderecognition;2)thesumofconsiderationreceivedfromthetransferofthefinancialasset,andtheaccumulativeamountofthe

changesofthefairvalueoriginallyincludedinothercomprehensiveincomeproportionatetothetransferredfinancialasset(financialassetstransferredrefertodebtinstrumentinvestmentsatfairvaluethroughothercomprehensiveincome).Ifthetransferoffinancialassetpartiallysatisfiestheconditionstoderecognition,theentirecarryingamountofthetransferredfinancialassetis,betweentheportionwhichisderecognizedandtheportionwhichisnot,apportionedaccordingtotheirrespectiverelativefairvalue,andthedifferencebetweentheamountsofthefollowingtwoitemsisincludedintoprofitorloss:1)thecarryingamountoftheportionwhichisderecognized;2)thesumofconsiderationoftheportionwhichisderecognized,andtheportionoftheaccumulativeamountofthechangesinthefairvalueoriginallyincludedinothercomprehensiveincomewhichiscorrespondingtotheportionwhichisderecognized(financialassetstransferredrefertodebtinstrumentinvestmentsatfairvaluethroughothercomprehensiveincome).

(4)FairvaluedeterminationmethodoffinancialassetsandliabilitiesTheCompanyusesvaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataandinformationareavailabletomeasurefairvalue.Theinputstovaluationtechniquesusedtomeasurefairvaluearearrangedinthefollowinghierarchyandusedaccordingly:

1)Level1inputsareunadjustedquotedpricesinactivemarketsforidenticalassetsorliabilitiesthattheCompanycanaccessatthemeasurementdate.

2)Level2inputsareinputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectlyorindirectly.Level2inputsinclude:quotedpricesforsimilarassetsorliabilitiesinactivemarkets;quotedpricesforidenticalorsimilarassetsorliabilitiesinmarketsthatarenotactive;inputsotherthanquotedpricesthatareobservablefortheassetorliability,forexample,interestratesandyieldcurvesobservableatcommonlyquotedintervals;market-corroboratedinputs;

3)Level3inputsareunobservableinputsfortheassetorliability.Level3inputsincludeinterestratethatisnotobservableandcannotbecorroboratedbyobservablemarketdataatcommonlyquotedintervals,historicalvolatility,futurecashflowstobepaidtofulfillthedisposalobligationassumedinbusinesscombination,financialforecastdevelopedusingtheCompany’sowndata,etc.

(5)ImpairmentoffinancialinstrumentsTheCompanyusesexpectedcreditlossesasthebasisforimpairmentoffinancialassetsmeasuredatamortizedcost,investmentsindebtinstrumentsatfairvaluethroughothercomprehensiveincome,contractassets,leasereceivables,loancommitmentsclassifiedasotherthanfinancialliabilitiesatfairvaluethroughprofitorloss,financialliabilitiesthatarenotclassifiedasfinancialliabilitiesatfairvaluethroughprofitorloss,orfinancialguaranteecontractsthatdonotFinancialguaranteecontractsforwhichthetransferoffinancialassetsdoesnotmeettheconditionsforderecognitionorforwhichthereisacontinuinginvolvementinthefinancialliabilityarisingfromthetransferredfinancialassetaretreatedasimpairedandalossprovisionisrecognized.Expectedcreditlosses,theweightedaverageofcreditlossesonfinancialinstrumentsweightedbytheriskofdefault.Creditlossesarethedifferencebetweenallcontractualcashflowsreceivablebythecompanyunderthecontractdiscountedattheoriginaleffectiveinterestrateandallcashflowsexpectedtobecollected,i.e.thepresentvalueofallcashshortfalls.Inparticular,forfinancialassetspurchasedororiginatedbythecompanythatarecreditimpaired,theyarediscountedatthecredit-adjustedeffectiveinterestrateofthefinancialasset.Forpurchasedororiginatedfinancialassetsthathavebeensubjecttocreditimpairment,theCompanyrecognizesonlythecumulativechangeinexpectedcreditlossesovertheentireperiodofexistencefrominitialrecognitionasaprovisionforlossesatthebalancesheetdate.

Forleasereceivables,receivablesresultingfromtransactionsregulatedbyASBENo.14-Revenueandcontractassets,theCompanyappliesasimplifiedmeasurementapproachandmeasurestheallowanceforlossesatanamountequaltotheexpectedcreditlossesovertheentireduration.Forfinancialassetsotherthanthosemeasuredabove,theCompanyassessesateachbalancesheetdatewhethertherehasbeenasignificantincreaseincreditrisksinceinitialrecognition.Iftherehasbeenasignificantincreaseincreditrisksinceinitialrecognition,theCompanymeasurestheallowanceforlossesbasedontheamountofexpectedcreditlossesovertheentiredurationofthefinancialinstrument;iftherehasnotbeenasignificantincreaseincreditrisksinceinitialrecognition,theCompanymeasurestheallowanceforlossesbasedontheamountofexpectedcreditlossesofthefinancialinstrumentoverthenext12months.Thecompanydetermineswhetherthecreditriskofafinancialinstrumenthasincreasedsignificantlysinceinitialrecognitionbycomparingtheriskofdefaultofthefinancialinstrumentatthebalancesheetdatewiththeriskofdefaultatthedateofinitialrecognition,usingreasonablyavailableandsupportableinformation,includingforward-lookinginformation.Atthebalancesheetdate,ifthecompanydeterminesthatafinancialinstrumenthasonlyalowcreditrisk,itassumesthatthecreditriskofthefinancialinstrumenthasnotincreasedsignificantlysinceinitialrecognition.Thecompanyassessesexpectedcreditriskandmeasuresexpectedcreditlossesonthebasisofanindividualfinancialinstrumentoraportfoliooffinancialinstruments.Whenaportfoliooffinancialinstrumentsisusedasthebasis,thecompanyclassifiesthefinancialinstrumentsintodifferentportfoliosbasedoncommonriskcharacteristics.Thecompanyremeasuresexpectedcreditlossesateachbalancesheetdate,andtheresultingincreaseorreversaloftheamountoflossprovisionisrecognizedasanimpairmentlossorgaininprofitorlossfortheperiod.Forfinancialassetscarriedatamortizedcost,theallowanceforlossesisoffsetagainstthecarryingamountofthefinancialassetasstatedinthebalancesheet;fordebtinvestmentscarriedatfairvaluethroughothercomprehensiveincome,theCompanyrecognizesitsallowanceforlossesinothercomprehensiveincome,withoutoffsettingthecarryingamountofthefinancialasset.

(6)OffsettingoffinancialassetsandfinancialliabilitiesFinancialassetsandfinancialliabilitiesarepresentedseparatelyinthebalancesheetandarenotoffsetagainsteachother.However,thecompanypresentstheminthebalancesheetatthenetamountafteroffsettingeachotherifthefollowingconditionsaresimultaneouslymet:1)thecompanyhasalegalrighttooffsettherecognizedamountandsuchlegalrightiscurrentlyenforceable;2)thecompanyplanstosettlethenetamount,ortorealizethefinancialassetandsettlethefinancialliabilityatthesametime.Fortransfersoffinancialassetsthatdonotmeettheconditionsforderecognition,thecompanydoesnotoffsetthetransferredfinancialassetsandrelatedliabilities.

12．Criteriaforrecognizingandprovidingforexpectedcreditlossesonreceivables

(1)Receivableswithexpectedcreditlossesbasedonacombinationofcreditriskcharacteristics

PortfolioType

PortfolioType

(2)Accountsreceivable–comparisontableofagesandlifetimeexpectedcreditlossrateofportfoliogroupedwithages

Theageingofaccountsreceivable/otherreceivablesiscalculatedfromthemonthinwhichtheamountsareactuallyincurred.

(3)CriteriaforidentifyingreceivablesforwhichexpectedcreditlossesareprovidedonanindividualbasisForreceivablesandcontractassetswithcreditrisksignificantlydifferentfromthatoftheportfolio,theCompanyaccruesexpectedcreditlossesonanindividualbasis.13．Inventories

(1)ClassificationofinventoriesInventoriesincludefinishedgoodsorgoodsheldforsaleintheordinarycourseofbusiness,workinprocessintheprocessofproduction,materialsorsupplies,etc.tobeconsumedintheproductionprocessorintherenderingofservices.

(2)Accountingmethodfordispatchinginventories:

1)Inventoriesotherthandevelopmentproductsareissuedusingthemonth-endlump-sumweighted-averagemethod.

2)Whenaprojectisdeveloped,thelandusedfordevelopmentisincludedinthedevelopmentcostoftheprojectbycalculatingtheapportionmentbasedonthefloorareaofthedevelopmentproducts.

3)Issuanceofsimilardevelopmentproductsisaccountedforbytheaveragefloorareamethod.

4)Ifthepublicancillaryfacilitiesarecompletedearlierthantherelevantdevelopmentproducts,afterthepublicancillaryfacilitiesarecompletedandfinalized,theyareallocatedtothedevelopmentcostsoftherelevantdevelopmentprojectsaccordingtothebudgetedcostsoftherelevantdevelopmentprojects;ifthepublicancillaryfacilitiesarecompletedlaterthantherelevant

developmentproducts,thepublicancillaryfacilitiesfeesarefirstwithheldfromtherelevantdevelopmentproducts,andthenadjustedaccordingtothedifferencebetweentheactualnumberoffeesincurredandthenumberoffeeswithdrawnafterthecompletionandfinalizationofthepublicancillaryfacilities.Ifthepublicfacilitiesarelaterthanthecompletionoftherelevantdevelopmentproducts,thepublicfacilitiesfeeswillbewithheldbytherelevantdevelopmentproductsfirst,andthedifferencebetweentheactualamountincurredandtheamountwithheldwillbeadjustedaccordingtothefinalaccountafterthecompletionofthepublicfacilities.

(3)InventorysystemPerpetualinventorymethodisadopted.

(4)Amortizationmethodoflow-valueconsumablesandpackages

1)Low-valueconsumablesLow-valueconsumablesareamortizedwithone-offmethod.

2)PackagesPackagesareamortizedwithone-offmethod.

(5)CriteriaforrecognizingandprovidingforprovisionfordeclineinvalueofinventoriesAtthebalancesheetdate,inventoriesaremeasuredatthelowerofcostornetrealizablevalue,andprovisionfordeclineinvalueofinventoriesismadeforthedifferencebetweencostandnetrealizablevalue.Thenetrealizablevalueofinventoriesuseddirectlyforsaleisdeterminedinthenormalcourseofproductionandoperationbytheestimatedsellingpriceoftheinventorieslessestimatedsellingexpensesandrelatedtaxes;thenetrealizablevalueofinventoriesrequiringprocessingisdeterminedinthenormalcourseofproductionandoperationbytheestimatedsellingpriceofthefinishedgoodsproducedlessestimatedcoststobeincurreduptothetimeofcompletion,estimatedsellingexpensesandrelatedtaxes;Atthebalancesheetdate,ifthereisacontractpriceagreedforonepartofthesameinventoryandnocontractpriceexistsfortheotherpart,thenetrealizablevalueisdeterminedseparatelyandcomparedwithitscorrespondingcost,andtheamountofprovisionorreversalofallowancefordeclineinvalueofinventoriesisdeterminedseparately.

14.Long-termequityinvestments

(1)JudgmentofjointcontrolandsignificantinfluenceJointcontrolisthecontractuallyagreedsharingofcontrolofanarrangement,whichexistsonlywhendecisionsabouttherelevantactivitiesrequiretheunanimousconsentofthepartiessharingcontrol.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontrolofthesepolicies.

(2)Determinationofinvestmentcost

1)Forbusinesscombinationundercommoncontrol,iftheconsiderationofthecombiningpartyisthatitmakespaymentincash,transfersnon-cashassets,assumesitsliabilitiesorissuesequitysecurities,onthedateofcombination,itregardstheshareofthecarryingamountoftheequityofthecombinedpartyincludedintheconsolidatedfinancialstatementsoftheultimatecontrollingpartyastheinitialcostoftheinvestment.Thedifferencebetweentheinitialcostofthelong-termequityinvestmentsandthecarryingamountofthecombinationconsiderationpaidortheparvalueofsharesissuedoffsetscapitalreserve;ifthebalanceofcapitalreserveisinsufficienttooffset,anyexcessisadjustedtoretainedearnings.Whenlong-termequityinvestmentsareobtainedthroughbusinesscombinationundercommoncontrolachievedinstages,theCompanydetermineswhetheritisa“bundledtransaction”.Ifitisa“bundledtransaction”,stagesasawholeareconsideredasone

transactioninaccountingtreatment.Ifitisnota“bundledtransaction”,onthedateofcombination,investmentcostisinitiallyrecognizedattheshareofthecarryingamountofnetassetsofthecombinedpartyincludedtheconsolidatedfinancialstatementsoftheultimatecontrollingparty.Thedifferencebetweentheinitialinvestmentcostoflong-termequityinvestmentsattheacquisitiondateandthecarryingamountofthepreviouslyheldlong-termequityinvestmentsplusthecarryingamountoftheconsiderationpaidforthenewlyacquiredequityisadjustedtocapitalreserve;ifthebalanceofcapitalreserveisinsufficienttooffset,anyexcessisadjustedtoretainedearnings.

2)Forbusinesscombinationnotundercommoncontrol,investmentcostisinitiallyrecognizedattheacquisition-datefairvalueofconsiderationspaid.Whenlong-termequityinvestmentsareobtainedthroughbusinesscombinationnotundercommoncontrolachievedinstages,theCompanydeterminedwhethertheyarestand-alonefinancialstatementsorconsolidatedfinancialstatementsinaccountingtreatment:

a.Inthecaseofstand-alonefinancialstatements,investmentcostisinitiallyrecognizedatthecarryingamountofthepreviouslyheldlong-termequityinvestmentsplusthecarryingamountoftheconsiderationpaidforthenewlyacquiredequity.b.Inthecaseofconsolidatedfinancialstatements,theCompanydetermineswhetheritisa“bundledtransaction”.Ifitisa“bundledtransaction”,stagesasawholeareconsideredasonetransactioninaccountingtreatment.Ifitisnota“bundledtransaction”,thecarryingamountoftheacquirer’spreviouslyheldequityinterestintheacquireeisremeasuredattheacquisition-datefairvalue,andthedifferencebetweenthefairvalueandthecarryingamountisrecognizedininvestmentincome;whentheacquirer’spreviouslyheldequityinterestintheacquireeinvolvesothercomprehensiveincomeunderequitymethod,therelatedothercomprehensiveincomeisreclassifiedasincomefortheacquisitionperiod,excludingothercomprehensiveincomearisingfromchangesinnetliabilitiesorassetsfromremeasurementofdefinedbenefitplanoftheacquiree.

3)Long-termequityinvestmentsobtainedthroughwaysotherthanbusinesscombination:theinitialcostofalong-termequityinvestmentobtainedbymakingpaymentincashisthepurchasecostwhichisactuallypaid;thatobtainedonthebasisofissuingequitysecuritiesisthefairvalueoftheequitysecuritiesissued;thatobtainedthroughdebtrestructuringisdeterminedaccordingto“CASBE12–DebtRestructuring”;andthatobtainedthroughnon-cashassetsexchangeisdeterminedaccordingto“CASBE7–Non-cashAssetsExchange”

(3)SubsequentmeasurementandrecognitionmethodofprofitorlossForlong-termequityinvestmentswithcontrolrelationship,itisaccountedforwithcostmethod;forlong-termequityinvestmentswithjointcontrolorsignificantinfluencerelationship,itisaccountedforwithequitymethod.

(4)DisposalofasubsidiaryinstagesresultingintheCompany’slossofcontrol

1)Principlesfordeterminingwhetherornotatransactionisa"packagedeal"Inthecaseofastep-by-stepdisposalofequityinvestmentsinsubsidiariesthroughmultipletransactionsuntillossofcontrol,theCompanydetermineswhetherastep-by-steptransactionisa"packagedeal"bytakingintoaccountthetermsandconditionsofthetransactionagreementforeachstepofthestep-by-steptransaction,therespectivedisposalconsideration,thetargetofthedisposal,themethodofdisposal,andthepointoftimeofthedisposal,amongotherinformation.Iftheterms,conditionsandeconomicimpactsofeachtransactionmeetoneormoreofthefollowingconditions,itisgenerallyrecognizedthatmultipletransactionsare"packagedeals":

a.Thetransactionsareenteredintoatthesametimeorinconsiderationoftheeffectsofeachother;b.Thetransactionsasawholeachieveacompletebusinessresult;

c.theoccurrenceofonetransactionisdependentontheoccurrenceofatleastoneothertransaction;d.atransactionisuneconomicwhenviewedinisolation,butiseconomicwhenconsideredinconjunctionwithothertransactions.

2)Accountingtreatmentfortransactionsthatarenot"packagedeals"a.IndividualfinancialstatementsForequityinterestsdisposedof,thedifferencebetweenthebookvalueandtheactualacquisitionpriceisrecognizedinprofitorlossforthecurrentperiod.Fortheremainingequityinterest,ifitstillhassignificantinfluenceovertheinvesteeunitorexercisesjointcontrolwithotherparties,itistransferredtotheequitymethodofaccounting;ifitcannolongerexercisecontrol,jointcontrolorsignificantinfluenceovertheinvesteeunit,itisaccountedforinaccordancewiththerelevantprovisionsof"AccountingStandardforBusinessEnterprises(ASBE)No.22-RecognitionandMeasurementofFinancialInstruments".b.ConsolidatedfinancialstatementsPriortothelossofcontrol,thedifferencebetweenthedisposalpriceandthedisposallong-termequityinvestment'scorrespondingshareofthesubsidiary'snetassetscalculatedonacontinuousbasisfromthedateofpurchaseorthedateofconsolidationisadjustedtocapitalsurplus(capitalpremium),andifcapitalpremiumisnotsufficienttobeeliminated,itiseliminatedtoretainedearnings.UponlossofcontroloverAtomics,theremainingequityinterestisremeasuredatitsfairvalueatthedateoflossofcontrol.Thedifferencebetweenthesumoftheconsiderationobtainedfromthedisposaloftheequityinterestandthefairvalueoftheremainingequityinterest,lesstheshareoftheoriginalsubsidiary'snetassetscontinuouslymeasuredfromthedateofpurchaseorthedateofconsolidationbasedontheoriginalshareholdingratio,isrecognizedasinvestmentincomeintheperiodinwhichcontrolislost,andgoodwillisalsoeliminated.Othercomprehensiveincome,suchasothercomprehensiveincomerelatedtoequityinvestmentsintheoriginalsubsidiaries,shouldbetransferredtoinvestmentincomeinthecurrentperiodwhencontrolislost.

）Accountingtreatmentof"packagetransactionsa.IndividualfinancialstatementsEachtransactionisaccountedforasadisposalofasubsidiaryandlossofcontrol.However,thedifferencebetweenthedisposalpriceandthecarryingvalueofthelong-termequityinvestmentcorrespondingtothedisposaloftheinvestmentineachcasebeforethelossofcontrolisrecognizedasothercomprehensiveincomeintheindividualfinancialstatementsandtransferredtoprofitorlossintheperiodofthelossofcontrolwhenthelossofcontroloccurs.b.ConsolidatedfinancialstatementsEachtransactionisaccountedforasadisposalofasubsidiaryandlossofcontrol.However,thedifferencebetweenthedisposalpriceandtheshareofthenetassetsofthesubsidiarycorrespondingtothedisposaloftheinvestmentineachcasebeforethelossofcontrolisrecognizedasothercomprehensiveincomeintheconsolidatedfinancialstatementsandtransferredtoprofitorlossintheperiodoflossofcontrolwhenthecontrolislost.

15.Fixedassets

(1)Recognitionprinciples

Fixedassetsaretangibleassetsheldforuseintheproductionofgoodsorrenderingofservices,forrentaltoothers,orforadministrativepurposes,andexpectedtobeusedduringmorethanoneaccountingyear.Fixedassetsarerecognizedif,andonlyif,

itisprobablethatfutureeconomicbenefitsassociatedwiththeassetswillflowtotheCompanyandthecostoftheassetscanbemeasuredreliably.

(2)Depreciationmethod

Categories

16.Constructioninprogress

(1)Constructioninprogressisrecognizedif,andonlyif,itisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheCompany,andthecostoftheitemcanbemeasuredreliably.Constructioninprogressismeasuredattheactualcostincurredtoreachitsdesignedusableconditions.

(2)Constructioninprogressistransferredintofixedassetsatitsactualcostwhenitreachesthedesignedusableconditions.Whentheauditingoftheconstructioninprogresswasnotfinishedwhilereachingthedesignedusableconditions,itistransferredtofixedassetsusingestimatedvaluefirst,andthenadjustedaccordinglywhentheactualcostissettled,buttheaccumulateddepreciationisnottobeadjustedretrospectively.

17、Borrowingcosts

(1)RecognitionprincipleofborrowingcostscapitalizationWheretheborrowingcostsincurredtotheCompanycanbedirectlyattributabletotheacquisitionandconstructionorproductionofassetseligibleforcapitalization,itiscapitalizedandincludedinthecostsofrelevantassets;otherborrowingcostsarerecognizedasexpensesonthebasisoftheactualamountincurred,andareincludedinprofitorloss.

(2)Borrowingcostscapitalizationperiod

1)Theborrowingcostsarenotcapitalizedunlessthefollowingrequirementsareallmet:1)theassetdisbursementshavealreadyincurred;2)theborrowingcostshavealreadyincurred;and3)theacquisitionandconstructionorproductionactivitieswhicharenecessarytopreparetheassetforitsintendeduseorsalehavealreadystarted.

2)Suspensionofcapitalization:wheretheacquisitionandconstructionorproductionofaqualifiedassetisinterruptedabnormallyandtheinterruptionperiodlastsformorethan3months,thecapitalizationoftheborrowingcostsissuspended;theborrowingcostsincurredduringsuchperiodarerecognizedasexpenses,andareincludedinprofitorloss,tilltheacquisitionandconstructionorproductionoftheassetrestarts.

3)Ceasingofcapitalization:whenthequalifiedassetunderacquisitionandconstructionorproductionisreadyfortheintendeduseorsale,thecapitalizationoftheborrowingcostsisceased.

(3)CapitalizationrateandcapitalizedamountofborrowingcostsForborrowingsexclusivelyfortheacquisitionandconstructionorproductionofassetseligibleforcapitalization,theto-be-capitalizedamountofinterestsisdeterminedinlightoftheactualinterestexpensesincurred(includingamortizationofpremiumordiscountbasedoneffectiveinterestmethod)ofthespecialborrowingsinthecurrentperiodlesstheinterestincomeontheunusedborrowingsasadepositinthebankorasatemporaryinvestment;whereageneralborrowingisusedfortheacquisitionandconstructionorproductionofassetseligibleforcapitalization,theCompanycalculatesanddeterminestheto-be-capitalizedamountofinterestsonthegeneralborrowingbymultiplyingtheweightedaverageassetdisbursementofthepartoftheaccumulativeassetdisbursementslessthegeneralborrowingbythecapitalizationrateofthegeneralborrowingused.

18.Intangibleassets

(1)Measurementmethod,usefullivesandimpairmenttest

1)Intangibleassetsincludelanduseright,patentright,non-patentedtechnology,etc.Theinitialmeasurementofintangibleassetsisbasedonitscost.

2)Forintangibleassetswithfiniteusefullives,theiramortizationamountsareamortizedwithintheirusefullivessystematicallyandreasonably,ifitisunabletodeterminetheexpectedrealizationpatternreliably,intangibleassetsareamortizedbythestraight-linemethodwithdetailsasfollows:

Items

(2)ScopeofR&Dexpendituresandrelatedaccountingtreatment

1)ThescopeofR&Dexpenditurestobepooled

①PersonnellaborcostsPersonnellaborcostsincludewagesandsalaries,basicpensioninsurancepremiums,basicmedicalinsurancepremiums,unemploymentinsurancepremiums,workinjuryinsurancepremiums,maternityinsurancepremiumsandhousingfundoftheCompany'sresearchanddevelopmentpersonnel,aswellaslaborcostsofexternalresearchanddevelopmentpersonnel.Whereresearchanddevelopmentpersonnelserveonmultipleresearchanddevelopmentprojectsatthesametime,laborcostsarerecognizedonthebasisoftherecordsofhoursworkedbyresearchanddevelopmentpersonnelforeachresearchanddevelopmentprojectprovidedbytheCompany'smanagement,andareallocatedonaproratabasisamongthedifferentresearchanddevelopmentprojects.Wherepersonneldirectlyengagedinresearchanddevelopmentactivitiesandexternalresearchanddevelopmentpersonnelaresimultaneouslyengagedinnon-researchanddevelopmentactivities,theCompanyallocatesthepersonnellaborcostsactuallyincurredbytheresearchanddevelopmentpersonnelbetweenresearchanddevelopmentexpensesandproductionandoperatingexpensesbasedontherecordsoftheirworkinghoursindifferentpositions,inaccordancewiththeproportionoftheiractualworkinghoursandotherreasonablemethods.

②Directinputcosts

DirectinputcostsrefertotherelevantexpendituresactuallyincurredbytheCompanyfortheimplementationofresearchanddevelopmentactivities.Itincludes:

a.directlyconsumedmaterials,fuelandpowercosts;b.thedevelopmentandmanufacturingcostsofmoldsandprocessequipmentusedforintermediatetestsandproducttrialproduction,thepurchasecostsofsamples,prototypesandgeneraltestingmeansthatdonotconstitutefixedassets,andtheinspectioncostsoftrialproducts;c.)thecostsofoperatingandmaintaining,adjusting,inspecting,testingandrepairinginstrumentsandequipmentusedforresearchanddevelopmentactivities.③Depreciationexpenseandlong-termamortizationexpenseDepreciationexpensereferstothedepreciationofinstruments,equipmentandbuildingsinuseusedinresearchanddevelopmentactivities.Ifinstruments,equipmentandbuildingsinuseareusedforresearchanddevelopmentactivitiesandarealsousedfornon-researchanddevelopmentactivities,necessaryrecordsarekeptoftheuseofsuchinstruments,equipmentandbuildingsinuse,andthedepreciationexpenseactuallyincurredisallocatedbetweenresearchanddevelopmentexpensesandproductionandoperatingexpensesusingareasonablemethodbasedonfactorssuchasactualman-hoursworkedandsquarefootageofspaceutilized.Long-termamortizedexpensesarelong-termamortizedexpensesincurredinthecourseofalteration,modification,renovationandrepairofresearchanddevelopmentfacilities,whicharesummarizedonthebasisofactualexpendituresandamortizedequallyoveraspecifiedperiodoftime.④AmortizationexpenseofintangibleassetsAmortizationexpenseofintangibleassetsistheamortizationexpenseofsoftware,intellectualproperty,andnon-patentedtechnologies(know-how,licenses,designsandcalculationmethods,etc.)usedinresearchanddevelopmentactivities.⑤DesigncostsDesignexpensesareexpensesincurredfortheconception,developmentandmanufactureofnewproductsandprocesses,designofprocesses,technicalspecifications,formulationofprotocols,operationalcharacteristics,etc.,includingexpensesrelatedtocreativedesignactivitiesforobtaininginnovative,creativeandbreakthroughproducts.⑥EquipmentdebuggingcostsandtestcostsEquipmentdebuggingcostsarecostsincurredforresearchanddevelopmentactivitiesintheprocessofpreparingworkpieces,includingcostsincurredforactivitiessuchasthedevelopmentofspecial,specializedproductionmachines,changesinproductionandqualitycontrolprocedures,orthedevelopmentofnewmethodsandstandards.Costsincurredforroutinetoolingpreparationandindustrialengineeringformassproductionandcommercializationarenotincludedinthescopeofcollection.⑦CommissionedexternalresearchanddevelopmentcostsEntrustedexternalresearchanddevelopmentexpensesareexpensesincurredbytheCompanyforresearchanddevelopmentactivitiesentrustedtootherorganizationsorindividualsinsideoroutsidethecountry(theresultsoftheresearchanddevelopmentactivitiesareownedbytheCompanyandarecloselyrelatedtotheCompany'smainbusinessoperations).⑧Otherexpenses

Otherexpensesrefertoexpensesotherthanthosementionedabovethataredirectlyrelatedtoresearchanddevelopmentactivities,includingtechnicallibraryanddatafees,datatranslationfees,expertconsultationfees,insurancefeesforhigh-techresearchanddevelopment,search,demonstration,evaluation,appraisalandacceptancefeesforresearchanddevelopmentresults,applicationfees,registrationfeesandagencyfeesforintellectualpropertyrights,meetingfees,travelfeesandcommunicationfees.

）Expendituresontheresearchphaseofaninternalprojectarerecognizedasprofitorlosswhentheyareincurred.AnintangibleassetarisingfromthedevelopmentphaseofaninternalprojectisrecognizediftheCompanycandemonstrateallofthefollowings:

1)thetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuseorsale;2)itsintentiontocompletetheintangibleassetanduseorsellit;3)howtheintangibleassetwillgenerateprobablefutureeconomicbenefits,amongotherthings,theCompanycandemonstratetheexistenceofamarketfortheoutputoftheintangibleassetortheintangibleassetitselfor,ifitistobeusedinternally,theusefulnessoftheintangibleasset;4)theavailabilityofadequatetechnical,financialandotherresourcestocompletethedevelopmentandtouseorselltheintangibleasset;and5)itsabilitytomeasurereliablytheexpenditureattributabletotheintangibleassetduringitsdevelopment.

19.Impairmentofpartoflong-termassetsForlong-termassetssuchaslong-termequityinvestments,fixedassets,constructioninprogress,right-of-useassets,intangibleassetswithfiniteusefullives,etc.,ifatthebalancesheetdatethereisindicationofimpairment,therecoverableamountistobeestimated.Forgoodwillrecognizedinbusinesscombinationandintangibleassetswithindefiniteusefullives,nomatterwhetherthereisindicationofimpairment,impairmenttestisperformedannually.Impairmenttestongoodwillisperformedonrelatedassetgrouporassetgroupportfolio.Whentherecoverableamountofsuchlong-termassetsislowerthantheircarryingamount,thedifferenceisrecognizedasprovisionforassetsimpairmentthroughprofitorloss.

20.Long-termprepaidexpenses

Long-termprepaidexpensesrefertocoststhathavebeenrecognizedbutwithamortizationperiodoveroneyear(excludingoneyear).Theyarerecordedwithactualcost,andevenlyamortizedwithinthebeneficiaryperiodorstipulatedperiod.Ifitemsoflong-termprepaymentsfailtobebeneficialtothefollowingaccountingperiods,residualvaluesofsuchitemsareincludedinprofitorloss.

21.Employeebenefits

(1)Short-termemployeebenefits

TheCompanyrecognizes,intheaccountingperiodinwhichanemployeeprovidesservice,short-termemployeebenefitsactuallyincurredasliabilities,withacorrespondingchargetoprofitorlossorthecostofarelevantasset.

(2)Post-employmentbenefits

TheCompanyclassifiespost-employmentbenefitplansaseitherdefinedcontributionplansordefinedbenefitplans.

1)TheCompanyrecognizesintheaccountingperiodinwhichanemployeeprovidesservicethecontributionpayabletoadefinedcontributionplanasaliability,withacorrespondingchargetoprofitorlossorthecostofarelevantasset.

2)AccountingtreatmentbytheCompanyfordefinedbenefitplanusuallyinvolvesthefollowingsteps:

①Inaccordancewiththeprojectedunitcreditmethod,usingunbiasedandmutuallycompatibleactuarialassumptionstoestimaterelateddemographicvariablesandfinancialvariables,measuretheobligationsunderthedefinedbenefitplan,anddeterminethe

periodstowhichtheobligationsareattributed.Meanwhile,theCompanydiscountsobligationsunderthedefinedbenefitplantodeterminethepresentvalueofthedefinedbenefitplanobligationsandthecurrentservicecost;

②Whenadefinedbenefitplanhasassets,theCompanyrecognizesthedeficitorsurplusbydeductingthefairvalueofdefinedbenefitplanassetsfromthepresentvalueofthedefinedbenefitplanobligationasanetdefinedbenefitplanliabilityornetdefinedbenefitplanasset.Whenadefinedbenefitplanhasasurplus,theCompanymeasuresthenetdefinedbenefitplanassetatthelowerofthesurplusinthedefinedbenefitplanandtheassetceiling;

③Attheendoftheperiod,theCompanyrecognizesthefollowingcomponentsofemployeebenefitscostarisingfromdefinedbenefitplan:a.servicecost;b.netinterestonthenetdefinedbenefitplanliability(asset);andc.changesasaresultofremeasurementofthenetdefinedbenefitliability(asset).Itemaanditembarerecognizedinprofitorlossorthecostofarelevantasset.Itemcisrecognizedinothercomprehensiveincomeandisnottobereclassifiedsubsequentlytoprofitorloss.However,theCompanymaytransferthoseamountsrecognizedinothercomprehensiveincomewithinequity.

(3)Terminationbenefits

Terminationbenefitsprovidedtoemployeesarerecognizedasanemployeebenefitliabilityforterminationbenefits,withacorrespondingchargetoprofitorlossattheearlierofthefollowingdates:a.whentheCompanycannotunilaterallywithdrawtheofferofterminationbenefitsbecauseofanemploymentterminationplanoracurtailmentproposal;orb.whentheCompanyrecognizescostorexpensesrelatedtoarestructuringthatinvolvesthepaymentofterminationbenefits.

(4)Otherlong-termemployeebenefits

Whenotherlong-termemployeebenefitsprovidedtotheemployeessatisfiedtheconditionsforclassifyingasadefinedcontributionplan,thosebenefitsareaccountedforinaccordancewiththerequirementsrelatingtodefinedcontributionplan,whileotherbenefitsareaccountedforinaccordancewiththerequirementsrelatingtodefinedbenefitplan.TheCompanyrecognizesthecostofemployeebenefitsarisingfromotherlong-termemployeebenefitsasthefollowings:a.servicecost;b.netinterestonthenetliabilityornetassetsofotherlong-termemployeebenefits;andc.changesasaresultofremeasurementofthenetliabilityornetassetsofotherlong-termemployeebenefits.Asapracticalexpedient,thenettotaloftheaforesaidamountsisrecognizedinprofitorlossorincludedinthecostofarelevantasset.

22.projectedliability

（1）Whenanobligationarisingfromcontingenciessuchasguaranteesgiventoothers,litigationmatters,productqualityassurance,losscontracts,etc.becomesapresentobligationofthecompany,anditisprobablethattheperformanceoftheobligationwillresultinanoutflowofeconomicbenefitstothecompanyandtheamountoftheobligationcanbemeasuredreliably,thecompanyrecognizestheobligationasaprojectedliability.（

）Thecompanyinitiallymeasuresaprojectedliabilityonthebasisofthebestestimateoftheexpenditurerequiredtosettletherelevantpresentobligationandreviewsthecarryingamountoftheprojectedliabilityatthebalancesheetdate.

23.RevenueAccountingpoliciesonrevenuerecognitionandmeasurement

（1）RevenuerecognitionprinciplesAtcontractinception,theCompanyshallassessthecontractsandshallidentifyeachperformanceobligationinthecontracts,anddeterminewhethertheperformanceobligationshouldbesatisfiedovertimeoratapointintime.TheCompanysatisfiesaperformanceobligationovertimeifoneofthefollowingcriteriaismet,otherwise,theperformanceobligationissatisfiedatapointintime:1)thecustomersimultaneouslyreceivesandconsumestheeconomicbenefitsprovidedbytheCompany’sperformanceastheCompanyperforms;2)thecustomercancontrolgoodsastheyarecreatedbytheCompany’sperformance;3)goodscreatedduringtheCompany’sperformancehaveirreplaceableusesandtheCompanyhasanenforceablerighttothepaymentsforperformancecompletedtodateduringthewholecontractperiod.Foreachperformanceobligationsatisfiedovertime,theCompanyshallrecognizerevenueovertimebymeasuringtheprogresstowardscompletesatisfactionofthatperformanceobligation.Inthecircumstancethattheprogresscannotbemeasuredreasonably,

butthecostsincurredinsatisfyingtheperformanceobligationareexpectedtoberecovered,theCompanyshallrecognizerevenueonlytotheextentofthecostsincurreduntilitcanreasonablymeasuretheprogress.Foreachperformanceobligationsatisfiedatapointintime,theCompanyshallrecognizerevenueatthetimepointthatthecustomerobtainscontrolofrelevantgoodsorservices.Todeterminewhetherthecustomerhasobtainedcontrolofgoods,theCompanyshallconsiderthefollowingindications:1)theCompanyhasapresentrighttopaymentforthegoods,i.e.,thecustomerispresentlyobligedtopayforthegoods;2)theCompanyhastransferredthelegaltitleofthegoodstothecustomer,i.e.,thecustomerhaslegaltitletothegoods;3)theCompanyhastransferredphysicalpossessionofthegoodstothecustomer,i.e.,thecustomerhasphysicallypossessedthegoods;4)theCompanyhastransferredsignificantrisksandrewardsofownershipofthegoodstothecustomer,i.e.,thecustomerhasobtainedsignificantrisksandrewardsofownershipofthegoods;5)thecustomerhasacceptedthegoods;6)otherevidenceindicatingthecustomerhasobtainedcontroloverthegoods.（

）Revenuemeasurementprinciple

1)Revenueismeasuredattheamountofthetransactionpricethatisallocatedtoeachperformanceobligation.ThetransactionpriceistheamountofconsiderationtowhichtheCompanyexpectstobeentitledinexchangefortransferringgoodsorservicestoacustomer,excludingamountscollectedonbehalfofthirdpartiesandthoseexpectedtoberefundedtothecustomer.

2)Iftheconsiderationpromisedinacontractincludesavariableamount,theCompanyshallconfirmthebestestimateofvariableconsiderationatexpectedvalueorthemostlikelyamount.However,thetransactionpricethatincludestheamountofvariableconsiderationonlytotheextentthatitishighprobablethatasignificantreversalintheamountofcumulativerevenuerecognizedwillnotoccurwhentheuncertaintyassociatedwiththevariableconsiderationissubsequentlyresolved.

3)Inthecircumstancethatthecontractcontainsasignificantfinancingcomponent,theCompanyshalldeterminethetransactionpricebasedonthepricethatacustomerwouldhavepaidforifthecustomerhadpaidcashforobtainingcontroloverthosegoodsorservices.Thedifferencebetweenthetransactionpriceandtheamountofpromisedconsiderationisamortizedundereffectiveinterestmethodovercontractualperiod.TheeffectsofasignificantfinancingcomponentshallnotbeconsiderediftheCompanyexpects,atthecontractinception,thattheperiodbetweenwhenthecustomerobtainscontrolovergoodsorservicesandwhenthecustomerpaysconsiderationwillbeoneyearorless.

4)Forcontractscontainingtwoormoreperformanceobligations,theCompanyshalldeterminethestand-alonesellingpriceatcontractinceptionofthedistinctgoodunderlyingeachperformanceobligationandallocatethetransactionpricetoeachperformanceobligationonarelativestand-alonesellingpricebasis.Differentoperatingmodelsforthesametypeofbusinessinvolvingdifferentrevenuerecognitionandmeasurementmethods

(1)RevenuefromsalesofproductsTheCompany’smainproductsarenutrition,flavorandfragrance,newpolymermaterials,etc.Salesofproductsareperformanceobligationssatisfiedatapointintime.RevenuefromdomesticsalesisrecognizedwhentheCompanyhasdeliveredgoodstothecustomerasagreedbycontractandhasobtaineddeliverynotesignedbythecustomer,andtheCompanyhascollectedthepaymentsorhasobtainedtherighttothepayments,andrelatedeconomicbenefitsarehighlyprobabletoflowtotheCompany.RevenuefromoverseassalesisrecognizedwhentheCompanyhasdeclaredgoodstothecustomsbasedoncontractualagreementsandhasobtainedabilloflading,andtheCompanyhascollectedthepaymentsorhasobtainedtherighttothepayments,andrelatedeconomicbenefitsarehighlyprobabletoflowtotheCompany.

(2)RevenuefromrealestatesalesRealestatesalesareperformanceobligationssatisfiedatapointintime.RevenuefromrealestatesalesisrecognizedwhentheCompanyhasdeliveredpropertiestothecustomerasagreedbycontractandhasobtainedtheclientacceptancereceiptssignedbythecustomer,andtheCompanyhascollectedthepaymentsorhasobtainedtherighttothepayments,andrelatedeconomicbenefitsarehighlyprobabletoflowtotheCompany.

24.Contractassets,contractliabilities

TheCompanypresentscontractassetsorcontractliabilitiesinthebalancesheetbasedontherelationshipbetweenitsperformanceobligationsandcustomers’payments.Contractassetsandcontractliabilitiesunderthesamecontractshalloffseteachotherandbe

presentedonanetbasis.TheCompanypresentsanunconditionalrighttoconsideration(i.e.,onlythepassageoftimeisrequiredbeforetheconsiderationisdue)asareceivable,andpresentsarighttoconsiderationinexchangeforgoodsthatithastransferredtoacustomer(whichisconditionalonsomethingotherthanthepassageoftime)asacontractasset.TheCompanypresentsanobligationtotransfergoodstoacustomerforwhichtheCompanyhasreceivedconsideration(ortheamountisdue)fromthecustomerasacontractliability.25．Governmentgrants

(1)Governmentgrantsshallberecognizedif,andonlyif,thefollowingconditionsareallmet:

1)theCompanywillcomplywiththeconditionsattachingtothegrants;

2)thegrantswillbereceived.Monetarygovernmentgrantsaremeasuredattheamountreceivedorreceivable.Non-monetarygovernmentgrantsaremeasuredatfairvalue,andcanbemeasuredatnominalamountinthecircumstancethatfairvaluecannotbeassessed.

（2）BasisofjudgmentandaccountingtreatmentofgovernmentgrantsrelatedtoassetsGovernmentgrantsthatarestipulatedingovernmentdocumentstobeusedforthepurchase,constructionorotherformationoflong-termassetsareclassifiedasasset-relatedgovernmentgrants.Ifthegovernmentdocumentsareunclear,thegovernmentgrantsarejudgedonthebasisofthebasicconditionsthatmustbemetinordertoobtainthegrants,andthosethatarebasedonthebasicconditionsofpurchasing,constructingorotherwiseforminglong-termassetsareclassifiedasasset-relatedgovernmentgrants.Governmentgrantsrelatedtoassetsareoffsetagainstthecarryingamountoftherelatedassetsorrecognizedasdeferredincome.Ifthegovernmentgrantsrelatedtoassetsarerecognizedasdeferredincome,theyarerecognizedinprofitorlossinareasonableandsystematicmannerovertheusefullivesoftherelatedassets.Governmentgrantsthataremeasuredatanominalamountarerecognizeddirectlyinprofitorloss.Iftherelatedassetsaresold,transferred,retiredordestroyedbeforetheendoftheirusefullives,theunallocatedbalanceoftherelateddeferredincomeistransferredtoprofitorlossintheperiodinwhichtheassetsaredisposedof.

（3）BasisofjudgmentandaccountingtreatmentofgovernmentgrantsrelatedtorevenuesGovernmentgrantsotherthanasset-relatedgovernmentgrantsareclassifiedasrevenue-relatedgovernmentgrants.Forgovernmentgrantsthatcontainbothasset-relatedandrevenue-relatedcomponents,ifitisdifficulttodistinguishbetweenasset-relatedandrevenue-relatedgovernmentgrants,theentiregovernmentgrantiscategorizedasrevenue-relatedgovernmentgrants.Governmentgrantsrelatedtoincomethatareusedtocompensateforrelatedcostsorlossesinfutureperiodsarerecognizedasdeferredincomeandarecreditedtocurrentprofitorlossorchargedtocurrentcostintheperiodinwhichtherelatedcostsorlossesarerecognized;thosethatareusedtocompensateforrelatedcostsorlossesthathavealreadybeenincurredaredirectlycreditedtocurrentprofitorlossorchargedtocurrentcost.

（4）GovernmentgrantsthatarerelatedtotheCompany'sdailyoperationsarerecognizedinotherincomeoroffsetagainstrelatedcostsandexpensesinaccordancewiththesubstanceoftheeconomicoperations.GovernmentgrantsthatarenotrelatedtotheCompany'sdailyactivitiesarerecognizedasnon-operatingincomeorexpenses.

（5）Policyinterestsubvention

1)Ifthetreasurydisbursesthesubsidizedinterestfundstoalendingbank,andthelendingbankprovidesloanstotheCompanyatapolicypreferentialinterestrate,theactualamountoftheloanreceivedisusedastherecordedvalueoftheloan,andtherelatedborrowingcostsarecalculatedbasedontheprincipalamountoftheloanandthepolicypreferentialinterestrate.

2)Ifthesubsidizedinterestratefundsaredirectlyallocatedtothecompanybythetreasury,thecorrespondingsubsidizedinterestrateshallbeoffsetagainsttherelevantborrowingcosts.

26.Deferredtaxassets/Deferredtaxliabilities

（

）Deferredtaxassetsordeferredtaxliabilitiesarecalculatedandrecognizedbasedonthedifferencebetweenthecarryingamountandtaxbaseofassetsandliabilities(andthedifferenceofthecarryingamountandtaxbaseofitemsnotrecognizedasassetsandliabilitiesbutwiththeirtaxbasebeingabletobedeterminedaccordingtotaxlaws)andinaccordancewiththetaxrate

applicabletotheperiodduringwhichtheassetsareexpectedtoberecoveredortheliabilitiesareexpectedtobesettled.

（2）Adeferredtaxassetisrecognizedtotheextentoftheamountofthetaxableincome,whichismostlikelytoobtainandwhichcanbedeductedfromthedeductibletemporarydifference.Atthebalancesheetdate,ifthereisanyexactevidencethatitisprobablethatfuturetaxableincomewillbeavailableagainstwhichdeductibletemporarydifferencescanbeutilized,thedeferredtaxassetsunrecognizedinpriorperiodsarerecognized.（

）Atthebalancesheetdate,thecarryingamountofdeferredtaxassetsisreviewed.Thecarryingamountofadeferredtaxassetisreducedtotheextentthatitisnolongerprobablethatsufficienttaxableincomewillbeavailabletoallowthebenefitofthedeferredtaxassettobeutilized.Suchreductionissubsequentlyreversedtotheextentthatitbecomesprobablethatsufficienttaxableincomewillbeavailable.

（4）Theincometaxanddeferredtaxfortheperiodaretreatedasincometaxexpensesorincomethroughprofitorloss,excludingthosearisingfromthefollowingcircumstances:1)businesscombination;and2)thetransactionsoritemsdirectlyrecognizedinequity.（

）Deferredincometaxassetsanddeferredincometaxliabilitiesarestatedatnetamountsafteroffsettingwhenthefollowingconditionsaresimultaneouslymet:1)thereisalegalrighttosettlecurrentincometaxassetsandcurrentincometaxliabilitiesonanetbasis;2)thedeferredincometaxassetsanddeferredincometaxliabilitiesrelatetoincometaxesleviedbythesametaxauthorityonthesametaxpayingentity,orrelatetodifferenttaxpayingentitiesbutarenotrealizedorsettledduringeachsignificantfutureperiodinwhichthedeferredincometaxassetsanddeferredincometaxliabilitiesarereversed.eachfutureperiodinwhichthedeferredincometaxassetsanddeferredincometaxliabilitiesarereversedtotheextentthatthetaxableentityinvolvedintendstoeithersettlethecurrentincometaxassetsandcurrentincometaxliabilitiesonanetbasisortoacquiretheassetsandsettletheliabilitiesatthesametime.

27.Leases

（1）AccountingtreatmentofleasesasalesseeAtthecommencementdate,theCompanyrecognizesaleasethathasaleasetermof12monthsorlessasashort-termlease,whichshallnotcontainapurchaseoption;theCompanyrecognizesaleaseasaleaseofalow-valueassetiftheunderlyingassetisoflowvaluewhenitisnew.IftheCompanysubleasesanasset,orexpectstosubleaseanasset,theheadleasedoesnotqualifyasaleaseofalow-valueasset.Forallshort-termleasesandleasesoflow-valueassets,leasepaymentsarerecognizedascostorprofitorlosswithstraight-linemethod/unit-of-productionmethodovertheleaseterm.Apartfromtheabove-mentionedshort-termleasesandleasesoflow-valueassetswithsimplifiedapproach,theCompanyrecognizesright-of-useassetsandleaseliabilitiesatthecommencementdate.

1)Right-of-useassetsAright-of-useassetisinitiallymeasuredatcost,whichconsistsof:①theinitialmeasurementamountoftheleaseliability;②leasepaymentsmadeonorbeforethecommencementdateoftheleaseterm,netofamountsrelatedtoleaseincentivesreceived,ifany;③initialdirectcostsincurredbythelessee;and④costsexpectedtobeincurredbythelesseeinordertodismantleandremovetheleasedasset,torehabilitatethesitewheretheleasedassetislocated,ortorestoretheleasedassettotheagreed-uponconditionunderthetermsofthelease.⑤Costsexpectedtobeincurredbythelesseefordismantlingandremovingtheleasedassetorrestoringtheleasedassettotheagreedstateundertheleaseterms.

TheCompanydepreciatesright-of-useassetsonastraight-linebasis.Ifownershipoftheleasedassetscanbereasonablydeterminedattheendoftheleaseterm,depreciationisprovidedovertheremainingusefullifeoftheleasedassets.IfitisnotreasonablycertainthattheCompanywillobtainownershipoftheleasedassetbytheendoftheleaseterm,theCompanydepreciatestheassetovertheshorteroftheleasetermortheremainingusefullifeoftheleasedasset.

2)LeaseliabilityAtthecommencementdate,theCompanymeasurestheleaseliabilityatthepresentvalueoftheleasepaymentsthatarenotpaidatthatdate,discountedusingtheinterestrateimplicitinthelease.Ifthatratecannotbereadilydetermined,theCompany’sincrementalborrowingrateshallbeused.Unrecognizedfinancingexpenses,calculatedatthedifferencebetweentheleasepaymentanditspresentvalue,arerecognizedasinterestexpensesovertheleasetermusingthediscountratewhichhasbeenusedtodeterminethepresentvalueofleasepaymentandincludedinprofitorloss.Variableleasepaymentsnotincludedinthemeasurementofleaseliabilitiesareincludedinprofitorlossintheperiodsinwhichtheyareincurred.Afterthecommencementdate,ifthereisachangeinthefollowingitems:a.actualfixedpayments;b.amountsexpectedtobepayableunderresidualvalueguarantees;c.anindexorarateusedtodetermineleasepayments;d.assessmentresultorexerciseofpurchaseoption,extensionoptionorterminationoption.,theCompanyremeasurestheleaseliabilitybasedonthepresentvalueofleasepaymentsafterchanges,andadjuststhecarryingamountoftheright-of-useassetaccordingly.Ifthecarryingamountoftheright-of-useassetisreducedtozerobutthereshallbeafurtherreductionintheleaseliability,theremainingamountshallberecognizedintoprofitorloss.

（2）Accountingforleasesaslessor

Attheinceptiondateofalease,theCompanyclassifiesleasesthattransfersubstantiallyalltherisksandrewardsassociatedwithownershipoftheleasedassetasfinanceleases,andallotherleasesasoperatingleases.

1)OperatingleasesTheCompanyrecognizesleasereceiptsasrentalincomeonastraight-linebasisineachperiodoftheleaseterm.Initialdirectcostsincurredarecapitalizedandamortizedonthesamebasisasrentalincomeandrecognizedinprofitorlossinthecurrentperiod.Variableleasepaymentsrelatedtooperatingleasesthatarenotrecognizedasleasereceiptsarerecognizedinprofitorlosswhentheyareactuallyincurred.

2)FinanceleasesAtthecommencementdateoftheleaseterm,theCompanyrecognizesafinanceleasereceivablebasedonthenetinvestmentinthelease(thesumoftheunguaranteedresidualvalueandthepresentvalueoftheleasereceiptsnotyetreceivedatthecommencementdateoftheleasetermdiscountedattheinterestrateembeddedinthelease)andderecognizestheassetunderafinancelease.Duringeachperiodoftheleaseterm,theCompanycalculatesandrecognizesinterestincomebasedontheinterestrateembeddedinthelease.

VariableleasepaymentsacquiredbytheCompanythatarenotincludedinthemeasurementofthenetinvestmentintheleasearerecognizedinprofitorlosswhentheyareactuallyincurred.

28.Worksafetyfund

SafetyproductionfeesextractedbytheCompanyinaccordancewiththeAdministrativeMeasuresfortheExtractionandUseofEnterpriseProductionSafetyExpenses(CaiZi[2022]No.136)issuedbytheMinistryofFinanceandtheMinistryofEmergencyResponseareincludedinthecostoftherelevantproductsorincurrentprofitorloss,andarealsorecordedintheaccountof"specialreserve".Whenthesafetyproductionfeeisused,ifitisanexpense,itisdirectlydeductedfromthespecialreserve.Ifafixedassetisformed,theexpenditureincurredissummarizedunderthe"constructioninprogress"accountandrecognizedasafixedassetwhenthesafetyprojectiscompletedandreachestheintendedstateofuse;atthesametime,thespecialreserveisdeductedinaccordancewiththecostofformingthefixedassetandaccumulateddepreciationofthesameamountisrecognized,andnodepreciationwillbeprovidedforthefixedassetinthesubsequentperiod.

29.SegmentreportingOperatingsegmentsaredeterminedbasedonthestructureoftheCompany’sinternalorganization,managementrequirementsandinternalreportingsystem.AnoperatingsegmentisacomponentoftheCompany:

（1）thatengagesinbusinessactivitiesfromwhichitmayearnrevenuesandincurexpenses;（

）whosefinancialperformanceisregularlyreviewedbytheManagementtomakedecisionsaboutresourcetobeallocatedtothesegmentandtoassessitsperformance;and（

）forwhichaccountinginformationregardingfinancialposition,financialperformanceandcashflowsisavailablethroughanalysis.

30.Accountingtreatmentrelatedtosharerepurchase

WhentheCompanyrepurchasesitssharesforthepurposeofreducingitsregisteredcapitalorrewardingitsemployees,ifthepurchasedsharesaretobekeptastreasuryshares,thetreasurysharesarerecordedatthecashdistributedtoexistingshareholdersforrepurchase;ifthepurchasedsharesaretoberetired,thedifferencebetweenthetotalparvalueofsharesretiredandthecashdistributedtoexistingshareholdersforrepurchaseistoreducecapitalreserve,orretainedearningswhenthecapitalreserveisnotenoughtoreduce.IftheCompanyrepurchasesvestedequityinstrumentsinequity-settledshare-basedpaymenttransactionswithemployees,costoftreasurysharesgrantedtoemployeesandcapitalreserve(othercapitalreserve)accumulatedwithinthevestingperiodaretobewrittenoffonthepaymentmadetoemployees,withacorrespondingadjustmentincapitalreserve(sharepremium).

31.Significantchangesinaccountingpoliciesandestimates

(1)Significantchangesinaccountingpolicies

□Applicable√NotApplicable

(2)Significantchangesinaccountingestimates

□Applicable√NotApplicable

（3）Adjustmentstoitemsrelatedtofinancialstatementsatthebeginningoftheyearoffirst-timeimplementationofnewaccountingstandardsfrom2025onwards

□Applicable√NotApplicableVI.Taxes

1.Maintaxesandtaxrates

Taxes

Note:ThesubsidiariesNHUEUROPEGmbH,NHUPERFORMANCEMATERIALSGMBHandBardoterminalGmbHaresubjecttotheserates.Differententerpriseincometaxratesapplicabletodifferenttaxpayers:

Taxpayers

2.Taxpreferentialpolicies

（1）Enterpriseincometax

1)Taxincentivesforhigh-techenterprises

①AccordingtotheHi-TechEnterpriseCertificate(GR202333009429)issuedbyZhejiangProvincialDepartmentofScienceandTechnology,ZhejiangProvincialDepartmentofFinanceandZhejiangProvincialTaxService,StateTaxationAdministration(STA),theCompanyisaccreditedasahi-techenterpriseandentitledtoenjoythetaxpreferentialpolicyfrom2023to2025.Itissubjecttotherateof15%forenterpriseincometaxin2025.

②AccordingtotheHi-TechEnterpriseCertificate(GR202233002530)issuedbyZhejiangProvincialDepartmentofScienceandTechnology,ZhejiangProvincialDepartmentofFinanceandZhejiangProvincialTaxService,STA,thesubsidiaryShangyuNHUBio-ChemCo.,Ltd.isaccreditedasahi-techenterpriseandentitledtoenjoythetaxpreferentialpolicyfrom2022to2024.Itissubjecttotherateof15%forenterpriseincometaxin2025.

③AccordingtotheHi-TechEnterpriseCertificate(GR202337003609)issuedbyDepartmentofScienceandTechnologyofShandongProvince,ShandongProvincialDepartmentofFinanceandShandongProvincialTaxService,STA,thesubsidiaryShandongNHUPharmaceuticalCo.,Ltd.isaccreditedasahi-techenterpriseandentitledtoenjoythetaxpreferentialpolicyfrom2023to2025.Itissubjecttotherateof15%forenterpriseincometaxin2025.

④AccordingtotheHi-TechEnterpriseCertificate(GR202437003425)issuedbyDepartmentofScienceandTechnologyofShandongProvince,ShandongProvincialDepartmentofFinanceandShandongProvincialTaxService,STA,thesubsidiaryShandongNHUAminoAcidCo.,Ltd.isaccreditedasahi-techenterpriseandentitledtoenjoythetaxpreferentialpolicyfrom2024to2026.Itissubjecttotherateof15%forenterpriseincometaxin2025.

⑤AccordingtotheHi-TechEnterpriseCertificate(GR202433008150))issuedbyZhejiangProvincialDepartmentofScienceandTechnology,ZhejiangProvincialDepartmentofFinanceandZhejiangProvincialTaxService,STA,thesubsidiaryZhejiangNHU

SpecialMaterialsCo.,Ltd.isaccreditedasahi-techenterpriseandentitledtoenjoythetaxpreferentialpolicyfrom2024to2026.Itissubjecttotherateof15%forenterpriseincometaxin2025.⑥AccordingtotheHi-TechEnterpriseCertificate(GR202423000652)issuedbyHeilongjiangProvincialDepartmentofScienceandTechnology,HeilongjiangProvincialDepartmentofFinanceandHeilongjiangProvincialTaxService,STA,thesubsidiaryHeilongjiangNHUBiotechnologyCo.,Ltd.isaccreditedasahi-techenterpriseandentitledtoenjoythetaxpreferentialpolicyfrom2024to2026.Itissubjecttotherateof15%forenterpriseincometaxin2025.⑦AccordingtotheHi-TechEnterpriseCertificate(GR202233004365)issuedbyZhejiangProvincialDepartmentofScienceandTechnology,ZhejiangProvincialDepartmentofFinanceandZhejiangProvincialTaxService,STA,thesubsidiaryZhejiangNHUPharmaceuticalCo.,Ltd.isaccreditedasahi-techenterpriseandentitledtoenjoythetaxpreferentialpolicyfrom2022to2024.Itissubjecttotherateof15%forenterpriseincometaxin2025.⑧AccordingtotheHi-TechEnterpriseCertificate(GR202237005690)issuedbyDepartmentofScienceandTechnologyofShandongProvince,ShandongProvincialDepartmentofFinanceandShandongProvincialTaxService,STA,thesubsidiaryShandongNHUFineChemicalScienceandTechnologyCo.isaccreditedasahi-techenterpriseandentitledtoenjoythetaxpreferentialpolicyfrom2022to2024.Itissubjecttotherateof15%forenterpriseincometaxin2025.

2)TaxincentivesforsmallandmicroenterprisesAccordingtotheAnnouncementoftheMinistryofFinanceandtheStateAdministrationofTaxationonFurtherSupportingtheDevelopmentofSmallandMicroEnterprisesandIndividualEntrepreneursinRelationtoTaxPolicies(AnnouncementoftheMinistryofFinanceandtheStateAdministrationofTaxationNo.12of2023):thepolicyofreducingthecalculationoftaxableincomeby25%forsmallandmicro-profitenterprises,andpayingtheenterpriseincometaxatarateof20%,wasextendedtoDecember31,2027forimplementation.Ltd.,asubsidiaryoftheCompany,issubjecttoenterpriseincometaxatthecorrespondingpreferentialtaxrate.

3)OverseasEnterpriseincometaxAccordingtoSection14oftheInlandRevenueOrdinance,Chapter112oftheLawsofHongKong,HongKongadoptstheterritorialsourceprincipleoftaxation,i.e.onlyprofitsderivedfromHongKongaresubjecttoHongKongtax,whereasprofitsderivedfromelsewherearenotsubjecttoHongKongprofitstax.Thesubsidiary,SunWooShing(HongKong)TradingCompanyLimited,issubjecttoenterpriseincometaxatthecorrespondingpreferentialtaxrate.

（2）VATPursuanttothe''AnnouncementoftheMinistryofFinanceandtheStateAdministrationofTaxationonthePolicyofValue-addedTaxCreditsforEnterprisesintheAdvancedManufacturingSector''(AnnouncementoftheMinistryofFinanceandtheStateAdministrationofTaxationNo.43of2023),from1January2023to31December2027,enterprisesintheadvancedmanufacturingsectorarepermittedtooffsetthevalue-addedtaxpayableagainstthecurrentperiod'screditableinputtaxbyaddinga5%credittothecurrentperiod'screditableinputtaxamount.TheCompanyanditssubsidiaries,ShangyuNHUBio-ChemCo.,Ltd,ZhejiangNHUPharmanceuticalCo.,Ltd.,ZhejiangNHUSpecialMaterialsCo.,Ltd.,ShaoxingYuchenNewMaterialsCo.,Ltd.,ShandongNHUAminoAcidCo.,Ltd,ShangdongNHUPharmanceuticalCo.,Ltd.,ShandongNHUFineChemicalScienceandTechnologyCo.,Ltd,HeilongjiangNHUBiotechnologyCo.,Ltd.,areentitledtothePreferentialpolicyofinputtaxcredit.

VII.Notestoitemsofconsolidatedfinancialstatements

1.Cashandbankbalances

Unit:RMBYuan

Items

Otherremarks：Othercashandbankbalances

Unit:RMBYuan

2.Held-for-tradingfinancialassets

Unit:RMBYuan

3.Notesreceivable

(1)Detailsoncategories

Unit:RMBYuan

(2)Disclosurebybaddebtaccrualmethod

Unit:RMBYuan

Categories

(Continued)

Provisionforbaddebtsismadeonaportfoliobasis:Bankacceptance

Unit:RMBYuan

Iftheallowanceforbaddebtsonnotesreceivableisbasedonageneralmodelofexpectedcreditlosses:

□Applicable√Notapplicable

（3）Pledgednotesatthebalancesheetdate

Unit:RMBYuan

（4）Endorsedordiscountedbutunduenotesatthebalancesheetdate

Unit:RMBYuan

Items

4.Accountsreceivable

（1）Ageanalysis

Unit:RMBYuan

（2）Detailsoncategories

Unit:RMBYuan

(Continued)

Provisionforbaddebtsismadeonaportfoliobasis:Accountsreceivablegroupedbyagingforbaddebtprovision?

Unit:RMBYuan

Ages

Adescriptionofthebasisfordeterminingtheportfolio:

ProvisionforbaddebtsusinganageingportfolioIftheallowanceforbaddebtsforaccountsreceivableisbasedonthegeneralmodelofexpectedcreditlosses:

□Applicable√Notapplicable

（3）Provisionsmade,collectedorreversedinthecurrentperiod

Provisionsmadeinthecurrentperiod:

Unit:RMBYuan

（4）Detailsofthetop5debtorswithlargestbalances

Unit:RMBYuan

5.Receivablesfinancing

（1）Presentationofreceivablefinancingclassifications

Unit:RMBYuan

（2）Disclosurebycategoryofbaddebtprovisionmethod

Unit:RMBYuan

Categories

(Continued)

Provisionforbaddebtsbyportfolio:Bankacceptance

Unit:RMBYuan

（3）PledgedFinancingReceivablesatbalancesheetdate

Unit:RMBYuan

（4）ReceivablefinancingattheendoftheperiodthathasbeenendorsedordiscountedbytheCompanyandisnotyetdueatthebalancesheetdate

Unit:RMBYuan

6.Otherreceivables

Unit:RMBYuan

Items

（1）Dividendreceivable1）Classificationofdividendsreceivable

Unit:RMBYuan

2）Agesanalysis

Unit:RMBYuan

3）Disclosurebybaddebtaccrualmethod

?Applicable□Notapplicable

Unit:RMBYuan

(Continued)

Categories

Categorynameforbaddebtprovisionscalculatedbycombination:Otherreceivablesforwhichbaddebtprovisionsarecalculatedbycombination

Unit:RMBYuan

Provisionforbaddebtsismadeonthebasisofageneralmodelofexpectedcreditlosses:

Unit:RMBYuan

ClassificationofstagesandbaddebtprovisioningratioThebasisofclassificationbystages:AccountsagedlessthanoneyearareclassifiedasstageI,accountsaged1to2yearsareclassifiedasstageII,andaccountsagedmorethan2yearsareclassifiedasstageIII.Changesincarryingamountsforwhichtheamountofchangeintheprovisionforlossesduringtheperiodismaterial.

□Applicable√Notapplicable

4）Provisionsmade,collectedorreversedinthecurrentperiodProvisionsmadeinthecurrentperiod:

Unit:RMBYuan

Categories

5）Detailsofthetop5debtorswithlargestbalances

Unit:RMBYuan

7.Prepayments

(1)Ageanalysis

Unit:RMBYuan

(2)Detailsofthetop5debtorswithlargestbalances

Unit:RMBYuan

Debtors

8.Inventories

IsthecompanysubjecttodisclosurerequirementsfortherealestateindustryNo

(1)Inventoryclassification

Unit:RMBYuan

(2)InventoryWrite-down

Unit:RMBYuan

Specificbasisfordeterminingnetrealizablevalue,reasonsforreversalorwrite-offofprovisionfordeclineinvalueofinventoriesintheperiod

Items

Provisionfordeclineinvalueofinventoriesbyportfolio:None

(3)Inventories–Developmentcost

Unit:RMBYuan

9.Othercurrentassets

Unit:RMBYuan

10.Otherequityinstrumentinvestments

Unit:RMBYuan

Items

11.Long-termequityinvestments

Unit:RMBYuan