HANGZHOU TIGERMED CONSULTING CO., LTD.
2019 Annual Report
April 2020
Section 1 Important, Contents and Definition
The Board of Directors, Board of Supervisors, Directors, Supervisors and senior management of the Company warrantthat the contents of the annual report are true, accurate and complete and there is no false representation, misleadingstatement or material omission, and take legal responsibilities jointly and severally.Cao Xiaochun, head of the Company, Jun Gao, person-in-charge of accounting affairs and Yu Guoyun, head ofaccounting department (accounting supervisor) warrant the truthfulness, accuracy and completeness of the financialstatements contained in this annual report.All directors have attended the Board meeting approving this report.NilThe dividend distribution plan considered and approved by the Company at the Board meeting: assuming the total sharecapital comprises 748,450,333 shares, a cash dividend of RMB2.78 (tax inclusive) was to be paid to all shareholders for every10 shares held with no bonus shares (tax inclusive) and no shares created by way of capitalisation of capital reserve for every10 shares held to all shareholders.
CONTENTS
Section 1 Important, Contents and Definition ...... 2
Section 2 Company Profile and Major Financial Indicators ...... 10
Section 3 Business Overview ...... 15
Section 4 Management Discussion and Analysis ...... 24
Section 5 Important Notice ...... 58
Section 6 Changes in Share Capital and Information on Shareholders ...... 84
Section 7 Preference Shares ...... 99
Section 8 Convertible Bonds ...... 100Section 9 Information on Directors, Supervisors, Senior Management and Employees ........ 101Section 10 Corporate Governance ...... 108
Section 11 Corporate Bonds ...... 116
Section 12 Financial Report ...... 117
Section 13 Documents available for Inspection ...... 304
Definition
| Term(s) defined | Details of definition | |
| “Company”, “our Company”, “Tigermed” | Hangzhou Tigermed Consulting Co., Ltd. | |
| “CRO” | Contract Research Organization | |
| “NMPA” | China National Medical Products Administration | |
| “FDA” | the U.S. Food & Drug Administration | |
| “GCP” | the Good Clinical Practice promulgated by the PRC government | |
| “ICH-GCP” | the Guidelines on Good Clinical Practice of the United States, European Union and Japan coordinated by International Conference on Harmonization | |
| “SOP” | Standard Operation Process | |
| “CRA” | Clinical Research Associate, mainly responsible for organizing clinical research of related projects and formulating implementation plans for clinical research of related projects. Clinical inspectors are generally required to possess professional knowledge in clinical medicine and health statistics, GCP certificate, extensive work experience in clinical trials, as well as strong external communication and coordination skills and language expression abilities | |
| “BD” | Business Development Department, mainly responsible for formulating and implementing development plans based on the Company’s strategy, establishing smooth cooperation channels with upstream and downstream and parallel partners, and communicating with relevant government authorities, associations and other organizations to seek support and obtain resources. | |
| “CRC” | Clinical Research Coordinator | |
| “SMO” | Site Management Organization, a professional management organization with integrated clinical resources operation, a well-managed professional commercial organization that assists clinical trial institutions to conduct specific operations of clinical trials and a verification agency for site management | |
| “GSP” | Good Supply Practice, a set of management procedures that manage all the factors that may result in quality issues in the process of distribution of drug products to avoid quality issues |
| “GMP” | Good Manufacturing Practice, the basic principle of drug manufacturing and quality management, which is applicable to the whole process of drug formulation manufacturing and the key process that affects the quality of finished products in the manufacturing of API | |
| “ARO” | Academic Research Organization, which differs from CRO with the following key features: it has academic expert teams in scientific institutions, hospital departments, disease prevention and control centers and other institutions and is responsible for the open publication of clinical trials in academic journals and meets the independent academic supervision requirements of clinical trials meeting the expectations of regulatory authorities | |
| “innovative drug(s)” | Class 1 chemical drugs classified according to the NMPA registration of chemical drugs and Class 1 biological products classified according to the NMPA registration of biological products | |
| “clinical research(es)” | a part of medical research and health research with the purpose of establishing the basic theories about human disease mechanism, disease prevention and health promotion. Clinical research involves the study of doctor-patient interaction and diagnostic clinical information, data, or patient population data | |
| “clinical trial(s)” | any systematic research of drugs in the human body (patients or healthy volunteers) to confirm or reveal the effects, adverse reactions, and/or absorption, distribution, metabolism, and excretion of the test drug with the purpose of determining the efficacy and safety of the test drug | |
| “Shanghai Tigermed” | Shanghai Tigermed Co Ltd, a wholly-owned subsidiary of the Company | |
| “MacroStat” | MacroStat (China) Clinical Research Co., Ltd., a wholly-owned subsidiary of the Company | |
| “Jiaxing Tigermed” | Jiaxing Tigermed Data Management Co., Ltd., a wholly-owned subsidiary of the Company | |
| “Hangzhou Simo” | Hangzhou Simo Co., Ltd., a wholly-owned subsidiary of the Company | |
| “Tigermed HK” | Hongkong Tigermed Co., Limited, a wholly-owned subsidiary of the Company | |
| “Taizhou Kanglihua” | Taizhou Kanglihua Pharmaceutical Technology Co., Ltd, a wholly-owned subsidiary of the Company | |
| “Guangzhou Tigermed” | Tigermed Research Institute Co., Ltd., a wholly-owned subsidiary of the Company | |
| “Tigermed MacroStat” | Tigermed MacroStat, LLC, a wholly-owned subsidiary of the Company | |
| “Bright Sky” | Bright Sky Resources Investment Ltd, a wholly-owned subsidiary of the Company | |
| “Beijing BMD” | Beijing Medical Development Co., Ltd, a wholly-owned subsidiary of the Company |
| “Suzhou BMD” | Beijing Medical Development (Suzhou) Co., Ltd, a wholly-owned subsidiary of the Company | |
| “Tigermed Equity” | Hangzhou Tigermed Equity Investment Partnership, a wholly-owned subsidiary of the Company | |
| “Tigermed-Jyton” | Taizhou Tigermed-Jyton Medical Tech. Co., Ltd., a wholly-owned subsidiary of the Company | |
| “Beijing Ejyton” | Beijing Ejyton Tech. Co., Ltd., a wholly-owned subsidiary of the Company | |
| “Jyton Emergo” | Jyton Emergo (Beijing) Medical Technology Co., Ltd., a wholly-owned subsidiary of the Company | |
| “Jyton Kangxin” | JYTON-GOWIN MEDICAL TECHNOLOGY CO.,LTD, a wholly-owned subsidiary of the Company | |
| “Jyton Kannel” | Beijing Jyton and Kannel Medical Tech. Co., Ltd., a wholly-owned subsidiary of the Company | |
| “Blue Sky” | Blue Sky Resources Investment Ltd., a wholly-owned subsidiary of the Company | |
| “TG SKY” | TG Sky Investment Ltd., a wholly-owned subsidiary of the Company | |
| “Chengdu Xinsheng” | Chengdu Xinsheng Tigermed Technology Company Limited, a wholly-owned subsidiary of the Company | |
| “Tigermed-BDM” | Tigermed-BDM Inc., a wholly-owned subsidiary of the Company | |
| “Tigermed Clinical” | Tigermed Clinical Research Co. Ltd., a wholly-owned subsidiary of the Company | |
| “Tigermed Australia” | Tigermed Australia Pty Limited, a wholly-owned subsidiary of the Company | |
| “Tigermed Singapore” | Singapore Tigermed PTE. Ltd., a wholly-owned subsidiary of the Company | |
| “Tiger-Xinze” | Tiger-Xinze Medical Technology (Jiaxing) Co., Ltd., a wholly-owned subsidiary of the Company | |
| “TG Mountain” | TG Mountain Investment CO., (GP), a wholly-owned subsidiary of the Company | |
| “TG Sky Growth” | TG Sky Growth (LP), a wholly-owned subsidiary of the Company | |
| “Tigermed Swiss” | Tigermed Swiss AG., a wholly-owned subsidiary of the Company | |
| “Tigermed USA” | Tigermed USA INC., a wholly-owned subsidiary of the Company | |
| “HK Healthcare” | Hong Kong Tigermed Healthcare Technology Co., Limited, a wholly-owned subsidiary of the Company | |
| “Tigermed-IntelliPV” | Hangzhou Tigermed-IntelliPV Co., Ltd., a wholly-owned subsidiary of the Company | |
| “Tigermed America” | Tigermed America LLC, a wholly-owned subsidiary of the Company |
| “Wuxi Tigermed” | Wuxi Tigermed Consulting Co., Ltd., a wholly-owned subsidiary of the Company | |
| “Jiaxing Clinflash” | Jiaxing Clinflash Computer Technology Co., Ltd., a controlling subsidiary of the Company | |
| “Beijing Canny” | Beijing Canny Consulting Inc., a controlling subsidiary of the Company | |
| “Hangzhou Taiyu” | Hangzhou Taiyu Investment Consulting Co., Ltd., a controlling subsidiary of the Company | |
| “Hangzhou Yuding” | Hangzhou Yuding Equity Investment Management Partnership (Limited Partnership), a controlling subsidiary of the Company | |
| “Fantastic Bioimaging” | Fantastic Bioimaging Co., Ltd., a controlling subsidiary of the Company | |
| “Frontage Holdings” | Frontage Holdings Corporation, a controlling subsidiary of the Company | |
| “Frontage Laboratories” | Frontage Laboratories, Inc., a controlling subsidiary of the Company | |
| “Frontage Shanghai” | Frontage Laboratories (Shanghai) Co., Ltd., a controlling subsidiary of the Company | |
| “Croley” | Croley Martell Holdings, Inc, a controlling subsidiary of the Company | |
| “Concord Biosciences” | Concord Biosciences LLC, a controlling subsidiary of the Company | |
| “Concord Holdings” | Concord Holdings, LLC, a controlling subsidiary of the Company | |
| “Frontage Canada” | 11736655 Canada, Ltd, a controlling subsidiary of the Company | |
| “RMI” | RMI Laboratories, LLC, a controlling subsidiary of the Company | |
| “BRI” | BRI Biopharmaceutical Research, Inc | |
| “Frontage Suzhou” | Frontage Laboratories (Suzhou) Co, Ltd., a controlling subsidiary of the Company | |
| “Frontage Luohe” | Frontage Laboratories (Luohe) Co, Ltd., a controlling subsidiary of the Company | |
| “DreamCIS” | DreamCIS Inc., a controlling subsidiary of the Company | |
| “Tigermed India” | Tigermed India Date Solution Private Limited, a controlling subsidiary of the Company | |
| “Opera” | Opera Contract Research Organization S.R.L., a controlling subsidiary of the Company | |
| “Jiaxing Yixin” | EPS Tigermed (Jiaxing) Co., Ltd., a controlling subsidiary of the Company | |
| “Tigermed Malaysia” | Tigermed Malaysia SDN BHD., a controlling subsidiary of the Company | |
| “Tigermed Xingrong” | Beijing Tigermed Xingrong Investment Management Co., Ltd., a controlling subsidiary of the Company | |
| “Beijing Yaxincheng” | Beijing Yaxincheng Medical InfoTech Co., Ltd., a controlling subsidiary of the Company | |
| “Yaxincheng Business” | Beijing Yaxincheng Business Service Co., Ltd., a controlling subsidiary of the Company |
| “Khorgas Yaxincheng” | Khorgas Yaxincheng Information Technology Co., Ltd., a controlling subsidiary of the Company | |
| “Xi’an Laisai” | Xi’an Laisai Translation Co., Ltd., a controlling subsidiary of the Company | |
| “Talent MedConsulting” | Hangzhou Talent MedConsulting Co., Ltd., a controlling subsidiary of the Company | |
| “Taiwan Tigermed” | Taiwan Tigermed Consulting Co. Ltd, a controlling subsidiary of the Company | |
| “Tiayu Phase II” | Hangzhou Taiyu Phase II Equity Investment Partnership, an investee of the Company | |
| “Jietong Inspection” | Hangzhou Tigermed Jietong Inspection Technology Co., Ltd., an investee of the Company | |
| “Shanghai Shengtong” | Shanghai Shengtong International Logistics Co., Ltd, an investee of the Company | |
| “Shengtong Supply Chain” | Shanghai Shengtong Pharmaceutical Supply Chain Management Co., Ltd., an investee of the Company | |
| “Luohe Taiyu Ankang” | Luohe Taiyu Ankang Investment Management Center (Limited Partnership), an investee of the Company | |
| “Luohe Yukang” | Luohe Yukang Investment Center Partnership, an investee of the Company | |
| “Shihezishi Taiyu” | Shihezishi Taiyu Equity Investment Partnership, an investee of the Company | |
| “Shihezi Tai’er” | Shihezi Tai’er Equity Investment Partnership, an investee of the Company | |
| “Shanghai Teddy” | Teddy Clinical Research Laboratory (Shanghai) Limited, an investee of the Company | |
| “Hangzhou Wangji” | Hangzhou Wangji Health Technology Co., Ltd., an investee of the Company | |
| “Hangzhou Yibai” | Hangzhou Yibai Health Management Co., Ltd., an investee of the Company | |
| “Combak Hospital” | Hangzhou Combak Hospital Co., Ltd., a wholly-owned subsidiary of Hangzhou Yibai, which is an investee of the Company | |
| “Mosim” | Mosim Co., Ltd., an investee of the Company | |
| “Yuzhou Yixin” | (Suzhou) Tigermed Co., Ltd., an investee of the Company | |
| “EPS Tigermed” | EPS Tigermed (Nantong) Co., Ltd., an investee of the Company | |
| “Frontage FJ Pharma” | FJ Pharma LLC, an investee of the Company | |
| “Frontage Clinical” | Frontage Clinical Services, Inc., an investee of the Company | |
| “Antengene Investment” | Antengene Investment Limited | |
| “Tigermed Cloud” | Hangzhou Tigermed Cloud Hospital Management Co., Ltd. |
| “Non-public offering” | the proposed offering of RMB-denominated ordinary shares (A shares) to target subscribers by the Company by way of non-public offering | |
| “CSRC” | China Securities Regulatory Commission | |
| “Shenzhen Stock Exchange” or “SSE” | the Shenzhen Stock Exchange | |
| “Company Law” | the Company Law of the People’s Republic of China | |
| “Securities Law” | the Securities Law of the People’s Republic of China | |
| “BDO CPA” | BDO China Shu Lun Pan Certified Public Accountants LLP | |
| “Sponsor” | Citi Orient Securities Co., Ltd. | |
| “Citi Orient” | Citi Orient Securities Co., Ltd. |
Section 2 Company Profile and Major Financial Indicators
I. Company information
| Stock short name | 泰格医药 | Stock code | 300347 |
| Company name in Chinese | 杭州泰格医药科技股份有限公司 | ||
| Company short name in Chinese | 泰格医药 | ||
| Company name in English (if any) | Hangzhou Tigermed Consulting Co.,Ltd | ||
| Company short name in English (if any) | Tigermed | ||
| Legal representative | Cao Xiaochun | ||
| Registered address | 1502-1, Dongguan Plaza, No. 618 Jiangnan Avenue, Binjiang District, Hangzhou | ||
| Postal code of registered address | 310053 | ||
| Office address | 15th floor, No. 618 Jiangnan Avenue, Binjiang District, Hangzhou | ||
| Postal code of office address | 310053 | ||
| Company website | www.tigermedgrp.com | ||
| ir@tigermedgrp.com | |||
II. Contact person and contact method
| Secretary to the Board | Representative of securities affairs | |
| Name | Gao Jun | Li Xiaori |
| Contact address | 15th floor, No. 618 Jiangnan Avenue, Binjiang District, Hangzhou | 15th floor, No. 618 Jiangnan Avenue, Binjiang District, Hangzhou |
| Telephone | 0571-89986795 | 0571-89986795 |
| Facsimile | 0571-89986795 | 0571-89986795 |
| ir@tigermedgrp.com | ir@tigermedgrp.com |
III. Information disclosure and place of inspection
| Name of media designated by the Company for information disclosure | Securities Times |
| Website designated by CSRC for publication of annual report | http://www.cninfo.com.cn/ |
| Place of inspecting the annual report of the Company | Securities affairs department of the Company |
IV. Other relevant informationAccounting firm engaged by the Company
| Name of accounting firm | BDO China Shu Lun Pan Certified Public Accountants LLP |
| Office address of accounting firm | 4th floor, No.61 Nanjing East Road, Shanghai |
| Name of signing accountants | Zhang Songbai, Wang Faliang |
Sponsor engaged by the Company that performs the duties of continuous supervision during the reporting period
√ Applicable □ Not applicable
| Name of sponsor | Office address of sponsor | Name of sponsor representatives | Period of continuous supervision |
| Citi Orient Securities Co., Ltd. | 24th floor, Building No.2, No.318 Zhong Shan South Road, Shanghai | Ge Shaozheng, Bian Jiazhen | February 2015 to December 2019 |
Financial advisor engaged by the Company that performs the duties of continuous supervision during the reporting period
□ Applicable√ Not applicable
V. Major accounting data and financial indicatorsWhether retrospective adjustments or restatements would be made by the Company to the accounting data for prior years
□ Yes √ No
| 2019 | 2018 | Change | 2017 | |
| Revenue (RMB) | 2,803,309,287.65 | 2,300,659,706.62 | 21.85% | 1,687,033,455.82 |
| Net profit attributable to shareholders of the listed company (RMB) | 841,634,823.38 | 472,183,931.65 | 78.24% | 301,013,932.80 |
| Net profit attributable to shareholders of the listed company after deducting extraordinary gain or loss (RMB) | 558,119,891.62 | 357,055,961.15 | 56.31% | 239,901,292.95 |
| Net cashflow from operating activities (RMB) | 527,557,935.51 | 522,242,718.65 | 1.02% | 314,970,861.81 |
| Basic earnings per share (RMB/share) | 1.13 | 0.63 | 79.37% | 0.41 |
| Diluted earnings per share (RMB/share) | 1.13 | 0.63 | 79.37% | 0.41 |
| Weighted average return on net assets | 23.65% | 17.52% | 6.13% | 13.74% |
| December 31, 2019 | December 31, 2018 | Change | December 31, 2017 | |
| Total assets (RMB) | 7,532,651,176.52 | 4,279,788,506.48 | 76.01% | 3,583,167,950.81 |
| Net assets attributable to shareholders of the listed company (RMB) | 4,225,457,956.55 | 2,668,584,135.27 | 58.34% | 2,491,046,293.20 |
VI. Quarterly major financial indicators
Unit: RMB
| First quarter | Second quarter | Third quarter | Fourth quarter | |
| Revenue | 608,888,953.83 | 728,405,635.50 | 693,703,343.54 | 772,311,354.78 |
| Net profit attributable to shareholders of the listed company | 145,507,918.52 | 206,610,332.04 | 176,005,998.02 | 313,510,574.80 |
| Net profit attributable to shareholders of the listed company after deducting extraordinary gain or loss | 111,544,220.08 | 176,185,239.19 | 150,387,116.25 | 120,003,316.10 |
| Net cashflow from operating activities | 51,154,595.75 | 74,907,541.11 | 214,234,583.53 | 187,261,215.12 |
Whether the above financial indicators or aggregate is materially different from the relevant financial indicators disclosed inquarterly reports or semi-annual reports of the Company
□ Yes √ No
VII. Differences in accounting data under domestic and foreign accounting standards
1. Differences in net profit and net assets disclosed in the financial statements under International AccountingStandard and China Accounting Standard
□ Applicable √ Not applicable
There is no difference in net profit and net assets disclosed in the financial statements during the reporting period underInternational Accounting Standard and China Accounting Standard.
2. Differences in net profit and net assets disclosed in financial statements under foreign accounting standards andChina Accounting Standard
□ Applicable √ Not applicable
There is no difference in net profit and net assets disclosed in the financial statements during the reporting period underforeign accounting standards and China Accounting Standard.
VIII. Items and amounts of extraordinary gain or loss
√ Applicable □ Not applicable
Unit: RMB
| Item | Amounts in 2019 | Amounts in 2018 | Amounts in 2017 | Remarks |
| Gain or loss from disposal of non-current assets (including those already written off in the provision for impairment of assets) | 43,737,385.02 | -151,707.39 | -107,618.59 | Mainly due to the disposal of long-term assets including the long-term equity investments and fixed assets during the reporting period. |
| Government grants (except for government grants which are closely related to the ordinary business of the Company and entitled in standard amounts or quantities in conformity with the uniform standards of the State) included in the profit or loss for the period | 16,216,189.63 | 10,570,098.10 | 12,845,384.29 | Mainly due to the government grants received by the Company during the reporting period. |
| Capital occupation fee received from non-financial entities included in profit or loss for the period | 1,818,429.16 | |||
| Gain from the excess of the fair value of the identifiable net assets of investees on acquisition of the investment over the investment cost in the Company’s subsidiaries, associates and joint ventures | 41,488,162.45 | Mainly due to the investment income arising from addition and consolidation of subsidiary by the Company during the reporting period. | ||
| Gain or loss from investments on trust or asset management | 1,371,800.46 | 1,544,444.66 | 4,277,695.56 | Mainly due to the income from wealth management products of the Company during the reporting period. |
| Profit or loss arising from changes in fair value of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities and derivative financial liabilities and investment gains received from disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other debt investments (except for those related to effective hedging businesses under ordinary business scope of the Company) | 277,841,928.30 | 126,926,483.99 | 48,906,000.13 | Mainly due to the investment income derived during the holding of other non-current financial assets and recognized upon disposal and the gain on changes in fair value arising from other non-current assets; and the gain arising from the remaining equity interest at fair value (restated) after control is lost. |
| Other non-operating income and expenses apart from the above items | -470,286.85 | 4,218,015.49 | 10,069,412.04 | |
| Less: Effect of income tax | 23,682,926.62 | 18,326,757.57 | 13,992,846.38 | |
| Effect of minority interests (after tax) | 72,987,320.63 | 11,471,035.94 | 885,387.20 | |
| Total | 283,514,931.76 | 115,127,970.50 | 61,112,639.85 | -- |
For items of extraordinary gain or loss of defined in the Notice on Explanation of Information Disclosure of CompaniesPublicly Issuing Securities No.1 – Extraordinary Gain or Loss, and items of extraordinary gain or loss illustrated in theNotice on Explanation of Information Disclosure of Companies Publicly Issuing Securities No.1 – Extraordinary Gain orLoss defined as items of extraordinary gain or loss, the Company shall provide the reasons
□ Applicable √ Not applicable
During the reporting period, there was no item of extraordinary gain or loss defined and illustrated in the Notice onExplanation of Information Disclosure of Companies Publicly Issuing Securities No.1 – Extraordinary Gain or Loss definedas item of extraordinary gain or loss.
Section 3 Business OverviewI. Principal Business Conducted by the Company During the Reporting Period
(I) Business Primarily Conducted by the Company
The Company is a contract research organisation (CRO) focused on providing professional services for theR&D of new drugs throughout the clinical trial process. It provides comprehensive and integrated clinicalresearch solutions to global pharmaceutical and medical device innovation companies to ensure researchquality, reduce R&D risks, shorten the R&D cycle, and save R&D expenditure, promoting the process ofproduct marketisation so that patients can use newer and better medicines and medical products soon.
(II) Business Model
The Company is committed to providing comprehensive and integrated service support for customers in thedevelopment of new drugs/medical devices in the best way, providing comprehensive technical services andsolutions from the stages of pre-clinical, clinical to post-launch to help customers enhance clinical researchefficiency and ensure research quality, saving time and cost. The Company’s principal business includesclinical trial solutions and clinical-related services and laboratory services.
1. Clinical Trial Solutions
The Company provides clinical trial operation services for innovative drugs, generic drugs and medicaldevices, as well as complementary services directly associated with clinical trial operations such as medicalwriting, translation and registration services and pharmacovigilance services.
(1) Clinical Drug Research
Relying on a sound quality management system, a standard operating procedure, a mature projectmanagement system, and a highly-qualified and experienced clinical team, we are able to ensureefficient project advancement, patient safety, and data quality throughout the process of a project fromstart to finish. We can provide medical liaison, early-, middle- and late-stage clinical development,medical monitoring, project management, quality management and other services.
Having a long-term cooperation with excellent clinical trial organisations in China and other parts ofthe world, we have established a close cooperative relationship with parties including researchinstitutes, hospitals, laboratories, and authoritative experts in the clinical field, to ensure that allclinical studies we serve comply with cGCP and relevant ICH-GCP guidelines, thus guaranteeingglobal consistency and high standards.
As of the disclosure date of this report, the Company has established 123 service outlets in majormainland China cities, Hong Kong and Taiwan that efficiently interact with clinical researchers,covering research hospital resources in 28 provinces, four autonomous regions, and four municipalities
nationwide, to fully share information of research hospitals.
The Company has mature and complete SOP and rich international project management experience.Project management is systematic and efficient, and whole-process dynamic monitoring andmanagement of research progress is implemented. The Company’s quality assurance department,which is independent of the clinical trial operation departments, evaluates the quality and riskthroughout the process, including clinical trial operations and suppliers, from an independentthird-party perspective, providing strong assurance for customers’ projects on its efficient clinicalinspection, comprehensive training system, and perfect SOP management.
(2) Clinical Medical Device Research
As China’s leading medical device regulatory liaison and clinical research service provider, our teamhas established long-term cooperative relations with over 1,400 medical device R&D and productioncompanies in more than 30 countries. We provide assistance in all aspects involved in the developmentand production of medical devices and in vitro diagnostic products in order to respond to changes incomplex international regulatory requirements.
The business is mainly undertaken by our subsidiary Tigermed-Jyton, and details of the business canbe found on its website http://www.jtmedical.com/.
(3) Medical Registration
The Company can provide professional registration-related services for chemical drugs, biologicalproducts and medical device products, including marketing authorisation and product registration, andmedical translation. The registration team has a wealth of practical experience. During the productregistration process, they can accurately grasp the key points in product registration with fullunderstanding of the specific requirements of NMPA, FDA, EMA and other regulatory authoritiesaround the world on the materials for product declaration, maintaining effective two-waycommunication with customers and government regulators at multiple levels and in many respects,including procedural regulations, regulatory requirements, technical compliance and other perspectives,to ensure speedy project progress, boost drug development, and shorten the time to market.
(4) Bioequivalence Services
The Company has a professional BE team with strong technical strengths and rich project experience,capable of regulating the scientificity and justifiability of solutions design according to domestic andforeign research progress. The team is experienced in developing analytical methods for compoundsand has the ability to develop challenging analytical methods. In addition, the Company hascooperated with a number of clinical organisations on the building of clinical centres that provide morereliable quality assurance in compliance with the verification standards of NMPA, FDA and the EU.
Providing customers with a unified quality system in China and the US, and operating in fullcompliance with the US FDA and the EU GLP/GMP/GCP standards, the Company successfully
underwent multiple US FDA on-site inspections and Chinese NMPA on-site inspections.
The business is mainly undertaken by our subsidiary Frontage Holdings. For details, please refer toFrontage Holdings’ announcement on the 2019 annual results, the link of which ishttps://www1.hkexnews.hk/listedco/listconews/sehk/2020/0330/2020033002201.pdf.
2. Clinical-related Services and Laboratory Services
The Company provides other important services in the drug development process, including datamanagement and statistical analysis, site management and patient recruitment, medical imaging as well aslaboratory services provided by our subsidiary Frontage Holdings.
(1) Provision of Comprehensive International Data Management and Statistical Analysis Services
The Company’s data management and statistical analysis team, mainly distributed in mainland China,Taiwan, the US, South Korea, and India, is committed to providing timely and high-quality datamanagement, biostatistics, and statistical programming services for clinical development andregistration submission. The team has the ability to manage the submission of data that meetsinternational standards, boasting the provision of flexible and accurate solutions for the whole researchprocess from start to finish, a thorough understanding of various disease areas, such as tumour,immunity, endocrine, neurology, and infectious diseases, an industry reputation for high credibility andtrustworthiness, an excellent track record on high quality and on-time delivery, and the permission forsponsors to access real-time data processes, which is in line with WHO-DD MedDRA, SAS and otherinternational standards and certifications.
The data management and statistical analysis team has a wealth of projects. As of the disclosure date ofthis report, it participated in more than 2,200 clinical research projects and more than 300 CDISCstandard projects, and submitted application of 16 drugs or indications for the FDA new drugapplication and biologic license application (NDA/BLA) approvals.
(2) Site Management and Patient Recruitment
The Company has a site management organisation (SMO) team covering all major cities in China. Theteam is committed to assisting researchers and research centres to complete liaison work involvingnon-medical judgment in clinical trials by providing professional services for site management andspecific operations to ensure the quality of clinical trials and the progress of research, promoting thestandardisation of clinical trials. Since the commencement of clinical trial centres management andoperation in May 2011, the CRC team has participated in more than 1,300 projects covering phase I-IVclinical research, mainly providing services to pharmaceutical companies at home and abroad.
As to recruitment service, the Company has service outlets in 40 major cities in China which haveestablished international standard operating procedures (SOPs) providing professional services fororganisations in more than 60 cities nationwide. The services include recruiting healthy participantsand patients to conduct phase I-IV clinical trials, providing health education and lectures for patients,
providing sponsors/CROs with health publicity and academic promotional services, promoting medicalApp business, and assisting in the recall of missed follow-ups according to the requirements ofsponsors/CROs or the site.
(3) Image Analysis
As a pioneering third-party independent medical imaging CRO in China, our subsidiary FantasticBioimaging may provide one-stop, professional imaging services and solutions for the clinical trial ofpharmaceuticals and medical devices, minimising bias to the greatest extent in an independent andnon-blindly manner throughout the project service process and thus helping sponsors to accelerate thedrug development process. The image analysis service areas cover phase I, II, III, and IV clinical trials.
The treatment areas cover clinical trials for cardiovascular diseases, tumour drugs, medical devices,central nervous system, rheumatic blood system diseases, musculoskeletal system diseases, skindiseases, otolaryngological and ophthalmological diseases, contrast agents, etc., imaging diagnosticreagents (CT, MRI), and medical equipment. The type of images includes CT, MRI, PET, PET/CT,SPECT, X-ray, angiography, ultrasound/ultrasound echo, endoscopy and digital photos, etc.
The image analysis team comprises many senior medical imaging specialists, project managers andsenior expert teams, all of whom have a professional background in imaging or working experience asa diagnostic doctor in a hospital imaging department.
(4) Informatised Clinical Trial Solutions
Our subsidiary Jiaxing Clinflash helps pharmaceutical companies improve the efficiency andeffectiveness of their R&D by providing first-class informatised solutions and professional services forclinical trials. It has three major independently-developed systems with intellectual property rights:
Clinflash EDC electronic data collection system, Clinflash IRT randomisation and drug managementsystem, and Clinflash Safety pharmacovigilance system.
(5) Laboratory Services
We provide a full range of integrated analytical research services from drug discovery to development.Our researchers leverage reliable technology and the best methods to provide data support andsolutions for customers in making decisions in the drug development process. The primary servicesinclude drug metabolism and pharmacokinetics (DMPK), toxicological services that guide newtherapies from drug discovery to product development, full range of bioanalysis services,pharmaceutical research that helps the entry of customers’ preparations into clinical research, andbioequivalence research that supports local and international customers in the declaration andregistration of generic drugs at the Chinese NMPA and the US FDA.
This business is mainly undertaken by our subsidiary Frontage Holdings. For details, please refer toFrontage Holdings’ announcement on the 2019 annual results, the link of which ishttps://www1.hkexnews.hk/listedco/listconews/sehk/2020/0330/2020033002201.pdf.
(III) General Information of the Industry in which the Company Operates
China is currently the second largest pharmaceutical market in the world. With the government’s rollout ofmultiple favourable policies in recent years and the increasing investments in new drug R&D, we expectChina’s pharmaceutical R&D spending to grow rapidly. This growth will also promote the growth of theCRO industry. At present, the growth rate of the Chinese CRO industry has exceeded the growth rate of theglobal CRO industry and even the overall pharmaceutical industry in China. Given the advantages in terms ofpatient resources and operating costs and the internationalisation of clinical research, more and moreinternational multi-centre clinics will enter China. At the same time, with the rapid development of China’sinnovative drug industry, a large amount of capital has flowed in, and R&D investments are on the increase.China’s new drug R&D is gradually integrating with the world.
1. Opportunities and Challenges under the New Clinical Trial Policy
On the back of China’s joining the ICH in 2017, the concepts, rules, systems, and technologies of clinicaltrials in China are fully in line with those of the world. The country has also continuously promulgatedrelevant policies and regulations to strengthen the supervision of clinical trials, putting forward higherrequirements for the authenticity and standardisation of industry operations. As to the reform of clinical trialmanagement, it is proposed that record management shall be implemented for determining the eligibility ofclinical trial organisations, and at the same time social investments in the establishment of clinical trialorganisations shall be encouraged to explore overall solutions for clinical research. Compared with thecertification system, the system of record-keeping of clinical trial organisations is greatly simplified, andthe time period can be well shortened. Its real implementation is seen to bring organisations conductingclinical trials of new drugs more opportunities to participate in clinical new drug research. As a result,governments in Beijing, Shanghai, Sichuan, Hainan and other regions have responded actively, and relevantpolicies have been successively introduced to provide support. At the same time, in July 2018, NMPAissued the Announcement on Adjusting the Review and Approval Procedures for Clinical Drug Trials,whereby the “tacit approval system” for clinical trials is implemented. The implementation of the system isconducive to speeding up approvals and increasing the enthusiasm of enterprises in the R&D of new drugs,thus accelerating the R&D and launch of new drugs.
In order to better adapt to the fast-growing clinical research requirements under the new situation ofallowing the development of clinical trials and clinical trial organisations usher in a new “spring” on aseries of new policies and reform measures that actively encourage innovation, promote the globalsimultaneous development of new drugs, emphasise the “easy in, strict out” clinical trial principle andstrengthen whole-process supervision, clinical trial stakeholders, clinical organisations, CROs, SMOs andothers shall work closely together to achieve complementary advantages, ensuring that every clinical trial ofnew drugs is properly done and thus pushing forward the process of new drug launches.
2. Main Reasons for the Growth of the Global and Chinese CRO Markets:
(1) Increasing R&D investments. The increase in R&D investments stimulates pharmaceutical innovation,thereby increasing the demand for CROs. In recent years, the Chinese government has introduced
favourable policies to encourage pharmaceutical R&D so as to promote the sustainable development ofthe market. The CRO industry will also benefit from the increased R&D investments bypharmaceutical companies and accordingly a gradually rising share of R&D outsourcing spending.
(2) Increasingly complex R&D process. This includes: (i) an increase in the number of large-scaleinternational multi-centre clinical trial projects; (ii) more stringent R&D supervision; (iii) the use ofmore innovative and complex scientific methods in response to unmet medical needs; (iv) the fact thatadopting advanced technology in the R&D process has also pushed more and more pharmaceuticalcompanies to pass outsourced operations to experienced CROs with advanced technology andexpertise.
(3) Cost saving and risk reduction. In the context of the increased competition for new drug R&D, CROshelp pharmaceutical companies effectively and professionally manage R&D activities while reducingcosts and risks.
(4) Rise of emerging biotech companies. There are many emerging biotech companies, especially in China.Due to their limited internal resources and capabilities, most emerging biotech companies needthird-party service providers to give guidance on their complex clinical research projects, thus creatingadditional demand for CRO services.
(5) Preferential policies of the Chinese government. Since 2015, Chinese regulatory authorities haveinitiated a series of regulatory changes aimed at the review and approval of medicines and medicaldevices. In recent years, regulatory authorities have been committed to encouraging innovation, bettermeeting clinical needs, and integrating with international standards. These preferential policies alsoencourage China to develop the pharmaceutical CRO market and serve as part of the continuousreform of her regulatory review and approval system to promote pharmaceutical innovation. Therelevant reforms cover the entire value chain of the Chinese pharmaceutical market from clinical trials,submission of regulatory documents, production to social insurance, providing more businessopportunities for CROs specialising in the R&D of innovative drugs.
(6) Tighter supervisory system. Since the China Food and Drug Administration (now called the China
National Medical Products Administration) required self-examination and review of all ongoingclinical trials in 2015, China has been committed to strengthening the integrity, authenticity and qualitymanagement of clinical trials in accordance with international standards. Therefore, clinical CROswith service quality meeting international standards are much sought after.
(7) Expiry of large numbers of biologics patents. Patents of several best-selling biopharmaceuticals inChina have expired or will expire in the near future and this will bring more business opportunities tothe Chinese biosimilar market. The demand for CROs engaged in BE and other relevant businesseswill also increase.
(8) Increasing cross-border opportunities. After China became a member of ICH in 2017, clinical dataobtained overseas may be applied at a broader level to support registration in China and, in reverse,facilitate more cross-border cooperation. The Chinese government has also been encouraging the
import of high-quality drugs, especially those that can address China’s unmet medical needs. Theseinitiatives are expected to bring more international multi-centre clinical trials and early-stage clinicalprojects initiated by multinational pharmaceutical companies to China.II. Significant Changes in Major Assets
1. Significant Changes in Major Assets
| Major assets | Description of the significant changes |
| Intangible assets | Intangible assets increased by RMB68.63million or 246.69% from the balance at the beginning of the period, mainly attributed to the Company’s purchase of information management systems and the increase in intangible assets of its newly-consolidated subsidiaries during the reporting period. |
| Accounts receivable | Accounts receivable increased by RMB315.70 million or 41.59% compared with the balance at the beginning of the period, mainly due to the fact that the Company’s accounts receivable increased with the year-on-year increase in operating income and that the projects had not progressed up to the time of payment during the reporting period. |
| Other current assets | Other current assets increased by RMB65.43 million or 427.54% from the balance at the beginning of the period, mainly due to the purchase of wealth management products by the Company’s subsidiaries during the reporting period. |
| Other non-current financial assets | Other non-current financial assets increased by RMB769.38 million or 51.95% from the balance at the beginning of the period, mainly due to the increased investments in minority interests and the increase from changes in fair value changes during the reporting period. |
| Long-term deferred expenses | Long-term deferred expenses increased by RMB10.38 million or 109.98% from the balance at the beginning of the period, mainly due to the renovation of a new laboratory by the Company’s subsidiary during the reporting period. |
| Cash and cash equivalents | Cash and cash equivalents increased by RMB1,337.82 million or 189.9% from the balance at the beginning of the period, mainly due to the fact that Frontage Holdings issued shares to the public and received proceeds from its listing on the Main Board of the Hong Kong Stock Exchange during the reporting period. |
2. Major Overseas Assets
√ Applicable □ Not applicable
| Details of the asset | Reasons for the formation | Size of asset | Location | Operating model | Control measures to ensure asset security | Profitability | Overseas assets as a percentage of the Company’s net assets | Any significant risk for impairment |
| Instruments and equipment | Frontage Laboratories acquired the assets through its own purchase and financial leasing for the needs of biological analysis and CMC, DMPK, Safety Toxic operations | US$14.16 million | Pennsylvania State and Ohio State in the US | The Company uses it for daily operations | Monitoring system and regular inventory check | Good | 1.79% | No |
| Other descriptions | Financial leasing of US$5.85 million and its own purchases of US$8.31 million | |||||||
III. Core Competitiveness Analysis
1. Ability to Provide Customers with Comprehensive Integrated Services as a Domestically-leading CRO
As a comprehensive integrated clinical CRO, the Company may provide customers with integrated clinicalresearch services for medicines, medical devices, etc. Through continuous improvement of business capabilitiesand professional standards, we provide comprehensive, effective, customised and quality solutions to Chinese andmultinational biopharmaceutical companies. The Company has accumulated rich expertise in global projectmanagement and has been commissioned by Chinese and international clients to carry out cross-border projects ofincreasing complexity. Currently, the Company has 123 service outlets (including those in Hong Kong and Taiwan)covering more than 800 clinical trial organisations, and has established overseas subsidiaries in ten countries inAsia Pacific, North America, Europe and other regions.
2. Industry-leading Quality Standards and Project Delivery Speed
Clinical R&D is high-input, high-risk and time-consuming research. Quality and speed are critical to thesuccessful development and commercialisation of medicines and medical devices. According to the Frost &Sullivan report, for innovative drugs, a well-designed and effectively-implemented clinical trial plan can shortenthe launching time by two years on average.
The Company wins the trust of customers by effectively completing high-quality R&D projects. The Company hasstrong quality control standards leading in the industry. Its quality management system covers every stage of theproject, from clinical design and planning to quality control in project execution as well as quality assurance andremedial measures, to ensure project quality and on-time delivery. To ensure that the compliance requirements ofrelevant laws and regulations are met, the quality control department regularly conducts a comprehensive updateof standard operating procedures. We also continuously review and improve our quality management system basedon customer feedback and global practical experience. We help in the launch of multiple new drugs, including thefirst China-made artificial heart “Yongrenxin”, the first China-made biosimilar drug Han Li Kang, the firstdomestic diagnosis of optic neuromyelitis (a rare disease), and the world’s first once-daily COPD closed tripletherapy being approved in China. With our expertise and efficiency, we have won customer recognition of ourservice quality and speed.
3. Experienced and Stable Core Management and Business Teams
The Company’s core management team members are stable and have rich medical expertise and clinical researchexperience. They can timely garner insight into industry development trends, enabling the Company to seizeopportunities and obtain first-mover advantages amidst industry developments.
Given the nature of clinical trials, a team of experienced and professional talents is required. Employees of theCompany being graduates from college with a degree and above account for as high as 88.23% of the total. Inview of the shortage of professional personnel, high turnover and other issues, the Company has formulated andimplemented targeted training programs, with the major ones including the orientation program, the project leadertraining program, the professional and technical personnel training program, and the management personneltraining program, in order to improve the management ability of its management team, the project managementability of technical personnel and the work skills of the employees. In addition, the Company provides competitivecompensation, including equity incentives, to employees to attract and retain talents. The above measures canenable us to reduce the turnover rate and better provide stable and high-quality service to our customers.
4. Investing in Innovative Drugs to Establish a Clinical Investment Ecosystem
As a leader dedicated to healthcare innovation, the Company has made a minority investment in innovativebiopharmaceutical and medical device startups. The Company’s industry reputation, experience and capabilitieshave made it possible to identify promising early-stage investment opportunities and build a diversified investmentportfolio. The Company provides financial support for startups and offers comprehensive R&D solutions for theirongoing projects. Through strategic investment, the Company aims to establish long-term cooperative relationswith these companies and promote innovation in the pharmaceutical industry in China and the world. In additionto financial returns, the Company believes that, as these startups grow and succeed, these equity investments willhelp the Company gain access to new technologies, acquire potential customers, and seize more businessopportunities.
Section 4 Management Discussion and AnalysisI. OverviewI. During the reporting period, operating income was RMB2,803.31 million, representing an increase of 21.85%
over the same period of the previous year. During the reporting period, the Company achieved a net profitattributable to the parent company of RMB841.63million, representing an increase of 78.24% over the sameperiod of the previous year.
During the reporting period, the value of new contracts was RMB4,230.87 million, representing an increase of
27.90% over the same period of the previous year. As of December 31, 2019, the cumulative value of theCompany’s contracts to be executed was RMB5,011.16 million, representing an increase of 36.05% over the sameperiod of the previous year.
(1) The clinical trial solutions business grew steadily during the reporting period, achieving revenue from principal
business of RMB1,346.67 million, representing an increase of 22.05% over the same period last year.Clinical-related and laboratory services grew stably during the reporting period, achieving revenue from principalbusiness of RMB1,446.48 million, representing an increase of 21.08% over the same period last year.
(2) During the reporting period, revenue from domestic business was RMB1,600.13 million, accounting for 57.08%
of the total and representing an increase of 29.63% over the same period of the previous year; revenue fromoverseas business was RMB1,203.18 million, accounting for 42.92% of the total and representing an increase of
12.84% over the same period of the previous year. The increase in revenue from domestic business during thereporting period was mainly due to the increase in the proportion of domestic clinical trials of innovative drugs intotal.
II. In 2019, continuously adhering to the “Excellence in Every Trial for Every Patient” development strategy, the
Company kept pushing organisational reform, strengthened group-based management to adapt to its developments,improved the global layout, optimised the operational and management process, and promoted the building oforganisational capabilities and brand culture. A synergy of business segments was created, the ability of providingR&D service in new medicines was comprehensively improved, and a rapid growth in performance wasmaintained.
In 2019, the Company ushered in one milestone after another and continued to boost successful high-qualityinnovative drug launches to meet clinical needs and bring hope to patients. More and more customers haveentrusted their projects to us, demonstrating their continued recognition and high trust in the professional servicesof Tigermed.
1. This year, the Company continued to improve its service capabilities and deepened its global layout
As of the disclosure date of the Report, the Company had 123 domestic service outlets (including those in Hong Kongand Taiwan) covering more than 800 drug clinical trial organisations nationwide, in addition to overseas subsidiaries
established in ten countries across regions including Asia Pacific, North America and Europe. With an extensive servicenetwork, the Company can help customers quickly carry out clinical trials. Through strategic acquisitions and its ownestablishments, the Company strives to achieve the diversification of services to expand global business servicescapabilities. The Company is one of the 27 GEM stocks included in the MSCI China Index and one of the firstcompanies selected in the CRO industry. The Company’s overseas influence is on the increase.
In May 2019, Frontage Holdings was officially listed on the Main Board of The Stock Exchange of Hong KongLimited. Frontage Holdings provides integrated and scientifically-driven research, analysis and development servicesthroughout the drug discovery and development process to assist pharmaceutical companies to achieve drugdevelopment goals. Having operations in both the US and China, Frontage Holdings may take advantage of and benefitfrom the growth opportunities in both markets. In September 2019, Frontage Holdings officially opened a newlaboratory of 42,000 square feet in Shanghai. The new laboratory will be entirely used to carry out sample analysis ofpreclinical TK/PK and clinical trials for small molecule drugs, as well as for the biological sample managementbusiness. With the official operation of the new laboratory in Shanghai, it is expected that the capacity bottleneck oflaboratory services will be effectively resolved and that advanced equipment and instruments and professionalpersonnel will be increased to provide more customers with high-quality drug research, analysis and developmentservices, helping customers achieve drug development goals and thus benefiting patients.
In 2019, the Company had the first subject case successfully enrolled in Singapore, ushering in a new milestone inclinical trial. Singapore is a gateway country in Southeast Asia having a world-class medical service system,international clinical researchers and experienced research teams. On July 30, 2019, the international, multi-centre,phase II/III clinical study of AZD3759, a new generation of oral, small molecule, reversible epidermal growth factorreceptor (EGFR) tyrosine kinase inhibitor (TKI) developed by Alpha BioPharma (Jiangsu) Co., Ltd., successfullycompleted the first subject case enrollment and drug administration in Singapore. The clinical research was carried outwith the help of the Company. This was also the first international, multi-centre clinical trial carried out by Tigermed inSingapore, with the first subject case enrolled in Singapore. Going forward, the Company will also provide R&Dservices to more Southeast Asian countries with potential.
In November 2019, Tigermed and Accerise Co., Ltd. announced that they will form a joint venture to provideinternational, multi-centre clinical trial services in Japan, as well as supporting services for the global development ofdomestic pharmaceutical and medical equipment enterprises.
In December 2019, the Company raised funds of approximately US$17.74 million on its own to purchase 1.4 millionordinary shares of ＥＰＳホールディングス株式会社 (EPS Holdings, Inc., “EPS”), a leading CRO in Japan, with ashareholding ratio of 3.06%. EPS is a company listed on the First Section (main board market) of the Tokyo StockExchange in Japan, primarily providing various high-value-added solutions for a number of customers, includingpharmaceutical companies, medical device manufacturers, new medicine R&D companies, medical institutions, anduniversity research institutes, to support their product development. After the completion of this transaction, it isexpected that the Company will establish a long-term cooperative relationship with EPS, which is conducive to theCompany’s further business expansion in the Asia-Pacific region.
The Company continuously improves and gradually optimises its quality management system, always makingpreparation for the ultimate goal of achieving the world’s highest quality standards for clinical trials. The Companyplans to achieve a high global quality standard not only at the business level but also at the level of functional
departments through building over three to five years, so that the operation is continuously optimised to better servecustomers. In 2019, the Company’s quality assurance department perfected 116 SOPs based on global developmentsand regulatory updates, providing system support for global project cooperation. It was responsible for 15 domestic andoverseas customer audits and no major issues were identified. It implemented 51 research centre audits and completed18 internal system audits to prevent risks and optimise business processes. In 2019, 25 centres under 19 projects of theCompany’s clinical operations department underwent and successfully passed the on-site inspection by the nationalbureau.
The series of initiatives above has not only brought about an improvement in performance and business capability ofthe Company, but has also led to the enhancement of the global cross-regional business layout and the further extensionof the upstream and downstream industry chains.
2. Growing together with numerous outstanding domestic customers has further strengthened the Company’sdetermination to contribute to the development of innovative drugs in China. It is a great honour of the Company towitness China’s development of innovative drugs over the past decade or so. This period sees the development ofChinese innovative drugs from the struggle of individual companies to stay on their feet to the current situation ofgoing full steam ahead, as well as the constant innovation in the regulatory system which is gradually integrating withthe world. As a country with a large population, China cannot rely solely on imported drugs to meet clinical and patientneeds. Therefore, in the future, we must rely on a greater number of excellent innovative pharmaceutical companies todevelop innovative drugs with real clinical value. Although there will certainly be many twists and turns in this process,the Chinese innovative drug industry, still in its infancy, is fully capable of leveraging advantages in terms ofresearchers, patients and other respects going forward to make better products at a relatively low cost, thereby allowingChinese new drugs to enter the world stage. Among the 13 Chinese Class 1 new drugs approved in 2019, seven of themwere developed with the assistance of Tigermed or its subsidiaries.
On August 26, 2019, the implantable left ventricular assist system developed by Chongqing Yongrenxin MedicalDevices Co., Ltd. was approved for launch. This product was the first implantable ventricular assist product approvedfor launching in China, which has filled the industry gap in the field of artificial heart. As a leading CRO in the medicaldevice field, Tigermed provides full-process clinical trial services for Chongqing Yongrenxin.
On January 23, 2020, Zelgen Biopharmaceuticals was listed on the Science and Technology Innovation Board of theShanghai Stock Exchange. Zelgen Biopharmaceuticals is an innovation-driven new drug R&D company focusing onmultiple therapeutic areas such as cancer, hemorrhage and blood diseases, and hepatobiliary diseases. Tigermed hascarried out in-depth cooperation with Zelgen Biopharmaceuticals in several new drug clinical research projects.
In November 2019, TY-302 capsule, a Class 1 targeted anticancer drug developed by ZhejiangTongyuankang Pharmaceutical Co Ltd., was granted the implicit permission of clinical trials to be used in hormonereceptor-positive and human epidermal growth factor receptor 2-negative (HR+/HER2-) for the treatment of locallyadvanced or metastatic breast cancer and other advanced solid tumours or hematological tumours. The Companyprovides full-process services for the application of its clinical trials.
3. Actively participating in foreign innovative drug projects for bringing hope to Chinese patients
In October 2019, the aquaporin-4 antibody (AQP4 Ab) test kit (enzyme-linked immunoassay) developed by the British
RSR company was approved by the NMPA for launch. The kit was the first domestically approved product for clinicaldiagnosis of neuromyelitis optica (NMO)/neuromyelitis optica spectrum disorder (NMOSD), which will help a greaternumber of NMO/NMOSD patients get more accurate diagnosis and treatment. As a leading CRO in the medical devicefield, Tigermed provides full-process technical services, including product registration and clinical research, in relationto the approval of the product.
In November 2019, GlaxoSmithKline (GSK) announced that its long-acting triple inhalation preparation “TrelegyEllipta” for the treatment of chronic obstructive pulmonary disease (COPD) has been approved by the NMPA. This wasthe first once-daily three-in-one inhalation formulation approved in China. Simo, a subsidiary of Tigermed, hadprovided full-process site management organisation (SMO) services for the clinical research of this drug. TrelegyEllipta was also the world’s first approved once-daily COPD closed triple therapy, which was launched in the US asearly as in 2017. The approval in China is likely to bring new hope to Chinese COPD patients.
4. Adhering to a win-win situation in the development of strategic business partners
In May 2019, the Company and Frontage Laboratories signed a letter of intent agreement for strategic cooperation withZhejiang Conba Pharmaceutical Co., Ltd. (hereinafter “Conba”). With the signing of the strategic cooperationagreement, Tigermed, Frontage Laboratories and Conba will give full play to their capabilities and advantages alongthe pharmaceutical industry chain in carrying out cooperation centering on products. Tigermed and FrontageLaboratories will provide drug consistency evaluation, new drug clinical research, post-launch drug clinicalre-evaluation and other relevant services. Both parties will also carry out intensive cooperation in terms of new drugincubation platforms, equity investments, market sales, etc.
In July 2019, the Company and AstraZeneca China announced that they have reached a strategic cooperation, and thatboth parties will adhere to their highly-consistent “patient-oriented” rationale in carrying out comprehensive strategiccooperation in the clinical research and development process of innovative pharmaceutical products. As an integratedglobal biopharmaceutical company driven by innovation, AstraZeneca has achieved outstanding performance insupporting and promoting new drug development and business model innovation in recent years. Tigermed is focusedon providing clinical research related services for innovative drugs to boost the commercialisation of innovativeproducts. Both parties are committed to the commercialisation of innovative pharmaceutical products, thereby makingmore contribution to human health undertakings.
In August 2019, Tigermed and Korea National Enterprise for Clinical Trials (KoNECT) entered into cooperation topromote exchanges between Chinese and Korean pharmaceutical industries. The cooperation aims to promotecooperation and exchanges in respect of new drug development and clinical research in China and South Korea, andfurther improve the success rate of new drug clinical R&D. In order to promote the development of the pharmaceuticalindustry and the R&D of new drugs in China and South Korea, both parties will actively carry out communications andexchanges, expand clinical research cooperation in the two countries, and share new drug R&D related experience.
In September 2019, Tigermed announced that it has entered into cooperation with Wuxi National High and New TechIndustrial Development Zone to become the first enterprise to station in the Wuxi International Life Science InnovationPark to provide professional full-process clinical research services for innovative pharmaceutical companies in theinnovation park, which is expected to accelerate pharmaceutical R&D and thus advance the transformation of scientificand technological innovations. Jointly created by Wuxi National High and New Tech Industrial Development Zone and
the world-renowned biopharmaceutical company AstraZeneca, Wuxi International Life Science Innovation Park,geared to domestic and foreign innovation companies, is engaged in the building of an integrated innovation incubationplatform covering early R&D, innovation incubation, achievements transformation, intelligent display and professionalservice in the life science field with the aim of establishing an innovative ecosystem for the healthcare industry.
In September 2019, Tigermed and Shenzhen Pingshan District People’s Government entered into cooperation to buildan integrated clinical research service platform. The Guangdong-Hong Kong-Macao Greater Bay Area, one of theregions with the highest degree of openness and the strongest economic vitality in China, occupies an importantstrategic position in the overall national development. As one of the four central cities in the Guangdong-HongKong-Macao Greater Bay Area, Shenzhen will also play a leading role in the biopharmaceutical industry and field. Thebiopharmaceutical industry is a key industry for development in Pingshan District, Shenzhen, and its industry patternfeaturing mutual fostering and joint development among large enterprises represented by Sanofi Pasteur andMicrochips Biotech, as well as micro-, small- and medium-sized innovative firms represented by Prekin, HwaGenPharmaceutical and others, has laid a good industrial foundation for comprehensive accelerated development. Tigermed,an industry-leading CRO, will also give full play to its professional service capabilities in the whole process of clinicalresearch. Through this cooperation, it will build an integrated clinical research service platform to seize historicopportunities in providing high-quality services for more. biopharmaceutical innovation companies in theGuangdong-Hong Kong-Macao Greater Bay Area, adding impetus to attaining biopharmaceutical innovation heights inthe Guangdong-Hong Kong-Macao Greater Bay Area.
Strategic co-construction cooperation model for CROs and clinical trial organisations under the new situation. In June2019, the 2019 China Clinical Trial Organisations ? Innovation ? Practice Summit Forum was held in Beijing. At theforum, participants conducted discussion on topics including the opportunities and challenges in clinical research aswell as the ways of implementing national pharmaceutical reforms and innovation policies, improving the managementlevel of clinical trial organisations and the quality of clinical research and jointly promoting the progress anddevelopment of pharmaceutical R&D. Under the new situation, in working closely with clinical trial organisations,CROs may consider the gradual transformation from a single project outsourcing cooperation into a long-term strategiccooperation model, and especially in the case of large-scale and standardised CROs, strategic vertical + horizontalcooperation may be carried out in all domains to achieve win-win collaboration.
Yibai Health, an investee of the Company, is a healthcare group building on clinical trial research centres as its corecompetitiveness and focusing on the provision of a full range of services for clinical trial research centres as itscharacteristics, experienced in strategic co-building with clinical trial organisations. It hopes that CROs and clinicaltrial organisations will further strengthen cooperation and interaction going forward to form a greater number of closeall-rounded long-term strategic cooperation capable of complementing each other, achieving win-win cooperation, anddelivering good projects to boost new drug R&D in China.
5. The Company actively organised and participated in industry conferences to provide joint assurance on the quality and
compliance of clinical trials with all clinical trial stakeholders; and actively built a two-way bridge for domestic andforeign customers
Quality is the core of clinical trials. During the reporting period, the Company and its subsidiaries conducted severalrounds of discussion surrounding joint efforts on promoting improvement in the quality of clinical trials amongstakeholders and the ways of managing clinical trial data and quality control to ensure the integrity, accuracy,
authenticity and reliability of data and to improve and perfect supervisory and inspection skills; the interpretation andanalysis of drug registration and application strategies under the new regulations and the initiation and implementationof drug R&D projects under the new circumstances; and special pharmacovigilance seminars. The Company alsostrengthened industry exchanges, further conducted in-depth study of a series of pharmaceutical policies andregulations, standardised the clinical trial process, and reinforced clinical trial collaboration among all parties to jointlyimprove the quality of clinical trials.
During the reporting period, experts of the Company repeatedly participated in special industry conferences, jointlyinterpreting new policies with all parties and discussing the difficulties and pain confronted to support the R&D of newdrugs. The topics discussed included the interpretation of the Administration of the Recordation of Clinical TrialOrganisations, the Pharmaceutical Administration Law and other new policies; early-stage clinical research discussion;verification and risk management for medical device clinical trials and medical device systems, as well as third-partymedical device testing technical services.
The Company actively participated in major overseas conferences, such as the American Biotechnology InnovationOrganisation (BIO) international convention, Europe’s largest biotechnology partnering conference BIO-Europe, andthe 38th J.P. Morgan Healthcare Conference in January 2020. While sharing the latest clinical research policies andregulations and industry developments in China, the Company gave briefings on its experience and insights in the areasof new drugs and medical devices, and conducted in-depth exchanges as to how to carry out clinical research, productregistration, international multi-centre clinical research on new drugs, and other matters in China. Through internationalexchanges, we are more deeply aware of the urgency and importance of global strategising that only with a completeglobal layout can we better serve in boosting the worldwide simultaneous clinical R&D of new drugs. On the otherhand, the Company is actively building a two-way bridge for foreign medical products coming into China and forChina’s innovative products going to the world, hence bringing in more foreign products beneficial to patients and atthe same time helping China’s innovative drugs to go abroad in a better and faster way.
The Company repeatedly participated in innovative drug investment conferences addressing the theme of new drugsinvestment and financing. Leading figures of the pharmaceutical industry gathered to share their insights, explore thefuture of the industry, and conduct seminars on the development directions, development strategies and critical issuesof biopharmaceutical-related fields. By participating in these conferences, the Company may attract potential customersand explore valuable investment targets, preparing potential project reserves.
6. Enjoying high acclaim
Hangzhou Yingfang Biotech Co., Ltd., a subsidiary of the Company, was named “Excellent Young Eagle Enterprise”.The Young Eagle Program is a strategic plan represented by high and new tech enterprises, technically advancedservice enterprises, technological innovation enterprises, and patent pilot (demonstration) enterprises at or above themunicipal level that are subject to the focused fostering and support of the Hangzhou Municipal Government. As apioneering third-party independent medical imaging CRO in China, Yingfang Biotech has been focusing on providingprofessional, efficient and timely services to customers since its establishment, and its business development has showna year-over-year growth trend.
Frontage Laboratories once again won the 2019 CRO Leadership Award from the authoritative Life Science Leadermagazine, which annually invites pharmaceutical companies, including biopharmaceutical firms, to evaluate the
capabilities and performance of contract research organisations. Frontage Laboratories has won this award severaltimes since 2014.
Dr. Li Song, Chief Executive Officer of Frontage Laboratories, a subsidiary of the Company, said, “We are honoured tobe selected as a CRO leader again this year. The employees of Frontage Laboratories are committed to meetingcustomer requirements through excellent quality standards, scientific expertise, strict regulatory compliance, as well astimely communication and project delivery. Thank you very much for your recognition of our efforts.”
In September 2019, Hutchison MediPharma (Shanghai) Ltd. (hereinafter “HMP”) awarded Hangzhou Simo Co., Ltd.the “*** Project Excellent Team Award” and the project leader Cao Wenwen the “Outstanding Contribution Award”.This was the first time Hutchison Whampoa granted awards to its vendors, which is a demonstration of the high level ofrecognition toward Simo’s team among customers.
In December 2019, the Company’s team won the “Hand-in-Hand Progress Award” for its outstanding contributions inthe *** Project carried out at Hua Medicine (Shanghai) Ltd.
II. Principal Business Analysis
1. Overview
See the relevant content of “I. Overview” in “Management Discussion and Analysis”.
2. Revenue and Cost
(1) Composition of Operating Income
Overall operating income
Unit: RMB
| 2019 | 2018 | YOY increase or decrease | |||
| Amount | As a percentage of total operating income | Amount | As a percentage of total operating income | ||
| Total operating income | 2,803,309,287.65 | 100% | 2,300,659,706.62 | 100% | 21.85% |
| By industry | |||||
| Service industry | 2,803,309,287.65 | 100.00% | 2,300,659,706.62 | 100.00% | 21.85% |
| By product | |||||
| Clinical trial solutions | 1,346,672,174.25 | 48.04% | 1,103,365,194.98 | 47.96% | 22.05% |
| Clinical-related and laboratory services | 1,446,481,832.51 | 51.60% | 1,194,664,965.71 | 51.93% | 21.08% |
| Others | 10,155,280.89 | 0.36% | 2,629,545.93 | 0.11% | 286.20% |
| By region | |||||
| Domestic | 1,600,125,132.65 | 57.08% | 1,234,363,529.12 | 53.65% | 29.63% |
| Overseas | 1,203,184,155.00 | 42.92% | 1,066,296,177.50 | 46.35% | 12.84% |
(2) Industries, Products and Regions Accounting for More Than 10% of the Company's Operating Income orOperating Profit
√ Applicable □ Not applicable
Unit: RMB
| Operating income | Operating cost | Gross profit margin | Increase or decrease in operating income comparing with the same period last year | Increase or decrease in operating costs comparing with the same period last year | Increase or decrease in gross profit margin comparing with the same period last year | |
| By industry | ||||||
| Service industry | 2,793,154,006.76 | 1,499,646,811.12 | 46.31% | 21.55% | 14.78% | 3.16% |
| By product | ||||||
| Clinical trial solutions | 1,346,672,174.25 | 756,895,112.52 | 43.80% | 22.05% | 11.68% | 5.23% |
| Clinical-related and laboratory services | 1,446,481,832.51 | 742,751,698.60 | 48.65% | 21.08% | 18.13% | 1.28% |
| By region | ||||||
| Domestic | 1,589,876,791.46 | 858,629,993.68 | 45.99% | 29.08% | 23.60% | 2.39% |
| Overseas | 1,203,277,215.30 | 641,016,817.44 | 46.73% | 12.85% | 4.76% | 4.11% |
In the case where adjustment has been made to the statistical basis of the Company’s principal business dataduring the reporting period, the Company’s principal business data adjusted in accordance with the basis as of theend of the reporting period in the most recent year will be used
□ Applicable √ Not applicable
(3) Is the Company’s Income from Sale of Goods Greater than the Income from Labour and Services
□ Yes √ No
(4) Performance of Major Sales Contracts Signed by the Company as of the Reporting Period
□ Applicable √ Not applicable
(5) Composition of Operating Costs
Industry classificationIndustry classification
Unit: RMB
| Type of industry | Item | 2019 | 2018 | YOY increase or decrease | ||
| Amount | As a percentage of total operating costs | Amount | As a percentage of total operating costs | |||
| Service industry | Direct labour | 770,168,448.06 | 51.33% | 605,699,306.22 | 46.27% | 5.06% |
| Service industry | Clinical trial fees | 239,057,544.26 | 15.93% | 304,705,556.02 | 23.28% | -7.35% |
| Service industry | Business travel and meeting expenses | 35,432,814.90 | 2.36% | 35,232,355.30 | 2.69% | -0.33% |
| Service industry | System usage fees | 43,387,387.26 | 2.89% | 53,076,560.99 | 4.06% | -1.17% |
Explanation
(6) Any Changes in the Scope of Consolidation During the Reporting Period
√ Yes □ No
(1) In January 2019, the Company transferred its 100% equity in Antengene Investment Limited;
(2) In February 2019, the Company invested in the establishment of Tigermed USA INC., with the Companyholding 100% of the shares;
(3) In February 2019, Tigermed USA INC., a subsidiary of the Company, invested in the establishment ofTigermed America LLC, with the Company holding 100% of the shares;
(4) In February 2019, the Company transferred its 20% equity in Shanghai Shengtong, a subsidiary in which the
Company holds a controlling interest, and Shanghai Shengtong will no longer be included in the Company’sscope of consolidation after the equity transfer;
(5) In June 2019, the Company transferred its 50% equity in Jetson Certification, a subsidiary in which theCompany holds a controlling interest, and Jetson Certification will no longer be included in the Company’sscope of consolidation after the equity transfer;
(6) In July 2019, the Company acquired Beijing Yaxincheng Medical InfoTech Co., Ltd., with the Companyholding 55% of the shares;
(7) In September 2019, the Company invested in the establishment of HK Healthcare, with the Company holding
100% of the shares;
(8) In September 2019, Tigermed HK, a subsidiary of the Company, invested in the establishment of TGMountain Investment Co., with the Company holding 100% of the shares;
(9) In September 2019, Tigermed HK, a subsidiary of the Company, invested in the establishment of TG Sky
Growth Investment Ltd., with the Company holding 100% of the shares;
(10) In October 2019, the Company transferred its 100% equity in Hangzhou Tigermed Cloud HospitalManagement Co., Ltd.;
(11) In October 2019, Frontage Shanghai, a subsidiary of the Company, invested in the establishment of FrontageLuohe, with the Company holding 100% of the shares;
(12) In October 2019, Frontage Holdings, a subsidiary of the Company, acquired Frontage Laboratories (Suzhou)Co., Ltd., with Frontage Holdings holding 75% of the shares;
(13) In October 2019, Frontage Holdings, a subsidiary of the Company, acquired RMI Laboratories, LLC, withFrontage Holdings holding 100% of the shares;
(14) In December 2019, Frontage Holdings, a subsidiary of the Company, acquired BRI BiopharmaceuticalResearch, Inc, with Frontage Holdings holding 100% of the shares.
(7) Significant Changes or Adjustments in the Company’s Business, Products or Services During the ReportingPeriod
□ Applicable √ Not applicable
(8) Major Customers and Vendors
On the Company’s major customers
| Total sales amount for the top five customers (RMB) | 573,727,199.09 |
| Total sales amount for the top five customers as a percentage of total annual sales amount | 20.47% |
| Related-party sales amount in the sales amount for the top five customers as a percentage of total annual sales amount | 0.00% |
Information of the Company’s top five customers
| Serial number | Name of customer | Sales amount (RMB) | As a percentage of total annual sales amount |
| 1 | First | 131,799,290.41 | 4.70% |
| 2 | Second | 123,121,992.43 | 4.39% |
| 3 | Third | 115,730,573.52 | 4.13% |
| 4 | Fourth | 112,294,403.24 | 4.01% |
| 5 | Fifth | 90,780,939.49 | 3.24% |
| Total | -- | 573,727,199.09 | 20.47% |
Explanation of other information of major customers
□ Applicable √ Not applicable
On the Company’s major vendors
| Total purchase amount for the top five vendors (RMB) | 65,893,453.49 |
| Total purchase amount for the top five vendors as a percentage of total annual purchase amount | 4.39% |
| Related-party purchase amount in the purchase amount for the top five vendors as a percentage of total annual purchase amount | 0.00% |
Information of the Company’s top five vendors
| Serial number | Name of vendor | Purchase amount (RMB) | As a percentage of total annual purchase amount |
| 1 | First | 26,302,032.52 | 1.75% |
| 2 | Second | 13,072,932.28 | 0.87% |
| 3 | Third | 9,120,935.46 | 0.61% |
| 4 | Fourth | 8,884,656.29 | 0.59% |
| 5 | Fifth | 8,512,896.94 | 0.57% |
| Total | -- | 65,893,453.49 | 4.39% |
Explanation of other information of major vendors
□ Applicable √ Not applicable
3. Expenses
Unit: RMB
| 2019 | 2018 | YOY increase or decrease | Explanation of significant changes | |
| Cost of sales | 81,071,523.43 | 54,454,432.35 | 48.88% | Cost of sales increased by 48.88% over the same period of the previous year, mainly attributed to the increase in sales staff during the reporting period. While achieving sales revenue, the Company also saw a year-on-year increase in expenses for market expansion. |
| Administration expenses | 349,642,929.43 | 314,197,849.45 | 11.28% | |
| Financial expenses | 9,557,944.76 | 7,392,798.47 | 29.29% | Financial expenses increased by 29.29% compared with the same period of last year, mainly due to the increase in borrowings by the Company during the reporting period. |
| R&D expenses | 124,049,308.27 | 88,025,353.33 | 40.92% | R&D expenses increased by 40.92% compared with the same period of last year, mainly due to the increase in the Company’s R&D investment and the increase in R&D expenses of newly consolidated subsidiaries during the reporting period. |
4. R&D Investment
√ Applicable □ Not applicable
In 2019, the Company continued to carry out technological innovation and independent R&D of core technologies toensure the continuous output of technological value. The Company carried out R&D, including clinical trial technologyresearch on drugs such as anti-rheumatoid arthritis drugs, antidepressants and anti-diabetes drugs, clinical trial artificialintelligence assisted system, system development supportive of clinical trial research IT systems based on datamanagement, development of cloud storage systems for clinical research data management, off-site clinical researchdata management research, and IVD analysis system, to provide technical support for customers to improve clinicaldrug data management, thus shortening the R&D duration, and improving the efficiency of clinical trials.
During the reporting period, the Company conducted in-depth research focusing on the development of a highlysensitive chemiluminescent enzyme substrate complex in the field of large molecule biological innovative drugsbioanalysis, the methodology for the development and verification of UPLC-MS/MS method for the determination ofthe concentration of a novel small molecule compound and its active metabolites in human plasma and theconcentration of Afatinib in biological samples, etc.
Intensive research was also carried out on the quality control and quality assurance system of clinical research projectsfor new drugs, the whole-process functional follow-up system for clinical research and other areas. Through theresearch and practice of SMO business processes and controls, the Company summed up the technical difficulties andfocal points in SMO services by way of information management means and created non-patented technologies tofurther improve the efficiency and quality of its work in SMO services.
In addition, the Company’s EDC data standardised derivative model for clinical trial statistical analysis, cloud datamanagement system for clinical trials, and data statistical project management system, aiming at improving the qualityof clinical trial data management and statistical analysis service, provided high-quality technical support and dataprotection for the data statistical analysis of domestic and foreign pharmaceutical companies.
The R&D investment was mainly used for the social insurance of R&D staff, software development, system usage,equipment depreciation, etc. The total investment in R&D during the reporting period was RMB124.05million,accounting for 4.43% of the total operating income.
The Company’s R&D investment and as a percentage of operating income over the past three years
| 2019 | 2018 | 2017 |
| Number of R&D staff (person) | 468 | 426 | 378 |
| Number of R&D staff as a percentage of the total number of staff | 9.44% | 10.93% | 11.76% |
| Amount invested in R&D (RMB) | 124,049,308.27 | 88,025,353.33 | 49,666,648.93 |
| Amount invested in R&D as a percentage of operating income | 4.43% | 3.83% | 2.94% |
| Amount of capitalised R&D expenditure (RMB) | 0.00 | 0.00 | 0.00 |
| Amount of capitalised R&D expenditure as a percentage of total R&D investment | 0.00% | 0.00% | 0.00% |
| Capitalised R&D expenditure as a percentage of current net profit | 0.00% | 0.00% | 0.00% |
Reasons for the significant change in the percentage of total R&D investment in operating income compared with lastyear
□ Applicable √ Not applicable
Reasons for the substantial change in the R&D investment capitalisation rate and explanation of its rationality
□ Applicable √ Not applicable
5. Cash Flow
Unit: RMB
| Item | 2019 | 2018 | YOY increase or decrease |
| Subtotal of cash inflow from operating activities | 2,714,061,094.36 | 2,404,141,600.05 | 12.89% |
| Subtotal of cash outflow from operating activities | 2,186,503,158.85 | 1,881,898,881.40 | 16.19% |
| Net cash flow from operating activities | 527,557,935.51 | 522,242,718.65 | 1.02% |
| Subtotal of cash inflow from investing activities | 551,319,237.00 | 596,144,294.86 | -7.52% |
| Subtotal of cash outflow from investing activities | 1,189,471,974.36 | 962,677,064.52 | 23.56% |
| Net cash flow from investing activities | -638,152,737.36 | -366,532,769.66 | -117.82% |
| Subtotal of cash inflow from financing activities | 2,951,208,470.82 | 662,133,332.50 | 345.71% |
| Subtotal of cash outflow from financing activities | 1,516,910,508.51 | 652,119,271.63 | 132.61% |
| Net cash flow from financing activities | 1,434,297,962.31 | 10,014,060.87 | 14,222.84% |
| Net increase in cash and cash equivalents | 1,338,899,687.27 | 172,960,189.14 | 674.11% |
Explanation of the main influencing factors for the significant year-on-year changes in the relevant data
√ Applicable □ Not applicable
(1) The cash outflow from investing activities was RMB1,189.47million, mainly due to the short-term outflow ofrolling wealth management portfolios and the Company’s new investments in companies such as I-MAB, EPSHoldings and Shanghai Mosim during the reporting period.
(2) The cash inflow from financing activities was RMB2,951.21 million, mainly due to the cash inflow of investment
funds from shareholders and loans received by the Company during the reporting period.
(3) The cash outflow from financing activities was RMB1,516.91 million, mainly due to the cash outflow arisingfrom the Company’s repayment of loans and the Company’s distribution of cash dividends during the reportingperiod.Explanation of the reasons for the significant difference between the net cash flow from operating activities and thecurrent net profit of the Company during the reporting period
√ Applicable □ Not applicable
(1) Mainly attributable to the Company’s gains from changes in fair value of RMB185.00 million and investment
gains of RMB179.83 million during the reporting period, which affected the Company’s net profit;
(2) Mainly attributable to the increase in the Company’s operating income during the reporting period and that the
projects had not progressed up to the time of payment.
III. Non-principal Business
√ Applicable □ Not applicable
Unit: RMB
| Amount | As a percentage of total profit | Explanation of the reasons | Is it sustainable | |
| Investment gains | 179,828,015.67 | 16.51% | Mainly due to the proceeds obtained from the transfer of equity arising from the Company’s equity transfer during the reporting period. | No |
| Gains or losses from changes in fair value | 184,996,027.19 | 16.99% | Mainly due to the changes in fair value of other non-current assets of the Company during the reporting period. | No |
| Asset impairment | No | |||
| Non-operating income | 5,900,367.91 | 0.54% | No | |
| Non-operating expenses | 1,385,263.13 | 0.13% | No | |
| Other income | 11,230,798.00 | 1.03% | No | |
| Gains on disposal of assets | -384,766.63 | -0.04% | No |
IV. Assets and Liabilities
1. Significant Changes in Asset Composition
For the first time since 2019, the Company will implement the new financial instruments standards, the new incomestandards and the new lease standards and make adjustment to relevant items in the financial statements at thebeginning of the given year
√ Applicable □ Not applicable
Unit: RMB
| End of 2019 | Beginning of 2019 | Increase or decrease in percentage terms | Explanation of significant changes | |||
| Amount | As a percentage of total assets | Amount | As a percentage of total assets | |||
| Cash and cash equivalents | 2,042,305,823.83 | 27.11% | 704,487,091.56 | 15.06% | 12.05% | Cash and cash equivalents increased by RMB1,337,818,700 from the opening balance, representing an increase of 189.9%, mainly due to the fact that Frontage Holdings issued shares to the public and received proceeds from its listing on the Main Board of the Hong Kong Stock Exchange during the reporting period. |
| Accounts receivable | 1,074,722,160.03 | 14.27% | 759,019,919.89 | 16.23% | -1.96% | |
| Inventories | 1,205,608.56 | 0.02% | 518,892.98 | 0.01% | 0.01% | |
| Long-term equity investments | 109,712,577.48 | 1.46% | 103,293,443.20 | 2.21% | -0.75% | |
| Fixed assets | 252,236,673.28 | 3.35% | 214,171,314.51 | 4.58% | -1.23% | |
| Projects under construction | 22,309,114.80 | 0.30% | 0.30% | |||
| Short-term borrowings | 863,771,746.55 | 11.47% | 602,834,093.20 | 12.89% | -1.42% | |
| Long-term borrowings | 36,500,000.00 | 0.48% | 3,431,702.95 | 0.07% | 0.41% |
2. Assets and Liabilities Measured at Fair Value
√ Applicable □ Not applicable
Unit: RMB
| Item | Figure at the beginning of the period | Gains or losses from changes in fair value in the current period | Accumulated fair value changes in equity | Impairment accrued in the current period | Amount of purchases in the current period | Amount of sales in the current period | Other changes | Figure at the end of the period |
| Financial assets | ||||||||
| 2. Derivative financial assets | 1,002,080.00 | 1,002,080.00 | ||||||
| Other non-current financial assets | 1,481,093,167.41 | 184,996,027.19 | 0.00 | 0.00 | 749,974,928.85 | 168,602,211.54 | 3,011,757.43 | 2,250,473,669.34 |
| Total of the above | 1,482,095,247.41 | 184,996,027.19 | 0.00 | 0.00 | 749,974,928.85 | 169,604,291.54 | 3,011,757.43 | 2,250,473,669.34 |
| Financial liabilities | 0.00 | 0.00 | ||||||
Other changesNilAny significant changes in the Company’s major asset measurement attributes during the reporting period
□ Yes √ No
3. Restricted Asset Claims as of the End of the Reporting Period
As of the end of the reporting period, the Company’s restricted asset claims: (1) lease deposits RMB2,092,860.00; (2)custodial accounts RMB3,126,897.13
V. Investment Status Analysis
1. Overall Situation
√ Applicable □ Not applicable
| Investment amount during the reporting period (RMB) | Investment amount in the same period last year (RMB) | Change in percentage terms |
| 723,170,525.82 | 465,172,508.09 | 55.46% |
2. Major Equity Investments Obtained During the Reporting Period
√ Applicable □ Not applicable
Unit: RMB
| Name of investee | Principal business | Form of investment | Investment amount | Shareholding percentage | Source of funds | Business partner | Investment period | Type of products | Expected income | Current investment gains or losses | Any litigation involved | Date of disclosure (if any) | Disclosure index (if any) |
| Beijing Yaxincheng Medical InfoTech Co., Ltd. | Translation service | Acquisition | 106,560,000.00 | 55.00% | Self-raised funds | Tianjin Yaxincheng Enterprise Management Consulting Partnership (Limited Partnership) | According to the Company’s actual operation period | Translation | 0.00 | 5,550,273.92 | No | July 30, 2019 | cninfo.com.cn |
| Total | -- | -- | 106,560,000.00 | -- | -- | -- | -- | -- | 0.00 | 5,550,273.92 | -- | -- | -- |
3. Major Non-equity Investments in Progress During the Reporting Period
□ Applicable √ Not applicable
4. Financial Assets Measured at Fair Value
√ Applicable □ Not applicable
Unit: RMB
| Type of assets | Initial investment cost | Gains or losses from changes in fair value in the current period | Accumulated fair value changes in equity | Amount of purchases during the reporting period | Amount of sales during the reporting period | Cumulative investment gains | Amount at the end of the period | Source of funds |
| Financial derivatives | 1,002,080.00 | Self-raised funds | ||||||
| Equity | 135,201,263.80 | -2,710,380.51 | 124,838,037.70 | 134,957,845.68 | Self-raised funds | |||
| Funds | 814,331,872.64 | 83,959,052.71 | 240,376,906.82 | 57,635,313.92 | 96,389,418.77 | 1,075,212,505.72 | Self-raised funds | |
| Others | 678,606,362.24 | 103,747,354.99 | 384,759,984.33 | 110,966,897.62 | 36,980,524.85 | 1,040,303,317.94 | Self-raised funds | |
| Total | 1,628,139,498.68 | 184,996,027.19 | 0.00 | 749,974,928.85 | 169,604,291.54 | 133,369,943.62 | 2,250,473,669.34 | -- |
5. Use of Proceeds
√ Applicable □ Not applicable
(1) Overall Situation
√ Applicable □ Not applicable
Unit: RMB0,000
| Year of fundraising | Form of fundraising | Total proceeds | Total amount of proceeds used in the current period | Cumulative amount of proceeds used | Total amount of proceeds that were subject to changes in purpose during the reporting period | Cumulative amount of proceeds that were subject to changes in purpose | Cumulative amount of proceeds that were subject to changes in purpose as a percentage of total | Total amount of proceeds that have not been used | Purpose and orientation of proceeds that have not been used | Amount of proceeds being idled for more than two years |
| 2012 | Initial public offering of shares | 48,117.1 | 49,656.98 | 0 | 0 | 0.00% | 0 | Finished using |
| 2016 | Non-public offering | 50,000 | 48,876.35 | 0 | 0 | 0.00% | 1,123.65 | As per the transfer agreement, given that the actual benefits realised by Beijing BMD in 2017 was lower than the committed benefits, the performance-based compensation mechanism was triggered, and the remaining amount shall be deducted. | ||
| 2017 | Non-public offering | 60,780 | 98.8 | 54,000 | 0 | 0 | 0.00% | 6,780 | As per the transfer agreement, Jyton & Techray did not meet the performance commitment standards. RMB60 million was not paid while the remaining RMB988,000 was paid in 2019. Excess proceeds of RMB7.8 million were mainly used to replenish working capital in the later period. | |
| Total | -- | 158,897.1 | 98.8 | 152,533.33 | 0 | 0 | 0.00% | 7,903.65 | -- | 0 |
| Explanation of the overall situation as to the use of proceeds | ||||||||||
In accordance with the effective approval by the resolutions of the Company’s annual general meeting in2010 and the first extraordinary general meeting in 2012, and the CSRC’s Securities Regulatory Approval
[2012] No. 896 Official Reply Concerning the Approval of Hangzhou Tigermed Consulting Co., Ltd.’sInitial Public Offering of Shares and Listing on the Growth Enterprise Market, the Company was approvedto issue not more than 13.4 million new shares. The Company issued 13,400,000 renminbi ordinary shares(A shares) through public offering, with a par value of RMB1.00 each. The shares were issued at a premium,and the issue price was RMB37.88 per share. The total proceeds were RMB507,592,000.00, and afterdeducting the issuance expenses of RMB26,421,021.00, the actual net proceeds were RMB 481,170,979.00.The above funds were all in place on August 10, 2012, and were verified by BDO China Shu Lun PanCertified Public Accountants LLP which issued the Xin Hui Shi Bao Zi (2012) No. 113752 CapitalVerification Report. According to the Proposal on the Feasibility of Investment Projects Funded by Proceedsof the Initial Public Offering reviewed and approved by the Company at the 2010 Annual General Meetingand the disclosures of the Company’s Prospectus, the “integrated clinical trial management platform” in theinvestment projects using the proceeds will be implemented by the Company; the data management centreproject will be implemented by Jiaxing Tigermed Data Management Co., Ltd., a wholly-owned subsidiary ofthe Company; and the SMO management centre project will be implemented by Hangzhou Simo Co., Ltd., awholly-owned subsidiary of the Company.
The planned use of proceeds that was committed is as follows:
Unit: RMB’0,000
Serial No. Name of project Amount to be invested1 Integrated clinical trial management platform 7,832.822 Data management centre project 11,608.363 SMO management centre project 1,662.74 Excess proceeds 27,013.22(Acquisition of 70.3% equity of Frontage Laboratories)Total 48,117.10
(II) In accordance with the effective approval by the resolutions of the Company’s first extraordinary general meeting in2015 and the CSRC’s Securities Regulatory Approval [2015] No. 3096 Official Reply Concerning the Approval of theNon-public Offering of Shares of Hangzhou Tigermed Consulting Co., Ltd., the Company was approved to issue not morethan 37,425,150 new shares in a non-public offering. The Company issued 37,425,149 renminbi ordinary shares (A shares)through non-public offering, with a par value of RMB1.00 each. The shares were issued at a premium, and the issue pricewas RMB13.36 per share. The total proceeds were RMB499,999,990.64, and after deducting the underwriting fees ofRMB21,000,000.00, the audit and capital verification fees of RMB2,000,000.00, and the lawyer fees of RMB1,200,000.00,the net proceeds were RMB 475,799,990.64. The above funds were all in place on January 13, 2016, and were verified byBDO China Shu Lun Pan Certified Public Accountants LLP which issued the Xin Hui Shi Bao Zi (2016) No. 110045 CapitalVerification Report. According to the investment projects funded by the proceeds that were disclosed by the Company in theResolutions of the 2015 First Extraordinary General Meeting of Hangzhou Tigermed Consulting Co., Ltd. on February 6,2015, the planned use of proceeds committed is as follows:
Unit: RMB’0,000
Serial No. Name of project Amount to be invested1 Acquisition of 100% equity of Beijing BMD 15,400.002 Working capital replenishment 34,600.00
Total 50,000.00
(III) In accordance with the effective approval by the resolution of the Company’s first extraordinary
general meeting in 2016 and the CSRC’s Securities Regulatory Approval [2017] No. 65 OfficialReply Concerning the Approval of the Non-public Offering of Shares of Hangzhou TigermedConsulting Co., Ltd., the Company was approved to issue not more than 30,000,300 new shares ina non-public offering. The Company issued 25,311,370 renminbi ordinary shares (A shares)through non-public offering, with a par value of RMB1.00 each. The shares were issued at apremium, and the issue price was RMB24.89 per share. The total proceeds wereRMB629,999,999.30, and after deducting the underwriting fees of RMB18,000,000.00, the auditand capital verification fees of RMB3,300,000.00, and the lawyer fees of RMB900,000.00, and thenet proceeds were RMB607,799,999.30. The above funds were all in place on April 26, 2017, andwere verified by BDO China Shu Lun Pan Certified Public Accountants LLP which issued the XinHui Shi Bao Zi (2017) No. ZA14261 Capital Verification Report. According to the investmentprojects funded by the proceeds that were disclosed by the Company in the Resolutions of the2016 First Extraordinary General Meeting of Hangzhou Tigermed Consulting Co., Ltd. on April 28,2016, the planned use of proceeds committed is as follows:
Unit: RMB’0,000
Serial No. Name of project Amount to be invested1 Acquisition of 100% equity of Jyton & Techray 60,000.002 Excess proceeds 780.00Total 60,780.00
As of December 31, 2019, the cumulative amount of proceeds used was RMB1,525,333,300. Among which,RMB496,569,800 of the proceeds used were from the initial public offering, RMB488,763,500 of the proceedsused from the first non-public offering, and RMB540,000,000 of the proceeds used from the second non-publicoffering.
Use of proceeds in details: Unit: RMB’0,000
Use of proceeds in the account for the initial public offering The account had been cancelled during the
reporting period
Use of proceeds in the account for the first non-public offering Amount used in 2019
1. Opening balance of the account: 6.84
2. Debit items of the account: 6.84Investment in projects to be funded by the proceeds 0.00Excess proceeds used in investments 0.00Permanent replenishment of working capital 6.84
3. Credit items of the account: 0.00
(1) Receipt of proceeds 0.00
(2) Interest income 0.00
4. Balance of the account: 0.00
Use of proceeds in the account for the second non-public offering Amount used in 2019
1. Opening balance of the account: 7,004.37
2. Debit items of the account: 7,053.8
Investment in projects to be funded by the proceeds 98.80Payment of issuing fees and handling fees 0.00Excess proceeds used in investments 0.00Permanent replenishment of working capital 6,955.00
3. Credit items of the account: 49.43
(1) Receipt of proceeds 0.00
(2) Interest income 49.43
4. Balance of the account: 0.00
(2) Projects Using the Proceeds as Committed
√ Applicable □ Not applicable
Unit: RMB0,000
| des of investment projects committed and excess proceeds | Any changes in the project (inclusive of partial changes) | Total investment committed | Adjusted total investment (1) | Amount invested during the reporting period | Cumulative investment amount as of the end of the period (2) | Investment progress as of the end of the period (3)＝(2)/(1) | The date when the project reaches its intended availability | Benefits achieved during the reporting period | Accumulated benefits as of the end of the reporting period | Are the expected benefits achieved | Any significant changes in project feasibility |
| Investment projects committed | |||||||||||
| 1. Integrated clinical trial management platform | No | 7,832.82 | 7,832.82 | 8,057.29 | 100.00% | October 1, 2014 | 0 | 0 | Not applicable | No | |
| 2. Data management centre | No | 11,608.36 | 11,608.36 | 0 | 11,918.57 | 100.00% | December 31, 2017 | 0 | 0 | Not applicable | No |
| 3. SMO management centre | No | 1,662.7 | 1,662.7 | 1,662.7 | 100.00% | January 1, 2014 | 0 | 0 | Not applicable | No | |
| 4. Acquisition of 100% equity of Beijing BMD | No | 15,400 | 14,276.35 | 0 | 14,276.35 | 100.00% | December 31, 2017 | 0 | 0 | Not applicable | No |
| 5. Working capital replenishment | No | 34,600 | 34,600 | 34,600 | 100.00% | March 31, 2016 | 0 | 0 | Not applicable | No | |
| 6. Acquisition of 100% equity of Jyton & Techray | No | 60,000 | 54,000 | 98.8 | 54,000 | 100.00% | December 31, 2018 | 0 | 0 | Not applicable | No |
| Subtotal of investment projects committed | -- | 131,103.88 | 123,980.23 | 98.8 | 124,514.91 | -- | -- | 0 | 0 | -- | -- |
| Orientation of excess proceeds | |||||||||||
| 1. Acquisition of 70.3% equity of Frontage Laboratories | No | 27,013.22 | 27,013.22 | 28,018.42 | 100.00% | July 1, 2014 | 0 | 0 | Not applicable | No | |
| Working capital replenishment (if any) | -- | 780 | 780 | -- | -- | -- | -- | -- | |||
| Subtotal of orientation of excess proceeds | -- | 27,793.22 | 27,793.22 | 0 | 28,018.42 | -- | -- | 0 | 0 | -- | -- |
| Total | -- | 158,897.1 | 151,773.45 | 98.8 | 152,533.33 | -- | -- | 0 | 0 | -- | -- |
| Circumstances and reasons for not achieving the progress as planned or the expected benefits (by specific project) | Nil | ||||||||||
| Explanation of major changes in project feasibility | Nil | ||||||||||
| Amount, | Applicable | ||||||||||
purposeandprogressin theuse ofexcessproceeds
1. On May 5, 2014, the Company reviewed and approved the Proposal on the Company’s Implementation of Major
Asset Purchases in Cash and the Proposal on the Use of Excess Proceeds and Self-owned Funds to Increase theCapital of Wholly-owned Subsidiaries and as the Source of Funds for this Major Asset Purchase at the fourthmeeting of the second board of directors, agreeing to the Company’s intention to use the excess proceeds from theinitial public offering and listing and its own funds to increase the capital of Tigermed HK as the final source offunds for paying the total price of this transaction. Among which, excess proceeds were RMB270.13million and thecorresponding interests were approximately RMB21.00million, and the shortfall for the total transaction price willbe made up by the Company using its own funds. Prior to the Company’s completion of the capital increase ofTigermed HK, Tigermed HK will use bank loans obtained by way of onshore guarantees for offshore loans to paythe price as required at the time of delivery of the transaction for the time being, and repay the above bank loanswith the capital increased after the capital increase has been completed. On May 23, 2014, the Company reviewedand approved the Proposal on the Company’s Implementation of Major Asset Purchases in Cash and the Proposal onthe Use of Excess Proceeds and Self-owned Funds to Increase the Capital of Wholly-owned Subsidiaries and as theSource of Funds for this Major Asset Purchase at the second extraordinary general meeting in 2014, agreeing to theCompany’s intention to use the excess proceeds from the initial public offering and listing and its own funds toincrease the capital of Tigermed HK as the final source of funds for paying the total price of this transaction. Amongwhich, excess proceeds were RMB270.13million and the corresponding interests were approximatelyRMB21.00million, and the shortfall for the total transaction price will be made up by the Company using its ownfunds. Prior to the Company’s completion of the capital increase of Tigermed HK, Tigermed HK will use bank loansobtained by way of onshore guarantees for offshore loans to pay the price as required at the time of delivery of thetransaction for the time being, and repay the above bank loans with the capital increased after the capital increasehas been completed. As of December 31, 2014, the Company paid US$45.00million for this transaction, of whichthe excess proceeds and their interests used totaling RMB280.18million.
2. On January 21, 2015, the Company reviewed and approved the Proposal on Changing the Investment Projects
Funded by Excess Proceeds and Using Excess Proceeds for Overseas Investment at the 13th meeting of the secondsession of Board of Directors, agreeing to the Company’s adjustment of the proposal on the Use of Excess Proceedsand Self-owned Funds to Increase the Capital of Wholly-owned Subsidiaries and as the Source of Funds for thisMajor Asset Purchase being reviewed and approved at the previous meeting. In order to improve the efficiency ofthe use of excess proceeds and maximise the interests of shareholders, the Company planned to change the use of theremaining excess proceeds and their interests, which were intended to replace the following payments made: (1)During the period from November 28 to December 3, 2014, Tigermed HK successively used the sums invested by itsparent company Tigermed to purchase 4,571,000 shares of Frontage Laboratories obtained after the exercise ofemployee options for a price of US$2.24million, equivalent to RMB13.98million; (2) as of November 14, 2014,Tigermed HK used the sums invested by its parent company to repay the accumulated interests of part of the loansthat were obtained by way of onshore guarantees for offshore loans in the Frontage Laboratories acquisitiontransaction, which amounted to US$0.4million, equivalent to RMB2.51million. The remaining excess proceeds andthe amount of interests being replaced totaled RMB16.48million. After the use of the excess proceeds and theirinterest balance has been changed, Tigermed HK will then use other sources of funds to pay the remainingtransaction balance of US$5.25million.
3. On February 6, 2015, the Company reviewed and approved the Proposal on Changing the Investment ProjectsFunded by Excess Proceeds and Using Excess Proceeds for Overseas Investment at the first extraordinary generalmeeting in 2015, agreeing to the Company’s adjustment of the proposal on the Use of Excess Proceeds andSelf-owned Funds to Increase the Capital of Wholly-owned Subsidiaries and as the Source of Funds for this MajorAsset Purchase being reviewed and approved at the previous meeting. In order to improve the efficiency of the useof excess proceeds and maximize the interests of shareholders, the Company planned to change the use of theremaining excess proceeds and their interests, which were intended to replace the following payments made: (1)During the period from November 28 to December 3, 2014, Tigermed HK successively used the sums invested by itsparent company Tigermed to purchase 4,571,000 shares of Frontage Laboratories obtained after the exercise ofemployee options for a price of US$2.24million, equivalent to RMB13.98million; (2) as of November 14, 2014,Tigermed HK used the sums invested by its parent company to repay the accumulated interests of part of the loans
| Changes in the implementation location of investment projects funded by the proceeds | Not applicable |
| Adjustment to the way of implementation of investment projects funded by the proceeds | Not applicable |
| Early investment and replacement of investment projects funded by the proceeds | Applicable |
| In 2012, the amount of excess proceeds used to replace the early investment was RMB51,024,718.78, upon verification by BDO China Shu Lun Pan Certified Public Accountants LLP which issued the Xin Hui Shi Bao Zi (2012) No. 114020 attestation report. In 2016, the amount of excess proceeds used to replace the early investment was RMB30,800,000.00, upon verification by BDO China Shu Lun Pan Certified Public Accountants LLP which issued the Xin Hui Shi Bao Zi (2016) No. 110138 attestation report. | |
| Tempora | Not applicable |
| ry replenishment of working capital using idle proceeds | |
| Reasons for the occurrence of a balance of proceeds in project implementation and the amount | Applicable |
| (1) According to the 14th meeting of the third session of Board of Directors on November 12, 2018, the project on the acquisition of 100% equity of Beijing BMD was fully completed. The remaining sum of RMB11.24million will be used for the permanent replenishment of working capital, and the special account for the proceeds had been cancelled during the reporting period. (2) As of the disclosure date of the report, the remaining sum of RMB0.99million for the transfer of Jyton & Techray had been paid. On July 12, 2019, the Company convened the 22nd meeting of the third session of Board of Directors, and reviewed and approved the Proposal on Closing the Investment Projects Funded by Proceeds and Using the Remaining Balance of Proceeds for Permanently Replenishing the Working Capital, agreeing to the Company’s closing of the “acquisition of 100% equity of Jyton & Techray”, an investment project funded by proceeds from the non-public offering in 2017, and the balance of proceeds (including interest income) for the above investment projects will be used to permanently replenish the Company’s working capital, and the corresponding accounts will be cancelled. | |
| Purpose and orientation of the unused proceeds | Nil |
| Issues or other circumstances present in the use of proceeds and the disclosures | The amount of overinvestments in the integrated clinical trial management platform was RMB2,244,700, and the amount of excess proceeds used in the acquisition of equity of Frontage Laboratories was RMB296,667,500, including excess proceeds of RMB270,132,200 and the corresponding interests of RMB26,535,300. On January 21, 2015, BDO China Shu Lun Pan Certified Public Accountants LLP issued the Attestation Report on the Use of Proceeds from Previous Fundraising (Xin Hui Shi Bao Zi [2015] No. 110059), and the Company made an announcement on January 22, 2015. However, the accounting of committed benefits in the report was not accurate enough, which has ignored the fact that the relevant projects do not produce benefits during the construction period. Upon verification by BDO China Shu Lun Pan Certified Public Accountants LLP, Xin Hui Shi Bao Zi [2015] No. 114261 Attestation Report on the Use of Proceeds from Previous Fundraising was reissued. The Company reviewed and approved the Proposal on Amending the Report on the Use of Proceeds from Previous Fundraising of the Company at the 17th meeting of the second board of directors on January 8, 2015. The Company published the Announcement on the Amending Report on the Use of Proceeds from Previous Fundraising on June 8, 2015. |
(3) Change of Projects Funded by the Proceeds
□ Applicable √ Not applicable
During the reporting period, the Company had not been found to have any changes of projects funded by theproceeds.
VI. Sale of Major Assets and Equity
1. Sale of Major Assets
□ Applicable √ Not applicable
During the reporting period, the Company was not involved in any sale of major assets.
2. Sale of Major Equity
□ Applicable √ Not applicable
VII. Analysis of Major Investees with a Controlling and Non-controlling Interest
√ Applicable □ Not applicable
Major subsidiaries and investees that affect the Company’s net profit by more than 10%
Unit: RMB
| Name of company | Type of company | Principal business | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net profit |
| Frontage Holdings | Subsidiary | Drug clinical research, biologics, bioanalysis | US$20,076.41 | 2,232,986,952.35 | 1,854,888,705.03 | 703,366,906.48 | 130,053,879.98 | 114,034,262.43 |
| MacroStat | Subsidiary | Data analysis | CNY1,440,584.97 | 142,671,337.71 | 112,751,284.77 | 186,523,472.82 | 111,119,211.66 | 97,948,545.36 |
Subsidiaries gained and disposed of during the reporting period
√ Applicable □ Not applicable
| Name of company | Way of gaining and disposing of the subsidiaries during the reporting period | Impact on the overall production and operation and the performance |
| Shanghai Shengtong | Transfer | No significant impact |
| Jietong Inspection | Transfer | No significant impact |
| Tigermed Cloud | Transfer | No significant impact |
| Antengene Investment | Transfer | No significant impact |
| Tigermed USA | Establishment | No significant impact |
| Tigermed America | Establishment | No significant impact |
| HK Healthcare | Establishment | No significant impact |
| TG Mountain | Establishment | No significant impact |
| TG Sky Growth | Establishment | No significant impact |
| Frontage Luohe | Establishment | No significant impact |
| Frontage Suzhou | Acquisition | No significant impact |
| RMI | Acquisition | No significant impact |
| BRI | Acquisition | No significant impact |
| Beijing Yaxincheng | Acquisition | No significant impact |
Major investees with a controlling and non-controlling interest
VIII. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
IX. The Company’s Future Development Prospects
(I) Future Development Trends of the Industry and the Company
1. Global Market
Under a globalised macro environment, more and more biopharmaceutical and medical device companies arequickening their pace of R&D, and the Company expects that more products will enter the clinical stage goingforward. The challenges and risks in the R&D of innovative drugs and medical devices are on the increase, andCROs with expertise and experience will be capable of helping customers carry out more complex and extremelychallenging clinical trial projects. At the same time, more customers have gradually realised that CROs will helpthem reduce costs and mitigate clinical R&D risks. All these reasons have led to a rise in the penetration rate ofclinical R&D outsourcing. CROs that provide comprehensive and diversified services to customers will seizeopportunities for development in the industry, and increase their competitiveness by improving theircomprehensive service capabilities to attract and retain customers. Currently, there are just a few CROs withrelevant capabilities. Looking ahead, it is expected that the CRO industry will continue to expand and integratealong with the existing industry leaders and the continuous influx of participants, whereas small or niche CROsmay face integration challenges.
The Company will step up its efforts to globalise its strategising, accelerate the implementation of its networklayout and service capacity building in Europe and North America, and invest in high-quality resources toestablish an international innovative drug team, boosting the commencement of worldwide simultaneous clinicalR&D of new drugs on better comprehensive service capabilities. Aiming at an international research level, theCompany continuously improves its service quality and professional level, and actively builds a two-way bridgefor foreign medical products coming into China and for China’s innovative products going to the world, hencebringing in more foreign products beneficial to patients and at the same time helping China’s innovative drugs togo abroad in a better and faster way.
2. Informatisation of Clinical Trials Being an Inevitable Trend in Clinical Trial Development
It is expected that the level of informatisation in the CRO industry will continue to improve, and the industry willface informatised transformation. Through informatisation, work efficiency in multiple areas will be improved.For example, the use of cloud technology and other technologies allow employees to have full control of theirwork and progress in real time during clinical centre inspection or business trip. The introduction of an onlinepatient recruitment system will also facilitate the search for a wider patient group and shorten the time to findsuitable patients for clinical trials. The use of electronic data collection systems will increase the efficiency ofdata entry and management.
With the deepening of its internationalisation strategy, the Company needs to achieve standardised globalbusiness processes through information systems and advanced technology platforms. The goal of the Company’sinformatisation is to use SDWAN to get through multi-cloud data circulation through Tigermed’s hybrid-cloudand multi-platform deployment. At the same time, the Company uses international advanced master datamanagement and governance technologies, and establishes a globalised international multi-centre projectmanagement platform to resolve geographical and cultural differences and other issues in order to betterundertake international projects.
3. Benevolent Policies of the Chinese Government
In recent years, the Chinese government has been vigorously intensifying the healthcare system reform andpromoting innovation in the pharmaceutical industry. In August 2019, the newly-revised PharmaceuticalAdministration Law was passed, encouraging innovation-related systems to become laws. It is clearly stipulatedthat the State encourages the research and creation of new drugs, and raises the tacit clinical trial approval,clinical trial organisation records management, priority review and approval, conditional approval and othersystems to laws. In addition, a system of holders of drug marketing license has been established to encourageinnovation from the perspective of institutional design. Several government preferential policies have beensuccessively promulgated, covering the entire value chain of the Chinese pharmaceutical market from clinicaltrials, submission of regulatory documents, production to social security. More and more attention has been paidto innovation capability, which has increased investments in the R&D of innovative drugs, stimulated thedevelopment of innovative drugs, and generated a large and increasing number of R&D pipelines for thedevelopment of innovative drug candidates, thus bringing more business opportunities to clinical CROs, such aspromoting the entry of relevant innovative drug candidates into the clinical stage.
While encouraging innovation, the Chinese market is also implementing a more stringent regulatory system.Since the China Food and Drug Administration (now called the China National Medical Products Administration)required self-examination and review of all ongoing clinical trials in 2015, China has been committed tostrengthening the integrity and quality management of clinical trials by complying with international standards.Therefore, there is a rising demand for clinical CROs with service quality meeting the international standards.
After China became a member of ICH in 2017, clinical data obtained overseas may be applied at a broader levelto support registration in China and, in reverse, facilitate more cross-border cooperation. The Chinese governmenthas also been encouraging the import of high-quality drugs, especially those that can address China’s unmetmedical needs. Through these initiatives, more cross-regional clinical trials and early-stage clinical projectsinitiated by multinational pharmaceutical companies are brought to China. Numerous companies and projects aredependent on Chinese clinical CROs capable of providing high-quality clinical research services with depthful
insight into the Chinese regulatory environment.
A domestic ecosystem for innovative drugs has been gradually formed, which constitutes a catalyst for the rapiddevelopment of domestic innovative drugs given the favourable policies and the influx of talents and capital. Thecontinuous emergence of a considerable number of new drugs being developed independently has graduallychanged the previous situation of solely relying on imported drugs to meet clinical and patient needs, which is ofgreat significance for developing countries like China. In the future, we must rely on a greater number ofexcellent innovative pharmaceutical companies to develop innovative drugs with real clinical value, make betterproducts at relatively low cost, gain discretionary pricing power, and turn expensive drugs into affordable ones.The Company will actively use its advantages in the field of new drug investment in identifying and investing innew drugs with clinical value. While boosting China’s new drug R&D through capital, it can also obtaininvestment income and explore potential quality business projects.
Since the implementation of clinical data self-examination and verification on July 22, 2015, more and moretraditional pharmaceutical enterprises have begun their transformation toward the R&D of innovative drugs, anda large number of innovative pharmaceutical companies have continuously increased their R&D investment intumours, rare diseases and other areas. The R&D process is getting complex, and the demand for servicesprovided by experienced CROs with advanced technology and expertise is gradually increasing. As adomestically leading CRO, the Company has a prominent edge in terms of service capability, service network,project experience, innovative drug research capability and professional talents. We expect that, after its globalstrategising has been completed, the Company will be able to undertake more domestic and foreign innovativedrug projects, thus achieving the Company’s “Excellence in Every Trial for Every Patient” development strategy.
(II) The Company’s 2020 Business Plan
1. By organising annual budget meetings, monthly/quarterly management meetings, FTF communications and othermeans, the Company will manage the business plans of business units, participate in their important managementmeetings, coordinate corporate resources to help them accomplish business goals. It will improve operationalefficiency and reduce management costs. It will build the Group’s headquarters functions (such as finance, HR,risk control, brand, and capital) under the Group’s globalised system to improve operational and managementefficiency and reduce administration expenses.
2. The Company will continue to enhance customer satisfaction and brand image, striving to build the Company intoa professional CRO that understands and fulfills customer needs. Improvement of the marketing managementsystem: The Company will establish mechanisms for the coordinated development of the marketing managementsystem and the project management system by promoting their optimisation to improve the timely delivery rate,thus fulfilling the commitments to customers. Establishment of a comprehensive customer feedback mechanism:
The Company will learn customer needs through visits, telephone calls, and surveys, and establish acomprehensive customer feedback mechanism to provide customers with the most appropriate solutions,continuously enhancing customer satisfaction.
3. The Company will continuously optimise internal operational and management processes and establish standardsfor Tigermed’s excellent operational and management system. Formulation of quality management systems by theTigermed standard: existing quality management processes and standards will be optimised taking into account the
standards and requirements of quality awards in the market to establish more demanding quality standards andmanagement mechanisms; establishment of Tigermed’s internal operational quality standards; establishment of adigital internal feedback mechanism: through the establishment of various digital feedback processes, operatingdata will be monitored in real-time to provide digital support and feedback for the Group’s managementdecision-making; building of operations improvement mechanisms: through digital quality feedback mechanism,issues will be timely detected and quality improvement tools will be used to continuously improve the quality ofoperations and realise the Group’s excellent operations.
4. The Company will build organisational capacity to create a performance-oriented corporate culture. Organisationalcapacity building under the Group’s globalised system: Group headquarters construction projects and regionalcapacity building projects. Optimisation of the overall incentive mechanisms: A performance management systemfit for Tigermed’s developments will be established and incentive schemes for project management, BD,innovation, and senior management will be optimised.
5. The Company will build talent reserves to continuously improve its leadership. Three major talent reservesprojects: core leadership building project, project manager training and development system building project, andcore leadership development project.
(III) Risk
1. Declining customer demand or expenditure on biopharmaceutical R&D services may have a significant adverseeffect on our business, financial position, operating performance and prospects.
The Company’s business development is mainly determined by the number and size of service contracts signedwith customers (mostly pharmaceutical and medical device companies). In recent years, the Company hasbenefited from the continuous growth of the global pharmaceutical and medical device market, the increase inR&D budgets among customers and the rise of customer outsourcing, which have increased customer demand forthe Company’s services. If the industry does not grow at the rate we expect, and there is a slowdown or a reversetrend, it may have a significant adverse effect on us. In addition, if there is a decline in investments in thepharmaceutical and medical device industry, the demand for outsourcing services will also decrease.
2. Risk in the improvement of overall operating capacity and management effectiveness
With the substantial growth of business, the continuous expansion in service areas, and the implementation of aglobalisation strategy, the Company needs to continuously improve and update its technology, optimise the brand,strengthen sales and marketing work, and expand recruitment, training and managerial employees. All of theabove work will require significant management, financial and human resources. If the Company fails toeffectively improve overall operating capacity and management efficiency, expansion may not be successful andthat the Company’s business, financial position and operating performance may be adversely affected.
3. Industrial policy risk
The Company belongs to the pharmaceutical R&D industry and is greatly affected by relevant policies, andregulators may change the relevant laws and regulations. As a result, the Company’s existing compliance
procedures may not be in line with the new legal and regulatory requirements, and the Company may need to incuradditional compliance costs and face the risk of negative investigation results issued by relevant governmentdepartments, which may affect the Company’s business development. At the same time, the Company providescustomers with a wide range of services across different geographic areas, and so the Company’s operations andbusiness developments must be compliant with local/relevant laws and regulations.
4. Industry qualifications risk
Currently, the Company is engaged in a business that does not require any relevant qualifications or governmentapprovals. In case of any change in laws and regulations or any new regulation coming into effect going forwardthat require the Company to obtain an approval, permit, license, registration, guarantee, certification or certificatefor its existing business, it is uncertain that the Company can successfully obtain such approval, permit, license,registration, guarantee, certification or certificate. Failure to obtain relevant qualifications or approvals may limitthe ability to conduct business, which may adversely affect the Company’s business, financial position andoperating performance.
5. Service quality risk
If the Company’s service cannot reach customer standards or meet customer needs, there is the risk of losingcustomers or failing to attract customers. Customers may transfer part or all of their business to the Company’scompetitors, reducing or terminating their business cooperation with the Company, which may adversely affect theCompany’s reputation, business, financial position, operating performance and prospects.
6. Human resources risk
Clinical trial professionals are the key to the development of the Company. How to recruit, train, motivate andretain experienced core technical personnel, core business personnel and management personnel with outstandingprofessional capabilities is a major human resources issue facing the Company. The Company has by nowformulated and implemented a targeted training plan to provide multi-dimensional promotion directions, and haslaunched employee stock ownership plans and equity incentive plans in multiple phases to attract and retain talents.However, with the fierce competition in the pharmaceutical R&D talents market, experienced and high-calibretalents are much sought after and so the Company must provide competitive compensation and benefit plans toattract and retain talents. If the Company cannot hire or retain a sufficient number of professionals to maintain theCompany’s expected growth and maintain a stable level of service, it may adversely affect the Company’sreputation, business, financial position, operating performance and prospects.
7. Acquisition and business integration risk
It has been indicated in previous data that acquisition plays a positive role in enhancing the Company’s productioncapacity and profitability. Going forward, whether a suitable acquisition target can be identified and whether thereare sufficient funds or operating resources to provide financial protection and integration for the relevantacquisition will be one of the risks facing the Company. In addition, the Company will further intensify theinternationalisation strategy. However, the Company has limited experience in cooperation with customers inEurope, North America and other regions, and it may encounter unforeseen obstacles and challenges overseas,
which may lead to the delay or failure of the Company’s expansion plan.
The Company employs huge resources to integrate existing business with the acquired business, but it facesseveral risks, such as the unsatisfactory performance of the acquisition target, unforeseen expenses, and thedifficulty in integrating the acquired business in a timely and effective manner. As far as the acquisition ofinternational projects is concerned, the Company may not be able to overcome difficulties in terms of internationalregulation, commercial management, language and customs. If the Company fails to successfully integrate recentand future potential acquisitions or reorganisations, its business, financial position and operating performance maybe adversely affected. In addition, the Company’s cash and stocks may be used for future acquisition, businessrestructuring or integration, which may not necessarily translate into expected returns, and at the same time a largeamount of acquisition-related expenses may be incurred, leading to the dilution of shareholders’ equity.
8. Risk of impairment of goodwill and other intangible assets
There was no goodwill impairment plan during the reporting period. Any impairment of goodwill or otherintangible assets going forward may have a significant adverse effect on the Company’s financial position andoperating performance.
9. Impact of the COVID-19 pandemic
The Company’s performance may be affected by the COVID-19 pandemic. Currently, the Company has no projectbeing cancelled due to the COVID-19 pandemic. However, hospitals have invested a lot of medical resources forpatients infected with COVID-19, resulting in fewer resources for clinical trials. At the same time, out of concernsabout potential infections, some patients were reluctant to participate in clinical trials during the COVID-19pandemic, which posed challenges to the Company’s patient recruitment work. As the COVID-19 pandemiccontinues to evolve and affects all parts of the world, it is currently difficult to determine whether we willencounter a reduction in customer orders and/or a loss of customers going forward, and whether the Company’sexisting and future projects will be substantially disrupted or delayed due to the COVID-19 pandemic. As for theextent to which the COVID-19 pandemic may continue to adversely affect our business, prospects and operatingperformance, these uncertainties cannot be reasonably estimated at present.
X. Registration Form for Surveys, Communications, Interviews and Other Activities Received
1. Registration Form for Surveys, Communications, Interviews and Other Activities Received During the
Reporting Period
√ Applicable □ Not applicable
| Date of reception | Form of reception | Type of recipient | Index of basic information of the survey |
| July 24, 2019 | Field research | Organisation | cninfo.com.cn |
| October 27, 2019 | Telecommunication | Organisation | cninfo.com.cn |
Section 5 Important NoticeI. Profit Distribution for Ordinary Shares and Transfer of Capital Reserve Fund into Share Capital of the CompanyProfit distribution policy for ordinary shares during the reporting period, especially the formulation, implementation oradjustment of cash dividend policy
√ Applicable □ Not applicable
On May 17, 2019, the Company convened the Annual General Meeting of 2018, which considered and approved the profitdistribution plan 2018. A cash dividend of RMB3.50 (tax inclusive) was paid to all Shareholders for every 10 shares heldbased on the total share capital as at the equity registration date for implementation of equity distribution plan 2018 lessshare capital after share repurchase. The remaining undistributed profits were carried forward for distribution in subsequentyears. At the same time, the Company paid to all Shareholders from capital reserve fund on the basis of 5 shares for every 10shares held. On June 25, 2019, the Company disclosed the Announcement on Implementation of Equity Distribution of 2018(announcement no.: 2019-070), according to which the equity distribution plan was: on the basis of a total of 499,119,271
shares entitled to the distribution (calculated as the total share capital of 500,176,537 shares as at the equity registration dateless 1,057,266 shares held by the Company’s dedicated account for repurchase), a cash dividend of RMB3.50 (tax inclusive)was paid to all Shareholders for every 10 shares held, amounting to a total cash dividend of RMB174,638,411.15 (taxinclusive), and a total of 249,559,635 shares were paid from capital reserve fund to all Shareholders on the basis of 5 sharesfor every 10 shares held. The equity registration date for the equity distribution was June 28, 2019 and the ex-dividend datewas July 1, 2019. As at the end of the reporting period, the Company had completed the implementation of equitydistribution of 2018.
| Particulars of Cash Dividend Policy | |
| Whether in compliance with the requirements of the Articles of Association or the resolutions of the general meeting: | Yes |
| Whether the dividend distribution criteria and proportion were well-defined and clear: | Yes |
| Whether the related decision-making process and mechanism were proper: | Yes |
| Whether independent Directors fulfilled their duties and played their necessary roles: | Yes |
| Whether the minority shareholders had adequate opportunities to express their opinions and appeals and their legitimate interests were fully protected: | Yes |
| Whether the conditions and procedures were compliant and transparent in respect of adjustments and changes in cash dividend policy: | Not applicable |
Both of the Company’s profit distribution plan and transfer of capital reserve fund into share capital plan are consistent withthe relevant requirements of the Company’s Articles of Association and dividend management method during the reportingperiod
√ Yes □ No □ Not applicable
Both of the Company’s profit distribution plan and transfer of capital reserve fund into share capital plan are consistent withthe relevant requirements of the Company’s Articles of Association.Profit distribution and transfer of capital reserve fund into share capital during the year
| Number of bonus shares for every 10 shares (share) | 0 |
| Dividend for every 10 shares (RMB) (tax inclusive) | 2.78 |
| Number of shares transferred for every 10 shares (share) | 0 |
| Share capital basis for distribution plan (share) | 748,450,333 |
| Amount of cash dividend (RMB) (tax inclusive) | 208,069,192.57 |
| Amount of cash dividend in other forms (such as share repurchase) (RMB) | 61,847,562.40 |
| Total cash dividend (including cash dividend in other forms) (RMB) | 269,916,754.97 |
| Distributable profits (RMB) | 738,648,152.47 |
| Percentage of total cash dividend (including cash dividend in other forms) to total profits distributed | 36.54% |
| Cash dividend | |
| Others | |
| Particulars of profit distribution or transfer of capital reserve fund plan | |
| The thirty-fourth meeting of the third session of the Board of Directors on April 15, 2020 considered and approved the Company’s profit distribution plan 2019 proposed by the Board of Directors. A cash dividend of RMB2.78 (tax inclusive) would be paid to all Shareholders for every 10 shares held based on the total share capital as at the equity registration date of equity distribution plan 2019 to be implemented less the shares held by the dedicated account for repurchase. The remaining undistributed profits would be carried forward for distribution in subsequent years. The Company would not pay to all Shareholders through transfer of capital reserve fund into share capital. As of December 31, 2019, the Company’s dedicated account for share repurchase held 1,057,266 shares of the Company. Calculating on the basis of share capital of 748,450,333 (i.e. total share capital of the Company of 749,507,599 shares less 1,057,266 shares held by the dedicated account for repurchase), the total amount of cash dividend was RMB208,069,192.57 (tax inclusive). According to the requirements of the Implementation Rules of the Shenzhen Stock Exchange on the Share Repurchase of Listed Companies, the amount of share repurchase of RMB61,847,562.40 implemented by the Company in 2019 was deemed as cash dividend. The Company proposed to distribute cash dividend of RMB269,916,754.97 in aggregate in 2019, including the amount of share repurchase implemented in 2019. | |
Profit distribution plan for ordinary shares and transfer of capital reserve fund into share capital plan of the Company for thepast 3 years (including this reporting period)
1. Profit Distribution Plan 2017
The eighth meeting of the third session of the Board of Directors on April 19, 2018 considered and approved the Company’sprofit distribution plan 2017 proposed by the Board of Directors. A cash dividend of RMB2 (tax inclusive) was paid to allShareholders for every 10 shares held based on the total share capital of the Company of 500,176,537 shares as at the end of2017, amounting to a total cash dividend of RMB100,035,307.40. The remaining undistributed profits were carried forwardfor distribution in subsequent years. The Company did not pay to all Shareholders through transfer of capital reserve fundinto share capital. On May 15, 2018, the Company convened the Annual General Meeting of 2017, which considered andapproved the profit distribution plan of 2017. On May 23, 2018, the Company disclosed the Announcement onImplementation of Equity Distribution of 2017 (announcement no.: 2018-037), according to which the equity registrationdate was May 29, 2018 and the ex-dividend date was May 30, 2018. As of December 31, 2018, the Company had completedthe implementation of equity distribution of 2017.
2. Profit Distribution Plan 2018
The sixteenth meeting of the third session of the Board of Directors on April 25, 2019 considered and approved theCompany’s profit distribution plan 2018 proposed by the Board of Directors. A cash dividend of RMB3.50 (tax inclusive)was paid to all Shareholders for every 10 shares held based on the total share capital as at the equity registration date of theimplementation of equity distribution plan 2018 less share capital after share repurchase. The remaining undistributed profits
were carried forward for distribution in subsequent years. At the same time, the Company paid to all Shareholders fromcapital reserve fund on the basis of 5 shares for every 10 shares held. On May 17, 2019, the Company convened the AnnualGeneral Meeting of 2018, which considered and approved the profit distribution plan of 2018. On June 25, 2019, theCompany disclosed the Announcement on Implementation of Equity Distribution of 2018 (announcement no.: 2019-070),according to which the equity distribution plan was: on the basis of a total of 499,119,271 shares entitled to the distribution(calculated as the total share capital of 500,176,537 shares as at the equity registration date less 1,057,266 shares held by theCompany’s dedicated account for repurchase), a cash dividend of RMB3.50 (tax inclusive) was paid to all Shareholders forevery 10 shares held, amounting to a total cash dividend of RMB174,638,411.15 (tax inclusive), and a total of 249,559,635shares were paid from capital reserve fund to all Shareholders on the basis of 5 shares for every 10 shares held. According tothe requirements of the Implementation Rules of the Shenzhen Stock Exchange on the Share Repurchase of ListedCompanies, the amount of share repurchase of RMB248,124,987.80 implemented by the Company in 2018 was deemed ascash dividend. The actual cash dividend distributed by the Company in 2018 was RMB422,763,398.95 in aggregate,including the amount of share repurchase implemented in 2018. The equity registration date of the equity distribution wasJune 28, 2019 and the ex-dividend date was July 1, 2019. As at the end of the reporting period, the Company had completedthe implementation of equity distribution of 2018.
3. Profit Distribution Plan 2019
The thirty-fourth meeting of the third session of the Board of Directors on April 15, 2020 considered and approved theCompany’s profit distribution plan 2019 proposed by the Board of Directors. A cash dividend of RMB2.78 (tax inclusive)would be paid to all Shareholders for every 10 shares held based on the total share capital of the Company as at the equityregistration date of profit distribution plan 2019 to be implemented less the shares held by the dedicated account forrepurchase. The remaining undistributed profits would be carried forward for distribution in subsequent years. TheCompany would not pay to all Shareholders through transfer of capital reserve fund into share capital. As of December 31,2019, the dedicated account for share repurchase of the Company held 1,057,266 shares of the Company. Calculating on thebasis of the shares capital of 748,450,333 (i.e. total share capital of the Company of 749,507,599 shares less 1,057,266shares held by the dedicated account for repurchase), the total amount of cash dividend was RMB208,069,192.57 (taxinclusive). According to the requirements of the Implementation Rules of the Shenzhen Stock Exchange on the ShareRepurchase of Listed Companies, the amount of share repurchase of RMB61,847,562.40 implemented by the Company in2019 was deemed as cash dividend. The Company’s actual cash dividend proposed for distribution in 2019 wasRMB269,916,754.97 in aggregate, including the amount of share repurchase implemented in 2019.
Cash dividend for ordinary shares of the Company for the past three years (including this reporting period)
Unit: RMB
| Year of distribution | Amount of cash dividend (tax inclusive) | Net profit attributable to ordinary shareholders of the listed company in the consolidated statement for the year of distribution | Ratio of amount of cash dividend to net profit attributable to ordinary shareholders of the listed company in the consolidated statement | Amount of cash dividend in other forms (such as share repurchase) | Ratio of amount of cash dividend in other forms to net profit attributable to ordinary shareholders of the listed company in the consolidated statement | Total amount of cash dividend (including cash dividend in other forms) | Ratio of total amount of cash dividend (including cash dividend in other forms) to net profit attributable to ordinary shareholders of the listed company in the consolidated statement |
| 2019 | 208,069,192.57 | 841,634,823.38 | 24.72% | 61,847,562.40 | 7.35% | 269,916,754.97 | 32.07% |
| 2018 | 174,638,411.15 | 472,183,931.65 | 36.99% | 248,124,987.80 | 52.55% | 422,763,398.95 | 89.54% |
| 2017 | 100,035,307.40 | 301,013,932.80 | 33.23% | 0.00 | 0.00% | 100,035,307.40 | 33.23% |
The Company generated profits during the reporting period and the profit distributable to the ordinary shareholders of theparent company was positive, but no cash dividend distribution plan for ordinary shares was proposed
□ Applicable √ Not applicable
II. Performance of Commitments
1. Commitments Performed during the Reporting Period and Not Yet Fulfilled as at the End of the Reporting Periodby De Facto Controllers of the Company, Shareholders, Related Parties, Acquirers and the Company
√ Applicable □ Not applicable
| Source of commitment | Undertaker | Type of commitment | Contents of commitment | Date of commitment | Period of commitment | Performance |
| Commitments stated in acquisition report or report of equity changes | Nil | |||||
| Commitments made during the asset restructuring | Nil |
| Commitments made upon the initial public offering or refinancing | Directors, Supervisors and senior management of the Company, such as Ye Xiaoping, Cao Xiaochun | Commitments on shares with selling restrictions | If I declared resignation within 6 months from the date of listing of initial public offering, I shall not transfer the shares of issuers held directly or indirectly within 18 months from the date of resignation; if I declared resignation between the 7th month and the 12th month from the date of listing of initial public offering, I shall not transfer the shares of issuers held directly or indirectly within 12 months from the date of resignation. During the tenure as Directors, Supervisors and senior management of the Company, the annual transfer of shares shall not exceed 25% of total shares of issuers held directly or indirectly by me. | August 17, 2012 | Long term | Normal performance |
| Ye Xiaoping, Cao Xiaochun | Commitments in terms of competition, connected transactions, misappropriation of funds | I, other enterprises other than joint stock companies directly or indirectly controlled by me and the non-controlling enterprises are not directly or indirectly engaged in any business or activities that compete or may compete with the business operated by joint stock companies. | August 17, 2012 | Long term | Normal performance |
| Ye Xiaoping, Cao Xiaochun, Shanghai Jiguang Investment Management Center (limited liability partnership), Ningbo Dingliang Ruixing Equity Investment Center (limited liability partnership), Sinolink Yonghua Value Growth Directional Increase Collective Asset Management Plan | Commitments on shares with selling restrictions | This issued shares shall not be transfer within 36 months from the date of listing. | February 3, 2016 | February 3, 2019 | Performed | |
| Commitments on share incentive | Hangzhou Tigermed Consulting Co., Ltd. | Commitments on share incentive | The Company promised not to provide loans and any other forms of financial support (including guarantees for their loans) for obtaining related equity in respect of incentive targets of restricted shares of 2019. | March 21, 2019 | June 21, 2022 | Normal performance |
| Other commitments made to minority shareholders of the Company | Nil | |||||
| Whether the commitments were performed timely | Yes | |||||
| If the commitments are due but have yet to be performed, specific reasons for unperformed commitments and future working plans should be provided in detail | Nil |
2. The Company has Made Profit Forecast(s) on its Assets or Projects, and the Reporting Period is Still Within thePeriod of the Profit Forecast(s). The Company shall Describe Whether Original Profit Forecast(s) on Assets orProjects of the Company have been Achieved and the Reasons
□ Applicable √ Not applicable
III. Appropriation of Funds of the Listed Company by Controlling Shareholders and their Related Parties forNon-operating Purposes
□ Applicable √ Not applicable
There was no appropriation of funds of the listed company by controlling Shareholders and their related parties fornon-operating purposes during the reporting period of the Company.IV. Statement of the Board of Directors Regarding the Latest “Non-standard Auditor’s Report”
□ Applicable √ Not applicable
V. Statement of the Board of Directors, the Supervisory Committee and independent Directors (if any) Regarding the“Non-standard Auditor’s Report” Issued by the Accounting Firm during this Reporting Period
□ Applicable √ Not applicable
VI. Description by the Board of Directors of Changes in Accounting Policies, Accounting Estimates during theReporting Period or Revisions of Significant Accounting Errors
√ Applicable □ Not applicable
1. Significant Changes in Accounting Policies
(1) Application of the Notice of the Ministry of Finance on Revising and Issuing the Format of 2019 Financial Statements ofGeneral Enterprises (《财政部关于修订印发2019年度一般企业财务报表格式的通知》) and the Notice on Revising andIssuing the Format of Consolidated Financial Statements (2019 Edition) (《关于修订印发合并财务报表格式（2019版）的通知》)The Ministry of Finance released the Notice on Revising and Issuing the Format of 2019 Financial Statements for GeneralEnterprises (Cai Kuai [2019] No. 6) on April 30, 2019, and the Notice on Revising and Issuing the Format of Consolidated
Financial Statements (Cai Kuai [2019] No. 16) on September 19, 2019, respectively.Major impacts incurred by application of the above provisions by the Company are as follows:
| Contents and reasons for changes in accounting policies | Approval procedure | Affected statement items and amounts | |
| Consolidated | Parent company | ||
| (1) “Note receivables and accounts receivables” in balance sheet should be split into “note receivables” and “accounts receivables” for presentation; “note payables and accounts payables” should be split into “note payables” and “accounts payables” for presentation; the comparative figures were adjusted accordingly. | Application according to the relevant policies of the Ministry of Finance | “Note receivables and accounts receivables” should be split into “note receivables” and “accounts receivables”, the closing balance of last year for “note receivables” was RMB734,248.00, the closing balance of last year for “accounts receivables” was RMB780,938,723.13. | “Note receivables and accounts receivables” should be split into “note receivables” and “accounts receivables”, the closing balance of last year for “note receivables” was RMB584,248.00, the closing balance of last year for “accounts receivables” was RMB353,651,431.06. |
(2) Application of the “Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of FinancialInstruments”, “Accounting Standards for Business Enterprises No. 23 – Transfer of Financial Assets”, “AccountingStandards for Business Enterprises No. 24 – Hedging Accounting” and “Accounting Standards for Business Enterprises No.37 – Presentation and Reporting of Financial Instruments” (Revised in 2017)In 2017, the Ministry of Finance revised the “Accounting Standards for Business Enterprises No. 22 – Recognition andMeasurement of Financial Instruments”, “Accounting Standards for Business Enterprises No. 23 – Transfer of FinancialAssets”, “Accounting Standards for Business Enterprises No. 24 – Hedge Accounting” and “Accounting Standards forBusiness Enterprises No. 37 – Presentation and Reporting of Financial Instruments”. According to the revised standards, forfinancial instruments that have not been derecognised on the date of initial application, if the previous recognition andmeasurement are inconsistent with the revised standards, they shall be retrospectively adjusted. If the comparative figures inthe financial statements for the prior period are inconsistent with the revised standards, no adjustment is required. TheCompany will adjust the retained revenue and other comprehensive income at the beginning of the year to reflect thecumulative effect from retrospective adjustments.Based on the closing balance of last year adjusted in accordance with the requirements of Cai Kuai [2019] No. 6 and CaiKuai [2019] No. 16, the major impacts of application of the above new financial instrument standards are as follows:
| Contents and reasons for changes in accounting policies | Approval procedure | Affected statement items and amounts | |
| Consolidated | Parent Company | ||
| (1) Available-for-sale equity instrument investments were reclassified as “financial assets at fair value through profit or loss”. | Application according to the relevant policies of the Ministry of Finance | Available-for-sale financial assets: decreased by RMB1,221,827,232.44; Other non-current financial assets: increased by RMB1,481,093,167.41; Deferred income tax liabilities: increased by RMB17,487,828.68; Other comprehensive income: decreased by | Available-for-sale financial assets: decreased by RMB428,798,851.31; Other non-current financial assets: increased by RMB552,184,375.81; Deferred income tax liabilities: increased by RMB17,487,828.68; Surplus reserve: increased by RMB10,589,769.58; |
| RMB1,656,924.71; Surplus reserve: increased by RMB10,589,769.58; Undistributed profit: increased by RMB163,349,350.85. Minority equity interest: increased by RMB69,495,910.57. | Undistributed profit: increased by RMB95,307,926.24. | ||
| (2) Provision for expected credit loss was made for “financial assets at amortised cost” and “financial assets (debt instruments) at fair value through other comprehensive income”. | Application according to the relevant policies of the Ministry of Finance | Accounts receivables: increased by RMB47,550,814.31; Receipts in advance: increased by RMB51,343,448.40; Undistributed profit: decreased by RMB1,124,053.88; Minority equity interest: decreased by RMB2,668,580.21. | Accounts receivables: increased by RMB26,718,495.70; Receipts in advance: increased by RMB26,718,495.70. |
(3) Application of “Accounting Standards for Business Enterprises No. 21 – Leases” (Revised in 2018)In 2018, the Ministry of Finance revised the “Accounting Standards for Business Enterprises No. 21 – Leases” (the “NewLease Standards”).The major impacts of applying the New Lease Standards on the financial statements of the Company’s subsidiaries FrontageHoldings Corporation and DreamCIS Inc. since January 1, 2019 are as follows:
| Contents and reasons for changes in accounting policies | Approval procedure | Affected statement items and amounts | |
| Consolidated | Parent company | ||
| (1) The Company as a lessee adjusted the leases that existed before the date of initial application | Application according to the relevant policies of the Ministry of Finance | Receipts in advance: decreased by RMB1,594,609.66; Fixed assets: decreased by RMB40,717,230.40; Right-of-use assets: increased by RMB133,692,062.02; Non-current liabilities due within one year: increased by RMB4,273,625.71; Lease liabilities: increased by RMB106,524,246.24; Long-term payables: decreased by RMB19,417,649.99. | |
(4) The Ministry of Finance released the Notice on Revising and Issuing the Accounting Standards for Business EnterprisesNo. 14 – Revenues (《关于修订印发<企业会计准则第14号--收入>的通知》) (Cai Kuai [2017] No. 22) (the “NewAccounting Standards No. 14”) on July 5, 2017, reforming revenue recognition model to align with the International
Financial Reporting Standards No. 15 – Revenue from Contracts with Customers. For initial application of this standard, anenterprise shall, in accordance with the cumulative effect of initially applying this standard, adjust the opening balance ofretained revenue and the amount of other relevant line items in the financial statements for the year of initial application andshall not adjust the information of the comparative period. If the parent company has not yet applied this standard while itssubsidiaries have, the parent company may, when preparing its consolidated financial statements, consolidate the financialstatements of the subsidiaries after adjusting them in accordance with the accounting policies of the parent company, or theparent company may directly consolidate the subsidiaries’ financial statements prepared according to this standard. Themajor impacts of applying the above requirements on the Company are as follows:
| Contents and reasons for changes in accounting policies | Approval procedure | Affected statement items and amounts | |
| Consolidated | Parent company | ||
| (1) The Company’s subsidiaries Frontage Holdings Corporation and DreamCIS Inc. applied the standard of “IFRS15 – Revenue from Contracts with Customers” | Application according to the relevant policies of the Ministry of Finance | Accounts receivables: decreased by RMB69,469,617.55; Contract assets: increased by RMB69,469,617.55; Receipts in advance: decreased by RMB119,150,065.69; Contract liabilities: increased by RMB119,150,065.69. | |
VII. Description of Changes within the Scope of Consolidated Statements in Comparison with Financial Statementsof Previous Year
√ Applicable □ Not Applicable
(1) In January 2019, the Company transferred 100% equity interest of Antengene Investment Limited;
(2) In February 2019, the Company invested to establish Tigermed USA INC. and the Company’s shareholding ratio was
100.00%;
(3) In February 2019, the Company’s subsidiary Tigermed USA INC. invested to establish Tigermed America LLC and theCompany’s shareholding ratio was 100.00%.
(4) In February 2019, the Company transferred 20% equity interest of its controlling subsidiary Shanghai Shengtong, whichceased to be consolidated into the Company after the equity transfer;
(5) In June 2019, the Company transferred 50% equity interest of its controlling subsidiary Jietong Inspection, which ceasedto be consolidated into the Company after the equity transfer;
(6) In July 2019, the Company acquired Beijing Yaxincheng Medical InfoTech Co. Ltd. and the Company’s shareholding ratiowas 55%;
(7) In September 2019, the Company invested to establish HK Healthcare and the Company’s shareholding ratio was 100.00%;
(8) In September 2019, the Company’s subsidiary Tigermed HK invested to establish TG Mountain Investment Co and theCompany’s shareholding ratio was 100.00%;
(9) In September 2019, the Company’s subsidiary Tigermed HK invested to establish TG Sky Growth Investment Ltd andthe Company’s shareholding ratio was 100.00%;
(10) In October 2019, the Company transferred 100% equity interest of Hangzhou Tigermed Cloud Hospital ManagementCo., Ltd.;
(11) In October 2019, the Company’s subsidiary Frontage Shanghai invested to establish Frontage Luohe and the
Company’s shareholding ratio was 100.00%;
(12) In October 2019, the Company’s subsidiary Frontage Holdings acquired Frontage Laboratories (Suzhou) Co, Ltd. andthe shareholding ratio of Frontage Holdings was 75%;
(13) In October 2019, the Company’s subsidiary Frontage Holdings acquired RMI Laboratories, LLC and the shareholdingratio of Frontage Holdings was 100%;
(14) In December 2019, the Company’s subsidiary Frontage Holdings acquired BRI Biopharmaceutical Research, Inc andthe shareholding ratio of Frontage Holdings was 100%.VIII. Appointment and Dismissal of Accounting FirmAccounting firm appointed currently
| Name of the domestic accounting firm | BDO China Shu Lun Pan Certified Public Accountants LLP |
| Compensation of the domestic accounting firm (RMB’0,000) | 170 |
| Continued term of audit service of the domestic accounting firm | 11 years |
| Names of the certified public accountants of the domestic accounting firm | Zhang Songbai, Wang Faliang |
| Continued term of audit service of the certified public accountants of the domestic accounting firm | 11 years |
| Name of the overseas accounting firm (if any) | Nil |
| Compensation of the overseas accounting firm (RMB’0,000) (if any) | 0 |
| Continued term of audit service of the overseas accounting firm (if any) | Nil |
| Name of the certified public accountants of the overseas accounting firm (if any) | Nil |
| Continued term of audit service of the certified public accountants of the overseas accounting firm (if any) | Nil |
Whether to change the appointed accounting firm
□ Yes √ No
Appointment of accounting firm, financial consultant or sponsor for auditing purpose of internal control
□ Applicable √ Not applicable
IX. Suspension of Listing and Termination of Listing after Disclosure of Annual Report
□ Applicable √ Not applicable
X. Bankruptcy or Restructuring Related Events
□ Applicable √ Not applicable
There were no bankruptcy or restructuring related events of the Company during the reporting period.
XI. Material Litigations and Arbitrations
□ Applicable √ Not applicable
There were no material litigation and arbitration of the Company for the current year.XII. Punishment and Rectification
√ Applicable □ Not applicable
| Name | Type | Reason | Type of investigation and punishment | Conclusion (if any) | Disclosure date | Disclosure index |
| Wang Xiaobo | Supervisor | Trading stocks during the sensitive period | Others | The company management department of ChiNext Board of the Shenzhen Stock Exchange issued a regulatory letter to the Company’s Supervisor Wang Xiaobo. | May 6, 2019 | The regulatory letter [2019] No. 42 of ChiNext Board of the Shenzhen Stock Exchange http://www.szse.cn/ |
Particulars of irregular trading of the Company’s stocks by Directors, Supervisors, senior management and shareholderswith more than 5% of shareholding
√ Applicable □ Not applicable
| Name of Director, Supervisor, senior management or shareholder with more than 5% of shareholding | Details of irregular trading of the Company’s stocks | Timing of recovering the proceeds from irregular trading | Amounts of proceeds recovered from irregular trading (RMB) | Accountability measures adopted by the Board of Directors |
| Wang Xiaobo | On March 28, 2019 (within the sensitive period for trading stocks), Ms. Wang Xiaobo reduced her shareholding of the Company’s non-restricted shares by 2,600 shares by way of centralised bidding through the system of the Shenzhen Stock Exchange. | 0.00 | The Board of Directors of the Company warned Ms. Wang Xiaobo regarding this reduction of shareholding during the window period. Ms. Wang Xiaobo promised to strictly comply with the relevant laws and regulations and avoid similar incidents from happening again. |
XIII. Integrity of the Company, its Controlling Shareholders and De Facto Controllers
□ Applicable √ Not applicable
XIV. Implementation of the Company’s Share Incentive Scheme, Employee Stock Plan or Other Staff IncentiveMeasures
√ Applicable □ Not applicable
(I) Employee Stock Plan
Employee Stock Plan 2017
1. On December 23, 2016, the Company convened the fortieth meeting of the second session of Board of Directors, theStaff Representative Meeting and the thirtieth meeting of the second session of Supervisory Committee respectively. Themeetings considered and approved the relevant resolutions including the Resolution on Phase One of Employee StockPlan of Hangzhou Tigermed Consulting Co., Ltd. (Draft) and Summary, the Resolution on Management of EmployeeStock Plan and the Resolution on Proposal to the General Meeting to Authorise the Board of Directors in Relation to theRelated Matters of Phase One of Employee Stock Plan of the Company. The independent Directors of the Companyexpressed their independent opinions in this regard, and the Supervisory Committee of the Company expressed its reviewopinions on the incentive-related matters.
2. On January 12, 2017, the Company convened the first Extraordinary General Meeting of 2017, which considered andapproved the Resolution on Phase One of Employee Stock Plan of Hangzhou Tigermed Consulting Co., Ltd. (Draft) andSummary, thereby agreeing on the implementation of the Phase One of Employee Stock Plan of the Company.
3. On May 8, 2017, the Company disclosed that the Phase One of Employee Stock Plan had completed the purchase ofshares through secondary market, with an accumulated number of purchased shares of the Company of 10,743,715 at anaverage trading price of RMB26.395 per share, which represented a total trading amount of RMB283,580,357.425 and 2.262%of the entire share capital of the Company. This portion of shares will be locked up as required during the lock-up period, i.e.the 12 months starting from the completion date of purchase of May 8, 2017.
4. On May 8, 2018, the lock-up period of the Phase One of Employee Stock Plan of the Company expired, and in
accordance with the Phase One of Employee Stock Plan of Hangzhou Tigermed Consulting Co., Ltd. (Draft), etc., shares ofthe Company were sold under the Employee Stock Plan.
5. As at the end of the reporting period, the Employee Stock Plan was still within its subsistence period.
Employee Stock Plan 2018
1. On November 12, 2018, the Company convened the fourteenth meeting of the third session of Board of Directors, theStaff Representative Meeting and the seventh meeting of the third session of Supervisory Committee respectively. Themeetings considered and approved the relevant resolutions including the Resolution on Employee Stock Plan 2018 ofHangzhou Tigermed Consulting Co., Ltd. (Draft) and Summary, the Resolution on Management of Employee Stock Plan2018 of Hangzhou Tigermed Consulting Co., Ltd. and the Resolution on Proposal to the General Meeting to Authorise theBoard of Directors in Relation to the Related Matters of Employee Stock Plan 2018 of the Company. The independentDirectors of the Company expressed their independent opinions in this regard, and the Supervisory Committee of theCompany expressed its review opinions on the related matters of the Employee Stock Plan.
2. On November 29, 2018, the Company convened the fourth Extraordinary General Meeting of 2018, which considered andapproved the Resolution on Employee Stock Plan 2018 of Hangzhou Tigermed Consulting Co., Ltd. (Draft) and Summary,thereby agreeing on the implementation of the Employee Stock Plan 2018 of the Company.
3. On March 20, 2019, the Company convened the fifteenth meeting of the third session of Board of Directors and the eighthmeeting of the third session of Supervisory Committee respectively, which considered and approved the Resolution onAmendments to Employee Stock Plan 2018 of Hangzhou Tigermed Consulting Co., Ltd. (Draft) and Summary and theRelevant Supporting Documents. Adjustments were made to the target participants, confirmation criteria and total amount offund raised of the Employee Stock Plan 2018 of the Company. The independent Directors of the Company expressed theirindependent opinions in this regard.
4. As at March 20, 2019, the Company implemented the completion repurchase plan using a security account dedicated toshare repurchase through centralised bidding trading, with an accumulated number of repurchased shares of the Company of7,005,832, representing 1.40% of the total equity of the Company at present. The maximum trading price was RMB49.50per share, while the lowest trading price was RMB38.50 per share, and the total trading amount was RMB310,005,109.98(including transaction fees). The implemention period of the share repurchase conformed to the requirements of therepurchase plan (12 months starting from the date on which the repurchase plan was considered and approved by the generalmeeting), and the actual number of shares repurchased, the repurchase price and the total amount of fund used conformed tothe repurchase plan considered and approved by the fourth Extraordinary General Meeting of 2018 of the Company. Theactual implemention was consistent with the repurchase plan originally disclosed, and the Company had completed therepurchase in accordance with the repurchase plan disclosed.
5. On June 6, 2019, the Company convened the nineteenth meeting of the third session of Board of Directors, whichconsidered and approved the Resolution on Non-transaction Transfer of Shares from Account Dedicated to ShareRepurchase of the Company to Dedicated Account of Employee Stock Plan 2018 of the Company, thereby agreeing on thetransfer of a total of 2,143,403 number of shares from the account dedicated to share repurchase of the Company to thededicated account of “Hangzhou Tigermed Consulting Co., Ltd. – Phase Two of Employee Stock Plan” by way ofnon-transaction transfer at an average trading price of the share repurchase of RMB44.25 per share.
6. On June 17, 2019, the Company convened the twentieth meeting of the third session of Board of Directors, whichconsidered and approved the Resolution on Selection of Asset Management Institution for Employee Stock Plan 2018 of theCompany and the Resolution on Adjustment to Number of Shares for Non-transaction Transfer of Shares from AccountDedicated to Share Repurchase of the Company to Dedicated Account of Employee Stock Plan 2018 of the Company,thereby agreeing on commissioning Yunan International Trust Co., Ltd. to manage the Employee Stock Plan by establishing“Yunan Trust – Tigermed Phase Two Employee Stock Collective Fund Trust Scheme 2018”, the share source of which was
through non-transaction share transfer from the account dedicated to share repurchase of the Company to the dedicatedaccount of the Employee Stock Plan. As some staff members waived their rights to subscribe their shares, the actual numberof transferred shares of the Employee Stock Plan was adjusted to 2,120,803.
7. On June 21, 2019, the Employee Stock Plan 2018 completed the non-transaction transfer of shares, and on June 20, 2019,the shares of the Company held by the security account dedicated to repurchase of the Company were transferred by way ofnon-transaction to the dedicated account of “Hangzhou Tigermed Consulting Co., Ltd. – Phase Two of Employee StockPlan”. The transfer price was RMB44.25 per share, and the total number of transferred shares was 2,120,803, representing
0.424% of the entire share capital of the Company. The portion of shares would be locked up as required during the lock-upperiod (i.e. 12 months from the date of announcing the completion of transfer at June 21, 2019).
(II) Share Incentive Scheme
Restricted Share Incentive Scheme 2019
1. On March 20, 2019, the Company convened the fifteenth meeting of the third session of Board of Directors and the eighthmeeting of the third session of Supervisory Committee respectively, which considered and approved the relevant resolutionsincluding the Resolution on Change of Use of Repurchase Shares, the Resolution on Restricted Share Incentive Scheme2019 of Hangzhou Tigermed Consulting Co., Ltd. (Draft) and Summary (“Incentive Scheme (Draft)”), the Resolution onImplementation, Assessment and Management of Restricted Share Incentive Scheme 2019 of Hangzhou TigermedConsulting Co., Ltd. and the Resolution on Proposal to the General Meeting to Authorise the Board of Directors in Relationto the Related Matters of Restricted Share Incentive Scheme of the Company. The source of the Restricted Share IncentiveScheme was from public shares which the Company repurchased. The independent Directors of the Company expressedtheir independent opinions agreeing to the above matters.
2. From March 21, 2019 to March 30, 2019, the Company announced on CNINFO website the Restricted Share IncentiveScheme 2019 Incentive Target List. As at the end of the announcing period (March 30, 2019), the Supervisory Committee ofthe Company had not received any objections on the proposed incentive targets from any staff members. On April 4, 2019,the Supervisory Committee of the Company issued the Description and Review Opinions by Hangzhou TigermedConsulting Co., Ltd. Supervisory Committee on the Announcement on Restricted Share Incentive Scheme 2019 IncentiveTarget List.
3. On April 10, 2019, the Company convened the first Extraordinary General Meeting of 2019, which considered andapproved the Resolution on Restricted Share Incentive Scheme 2019 of Hangzhou Tigermed Consulting Co., Ltd. (Draft)and Summary, the Resolution on Implementation, Assessment and Management of Restricted Share Incentive Scheme2019 of Hangzhou Tigermed Consulting Co., Ltd. and the Resolution on Authorisation by the General Meeting for theBoard of Directors in Relation to the Related Matters of Restricted Share Incentive Scheme of the Company. At the sametime, based on the review on trading of the Company’s shares by the insiders and incentive targets of the Restricted ShareIncentive Scheme within the 6 months prior to the announcement of the Incentive Scheme (Draft), the Company issued theAnnouncement by Hangzhou Tigermed Consulting Co., Ltd. on Self-review on Trading of the Company’s Shares byInsiders and Incentive Targets of Restricted Share Incentive Scheme 2019. In the self-review, the Company did not noticeany circumstances in which an insider or incentive target of the Incentive Scheme had made use of the Incentive Scheme totrade the Company’s shares in relation to insider information.
4. On June 6, 2019, the nineteenth meeting of the third session of Board of Directors and the tenth meeting of the thirdsession of Supervisory Committee of the Company considered and approved the Resolution on Adjustments to FirstGranting Incentive Target List and Quantities Granted of Restricted Share Incentive Scheme 2019 of the Company and theResolution on Matters Related to First Granting of Restricted Share Incentive Scheme 2019 of the Company. Theindependent Directors of the Company expressed their independent opinions agreeing to the matter, and the Supervisory
Committee reviewed the first granting incentive target list and expressed its agreement. The corresponding legal opinionwas issued by Beijing Jiayuan Law Firm, while the independent financial advisor report was issued by the financial advisor.
5. On June 21, 2019, the Company disclosed the Announcement on Completion of Registration for First Granting ofRestricted Share Incentive Scheme 2019. Upon the approval and confirmation by the Shenzhen Stock Exchange and theShenzhen Branch of China Securities Depository and Clearing Corporation Limited, the Company completed theregistration for first granting of the Restricted Share Incentive Scheme 2019. The date of listing for the shares granted wasJune 21, 2019. There were 429 incentive targets for the first granting, who were granted a total of 3,827,763 restrictedshares.
6. On July 12, 2019 and July 30, 2019, the 22nd meeting of the third session of Board of Directors, the eleventh meeting ofthe third session of Supervisory Committee and the second Extraordinary General Meeting of 2019 of the Companyconsidered and approved the Resolution on Adjustments to Quantity of Restricted Shares Repurchased, Repurchase Priceand Repurchase and Cancellation of Portion of Restricted Shares in 2019. As the Company had completed the implementionof the Interest Distribution Plan 2018 on July 1, 2019, corresponding adjustments would be made to the repurchase quantityand price for the first granting portion of restricted shares under the Restricted Share Incentive Scheme 2019 of theCompany. In the meantime, 7 incentive targets were no longer eligible for incentive due to their departure, whose restrictedshares granted but not yet unlocked for sale were repurchased for cancellation. On September 3, 2019, the Companycompleted the repurchase and cancellation of such restricted shares.
7. On August 21, 2019 and September 10, 2019, the Company convened the twenty-fourth meeting of the third session ofBoard of Directors, the twelfth meeting of the third session of Supervisory Committee and the third session of ExtraordinaryGeneral Meeting of 2019 respectively, which considered and approved the Resolution on Repurchase and Cancellation ofPortion of Restricted Shares in 2019, thereby agreeing to the repurchase and cancellation of a total of 68,451 restrictedshares by the Company for 6 departed incentive targets, whose restricted shares were granted but not yet uplocked for sale.On November 4, 2019, the Company completed the repurchase and cancellation of the respective portion.
8. On October 29, 2019 an November 15, 2019, the Company convened the twenty-seventh meeting of the third session ofBoard of Directors, the fourteenth meeting of the third session of Supervisory Committee and the fourth ExtraordinaryGeneral Meeting of 2019 respectively, which considered and approved the Resolution on Repurchase and Cancellation ofPortion of Restricted Shares in 2019, thereby agreeing to the repurchase and cancellation of a total of 32,682 restrictedshares by the Company for 3 departed incentive targets.
9. On December 9, 2019 and December 27, 2019, the Company convened the twenty-eighth meeting of the third session ofBoard of Directors, the fifteenth meeting of the third session of Supervisory Committee and the fifth Extraordinary GeneralMeeting of 2019 respectively, which considered and approved the Resolution on Repurchase and Cancellation of Portion ofRestricted Shares in 2019, thereby agreeing to the repurchase and cancellation of a total of 16,845 restricted shares by theCompany for 2 departed incentive targets, whose restricted shares were granted but not yet uplocked for sale.
10. On December 9, 2019, the twenty-eighth meeting of the third session of Board of Directors and the fifteenth meeting ofthe third session of Supervisory Committee of the Company considered and approved the Resolution on Granting-relatedMatters of Reserved Portion under Restricted Share Incentive Scheme 2019 of the Company. The Company would grant770,894 reserved restricted shares to 56 incentive targets at the granting price of RMB31.46 per share. The independentDirectors of the Company clearly expressed their independent opinions agreeing to the matter, and the SupervisoryCommittee reviewed the granting incentive target list for the reserved portion of restricted shares and expressed itsagreement. The corresponding legal opinion was issued by Beijing Jiayuan Law Firm, while the independent financialadvisor report was issued by the financial advisor.
| Temporary title of announcement | Date of disclosure | Announcement no. | Index of announcement disclosure |
| Announcement on Resolution(s) of the first Extraordinary General Meeting of 2017 | January 12, 2017 | 2017-001 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Implementation Progress of Phase One of Employee Stock Plan | February 10, 2017 | 2017-003 | CNINFO website (http://www.cninfo.com.cn/) |
| SITC – Tigermed Phase One Employee Stock Plan Collective Fund Trust Scheme Trust Contract | February 10, 2017 | - | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Implementation Progress of Phase One of Employee Stock Plan | March 10, 2017 | 2017-006 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Implementation Progress of Phase One of Employee Stock Plan | April 7, 2017 | 2017-013 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Phase One of Employee Stock Plan Completion of Share Purchase | May 8, 2017 | 2017-033 | CNINFO website (http://www.cninfo.com.cn/) |
| Indicative Announcement on Employee Stock Plan of the Company Expiry of Lock-up Period | April 26, 2018 | 2018-034 | CNINFO website (http://www.cninfo.com.cn/) |
| Employee Stock Plan 2018 (Draft) | November 13, 2018 | - | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Resolution(s) of the fourth Extraordinary General Meeting of 2018 | April 26, 2018 | 2018-081 | CNINFO website (http://www.cninfo.com.cn/) |
| Hangzhou Tigermed Consulting Co., Ltd. Employee Stock Plan 2018 (Amended Draft) | March 21, 2019 | - | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Adjustments to Employee Stock Plan 2018 of the Company | March 21, 2019 | 2019-017 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Completion of Share Repurchase of the Company and Share Changes | March 21, 2019 | 2019-025 | CNINFO website (http://www.cninfo.com.cn/) |
| Hangzhou Tigermed Consulting Co., Ltd. Restricted Share Incentive Scheme 2019 (Draft) | March 21, 2019 | - | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Resolution(s) of the first Extraordinary General Meeting of 2019 | April 10, 2019 | 2019-030 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Resolution(s) of the nineteenth meeting of the third session of Board of Directors | June 6, 2019 | 2019-062 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Adjustments to First Granting Incentive Target List and Quantities Granted of Restricted Share Incentive Scheme 2019 | June 6, 2019 | 2019-060 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on First Granting-related Matters of Restricted Share Incentive Scheme 2019 | June 6, 2019 | 2019-061 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Resolution(s) of the twentieth meeting of the third session of Board of Directors | June 18, 2019 | 2019-066 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Completion of Registration for First Granting of Restricted Share Incentive Scheme 2019 | June 21, 2019 | 2019-068 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Completion of Non-transaction Transfer of Employee Stock Plan 2018 | June 21, 2019 | 2019-069 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Adjustments to Quantity of Restricted Shares Repurchased, Repurchase Price and Repurchase and Cancellation of Portion of Restricted Shares in 2019 | July 15, 2019 | 2019-080 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Completion of Repurchase and Cancellation of Portion of Restricted Shares | September 3, 2019 | 2019-099 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Repurchase and Cancellation of Portion of Restricted Shares in 2019 | October 30, 2019 | 2019-114 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Completion of Repurchase and Cancellation of Portion of Restricted Shares | Novembre 4, 2019 | 2019-120 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Granting-related Matters of Reserved Portion of Restricted Share Incentive Scheme 2019 | December 10, 2019 | 2019-129 | CNINFO website (http://www.cninfo.com.cn/) |
| Announcement on Repurchase and Cancellation of Portion of | December 10, 2019 | 2019-130 | CNINFO website (http://www.cninfo.com.cn/) |
XV. Major Connected Transactions
1. Connected Transactions Associated with Day-to-day Operations
□ Applicable √ Not applicable
The Company did not conduct any connected transactions in the ordinary course of business during the reporting period.
2. Connected Transactions in Connection with Purchase or Sale of Assets or Equity Interests
□ Applicable √ Not applicable
The Company did not conduct any connected transactions in connection with purchase or sale of assets or equity interestsduring the reporting period.
3. Connected Transactions in Connection with Joint External Investment
□ Applicable √ Not applicable
The Company did not conduct any connected transactions in connection with joint external investment during the reportingperiod.
4. Amounts due from/to Related Parties
□ Applicable √ Not applicable
The Company did not have any amounts due from/to related parties during the reporting period.
5. Other Major Connected Transactions
□ Applicable √ Not applicable
The Company did not conduct any other major connected transactions during the reporting period.XVI. Significant Contracts and their Implementation
1. Entrustment, Contracting and Leasing
(1) Entrustment
□ Applicable √ Not applicable
The Company had no entrustment during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
The Company had no contracting during the reporting period.
(3) Leasing
√Applicable □Not applicable
Description on LeasingAs at December 31, 2019, due to operational needs, the subsidiaries Frontage Labs and Concord obtained from the financialinstitution De Lage Landen respectively by finance leasing precision instruments and equipment for BIO (bioanalysis), CMC,DMPK and Safety Toxic worth US$8.92 million in total originally. In particular, US$4.69 million were attributable toinstruments and equipment for BIO, US$2.08 million for CMC, US$1.22 million for DMPK and US$0.93 million for SafetyToxic.The Company accounted the above instruments and equipment as self-owned fixed assets which were depreciated over aperiod of 7 years. As at December 31, 2019, the accumulated depreciation amounted to US$1.57 million for bioanalyticalinstruments and equipment, US$0.98 million for CMC, US$0.37 million for DMPK and US$0.14 million for Safety Toxic.Items of the Company generating a profit or loss which contributed to 10% or more of the total profit of the Companyduring the reporting period
□ Applicable √ Not applicable
During the reporting period, there was no leasing of the Company generating a profit or loss which contributed to 10% ormore of the total profit of the Company during the reporting period.
2. Significant Guarantees
√Applicable □Not applicable
(1) Guarantees
Unit: RMB0,000
| External guarantees undertaken by the Company and its subsidiaries (excluding guarantees for subsidiaries) | ||||||||
| Name of guaranteed | Disclosure date of the announcement about the guarantee facilities | Guarantee facilities | Actual date | Actual amount of guarantee | Type of guarantee | Guarantee period | Fulfilled or not | Related party guaranteed or not |
| Shanghai Shengtong International Logistics Co., Ltd. | June 6, 2018 | 1,200 | June 27, 2019 | 278 | Joint liability guarantee | 7 months | No | Yes |
| Shanghai Shengtong International Logistics Co., Ltd. | June 6, 2018 | 1,200 | July 16, 2019 | 309 | Joint liability guarantee | 6 months | No | Yes |
| Shanghai Shengtong International Logistics Co., Ltd. | June 6, 2018 | 1,200 | July 23, 2019 | 300 | Joint liability guarantee | 6 months | No | Yes |
| Shanghai Shengtong International Logistics Co., Ltd. | June 6, 2018 | 1,200 | July 26, 2019 | 49 | Joint liability guarantee | 6 months | No | Yes |
| Shanghai Shengtong International Logistics Co., Ltd. | June 6, 2018 | 1,200 | July 25, 2019 | 238 | Joint liability guarantee | 6 months | No | Yes |
| Total external guarantee facilities approved during the reporting period (A1) | 1,200 | Total actual amount of external guarantees during the reporting period (A2) | 1,174 | |||||
| Total external guarantee facilities approved at the end of the reporting period (A3) | 1,200 | Total actual balance of external guarantees at the end of the reporting period (A4) | 1,174 | |||||
| The Company’s guarantees for subsidiaries | ||||||||
| Name of guaranteed | Disclosure date of the announcement about the guarantee facilities | Guarantee facilities | Actual date | Actual amount of guarantee | Type of guarantee | Guarantee period | Fulfilled or not | Related party guaranteed or not |
| Subsidiaries’ guarantees for subsidiaries | ||||||||
| Name of guaranteed | Disclosure date of the announcement about the guarantee facilities | Guarantee facilities | Actual date | Actual amount of guarantee | Type of guarantee | Guarantee period | Fulfilled or not | Related party guaranteed or not |
| Total guarantee of the Company (total of the above three items) | ||||||||
| Total guarantee facilities approved during the reporting period (A1+B1+C1) | 1,200 | Total actual guarantee amount during the reporting period (A2+B2+C2) | 1,174 | |||||
| Total guarantee facilities approved at the end of the reporting period (A3+B3+C3) | 1,200 | Total actual guarantee balance at the end of the reporting period (A4+B4+C4) | 1,174 | |||||
| % of total actual guarantee amount (A4+B4+C4) in net assets of the Company | 0.28% | |||||||
| Of which: | |
| Guarantee balance provided to Shareholders, the de facto controllers and their related parties (D) | 0 |
| Debt guarantee balance provided directly or indirectly to the guaranteed party with a gearing ratio of over 70% (E) | 0 |
| Amount of total guarantee amount in excess of 50% of net assets of the Company (F) | 0 |
| Total amount of the above three guarantees (D+E+F) | 0 |
| Explanations on liabilities for guarantees incurred during the reporting period or possibly assuming joint settlement liabilities by the Company in respect of undue guarantees (if any) | Nil |
| Explanations on external guarantees provided in violation of prescribed requirements (if any) | Nil |
Specific explanation of compound guarantees
(2) Irregular External Guarantees
□ Applicable √ Not applicable
The Company did not have any irregular external guarantees during the reporting period.
3. Entrust Others to Manage Cash Assets
(1) Entrusted Wealth Management
√Applicable □Not applicable
Particulars of entrusted wealth management during the reporting period
Unit: RMB’0,000
| Specific type | Source of funds for entrusted wealth management | Amount of entrusted wealth management | Outstanding balance | Amount due but not yet received |
| Wealth management products of banks | Self-owned capital | 42,639 | 6,746 | 0 |
| Total | 42,639 | 6,746 | 0 | |
Particulars of high-risk entrusted wealth management with individually significant amount or of low-security, low-liquidityand non-principal protected products
□ Applicable √ Not applicable
Expected irrecoverable principal or other potential impairment in entrusted wealth management
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
The Company had no entrusted loans during the reporting period.
4. Other Significant Contracts
□ Applicable √ Not applicable
The Company did not have any other significant contracts during the reporting period.XVII. Social Responsibility
1. Performance of Social Responsibility
For details, please refer to the full text of Social Responsibility Report of the Company disclosed on CNINFO website onAugust 23, 2019.
2. Performance of Social Responsibility with Respect to Targeted Poverty Alleviation
(1) Targeted Poverty Alleviation Planning
Nil
(2) Annual Summary on Targeted Poverty Alleviation
Nil
(3) Subsequent Targeted Poverty Alleviation Plan
Nil
3. Environmental Protection
Whether the listed company and its subsidiaries belong to key pollutant discharging units announced by the environmentalprotection departmentNot applicableNilXVIII. Description of Other Significant Events
√Applicable □Not applicable
1. On April 25, 2019, the Company convened the sixteenth meeting of the third session of Board of Directors, whichconsidered and approved the Resolution on Appointment of Ms. Cao Xiaochun as General Manager of the Company andthe Resolution on Change of Legal Representative of the Company and Amendment(s) to Articles of Association. As Mr.
Ye Xiaoping, the Chairman of the Board and general manager of the Company, resigned as the general manager and legalrepresentative of the Compnay, the Company proposed to appoint Ms. Cao Xiaochun as the general manager of theCompany who would also serve as the legal representative of the Company. As a result, corresponding amendmentswould have to be made to the Articles of Association in relation to the terms of service of the legal representative. OnMay 17, 2019, the Company convened the Annual General Meeting of 2018, which considered and approved theResolution on Change of Legal Representative of the Company and Amendment(s) to Articles of Association.
2. On December 12, 2019, the Company convened the twenty-ninth meeting of the third session of Board of Directors,which considered and approved the Resolution on Authorising Management of the Company to Prepare for Issuance ofOverseas Listed Foreign Shares (H Shares) and Listing on The Stock Exchange of Hong Kong Limited. The Board of theCompany authorised the management to commence the preliminary preparatory work for issuance of overseas listed foreignshares (H Shares) and listing on The Stock Exchange of Hong Kong Limited. The aforesaid authorisation would remaineffective for a period of 12 months from the approval date by the Board. For details, please refer to the relevantannouncement of the Company dated December 13, 2019.XIX. Significant Events of Subsidiaries of the Company
√Applicable □Not applicable
1. On May 29, 2019, the Company issued on CNINFO website the Announcement on Progress of Overseas (Hong Kong)
Listing of a Subsidiary of the Company. On May 29, 2019, Frontage Holdings, a subsidiary of the Company, was informedby its Joint Sponsors Merrill Lynch Far East Limited and Goldman Sachs (Asia) L.L.C. that the Joint Sponsors received onthe same date a letter from The Stock Exchange of Hong Kong Limited, which confirmed the formal approval by the HongKong Stock Exchange on the listing of Frontage Holdings. As approved by the Hong Kong Stock Exchange, the newlyissued 501,910,000 ordinary shares of Frontage Holdings (before exercising the right for over-allotment) were listed fortrading on the Main Board of the Hong Kong Stock Exchange on May 30, 2019. The English and Chinese abbreviations ofthe shares of Frontage Holdings were “FRONTAGE” and “方达控股” respectively with the stock code “1521”.
2. On August 21, 2019 and September 10, 2019, the Company convened the twenty-fourth meeting of the third session ofBoard of Directors and the third session of Extraordinary General Meeting of 2019 respectively, which considered andapproved the relevant resolution(s) on spin-off and overseas public offering of DreamCIS Inc. (“DreamCIS”, a controllingsubsidiary) and listing on the Korea Stock Exchange (KRX) KOSDAQ. On September 27, 2019, DreamCIS was informedby its listing sponsor NH Investment & Securities Co., Ltd that the application documents for DreamCIS’ initial publicoffering and listing on the Korea Stock Exchange (KRX) were submitted to the Korea Stock Exchange on September 27,2019. On March 26, 2020, the listing of DreamCIS Inc. was approved by the Korea Stock Exchange. For details, please referto the relevant announcements of the Company issued on CNINFO website dated August 23, September 10 and September27, 2019 and March 27, 2020.
3. On October 31, 2019, the official website of the National Medical Products Administration (NMPA) issued the NMPAAnnoucement on Clinical Drug Clinical Trial Organisation Qualification Accreditation (No. 5) (2019 No. 86) (《国家药监局关于药物临床试验机构资格认定检查的公告》（第5号）（2019年第86号）). The Company’s participating hospitalHangzhou Combak Hospital Co., Ltd. passed the National Clinical Drug Clinical Trial Organisation QualificationAccreditation (GCP certification) and obtained the Clinical Drug Clinical Trial Organisation Qualification Certificate (No.1056) (《药物临床试验机构资格认定证书》（编号1056号）). For details, please refer to the relevant announcement of theCompany issued on CNINFO website dated October 31, 2019.
4. On October 29, 2019 and November 15, 2019, the Company convened the twenty-seventh meeting of the third session ofBoard of Directors and the fourth Extraordinary General Meeting of 2019 respectively, which considered and approved theResolution on Proposed Purchase of Portion of Equity Interests of EPS Holdings, Inc. by a Wholly-owned Subsidiary.HongKong Tigermed Co., Ltd (“Tigermed HK”, a wholly-owned subsidiary) was proposed to raise approximatelyUS$17,743,300 to purchase 1,400,000 ordinary shares of ＥＰＳホールディングス株式会社 (EPS Holdings, Inc.,“EPS”), and EPS would transfer the portion of equity interests to Tigermed HK by way of transfer of treasury shares. Uponcompletion of the transaction, Tigermed HK would hold 3.06% equity interests of EPS as long term investment. As atDecember 16, 2019, Tigermed HK had made the payment for the equity transfer and completed the relevant procedures inaccordance with the requirements of the equity transfer agreement. For details, please refer to the relevant announcements ofthe Company issued on CNINFO website dated October 30 and December 16, 2019.
5. On November 20, 2019, “Shield” APP, which was developed by the Company’s investee Hangzhou Wangji HealthTechnology Co., Ltd., obtained the medical device licence of Auxiliary Management Software for Prevention of Hepatitis BMother-to-infant Transmission (《乙肝母婴阻断辅助管理软件》) (Licence No.: Zhe Xie Zhu Zhun 20192210633) issued bythe Zhejiang Medical Products Administration. It was the first officially approved mobile APP software device licence in thearea of liver disease prevention and treatment since the implemention of the new list. According to the prospective clinicalresearch data of 1,008 cases being studied, the success rate of preventing mother-to-infant transmission was above 99%,indicating the use of “Shield” APP combining with antiviral intervention on pregnant women in the third trimester with highviral load could further reduce hepatitis B mother-to-infant transmission rate through the standardised and combinedimmunisation effect on newborns.
Section 6 Changes in Share Capital and Information on
Shareholders
I. Changes in Share Capital
1. Statement of Changes in Shares
Unit: Shares
| Before change | Change (+, -) | After change | |||||||
| Number | Percentage | New share issue | Bonus issue | Transfer of surplus to capital | Others | Sub-total | Number | Percentage | |
| I. Shares with selling restrictions | 170,596,240 | 34.11% | 71,565,619 | -24,605,916 | 46,959,703 | 217,555,943 | 29.03% | ||
| 3. Shares held by other domestic investors | 161,892,880 | 32.37% | 68,085,479 | -24,831,587 | 43,253,892 | 205,146,772 | 27.37% | ||
| Including: Shares owned by domestic legal persons | 18,712,575 | 3.74% | 0 | -18,712,575 | -18,712,575 | 0 | 0.00% | ||
| Shares owned by domestic natural persons | 143,180,305 | 28.63% | 68,085,479 | -6,119,012 | 61,966,467 | 205,146,772 | 27.37% | ||
| 4. Shares held by foreign investors | 8,703,360 | 1.74% | 3,480,140 | 225,671 | 3,705,811 | 12,409,171 | 1.66% | ||
| Shares held by foreign natural persons | 8,703,360 | 1.74% | 3,480,140 | 225,671 | 3,705,811 | 12,409,171 | 1.66% | ||
| II. Shares without selling restrictions | 329,580,297 | 65.89% | 177,994,016 | 24,377,343 | 202,371,359 | 531,951,656 | 70.97% | ||
| 1. RMB ordinary shares | 329,580,297 | 65.89% | 177,994,016 | 24,377,343 | 202,371,359 | 531,951,656 | 70.97% | ||
| III. Total number of Shares | 500,176,537 | 100.00% | 249,559,635 | -228,573 | 249,331,062 | 749,507,599 | 100.00% | ||
Reason(s) for changes in Shares
√ Applicable □ Not applicable
1. The 37,425,149 Shares of the Company issued by way of non-public issuance on the Shenzhen Stock Exchange on 3February 2016 were listed and traded on 11 February 2019. Please refer to the announcement (2019) no. 005 of theCompany published on www.cninfo.com.cn for details.
2. On 21 June 2019, a total of 3,827,763 restricted shares were granted to 429 target subscribers in the initial grant under the2019 restricted stock incentive scheme of the Company. The lock-up period of the restricted shares in the initial grant underthe 2019 restricted stock incentive scheme shall be 12 months, 24 months and 36 months from the registration completiondate of the initial grant of the restricted shares. Please refer to the announcement (2019) no. 068 of the Company publishedon www.cninfo.com.cn for details.
3. On 21 June 2019, the 2018 employee share ownership scheme of the Company completed the non-trade transfer of theshares. The Shares of the Company held through the specific securities account for repurchase were transferred to thespecific account “Hangzhou Tigermed Consulting Co., Ltd. – Second Phase of the Employee Share Ownership Scheme” byway of non-trade transfer. A total of 2,120,803 shares were transferred. Please refer to the announcement (2019) no. 069 ofthe Company published on www.cninfo.com.cn for details.
4. On 1 July 2019, the Company implemented the 2018 dividend distribution plan. Under the 2018 dividend distributionplan, assuming the total number of shares entitled to the distribution is 499,119,271, i.e. total share capital of the Companyof 500,176,537 shares as at the registration date of dividend distribution less 1,057,266 shares held through the Company’sspecific securities account for repurchase, a cash dividend of RMB3.50 (tax inclusive) was to be paid to all shareholders forevery 10 shares held and a total of 249,559,635 shares were created by way of capitalisation of capital reserve on the basis of
5.00 shares for every 10 shares held to all shareholders. Upon completion of the dividend distribution, the total share capital ofthe Company increased to 749,736,172 shares. Please refer to the announcement (2019) no. 070 of the Company published on
www.cninfo.com.cn for details.
5. On 30 July 2019, the Resolution regarding the Adjustment to the Number, Repurchase Price as well as Repurchase andCancellation of Part of the 2019 Restricted Shares (《关于调整2019年限制性股票回购数量、回购价格及回购注销部分限制性股票的议案》) was considered and approved at the 2019 second extraordinary general meeting of the Company,pursuant to which it was agreed that a total of 110,595 restricted shares granted to seven resigned target subscribers but notyet unlocked shall be repurchased and cancelled. The above repurchase and cancellation was completed on 3 September 2019.Upon completion of repurchase and cancellation, the total share capital of the Company was reduced from 749,736,172 sharesto 749,625,577 shares. Please refer to the announcement (2019) no. 099 of the Company published on www.cninfo.com.cn fordetails.
6. On 10 September 2019, the Resolution regarding the Repurchase and Cancellation of Part of the 2019 Restricted Shares(《关于回购注销部分2019年限制性股票的议案》) was considered and approved at the 2019 third extraordinary generalmeeting of the Company, pursuant to which it was agreed that a total of 68,451 restricted shares granted to six resignedtarget subscribers but not yet unlocked shall be repurchased and cancelled. The above repurchase and cancellation wascompleted on 4 November 2019. Upon completion of repurchase and cancellation, the total share capital of the Companywas reduced from 749,625,577 shares to 749,557,126 shares. Please refer to the announcement (2019) no. 120 of theCompany published on www.cninfo.com.cn for details.
7. On 15 November 2019, the Resolution regarding the Repurchase and Cancellation of Part of the 2019 Restricted Shares(《关于回购注销部分2019年限制性股票的议案》) was considered and approved at the 2019 fourth extraordinary generalmeeting of the Company, pursuant to which it was agreed that a total of 32,682 restricted shares granted to three resignedtarget subscribers but not yet unlocked shall be repurchased and cancelled. As at the date of disclosure of this report, theabove repurchase and cancellation was completed. Upon completion of repurchase and cancellation, the total share capital ofthe Company was reduced from 749,557,126 shares to 749,524,444 shares. Please refer to the announcement (2019) no. 114of the Company published on www.cninfo.com.cn for details.
8. On 27 December 2019, the Resolution regarding the Repurchase and Cancellation of Part of the 2019 Restricted Shares(《关于回购注销部分2019年限制性股票的议案》) was considered and approved at the 2019 fifth extraordinary generalmeeting of the Company, pursuant to which it was agreed that a total of 16,845 restricted shares granted to two resignedtarget subscribers but not yet unlocked shall be repurchased and cancelled. As at the date of disclosure of this report, theabove repurchase and cancellation was completed. Upon completion of repurchase and cancellation, the total share capital ofthe Company was reduced from 749,524,444 shares to 749,507,599 shares. Please refer to the announcement (2019) no. 130of the Company published on www.cninfo.com.cn for details.
Approval(s) for changes in Shares
□ Applicable √ Not applicable
Transfer(s) for changes in Shares
√ Applicable □ Not applicable
1. On 21 June 2019, a total of 3,827,763 restricted shares were granted to 429 target subscribers in the initial grant under the2019 restricted stock incentive scheme of the Company. The lock-up period of the restricted shares in the initial grant underthe 2019 restricted stock incentive scheme shall be 12 months, 24 months and 36 months from the registration completion dateof the initial grant of the restricted shares. Please refer to the announcement (2019) no. 068 of the Company published on fordetails.
2. On 21 June 2019, the 2018 employee share ownership scheme of the Company completed the non-trade transfer of theshares. The Shares of the Company held through the specific securities account for repurchase were transferred to the specificaccount “Hangzhou Tigermed Consulting Co., Ltd. – Second Phase of the Employee Share Ownership Scheme” by way ofnon-trade transfer. A total of 2,120,803 shares were transferred. This portion of the Shares shall be locked in accordance withregulations and the lock-up period shall be 12 months from the date of disclosure of this announcement. Please refer to theannouncement (2019) no. 069 of the Company published on www.cninfo.com.cn for details.
The progress in implementation of share repurchase
√ Applicable □ Not applicable
1. The Company convened the fourteenth meeting of the third board of Directors on 12 November 2018 and the 2018 fourthextraordinary general meeting on 29 November 2018 in order to review and approve the Resolution regarding the Program toRepurchase Shares of the Company (《关于回购公司股份预案的议案》), the Resolution regarding the Authorisation to theBoard of Directors to Deal with All Matters in Relation to the Share Repurchase to be Proposed at the General Meetings (《关于提请股东大会授权董事会全权办理本次回购股份相关事宜的议案》) and other related resolutions regarding therepurchase. The Company intended to use its own funds to repurchase part of the Company’s public shares by centralised
competitive bidding or other means permitted by laws and regulations as the source of shares for the implementation of theCompany’s 2018 Employee Stock Ownership Scheme. The total funds to be used for the share repurchase shall not be lessthan RMB250 million and not more than RMB500 million, and the price of the shares to be repurchased shall not be more thanRMB52.00, inclusive, per share. The period of this share repurchase shall be 12 months from the date of the general meetingreviewing and approving the resolution regarding the share repurchase program. The Company disclosed the Report on theRepurchase of Shares of the Company (《关于回购公司股份的报告书》) on 7 December 2018. On the same day, theCompany implemented the share repurchase for the first time by centralised competitive bidding and disclosed theAnnouncement on the First Repurchase of Shares of the Company (《关于首次回购公司股份的公告》). On 12 December2018, the Company disclosed the Announcement on the Repurchase of Shares of the Company Reaching 1% and the Progressin Repurchase (《关于回购公司股份比例达1%暨回购进展公告》). Please refer to the relevant announcements of theCompany published on the website designated by CSRC for information disclosure (www.cninfo.com.cn) for details.
2. As of 20 March 2019, the implementation of the repurchase program was completed. The Company repurchased 7,005,832shares by centralised competitive bidding through the specific securities account for repurchase, accounting for 1.40% of theCompany’s total share capital. The highest transaction price was RMB49.50 per share and the lowest transaction price wasRMB38.50 per share. The total transaction amount was RMB310,005,109.98 (inclusive of transaction fees). The Companydisclosed the Announcement on the Repurchase of Shares of the Company Reaching 1% and the Progress in Repurchase (《关于回购公司股份比例达1%暨回购进展公告》) and the Report on the Progress in Repurchase of Shares of the Company (《关于回购公司股份的进展公告》) on 21 December 2018, 2 January 2019, 1 February 2019, and 1 March 2019, respectively. Fordetails, please refer to the relevant announcements of the Company published on www.cninfo.com.cn, the informationdisclosure website designated by China Securities Regulatory Commission. The implementation period of the Company’sshare repurchase was compliant with the requirements on repurchase programs (12 months from the date of the generalmeeting reviewing and approving the repurchase program), and the actual number of shares repurchased, the repurchase price,and the total amount of funds used were in line with the repurchase program reviewed and approved at the 2018 fourthextraordinary general meeting of the Company. No difference between the actual implementation and the original repurchaseprogram disclosed has been found. The Company has completed the repurchase in accordance with the repurchase programdisclosed.
The progress in implementation of the reduction of holdings of repurchased shares by centralised competitive bidding
□ Applicable √ Not applicable
Impact of changes in Shares on financial indicators such as basic earnings per share and diluted earnings per share and netassets per share attributable to the Company’s common stock shareholders in the latest year and the latest period
□ Applicable √ Not applicable
Other disclosures as deemed necessary by the Company or required by the securities regulatory authority
□ Applicable √ Not applicable
2. Changes in Restricted Shares
√ Applicable □ Not applicable
Unit: share
| Name of shareholder | No. of restricted shares at the beginning of the period | No. of restricted shares increased in this period | No. of restricted shares unlocked in this period | No. of restricted shares at the end of the period | Reasons for the restriction | Proposed date of unlocking the restricted shares |
| Ye Xiaoping | 100,592,050 | 46,546,024 | 7,499,999 | 139,638,075 | Lock-up for senior executives | After the initial grant, the restricted shares held by individuals to be unlocked on 3 February 2019, and the restricted shares held by senior executives to be unlocked by 25% annually |
| Cao Xiaochun | 35,396,625 | 16,040,443 | 2,199,756 | 49,237,312 | Lock-up for senior executives | After the initial grant, the restricted shares held by individuals to be unlocked on 3 February 2019, and the restricted shares held by senior executives to be unlocked by 25% annually |
| Shi Xiaoli | 7,150,080 | 3,575,040 | 0 | 10,725,120 | Lock-up for senior executives | The restricted shares held by senior executives to be unlocked by 25% annually |
| Wang Xiaobo | 41,550 | 20,775 | 0 | 62,325 | Lock-up for senior executives | The restricted shares held by senior executives to be unlocked by 25% annually |
| Zhuan Yin | 6,864,000 | 3,432,000 | 0 | 10,296,000 | Lock-up for senior executives | The restricted shares held by senior executives to be unlocked by 25% annually |
| Wen Chen | 1,839,360 | 694,680 | 450,000 | 2,084,040 | Lock-up for senior executives | The restricted shares held by senior executives to be unlocked by 25% annually |
| 429 target restricted shares subscribers in 2019, including Yu Ling | 0 | 5,741,644 | 228,573 | 5,513,071 | Restricted shares for incentive scheme | A total of 228,573 restricted shares granted to 18 resigned target subscribers but not yet unlocked to be repurchased and cancelled as of the date of this report, and for the rest of the restricted shares in 2019, 30% of them to be unlocked on 21 June 2020, 30% of them to be unlocked on 21 June 2021, and 40% of them to be unlocked on 21 June 2022 |
| Ningbo Dingliang Ruixing Equity Investment Center (limited liability partnership) | 7,485,030 | 0 | 7,485,030 | 0 | Restricted shares held by institutional investors after the initial grant | After the initial grant, the restricted shares held by institutional investors to be unlocked on 3 February 2019 |
| Shanghai Jiguang Investment Management Center (limited liability partnership) | 7,485,030 | 0 | 7,485,030 | 0 | Restricted shares held by institutional investors after the initial grant | After the initial grant, the restricted shares held by institutional investors to be unlocked on 3 February 2019 |
| Sinolink Securities – Industrial Bank – Sinolink Yonghua Value Growth Directional Increase Collective Asset Management Plan | 3,742,515 | 0 | 3,742,515 | 0 | Restricted shares held by institutional investors after the initial grant | After the initial grant, the restricted shares held by institutional investors to be unlocked on 3 February 2019 |
| Total | 170,596,240 | 76,050,606 | 29,090,903 | 217,555,943 | -- | -- |
II. Issuance of Securities and Listing
1. Issuance of Securities (Excluding Preferred Stocks) during the Reporting Period
□ Applicable √ Not applicable
2. Total Number of Shares and Explanation of Changes in the Shareholding Structure and Changesin the Assets and Liability Structure
√ Applicable □ Not applicable
1. On 1 July 2019, the Company implemented the 2018 dividend distribution plan. This dividend distribution plan of theCompany: assuming the total number of shares entitled to the distribution is 499,119,271, i.e. total share capital of theCompany of 500,176,537 shares as at the registration date of dividend distribution less 1,057,266 shares held through theCompany’s specific securities account for repurchase, a cash dividend of RMB3.50 (tax inclusive) was to be paid to allshareholders for every 10 shares held and a total of 249,559,635 shares were created by way of capitalisation of capital reserveon the basis of 5.00 shares for every 10 shares held to all shareholders. Upon completion of the dividend distribution, the totalshare capital of the Company increased to 749,736,172 shares. Please refer to the announcement (2019) no. 070 of theCompany published on www.cninfo.com.cn for details.
2. On 30 July 2019, the Resolution regarding the Adjustment to the Number, Repurchase Price as well as Repurchase andCancellation of Part of the 2019 Restricted Shares (《关于调整2019年限制性股票回购数量、回购价格及回购注销部分限制性股票的议案》) was considered and approved at the 2019 second extraordinary general meeting of the Company,pursuant to which it was agreed that a total of 110,595 restricted shares granted to seven resigned target subscribers but not yetunlocked shall be repurchased and cancelled. The above repurchase and cancellation was completed on 3 September 2019.Upon completion of repurchase and cancellation, the total share capital of the Company was reduced from 749,736,172 sharesto 749,625,577 shares. Please refer to the announcement (2019) no. 099 of the Company published on www.cninfo.com.cn fordetails.
3. On 10 September 2019, the Resolution regarding the Repurchase and Cancellation of Part of the 2019 Restricted Shares(《关于回购注销部分2019年限制性股票的议案》) was considered and approved at the 2019 third extraordinary generalmeeting of the Company, pursuant to which it was agreed that a total of 68,451 restricted shares granted to six resigned targetsubscribers but not yet unlocked shall be repurchased and cancelled. The above repurchase and cancellation was completed on4 November 2019. Upon completion of repurchase and cancellation, the total share capital of the Company was reduced from749,625,577 shares to 749,557,126 shares. Please refer to the announcement (2019) no. 120 of the Company published on
www.cninfo.com.cn for details.
4. On 15 November 2019, the Resolution regarding the Repurchase and Cancellation of Part of the 2019 Restricted Shares(《关于回购注销部分2019年限制性股票的议案》) was considered and approved at the 2019 fourth extraordinary generalmeeting of the Company, pursuant to which it was agreed that a total of 32,682 restricted shares granted to three resignedtarget subscribers but not yet unlocked shall be repurchased and cancelled. As at the date of disclosure of this report, the aboverepurchase and cancellation was completed. Upon completion of repurchase and cancellation, the total share capital of theCompany was reduced from 749,557,126 shares to 749,524,444 shares. Please refer to the announcement (2019) no. 114 of theCompany published on www.cninfo.com.cn for details.
5. On 27 December 2019, the Resolution regarding the Repurchase and Cancellation of Part of the 2019 Restricted Shares (《关于回购注销部分2019年限制性股票的议案》) was considered and approved at the 2019 fifth extraordinary general meetingof the Company, pursuant to which it was agreed that a total of 16,845 restricted shares granted to two resigned targetsubscribers but not yet unlocked shall be repurchased and cancelled. As at the date of disclosure of this report, the aboverepurchase and cancellation was completed. Upon completion of repurchase and cancellation, the total share capital of theCompany was reduced from 749,524,444 shares to 749,507,599 shares. Please refer to the announcement (2019) no. 130 of theCompany published on www.cninfo.com.cn for details.
3. Existing Employee Shares
□ Applicable √ Not applicable
III. Shareholders and De Facto Controllers
1. Number of Shareholders and the Shareholding
Unit: share
| Total number of holders of ordinary shares at the end of the reporting period | 23,832 | Total number of holders of ordinary shares at the end of the month prior to the disclosure date of the annual report | 27,855 | Total number of holders of preferred shares with voting rights restored at the end of the reporting period (if any) (see Note 9) | 0 | Total number of holders of preferred shares with voting rights restored at the end of the month prior to the disclosure date of the annual report (if any) (see Note 9) | 0 | ||
| Shareholding of shareholders holding more than 5% of the total shares or the top ten shareholders | |||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | No. of shares held at the end of the reporting period | Increase or decrease during the reporting period | No. of shares held subject to selling restrictions | No. of shares held not subject to selling restrictions | Situation of pledged or frozen shares | ||
| Share status | Quantity | ||||||||
| Ye Xiaoping | Domestic natural person | 23.65% | 177,239,541 | 53,116,808 | 139,638,075 | 37,601,466 | |||
| Hong Kong Securities Clearing Company Limited | Overseas legal person | 14.11% | 105,787,300 | 68,788,753 | 0 | 105,787,300 | |||
| Cao Xiaochun | Domestic natural person | 8.56% | 64,161,774 | 20,395,274 | 49,237,312 | 14,924,462 | Pledged | 29,890,000 | |
| TEMASEK FULLERTON ALPHA PTE LTD | Overseas legal person | 2.58% | 19,329,428 | 4,780,086 | 0 | 19,329,428 | |||
| Central Huijin Asset Management Co., Ltd. | State-owned legal person | 1.99% | 14,941,050 | 4,980,350 | 0 | 14,941,050 | |||
| Shi Xiaoli | Domestic natural person | 1.66% | 12,419,648 | 2,886,208 | 10,725,120 | 1,694,528 | |||
| Xu Jialian | Domestic natural person | 1.48% | 11,125,000 | 3,225,000 | 0 | 11,125,000 | ||||
| ZHUAN YIN | Overseas natural person | 1.42% | 10,664,400 | 1,512,400 | 10,296,000 | 368,400 | ||||
| Aberdeen Standard Investments (Asia) Limited – Aberdeen Standard – China A Share Equity Fund | Overseas legal person | 1.32% | 9,876,459 | 9,876,459 | 0 | 9,876,459 | ||||
| China Life AMP Asset Management – China Construction Bank – Life Insurance – Hybrid Portfolio entrusted to China Life AMP Asset Management by China Life Insurance (Group) Company | Others | 1.01% | 7,593,411 | 2,531,137 | 0 | 7,593,411 | ||||
| Strategic investors or general legal persons becoming the top ten shareholders due to new share placement (if any) (see Note 4) | Nil | |||||||||
| Explanation of the connected relationship or concerted action among the above shareholders | Ye Xiaoping and Cao Xiaochun signed the Acting-in-Concert Agreement, pursuant to which the two are persons acting in concert and the de facto controllers of the Company. | |||||||||
| Shareholding of the top ten shareholders not subject to selling restrictions | ||||||||||
| Name of shareholder | No. of shares held not subject to selling restrictions | Type of shares | ||||||||
| at the end of the reporting period | Share type | Quantity | |
| Hong Kong Securities Clearing Company Limited | 105,787,300 | Renminbi ordinary shares | 105,787,300 |
| Ye Xiaoping | 37,601,466 | Renminbi ordinary shares | 37,601,466 |
| TEMASEK FULLERTON ALPHA PTE LTD | 19,329,428 | Renminbi ordinary shares | 19,329,428 |
| Central Huijin Asset Management Co., Ltd. | 14,941,050 | Renminbi ordinary shares | 14,941,050 |
| Cao Xiaochun | 14,924,462 | Renminbi ordinary shares | 14,924,462 |
| Xu Jialian | 11,125,000 | Renminbi ordinary shares | 11,125,000 |
| Aberdeen Standard Investments (Asia) Limited – Aberdeen Standard – China A Share Equity Fund | 9,876,459 | Renminbi ordinary shares | 9,876,459 |
| China Life AMP Asset Management – China Construction Bank – Life Insurance – Hybrid Portfolio entrusted to China Life AMP Asset Management by China Life Insurance (Group) Company | 7,593,411 | Renminbi ordinary shares | 7,593,411 |
| China Merchants Bank Co., Ltd. – China Universal Health Service Flexible Allocation Hybrid Securities Investment Fund | 7,500,107 | Renminbi ordinary shares | 7,500,107 |
| Hillhouse Capital Management Limited – HCM China Fund | 7,500,000 | Renminbi ordinary shares | 7,500,000 |
| Explanation of the connected relationship or concerted action among the top ten holders of non-restricted shares as well as among the top ten holders of non-restricted shares and the top ten shareholders | Ye Xiaoping and Cao Xiaochun signed the Acting-in-Concert Agreement, pursuant to which the two are persons acting in concert and the de facto controllers of the Company. |
| Description of shareholders participating in the margin trading business (if any) (see Note 5) | Nil |
Whether top ten ordinary shareholders or top ten ordinary shareholders who are not subject to lock-up restriction of theCompany carried out any agreed buy-back transactions during the reporting period
□ Yes √ No
No agreed buy-back transaction was carried out by top ten ordinary shareholders or top ten ordinary shareholders who arenot subject to lock-up restriction of the Company during the reporting period.
2. Controlling Shareholders
Nature of controlling shareholder: natural person holdingType of controlling shareholder: natural person
| Name of controlling shareholder | Nationality | Any right of abode acquired in other countries or regions |
| Ye Xiaoping | China | No |
| Cao Xiaochun | China | No |
| Main occupation and position | Ye Xiaoping served as Chairman of the Company and Cao Xiaochun served as Director and General Manager of the Company. | |
| Shareholding of other domestic and overseas listed companies with a controlling or non-controlling interest during the reporting period | Nil | |
Changes in controlling shareholders during the reporting period
□ Applicable √ Not applicable
During the reporting period, there were no changes in controlling shareholders of the Company.
3. De Facto Controllers and their Persons Acting in Concert
Nature of de facto controller: domestic natural personType of de facto controller: natural person
| Name of de facto controller | Relationship with de facto controller | Nationality | Any right of abode acquired in other countries or regions |
| Ye Xiaoping | Himself | China | No |
| Cao Xiaochun | Acting in concert (including having an agreement, a family relationship and common control) | China | No |
| Main occupation and position | Ye Xiaoping served as Chairman of the Company and Cao Xiaochun served as Director and General Manager of the Company. | ||
| Domestic and overseas listed companies with a controlling interest in the past ten years | Nil | ||
Changes in de facto controllers during the reporting period
□ Applicable √ Not applicable
During the reporting period, there were no changes in de facto controllers of the Company.Block diagram of the property rights and controlling relationship between the Company and its de facto controllers
De facto controller controlling the Company through a trust or other asset management means
□ Applicable √ Not applicable
4. Other Legal Person Shareholders Holding More Than 10% of the Total Shares
□ Applicable √ Not applicable
5. Restriction on Reduction of Shareholdings by Controlling Shareholders, De Facto Controllers,Restructuring Parties and Other Undertaking Entities
□ Applicable √ Not applicable
Section 7 Preference Shares
□ Applicable √ Not applicable
During the reporting period, the Company did not have preference shares.
Section 8 Convertible Bonds
□ Applicable √ Not applicable
During the reporting period, the Company did not have convertible bonds.
Section 9 Information on Directors, Supervisors, Senior
Management and EmployeesI. Change in Shareholding of Directors, Supervisors and Senior Management
| Name | Position | Status of office | Gender | Age | Date of commencement of term of office | Date of termination of term of office | Shareholding at the beginning of the period (shares) | Increase in the number of shares during the current period (shares) | Decrease in the number of shares during the current period (shares) | Other changes (shares) | Shareholding at the end of the period (shares) |
| Ye Xiaoping | Chairman of the Board | Incumbent | Male | 57 | 18 September 2010 | 124,122,733 | 0 | 8,944,559 | 62,061,367 | 177,239,541 | |
| Ye Xiaoping | General Manager | Resigned | Male | 57 | 18 September 2010 | 24 April 2019 | |||||
| Cao Xiaochun | Director | Incumbent | Female | 51 | 18 September 2010 | 43,766,500 | 0 | 991,984 | 21,387,258 | 64,161,774 | |
| Cao Xiaochun | General Manager | Appointed | Female | 51 | 25 April 2019 | ||||||
| Cao Xiaochun | Secretary to the Board | Resigned | Female | 51 | 18 September 2010 | 29 April 2019 | |||||
| Yin Zhuan | Director, Deputy General Manager | Incumbent | Female | 55 | 18 September 2010 | 9,152,000 | 0 | 2,188,600 | 3,701,000 | 10,664,400 | |
| Zeng Su | Independent Director | Incumbent | Female | 61 | 6 May 2015 | 0 | 0 | 0 | 0 | 0 | |
| Chen Zhimin | Independent Director | Incumbent | Female | 60 | 24 December 2015 | 0 | 0 | 0 | 0 | 0 |
| Zheng Bijun | Independent Director | Incumbent | Female | 51 | 23 August 2017 | 0 | 0 | 0 | 0 | 0 | |
| Shi Xiaoli | Supervisor | Incumbent | Female | 49 | 18 September 2010 | 9,533,440 | 0 | 1,880,512 | 4,766,720 | 12,419,648 | |
| Mo Shuang | Supervisor | Incumbent | Female | 35 | 7 June 2017 | 0 | 0 | 0 | 0 | 0 | |
| Wang Xiaobo | Supervisor | Incumbent | Female | 45 | 15 May 2018 | 55,400 | 0 | 2,600 | 26,400 | 79,200 | |
| Chen Wen | Deputy General Manager | Incumbent | Male | 52 | 18 September 2010 | 1,852,480 | 0 | 0 | 926,240 | 2,778,720 | |
| Gao Jun | Deputy General Manager, Financial Controller | Incumbent | Male | 45 | 2 December 2016 | 0 | 0 | 0 | 0 | 0 | |
| Gao Jun | Secretary to the Board | Appointed | Male | 45 | 30 April 2019 | ||||||
| Total | -- | -- | -- | -- | -- | -- | 188,482,553 | 0 | 14,008,255 | 92,868,985 | 267,343,283 |
II. Changes of the Company’s Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
| Name | Position held | Status | Date | Reasons |
| Ye Xiaoping | General Manager | Resigned | 24 April 2019 | Personal reason |
| Cao Xiaochun | Secretary to the Board | Resigned | 29 April 2019 | Personal reason |
| Cao Xiaochun | General Manager | Appointed | 25 April 2019 | Considered and approved by the sixteenth meeting of the third session of the Board of the Company upon nomination by the Chairman of the Company |
| Gao Jun | Secretary to the Board | Appointed | 30 April 2019 | Considered and approved by the sixteenth meeting of the third session of the Board of the Company upon nomination by the Chairman of the Company |
III. Employment Information
Professional background, major work experiences and current main responsibilities of the incumbent Directors, Supervisorsand senior management of the CompanyMr. Ye Xiaoping, born in February 1963, Chinese nationality but without permanent residency abroad, holds a doctoraldegree from Oxford University in the UK. Mr. Ye has been engaged in medical clinical research and management for manyyears. He has been with the Company since March 2005 and is currently the Chairman of the Company.Ms. Cao Xiaochun, born in March 1969, Chinese nationality but without permanent residency abroad, holds a bachelor’sdegree and is a member of China Association for Promoting Democracy, a licensed pharmacist and a senior engineer. Ms.Cao has been engaged in medical clinical research and management for many years. She has been with the Company sinceJanuary 2005 and is currently the Director and general manager of the Company.Ms. Yin Zhuan, born in September 1965, US nationality, holds a bachelor’s degree in law from Fudan University and amaster’s degree in biostatistics from University of Massachusetts. She has 15 years of working experience in biostatisticsand management of world-renowned pharmaceutical companies and CRO companies, of which 8 years in the US and 7years in China/Asia. She has served at MacroStat as general manager since September 2005. Ms. Yin Zhuan has uniqueexperience in various treatment areas of new drug evaluation, especially in the field of cancer. Ms. Yin Zhuan is a memberof American Medical Information Association and has published various articles in many medical journals in the US. She iscurrently the Director and deputy general manager of the Company.Mr. Zeng Su, born in 1959, Chinese nationality but without residency abroad, holds a postgraduate degree and is a doctorand professor. Mr. Zeng was a pharmacist of Zhejiang Changguang Coal Mine Company Hospital (浙江长广煤矿公司医院), a lecturer of Zhejiang Medical University, a visiting scholar of University of Utah in the US, a professor of ZhejiangMedical University and a visiting scholar of Medical University of South Carolina in the US. He is currently a professor ofZhejiang University, an independent Director of Zhejiang Conba Pharmaceutical Co., Ltd and an independent Director ofZhejiang Huahai Pharmaceutical Co., Ltd.Ms. Chen Zhimin, born in April 1960, Chinese nationality, is a member of Hangzhou Democratic Association and holds amaster’s degree. She retired in May 2015. Ms. Chen served as senior consultant at Zhejiang Tianjian Oriental EngineeringInvestment Consulting Co., Ltd., standing director at Zhejiang Institute of Certified Public Accountants and vice president atZhejiang Engineering Cost Association. From May 1996 to January 2000, Ms. Chen served at Zhejiang Zhejing AssetsEvaluation Office as head of the office. From January 2000 to February 2009, Ms. Chen served at Zhejiang Zhejing AssetsEvaluation Co., Ltd. as the chairman of the Board and general manager. From February 2009 to April 2015, Ms. Chenserved at Zhejiang Tianjian Oriental Engineering Investment Consulting Co., Ltd. as the general manager. Since May 2005,Ms. Chen served as senior consultant at Zhejiang Tianjian Oriental Engineering Investment Consulting Co., Ltd., externalDirector at Zhejiang Caitong Capital Investment Co., Ltd. and independent director at Zhejiang Jinke Culture Industry Co.,Ltd., Zhejiang Weixing Industrial Development Co., Ltd., Zhejiang Canaan Technology Limited and Zhejiang JollyPharmaceutical Co., Ltd. She was a member of the 9th, 10th and 11th Zhejiang Provincial Committee of the ChinesePeople’s Political Consultative Conference and is a member of the 11th and 12th Hangzhou Democratic Association.Mr. Zheng Bijun, born in September 1969, Chinese nationality but without residency abroad, holds a bachelor’s degree infinance from Lanzhou Business School (renamed as Lanzhou University of Finance and Economics in 2015) and an EMBAfrom the School of Economics and Management of Tsinghua University. He is currently a partner of DeHeng Law Offices.
Ms. Shi Xiaoli, born in January 1971, Chinese nationality but without permanent residency abroad, holds a master’s degree.Ms. Shi has been engaged in clinical trial and research of drugs for many years. She has been with the Company sinceJanuary 2015 and is currently the controller of data resources department of the Company and chairman of the SupervisoryCommittee.Ms. Wang Xiaobo, born in January 1975, Chinese nationality but without permanent residency abroad, holds a master’sdegree. Ms. Wang has engaged in translation for many years. She has been with the Company since January 2003 and iscurrently the senior translation director of translation department of the Company and shareholder representative supervisor.Ms. Mo Shuang, born in August 1985, Chinese nationality but without permanent residency abroad, holds a postgraduatedegree. Ms. Mo served as the legal officer at Hangzhou Hexing Electrical Co., Ltd. Since April 2013, she has served at theCompany as legal manager and is currently the senior legal manager and employee representative supervisor of theCompany.Mr. Chen Wen, born in October 1968, US nationality, holds a master’s degree. Mr. Wen graduated from Purdue Universityin the US with a bachelor’s degree in biochemistry, Washington University in St. Louis with a master’s degree in medicineand the University of Durham in the UK with a master’s degree in business administration. Since May 2009, he has served atthe Company as deputy general manager and general manager of business development department. Mr. Chen Wen has morethan 10 years of experience in clinical research and business development in the US and China.Mr. Gao Jun, born in 1975, Australian nationality, holds a bachelor’s degree. From May 2011 to December 2015, Mr. Gaoserved as a vice president, chief financial officer and board secretary of McWong Environmental Technology CorporationLimited. From April 2016 to October 2016, Mr. Gao served at Shanghai Xiaoi Robot Technology Corporation Limited asthe chief financial officer and board secretary. He joined the Company in December 2016 and is currently the deputy generalmanager, person in charge of accounting and secretary to the Board.
Positions held in entities of Shareholders
□ Applicable √ Not applicable
Positions held in other entities
√ Applicable □ Not applicable
| Name of the incumbent personnel | Name of other entities | Positions held in other entities | Date of commencement of term of office | Date of termination of term of office | Whether remuneration and allowance is received from other entities |
| Chen Zhimin | Zhejiang Jinke Culture Industry Co., Ltd. | Independent director | 26 June 2015 | Yes | |
| Chen Zhimin | Zhejiang Jolly Pharmaceutical Co., Ltd. | Independent director | 13 January 2017 | 31 March 2020 | Yes |
| Chen Zhimin | Zhejiang Weixing Industrial Development Co., Ltd. | Independent director | 7 June 2016 | Yes |
| Chen Zhimin | Zhejiang Canaan Technology Limited | Independent director | 22 April 2016 | Yes | |
| Zeng Su | Zhejiang Conba Pharmaceutical Co., Ltd. | Independent director | 15 May 2014 | Yes | |
| Zeng Su | Zhejiang Huahai Pharmaceutical Co., Ltd. | Independent director | 10 May 2016 | Yes |
Punishments imposed by securities regulatory authorities on Directors, Supervisors and senior management of the Companywho are incumbent or resigned in the past three years
□ Applicable √ Not Applicable
IV. Remuneration for Directors, Supervisors and Senior ManagementThe decision-making process, determination basis and actual payments of remuneration for Directors, Supervisors andsenior management
Decision-making process: the remuneration of Directors, Supervisors and senior management holding position in theCompany shall be paid by the Company according to other positions held. No additional allowance is paid to Directors andSupervisors. The allowance of independent Directors shall be paid by resolution approved by the general meeting.
Basis of determination: based on the performance appraisal standard formulated by the Company and with reference tosimilar remuneration in the market.
Actual payments: total remuneration in 2019 was RMB7,292,100.
Remuneration of Directors, Supervisors and senior management of the Company during the reporting period
Unit: RMB0’000
| Name | Position | Gender | Age | Status of office | Total remuneration received from the Company before tax | Whether remuneration is received from related parties of the Company |
| Ye Xiaoping | Chairman of the Board | Male | 57 | Incumbent | 81.82 | No |
| Ye Xiaoping | General Manager | Male | 57 | Resigned | No | |
| Cao Xiaochun | Director | Female | 51 | Incumbent | 78.41 | No |
| Cao Xiaochun | General Manager | Female | 51 | Appointed | No | |
| Cao Xiaochun | Secretary to the Board | Female | 51 | Resigned | No | |
| Yin Zhuan | Director, Deputy General Manager | Female | 55 | Incumbent | 75.34 | No |
| Zeng Su | Independent Director | Male | 61 | Incumbent | 9.6 | No |
| Chen Zhimin | Independent Director | Female | 60 | Incumbent | 9.6 | No |
| Zheng Bijun | Independent Director | Male | 51 | Incumbent | 9.6 | No |
| Shi Xiaoli | Supervisor | Female | 49 | Incumbent | 62.87 | No |
| Mo Shuang | Supervisor | Female | 35 | Incumbent | 21.36 | No |
| Wang Xiaobo | Supervisor | Female | 45 | Incumbent | 74.29 | No |
| Chen Wen | Deputy General Manager | Male | 52 | Incumbent | 138.96 | No |
| Gao Jun | Deputy General Manager，Financial Controller | Male | 45 | Incumbent | 167.36 | No |
| Gao Jun | Secretary to the Board | Male | 45 | Appointed | No | |
| Total | -- | -- | -- | -- | 729.21 | -- |
Share incentives granted to Directors and senior management of the Company during the reporting period
□ Applicable √ Not applicable
V. Information on Employees of the Company
1. Number of Employees, Composition by Profession and Educational Level
| Number of incumbent employees in the parent company | 1,064 |
| Number of incumbent employees in major subsidiaries | 3,895 |
| Total number of incumbent employees | 4,959 |
| Total number of paid employees in the current period | 4,959 |
| Number of retired employees that the parent company and major subsidiaries have to cover their expenses | 0 |
| Composition by Profession | |
| Type of profession | Number of employees |
| Production | 0 |
| Sales | 143 |
| Technician | 4,429 |
| Finance | 81 |
| Administration | 306 |
| Total | 4,959 |
| Educational Level | |
| Type of educational level | Number of employees |
| Postgraduate and above | 1,254 |
| Bachelor | 3,124 |
| Matriculation | 493 |
| Secondary vocational or below | 88 |
| Total | 4,959 |
2. Remuneration Policy
The remuneration policy is a key integral part of the Company, under which a remuneration management system has beenestablished. Through the establishment and implementation of the remuneration management policy, the remunerationconcept, structure and adjustment mechanism have been determined, and the mechanism to attract, motivate and retaintalents has been established. With the increasingly fierce competition for talents in the industry, the Company has adopted adiversified remuneration portfolio, such as salary in combination with equity incentives as well as the measurement ofmulti-dimensional indicators which balances the efforts and returns of employees, so as to achieve the incentive effects. TheCompany implemented the employee share ownership scheme and restricted share incentive scheme in 2017 and 2019respectively as a significant medium- to long-term incentive project to retain employees, while attracting outstandingexternal talents to join the Company with market-competitive remuneration package according to the prevailing marketremuneration.
3. Training Programme
“Adhering to the people-oriented approach, respecting the value of every employee, caring for the career growth anddevelopment of employees” is the business philosophy that the Company has been upholding. Therefore, the Companydevotes great efforts to conducting employee training so as to continuously enhance the professionalism of employees,improve the organisational performance of the Company, create a sound atmosphere for learning and working and promotethe sustainable development of the Company. Focusing on orientation training, job-specific skill training and managementtraining as well as centring on the core values of “quality and compliance”, the Company has gradually shaped a multi-level,sub-category, multi-form, practical and dynamic training structure which is complementary to the enterprise developmentand in line with the growth pattern of employees. A workforce whose employees are eager to learn and innovative has beenbuilt to provide key employees with directions to career planning in Tigermed as well as to provide talent assurance for theenterprise’s development strategy. In 2019, on top of Tigermed’s ongoing management training, the Company alsostrengthened the training and promotion of the corporate culture and values.
4. Information on Labour Outsourcing
□ Applicable √ Not applicable
Section 10 Corporate GovernanceI. Overview of Corporate GovernanceDuring the reporting period, the Company was in strict compliance with the requirements of relevant laws andadministrative regulations including the Company Law, the Securities Law, the Code of Corporate Governance for ListedCompanies, the Rules Governing the Listing of Shares on the ChiNext Market of Shenzhen Stock Exchange and theGuidelines of Shenzhen Stock Exchange on Standardised Operation by Companies Listed on the ChiNext Market, as well asthe requirements of internal control system including the Articles of Association, the Rules of Procedure of General Meetingand the Procedural Rules of the Board of Directors, with a view to continuously improving the corporate governancestructure of the Company.
1. Shareholders and General Meetings
The Company convenes and holds general meetings in strict accordance with the requirements of the Rules of Shareholder’sGeneral Meeting of Listed Companies, the Articles of Association and the Rules of Procedure of General Meeting, andfacilitates the Shareholders’ participation in the meetings to fully exercise their rights. Meeting procedures have been set upfor each resolution considered at the general meetings of the Company, which treat all Shareholders equally, allowexplanation and elaboration for the Shareholders’ enquires while taking suggestions and opinions raised by the Shareholders,ensuring the right to speak of minority shareholders.
2. The Company, Controlling Shareholders and De Facto Controllers
The Company runs its independent and complete principal businesses with independent operational capabilities. In terms ofpersonnel, assets, businesses, management institutions and financial accounting system, the Company is independent of theControlling Shareholders and the De Facto Controllers, and is able to operate and run businesses independently whileassuming independent obligations and risk exposures. The Controlling Shareholders and the De Facto Controllers canexercise their lawful rights and shall assume their corresponding obligations. During the reporting period, no acts thatexceeded the authorised permission of general meetings and the Board, directly or indirectly interfered the Company’sdecision making and operational activities or infringed on other Shareholders’ interests by using controlling positionshappened, which adversely affected on the Company’s governance structure and independence.
3. Directors and the Board of Directors
No Directors of the Company are prohibited from acting as a Director of the Company by virtue of Article 147 of theCompany Law. The appointment and dismissal of the Directors strictly follow the approval procedures of the Board andgeneral meetings and there exists no conflict with the relevant laws and regulations and the Articles of Association. Duringtheir tenure, all Directors work conscientiously and diligently, pay attention to the operational conditions of the Companycontinuously and actively participate in the relevant training to enhance their standardised operational level. The Directorsalso attend the Board meetings actively, giving full play to their respective expertise as well as making decisions in aprudent manner in order to safeguard the interests of the Company and the Shareholders as a whole. The procedures toconvene and hold the Board meetings of the Company are in line with the requirements of the relevant regulations. Records
of the previous Board meetings are true, accurate, complete and kept safe, and the meeting resolutions are adequate, accurateand disclosed in a timely manner. Setting up under the Board are the Strategic Development Committee, the AuditCommittee, the Remuneration and Evaluation Committee and the Nomination Committee.
4. Supervisors and Supervisory Committee
No Supervisors of the Company are prohibited from acting as a Supervisor of the Company by virtue of Article 147 of theCompany Law, and all Supervisors are qualified under the relevant requirements of the Articles of Association. Theprocedures to convene and hold the meetings of the Supervisory Committee of the Company and to vote at the meetings arein accordance with the requirements under the Rules of Procedure of the Supervisory Committee. The Supervisors of theCompany exercise the functions and rights of the Supervisory Committee in order to perform their duties with full diligence.
5. Performance Evaluation and Incentive Scheme
The Company has established a corporate performance evaluation and incentive scheme. The performance evaluationstandards and procedures for the Directors, the Supervisors and the senior management are fair and transparent. Theirremunerations are linked up with the operating results of the Company, and the appointment of the senior management isopen, transparent and in compliance with the requirements of laws and regulations.
6. Information Disclosure and Transparency
During the reporting period, the Company disclosed its information in a true, accurate, complete, timely and fair manner instrict compliance with the relevant laws and regulations and the requirements under the Articles of Association and theManagement System for Information Disclosure. The Company issued a total of 4 periodic reports and 212 temporaryannouncements via the media outlets designated by the CSRC, namely The Securities Times, The China Securities Journaland the CNINFO website (www.cninfo.com.cn) and disclosed information such as share capital structure, financial reportsand corporate governance on the investor relations section in our corporate website.
7. Investor Relations Management
In accordance with the requirements of the relevant laws, regulations and the Management System for Investor Relations,the Company designated the secretary to the Board as the person-in-charge for the management of investor relations, who isresponsible for coordinating investor relations, receiving visiting Shareholders, answering enquires from investors andproviding them with information already disclosed by the Company. The Company responds to enquires from investors bymeans of phone calls, e-mails, interactive investor relations platform, investor relations section in the corporate website,investor reception day, etc. While enhancing the exchange of information and promoting positive interactions with investors,the Company has effectively improved our corporate transparency.
8. Our Stakeholders
The Company fully respects and safeguards the legitimate interests of our stakeholders, realising the coordination andbalance of the interests of each part of the Shareholders, employees, medics, patients and the society. While achievingsustainable and healthy development of the Company and the interests of its Shareholders, the Company also focuses onenvironmental protection and actively participates in public welfare.
9. Establishment and Execution of Internal Audit System
The Audit Committee set up under the Board is primarily responsible for the communication, supervision, meetingarrangement and inspection of the internal and external audit of the Company. The audit department under the AuditCommittee is its daily operational office, which has played an active role since the Company became listed. In accordance
with the requirements for listed companies, the audit department improved the departmental functions and personnelarrangements, established and implemented the internal control system of the Company as well as inspected and supervisedthe authenticity and integrity of the Company’s financial information.
Whether there is material deviation between the actual management of the Company and the regulatory documents relatingto the governance of listed companies published by CSRC
□ Yes √ No
No material deviation between the actual management of the Company and the regulatory documents relating to thegovernance of listed companies published by CSRC.II. Independence of Businesses, Personnel, Assets, Institutions, Finance, etc. of theCompany from the Controlling ShareholdersThe Controlling Shareholders of the Company strictly regulated their own behavior, without directly or indirectly interferingwith the Company's decision-making process and operational activities beyond the general meetings. The Company runs itsindependent and complete businesses with independent operation capabilities, and is independent from the ControllingShareholder in businesses, personnel, assets, institutions and finance. The Board, the Supervisory Committee and internalinstitutions of the Company operate independently from each other.III. Peer Competition
□ Applicable √ Not applicable
IV. Convening of Annual General Meeting and Extraordinary General Meeting duringthe Reporting Period
1. General Meetings during the Reporting Period
| Sessions of meeting | Types of meeting | Participation ratio of investors | Date of convening | Date of disclosure | Index of disclosure |
| 2019 first extraordinary general meeting | Extraordinary general meeting | 49.11% | 10 April 2019 | 10 April 2019 | Please refer to the CNINFO website www.cninfo.com.cn/ |
| 2018 annual general meeting | Annual general meeting | 49.36% | 17 May 2019 | 17 May 2019 | Please refer to the CNINFO website www.cninfo.com.cn/ |
| 2019 second extraordinary general meeting | Extraordinary general meeting | 50.62% | 30 July 2019 | 30 July 2019 | Please refer to the CNINFO website www.cninfo.com.cn/ |
| 2019 third extraordinary general meeting | Extraordinary general meeting | 47.77% | 10 September 2019 | 10 September 2019 | Please refer to the CNINFO website www.cninfo.com.cn/ |
| 2019 fourth extraordinary general meeting | Extraordinary general meeting | 48.46% | 15 November 2019 | 15 November 2019 | Please refer to the CNINFO website www.cninfo.com.cn/ |
| 2019 fifth extraordinary general meeting | Extraordinary general meeting | 48.58% | 27 December 2019 | 27 December 2019 | Please refer to the CNINFO website www.cninfo.com.cn/ |
2. Request for Convening of Extraordinary General Meeting by Preference Shareholders withRecovered Voting Rights
□ Applicable √ Not applicable
V. Performance of Duties by Independent Directors during the Reporting Period
1. Attendance of Independent Directors at Board Meetings and General Meetings
| The attendance of independent Directors at Board meetings and general meetings | |||||||
| Name of independent Directors | Number of attendances at Board meetings required during this reporting period | Number of attendances at Board meetings in person | Number of attendances at Board meetings by telecommunications | Number of attendances at Board meetings by proxy | Number of absences | Two consecutive absences from Board meetings in person | Number of attendances at general meetings |
| Zeng Su | 15 | 0 | 15 | 0 | 0 | No | 2 |
| Chen Zhimin | 15 | 0 | 15 | 0 | 0 | No | 1 |
| Zheng Bijun | 15 | 0 | 15 | 0 | 0 | No | 2 |
Explanation for two consecutive absences from board meetings in person
2. Objections Raised by Independent Directors on Matters of the Company
Whether independent Directors raised any objections on matters of the Company
□ Yes √ No
During the reporting period, independent Directors did not raise any objections on matters of the Company.
3. Other Explanations on Performance of Duties by Independent Directors
Whether independent Directors’ suggestions for the Company were accepted
√ Yes □ No
Explanation for independent Directors’ suggestions for the Company being accepted or unaccepted
Independent Directors closely monitored the operating conditions of the Company and raised enquires to the keymanagement including the Chairman of the Company, secretary to the Board and financial controller at Board meetings,general meetings and at other times so as to have a comprehensive understanding of the daily operation and material issuesof the Company, making full use of their professional advantages to develop pertinent analysis and valuable advices for theCompany as well as providing constructive opinions on the Company’s overall development strategy and the circumstancesthat the Company was facing with.VI. Performance of Duties by Special Committees under the Board during theReporting PeriodPerformance of duties by the Audit Committee: during the reporting period, the Audit Committee considered the quarterlyand annual financial statements issued by the Company, work plans and special reports of the internal audit department instrict accordance with the Working Rules of the Audit Committee of the Board and the Work Regulations on Annual Reportfor the Audit Committee of the Company. The Audit Committee also reviewed and provided opinions in respect of theSelf-evaluation Report of Corporate Internal Control, concluded the work performed by the accounting firm andrecommended to reappoint the annual audit institution. At the same time, the Audit Committee conducted an auditinspection on capital transaction between the Company and the related parties, external guarantees and other significantmatters, with a view to continuously monitoring the placement and usage of funds raised by the Company as well as theprogress of funded investment projects.
Performance of duties by the Remuneration and Evaluation Committee: during the reporting period, the Remuneration andEvaluation Committee performed its duties diligently in strict accordance with the relevant requirements of the Articles ofAssociation, the Working Rules of the Remuneration and Evaluation Committee of the Board, etc. During the reportingperiod, the Remuneration and Evaluation Committee conducted a review on the remunerations of the Company’s Directors,Supervisors and senior management, and considered that the determination and distribution of remuneration standard andthe total annual remuneration matched with their respective positions, and were therefore in line with the Company’srequirements on remuneration management. The Remuneration and Evaluation Committee also considered carefully the2019 restricted equity incentive scheme and the 2018 employee share holding scheme, which were in compliance with therequirements of the relevant laws and regulations. These schemes are beneficial for the sustainable development of theCompany, without restriction by the relevant laws and regulations and prejudice against the interests of the Company and allShareholders, and without forced participation in these schemes by employees by way of apportionment, mandatorydistribution or otherwise. The Company’s equity incentive scheme and employee share holding scheme can further improve itsincentive and binding mechanism, facilitate the sustainable development of the Company, form a community of sharedinterest of the Company’s employees and Shareholders, enhance management efficiency and the sense of motivation,innovation and responsibility of employees, and are in the interest of the Company’s long-term growth. Employees shallparticipate in the 2019 restricted equity incentive scheme and the 2018 employee share holding scheme in accordance withlaws and regulations, on a voluntary basis and at their own risks, without any breach of laws or regulations.
VII. Work of Supervisory CommitteeWhether the Supervisory Committee found any risk exposures of the Company in its supervisory activities during thereporting period
□ Yes √ No
The Supervisory Committee of the Company had no objection on the supervisory matters during the reporting period.
VIII. Evaluation and Incentives for Senior ManagementThe Company implements a remuneration system combining the basic remuneration and performance remuneration to itssenior management in accordance with the Remuneration Evaluation System for Senior Management. In this regard, theCompany has established a comprehensive performance evaluation and incentive binding system for senior management.The Company conducts work review activities and performance evaluation for senior management on an annual basis andrewards with incentives such as corresponding annual salary and year-end bonus according to the year-end evaluation.IX. Evaluation Report of Internal Control
1. Details on the Material Deficiencies in Internal Control Detected during the Reporting Period
□ Yes √ No
2. Self-evaluation Report of Internal Control
| Disclosure date of the full text of evaluation report of internal control | 17 April 2020 | |
| Disclosure index of the full text of evaluation report of internal control | CNINFO website | |
| The ratio of total assets of units included in the assessment scope to the total assets in the Company’s consolidated financial statements | 100.00% | |
| The ratio of operating income of units included in the assessment scope to the operating income in the Company’s consolidated financial statements | 100.00% | |
| Criteria for deficiency recognition | ||
| Categories | Financial report | Non-financial report |
| Qualitative criteria | 1. Material deficiencies: material frauds involving disclosure of financial information; material misstatements on the Company’s financial reports detected by external supervisory or audit agencies while the corresponding control activities of the Company fails to identify the same; material loopholes in the preparation and control procedures of financial reports of the Company that may result in material misstatements in the Company’s statements. 2. Major deficiencies: control loopholes in the preparation and control procedures of financial reports of the Company which shall warrant the attention of the Board and the management to make improvement although no material misstatements will be resulted in the Company’s statements. 3. General deficiencies: all internal control deficiencies of financial reports except the material deficiencies and major deficiencies. | 1. General deficiencies: loss ≤ 2% of the total operating income. 2. Major deficiencies: 2% of the total operating income ＜ loss ≤ 5% of the total operating income. 3. Material deficiencies: loss ＞ 5% of the total operating income. |
| Quantitative criteria | 1. General deficiencies: potential effect ≤ 3% of the total profit; or potential effect ≤ 1% of the total assets; or potential effect ≤ 2% of the operating income. 2. Major deficiencies: 3% of the total profit < potential effect ≤ 5% of the total profit; or 1% of the total assets < potential effect ≤ 2% of the total assets; or 2% of the operating income < potential effect ≤ 5% of the operating income. 3. Material deficiencies: potential effect > 5% of the total profit; or potential effect > 2% of the total assets; or potential effect > 5% of the operating income. | 1. Material deficiencies: deficiencies which have a high probability of occurrence, seriously decrease the work efficiency or effect, greatly increase the uncertainty of effect or significantly deviate the effect from the expected targets. 2. Major deficiencies: deficiencies which have a relatively high probability of occurrence, significantly decrease the work efficiency or effect, significantly increase the uncertainty of effect or significantly deviate the effect from the expected targets. 3. General deficiencies: deficiencies which have a low probability of occurrence, decrease the work efficiency or effect, increase the uncertainty of effect or deviate the effect from the expected targets. |
| Number of material deficiencies in financial reports | 0 | |
| Number of material deficiencies in non-financial reports | 0 |
| Number of major deficiencies in financial reports | 0 |
| Number of major deficiencies in non-financial reports | 0 |
X. Audit Report or Assurance Report of Internal ControlAssurance report of internal control
| Audit opinion section in the assurance report of internal control | |
| We consider that the Company has maintained effective internal control with respect to the financial statements in all material aspects as at December 31, 2019 in accordance with the Basic Standard for Enterprise Internal Control promulgated by the five ministries and commissions including the Ministry of Finance and relevant provisions. The conclusion is arrived at subject to the inherent restrictions referred to in the assurance report. | |
| Disclosure of the assurance report of internal control | Disclosure |
| Disclosure date of the full text of assurance report of internal control | 17 April 2020 |
| Disclosure index of the full text of assurance report of internal control | CNINFO website |
| Type of opinion of the assurance report of internal control | Standard unqualified opinion |
| Whether there is any material deficiency in the non-financial report | No |
Note: The disclosure index can disclose announcement number, announcement name and the website disclosed by theannouncement.Whether the accounting firm issued assurance report of internal control with non-standard opinion
□ Yes √ No
Whether the opinions in the assurance report of internal control issued by the accounting firm are in line with the opinions ofthe Board’s self-evaluation report
√ Yes □ No
Section 11 Corporate BondsWhether there are any corporate bonds of the Company offered publicly and listed on stock exchanges which have not yetbecome due or have become due but not been fully settled as at the approval date of the annual report
No
Section 12 Financial Report
I. AUDITOR’S REPORT
| Type of audit opinion | Standard unqualified opinion |
| Date of signing the Auditor’s Report | April 15, 2020 |
| Name of auditing firm | BDO China Shu Lun Pan Certified Public Accountants LLP |
| Document number of the Auditor’s Report | Xin Kuai Shi Bao Zi [2020] No. ZA10918 |
| Name of CPA | Zhang Songbai (張松柏) Wang Faliang (王法亮) |
Text of Auditor’s Report
Auditor’s Report
Xin Kuai Shi Bao Zi [2020] No. ZA10918
To the Shareholders of Hangzhou Tigermed Consulting Co., Ltd.:
I. Audit opinionsWe have audited the financial statements of Hangzhou Tigermed Consulting Co., Ltd. (“Tigermed”), which comprisethe consolidated and the Parent Company’s balance sheet as at December 31, 2019 as well as the consolidated and ParentCompany’s income statements, the consolidated and Parent Company’s cash flow statements, the consolidated and ParentCompany’s statements of changes in owners’equity for 2019, and notes to the related financial statements.In our opinion, the accompanying financial statements are prepared in all material aspects according to the“Accounting Standards for Business Enterprises”, and give a fair view of Tigermed’s consolidated and Parent Company’sfinancial position as at December 31, 2019 and its consolidated and Parent Company’s operating results and cash flow for2019.II. Basis for audit opinionsWe have conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China.Our responsibilities under these standards have been further explained in the section “Responsibilities of certified publicaccountants for auditing financial statements” in the Auditor’s Report. We are independent of Tigermed according to the“Code of Ethics for Certified Public Accountants of China” (the “Code”), and we have fulfilled our other ethicalresponsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinions.III. Key audit mattersKey audit matters are those matters that in our professional judgement are of most significance in our audit of thefinancial statements for the current period. These matters are addressed in the context of audit of the financial statements asa whole and in forming our audit opinion thereon, and we do not provide a separate opinion on these matters. We determinedthat the following matters are the key audit matters that need to be communicated in the Auditor’s Report.
| Key audit matters | How our audit addressed the key audit matters |
| (I) Revenue recognition | |
| Please refer to the accounting policies mentioned in notes 26 under “III. Significant Accounting Policies and Accounting Estimates” and note (38) under “V. Notes to Items of the Consolidated Financial Statements” in the notes to financial statements. In 2019, Tigermed recorded consolidated operating income of RMB2,803,309,287.65, including service income of RMB2,776,795,400.37, accounting for 99.05% of the Company's consolidated operating income, the amount and proportion of which are relatively significant. As described in Note III (26) of Tigermed’s financial statements, revenue from contract of Tigermed’s clinical trial solutions (臨床試驗技術服務), registration application services (注册申报服务), Phase I clinical bioanalysis testing services (I期临床生物分析测试服务), CMC services, SMO services, GMP registration services, etc. shall be recognised by the percentage of completion method on the balance sheet date according to the Accounting Standards for Business Enterprises. Service income from rendering clinical trial statistic analysis services (临床试验统计分析服务), training services, clinical evaluation services (临床评估服务), etc., shall be recognised at the balance sheet date before completion of the services at the amount of the labour cost incurred which shall be carried forward at the same amount to service cost; upon completion of the services, service income for the current period shall be recognized at the settlement amount agreed in the contract deducting the accumulated amount of service income recignised during the previous accounting period. Services such as medical testing services (医学检测服务), medical imaging services (医学影像服务), and medical information translation services (醫學資料翻譯服務) provided by Tigermed shall be recognized as service income based on other methods. The recognition methods for Tigermed's service income are diverse and the methods for recognition of service are complicated. In particular, the income recognised by percentage-of-completion method involves significant judgments and estimates of the management. Therefore, we classified operating income as a key audit matter. | The major audit procedures we have implemented include the following: (1) We have understood and tested the policies, procedures, methods and related internal controls for the audited and estimated total income as well as the estimated total cost of Tigermed’s service contracts; (2) We have obtained a list of contracts for projects under execution, inspected settlements received and other specific implementation of contract; (3) We have selected important projects and carried out external confirmations regarding project execution nodes, item receipts, sales invoices, etc.; (4) We have obtained a breakdown for expected total cost of project under execution and reviewed its rationality; (5) We have checked whether aggregated cost incurred is accurate; (6) We have analysed the reasons for and rationality of the gross profit rate change for contracts under execution; (7) We have implemented substantive testing procedures to review the accuracy in measuring the service income of Tigermed. |
| (II) Gains from change in fair value | |
| Please refer to the accounting policies mentioned in notes (10) under “III. Significant Accounting Policies and Accounting Estimates” and note (12) under “V. Notes to Items of the Consolidated Financial Statements” in the notes to financial statements. As of December 31, 2019, financial assets at fair value through profit or loss of Tigermed were RMB 2,250,473,669.34. The valuation of Tigermed’s financial instruments is based on a combination of market data and valuation models. The input value of the valuation model includes information reliably available from the active market, and when observable parameters cannot be obtained reliably, that is, when the fair value of the financial instruments belongs to the second and third levels, the input value was based on the management ’s assumptions and estimates, and included factors such as the credit risks of both parties to the transaction, the volatility and correlation of market interest rates and other factors. As the valuation methods for the fair value of some financial instruments were relatively complicated, the Management engaged a third-party valuation firm with relevant qualifications to evaluate the fair value. Also, determining the input value used in the valuation model involved significant management estimates, we therefore identified the assessment of fair value of financial instruments as a key audit matter. | Our audit procedures mainly include the following: (1) We have evaluated the objectivity, independence and professional competence of the third-party valuation firm engaged by the Management; selected major or typical samples and reviewed the evaluation methods and assumptions as well as the rationality of the selected major evaluation parameters; (2) We have implemented an audit procedure to evaluate the valuation techniques, parameters and assumptions used by Tigermed, including comparing valuation techniques commonly used by peer organisations in the market in the current year, comparing observable parameters used with available external market data, and obtaining valuation results from different sources for comparative analysis. For financial instruments that have used significant unobservable parameters in valuation, such as unlisted equity investments and equity fund investments, we have understood the overall evaluation method, the analysis and evaluation process, and the rationality of key evaluation parameters. |
VI. Other informationThe management of Tigermed (the “Management”) is responsible for the other information. The otherinformation comprises the information included in Tigermed’s 2019 Annual Report, other than the financial statementsand our Auditor’s Report thereon.
Our audit opinion on the financial statements does not cover the other information and we do not express anyform of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,in doing so, consider whether the other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the Management and those charged with governance for the financial statements
The Management is responsible for the preparation of the financial statements in accordance with theAccounting Standards for Business Enterprises to realize fair presentation, and for the design, implementation andmaintenance of necessary internal control so that the financial statements are free from material misstatement, whetherdue to fraud or error.
In preparing the financial statements, the Management is responsible for assessing Tigermed’s ability tocontinue as a going concern, disclosing matters related to going concern and using the going concern assumption unlessthe Management either intends to liquidate the Company or to cease operations, or have no realistic alternative but todo so.Those charged with governance are responsible for overseeing Tigermed’s financial reporting process.
VI. Certified public accountant’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are freefrom material misstatement due to fraud or error, and to issue an Auditor’s Report that includes audit opinion.Reasonable assurance is a high level assurance, but is not a guarantee that an audit conducted in accordance withaccounting standards will always detect a material misstatement when it exists. Misstatements can arise from fraud orerror and are usually considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with accounting principle, we exercise professional judgement and maintainprofessional skepticism throughout the audit. Meanwhile, we also perform the followings:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud orerror, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our audit opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit to design audit procedures that areappropriate in the circumstances, but not for expressing an opinion on the effectiveness of internal control.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by the Management.
(4) Conclude on the appropriateness of the Management’s use of the going concern assumption. Meanwhile,based on the audit evidence obtained, conclude on whether a material uncertainty exists related to events or conditionsthat may cast significant doubt on Tigermed’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required by audit standards to draw attention in our Auditor’s Report to the relateddisclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusionsare based on the information obtained up to the date of our Auditor’s Report. However, future events or conditionsmay cause Tigermed to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether thefinancial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within Tigermed to express an audit opinion on the financial statements. We are responsible for the guidance,supervision and performance of the group audit, and remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including deficiencies worthy of attention in internal control that weidentify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence and to communicate with them all relationships and other matters that mayreasonably be thought to bear on our independence and related safeguards.
From the matters communicated with those charged with governance, we determine those matters that are of
most significance in the audit of the financial statements for the current period and are therefore the key audit matters.We describe these matters in our Auditor’s Report unless law or regulation precludes public disclosure about suchmatter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our auditreport because the adverse consequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
| BDO China Shu Lun Pan Certified Public Accounts LLP | Chinese Certified Public Accounts: (Project Partner) |
| Chinese Certified Public Accounts: | |
| Shanghai, China | April 15, 2020 |
II. FINANCIAL STATEMENTSUnits of statements in notes to financial statements: RMB
1. Consolidated Balance Sheet
Prepared by: Hangzhou Tigermed Consulting Co., Ltd.
December 31, 2019
Unit: Yuan
| Item | December 31, 2019 | December 31, 2018 |
| Current assets: | ||
| Cash and cash equivalents | 2,042,305,823.83 | 704,487,091.56 |
| Settlement reserves | ||
| Placements with banks and other financial institutions | ||
| Trading financial assets | ||
| Financial assets at fair value through profit or loss | ||
| Derivatives financial assets | 1,002,080.00 | |
| Bills receivable | 5,670,214.14 | 734,248.00 |
| Trade receivable | 1,074,722,160.03 | 780,938,723.13 |
| Financing receivables | ||
| Prepayments | 26,079,640.24 | 47,157,740.45 |
| Premium receivables | ||
| Receivables from reinsurers | ||
| Deposits receivable from reinsurance | ||
| Other receivables | 55,786,045.03 | 53,105,221.78 |
| Including: Interests receivable | 5,598,786.55 | 1,926,868.87 |
| Dividends receivable | 3,960,000.00 | |
| Financial assets held under resale agreements | ||
| Inventories | 1,205,608.56 | 518,892.98 |
| Contract Assets | 83,457,298.19 | |
| Assets classified as available-for-sale | ||
| Non-current assets due within one year | ||
| Other current assets | 80,732,965.83 | 15,303,714.88 |
| Total current assets | 3,369,959,755.85 | 1,603,247,712.78 |
| Non-current assets: | ||
| Loans and advances granted | ||
| Debt investments | ||
| Financial assets available for sale | 1,221,827,232.44 | |
| Other debt investments | ||
| Held-to-maturity investment | ||
| Long-term receivables | ||
| Long-term equity investments | 109,712,577.48 | 103,293,443.20 |
| Other investments in equity instruments | ||
| Other non-current financial assets | 2,250,473,669.34 | |
| Investment properties | ||
| Fixed assets | 252,236,673.28 | 254,888,544.91 |
| Construction in progress | 22,309,114.80 | |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-to-use assets | 151,266,396.53 | |
| Intangible assets | 96,448,963.95 | 27,820,126.56 |
| Development expenses |
| Goodwill | 1,157,830,872.80 | 1,032,926,915.93 |
| Long-term deferred expenses | 19,813,737.78 | 9,436,008.62 |
| Deferred income tax assets | 91,476,101.29 | 19,153,227.31 |
| Other non-current assets | 11,123,313.42 | 7,195,294.73 |
| Total non-current assets | 4,162,691,420.67 | 2,676,540,793.70 |
| Total assets | 7,532,651,176.52 | 4,279,788,506.48 |
| Current liabilities: | ||
| Short-term borrowings | 863,771,746.55 | 602,834,093.20 |
| Borrowings from central bank | ||
| Placements from banks and other financial institutions | ||
| Trading financial liabilities | ||
| Financial liabilities at fair value through profit or loss | ||
| Derivative financial liabilities | ||
| Bills payable | ||
| Trade payable | 75,191,462.94 | 44,027,540.32 |
| Receipts in advance | 257,952,288.76 | 329,449,892.03 |
| Contract Liabilities | 140,288,059.36 | |
| Amount from sales of repurchased financial assets | ||
| Deposit taking and deposit in inter-bank market | ||
| Client money received for acting as securities trading agent | ||
| Client money received for acting as securities trading agent | ||
| Payroll payable | 122,653,453.56 | 67,948,673.56 |
| Taxes payable | 112,386,967.79 | 78,942,327.91 |
| Other payables | 185,081,451.57 | 44,050,711.91 |
| Including: Interests payable | 1,788,386.25 | |
| Dividends payable | 2,753,709.82 | 1,443,558.82 |
| Handling charge and commissions payable | ||
| Payables to reinsurers | ||
| Liabilities classified as available-for-sale |
| Non-current liabilities due within one year | 33,366,866.13 | 41,388,921.21 |
| Other current liabilities | ||
| Total current liabilities | 1,790,692,296.66 | 1,208,642,160.14 |
| Non-current liabilities: | ||
| Deposits for insurance contracts | ||
| Long-term borrowings | 36,500,000.00 | 3,431,702.95 |
| Debentures payable | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | 117,750,400.50 | |
| Long-term payables | 20,342,856.26 | 19,417,649.99 |
| Long-term staff remuneration payable | ||
| Estimated liabilities | ||
| Deferred income | ||
| Deferred income tax liabilities | 45,717,681.16 | 14,137,234.36 |
| Other non-current liabilities | ||
| Total non-current liabilities | 220,310,937.92 | 36,986,587.30 |
| Total liabilities | 2,011,003,234.58 | 1,245,628,747.44 |
| Owners’equity: | ||
| Share capital | 749,507,599.00 | 500,176,537.00 |
| Other equity instruments | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital reserves | 1,708,303,157.96 | 1,322,649,363.20 |
| Less: Treasury stock | 193,169,267.59 | 248,124,987.77 |
| Other comprehensive income | 26,299,381.47 | -822,384.09 |
| Special reserve | ||
| Surplus reserve | 138,552,737.39 | 84,003,316.49 |
| General risk provision | ||
| Undistributed profit | 1,795,964,348.32 | 1,010,702,290.44 |
| Total owners’ equity attributable to the Parent Company | 4,225,457,956.55 | 2,668,584,135.27 |
| Minority interests | 1,296,189,985.39 | 365,575,623.77 |
| Total owners’ equity | 5,521,647,941.94 | 3,034,159,759.04 |
| Total liabilities and owners’ equity | 7,532,651,176.52 | 4,279,788,506.48 | |||
| Legal representative: Cao Xiaochun | Person-in-charge of accounting: Jun Gao (高峻) | Head of accounting department: Yu Guoyun | |||
2. Balance Sheet of the Parent Company
Unit: Yuan
| Item | December 31, 2019 | December 31, 2018 |
| Current assets: | ||
| Monetary fund | 126,988,177.98 | 123,057,242.51 |
| Trading financial assets | ||
| Financial assets at fair value through profit or loss | ||
| Derivatives financial assets | 1,002,080.00 | |
| Bills receivable | 584,248.00 | |
| Trade receivable | 618,880,233.00 | 353,651,431.06 |
| Financing receivables | ||
| Prepayments | 6,412,248.09 | 5,846,369.92 |
| Other receivables | 45,184,571.45 | 65,203,460.92 |
| Including: Interests receivable | 1,060,780.97 | |
| Dividends receivable | 3,960,000.00 | 4,087,748.46 |
| Inventories | ||
| Contract assets | ||
| Assets classified as available-for-sale | ||
| Non-current assets due within one year | ||
| Other current assets | ||
| Total current assets | 797,465,230.52 | 549,344,832.41 |
| Non-current assets: | ||
| Debt investments | ||
| Financial assets available for sale | 428,798,851.31 | |
| Other debt investments |
| Held-to-maturity investment | ||
| Long-term receivables | ||
| Long-term equity investments | 2,475,309,563.49 | 2,112,016,831.68 |
| Other investments in equity instruments | ||
| Other non-current financial assets | 570,273,006.58 | |
| Investment properties | ||
| Fixed assets | 11,935,029.23 | 13,713,654.92 |
| Construction in progress | ||
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-to-use assets | ||
| Intangible assets | 3,623,032.40 | 2,160,179.39 |
| Development expenses | ||
| Goodwill | ||
| Long-term deferred expenses | 1,352,451.49 | |
| Deferred income tax assets | 9,283,815.77 | 6,043,673.84 |
| Other non-current assets | 1,379,977.91 | 973,200.00 |
| Total non-current assets | 3,073,156,876.87 | 2,563,706,391.14 |
| Total assets | 3,870,622,107.39 | 3,113,051,223.55 |
| Current liabilities: | ||
| Short-term borrowings | 513,742,523.36 | 591,094,093.20 |
| Trading financial liabilities | ||
| Financial liabilities at fair value through profit or loss | ||
| Derivative financial liabilities | ||
| Bills payable | ||
| Trade payable | 21,152,100.75 | 10,075,666.97 |
| Receipts in advance | 78,194,033.98 | 99,013,397.65 |
| Contract liabilities | ||
| Payroll payable | 37,652,698.82 | 9,956,851.74 |
| Taxes payable | 34,876,600.97 | 25,753,804.32 |
| Other payables | 649,355,636.01 | 316,601,859.60 |
| Including: Interests payable | 1,771,550.32 | |
| Dividends payable |
| Liabilities classified as available-for-sale | ||
| Non-current liabilities due within one year | 1,054,427.08 | |
| Other current liabilities | ||
| Total current liabilities | 1,336,028,020.97 | 1,052,495,673.48 |
| Non-current liabilities: | ||
| Long-term borrowings | 36,500,000.00 | |
| Debentures payable | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term staff remuneration payable | ||
| Estimated liabilities | ||
| Deferred income | ||
| Deferred income tax liabilities | 18,128,868.10 | |
| Other non-current liabilities | ||
| Total non-current liabilities | 54,628,868.10 | |
| Total liabilities | 1,390,656,889.07 | 1,052,495,673.48 |
| Owners’ equity: | ||
| Share capital | 749,507,599.00 | 500,176,537.00 |
| Other equity instruments | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital reserves | 1,046,746,280.81 | 1,302,479,192.64 |
| Less: Treasury stock | 193,169,267.59 | 248,124,987.77 |
| Other comprehensive income | ||
| Special reserve | ||
| Surplus reserve | 138,232,453.63 | 83,683,032.73 |
| Undistributed profit | 738,648,152.47 | 422,341,775.47 |
| Total owners’ equity | 2,479,965,218.32 | 2,060,555,550.07 |
| Total liabilities and owners’ equity | 3,870,622,107.39 | 3,113,051,223.55 |
3. Consoidated Income Statement
Unit: Yuan
| Item | Year 2019 | Year 2018 |
| I. Total operating income | 2,803,309,287.65 | 2,300,659,706.62 |
| Including: Operating income | 2,803,309,287.65 | 2,300,659,706.62 |
| Interest income | ||
| Premium earned | ||
| Handling fee and commission income | ||
| II. Total cost of operations | 2,075,730,308.42 | 1,782,269,171.70 |
| Including: Cost of operations | 1,500,405,542.04 | 1,308,913,354.24 |
| Interest expenses | ||
| Handling fees and commission expenses | ||
| Surrender value | ||
| Net cash in compensation | ||
| Net provisions for insurance contract | ||
| Policy payment expense | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 11,003,060.49 | 9,285,383.86 |
| Selling expenses | 81,071,523.43 | 54,454,432.35 |
| Management expenses | 349,642,929.43 | 314,197,849.45 |
| Research and development expenses | 124,049,308.27 | 88,025,353.33 |
| Financial expenses | 9,557,944.76 | 7,392,798.47 |
| Including: Interest expenses | 40,403,063.38 | 19,364,580.03 |
| Interest income | 25,461,633.69 | 7,801,808.04 |
| Add: Other income | 13,814,588.40 | 4,567,093.00 |
| Gains on investment (Loss is represented by “-”) | 179,828,015.67 | 118,853,823.81 |
| Including: Gains from investment in associated companies and joint ventures | -9,767,683.63 | 9,598,320.01 |
| Income from de-recognition of financial assets measured at amortised cost | ||
| Foreign exchange gains (Loss is represented by “-”) | ||
| Net gains from hedging exposure (Loss is represented by “-”) | ||
| Gains from change in fair value (Loss is represented by “-”) | 184,996,027.19 | 5,154,124.11 |
| Impairment loss of credit (Loss is represented by “-”) | -21,186,117.33 | |
| Impairment loss of assets (Loss is represented by “-”) | -50,962,641.19 | |
| Gains from disposal of assets (Loss is represented by “-”) | -384,766.63 | -151,707.39 |
| III. Operating profit (Loss is represented by “-”) | 1,084,646,726.53 | 595,851,227.26 |
| Add: Non-operating income | 5,900,367.91 | 12,120,570.70 |
| Less: Non-operating expenses | 1,385,263.13 | 1,899,550.11 |
| IV. Profit before Tax (Total loss is represented by “-”) | 1,089,161,831.31 | 606,072,247.85 |
| Less: Income tax expenses | 113,839,474.62 | 99,275,079.69 |
| V. Net Profit (Total loss is represented by “-”) | 975,322,356.69 | 506,797,168.16 |
| (I) Classified by continuing operation | ||
| 1. Net profit from continuing operation (Net loss is represented by “-”) | 978,980,143.28 | 502,763,865.98 |
| 2. Net profit from discontinued operations (Net loss is represented by “-”) | -3,657,786.59 | 4,033,302.18 |
| (II) Classified by ownership of the equity | ||
| 1. Net profit attributable to owners of the Parent Company | 841,634,823.38 | 472,183,931.65 |
| 2. Profit or loss of minority interests | 133,687,533.31 | 34,613,236.51 |
| VI. Net other comprehensive income after tax | 38,413,151.55 | 3,521,852.15 |
| Net other comprehensive income after tax attributable to owners of the Parent Company | 28,778,690.27 | -240,029.93 |
| (I) Other comprehensive income that cannot be reclassified to profit or loss in subsequent periods | ||
| 1. Changes arising from the remeasurement of defined benefit plans | ||
| 2. Other comprehensive income under equity method that cannot be reclassified into profit or loss | ||
| 3. Changes in fair value of investment in other equity instruments | ||
| 4. Changes in fair value of the Company’s own credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income to be reclassified to profit or loss | 28,778,690.27 | -240,029.93 |
| 1. Other comprehensive income that can be reclassified into profit or loss under equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Gains and losses from changes in fair value of available-for-sale financial assets | -1,640,142.47 | |
| 4. Amount of financial assets reclassified into other comprehensive income | ||
| 5. Gains and losses from held-to-maturity investment reclassified as available-for-sale financial assets | ||
| 6. Credit impairment provision for other debt investment |
| 7. Reserves for cash flows hedges | ||
| 8. Exchange differences from retranslation of financial statements | 28,778,690.27 | 1,400,112.54 |
| 9. Others | ||
| Net comprehensive income after tax attributable to minority shareholders | 9,634,461.28 | 3,761,882.08 |
| VII. Total comprehensive income | 1,013,735,508.24 | 510,319,020.31 |
| Total comprehensive income attributable to owners of the Parent Company | 870,413,513.65 | 471,943,901.72 |
| Total comprehensive income attributable to minority shareholders | 143,321,994.59 | 38,375,118.59 |
| VIII. Earnings per share: | ||
| (I) Basic earnings per share | 1.13 | 0.63 |
| (II) Diluted earnings per share | 1.13 | 0.63 |
In case of business combination for enterprises under common control in the current period, the net profit of the acquireesbefore combination is RMB0.00, while the net profit of the acquirees in the previous period was RMB0.00.
| Legal representative: Cao Xiaochun | Person-in-charge of accounting: Jun Gao (高峻) | Head of accounting department: Yu Guoyun |
4. Income Statement of the Parent Company
Unit: Yuan
| Item | Year 2019 | Year 2018 |
| I. Operating income | 1,177,292,000.42 | 897,170,707.04 |
| Less：Cost of operations | 803,349,570.94 | 627,159,611.47 |
| Taxes and surcharges | 5,055,951.37 | 3,451,738.55 |
| Selling expenses | 27,599,295.58 | 22,053,212.02 |
| Management expenses | 101,098,884.12 | 69,650,108.81 |
| Research and development expenses | 45,740,699.46 | 30,974,485.84 |
| Financial expenses | 26,033,517.32 | 12,336,560.75 |
| Including: Interest expenses | 30,309,882.29 | 15,383,911.62 |
| Interest income | 1,696,778.30 | 2,925,682.58 |
| Add: Other income | 9,558,688.97 | 2,320,681.00 |
| Gains on investment (Loss is represented by “-”) | 275,568,075.92 | 103,986,153.18 |
| Including: Gains from investment in associated companies and joint ventures | -11,195,749.38 | 7,813,623.94 |
| Income from de-recognition of financial assets measured at amortised cost (Loss is represented by “-”) | ||
| Net gains from hedging exposure (Loss is represented by “-”) | ||
| Gains from change in fair value (Loss is represented by “-”) | 20,521,166.40 | 3,703,624.11 |
| Impairment loss of credit (Loss is represented by “-”) | -5,045,046.20 | |
| Impairment loss of assets (Loss is represented by “-”) | -36,321,239.74 | |
| Gains from disposal of assets (Loss is represented by “-”) | -106,360.47 | -64,798.12 |
| II. Operating profit (Loss is represented by “-”) | 468,910,606.25 | 205,169,410.03 |
| Add: Non-operating income | 533,542.76 | |
| Less: Non-operating expenses | 1,190,090.92 | 1,157,677.27 |
| III. Profit before Tax (Total loss is represented by “-”) | 467,720,515.33 | 204,545,275.52 |
| Less: Income tax expenses | 28,124,002.10 | 25,240,348.26 |
| IV. Net profit (Net loss is represented by “-”) | 439,596,513.23 | 179,304,927.26 |
| (I) Net profit from continuing operation (Net loss is represented by “-”) | 439,596,513.23 | 179,304,927.26 |
| (II) Net profit from discontinued operations (Net loss is represented by “-”) | ||
| V. Net other comprehensive income after tax | ||
| (I) Other comprehensive income that cannot be reclassified to profit or loss in subsequent periods |
| 1. Changes arising from the remeasurement of defined benefit plans | ||
| 2. Other comprehensive income under equity method that cannot be reclassified into profit or loss | ||
| 3. Changes in fair value of investment in other equity instruments | ||
| 4. Changes in fair value of the Company’s own credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income to be reclassified to profit or loss | ||
| 1. Other comprehensive income that can be reclassified into profit or loss under equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Gains and losses from changes in fair value of available-for-sale financial assets | ||
| 4. Amount of financial assets reclassified into other comprehensive income | ||
| 5. Gains and losses from held-to-maturity investment reclassified as available-for-sale financial assets | ||
| 6. Credit impairment provision for other debt investments | ||
| 7. Reserves for cash flows hedges | ||
| 8. Exchange differences from retranslation of financial statements | ||
| 9. Others | ||
| VI. Total comprehensive income | 439,596,513.23 | 179,304,927.26 |
| VII. Earnings per share: | ||
| (I) Basic earnings per share | 0.59 | 0.24 |
| (II) Diluted earnings per share | 0.59 | 0.24 |
5. Consolidated Cash Flow Statement
Unit: Yuan
| Item | Year 2019 | Year 2018 |
| I. Cash flows generated from operating activities: | ||
| Cash received from sales of goods and services | 2,657,936,537.03 | 2,341,959,057.84 |
| Net increase in deposits from customers and other banks | ||
| Net increase in borrowings from PBOC | ||
| Net increase in borrowings from other financial institutions | ||
| Cash received from premium of original insurance contract | ||
| Net cash inflow from reinsurance business | ||
| Net increase in deposit of the insured and investment | ||
| Cash received from interest, handling fees and commissions | ||
| Net increase of placements from banks and other financial institutions | ||
| Net increase of repurchase business | ||
| Net cash received for acting as securities trading agent | ||
| Tax rebates received | 2,795,449.52 | 3,210,240.19 |
| Other cash received from activities relating to operation | 53,329,107.81 | 58,972,302.02 |
| Sub-total of cash inflows from operating activities | 2,714,061,094.36 | 2,404,141,600.05 |
| Cash paid for goods and services | 738,146,188.68 | 757,877,703.17 |
| Net increase in customer loans and advances | ||
| Net increase of deposits in PBOC and other banks | ||
| Cash paid for compensation under the original insurance contract |
| Net increase of placements with banks and other financial institutions | ||
| Cash paid for interest, handling fees and commissions | ||
| Cash paid for policy bonus | ||
| Cash paid to and on behalf of employees | 1,039,048,508.17 | 801,601,658.68 |
| Tax payments | 237,133,891.87 | 143,557,682.26 |
| Other cash payments relating to operating activities | 172,174,570.13 | 178,861,837.29 |
| Sub-total of cash outflows from operating activities | 2,186,503,158.85 | 1,881,898,881.40 |
| Net cash flows generated from operating activities | 527,557,935.51 | 522,242,718.65 |
| II. Cash flows generated from investing activities: | ||
| Cash received from redemption of investments | 501,974,055.84 | 585,808,505.70 |
| Cash from gains on investment | 13,078,858.50 | 16,307,699.11 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 3,363,380.89 | 492,090.92 |
| Net cash received from disposal of subsidiaries and other operating entities | 32,902,941.77 | -17,437,426.79 |
| Other cash received from activities relating to investment | 10,973,425.92 | |
| Sub-total of cash inflows from investing activities | 551,319,237.00 | 596,144,294.86 |
| Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets | 102,910,675.81 | 91,718,091.95 |
| Cash paid for investments | 1,014,615,034.82 | 842,922,786.32 |
| Net increase in policy loans | ||
| Net cash paid for acquisition of subsidiaries and other operating entities | 71,946,263.73 | 28,036,186.25 |
| Other cash paid for activities relating to investment |
| Sub-total of cash outflows from investing activities | 1,189,471,974.36 | 962,677,064.52 |
| Net cash flows generated from investing activities | -638,152,737.36 | -366,532,769.66 |
| III. Cash flows generated from financing activities: | ||
| Cash received from capital contributions | 1,440,837,276.59 | 59,299,239.30 |
| Including: Cash received by subsidiaries from minority shareholders’ investment | ||
| Cash received from borrowings | 1,250,433,088.71 | 602,834,093.20 |
| Other cash received from activities related to financing | 259,938,105.52 | |
| Sub-total of cash inflows from financing activities | 2,951,208,470.82 | 662,133,332.50 |
| Cash repayments of borrowings | 1,070,623,089.41 | 263,075,434.05 |
| Dividends paid, profit distributed or interest paid in cash | 265,970,155.44 | 126,648,942.96 |
| Including: Dividend and profit paid by subsidiaries to minority shareholders | ||
| Other cash paid for activities relating to financing | 180,317,263.66 | 262,394,894.62 |
| Sub-total of cash outflows from financing activities | 1,516,910,508.51 | 652,119,271.63 |
| Net cash flows generated from financing activities | 1,434,297,962.31 | 10,014,060.87 |
| IV. Effect of changes in exchange rate on cash and cash equivalents | 15,196,526.81 | 7,236,179.28 |
| V. Net increase in cash and cash equivalents | 1,338,899,687.27 | 172,960,189.14 |
| Add: Balance of cash and cash equivalents at the beginning of the period | 698,186,379.43 | 525,226,190.29 |
| VI. Balance of cash and cash equivalents at the end of the period | 2,037,086,066.70 | 698,186,379.43 |
6. Cash Flow Statement of the Parent Company
Unit: Yuan
| Item | Year 2019 | Year 2018 |
| I. Cash flows generated from operating activities: | ||
| Cash from sales of goods and rendering services | 935,511,723.80 | 870,855,827.47 |
| Tax rebates received | ||
| Other cash received from activities relating to operation | 215,601,535.82 | 64,391,203.72 |
| Sub-total of cash inflows from operating activities | 1,151,113,259.62 | 935,247,031.19 |
| Cash paid for goods and services | 646,893,755.02 | 518,121,847.10 |
| Cash paid to and on behalf of employees | 236,201,302.27 | 180,541,767.74 |
| Tax payments | 54,798,792.29 | 29,068,519.65 |
| Other cash payments relating to operating activities | 58,359,187.67 | 98,167,440.88 |
| Sub-total of cash outflows from operating activities | 996,253,037.25 | 825,899,575.37 |
| Net cash flows generated from operating activities | 154,860,222.37 | 109,347,455.82 |
| II. Cash flows generated from investing activities: | ||
| Cash received from redemption of investments | 121,081,187.08 | 46,509,325.01 |
| Cash from gains on investment | 192,510,197.12 | 87,988,914.92 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 30,698.60 | 104,003.47 |
| Net cash received from disposal of subsidiaries and other operating entities | ||
| Other cash received from activities relating to investment | 8,323,973.87 | |
| Sub-total of cash inflows from investing activities | 313,622,082.80 | 142,926,217.27 |
| Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets | 6,694,021.90 | 3,739,455.95 |
| Cash paid for investments | 395,646,461.66 | 393,146,471.56 |
| Net cash paid for acquisition of subsidiaries and other operating entities | ||
| Other cash paid for activities relating to investment | ||
| Sub-total of cash outflows from investing activities | 402,340,483.56 | 396,885,927.51 |
| Net cash flows generated from investing activities | -88,718,400.76 | -253,959,710.24 |
| III. Cash flows generated from financing activities | ||
| Cash received from capital contributions | ||
| Cash received from borrowings | 1,028,588,186.40 | 591,094,093.20 |
| Other cash received from activities relating to financing | 249,445,333.04 | |
| Sub-total of cash inflows from financing activities | 1,278,033,519.44 | 591,094,093.20 |
| Cash repayments of borrowings | 1,070,623,089.41 | 221,971,128.21 |
| Dividends paid, profit distributed or interest paid in cash | 203,195,700.16 | 116,432,794.42 |
| Other cash paid for activities relating to financing | 67,916,937.46 | 248,124,987.77 |
| Sub-total of cash outflows from financing activities | 1,341,735,727.03 | 586,528,910.40 |
| Net cash flows generated from financing activities | -63,702,207.59 | 4,565,182.80 |
| IV. Effect of changes in exchange rate on cash and cash equivalents | 2,932,593.45 | 368,655.37 |
| V. Net increase in cash and cash equivalents | 5,372,207.47 | -139,678,416.25 |
| Add: Balance of cash and cash equivalents at the beginning of the period | 121,615,970.51 | 261,294,386.76 |
| VI. Balance of cash and cash equivalents at the end of the period | 126,988,177.98 | 121,615,970.51 |
7. Consolidated Statement of Changes in Owners’ Equity
Amount in the current period
Unit: Yuan
| Item | Year 2019 | ||||||||||||||
| Owners’ equity attributable to the Parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profit | Others | Sub-total | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I. Balance at the end of last year | 500,176,537.00 | 1,322,649,363.20 | 248,124,987.77 | -822,384.09 | 84,003,316.49 | 1,010,702,290.44 | 2,668,584,135.27 | 365,575,623.77 | 3,034,159,759.04 | ||||||
| Add: Effects of changes in accounting policies | -1,656,924.71 | 10,589,769.58 | 162,225,296.97 | 171,158,141.84 | 66,827,330.36 | 237,985,472.20 | |||||||||
| Effects of corrections of prior year errors | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the beginning of the year | 500,176,537.00 | 1,322,649,363.20 | 248,124,987.77 | -2,479,308.80 | 94,593,086.07 | 1,172,927,587.41 | 2,839,742,277.11 | 432,402,954.13 | 3,272,145,231.24 | ||||||
| III. Increase/decrease in the period (Decrease is represented by “-”) | 249,331,062.00 | 385,653,794.76 | -54,955,720.18 | 28,778,690.27 | 43,959,651.32 | 623,036,760.91 | 1,385,715,679.44 | 863,787,031.26 | 2,249,502,710.70 | ||||||
| (I) Total comprehensive income | 28,778,690.27 | 841,634,823.38 | 870,413,513.65 | 143,321,994.59 | 1,013,735,508.24 | ||||||||||
| (II) Owners’ contribution and decrease in capital | -228,573.00 | -6,173,276.83 | 61,847,562.40 | -68,249,412.23 | 1,393,933,150.10 | 1,325,683,737.87 | |||||||||
| 1. Owners’ contribution of ordinary shares | -228,573.00 | -5,840,802.06 | -6,069,375.06 | 1,418,061,787.36 | 1,411,992,412.30 | ||||||||||
| 2. Capital contribution by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payments credited to owners’ equity | 16,555,900.00 | 16,555,900.00 | 33,466,707.36 | 50,022,607.36 | |||||||||||
| 4. Others | -16,888,374.77 | 61,847,562.40 | -78,735,937.17 | -57,595,344.62 | -136,331,281.79 | ||||||||||
| (III) Profit distribution | 43,959,651.32 | -218,598,062.47 | -174,638,411.15 | -55,237,910.14 | -229,876,321.29 | ||||||||||
| 1. Appropriation to surplus reserve | 43,959,651.32 | -43,959,651.32 | |||||||||||||
| 2. Appropriation to general risk provision | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -174,638,411.15 | -174,638,411.15 | -55,237,910.14 | -229,876,321.29 |
| 4. Others | |||||||||||||||
| (IV) Internal carry-forward of owners’ equity | 249,559,635.00 | -249,559,635.00 | |||||||||||||
| 1. Conversion of capital reserve into capital (or shares) | 249,559,635.00 | -249,559,635.00 | |||||||||||||
| 2. Capital (or share capital) created on surplus reserves | |||||||||||||||
| 3. Making good of loss with surplus reserve | |||||||||||||||
| 4. Carry-forward of amount change in defined benefit plan to retained earning | |||||||||||||||
| 5. Carry-forward of other comprehensive income to retained earning | |||||||||||||||
| 6.Others | |||||||||||||||
| (V) Special reserves | |||||||||||||||
| 1. Withdrawal | |||||||||||||||
| 2. Used | |||||||||||||||
| (VI) Others | 641,386,706.59 | -116,803,282.58 | 758,189,989.17 | -618,230,203.29 | 139,959,785.88 | ||||||||||
| IV. Balance at the end of the period | 749,507,599.00 | 1,708,303,157.96 | 193,169,267.59 | 26,299,381.47 | 138,552,737.39 | 1,795,964,348.32 | 4,225,457,956.55 | 1,296,189,985.39 | 5,521,647,941.94 |
Amount in last period
Unit: Yuan
| Item | Year 2018 | ||||||||||||||
| Owners’ equity attributable to the Parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profit | Others | Sub-total | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I. Balance at the end of last year | 500,176,537.00 | 1,268,895,127.68 | -582,354.16 | 66,072,823.76 | 668,973,483.95 | 2,503,535,618.23 | 315,455,625.54 | 2,818,991,243.77 | |||||||
| Add: Effects of changes in accounting policies | -12,489,325.03 | -12,489,325.03 | -5,188,417.40 | -17,677,742.43 | |||||||||||
| Effects of corrections of prior year errors | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the beginning of the year | 500,176,537.00 | 1,268,895,127.68 | -582,354.16 | 66,072,823.76 | 656,484,158.92 | 2,491,046,293.20 | 310,267,208.14 | 2,801,313,501.34 | |||||||
| III. Increase/decrease in the period (Decrease is represented by “-”) | 53,754,235.52 | 248,124,987.77 | -240,029.93 | 17,930,492.73 | 354,218,131.52 | 177,537,842.07 | 55,308,415.63 | 232,846,257.70 | |||||||
| (I) Total comprehensive income | -240,029.93 | 472,183,931.65 | 471,943,901.72 | 38,375,118.59 | 510,319,020.31 | ||||||||||
| (II) Owners’ contribution and decrease in capital | 5,629,745.75 | 5,629,745.75 | 19,580,900.59 | 25,210,646.34 | |||||||||||
| 1. Owners’ contribution of ordinary shares | 9,597,413.30 | 9,597,413.30 | |||||||||||||
| 2. Capital contribution by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payments credited to owners’ equity | 5,629,745.75 | 5,629,745.75 | 2,541,407.89 | 8,171,153.64 | |||||||||||
| 4. Others | 7,442,079.40 | 7,442,079.40 | |||||||||||||
| (III) Profit distribution | 17,930,492.73 | -117,965,800.13 | -100,035,307.40 | -14,355,339.78 | -114,390,647.18 | ||||||||||
| 1. Appropriation to surplus reserve | 17,930,492.73 | -17,930,492.73 | |||||||||||||
| 2. Appropriation to general risk provision | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -100,035,307.40 | -100,035,307.40 | -14,355,339.78 | -114,390,647.18 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carry-forward of owners’ equity |
| 1. Conversion of capital reserve into capital (or shares) | |||||||||||||||
| 2. Capital (or share capital) created on surplus reserve | |||||||||||||||
| 3. Making good of loss with surplus reserve | |||||||||||||||
| 4. Carry-forward of amount change in defined benefit plan to retained earning | |||||||||||||||
| 5. Carry-forward of other comprehensive income to retained earning | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserves | |||||||||||||||
| 1. Withdrawal | |||||||||||||||
| 2. Used | |||||||||||||||
| (VI) Others | 48,124,489.77 | 248,124,987.77 | -200,000,498.00 | 11,707,736.23 | -188,292,761.77 | ||||||||||
| IV. Balance at the end of the period | 500,176,537.00 | 1,322,649,363.20 | 248,124,987.77 | -822,384.09 | 84,003,316.49 | 1,010,702,290.44 | 2,668,584,135.27 | 365,575,623.77 | 3,034,159,759.04 |
8. Statement of Changes in Owners’ Equity of the Parent Company
Amount in the current period
Unit: Yuan
| Item | Year 2019 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Others | Total owners’ equity | |||
| Preference shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the end of last year | 500,176,537.00 | 1,302,479,192.64 | 248,124,987.77 | 83,683,032.73 | 422,341,775.47 | 2,060,555,550.07 | ||||||
| Add: Effects of changes in accounting policies | 10,589,769.58 | 95,307,926.24 | 105,897,695.82 | |||||||||
| Effects of corrections of prior year errors | ||||||||||||
| Others | ||||||||||||
| II. Balance at the beginning of the year | 500,176,537.00 | 1,302,479,192.64 | 248,124,987.77 | 94,272,802.31 | 517,649,701.71 | 2,166,453,245.89 | ||||||
| III. Increase/decrease in the period (Decrease is represented by “-”) | 249,331,062.00 | -255,732,911.83 | -54,955,720.18 | 43,959,651.32 | 220,998,450.76 | 313,511,972.43 | ||||||
| (I) Total comprehensive income | 439,596,513.23 | 439,596,513.23 | ||||||||||
| (II) Owners’ contribution and decrease in capital | -228,573.00 | -6,173,276.83 | 61,847,562.40 | -68,249,412.23 | ||||||||
| 1. Owners’ contribution of ordinary shares | -228,573.00 | -5,840,802.06 | -6,069,375.06 | |||||||||
| 2. Capital contribution by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payments credited to owners’ equity | 16,555,900.00 | 16,555,900.00 | ||||||||||
| 4. Others | -16,888,374.77 | 61,847,562.40 | -78,735,937.17 | |||||||||
| (III) Profit distribution | 43,959,651.32 | -218,598,062.47 | -174,638,411.15 | |||||||||
| 1. Appropriation to surplus reserve | 43,959,651.32 | -43,959,651.32 | ||||||||||
| 2. Distribution to owners (or shareholders) | -174,638,411.15 | -174,638,411.15 | ||||||||||
| Others | ||||||||||||
| (IV) Internal carry-forward of owners’ equity | 249,559,635.00 | -249,559,635.00 | ||||||||||
| 1. Conversion of capital reserve into capital (or shares) | 249,559,635.00 | -249,559,635.00 | ||||||||||
| 2. Capital (or share capital) created on surplus reserve | ||||||||||||
| 3. Making good of loss with surplus reserve |
| 4. Carry-forward of amount change in defined benefit plan to retained earning | ||||||||||||
| 5. Carry-forward of other comprehensive income to retained earning | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserves | ||||||||||||
| 1. Withdrawal | ||||||||||||
| 2. Used | ||||||||||||
| (VI) Others | -116,803,282.58 | 116,803,282.58 | ||||||||||
| IV. Balance at the end of the period | 749,507,599.00 | 1,046,746,280.81 | 193,169,267.59 | 138,232,453.63 | 738,648,152.47 | 2,479,965,218.32 |
Amount in last period
Unit: Yuan
| Item | Year 2018 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Others | Total owners’ equity | |||
| Preference shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the end of last year | 500,176,537.00 | 1,302,479,192.64 | 65,752,540.00 | 361,002,648.34 | 2,229,410,917.98 | |||||||
| Add: Effects of changes in accounting policies | ||||||||||||
| Effects of corrections of prior year errors | ||||||||||||
| Others | ||||||||||||
| II. Balance at the beginning of the year | 500,176,537.00 | 1,302,479,192.64 | 65,752,540.00 | 361,002,648.34 | 2,229,410,917.98 | |||||||
| III. Increase/decrease in the period (decrease is represented by “-”) | 248,124,987.77 | 17,930,492.73 | 61,339,127.13 | -168,855,367.91 | ||||||||
| (I) Total comprehensive income | 179,304,927.26 | 179,304,927.26 | ||||||||||
| (II) Owners’ contribution and decrease in capital | 248,124,987.77 | -248,124,987.77 | ||||||||||
| 1. Owners’ contribution of ordinary shares | 5,432,873.00 | -5,432,873.00 | ||||||||||
| 2. Capital contribution by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payments credited to owners’ equity | ||||||||||||
| 4. Others | 242,692,114.77 | -242,692,114.77 | ||||||||||
| (III) Profit distribution | 17,930,492.73 | -117,965,800.13 | -100,035,307.40 |
| 1. Appropriation to surplus reserve | 17,930,492.73 | -17,930,492.73 | ||||||||||
| 2. Distribution to owners (or shareholders) | -100,035,307.40 | -100,035,307.40 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal carry-forward of owners’ equity | ||||||||||||
| 1. Conversion of capital reserve into capital (or shares) | ||||||||||||
| 2. Capital (or share capital) created on surplus reserve | ||||||||||||
| 3. Making good of loss with surplus reserve | ||||||||||||
| 4. Carry-forward of amount change in defined benefit plan to retained earning | ||||||||||||
| 5. Carry-forward of other comprehensive income to retained earning | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserves | ||||||||||||
| 1. Withdrawal |
| 2. Used | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Balance at the end of the period | 500,176,537.00 | 1,302,479,192.64 | 248,124,987.77 | 83,683,032.73 | 422,341,775.47 | 2,060,555,550.07 |
III. BASIC INFORMATION OF THE COMPANY(I) Company OverviewHangzhou Tigermed Consulting Co., Ltd. (the “Company”) , whose predecessor was Hangzhou Tigermed Limited, wasestablished in the PRCon December 15, 2004 upon approval by Hangzhou Administration for Industry and CommerceHigh-tech Industry and Commerce Branch. The registered capital of the Company was RMB500,000, jointly contributed bynatural persons Ye Xiaoping (葉小平), Cao Xiaochun (曹曉春) and Shi Xiaoli (施笑利) in the amounts of RMB300,000,RMB150,000 and RMB50,000 respectively, has been verified by the capital verification report Zhejing TianceYanzi (2004)No. 145 issued by Zhejiang Zhejingtiance Certified Public Accountants Co., Ltd.
According to the resolution of Shareholders' meeting of the Company dated January 6, 2008 and the revised Articles ofAssociation, the Company applied for increase in registered capital to RMB5 million, of which RMB2,652,500, RMB875,500 and RMB360,000 were further contribution of original Shareholders Ye Xiaoping (葉小平), Cao Xiaochun (曹曉春) and Shi Xiaoli (施笑利) respectively; while RMB406,500 and RMB205,500 respectively were contributed by newnatural persons Xu Jialian (徐家廉)and Gong Yunjie (宮蕓潔). The Company obtained the business license for enterpriselegal person after the change in January 2008.
According to the resolution of Shareholders ’meeting of the Company dated March 31, 2008, the Capital Increase and M&AAgreement and the revised Articles of Association, the Company applied for increase in registered capital to RMB5,882,353and agreed with the capital injection from the new Shareholder QM8 Limited in the amount of US$5,000,000 to subscribefor RMB882,353 of the Company’s increased share capital (by capitalisation of share premium RMB33,818,647.00), whilethe nature of the Company was changed from a domestic enterprise to a sino-foreign joint venture. On May 5, 2008, theForeign Trade and Economic Cooperation Department of Zhejiang Province issued the “Approval for the Equity M&A andCapital Increase and Change into a Sino-foreign Joint Venture of Hangzhou Tigermed Consulting Co., Ltd. " (ZhewaiJingmao Zihan (浙外经贸资函)(2008) No. 237) approving the equity M&A and capital increase of the Company and itschange into a sino-foreign joint venture. The Company obtained the business license for enterprise legal person after thechange in June 2008.
According to the resolution of Board meeting dated July 18, 2008 and the revised Articles of Association, the Companyapplied for increase in registered capital to RMB30 million, and agreed to the conversion of the Company's premium capitalreserve of RMB24,117,647 into capital. After the conversion, Shareholders Ye Xiaoping (葉小平), Cao Xiaochun (曹曉春),Shi Xiaoli (施笑利), Xu Jialian (徐家廉), Gong Yunjie (宮蕓潔)and QM8 Limited held shares of the Company in theamounts of RMB15.06 million , RMB5.22 million, RMB 2.091 million, RMB2.073 million, RMB1.047 million andRMB4.5 million respectively. The Company obtained the business license for enterprise legal person after the change onSeptember 4, 2008.
According to the equity transfer agreement dated November 16, 2009, Shareholder Ye Xiaoping (叶小平) transferredRMB1.71 million of equity of the Company he held to Hangzhou Taimo Investment Management Limited (杭州泰默投资
管理有限公司) for RMB2.633 million. After the transfer, Hangzhou Taimo Investment Management Limited held 5.70% ofthe Company's equity. According to the equity transfer agreement dated November 16, 2009, Shareholders Ye Xiaoping (葉小平), Cao Xiaochun (曹曉春) and Gong Yunjie (宮蕓潔) transferred the RMB123,000, RMB 636,000 and RMB81,000equity of the Company held by them respectively to Hangzhou Taidi Investment Management Limited (杭州泰迪投資管理有限公司) for RMB189,420, RMB 997,444 and RMB124,740 respectively. After the transfer, Hangzhou Taidi InvestmentManagement Limited (杭州泰迪投資管理有限公司) held 2.80% equity of the Company. The Company obtained thebusiness license for enterprise legal person after the change in December 2008. According to the equity transfer agreementdated December 28, 2009, Shareholders Xu Jialian (徐家廉)and Gong Yunjie (宮蕓潔)transferred to Hongqiao Zhang theRMB252,000 and RM48,000 equity of the Company held by them respectively for RMB388,080 and RMB73,920respectively. After the transfer, Hongqiao Zhang Held 1% equity of the Company; Shareholders Shi Xiaoli (施笑利) andQM8 Limited transferred to Wen Chen the RMB255,000 and RMB195,000 equity of the Company held by themrespectively for RMB392,700 and RMB300,300 respectively. After the transfer, Wen Chen held 1.5% equity of theCompany . The Company obtained the business license for enterprise legal person after the change in April 2010.
According to the resolution of Board meeting of the Company dated December 28, 2009, the capital increase agreement andthe revised Articles of Association, the Company applied for increase in registered capital to RMB 35,535,118. On February22, 2010, the original Shareholder QM8 Limited contributed US$2,000,028.5 (equivalent to RMB 13,654,394.57 ) tosubscribe for the Company ’s increased registered capital of RMB 1,875,000 (the premium of RMB11,779,394.57 wastransferred to capital reserve); new Shareholder Yin Zhuan , Zhang Bing, Liu Minzhi and Ruiqin Investment (上海睿勤投资咨询有限公司) contributed USD452,000 (equivalent to RMB 3,085,804), USD214,000 (equivalent to RMB1,460,978),USD55,339 (equivalent to RMB377,815.94) and RMB 711,414 to subscribe for the increased registered capital ofRMB2,004,181 (a premium of RMB1,081,623 was transferred to capital reserve), RMB948,788 (a premium ofRMB512,190 was transferred to capital reserve), RMB 245,192 (a premium of RMB132,623.94 was transferred to capitalreserve) and RMB461,957 (a premium of RMB249,457was transferred to capital reserve) of the Company. The Companyobtained the business license for enterprise legal person after registration change in April 2010.
According to the resolution of Board meeting of the Company dated August 4, 2010, the sponsor agreement dated August 16,2010 and the revised Articles of Association, the Company's audited net assets on May 31, 2010 were RMB 67,647,753.65,which was converted into the Company's share capital at a ratio of 1: 0.5913, accounting for a total of 40 million shares witha par value of RMB1.00 each. Meanwhile, RMB27,647,753.65 was transferred to capital reserve and the Company as awhole was changed into a joint stock company. The Company obtained the business license for enterprise legal person onNovember 4, 2010.
According to the resolution of the 2010 annual general meeting and the resolution of the 2012 first extraordinary generalmeeting of the Company, and with the "Reply of approval for initial public offering and listing of shares on GEM byHangzhou Tigermed Consulting Co., Ltd. (關於核准杭州泰格醫藥科技股份有限公司首次公開發行股票並在創業板上市的批復)" (CSRC Approval Document [2012] No. 896) issued by the China Securities Regulatory Commission, theCompany publicly issued to the public 13,400,000.00 shares of RMB ordinary shares (A Shares), representing an increase inshare capital of RMB13,400,000.00, and the share capital after the change was RMB53,400,000.00. The net proceeds wasRMB481,170,979.00, of which share capital of RMB13.40 million and the share premium of RMB467,770,979.00 wasincluded in the capital reserve. The Company has obtained the business license for enterprise legal person after the changeon November 27, 2012.
According to the resolution of the 2012 annual general meeting held on April 9, 2013 and the revised Articles of Association,
and approved by document “Administrative Approval of Decision to Change Hangzhou Tigermed Consulting Co., Ltd. ”(Hang Wai Jingmao Wai Fu( Xu (2013) No. 99) by Hangzhou Foreign Trade and Economic Cooperation Bureau, theregistered capital of the Company was increased by RMB53,400,000.00 by way of capitalization of capital reserve. Theregistered capital after increase was RMB106,800,000.00. On December 6, 2013, the Company obtained its new “BusinessLicense for Enterprise Legal Person” reflecting such change.
According to the resolution of the 2013 annual general meeting and the revised Articles of Association, the Companyapplied for an increase in registered capital of RMB106,800,000.00 by way of capitalization of capital reserve. As a result,the registered capital of the Company was increased to RMB213,600,000.00. On July 22, 2014, the Company obtained itsnew “Business License for Enterprise Legal Person” reflecting such change.
According to the "Resolution regarding the grant of vested options for the first exercise period of the stock option scheme(關於首次授予股票期權第一個行權期可行權的議案)" adopted by the Company at the 11th meeting of the second Boardin 2014, the Company's eligible participants exercised for a total of 1,419,177 share options in the first exercise period, theregistered capital was thus increased by RMB1,419,177.00 to RMB215,019,177.00. The Company obtained the EnterpriseLegal Person Business Licence issued by the Administration for Industry and Commerce of Zhejiang Province on February15, 2015.
According to the resolution of the 2014 annual general meeting and the revised Articles of Association, the Companyapplied for an increase in registered capital of RMB215,019,177 by way of capitalization of capital reserve. As a result, theregistered capital of the Company was increased to RMB430,038,354.00.
According to the “Resolution on adjusting the exercise price and exercise quantity of stock option incentive scheme (關於調整股票期權激勵計畫行權價格及行權數量的議案)” adopted by the Company at the 16th meeting of the second Board in2015, the number of stock options granted was 1,120,000 and the number of vested options was 560,000. The registeredcapital of the Company was increased by RMB560,000.00 to RMB430,598,354.00.
According to the “Resolution on increasing the Company’s registered capital and amendment to the Articles of Associationof the Company (關於增加公司註冊資本並修改公司章程的議案)” adopted by the Company at the 25th meeting of thesecond Board in 2015, the Company granted a total of 2,717,556 vested options for exercise during the second exerciseperiod to 150 beneficiaries assessed and approved during the second exercise period. The registered capital of the Companywas increased by RMB2,717,556.00 to RMB433,315,910.00.
According to the resolution of the Company's first extraordinary general meeting in 2015 and approved by China SecuritiesRegulatory Commission with the approval of the China Securities Regulatory Commission [2015] No. 3096, the Companyissued 37,425,150.00 ordinary shares denominated in RMB (A Shares) by way of non-public offering at a par value of RMB
1.00 each. The shares were issued at a premium of RMB13.36 per share, and raised a total of RMB499,999,990.64. TheCompany's non-public offering of shares was subscribed as to 13,473,053.00 shares by Ye Xiaoping, 5,239,521.00 shares byCao Xiaochun, 7,485,030.00 shares by Ningbo Dingliang Ruixing Equity Investment Center （Limited Partnership）,3,742,515.00 shares by Guojinyongye Value-added aggregate asset management plan, and 7,485,030.00 shares by ShanghaiJiguang Investment Management Center （Limited Partnership）.The registered capital and paid-in capital wasRMB470,741,059.00 after the issue.
According to the "Resolution on the reserve of grant of stock option for exercise in the second exercise period (關於預留授予股票期權第二個行權期可行權的議案)" adopted by the Company at the 32th meeting of the second Board in 2016, theCompany applied for the targeted issuance of shares to the eligible participants. The Company's registered capital wasincreased by RMB560,000.00 to RMB471,301,059.00.
According to the "Resolution regarding the grant of vested options for the third exercise period of the stock option scheme(關於首次授予股票期權第三個行權期可行權的議案)" adopted by the Company at the 36th meeting of the second Boardin 2016, the number of vested stock options was 3,564,108.00 and the exercise price of the stock option was RMB13.34.The total capital contribution was RMB47,545,200.72, of which 3,564,108.00 yuan was used to increase the Company'sregistered capital, and RMB43,981,092.72 for the increase of capital reserve, and the registered capital after the issue wasRMB474,865,167.00.According to the resolution approved at the first extraordinary general meeting of the Company in 2016 and the "Approvalfor the Non-public Issuance of Shares of Hangzhou Tigermed Consulting Co., Ltd. (Document [2017] No. 65) (關於核准杭州泰格醫藥科技股份有限公司非公開發行股票的批復)” issued by the China Securities Regulatory Commission, theCompany issued 25,311,370 ordinary shares denominated in RMB (A Shares) by way of non-public offering, and raised netproceeds of RMB607,799,999.30, which was verified by BDO China Shu Lun Pan Certified Public Accountants LLP with aletter of capital verification report Xin Hui Shi Bao Zi (2017) No. ZA14261. The registered capital after the issue wasRMB500,176,537.00.
According to the "Resolution on the Plan for Repurchase of the Shares of the Company (關於回購公司股份預案的議案)"and the "Resolution on Authorisation Granted to the Board by the General Meeting to Deal With Matters Relating to theShare Repurchase with Absolute Discretion (關於提請股東大會授權董事會全權辦理本次回購股份相關事宜的議案)" atthe 14th Meeting of the third board of directors in 2019, on March 20, 2019, the Company accumulatively repurchased7,005,832 shares of the Company through centralized bidding trading under its designated account for share repurchase asshares for the Company's employee share ownership scheme or equity incentives. According to the “Restricted ShareIncentive Plan (Draft) 2019 and its Summary of Hangzhou Tigermed Consulting Co., Ltd. (杭州泰格醫藥科技股份有限公司2019年限制性股票激勵計畫（草案）)” reviewed and approved at the 15th meeting of the third board of directors of theCompany, the Company should grant 4,859,311 restrictive shares to its targets, of which 4,088,417 shares were grantedinitially, and 770,894 shares were reserved. The price granted was RMB39.83 per share. 41 beneficiaries surrendered therestricted shares. Therefore, as of May 28, 2019, 3,827,763 shares were actually granted to the beneficiaries. As of May 28,2019, the cumulative registered capital after the issue was RMB500,176,537.00 and the paid-in capital (share capital) wasRMB500,176,537.0, which was verified by BDO China Shu Lun Pan Certified Public Accountants LLP with a letter ofcapital verification report Xin Hui Shi Bao Zi [2019] No. ZA14913 on May 28, 2019.
According to the “Resolution on Non-trade Transfer of Shares from the Company's Designated Account for ShareRepurchase to the Company’s Designated Account for 2018 Employee Share Ownership Scheme" resolved at the 19thmeeting of the third Board of the Company(關於公司回購股份專戶向公司2018年員工持股計畫專戶非交易過戶轉讓股票的議案)", a total of 2,143,403 shares were transferred at the average repurchase price of RMB44.25 per share from theCompany's designated account for share repurchase to the designated account of "Hangzhou Tigermed Consulting Co.,Ltd.-Phase II Employee Share Ownership Scheme" by way of non-trade transfer. Since some employees surrendered theirsubscription right, according to the “Resolution on the Adjustment to the Number of Non-trade Transfer of Shares from theCompany's Designated Account for Share Repurchase to the Company’s Designated Account for 2018 Employee ShareOwnership Scheme (關於公司回購股份專戶向公司2018年員工持股計畫專戶非交易過戶轉讓股票數量調整的議案)”resolved at the 20th meeting of the third board of directors in 2019, the actual number of shares transferred to the employee
share ownership scheme was adjusted to 2,120,803 shares, totaling RMB93,845,532.75. As of June 17, 2019, the cumulativeregistered capital after the tranfer was RMB500,176,537.00, and the paid-in capital (share capital) was RMB 500,176,537.00,which was verified by BDO China Shu Lun Pan Certified Public Accountants LLP with a letter of capital verification reportXin Hui Shi Bao Zi [2019] No. ZA ZA15021 on June 17, 2019.According to the resolution of the 2018 Annual General Meeting and the resolution of the 16th meeting of the third sessionof the Board, it was considered and approved: based on the total share capital on the record date for the futureimplementation of the 2018 equity distribution plan (after deducting share capital held by the Company’s designated accountfor share repurchase), a cash dividend of RMB3.5 (including tax) will be distributed to all shareholders for every 10 sharesheld, and the remaining undistributed profits will be carried forward for distribution in the future year; at the same time, theCompany will issue shares to all shareholders by transferring capital reserve on the basis of five shares for every 10 sharesheld. As of March 20, 2019, the Company has accumulatively repurchased 7,005,832 shares of the Company throughcentralized bidding trading under the designated account for share repurchase. Based on the total share capital of500,176,537 shares (after deducting 1,057,266 shares held by the Company’s designated account for share repurchase), atotal of 499,119,271 shares were available for distribution, total cash dividend was RMB174,691,744.85 (including tax), and249,559,635 shares were issued by capitalization of capital reserve. The registered capital was RMB749,736,172 aftercapitalization issue to the original shareholders in proportion of their respective capital contribution. As of July 1, 2019, thecumulative registered capital after the issue was RMB749,736,172.00, and the paid-in capital (share capital) wasRMB749,736,172.00, which was verified by BDO China Shu Lun Pan Certified Public Accountants LLP with a letter ofcapital verification report Xin Hui Shi Bao Zi [2019] No. ZA15413 on June 17, 2019.According to the "Resolution on Adjusting the Repurchase Number, Repurchase Price of Restricted Shares and Repurchaseand Cancellation of Certain Restricted Shares in 2019 (關於調整 2019 年限制性股票回購數量、回購價格及回購登出部分限制性股票的議案)" and the "Resolution on Altering the Registered Capital of the Company and Amendment of theArticles of Association (關於變更公司註冊資本及修改公司章程的議案)" considered and approved at the 22nd meeting ofthe thrid Board and the 2019 second extraordinary general meeting, in view of seven beneficiaries of the Company's 2019restricted share incentive scheme had resigned for personal reasons, according to the relevant provisions under the"Measures for the Administration of Equity Incentives of Listed Companies (上市公司股權激勵管理辦法)" and the“Restricted Share Incentive Plan (Draft) 2019 of Hangzhou Tigermed Consulting Co., Ltd. (杭州泰格醫藥科技股份有限公司 2019 年限制性股票激勵計畫（草案）)”, 110,595 restricted shares which were granted but not unlocked by the saidseven beneficiaries were repurchased and cancelled. After the repurchase and cancellation, the total number of shares of theCompany will be reduced from 749,736,172 shares to 749,625,577 shares, and the registered capital will be altered fromRMB749,736,172 to RMB749,625,577 ,which was verified by BDO China Shu Lun Pan Certified Public Accountants LLPwith a letter of capital verification report Xin Hui Shi Bao Zi [2019] No. ZA15414 on July 31, 2019.
The 24th meeting of the third Board of Directors and the 2019 Third Extraordinary General Meeting reviewed and approvedthe "Resolution on the Repurchase and Cancellation of Certain Restricted Shares in 2019(關於回購登出 部分2019 年限制性股票的議案)" and the "Resolution on Altering the Registered Capital of the Company and Amendment of the Articlesof Association (關於變更公司註冊資本及修改公司章程的議案)”, in view of six beneficiaries of the Company's 2019restricted share incentive scheme had resigned for personal reasons, according to the relevant provisions under the"Measures for the Administration of Equity Incentives of Listed Companies (上市公司股權激勵管理辦法)" and the“Restricted Share Incentive Plan (Draft) 2019 of Hangzhou Tigermed Consulting Co., Ltd.( 杭州泰格醫藥科技股份有限公司 2019 年限制性股票激勵計畫（草案）)”, 68,451 restricted shares which were granted but not unlocked by the said sixbeneficiaries were repurchased and cancelled. After the repurchase and cancellation, the total number of shares of theCompany will be reduced from 749,625,577 shares to 749,557,126 shares, and the registered capital will be altered from749,625,577 yuan to 749,557,126 yuan, which was verified by BDO China Shu Lun Pan Certified Public Accountants LLP
with a letter of capital verification report Xin Hui Shi Bao Zi [2019] No. ZA15698 on September 10, 2019.
According to the “Summary of Restricted Share Incentive Plan (Draft) 2019 of Hangzhou Tigermed Consulting Co., Ltd.(杭州泰格醫藥科技股份有限公司2019年限制性股票激勵計畫（草案）摘要)” Resolved at the 28
thmeeting of the thirdBoard of the Company in 2019, the Company applied to grant 770,894 restriced shares to 54 beneficiaries at a price ofRMB31.46 per share. All the shares were derived from buy-back of ordinary A shares by the Company from secondarymarket, which was verified by BDO China Shu Lun Pan Certified Public Accountants LLP with a letter of capitalverification report Xin Hui Shi Bao Zi [2020] No. ZA10087 on January 22, 2020.According to the “Resolution for the Repurchase and Cancellation of Certain Restricted Shares 2019(關於回購登出部分2019 年限制性股票的議案)” and the “Resolution on the Alteration of the Registered Share Capital and Amendment of theArtices of Association of the Company (關於變更公司註冊資本及修改公司章程的議案)” considered and approved at the
th Meeting of the third Board, the 4
th meeting of the 2019 Extraordinary General Meeting and the 28
thMeeting of the thirdBoard and the 5
th
meeting of the 2019 Extraordinary General Meeting, in view of five beneficiaries of the Company's 2019restricted share incentive scheme had resigned for personal reasons, according to the relevant provisions under the"Measures for the Administration of Equity Incentives of Listed Companies (上市公司股權激勵管理辦法)" and the“Restricted Share Incentive Plan (Draft) 2019 of Hangzhou Tigermed Consulting Co., Ltd.( 杭州泰格醫藥科技股份有限公司 2019 年限制性股票激勵計畫（草案）)”, 49,527.00 restricted shares which were granted but not unlocked by the saidfive beneficiaries were repurchased and cancelled. After the repurchase and cancellation, the total number of shares of theCompany will be reduced from 749,557,126 shares to 749,507,599 shares, and the registered capital will be altered fromRMB749,557,126 to RMB 749,507,599, which was verified by BDO China Shu Lun Pan Certified Public Accountants LLPwith a letter of capital verification report Xin Hui Shi Bao Zi [2020] No. ZA10110 on February 26, 2020.
The Company obtained the Business License for Enterprise Legal Person registered by the Administration for Industry andCommerce of Zhejiang Province in March 2020. The unified social credit code is 9133000076823762XE, the registeredcapital is RMB749,507,599, and the registered office is located at 1502-1, Dongguan Plaza, No. 618 Jiangnan Avenue,Binjiang District, Hangzhou, China; the legal representative is Cao Xiaochun; the type of incorporation is joint stock limitedliability company (Sino-foreign joint venture, listing).
The business scope of the Company: services: technology development, technical consultation, results transfer, medical trialdata management and statistical analysis of pharmaceutical-related industrial products and health-related industrial products,translation, information technology and business processes such as data processing by undertaking service outsourcing, adultnon-certificate labor vocational skills training, adult non-cultural education and training, collecting, organizing, storing andpublishing talent supply and demand information, conducting job introductions, and conducting talent informationconsultation.
The financial statements have been approved by all Directors (board of directors) of the Company on April 15, 2020.
(II) Scope of Consolidated Financial Statements
As of December 31, 2019, subsidiaries within the scope of the Company's consolidated financial statements are asfollows:
MacroStat (China) Clinical Research Co., Ltd.（“MacroStat”）Hangzhou Simo Co., Ltd.（“Hangzhou Simo”）
| Hangzhou Simo Co., Ltd.（“Hangzhou Simo”） |
| Jiaxing Tigermed Data Management Co., Ltd.（“Jiaxing Tigermed”） |
| Shanghai Tigermed Co., Ltd（“Shanghai Tigermed”） |
| Tigermed Research Institute Co., Ltd.（“Guangzhou Tigermed”） |
| Hangzhou Tigermed-IntelliPV Co., Ltd.（“Tigermed-IntelliPV”） |
| Tiger-Xinze Medical Technology (Jiaxing) Co., Ltd.（“Tiger-Xinze”） |
| Wuxi Tigermed Consulting Co., Ltd.（“Wuxi Tigermed”） |
Taizhou Kanglihua Pharmaceutical Technology Co., Ltd（“Taizhou Kanglihua”）Beijing Medical Development Co., Ltd.（“Beijing BMD”）
| Beijing Medical Development Co., Ltd.（“Beijing BMD”） |
| Taizhou Tigermed-Jyton Medical Tech. Co., Ltd.（” Tigermed-Jyton”） |
| Hangzhou Tigermed Equity Investment Partnership（“Tigermed Equity”） |
| Hangzhou Talent MedConsulting Co., Ltd.（“Talent MedConsulting”） |
| Fantastic Bioimaging Co., Ltd.（“Fantastic Bioimaging”） |
| Beijing Yaxincheng Medical InfoTech Co., Ltd.（“Beijing Yaxincheng”） |
| Jiaxing Clinflash Computer Technology Co., Ltd.（“Jiaxing Clinflash”） |
Hangzhou Taiyu Investment Consulting Co., Ltd.（“Hangzhou Taiyu”）EPS Tigermed (Jiaxing) Co., Ltd.（“EPS Tigermed”）
| EPS Tigermed (Jiaxing) Co., Ltd.（“EPS Tigermed”） |
| Beijing Tigermed Xingrong Investment Management Co., Ltd.（“Tigermed Xingrong”） |
| Beijing Canny Consulting Inc.（“Beijing Canny”） |
| Hangzhou Yuding Equity Investment Management Partnership (Limited Partnership)（“Hangzhou Yuding”） |
| Luohe Taiyu Ankang Investment Management Center (Limited Partnership)（“Luohe Taiyu Ankang”） |
| Shihezi Tai’er Equity Investment Partnership（“Shihezi Tai’er”） |
| Hangzhou Taiyu Phase II Equity Investment Partnership（“Taiyu Phase II”） |
| Beijing Medical Development (Suzhou) Co., Ltd（Suzhou BMD”） |
| Beijing Jyton and Kannel Medical Tech. Co., Ltd.（“Jyton and Kannel”） |
| JYTON-GOWIN MEDICAL TECHNOLOGY CO., LTD. （“Jyton Kangxin”） |
| Jyton and Emergo (Beijing) Medical Technology Co., Ltd. （“Jyton Emergo”） |
| Beijing Ejyton Tech. Co., Ltd.（“Beijing Ejyton”） |
| Beijing Yaxincheng Business Service Co., Ltd.（“Yaxincheng Business”） |
| Khorgas Yaxincheng Information Technology Co., Ltd.（“Khorgas Yaxincheng”） |
| Xi’an Laisai Translation Co., Ltd.（“Xi’an Laisai”） |
| Luohe Yukang Investment Center Partnership（“Luohe Yukang”） |
| Shihezishi Taiyu Equity Investment Partnership（“Shihezishi Taiyu”） |
| Frontage Laboratories (Shanghai) Co., Ltd.（“Frontage Shanghai”） |
| Frontage Laboratories (Luohe) Co, Ltd.（“Frontage Luohe”） |
| Frontage Laboratories (Suzhou) Co, Ltd.（“Frontage Suzhou”） |
| Hongkong Tigermed Co., Limited（“Hongkong Tigermed”） |
Hong Kong Tigermed Healthcare Technology Co., Limited（“HK Healthcare”）Tigermed USA INC.（“Tigermed USA”）
Tigermed America LLC（“Tigermed America”）Frontage Holdings Corporation（“Frontage Holdings”）
| Frontage Holdings Corporation（“Frontage Holdings”） |
| Frontage Laboratories, Inc. （“Frontage Labs”） |
| Croley Martell Holdings, Inc（“Croley”） |
| Concord Holdings, LLC（“Concord Holdings”） |
| Concord Biosciences, LLC（“Concord Biosciences”） |
| RMI Laboratories, LLC（“RMI”） |
| 11736655 Canada, Ltd（“Frontage Canada”） |
BRI Biopharmaceutical Research, Inc（“BRI”）DreamCIS Inc.（“DreamCIS”）
| DreamCIS Inc.（“DreamCIS”） |
| Taiwan Tigermed Consulting Co.Ltd. （“Taiwan Tigermed”} |
| Tigermed-BDM Inc.（“Tigermed-BDM”） |
| Tigermed India Data Solutions Private Limited（“Tigermed India”） |
| Opera Contract Research Organization S.R.L.“Opera”） |
| Tigermed Clinical Research Co., Ltd.（“Tigermed Clinical ”） |
| Tigermed Australia Pty Limited.（“Tigermed Australia”） |
Tigermed Malaysia SDN. BHD.（“Tigermed Malaysia”）Singapore Tigermed Pte. Ltd.（“Tigermed Singapore”）
| Singapore Tigermed Pte. Ltd.（“Tigermed Singapore”） |
| Tigermed Swiss AG（“Tigermed Swiss”） |
| Bright Sky Resources Investment Ltd（“Bright Sky”） |
| Blue Sky Resources Investment Ltd.（“Blue Sky”） |
| TG Sky Investment Ltd.（“TG Sky ”） |
| TG Mountain Investment Co（“TG Mountain”） |
| TG Sky Growth Investment Ltd（“TG Sky Growth ”） |
| Tigermed macrostat llc（“Tigermed macrostat”） |
| Chengdu Xinsheng Tigermed Technology Company Limited（“Chengdu Xinsheng”） |
For details of the scope of and changes in the consolidated financial statements for the current period, please refer to “VIII.Change in Scope of Consolidation” and “IX. Interests in Other Entities” in these notes.IV. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS
1. Basis of Preparation
The Company prepares the financial statements on an on-going basis, based on actually occurred transactions and events andpursuant to the Accounting Standards of Enterprises－Basic Standards issued by the Ministry of Finance as well as variousspecific accounting standards, application guidelines for enterprise accounting standards, interpretation of enterpriseaccounting standards and other relevant regulations (Hereinafter collectively referred to as "Accounting Standards forEnterprises"), and the disclosure requirements of the China Securities Regulatory Commission’sPreparation Rules for Information Disclosure by Companies Offering Securities to the Public No. 15－General Provisionson Financial Reports.
2. Continuing as a Going Concern
For twelve months from the end of the reporting period, the Company has no operation risks that may be caused by certainevents or circumstances in financial, operational and other aspects, which alone or together with other events orcircumstances do not cast significant doubts on its continuing as a going concern.V. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATESNotice on specific accounting policies and accounting estimates:
See "V. Significant Accounting Policies and Accounting Estimates" for related contents in "Financial Reports".
1. Statement of compliance with Accounting Standards for Business Enterprises
The financial statements comply with the requirements of the Accounting Standards for Business Enterprises issued by theMinistry of Finance, truly and completely reflect the Company’s consolidated financial position and the financial position ofthe parent on December 31, 2019 as well as the consolidated operating results and cash flows and the operating results andcash flows of the parent for 2019
2. Accounting period
The fiscal year is from January 1 to December 31 of the Gregorian calendar.
3. Business cycle
The Company's business cycle is 12 months.
4. Accounting currency
The Company adopts RMB as the accounting currency.
5. Accounting treatment of business combination involving enterprises under and not under common controlBusiness combination involving enterprises under common control: the assets and liabilities obtained by the acquirer in thebusiness combination shall be meaured at the carrying amount of the assets and liabilities of the acquiree (including thegoodwill formed by the ultimate controller acquiring the acquiree) in the consolidated financial statements of the ultimatecontroller as at the combination date. The difference between the carrying amount of the net assets obtained in thecombination and the carrying amount of the consideration paid for the combination (or the aggregate face value of sharesissued as consideration) shall be adjusted to share premium under capital reserve. If the capital reserve is not sufficient toabsorb the difference, any excess shall be adjusted against retained earnings.
Business combination not involving enterprises under common control: the assets paid and liabilities incurred or assumed bythe acquirer as consideration of the business combination on the date of acquisition shall be measured at fair value, and thedifference between the fair value and its carrying amount shall be included in the profit and loss of the current period. Whenthe combination cost is greater than the fair value share of the identifiable net assets of the acquiree in the combination, thedifference shall be recognized as goodwill; when the combination cost is less than the fair value share of the identifiable net
assets of the acquiree in the combination, the difference shall be included in the profit and loss of the current period.
The direct related expenses incurred in the business combination shall be included in the profit and loss of the current periodwhen incurred; the transaction costs of issuing equity securities or debt securities for the business combination shal beincluded in the initial recognition amount of the equity securities or debt securities.
6. Preparation of consolidated financial statements
1. Scope of Consolidation
The consolidation scope of the consolidated financial statements shall be determined on the basis of control. Theconsolidation scope includes the Company and all its subbsidiaries.
2. Procedures of Consolidation
Based on the financial statements of its own and and its subsidiaries, the Company prepared the consolidated financialstatements by referring to other relevant information. When the Company prepares the consolidated financial statements, ittreats the entire enterprise group as an accounting entity, and reflects the overall financial position, operating results andcash flow of the enterprise group in accordance with the requirements for the recognition, measurement and presentation ofrelevant accounting standards for business enterprises and according to unified accounting policies.All subsidiaries included in the consolidated financial statements shall be consistent in accounting policies and accountingperiods with those of the Company. When the accounting policies and accounting periods adopted by the subsidiaries areinconsistent with those of the Company in preparation of consolidated financial statements, necessary adjustment shall bemade according to the accounting policies and accounting period of the Company.
For subsidiaries acquired through business combination not involving enterprises under common control, adjustments shallbe made to their financial statements based on the fair value of the identifiable net assets at the acquisition date. Forsubsidiaries acquired through business combination involving enterprices under common control, adjustments shall be madeto their financial statements based on the carrying amount of their assets and liabilities in the financial statements of theultimate controller (including the goodwill formed by the ultimate controller acquiring the subsidiary).The share of minority Shareholders in the owner’s equity, current net profit and loss and current comprehensive income ofsubsidiaries is separately shown under the owner’s equity item of the consolidated balance sheet, the net profit item and thecomprehensive income item of consolidated income statement. When the current losses shared by minority Shareholdersexceed the balance formed by the minority Shareholders’ share in the initial owner’s equity, then deduct the differencebetween these two from minority Shareholders’ rights and interests.
（1）Increase in subsidiary or business
During the reporting period, if for increase in subsidiary or business due to business combination of enterprise undercommon control, the opening balance of the consolidated balance sheet shall be adjusted; the income, expenses and profitfrom combination of subsidiary or business from the beginning of the current period to the end of the reporting period areincluded in the consolidated income statement; the cash flow from combination of subsidiary or business from the beginningof the current period to the end of the reporting period is included in the consolidated cash flow statement, while the relevantitems of the comparative statements are adjusted as if the combined reporting entity has been in existence since the timewhen the ultimate controller begins the control.
If due to reasons such as further investment control can be implmentated on investees under common control, partiesdeemed to be involved in the combination shall be adjusted immediately in the current state when the ultimate controllerbegins the control. For equity investment held before gaining control of the acquiree, the change in relevant profit and loss,other comprehensive income and other net assets recognised from the date of obtaining the original equity and the date whenthe acquirer and the acquiree are under common control (which ever is the latter) to the date of combination are used tooffset the opening retained earnings or current profit and loss respectively during the period of the comparative statements.
During the reporting period, if for increase in subsidiary or business due to business combination of enterprise not undercommon control, the opening balance of the consolidated balance sheet shall not be adjusted; the income, expenses andprofit of such subsidiary or business from the date of acqusition to the end of the reporting period are included in theconsolidated income statement; cash flow of such subsidiary or business from the date of acqusition to the end of thereporting period are included in the consolidated cash flow statement.
Where control can be implemented on investees not under common control due to reasons such as further investment, theCompany re-measures the equity of the acquirees held before the date of acqusition according to the fair value of suchequity at the acqusition date, with the difference in the fair value and the carrying amount to be included in the investmentincome of the current period. If the equity of the acquirees held before the date of acquisition involves changes in othercomprehensive income and other owners’ equity under the equity method of accounting other than net profit and loss,changes relating to other comprehensive income and other owners’ equity profit distribution are converted into the currentinvestment income at the date of acqusition, except for other comprehensive income arising from changes in the netliabilities or net assets under defined benefit plan remeasured by the investees.
(2）Disposal of subsidiaries and business
① General methods of treatment
During the reporting period, if the Company disposes of a subsidiary or business, the income, expenses and profit of thesubsidiary or business from the beginning of the period to the disposal date are included in the consolidated incomestatement; the cash flow of the subsidiary or business from the beginning of the period to the disposal date is included in theconsolidated cash flow statement.
Where control of the investee is lost due to partial disposal of the equity investment, or any other reasons, the remainingequity investment is remeasured to fair value at the date in which control is lost. The sum of consideration received fromdisposal of equity investment and the fair value of the remaining equity investment, net of the difference between the sum ofthe Company’s previous share of the subsidiary’s net assets recorded from the acquisition date or combination date andgoodwill, is recognised in investment income in the period in which control is lost. Other comprehensive income or netprofit and lossrelated to the previous equity investment in the subsidiary, changes in equity except the other comprehensive income andprofit distribution, are transferred to investment income of the current period when control is lost, except the othercomprehensive income as a result of the changes arising from the remeasurement of the net assets and net liabilitiesof the investee’s defined benefit plan.
Where loss of control is due to the decrease in the Company’s shareholding as a result of the increase in capital contributionto the subsidiary by other investing parties, the accounting principle described above will be applied.
②Disposal of subsidiary achieved by stages
When disposal of equity interests of subsidiaries through multiple transactions until control is lost, generally transactions instages are treatment as a package deal in accounting if the transaction terms, conditions, and economic impact of disposal ofthe subsidiary’s equity interests comply with one or more of the following:
ⅰ . These transactions are achieved at the same time or the mutual effects on each other are considered;ⅱ． A complete set of commercial results can be achieved with reference to the series of transactions as a whole;ⅲ． Achieving a transaction depends on at least achieving of one of the other transaction;ⅳ． One transaction recognised separately is not economical, but it is economical when considered together with othertransactions.If losing control of a subsidiary in disposal of equity interests through multiple transactions is recognised as a package deals,these transactions shall be in accounting treated as loss control of a subsidiary in disposal of equity interests achieved.However, the differences between price on each disposal and disposal of investment on the subsidiary’s net assets shall berecognised in other comprehensive income in the consolidated financial statements before losing control, and transferred inprofit or loss for the period when the control is lost.If all transactions in disposal of equity interests of subsidiaries until losing control are not a package deals, accountingtreatment for partial disposal of equity investments of subsidiary without losing control shall be applied before control is lost.When control is lost, general accounting treatment for disposal of a subsidiary shall be used.
（3）Acquisition of minority interest of subsidiaries
The Company shall adjust the share premium in the capital reserve of the consolidated balance sheet with respect to anydifference between the long-term equity investment arising from the purchase of minority interest and the net assetsattributing to the parent company continuously calculated on the basis of the newly increased share proportion as of theacquisition date (or date of combination) or, adjust the retained earnings in case the share premium in the capital reserve isinsufficient for write-down.
（4）Partial disposal of equity investment in subsidiaries without losing control
The difference between disposal consideration of long-term equity investment in subsidiaries partially disposed by theGroup without losing control and the share of net assets calculated from the date of acquisition or combination date shall beadjusted to share premium in the capital reserve in the consolidated balance sheet. Adjustments shall be made to retainedearnings in the event that the share premiums in the capital reserves are not sufficient.
7. Classification of the joint arrangements and accounting method
A joint arrangement is classified as either a joint operation or a joint venture.The Company is engaged in joint operation when the Company is a joint operator of joint arrangement, being entitled to theassets and assuming the liabilities relating to the arrangement.The Company recognizes the following items in relation to its interest in a joint operation, and carries out correspondingaccounting treatment in accordance with relevant accounting standards:
（1）The Company’s solely-held assets, and the Company’s share of any assets held jointly;
（2）The Company’s solely-assumed liabilities, and the Company’s share of any liabilities incurred jointly;
（3）The Company’s revenue from the sale of its share of the output arising from the joint operation;
（4）The Company’s share of the revenue from the sale of the output by the joint operation;
（5）Its solely-incurred expenses and the Company’s share of any expenses incurred jointly.
Please refer to Note “V. (14) Long-term equity investment” for details on the Company’s accounting policy of jointarrangements.
8. Determination of cash and cash equivalents
In preparing the cash flow statement, the cash on hand and deposits that are available for payment at any time of theCompany are recognised as cash. The short-term (due within 3 months from the date of purchase) and highly liquidinvestments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of valuechange are recognised as cash equivalents.
9. Foreign currency transactions
1. Foreign currency business
Foreign currency transactions shall be translated into RMB at the spot exchange rate on the day when the transactionsoccurred.Balance sheet date foreign currency monetary items shall be translated using the spot exchange rate at the balance sheet date.The resulting exchange differences are recognised in profit or loss for the current period, except for those differences relatedto a specific-purpose borrowing denominated in foreign currency for acquisitions and construction of the qualified assets,which should be capitalised as cost of the borrowings.
2. Translation of foreign currency financial statements
All assets and liabilities items in the balance sheet are translated based on spot exchange rate on the balance sheet date;owners’ equity items other than “undistributed profit” are translated at a spot exchange rate when accrued. Revenue andexpense items in the income statement are translated at a spot exchange rate at the transaction occurrence date.For disposal of overseas operation, the difference arising from the translation of the foreign currency financial statements ofthe overseas operation, is accounted for in the profit and loss account in the current period from owners’ equity items.
10. Financial instruments
Financial instruments include financial assets, financial liabilities, and equity instrument.
1. Category of financial instruments
Accounting policy applicable from January 1, 2019The Company classifies financial assets into the following categories based on the business model of the financial assetsunder management and the contractual cash flow characteristics of financial assets: Financial assets measured at amortizedcost; Financial assets measured at amortized cost; Financial assets at fair value through other comprehensive income (debtinstruments) and financial assets at fair value through profit or loss.
The financial assets are classified as financial assets at amortized cost if the contractual cash flows of the investmentscomprise solely payments of principal and interests and the investment is held within a business model whose objective isachieved by the collection of contractual cash flows. The financial assets are classified as financial assets at fair valuethrough comprehensive income (debt instrument) if the contractual cash flows of the investments comprise solely paymentsof principal and interests and the investment is held within a business model whose objective is achieved by the collection ofcontractual cash flows and the sales of the financial assets. Other than the above, the financial assets are classisfied asfinancial assets at fair value through profit or loss.For investments in non-transactional equity instruments, the Company determines at the initial recognition whether they are
designated as financial assets (equity instruments) that are measured at fair value and whose changes are included in othercomprehensive income. At the time of initial recognition, in order to eliminate or significantly reduce accounting mismatch,financial assets can be designated as financial assets measured at fair value and whose changes are included in the profitsand losses of the current period.Financial liabilities, at initial recognition, measured at financial liabilities measured at fair value through profit or loss, andamortised cost.When meeting the criteria as followed, the Company may, at initial recognition, irrevocably designate afinancial liability asmeasured at fair value through profit or loss:
1)It eliminates or significantly reduces a measurement or recognition inconsistency
2)A group of financial liabilities or financial assets and financial liabilities is managed and its performance is evaluated on afair value basis, in accordance with a documented risk management or investment strategy, and information about the groupis provided internally on that basis to the entity’s key management personnel
3)The financial liabilities include embedded derivatives which can be split separately.
Accounting policy applicable prior to January 1, 2019Financial assets and financial liabilities are classified at initial recognition as : financial assets or liabilities measured at fairvalue through profit or loss, including held-for-trading financial assets or financial liabilities and directly designated asfinancial assets or financial liabilities measured by fair value with changes included in the current profits and losses;held-to-maturity investments; accounts receivable; available-for-sale financial assets; other financial liabilities etc.
2. Recognition and measurement of financial instruments
Accounting policy applicable from January 1, 2019（1 ）Financial assets measured at amortised costFinancial assets measured at amortised cost include bills receivable and accounts receivable, other receivables, long-termreceivables, and debt investment, which are initially measured at fair value, and related transaction costs are included in theinitial recognition amount; Accounts receivable that do not contain significant financing components and accountsreceivable that the Company has decided not to consider for a financing component of no more than one year are initiallymeasured at the contractual transaction price.Interest calculated by the effective interest method during the period of holding is included in the current profit and loss.When recovering or disposing, the difference between the price obtained and the book value of the financial asset isincluded in the current profit and loss.
（2）Financial assets measured at fair value and whose changes are included in other comprehensive income (debtinstruments)Financial assets (debt instruments) that are measured at fair value and whose changes are included in other comprehensiveincome include other debt investments, which are initially measured at fair value, and related transaction costs are includedin the initial recognition amount. The financial assets are subsequently measured at fair value. Changes in fair value areincluded in other comprehensive income except for interest, impairment losses or gains and exchange gains and lossescalculated using the effective interest method.
When the recognition is terminated, the accumulated gain or loss previously recognised in othercomprehensive income istransferred from other comprehensive income and recognised in profit or loss.
（3）Financial assets measured at fair value and whose changes are included in other comprehensive income (debt
instruments)Financial assets measured by fair value and whose changes are included in other comprehensive income (equity instruments),including other equity instruments, are initially measured at fair value, and related transaction costs are included in the initialrecognition amount. The financial assets are subsequently measured at fair value, and changes in fair value are included inother comprehensive income. The dividends obtained are included in the current profits and losses.When the recognition is terminated, the accumulated gain or loss previously included in othercomprehensive income istransferred from other comprehensive income and included in retained earnings.
（4）Financial assets measured at fair value through profit or loss
Financial assets measured at fair value through profit or loss include held-for-trading financial assets, derivative financialassets and other non-current financial assets, which are initially measured at fair value. The financial assets are subsequentlymeasured at fair value, and changes in fair value are recognised in profit or loss.
（5）Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss, including held-for trading financial liabilities, derivativefinancial liabilities, etc., are initially measured at fair value, and related transaction expense is recognized in profit or loss.The financial liabilities are subsequently measured at fair value, and changes in fair value are recognised in profit or loss.When the recognition is terminated, the difference between the fair value and the initially recorded amount is recognized asinvestment income, and the gains and losses from changes in fair value are recognized in profit or loss.
（6）Financial liabilities measured at amortised cost
Financial liabilities measured at amortized cost include short-term borrowings, bills payable and accounts payable, otherpayables, long-term borrowings, bonds payable, long-term payables, initially measured at fair value, and related transactioncosts are included in the initial recognition amount.Interest calculated by the effective interest method during the period of holding is included in the current profit and loss.When the derecognition is terminated, the difference between the consideration paid and the carrying amount of thefinancial liability is recognized in profit or loss.Accounting policy applicable prior to January 1, 2019
（1）Financial assets at fair value and whose changes are included in profit or loss (financial liabilities)When acquired, the fair value (net of declared but not paid cash dividends or bond interest that has expired but not yetreceived) is recognized as the initial confirmation amount and the relevant transaction costs are included in profit or loss.The interest or cash dividends received during the holding period are recognized as investment income, and the change infair value is included in the current profit and loss at the end of the period.At the time of disposal, the difference between its fair value and the initial amount is recognized as investment income, andthe profit and loss in fair value are adjusted.
（2）Held-to-maturity investments
When acquired, the sum of the fair value (net of bond interest that has expired but not yet received) and the relatedtransaction expenses is taken as the amount initially recognized.During the holding period, the interest income is calculated based on the amortised cost and the effective interest rate, and isincluded in the investment income. The effective interest rate is determined when acquired and remains in the expected termor for a shorter period.The difference between the amount received and the book value of such investment is recognized in the investment incomeat their disposal.
（3）Accounts receivable
The debts receivable arising from the sales of goods or provision of labour services by the Company, and the rights to debt
instruments of other business held by the company that do not include ones that are quoted on an active market, includingaccounts receivable and other receivables, are recognized using the contractual amount receivable from the buyer or theagreed fees as initial recognition amount; those of a financing nature are recognized using its current value as initialrecognition amount.Upon receipt or disposal, the difference between the consideration received and the carrying amount of the receivable isrecognized in profit or loss for the period.
（4）Available-for-sale financial assets
When acquired, the sum of the fair value (net of the cash dividends that have been declared but not yet paid or the bondinterest that has expired but not yet received) and the related transaction costs is recognized as the amount initiallyrecognized.The interest or cash dividends obtained during the holding period are recognized as investment income, which is measuredat fair value through other comprehensive income at the end of the period. However, the investment in equity instrument thatare not quoted in an active market and whose fair value cannot be measured reliably, and derivative financial assets that arelinked to such equity instrument and that must be settled through the delivery of the equity instrument shall be measured atcost.When disposed, the difference between the amount received and the book value of such financial assets is included in theinvestment income. At the same time, the amount of the change in the fair value directly included in other comprehensiveincome corresponding to the disposal portion is transferred out and is included in the profit or loss for the period.
（5）Other financial liabilities
The sum of its fair value and related transaction cost is taken as the amount initially recognized. It was subsequentlymeasured at amortized cost.
3. Basis for recognition and measurement method of transferred financial assets
When a company transfers its financial asset, the financial assets shall derecognized in the event that almost all the risks andrewards of the ownership of such financial assets have been transferred to the transferee; the financial assets shall not bederecognized in the event that almost all the risks and rewards of ownership of such financial assets are retained.When judging whether the transfer of financial assets satisfies the conditions for derecognition of the above-mentionedfinancial assets, the principle of substance over form is adopted. The company divides the transfer of financial assets into theoverall transfer and partial transfer of financial assets. If the overall transfer of financial assets meets the conditions forderecognition, the difference between the following two amounts is included in the profit or loss for the period:
(1) the book value of the transferred financial assets;
(2) the sum of the consideration received as a result of the transfer and the cumulative change in fair value that wasoriginally directly recognized in owners’ equity in the case where the transferred financial assets are available-for-salefinancial assets.If the partial transfer of financial assets meets the conditions for derecognition, the book value of the transferred financialassets is apportioned between the derecognition portion and the non-derecognition portion at their respective fair values, andthe difference between the following two amounts is included in the profit or loss for the period:
(1) The book value of the derecognition portion;
(2) the sum of the consideration for the derecognition portion and the accumulated change in fair value corresponding to thederecognition portion that was originally directly recognized in owners’ equity in the case where the transferred financialassets are available-for-sale financial assets.
4. Conditions for derecognition of financial liabilities
If all or part of the current obligations of financial liabilities have been discharged, the financial liabilities or part of themwill be derecognized; if the company signs an agreement with the creditor, to replace the existing financial liabilities withnew financial liabilities with substantially different terms of contract, the existing financial liabilities shall be derecognizedwhile the new financial liabilities are recognized.If substantial changes are made to the contract terms (whole or in part) of existing financial liabilities, the existing financialliabilities (or part of them) shall be derecognized, and the financial liability after the modification of terms shall berecognized as a new financial liability.When all or part of the financial liabilities is derecognized, the difference between the book value of the derecognizedfinancial liabilities and the paid consideration (including the non-cash assets transferred out or the new financial liabilities)shall be included in the profit or loss for the period.If the Company repurchases part of the financial liabilities, the book value of the entire financial liabilities is allocated onthe repurchase date based on the relative fair value of the continuing recognition portion and the derecognition portion. Thedifference between the book value assigned to the derecognized portion and the consideration paid (including the non-cashassets transferred out or the new financial liabilities) shall be included in the profit or loss for the period.
5. Method for determining the fair value of financial assets and financial liabilities
As for financial instruments with an active market, their fair value is determined by quoted prices in the active market. Asfor financial instruments without an active market, their fair value is determined by using valuation techniques. At the timeof valuation, the company adopts valuation techniques that are applicable in the current circumstances and sufficientlysupported by available data and other information, and selects input values that are consistent with the characteristics of theassets or liabilities considered by the market participants in the transactions of the relevant assets or liabilities, andprioritizes the use of relevant observable input values. Unobservable input values are used only if the relevant observableinput values are not available or are not practicable.
6. Testing methodology and accounting for impairment of financial assets
Accounting policy applicable from January 1, 2019The Company considers all reasonable and evidenced information, including forward-looking information, to estimate theexpected credit losses of financial assets measured at amortized cost and financial assets (debt instruments) measured at fairvalue through other comprehensive income, either individually or in combination. The measurement of expected creditlosses depends on whether the financial assets have increased significantly since the initial recognition.If the credit risk of the financial instrument has increased significantly since the initial recognition, the Company measuresits loss provision at the amount equivalent to the expected credit loss for the entire life of the financial instrument; If thecredit risk of the financial instrument has not increased significantly since the initial confirmation, the Company measuresits loss provision at the amount equivalent to the expected credit loss for the financial instrument over the next 12 months.The increase or return of the loss provision resulting therefrom shall be credited to the current profit or loss as animpairment loss or gain.Usually more than 30 days overdue, the Company considers that the credit risk of the financial instrument has significantlyincreased, unless there is conclusive evidence that the credit risk of the financial instrument has not increased significantlysince the initial recognition.If the credit risk of a financial instrument on the balance sheet date is low, the Company does not consider that the credit risk
of the financial instrument has increased significantly since its initial recognition.If any objective evidence shows that the financial asset has suffered credit impairment, the Company shall make provisionfor impairment of the financial asset individually.Regarding accounts receivable, whether or not it contains a significant financing component, the loss allowance is measuredthroughout the life of the receivable at an amount equal to lifetime expected credit losses.For lease receivables and long-term receivables derived from the sale of commodities or the provision of labor services, theloss allowance is measured throughout the life of the receivable at an amount equal to lifetime expected credit losses.Accounting policy applicable prior toJanuary 1, 2019Except for financial assets measured at fair value through profit or loss for the period, the company checks the book value offinancial assets on the balance sheet date. If there is objective evidence that a financial asset is impaired, the provision forimpairment will be made.
(1) Provision for impairment of available-for-sale financial assets:
If the fair value of available-for-sale financial assets decline significantly at the end of the period, or it is expected that suchdecline trend is non-temporary after comprehensive consideration of various relevant factors, and it is deemed to beimpaired. The accumulated losses resulting from such decline in the fair value directly included in the owner’s equity aretransferred out for recognition of the impairment loss.For the available-for-sale debt instruments that have been recognized for impairment losses, the originally recognizedimpairment loss shall be reversed and included in the profit or loss for the period in the events that the fair value of suchdebt instruments is increased in the subsequent accounting period and the originally recognized impairment loss isobjectively related to the event occurred after such recognition.Impairment losses arising from investments in available-for-sale equity instruments are not reversed through profit or loss.
(2) Provision for bad debts of receivables:
① The receivables that are individually significant and subject to separate provision for bad debts:
The basis for judgment of individually significant amount and amount criteria: Top five accounts receivable balanceMethod to provision for bad debts that are individually significant and subject to separate provision:
| The basis for judgment of individually significant amount and amount criteria: | Top five accounts receivable balance |
| Method to provision for bad debts that are individually significant and subject to separate provision: | The Company assesses individually significant receivables for impairment on individual basis, the Company recognises the impairment loss based on the difference between the carrying amount and the present value of estimated future cash flows. Impairment test on individual basis is conducted for accounts receivable and other receivables, where there is no impairment on individual basis, bad debts are included in the group of receivables with similar credit risks to test for impairment. |
②Provision for bad debts of receivables based on credit risk feature combination:
| Accrual method for provision for bad debts based on credit risk feature combination | |
| Aging analysis | |
| groups of receivables with similar credit risk characteristics by ageing and taking into consideration of the current circumstances. | |
| Other methods | Bills receivable, prepayments, and long-term receivables which are not classified into credit risks characteristics group are subject to separate impairment assessment. If there is objective evidence that the receivables are impaired, the impairment loss and the provision for bad debts are determined based on the amount of the present value of the future cash flows expected to be derived from the receivables below the carrying amount. If there is no impairment identified according to the impairment assessment, no provision for bad debts shall be recognised. |
In the combination, the provision for bad debts is made by balance percentage method:
| Ageing | Proportion of provision for accounts receivable(%) | Proportion of provision for other receivables(%) |
| Within 1 year (inclusive) | 5 | 5 |
| 1-2 years | 10 | 10 |
| 2-3 years | 20 | 20 |
| 3-4 years | 40 | 40 |
| 4-5 years | 80 | 80 |
| Over 5 years | 100 | 100 |
② The receivables that are not individually significant but subject to separate provision for bad debts:
Reasons for separate provision for bad debts: The receivables that are not individually significant but has beenimpaired by objective evidence shall be tested for impairment individually.Method for bad debt provision: Base on the current situation to determine the proportion of bad debt provision.
（3）Provision for impairment of held-to-maturity investments:
The impairment loss of held-to-maturity investments is measured by reference to the measurement method of impairmentloss of receivables.
11. Inventories
1.Category of inventory
Inventories include raw materials.
2. Determination of cost
Cost of inventories is determined using the weighted average method.
3. Basis for the determination of net realisable value of different type of inventories
Net realisable value of held-for-sale commodity stocks, such as finished goods, goods-in-stock, and held for-sale rawmaterials, during the normal course of production and operation, shall be determined by their estimated selling price less therelated selling expenses and taxes; the net realizable value of material inventories, which need to be processed, during thenormal course of production and operation, shall be determined by the amount after deducting the estimated cost ofcompletion, estimated selling expenses and relevant taxes from the estimated selling price of finished goods; the netrealisable value of inventories held for execution of sales contracts or labour contracts shall be calculated on the ground ofthe contracted price. If an enterprise holds more inventories than the quantity stipulated in the sales contract, the net
realisable value of the exceeding part shall be calculated on the ground of general selling price.Decline in value of inventories is made on an item-by-item basis at the end of the period. For large quantity and low valueitems of inventories, provision may be made based on categories of inventories; for items of inventories relating to a productline that is produced and marketed in the same geographical area and with the same or similar end uses or purposes, whichcannot be practicable evaluated separately from other items in that product line, provision for decline in value of inventoriesmay be determined on an aggregate basis.Unless there is evidence clearly shows that abnormality in market price exists as of the balance sheet date, the net realisablevalue of inventories is determined based on the market price as of the balance sheet date.
4. Inventory system
The perpetual inventory system is adopted.
5. Amortisation of low-value consumables and packaging materials
（1）Low-value consumables are amortised using the immediate write-off method;
（2）Packaging materials are amortised using the immediate write-off method.
12. Contractual assets
The Company presents contractual assets or contractual liabilities in the balance sheet based on the relationship betweenperformance obligations and customer payments. The consideration (except for receivables) that the Company has the right(such right depends on factors other than the passage of time) to transfer goods or provide services to customers is listed ascontractual assets. Contractual assets and contractual liabilities under the same contract are presented on a net basis.
For details on the determination and accounting treatment of expected credit losses of contractual assets please refer to Note“(V) 10. Testing methodology and accounting for impairment of financial assets”.
13. Assets classified as held-for-sale
The Company recognises non-current assets or disposal groups which meet the following conditions as assets held for sale:
（1）The assets or disposal groups must be available for sale immediately under the current conditions according to the usualterms of the sale of such assets in similar transactions;
（2）The assets are highly likely to be sold, namely, the Company has been offered a resolution with disposition of the assets.The Company has entered into an agreement on irrevocable transfer with the transferee and the transfer will be completedwithin 1 year. If regulation needs to be approved by shareholders, it has approved by the general meeting of shareholders orrelevant authority.
14. Long-term equtity investment
1. Joint control or significant influence criterion
Joint control is the contractually agreed sharing of control of an arrangement, and exists only when decisions about therelevant activities of the arrangement require the unanimous consent of the parties sharing control. The Company togetherwith the other joint venture parties can jointly control over the investee and are entitled to the right of the net assets of theinvestee, the investee is joint venture of the Company.Significant influence refers to the power to participate in making decisions on the financial and operating policies of anenterprise, but not the power to control, or jointly control, the formulation of such policies with other parties. Where the
Company can exercise significant influence over the investee, the investee is an associate of the Company.
2. Determination of initial investment cost
（1）Long-term equity investments formed through business combination of entities
For business combinations involving entities under common control: where the Company pays cash, transfers non-cashassets, bear debts or issue equity securities as consideration of combinations, the initial investment cost of long-term equityinvestments are the share with reference to the book value of the shareholders’ equity of the acquiree in the financialstatements of the ultimate controlling party on the date of combinations. In connection with imposing control over theinvestee under joint control as a result of additional investment and other reasons, on the combination date, the initial cost oflong-term equity investments shall be determined based on share of carrying amounts in the consolidated financial statementof the ultimate controlling party by net assets of the combined party after the combination. The difference between initialinvestment cost and the carrying value of long term equity investment before combination and the sum of carrying value ofnewly paid consideration for additional shares acquired on the date of combination is to adjust share premium. If the balanceof share premium is insufficient, any excess is adjusted to retained earnings.Business combinations involving entities not under common control: the cost of the combination ascertained on the date ofacquisition shall be taken as the initial investment cost of the long-term equity investments. In connection with imposingcontrol over the investee not under joint control as a result of additional investment and other reasons, the initial investmentcost when changing to the cost method shall be the sum of the carrying value of the equity investment originally held andthe newly increased initial investment cost.
（2）Long-term equity investments acquired by other means
The initial cost of investment of a long-term equity investment obtained by the Company by cash payment shall be thepurchase cost which it is actually paid.The initial cost of investment of a long-term equity investment obtained by the Company by means of issuance of equitysecurities shall be the fair value of the equity securities issued.If the non-monetary assets transaction is commercial in nature and the fair value of the assets received or surrendered can bereliably measured, the initial cost of investment of a long-term equity investment received the non-monetary assetstransaction, shall be determined on the basis of the fair value of the assets surrendered and the related tax payable, unlessthere are concrete evidence that the fair value of the assets received is more reliable; For non-monetary assets transactionwhich does not meet the above conditions, the initial cost of investment of a long-term equity investment received shall bethe book value of the assets surrendered and the relevant taxes payable.For the long-term equity investment acquired by the Company through debt restructurings, its book value is determinedbased on the fair value of the creditor’s rights waived and the taxes that can be directly attributable to the asset and othercosts, and the balance between the fair value and book value of the creditor’s rights waived is included in current profit orloss.
3. Subsequent measurement and recognition of profit or loss
（1）Long-term equity investment accounted for by cost method
Long-term equity investment in subsidiaries of the Company is accounted for by cost method, except for the actualconsideration paid for the acquisition of investment or the declared but not yet distributed cash dividends or profits whichare included in the consideration, investment gains is recognised as the Company’ shares of the cash dividends or profitsdeclared by the investee.
（2）Long-term equity investment accounted for by equity method
Long-term equity investments of associates and jointly controlled entities are accounted for using equity method. Where theinitial investment cost of a long-term equity investment exceeds the investor’s interest in the fair value of the investee’sidentifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost; where the initialinvestment cost is less than the investor’s interest in the fair value of the investee’s identifiable net assets at the acquisition
date, the difference shall be charged to profit or loss for the current period.The Company recognizes the investment income and other comprehensive income according to the shares of net profit orloss and other comprehensive income realised by the investee which it shall be entitled or shared respectively, andsimultaneously makes adjustment to the carrying value of long-term equity investments; The carrying value of long-termequity investment shall be reduced by attributable share of the profit or cash dividends for distribution declared by theinvestee. In relation to other changes of owner’s equity except for net profits and losses, other comprehensive income andprofit distributions of the investee, the carrying value of long-term equity investments shall be adjusted and included inowner’s equity.When determining the amount of proportion of net profit or loss in the investee which it entitles, fair value of eachidentifiable assets of the investee at the time when the investment is obtained shall be used as basis, and according to theaccounting policies and accounting period of the Company, adjustment shall be made to the net profit of the investee.During the period of holding investments, when preparing consolidated financial statements by the investee, the accountingshall be based on the amounts attributable to the investee in the net profit, other comprehensive income and other changes ofthe owner’s equity in the consolidated financial statements.The unrealised profit or loss resulting from transactions between the Company and its associates or joint venture shall beeliminated in portion to the investor’s equity interest of investee, based on which investment income or loss shall berecognised. Any losses resulting from transactions, which are attributable to impairment of assets, shall be fully recognised.Transactions of the assets casted and sold that are able to constitute an agreement between the Company and associates, jointventure shall be dealt with in accordance with Note “V. (5) Accounting method for business combination involvingenterprises under common control and not under common control” and Note“V. (6) Preparation of consolidated financialstatements”.In recognition of share of losses in the investee, the Company treats it in the following order: Firstly, the Company will writeoff the carrying value of long-term equity investments. Secondly, in the event the aforesaid carrying value is insufficient forwrite off, it shall continue to recognize investment loss and write off carrying values of long-term receivables to the extentof the carrying amount of the long-term equity which substantively constitutes the net investment in the investee. Finally,after the above treatment, for the additional obligations which shall be still assumed by entities according to investmentcontract or agreement, the estimated liabilities shall be recognized based on the obligations which are expected to assumeand included in the investment loss for the current period.
(3）Disposal of long-term equity investment
For disposalof long-term equity investment, the difference between the carrying amount and the actual purchase price isincluded in the profit and loss of the current period.
For long-term equity investments accounted for using the equity method, when disposing of the investment , the same basisfor direct disposalof related assets or liabilities by the investee will be used, and accounting treatment will be carried out forthe portion originally included in other comprehensive income at a corresponding rate. Owners’ equity recognised due tochanges in the owners’ equity other than net profit and loss, other comprehensive income and profit distribution of theinvestee will be carried forward in proportion to the current profit and loss, except for other comprehensive income arisingfrom change in net liabilities or net assets due to the investee’s remeasurement of the defined benefit plan.
If joint control or significant influence on the investee is lost due to reasons including disposal of part of the equityinvestment, etc., the remaining equity after the disposal shall instead be accounted for according to the standards forrecognition and measurement of financial instruments, while the difference between the fair value and the carrying amounton the date of loss of joint control or significant influence shall be included in the profit and loss of the current period. Othercomprehensive income in the original equity investment recognised due to the use of equity method of accounting shall be
accounted for on the same basis as the investee's direct disposal of related assets or liabilities when the use of equity methodof accounting is ceased. Owners’ equity recognised due to changes in owners’ equity other than net profit and loss, othercomprehensive income and profit distribution of the investee shall all be transferred to the current profit and loss when theuse of equity method is ceased.
If the Company loses control of the investee due to reasons such as disposal of part of its equity investment in the investeeor decreased shareholding ratio of the Company because of capital increase of other investors in subsidiaries, use the equitymethod of accounting instead when the remaining equity can exercise joint control or significant influence, and makeadjustment as if the equity method has been used for accounting when the equity is acquired in the preparation of individualfinancial statements; if the remaining equity cannot exercise joint control or significant influence over the investee,accounting treatment shall be made instead according to relevant provisions for recognition and measurement of financialinstruments, and the difference between the fair value and the carrying amount on the date of loss of control is accounted forin the profit and loss of the current period.
Where the disposed equity is obtained through business combination due to additional investment and other reasons, whenpreparing individual financial statements, remaining equity after the disposal is accounted for using the cost method or theequity method, while other comprehensive income and other owners’ equity recognised due to the use of equity methods ofaccounting for the equity investment held before the purchase date are carried forward in proportion; where the remainingequity after disposal is accounted for according to the recognition and measurement standards for financial instruments, andall other comprehensive income and other owner's equity are carried forward.
15. Conditions for recognition of fixed assets
(1) Conditions for recognition
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, forrental to others, or for administrative purposes; and have a useful life of more than one accounting year. Fixed asset isrecognised when it meets the following conditions: (1) It is probable that the economic benefits associated with the fixedasset will flow to the enterprise; (2) Its cost can be reliably measured.
（2）Method for depreciation
| Asset class | Depreciation method | Depreciation period (year) | Residual value | Annual depreciation |
| House and building | Straight-line method | 10~40 | 5.00 | 2.375~9.50 |
| Special equipment | Straight-line method | 5~10 | 5.00 | 9.50~19.00 |
| Transportation equipment | Straight-line method | 5 | 5.00 | 19.00 |
| General equipment | Straight-line method | 5 | 5.00 | 19.00 |
Fixed assets are depreciated by categories using the straight-line method, and the annual depreciation rates are determinedby categories based upon their estimated useful lives and their estimated residual values. Where different components of afixed asset have different useful lives or generate economic benefits for the enterprise in different ways, differentdepreciation rates or depreciation methods shall apply, and each component is depreciated separately.
For a fixed asset leased under finance lease, if it can be reasonably determined that the ownership of the leased asset can beacquired upon the expiry of the lease term, such asset will be depreciated over its remaining useful life; if it cannot bereasonably determined that the ownership of the leased asset can be acquired upon the expiry of the lease term, such assetwill be depreciated over the shorter of the lease term and its remaining useful life.
（3）Recognition, measurement and depreciation of fixed assets under finance lease
Where any one of the following conditions is provided in the lease agreement between the Company and the lessor, assetsunder finance lease will be recognised: (1) upon the expiry of lease, the ownership of the leased asset will be transferred tothe Company; (2) the Company has the option to purchase the leased asset at a price that is expected to be far less than thefair value of the leased asset at the exercise of the option; (3) the lease term accounts for the majority of the useful life of theleased asset; (4) the present value of the minimum lease payment at the inception of the lease is substantially the same as thefair value of the leased asset. At inception of the lease, the leased asset shall be stated at the lower of the fair value of theleased asset and the present value of the minimum lease payments, and the minimum lease payments shall be recorded as thecarrying amount of long-term payables. The difference between the recorded amount of the leased asset and the minimumlease payments shall be accounted for as unrecognised finance charge.
16. Construction in progress
Construction in progress is measured at all the expenditures incurred to bring the fixed assets ready for their intended use. Ifthe construction in progress of fixed assets constructed are ready for their intended use but the final account of completedproject has not been issued, it should be transferred to fixed assets at an estimated cost according to the construction budget,construction price or actual cost, and depreciation should be provided according to deprecation policy for fixed assets fromthe date when the assets are ready for their intended use. When the final account of completed project is issued, theestimated cost will be adjusted according to the actual cost, while the original depreciation charge will not be adjusted.
17. Borrowing costs
1. Criteria for recognition of capitalised borrowing costs
Borrowing costs refer to borrowing interest, amortization of discounts or premiums, ancillary costs and exchangedifferences arising from foreign currency borrowings, etc.The Company’s borrowing costs that are directly attributable to the acquisition or production of a qualifying asset arecapitalised into the cost of relevant assets. Other borrowing costs are recognised as expenses in profit or loss in the period inwhich they are incurred.Qualifying assets include fixed assets, investment property and inventories that necessarily take a substantial period of timefor acquisition, construction or production to get ready for their intended use or sale.Capitalisation of borrowing costs begins when the following three conditions are fully satisfied:
（1）expenditures for the assets (including cash paid, non-currency assets transferred or interest-bearing liabilities assumedfor the acquisition, construction or production of qualifying assets) have been incurred;
（2）borrowing costs have been incurred;
（3）acquisition, construction or production that are necessary to enable the asset reach its intended usable or saleablecondition have commenced.
2. Capitalisation period of borrowing costs
The capitalisation period shall refer to the period between the commencement and the cessation of capitalisation of
borrowing costs, excluding the period in which capitalisation of borrowing costs is temporarily suspended.Capitalisation of borrowing costs shall cease when the qualifying asset under acquisition and construction or production getsready forintended use or sale.If part of an asset being acquired, constructed or produced has been completed respectively and put into use individually,capitalisation of borrowing costs should cease.If different parts of the asset acquired, constructed or produced are completed separately, but such asset will not be ready forthe intended use or sale until all parts have been completed, then the borrowing costs will be capitalised until the completionof all parts of the said asset.
3. Suspension of capitalisation period
Capitalisation of borrowing costs shall be suspended during periods in which the acquisition, construction or production of aqualifying asset is interrupted abnormally, when the interruption is for a continuous period of more than 3 months; if theinterruption is a necessary step for making the qualifying asset under acquisition and construction or production ready forthe intended use or sale, the capitalisation of the borrowing costs shall continue. The borrowing costs incurred during suchperiod of interruption shall be recognised in current profit or loss. When the acquisition and construction or production ofthe asset resumes, the capitalisation of borrowing costs commences.
4. Calculation of capitalisation rate and amount of borrowing costs
Specific borrowings for the acquisition, construction or production of qualifying assets, borrowing costs of the specificborrowings actually incurred in the current period minus the interest income earned on the unused borrowing loans as adeposit in the bank or as investment income earned from temporary investment will be used to determine the amount ofborrowing costs for capitalisation.General borrowings for the acquisition, construction or production of qualifying assets, the to-be-capitalised amount ofinterests on the general borrowing shall be calculated and determined by multiplying the weighted average assetdisbursement of the part of the accumulative asset disbursements minus the specifically borrowed loans by the capitalisationrate of the general borrowing used. The capitalisation rate shall be calculated and determined according to the weightedaverage interest rate of general borrowings.
18. Intangible assets
（1）Measurement, useful life and impairment test
1. Measurement of intangible assets
（1）Intangible assets are initially measured at cost upon acquisition;
The costs of an externally purchased intangible asset include the purchase price, relevant taxes and expenses paid, and otherexpenditures directly attributable to bringing the asset ready for its intended use. If the payment for an intangible asset isdelayed beyond the normal credit conditions and it is of financing nature in effect, the cost of the intangible asset shall beascertained based on the present value of the purchase price.The amount of intangible assets acquired from debt restructuring should be recorded at the fair value of the creditor’ rightswaived thereunder and other costs including the taxes directly attributable to bringing the asset ready for its intended use,and the difference between the fair value and the carrying amount of creditor’ right waived thereunder should be included incurrent profit or loss.If the non-monetary assets transaction is commercial in nature and the fair value of the assets received or surrendered can bereliably measured, the intangible assets received in the non-monetary assets transaction, shall be measured on the basis ofthe fair value of the assets surrendered, unless there is concrete evidence that the fair value of the assets received is more
reliable. For non-monetary assets transaction which does not meet the above conditions, the cost of intangible assetsreceived shall be the book value of the assets surrendered and the relevant taxes and expenses payable, and no gain or losswill be recognised.
（2）Subsequent measurement
The Company shall analyse and judge the useful life of intangible assets upon acquisition.As for intangible assets with a finite useful life, they are amortizedusing the straight-line method over the term in which economic benefits are brought to the firm; If the term in whicheconomic benefits are brought to the firm by an intangible asset cannot be estimated, the intangible asset shall be taken as anintangible asset with indefinite useful life, and shall not be amortized.
2. Estimated useful lives for the intangible assets with finite useful life
| Items | Estimated useful lives | Basis |
| Land use rights 1 | 49.33 | Land use rights date |
| Land use rights 2 | temporarily 50 | Land use rights date |
| Technology usage fee | 5 | Estimated software update and upgrade period |
| Financial software | 5 | Estimated software update and upgrade period |
| Customer relationship | 2-7 | |
| Others | 5 | Estimated software update and upgrade period |
3. Determination basis of intangible assets with indefinite useful life and procedures for review of the useful life thereofAt the balance sheet date, the Company does not have any intangible assets with indefinite useful lives.
（2）Accounting policy regarding the expenditure on the internal research and development
1. Specific criteria for the division of research phase and development phase
The expenses for internal research and development projects of the Company are divided into expenses in the research phaseand expenses in the development phase.Research phase: Scheduled innovative investigations and research activities to obtain and understand scientific ortechnological knowledge.Development phase: Apply the research outcomes or other knowledge to a plan or design prior to a commercial productionor use in order to produce new or substantially improved materials, devices, products, etc.
2. Specific criteria for capitalisation at development phase
Expenses incurred in the development phase are recognised as intangible assets if the following conditions are fulfilled:
（1）the technical feasibility of completing the intangible asset so that it will be available for use or for sale;
（2）the intention to complete the intangible asset for use or for sale;
（3）the ways in which the intangible asset generate economic benefits, including there is evidence that the productsproduced using the intangible asset has a market or the intangible asset itself has a market, or it the intangible asset is forinternal use, there is evidence that proves its usefulness;
（4）the availability of adequate technical, financial and other resources to complete the development and the ability to useor sell theintangible asset; and
（5）the expenditures attributable to the development phase of the intangible asset could be reliably measured.Expenditure in the development phase, if it does not meet the conditions listed above, is charged to profit or loss when
incurred. Expenditure in the research phase is included in profit or loss when incurred.
19. Impairment of long-term assets
Long-term assets, such as long-term equity investment, fixed assets, construction in progress, and intangible assets withfinite useful life are tested for impairment if there is any indication that an asset may be impaired at the balance sheet date. Ifthe result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount, aprovision for impairment and an impairment loss are recognised for the amount by which the asset’s carrying amountexceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and thepresent value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determinedand recognised on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset,the recoverable amount of a group of assets to which the asset belongs to is determined. A group of assets is the smallestgroup of assets that is able to generate cash inflows independently.Impairment tests for goodwill, intangible assets with indefinite useful life and intangible assets not ready to use shall becarried out at least at the end of each year.When the Company performs impairment test on goodwill, the Company shall, as of the purchase day, allocate on areasonable basis the carrying value of the goodwill formed by merger of enterprises to the relevant asset group, or if there isa difficulty in allocation, to allocate it to the set of asset groups. Goodwill is allocated to each asset group or set of assetgroups, which is expected to relatively benefit from the synergies of the combination for the purpose of impairment testing.For the purpose of impairment test on the relevant asset group or the set of asset groups containing goodwill, if any evidenceshows that the impairment of asset group or set of asset groups related to goodwill is possible, an impairment test will bemade firstly on the asset group or set of asset groups not containing goodwill, thus calculating the recoverable amount andcomparing it with the relevant carrying value so as to recognize the corresponding impairment loss. Then the Company willmake an impairment test on the asset groups or set of asset groups containing goodwill, and compare the carrying value ofthe asset groups or set of asset groups (including the carrying value of the goodwill allocated thereto) with the recoverableamount. Where the recoverable amount of the relevant assets group or set of the asset groups is lower than the carryingvalue thereof, it shall recognize the impairment loss of the goodwill. Once the above asset impairment loss is recognised, itwill not be reversed in subsequent accounting periods.
20. Long-term deferred expenses
Long-term deferred expenses are expenditures and other expenses which have occurred with amortization period over 1 yearand shall be borne by the current period and subsequent periods. Long-term deferred expenses of the Company include fixedassets improvement expenses, technology usage fee and rental fee.
1. Method of Amortization
Long-term deferred expenses will be amortized evenly during its beneficial period
2. Amortization Period
Improvement expenses on fixed assets leased under operating leases are amortized over 5 years.Technology usage fee is amortized over 3 years.Rental fee is amortized over the rental period.
21. Contractual liabilities
The Company presents contractual assets or contractual liabilities in the balance sheet based on the relationship betweenperformance obligations and customer payments. The obligation of the Company to transfer or receivable customers’considerations and to transfer goods or provide services to customers is presented as contractual liabilities. The Companypresents a net contractual asset or a net contractual assetlity under the same contract.
22. Employee benefits
（1）Accounting treatment of short-term benefits
In the accounting period in which employees provide service for the Company, short-term benefits actually incurred arerecognised as liabilities and charged to profit or loss or cost of relevant assets.With regard to contributions to social insurance schemes and housing provident funds and provision for labour unionexpenses and employee education expenses as required by regulations, the Company should calculate and recognize thecorresponding employee benefits payables according to the appropriation basis and proportion as stipulated by relevantrequirements in the accounting period in which employees provide service.Non-currency employee benefits will be accounted for in accordance with their fair value if they can be measured reliably.
（2）Accounting treatment of post-employment benefits
（1）Defined contribution scheme
The Company will pay basic pension insurance and unemployment insurance in accordance with the relevant provisions ofthe local government for the staff. During the accounting period when the staff provides service, the Company will calculatethe amount payable in accordance with the local stipulated basis and proportions which will be recognised as liabilities, andthe liabilities would be charged into current profits and loss or costs of assets.
（2）Defined benefit scheme
The welfare responsibilities generated from defined benefit scheme based on the formula determined by projected unit creditmethod would be vested to the service period of the staff and charged into current profit or loss or costs of relevant assets.The deficit or surplus generated from the present value of obligations of the defined benefit scheme minus the fair value ofthe assets of defined benefit scheme is recognised as net liabilities or net assets. When the defined benefit scheme hassurplus, the Company will measure the net assets of the defined benefit scheme at the lower of the surplus of defined benefitscheme and the upper limit of the assets.All defined benefit plans obligations, including the expected duty of payment within 12 months after the end of annualreporting period during which the staff provided service, are discounted based on the market yield of government bondsmatching the term and currency of defined benefit plan obligations or corporate bonds of high quality in the active marketon the balance sheet date.The service cost incurred by the defined benefit scheme and the net interest of the net liabilities and net assets of the definedbenefit scheme would be charged to current profit or loss or relevant costs of assets. The changes arising from theremeasurement of the net liabilities or net assets of the defined benefit scheme would be included in other comprehensive
income and are not reversed to profit or loss in a subsequent accounting period; when the previously defined benefits plan isterminated, such amount included in other comprehensive income shall be transferred to undistributed profit.When the defined benefit scheme is settled, the gain or loss is recognised based on the difference between the present valueof obligations under the defined benefit scheme and the settlement price at the balance sheet date.
（3）Accounting treatment of termination benefits
The Company recognizes employee benefits liabilities arising from termination benefits and recorded in profit or loss whenit cannot unilaterally withdraw the offer of termination benefits resulting from the employment termination plan or theproposed layoff, or when it recognizes costs or expenses for restructuring involving the payment of termination benefits(whichever is earlier).
23. Estimated liabilities
1. Recognition criteria of estimated liabilities
The Company shall recognize an obligation related to contingency involving litigation, debt guarantee, loss-making contractor restructuring as an estimated liability, when all of the following conditions are satisfied:
（1）such obligation is the present obligation of the Company;
（2）the performance of such obligation is likely to lead to an outflow of economic benefits out of the Company; and
（3）the amount of such obligation can be reliably measured.
2. Measurement methods for various estimated liabilities
The estimated liabilities of the Company are initially measured at the best estimate of expenditure required for theperformance of relevant present obligations.The Company shall take into consideration the risks, uncertainties, time value of money and other factors relating to thecontingencies in determining the best estimate. If the time value of money is significant, the best estimates shall bedetermined after discount of relevant future cash outflows.The best estimate will be dealt with separately in the following circumstances:
The expenses required have a successive range (or band), in which the possibilities of occurrence of each result are the same,and the best estimate should be determined as the middle value for the range, i.e. the average of the upper and lower limit.The expenses required does not have a successive range (or band), or although there is a successive range (or band), thepossibilities of occurrence of each result are not the same, if the contingency is related to individual item, the best estimateshould be determined as the most likely amount; where the contingency is related to a number of items, the best estimateshould be calculated and determined according to the possible results and the relevant possibilities.Where some or all of the expenditure required to settle an estimated liability is expected to be reimbursed by a third party,the reimbursement is separately recognised as an asset when it is virtually certain that the reimbursement will be received.The amount recognised for the reimbursement is limited to the carrying amount of the liability recognised.
24. Share-based payment
The Company’s share-based payment represents transactions in which the Company receives services from employees or
other parties by granting equity instruments or incurring liabilities that are based on the price of the equity instruments to theemployee or other suppliers. The Company’s share-based payments included equity-settled share-based payments andcash-settled share-based payments.
1. Equity-settled share-based payment and equity instrument
As to an equity-settled share-based payment in return for services of employees, calculation will be based on the fair valueof the equity instrument granted to the employees. If the Company make the share-based payment by restricted shares,employees will subscribe the share but those shares shall not be listed on the market or transferred before it fulfill theunlocking condition and unlocked. If the unlocking conditions stipulated in the equity incentive scheme cannot be fulfilledeventually, the Company will repurchase those shares based on the predetermined price. Upon obtaining the payment forsubscribing restricted shares made by the employees, the Company will recognised the share capital and capital reserve(share capital premium) according to the payment it received, while fully recognize a liability for its repurchasing obligationas well as its treasury shares. On each balance sheet date within the vesting period, the Company will make the bestestimation of the number of vested equity instruments based on the subsequent information such as the updated changes inthe number of executives and the achievement of performance standard. Based on the above results, the services received inthe current period will be included in the relevant cost or expense based on the fair value on the date of grant, and the capitalreserve will be increased accordingly. The recognised cost or expense and owners’ interest will not be adjusted after thevesting date. However, equity instruments vested immediately after the date of grant will be included in the relevant cost orexpense based on its fair value on the date of grant, and the capital reserve will be increased accordingly.For the share-based payments that are not vested eventually, no cost or expense will be recognised, except the vestingcondition is market condition or non-exercisable condition. Under such circumstances, no matter whether the marketcondition or non-exercisable condition can be fulfilled, the share-based payment will be deemed as vested as long as all thenon-market conditions in the vesting condition are fulfilled.If the terms of the equity-settled share-based payment are amended, the Company shall recognize the services received atleast based on the situation before the amendment was made. In addition, any amendment resulting in the increase of the fairvalue of the equity instrument granted or changes that are beneficial to the staff on the amendment date, will be recognisedas an increase in the service received.If the equity-settled share-based payment is cancelled, it will be accounted for as accelerated exercise on the cancellationdate and the unrecognised amount will be recognised immediately. Employees and other parties are able to satisfy thenon-vesting conditions. If the conditions are not fulfilled during the vesting period, the equity settled share-based paymentwill be deemed as cancelled. However, if new equity instruments are vested and they are verified at the vesting date of newequity instrument as alternatives vested to cancelled equity instruments, the treatment on the new equity instrument is inconformity with the modified treatment on disposal of equity instrument.
2. Cash-settled share-based payments and equity instrument
A cash-settled share-based payment shall be measured in accordance with the fair value of liability calculated and confirmedbased on the shares or other equity instruments undertaken by the Group. It is initially measured at fair value on the date ofgrant using the BS model, taking into account the terms and conditions of the equity instrument granted. If the right may beexercised immediately after the grant, the fair value of the liability undertaken by the enterprise shall, on the date of thegrant, be included in the relevant costs or expenses, and the liabilities shall be increased accordingly. If the right may not beexercised until the vesting period comes to an end or until the specified performance conditions are met, within the vestingperiod, the services obtained in the current period shall, based on the best estimate of the information about the exercisableright, be included in the relevant costs or expenses and the corresponding liabilities at the fair value of the liabilityundertaken by the enterprise. For each of the balance sheet date and settlement date before the settlement of the relevant
liabilities, fair value of the liabilities will be remeasured and the changes will be included in the profit or loss for the currentperiod.
25. Other financial instruments such as preference shares and perpetual bonds
At initial recognition, the Company classifies the preference shares/perpetual bonds issued as financial assets, financialliabilities or equity instruments based on their contractual terms and their economic substance rather than just in legal form.For financial instruments such as perpetual bonds/preference shares issued by the Company that meet one of the followingconditions, the financial instrument as a whole or its components are classified as financial liabilities upon initialrecognition:
（1）the Company cannot unconditionally avoid the performance of a contractual obligation by paying cash or deliveringother financial assets;
（2）including contractual obligations to deliver a variable number of its own equity instruments;
（3）including a derivative that is settled in its own equity (such as conversion right), and such derivative is not settled by itexchanging a fixed amount of cash or another financial asset for a fixed number of its own equity instruments.
（4） there are contract terms that indirectly form contract obligations;
（5）when the issuer is liquidated, the perpetual bonds are in the same order of settlement as the ordinary bonds and otherdebts issued by the issuer.For financial instruments such as perpetual bonds/preference shares that do not meet one of the above conditions, thefinancial instrument as a whole or its components are classified as equity instruments upon initial recognition.
26. Revenue
Whether the New Accounting Standards for Business Enterprises on Revenue (“New ASBE on Revenue”) has beenimplemented
□ Yes √ No
1. General principles for the recognition of revenue from sales of goods
（1）The Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
（2）The Company retains neither continuing managerial involvement to the degree usually associated with ownership noreffective control over the goods sold;
（3）The amount of revenue can be measured reliably;
（4）It is probable that the economic benefits associated will flow to the enterprise;
（5）The relevant costs incurred or to be incurred can be measured reliably.
2. Specific principles
If the outcome of the rendering of services transaction can be reliably estimated at the balance sheet date, the percentage ofcompletion method shall be used to recognize revenue from the rendering of services. The progress of the completion of therendering of services are recognised based on the proportion of the costs incurred to the estimated total cost.The total revenue of rendering of services shall be determined in accordance with the contract or agreed price received orreceivable, except that contract or agreed price received or receivable is unfair. At the balance sheet date, the total revenueof rendering of services multiplied by the completion progress and deducting the aggregate revenue of rendering of servicesrecognised in previous accounting period shall be recognised as the revenue of rendering of services for current period.
Meanwhile, the cost of service for current period shall be recognised based on the cost incurred for current period.If the outcome of the rendering of services transaction cannot be reliably estimated at the balance sheet date, the followingtreatment shall be applied:
（1）If the cost of rendering of services is expected to be compensated, the cost already incurred for rendering of servicesshall be recognised as revenue of rendering of services, and the same amount shall be transferred to cost of service.
（2）If the cost of rendering of services is not expected to be compensated, the cost already incurred for rendering ofservices shall be included in the profits and losses for the current period and shall not be recognised as revenue of renderingof services.For clinical trial solutions, registration application services, phase I clinical trial services, phase I clinical bioanalysis testingservices, GMP registration services, BE bioequivalence studies services, medical writing services, audit services, EDCservices and pharmacovigilance services provided by the Company, revenue from rendering of services shall be recognisedby percentage of completion method.The progress of the completion of the rendering of services shall be determined using the following methods, respectively:
1. Clinical trial solutions, registration application services, phase I clinical bioanalysis testing services and GMP registrationservices provided by the Company shall be determined based on the proportion of the costs incurred to the estimated totalcost.
2. Phase I clinical trial services, BE bioequivalence studies services, medical writing services, audit services, EDC servicesand pharmacovigilance services provided by the Company, which are divided into different stages of procedures andmilestones according to the business processes, shall be determined taking into account the proportion of the amount ofcontract work completed to the total estimated amount of contract work.
3. For clinical trial statistical analysis services, training services, clinical evaluation services and academic promotionservices provided by the Company, due to the short service cycle, revenue from rendering of services shall be recognisedbased on the amount of the service cost incurred before the completion of the service on the balance sheet date, and anequivalent amount is charged to profit or loss as service cost; when the service is completed, service revenue for the currentperiod shall be recognised based on the amount of the settlement amount stipulated in the contract after deducting theaccumulated service revenue recognised for work at that stage in previous accounting periods.
4. For medical testing services and medical imaging services provided by the Company, revenue shall be recognised whenrelevant service activities occur, and the recognised amount is the amount of work completed each month multiplied by thecontract unit price.
5. For medical information translation services provided by the Company, which belong to service fees charged forproviding repeated services to customers, revenue shall be recognised when relevant service activities occur, and therecognised amount is the amount of translations completed each month multiplied by the contract unit price.
6. For logistics and transportation services provided by the Company, revenue shall be recognised when the goods arrive andthe Company signs for them. The recognised amount is the weight of the transportation target multiplied by the agreed unitprice.
7. On-site clinical trial services provided by the Company shall be amortized and recognised using the straight-line methodover the service duration based on the total contract price. For investment advisory services provided by the Company,revenue shall be recognised when relevant service activities occur, and shall be recognised evenly on a monthly basis withinthe advisory service period based on the contract amount.
8. Frontage Holdings, a subsidiary of the Company, implements the IFRS 15 “International Financial Reporting Standard 15- Revenue from Contracts with Customers” standard. For bioequivalence services provided by the Company, revenue shallbe recognised using the input method. For CMC, DMPK and bioanalysis services, revenue shall be recognised using theoutput method.
9. For SMO services provided by the Company, revenue shall be recognised based on the actual amount of work incurred,
and the recognised amount is the amount of work completed each month multiplied by the contract unit price.
27. Government grants
1. Types
Government grants are monetary assets or non-monetary assets obtained by the Company from the government for free, andare divided into government grants related to assets and government grants related to income.Government grants related to assets are those obtained by the Company for the purposes of acquisition, construction or otherproject that forms a long-term asset. Government grants related to income refer to the government grants other than thoserelated to assets.The standard for the Company to classify the government grant as asset-related is: The explicit objects of subsidies indicatedin the government document are long-term assets such as fixed assets or intangible assets.The standard for the Company to classify the government grant as income-related is: No explicit objects of subsidies areindicated in the government document or the explicit objects of subsidies indicated in the government document arenon-long-term assets.
2. Timing for recognition
Assets-related government grants, when appropriated by bank transfer, shall be generally recognised in accordance with theaccount when actual amount received; when appropriated in the form of non-monetary assets, shall be recognised when theassets are actually acquired and the relevant transfer procedures are completed. Income-related government grants, whenappropriated by bank transfer, shall be generally recognised in accordance with the account when actual amount received;only if there is sufficient evidence to show that the grants are allocated in accordance with fixed quotas, the grants shall berecognised when they become receivables and measured based on the amount receivable.
3. Accounting treatment
Asset-related government grant shall be used to offset the carrying amount of relevant asset or recognised as deferredincome. The amount recognised as deferred income shall be recorded in current profit or loss by installments in a reasonableand systematic way over the useful life of the relevant assets (the government grants related to the Company’s dailyactivities shall be included in other income; and the government grants unrelated to the Company’s daily activities shall beincluded in non-operating income;Government grants related to income that are used to compensate relevant costs or losses of the Company in subsequentperiods are recognised as deferred income and recorded in current profit or loss when such costs and losses are recognised(government grants related to the Company’s daily activities shall be included in other income; government grants unrelatedto the Company’s daily activities shall be included in non-operating income) or offset relevant costs or losses; and the grantsused to compensate relevant costs or losses that have incurred by the Company are recorded directly in current profit or loss(government grants related to the Company’s daily activities shall be included in other income; government grants unrelatedto the Company’s daily activities shall be included in non-operating income) or offset relevant costs or losses.The interest subsidies for policy-related preferential loans obtained by the Company are divided into two types and subjectto accounting treatment separately:
（1）Where the interest subsidies are appropriated from the fiscal funds to the lending bank and then the bank provides loansto Company at a policy-based preferential interest rate, the Company will recognize the amount of borrowings received as
the initial value and calculate the borrowing costs according to the principal amount and the policy-based preferentialinterest rate.
（2）Where the interest subsidies are paid directly to the Company, the Company will use such interest subsidies to offsetthe corresponding borrowing costs.
28. Deferred income tax assets/deferred income tax liabilities
Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available againstwhich deductible temporary differences can be utilized. For deductible losses and tax credits that can be reversed in thefuture period, deferred tax assets shall be recognised to the extent that it is probable that taxable profit will be available inthe future to offset the deductible losses and tax credits.Save for exceptions, deferred income tax liabilities shall be recognised for the taxable temporary difference.The exceptions for not recognition of deferred income tax assets and deferred income tax liabilities include: the initialrecognition of the goodwill; other transactions or matters other than business combinations in which neither profit nortaxable income (or deductible loss) will be affected when transactions occur.When the Group has a legally enforceable right to set-off and intends either to settle on a net basis or to acquire the incometax asset and settle the income tax liability simultaneously, current income tax assets and current income tax liabilities shallbe presented as the net amount after offsetting.When the Group has the legal right to set off current income tax assets and current income tax liabilities on a net basis, suchdeferred income tax assets and deferred income tax liabilities are related to income tax to be paid by the same entity liable topay tax to the same tax authority, or related to different entities liable to pay tax but the relevant entities intend to settle on anet basis or to acquire the income tax assets and settle the income tax liabilities simultaneously in the future period in whichsignificant deferred income tax assets and liabilities would be reversed, deferred income tax assets and liabilities shall bepresented as the net amount after offsetting.
29. Lease
（1）Accounting treatment of operating leases
（1）Lease fees paid by the Company for leased asset shall be amortized at straight line method over the whole lease period(including rent-free period) and will be included in the current expenses. Initial direct costs relating to lease transactionspaid by the Company shall be included in the current expenses.If the expense related to the lease which shall be paid by the Company is assumed by the lessor of the asset, then suchexpenses shall be deducted from total lease fees, and the balances shall be amortized over the lease term s and charged to thecurrent expenses.
（2）The Company’s rental expenses collected for leased assets shall, within the whole lease term including the rent-freeperiod, be amortized with the straight-line method and recognised as relevant rental income. Initial direct costs related tolease transactions paid by the Company are included in current expenses; in case of a large amount, such costs shall becapitalised and then included in the current revenue by stages at the same base as the recognition of rental income over thewhole lease term.When the Company bears costs related to the lease borne by the leasee, the Company shall deduct the part of expenses fromthe total rents and amortize the rents after deduction over the lease term.
（2）Accounting treatment of financing leases
（1）Assets acquired under financing leases: At the commencement of the lease term, the company will use the lower of thefair value of the leased assets and the present value of the minimum lease payments as the book value of the leased assets,and the minimum lease payments as the book value of the long-term payables. The difference between the book value of theleased assets and the long-term payables is recorded as the unrecognised financing fee. The Company adopts effectiveinterest rate method to amortize unrecognised financing expenses over the lease period of the asset and includes them intofinancial expenses. The initial direct costs incurred by the company are included in the value of the leased asset.
（2）Assets leased out under financing leases: At the commencement date of lease term, the Company recognizes thedifference between the sum of financing lease receivable and the unguaranteed residual value, and the present value thereofas unrealized financing income, and recognizes the same as rental income over the periods when rent is received in thefuture. The Company’s initial direct costs associated with rental transactions shall be included in the initial measurement ofthe finance lease receivables, and the amount of the income recognised during the lease term shall be reduced.
30. Other significant accounting policies and accounting estimates
1. Discontinued operation
A discontinued operation is a component that either has been disposed of or is classified as held for sale by the Company,and is separately identifiable operationally and for financial reporting purposes, and satisfies one of the followingconditions:
（1）represents a separate major line of business or geographical area of operations;
（2）is part of a single co-ordinate plan to dispose of a separate major line of business or geographical area of operations;and
（3）is a subsidiary acquired exclusively with a view to resale.
2. Repurchase of the shares of the Company
The Restricted Shares granted to Participants by the Company shall be subject to various Lock-up Periods, immediatelyfrom the Date of Grant, and the interval between the Date of Grant and the First Date of Unlocking shall not be less than 12months. During the Lock-up Periods, no Restricted Share held by the Participants is allowed to be transferred, pledged orcharged or used for debt repayment.Upon the fulfillment of the Unlocking Conditions, the Company shall handle all matters required for the grant and unlockingof Restricted Shares in accordance with the relevant regulations once the Participants have fulfilled the conditions forunlocking the Restricted Shares. All of the Restricted Shares held by Participants who have not satisfied the conditions forunlocking the Restricted Shares shall not be unlocked or shall be deferred to the next period for unlocking and shall berepurchased and cancelled by the Company at the grant price.Cash dividends to be received by Participants from the Restricted Shares granted shall be held in escrow by the Companyand shall be distributed to the Participants upon unlocking; the Company shall however forfeit the dividends if the RestrictedShares cannot be unlocked in accordance with the Restricted Share Incentive Scheme. Restricted Shares granted to theParticipants issued upon capitalisation issue, bonus issue, subdivision of share capital shall remain unlocked and shall not bedisposed of or transferred in any manner in the secondary market, subject to the same unlock period as the Restricted Shares;in the event that the Restricted Shares under the Restricted Share Incentive Scheme cannot be unlocked, the shares shall berepurchased and cancelled by the Company.
In case of termination of the Restricted Share Incentive Scheme, the Company shall repurchase all Restricted Shares that arestill locked up and deal with such repurchased shares in accordance with the Company Law.
31. Changes in significant accounting policies and accounting estimates
（1）Changes in significant accounting policies
√ Applicable □ Not applicable
| Contents and reasons for changes in accounting policies | Examination and approval procedure | Remarks |
1. Changes in significant accounting policies
（1）Implementation of the “Notice of the MOF on the Revised Format of 2019 Financial Statements for GeneralEnterprises (Cai Kuai [2019] No. 6)” and the “Notice of the MOF on the Revised Format of Consolidated FinancialStatements (2019 version)The Ministry of Finance (“MOF”) released the Notice of the MOF on the Revised Format of 2019 Financial Statements forGeneral Enterprises (Cai Kuai [2019] No. 6) in April 30, 2019, and the Notice of the MOF on the Revised Format ofConsolidated Financial Statements (Cai Kuai [2019] No.16) in September 19, 2019.Main influences incurred by the implementation of such standard by the Company are as follows:
| Contents and reasons for changes in accounting policies | Examination and approval procedure | Influenced statement item name and amount | |
| Consolidated | Parent | ||
| （1）The “bills receivables and accounts receivables” in the balance sheet are separately listed as “bills receivables” and “accounts receivables”; “Notes payable and accounts payable” are separately listed as“notes payables” and “accounts payables”. Comparative data is adjusted accordingly. | According to the relevant policies of MOF | “Bills receivable and accounts receivable” are separately listed as“bills receivable” and “accounts receivable”. The closing balance of “bills receivable” at the end of previous year is 734,248.00 yuan, the closing balance of “accounts receivable” at the end of previous year is 780,938,723.13 yuan. | “Bills receivable and accounts receivable” are separately listed as“bills receivable” and “accounts receivable”. The closing balance of “bills receivable” at the end of previous year is 584,248.00 yuan, the closing balance of “accounts receivable” at the end of previous year is 353,651,431.06 yuan. |
（2）Implementation of CAS No.22 – Financial Instruments: Recognition and Measurement, CAS No. 23 – Transfer of
Financial Assets, CAS No.24 – Hedge Accounting and CAS No.37 – Presentation and Disclosures of FinancialInstruments (Revised in 2017)MOF revised CAS No.22 – Financial Instruments: Recognition and Measurement, CAS No. 23 – Transfer of Financial Assets,CAS No.24 – Hedge Accounting and CAS No.37 – Presentation and Disclosures of Financial Instruments in 2017. Accordingto the revised standard, if the data relating to the prior period comparative financial statements are inconsistent with the revisedstandard, the financial instruments that existed before the first implementation date should be retrospectively adjusted. If thedata relating to the prior period comparative financial statements are inconsistent with the revised standard, no adjustment is
required. The Company will adjust the retained earnings and other comprehensive income at the beginning of the year due tothe cumulative impact of retrospective adjustments.
Based on the balance at the end of the previous year adjusted in accordance with the provisions of Caihui [2019] No. 6 andCaihui [2019] No. 16, main influences incurred by the implementation of such standard by the Company are as follows:
| Contents and reasons for changes in accounting policies | Examination and approval procedure | Influenced statement item name and amount | |
| Consolidated | Parent | ||
| （1）Available-for-sale equity instrument investments are reclassified as "financial assets measured at fair value and whose changes are included in current profit or loss." | According to the relevant policies of MOF | Available-for-sale financial assets: a decrease of 1,221,827,232.44 yuan; other non-current financial assets: an increase of 1,481,093,167.41 yuan; deferred income tax liabilities: an increase of 17,487,828.68 yuan; other comprehensive income: decreased by 1,656,924.71 yuan; surplus reserve: increased by 10,589,769.58 yuan; undistributed profit: increased by 163,349,350.85 yuan. Minority equity: an increase of 69,495,910.57 yuan. | Available-for-sale financial assets: a decrease of 428,798,851.31 yuan; other non-current financial assets: an increase of 552,184,375.81 yuan; deferred income tax liabilities: an increase of 17,487,828.68 yuan; surplus reserve: an increase of 10,589,769.58 yuan; undistributed profits: an increase of 95,307,926.24 yuan. |
| （2）Provision for expected credit loss is made for “financial assets measured at amortised cost” and “financial assets are classified as financial assets at fair value through comprehensive income (debt instrument)” | According to the relevant policies of MOF | Accounts receivable: an increase of 47,550,814.31 yuan; accounts receivable: an increase of 51,343,448.40 yuan Undistributed profit: decreased by 1,124,053.88 yuan; minority equity: decreased by 2,668,580.21 yuan. | Accounts receivable: an increase of 26,718,495.70 yuan; advance receipts: an increase of 26,718,495.70 yuan. |
（3）Implementation of CAS No. 21 – Lease (Revised in 2018)
MOF revised CAS No. 21 – Lease in 2018 (“New Lease Standard”).The main impact on the financial statements regarding the implementation of the New Lease Standard by the Company'ssubsidiaries Frontage Holdings Corporation and DreamCIS Inc. starting from January 1, 2019:
| Contents and reasons for changes in accounting policies | Examination and approval procedure | Influenced statement item name and amount | |
| Consolidated | Parent | ||
| （1）As a lessee, the Company adjusts the leases that existed before the first execution date | According to the relevant policies of MOF | Prepayments: decreased by 1,594,609.66 yuan; fixed assets: decreased by 40,717,230.40 yuan; Right-of-use assets: an increase of 133,692,062.02 yuan; non-current liabilities due in one year: an increase of 4,273,625.71 yuan; lease liabilities: an increase of 106,524,246.24 yuan; long-term payables; a decrease of 19,417,649.99 yuan. | |
（4）On July 5, 2017, the MOF issued Notice of the Ministry of Finance on Revising and Issuing the Accounting Standards
for Business Enterprises No. 14—Revenue (Caihui [2017] No. 22) (referred to as "New Accounting Standard No. 14")to revise the revenue recognition model, which largely converged with IFRS No. 15 – Revenue from Contracts withCustomers. Enterprises that implement this Standard for the first time shall adjust the retained earnings and theamount of other related items in the financial statements at the beginning of the year (in which this Standard is firstimplemented) in accordance with the cumulative effect of the first implementation of this Standard, whereby theinformation related to comparable period shall not be adjusted. If the parent company has not implemented thisStandard and the subsidiary company has implemented this Standard, the parent company may adjust the subsidiary ’sfinancial statements in accordance with the parent company ’s accounting policies when preparing the consolidatedfinancial statements, or directly merge the financial statements prepared by subsidiaries in accordance with thisStandard. The main effects of the Company's implementation of the above are as follows:
| Contents and reasons for changes in accounting policies | Examination and approval procedure | Influenced statement item name and amount | |
| Consolidated | Parent | ||
| （1）Frontage Holdings Corporation and DreamCIS Inc., both subsidiaries of the Company, implement IFRS 15 “IFRS 15 - Revenue from Contracts with Customers” | According to the relevant policies of MOF | Accounts receivable: decreased by 69,469,617.55 yuan; contract assets: increased by 69,469,617.55 yuan; Accounts received in advance: decreased by 119,150,065.69 yuan; contract liabilities: increased by 119,150,065.69 yuan. |
（2）Changes in significant accounting estimates
□ Applicable √ Not applicable
（3）Implementation of new financial instruments standards, new income standards or new lease standards from 2019 and
adjustment to related financial statements at the beginning of the year
√ Applicable □ Not applicable
Consolidated Balance Sheet
Unit: Yuan
| Item | December 31, 2018 | January 1, 2019 | Ajusted Amount |
| Current assets: | |||
| Monetary fund | 704,487,091.56 | 704,487,091.56 | |
| Settlement reserves | |||
| Placements with banks and other financial institutions | |||
| Trading financial assets | |||
| Financial assets at fair value through profit or loss | |||
| Derivatives financial assets | 1,002,080.00 | 1,002,080.00 | |
| Bills receivable | 734,248.00 | 734,248.00 | |
| Trade receivable | 780,938,723.13 | 759,019,919.89 | -21,918,803.24 |
| Financing receivables | |||
| Prepayments | 47,157,740.45 | 45,563,130.79 | -1,594,609.66 |
| Premium receivables | |||
| Receivables from reinsurers | |||
| Deposits receivable from reinsurance | |||
| Other receivables | 53,105,221.78 | 53,105,221.78 | |
| Including: Interests receivable | 1,926,868.87 | 1,926,868.87 | |
| Dividends receivable | |||
| Financial assets held under resale agreements | |||
| Inventories | 518,892.98 | 518,892.98 | |
| Contractual assets | 69,469,617.55 | 69,469,617.55 |
| Assets classified as available-for-sale | |||
| Non-current assets due within one year | |||
| Other current assets | 15,303,714.88 | 15,303,714.88 | |
| Total current assets | 1,603,247,712.78 | 1,649,203,917.43 | 45,956,204.65 |
| Non-current assets: | |||
| Loans and advances granted | |||
| Debt investments | |||
| Financial assets available for sale | 1,221,827,232.44 | -1,221,827,232.44 | |
| Other debt investments | |||
| Held-to-maturity investment | |||
| Long-term receivables | |||
| Long-term equity investments | 103,293,443.20 | 103,293,443.20 | |
| Other investments in equity instruments | |||
| Other non-current financial assets | 1,481,093,167.41 | 1,481,093,167.41 | |
| Investment properties | |||
| Fixed assets | 254,888,544.91 | 214,171,314.51 | -40,717,230.40 |
| Construction in progress | |||
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-to-use assets | 133,692,062.02 | 133,692,062.02 | |
| Intangible assets | 27,820,126.56 | 27,820,126.57 | |
| Development expenses | |||
| Goodwill | 1,032,926,915.93 | 1,032,926,915.93 | |
| Long-term deferred expenses | 9,436,008.62 | 9,436,008.62 | |
| Deferred income tax assets | 19,153,227.31 | 19,153,227.31 | |
| Other non-current assets | 7,195,294.73 | 7,195,294.73 |
| Total non-current assets | 2,676,540,793.70 | 3,028,781,560.29 | 352,240,766.59 |
| Total assets | 4,279,788,506.48 | 4,677,985,477.72 | 398,196,971.24 |
| Current liabilities: | |||
| Short-term borrowings | 602,834,093.20 | 602,834,093.20 | |
| Borrowings from central bank | |||
| Placements from banks and other financial institutions | |||
| Trading financial liabilities | |||
| Financial liabilities at fair value through profit or loss | |||
| Derivative financial liabilities | |||
| Bills payable | |||
| Trade payable | 44,027,540.32 | 44,027,540.32 | |
| Receipts in advance | 329,449,892.03 | 261,643,274.74 | -67,806,617.29 |
| Contractual liabilities | 119,150,065.69 | 119,150,065.69 | |
| Amount from sales of repurchased financial assets | |||
| Deposit taking and deposit in inter-bank market | |||
| Client money received for acting as securities trading agent | |||
| Client money received for acting as securities trading agent | |||
| Staff remuneration payable | 67,948,673.56 | 67,948,673.56 | |
| Taxes payable | 78,942,327.91 | 78,942,327.91 | |
| Other payables | 44,050,711.91 | 44,050,711.91 | |
| Including: Interests payable | 1,788,386.25 | 1,788,386.25 | |
| Dividends payable | 1,443,558.82 | 1,443,558.82 |
| Handling charge and commissions payable | |||
| Payables to reinsurers | |||
| Liabilities classified as available-for-sale | |||
| Non-current liabilities due within one year | 41,388,921.21 | 45,662,546.92 | 4,273,625.71 |
| Other current liabilities | |||
| Total current liabilities | 1,208,642,160.14 | 1,264,259,234.25 | 55,617,074.11 |
| Non-current liabilities: | |||
| Deposits for insurance contracts | |||
| Long-term borrowings | 3,431,702.95 | 3,431,702.95 | |
| Debentures payable | |||
| Including: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | 106,524,246.24 | 106,524,246.24 | |
| Long-term payables | 19,417,649.99 | -19,417,649.99 | |
| Long-term staff remuneration payable | |||
| Estimated liabilities | |||
| Deferred income | |||
| Deferred income tax liabilities | 14,137,234.36 | 31,625,063.04 | 17,487,828.68 |
| Other non-current liabilities | |||
| Total non-current liabilities | 36,986,587.30 | 141,581,012.23 | 104,594,424.93 |
| Total liabilities | 1,245,628,747.44 | 1,405,840,246.48 | 160,211,499.04 |
| Owners’ equity: | |||
| Share capital | 500,176,537.00 | 500,176,537.00 | |
| Other equity instruments | |||
| Including: Preference shares | |||
| Perpetual bonds |
| Capital reserves | 1,322,649,363.20 | 1,322,649,363.20 | |
| Less: Treasury stock | 248,124,987.77 | 248,124,987.77 | |
| Other comprehensive income | -822,384.09 | -2,479,308.80 | -1,656,924.71 |
| Special reserve | |||
| Surplus reserve | 84,003,316.49 | 94,593,086.07 | 10,589,769.58 |
| General risk provision | |||
| Undistributed profit | 1,010,702,290.44 | 1,172,927,587.41 | 162,225,296.97 |
| Total owners’equity attributable to the Parent Company | 2,668,584,135.27 | 2,839,742,277.11 | 171,158,141.84 |
| Minority interests | 365,575,623.77 | 432,402,954.13 | 66,827,330.36 |
| Total owners’ equity | 3,034,159,759.04 | 3,272,145,231.24 | 237,985,472.20 |
| Total liabilities and owners’ equity | 4,279,788,506.48 | 4,677,985,477.72 | 398,196,971.24 |
Explanation of adjustment statusBalance Sheet of the Parent Company
Unit: Yuan
| Item | December 31, 2018 | January 1, 2019 | Adjusted Amount |
| Current assets: | |||
| Monetary fund | 123,057,242.51 | 123,057,242.51 | |
| Trading financial assets | |||
| Financial assets at fair value through profit or loss | |||
| Derivatives financial assets | 1,002,080.00 | 1,002,080.00 | |
| Bills receivable | 584,248.00 | 584,248.00 | |
| Trade receivable | 353,651,431.06 | 380,369,926.76 | 26,718,495.70 |
| Financing receivables | |||
| Prepayments | 5,846,369.92 | 5,846,369.92 | |
| Other receivables | 65,203,460.92 | 65,203,460.92 | |
| Including: Interests receivable | 1,060,780.97 | 1,060,780.97 | |
| Dividends receivable | 4,087,748.46 | 4,087,748.46 | |
| Inventories | |||
| Contractual assets |
| Assets classified as available-for-sale | |||
| Non-current assets due within one year | |||
| Other current assets | |||
| Total current assets | 549,344,832.41 | 576,063,328.11 | 26,718,495.70 |
| Non-current assets: | |||
| Debt investments | |||
| Financial assets available for sale | 428,798,851.31 | -428,798,851.31 | |
| Other debt investments | |||
| Held-to-maturity investment | |||
| Long-term receivables | |||
| Long-term equity investments | 2,112,016,831.68 | 2,112,016,831.68 | |
| Other investments in equity instruments | |||
| Other non-current financial assets | 552,184,375.81 | 552,184,375.81 | |
| Investment properties | |||
| Fixed assets | 13,713,654.92 | 13,713,654.92 | |
| Construction in progress | |||
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-to-use assets | |||
| Intangible assets | 2,160,179.39 | 2,160,179.39 | |
| Development expenses | |||
| Goodwill | |||
| Long-term deferred expenses | |||
| Deferred income tax assets | 6,043,673.84 | 6,043,673.84 | |
| Other non-current assets | 973,200.00 | 973,200.00 | |
| Total non-current assets | 2,563,706,391.14 | 2,687,091,915.64 | 123,385,524.50 |
| Total assets | 3,113,051,223.55 | 3,263,155,243.75 | 150,104,020.20 |
| Current liabilities: | |||
| Short-term borrowings | 591,094,093.20 | 591,094,093.20 | |
| Trading financial liabilities |
| Financial liabilities at fair value through profit or loss | |||
| Derivative financial liabilities | |||
| Bills payable | |||
| Trade payable | 10,075,666.97 | 10,075,666.97 | |
| Receipts in advance | 99,013,397.65 | 125,731,893.35 | 26,718,495.70 |
| Contractual liabilities | |||
| Staff remuneration payable | 9,956,851.74 | 9,956,851.74 | |
| Taxes payable | 25,753,804.32 | 25,753,804.32 | |
| Other payables | 316,601,859.60 | 316,601,859.60 | |
| Including: Interests payable | 1,771,550.32 | 1,771,550.32 | |
| Dividends payable | |||
| Liabilities classified as available-for-sale | |||
| Non-current liabilities due within one year | |||
| Other current liabilities | |||
| Total current liabilities | 1,052,495,673.48 | 1,079,214,169.18 | 26,718,495.70 |
| Non-current liabilities: | |||
| Long-term borrowings | |||
| Debentures payable | |||
| Including: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | |||
| Long-term payables | |||
| Long-term staff remuneration payable | |||
| Estimated liabilities | |||
| Deferred income | |||
| Deferred income tax liabilities | 17,487,828.68 | 17,487,828.68 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 17,487,828.68 | 17,487,828.68 | |
| Total liabilities | 1,052,495,673.48 | 1,096,701,997.86 | 44,206,324.38 |
| Owners’ equity: | |||
| Share capital | 500,176,537.00 | 500,176,537.00 |
| Other equity instruments | |||
| Including: Preference shares | |||
| Perpetual bonds | |||
| Capital reserves | 1,302,479,192.64 | 1,302,479,192.64 | |
| Less: Treasury stock | 248,124,987.77 | 248,124,987.77 | |
| Other comprehensive income | |||
| Special reserve | |||
| Surplus reserve | 83,683,032.73 | 94,272,802.31 | 10,589,769.58 |
| Undistributed profit | 422,341,775.47 | 517,649,701.71 | 95,307,926.24 |
| Total owners’ equity | 2,060,555,550.07 | 2,166,453,245.89 | 105,897,695.82 |
| Total liabilities and owners’ equity | 3,113,051,223.55 | 3,263,155,243.75 | 150,104,020.20 |
Explanation of adjustment status
（4）Explanatory note on retrospective adjustment of implementation of new financial instrument standards or newlease standard from 2019
□ Applicable √ Not applicable
VI. TAXES
1. Main taxes and tax rates
| Types of taxes | Basis for tax assessment | Tax rate |
| Value-added Tax | Output VAT is calculated on taxable services income under tax laws. The remaining balance of output VAT, after deducting the deductible input VAT of the period, is VAT payable. | 13%、9%、6%、3%、1% |
| City maintenance and construction tax | Based on the value-added tax and consumption tax | 7%、1% |
| Corporate income tax | Based on taxable income | 25% |
| Education Surcharges (including local education surcharge) | Based on the value-added tax and consumption tax | 5% |
Notes on taxpayers subject to different enterprise income tax rates
| Name of tax payer | Income tax rate |
| Tigermed and its domestic subsidiaries (except limited partnerships) | 25% |
| Subsidiaries incorporated in Cayman Islands and BVI | 0% |
2. Tax Preference
1. Value-added tax
In accordance with the Notice on VAT Zerorating or VAT Exemption for Taxable Services (关于应税服务适用增值税零税率和免税政策的通知) (Caishui [2011] No.13) issued by the Ministry of Finance and the State Administration ofTaxation, the Company and its subsidiaries MacroStat (China) Clinical Research Co., Ltd (美斯達（上海）醫藥開發有限公司), Jiaxing Clinflash Computer Technology Co., Ltd. (嘉興易迪希電腦技術有限公司), Frontage Laboratories (Shanghai)Co., Ltd.( 方達醫藥技術（上海）有限公司) are exempted from value-added tax.
2. Corporate income tax
（1）The Company obtained the High-tech Enterprise Certificate No. GR201733000372 jointly issued by the ZhejiangProvincial Department of Science and Technology, the Zhejiang Provincial Department of Finance, the Zhejiang StateTaxation Bureau, and the Zhejiang Local Taxation Bureau on November 13, 2017, which is valid for three years. TheCompany is subject to a reduction in corporate income tax from 2017 to 2019.
（2）MacroStat (China) Clinical Research Co., Ltd (美斯達（上海）醫藥開發有限公司) , a subsidiary of the Company,obtained the Technical Advanced Service Enterprise Certificate No.20193101150205 jointly issued by the Shanghai Scienceand Technology Commission, the Shanghai Municipal Commission of Commerce, the Shanghai Municipal Finance Bureau,the State Administration of Taxation Shanghai Taxation Bureau, and Shanghai Municipal Development and ReformCommission on December 16, 2019, which is valid for three years. The Company is subject to a 15% reduction in corporateincome tax from 2019 to 2021.
（3）Hangzhou Simo Co., Ltd. (杭州思默醫藥科技有限公司), a subsidiary of the Company, obtained the High-techEnterprise Certificate No. GR201733000635 jointly issued by the Zhejiang Provincial Department of Science andTechnology, the Zhejiang Provincial Department of Finance, the Zhejiang State Taxation Bureau, and the ZhejiangProvincial Local Taxation Bureau on November 13, 2017, which is valid for three years. The Company is subject to a 15%reduction in corporate income tax from 2017 to 2019.
（4）Jiaxing Tigermed Data Management Co., Ltd. (嘉興泰格資料管理有限公司), a subsidiary of the Company, obtainedthe High-tech Enterprise Certificate No. GR201833003876 issued by the Zhejiang Provincial Department of Science andTechnology, the Zhejiang Provincial Department of Finance and the Zhejiang Provincial Office of the State Administrationof Taxation on November 30, 2018, which is valid for three years. The Company is subject to a 15% corporate income taxreduction from 2018 to 2020.
（5）Fantastic Bioimaging Co., Ltd. (杭州英放生物科技有限公司), a subsidiary of the Company, obtained the High-techEnterprise Certificate No. GR201733003513 issued by the Zhejiang Provincial Department of Science and Technology, theZhejiang Provincial Department of Finance, the Zhejiang State Taxation Bureau, and the Zhejiang Local Taxation Bureauon November 13, 2017, which is valid for three years. The Company is subject to a 15% reduction in corporate income taxfrom 2017 to 2019.
（6）Jiaxing Clinflash Computer Technology Co., Ltd. (嘉興易迪希電腦技術有限公司), a subsidiary of the Company,obtained the High-tech Enterprise Certificate No. GR201833003786 issued by the Zhejiang Provincial Department ofScience and Technology, the Zhejiang Provincial Department of Finance, and the State Administration of Taxation ZhejiangProvincial Taxation Bureau on November 30, 2018, which is valid for three years. The Company is subject to a 15%reduction in corporate income tax from 2018 to 2020.
（7）Beijing Medical Development (Suzhou) Co., Ltd (仁智（蘇州）醫學研究有限公司), a subsidiary of the Company,obtained the High-tech Enterprise Certificate No. GR201832003833 jointly issued by the Jiangsu Provincial Department ofScience and Technology, Jiangsu Provincial Department of Finance, Jiangsu State Taxation Bureau, and Jiangsu ProvincialLocal Taxation Bureau on November 28, 2018, which is valid for three years. The Company is subject to a 15% reduction incorporate income tax from 2018 to 2020.
（8）捷通康信（北京）醫藥科技有限公司, a subsidiary of the Company, obtained the High-tech Enterprise Certificate No.GR201811006751 jointly issued by the Beijing Municipal Science and Technology Commission, the Beijing MunicipalFinance Bureau, the Beijing National Taxation Bureau, and the Beijing Local Taxation Bureau on November 30, 2018,which is valid for three years. The Company is subject to a 15% reduction in corporate income tax from 2018 to 2020.
（9）Beijing Jyton and Kannel Medical Tech. Co., Ltd. (北京捷通康諾醫藥科技有限公司), a subsidiary of the Company,obtained the High-tech Enterprise Certificate No. GR201811007915 jointly issued by Beijing Municipal Science andTechnology Commission, Beijing Municipal Finance Bureau, Beijing National Taxation Bureau, and Beijing Local TaxationBureau on November 30, 2018, which is valid for three years. The Company is subject to a 15% reduction in corporateincome tax from 2018 to 2020.
（10）捷通埃默高（北京）醫藥科技有限公司, a subsidiary of the Company, obtained the High-tech Enterprise CertificateNo. GR201811008621, jointly issued by the Beijing Municipal Science and Technology Commission, Beijing MunicipalFinance Bureau, Beijing National Taxation Bureau, and Beijing Local Taxation Bureau on November 30, 2018, which isvalid for three years. The Company is subject to a 15% reduction in corporate income tax from 2018 to 2020.
（11）Beijing Ejyton Tech. Co., Ltd. (北京醫捷通科技有限公司), a subsidiary of the Company, obtained the High-techEnterprise Certificate No. GR201711004868, jointly issued by Beijing Municipal Science and Technology Commission,Beijing Municipal Finance Bureau, Beijing National Taxation Bureau, and Beijing Local Taxation Bureau on December 6,2017, which is valid for three years. The Company is subject to a 15% reduction in corporate income tax from 2017 to 2019.
（12）Frontage Laboratories (Shanghai) Co., Ltd.(方達醫藥技術（上海）有限公司), a subsidiary of the Company, obtainedthe High-tech Enterprise Certificate No. GR201731001442, issued by the Shanghai Science and Technology Commission,Shanghai Municipal Finance Bureau, Shanghai State Taxation Bureau, and Shanghai Local Taxation Bureau on November 23,2017, which is valid for three years. The Company is subject to a 15% reduction in corporate income tax from 2017 to 2019.
（13）Frontage Laboratories (Suzhou) Co, Ltd (方達醫藥技術（蘇州）有限公司), a subsidiary of the Company, obtained theHigh-tech Enterprise Certificate No. GR201832003991, issued by Jiangsu Provincial Department of Science andTechnology, Jiangsu Provincial Department of Finance, and State Administration of Taxation Jiangsu Provincial TaxationBureau on November 28, 2018, which is valid for three years The Company is subject to a 15% reduction in corporateincome tax from 2018 to 2020.
（14）北京雅信誠醫學資訊科技有限公司, a subsidiary of the Company, obtained the High-tech Enterprise Certificate No.GR201711002276, jointly issued by the Beijing Municipal Science and Technology Commission, Beijing MunicipalFinance Bureau, Beijing State Taxation Bureau, and Beijing Local Taxation Bureau on October 25, 2017, which is valid forthree years. The Company is subject to a 15% reduction in corporate income tax from 2017 to 2019.
3. Others
Hong Kong corporate income tax rate：
| Taxable income | Tax payable |
| Below HKD2 million | 8.25% |
| Over HKD2 million | 16.50% |
U.S. corporate income taxFederal income taxThe federal income tax adopts a gradual tax rate according to different income levels, as follows:
Unit: USD
| Taxable income | Tax payable |
| 0 to 50,000 | Taxable income *15% |
| 50,000 to 75,000 | 7,500+( Taxable income -50,000)*25% |
| 75,000 to 100,000 | 13,750+(Taxable income-75,000)*34% |
| 100,000 to 335,000 | 22,250+(Taxable income-100,000)*39% |
| 335,000 to 10,000,000 | 113,900+(Taxable income-335,000)*34% |
| 10,000,000 to 15,000,000 | 3,400,000+(Taxable income-10.000,000)*35% |
| 15,000,000 to 18,333,333 | 5,150,000+(Taxable income-15.000,000)*38% |
| Over 18,333,333 | Taxable income*35% |
State income tax方達醫藥 is located in Pennsylvania and is based on 5.66% of taxable income.Tigermed-BDM is located in New Jersey and is based on 9% of taxable income.Tigermed MacroStat is located in California and based on 8.65% of taxable income.Concord is subject to 2.38% of the taxable income.
Canadian corporate income taxFederal income tax rate: 15%State income taxTigermed Clinical is located in British Columbia, Canada, and is based on 11% of taxable income.
Australian corporate income tax rate: 30% of total profits;
Malaysian corporate income tax rate: 28% of total profits;
Singapore corporate income tax rate:
| Taxable income (gain) | Newly established company (first three years) | Taxable income (gain) | Existing company (more than three years) |
| First SGD100,000 | Nil | First SGD100,000 | 4.25% |
| SGD 100,001 to SGD 300,000 | 8.50% | SGD 100,001 to SGD 300,000 | 8.50% |
| Over SGD300,000 | 17% | Over SGD300,000 | 17% |
Taiwan corporate income taxProfit-making enterprises with taxable income of less than 120,000 yuan for the whole year are exempted from income tax forprofit-making enterprises.For profit-making enterprises whose taxable income exceeds 120,000 yuan throughout the year, 20% of the total taxableincome will be levied.
Switzerland: based on 17.77% of total profits;
Indian corporate income tax rate: 25% of taxable income;
Romania: For small and micro enterprises, 1% of income;
Korean corporate income tax rate:
| Taxable income | Tax payable |
| Basic income tax rate | 22% |
| Under 200 million Won | 11% |
| Over 20 billion Won | 24.20% |
VII. NOTES TO ITEMS IN CONSOLIDATED FINANCIAL STATEMENTS
1. Monetary fund
Unit: yuan
| Item | Closing balance | Opening balance |
| Cash | 52,029.89 | 88,274.65 |
| Bank deposit | 2,005,976,226.21 | 696,243,743.42 |
| Other cash and bank balance | 36,277,567.73 | 8,155,073.49 |
| Total | 2,042,305,823.83 | 704,487,091.56 |
| Including: the balances of deposits overseas | 1,574,402,824.51 | 211,591,633.70 |
| Cash and bank balance which is restricted by deposit, pledge or freeze | 5,219,757.13 | 6,300,712.13 |
Cash and bank balance which is restricted by deposit, pledge or freeze and repatriation from abroad is shown below:
| Item | Closing balance | Balance at the end of previous year |
| Frozen for litigation | 2,700,000.00 |
| Foreign exchange swap margin | 1,441,272.00 | |
| Lease deposit | 2,092,860.00 | 2,058,960.00 |
| Bank custody account | 3,126,897.13 | 100,480.13 |
| Total | 5,219,757.13 | 6,300,712.13 |
2. Derivatives financial assets
Unit: Yuan
| Item | Closing balance | Opening balance |
| USD to RMB swap | 1,002,080.00 |
| Total | 1,002,080.00 |
3、Bills receivable
（1）Bills receivable
Unit: Yuan
| Item | Closing balance | Opening balance |
| Bank acceptance bill | 4,118,028.75 | 734,248.00 |
| Commercial acceptance bill | 1,979,641.60 | |
| Bad debt provision | -427,456.21 | |
| Total | 5,670,214.14 | 734,248.00 |
Note: Concord Biosciences, LLC, a subsidiary of the Company, accrued credit impairment losses of 427,456.21 yuan.If provision for bad debts of bills receivable was made using the general approach of expected credit loss, please disclose theinformation on provision for bad debts with reference to the disclosures of other receivables:
□ Applicable √ Not applicable
4. Trade receivable
（1）Trade receivable disclosed by classification
Unit: Yuan
| Type | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Value | Percentage | Value | Percentage | Value | Percentage | Value | Percentage | |||
| Trade receivable with individual accrual | 2,812,207.08 | 0.24% | 2,812,207.08 | 100.00% | ||||||
| Including： | ||||||||||
| Trade receivable with individual insignificance but individually accruing bad debt provision | 2,812,207.08 | 0.24% | 2,812,207.08 | 100.00% | ||||||
| Trade receivable for which allowance for bad debts is made on group basis | 1,159,425,357.75 | 99.76% | 84,703,197.72 | 7.31% | 1,074,722,160.03 | 821,267,649.84 | 100.00% | 62,247,729.95 | 7.58% | 759,019,919.89 |
| Including： | ||||||||||
| Trade receivable for which provision for bad debts is made on credit risk characteristics basis | 1,159,425,357.75 | 99.76% | 84,703,197.72 | 7.31% | 1,074,722,160.03 | 821,267,649.84 | 100.00% | 62,247,729.95 | 7.58% | 759,019,919.89 |
| Total | 1,162,237,564.83 | 100.00% | 87,515,404.80 | 1,074,722,160.03 | 821,267,649.84 | 100.00% | 62,247,729.95 | 7.58% | 759,019,919.89 |
Trade receivable with individual accrual：
Unit: Yuan
| Name | Closing | |||
| Book balance | Provision for bad debt | Percentage | Reasons | |
| Company 1 | 1,092,538.25 | 1,092,538.25 | 100.00% | Expected not to be recovered |
| Company 2 | 926,137.00 | 926,137.00 | 100.00% | Expected not to be recovered |
| Company 3 | 482,385.07 | 482,385.07 | 100.00% | Expected not to be recovered |
| Company 4 | 283,348.00 | 283,348.00 | 100.00% | Expected not to be recovered |
| Company 5 | 27,798.76 | 27,798.76 | 100.00% | Expected not to be recovered |
| Total | 2,812,207.08 | 2,812,207.08 | -- | -- |
If provision for bad debts of trade receivable was made using the general approach of expected credit loss, please disclosethe information on provision for bad debts with reference to the disclosures of other receivables:
□ Applicable √ Not applicable
Disclosure by age
Unit: Yuan
| Ageing | Book balance |
| Under 90 days | 309,488,379.58 |
| 90 to180 days | 34,021,795.44 |
| 180 days to 1 year | 16,867,774.87 |
| Above 1 year | 25,438,629.36 |
| Not yet invoiced | 773,608,778.50 |
| Trade receivable with individual insignificance but individually accruing bad debt provision | 2,812,207.08 |
| Total | 1,162,237,564.83 |
（2）Provision, retrieval and reversal of provision for bad debts for the period
Provisions for bad debts for the period:
Unit: Yuan
| Type | Opening balance | Movement during the period | Closing balance | |||
| Provision | Retrieval and reversal | Write-off | Others | |||
| Trade receivable for which provision for bad debts is made on credit risk characteristics basis | 62,247,729.95 | 22,353,957.85 | 101,509.92 | 84,703,197.72 | ||
| Trade receivable with individual insignificance but individually accruing bad debt provision | 2,812,207.08 | 2,812,207.08 | ||||
| Total | 62,247,729.95 | 25,166,164.93 | 101,509.92 | 87,515,404.80 | ||
（3）Top five other receivables according to closing balance of debtors
Unit: Yuan
| Name of debtor | Closing balance | Percentage of closing balance of total other receivables | Name of debtor |
| Debtor 1 | 72,379,685.69 | 6.23% | 5,589,793.57 |
| Debtor 2 | 69,461,663.10 | 5.98% | 3,509,929.65 |
| Debtor 3 | 36,490,249.60 | 3.14% | 1,823,693.17 |
| Debtor 4 | 26,555,943.55 | 2.28% | 1,436,977.70 |
| Debtor 5 | 25,752,213.28 | 2.22% | 1,284,909.94 |
| Total | 230,639,755.22 | 19.85% |
5. Prepayment
（1）Prepayment categorised by age
Unit: Yuan
| Ageing | Closing balance | Opening balance | ||
| Amount | Percentage | Amount | Percentage | |
| Within 1 year | 23,282,356.21 | 89.27% | 44,175,653.91 | 96.96% |
| 1 to 2 years | 2,651,436.28 | 10.17% | 479,796.25 | 1.05% |
| 2 to 3 years | 145,847.75 | 0.56% | 279,300.33 | 0.61% |
| Over 3 years | 628,380.30 | 1.38% | ||
| Total | 26,079,640.24 | -- | 45,563,130.79 | -- |
Note: DreamCIS Inc., our subsidiary in Korea, accrued provision for credit loss impairment due within one year amountedto 486,173.81 yuan, net.
（2）Prepayments with top five ending balance collected as per the subject for prepayment
| Name | Closing balance | Percentage of closing balance of total prepayment(%) |
| Company 1 | 4,243,865.71 | 16.27 |
| Company 2 | 2,432,680.00 | 9.33 |
| Company 3 | 700,000.00 | 2.68 |
| Company 4 | 416,223.43 | 1.60 |
| Company 5 | 397,409.96 | 1.52 |
| Total | 8,190,179.10 | 31.40 |
6. Other receivables
Unit： Yuan
| Item | Closing balance | Opening balance |
| Interests receivable | 5,598,786.55 | 1,926,868.87 |
| Dividends receivable | 3,960,000.00 | |
| Other receivables | 46,227,258.48 | 51,178,352.91 |
| Total | 55,786,045.03 | 53,105,221.78 |
（1）Interests receivable
1）Classification of interests receivable
Unit： Yuan
| Item | Closing balance | Opening balance |
| Time deposits | 5,598,786.55 | 804,748.44 |
| Corporate loans | 1,122,120.43 | |
| Total | 5,598,786.55 | 1,926,868.87 |
（2）Dividends receivable
1）Classification of dividends receivable
Unit： Yuan
| Item (or investee) | Closing balance | Opening balance |
| Mosim Co., Ltd. | 3,960,000.00 | |
| Total | 3,960,000.00 |
（3）Other receivables
1）Classification of other receivables by nature
Unit： Yuan
| Nature | Closing book balance | Opening book balance |
| Current account | 29,998,763.19 | 46,393,472.85 |
| Security | 8,908,701.91 | 5,067,817.28 |
| Petty cash | 3,085,558.49 | 4,115,541.69 |
| Deposits | 7,601,926.14 | 7,544,650.03 |
| Others | 4,224,013.21 | 3,341,520.52 |
| Total | 53,818,962.94 | 66,463,002.37 |
2）Provisions for bad debts
Unit： Yuan
| Provisions for bad debts | First stage | Second stage | Third stage | Total |
| Expected credit losses over the next 12 months | Expected credit losses over the whole subsisting period (not credit-impaired) | Expected credit losses over the whole subsisting period (credit-impaired) | ||
| Balance as at January 1, 2019 | 14,664,649.46 | 620,000.00 | 15,284,649.46 | |
| Amounts due for the period as at January 1, 2019 | —— | —— | —— | —— |
| Provisions for the period | -8,603,445.00 | 910,500.00 | -7,692,945.00 | |
| Balance as at December 31, 2019 | 6,061,204.46 | 1,530,500.00 | 7,591,704.46 |
Changes in book balance of provisions for losses with significant changes in the current period
□ Applicable √ Not applicable
Disclosure by aging
Unit： Yuan
| Aging | Carrying amount |
| Within 1 year (inclusive) | 35,289,184.87 |
| 1 to 2 years | 8,205,733.04 |
| 2 to 3 years | 4,979,832.66 |
| Over 3 years | 5,344,212.37 |
| 3 to 4 years | 2,584,287.51 |
| 4 to 5 years | 774,672.61 |
| Over 5 years | 1,985,252.25 |
| Total | 53,818,962.94 |
3）Details of provision, retrieval or reversal of bad debts for the periodDetails of provision for bad debts during the period:
Unit： Yuan
| Type | Opening balance | Changes for the period | Closing balance | |||
| Provision | Retrieval or reversal | Write off | Others | |||
| Other receivables of which the provision for bad debts is made by portfolio of credit risk characteristics | 14,664,649.46 | -6,662,909.56 | -1,940,535.44 | 6,061,204.46 | ||
| Other receivables that are individually insignificant but are provided for bad debts on individual basis | 620,000.00 | 910,500.00 | 1,530,500.00 | |||
| Total | 15,284,649.46 | -5,752,409.56 | -1,940,535.44 | 7,591,704.46 |
4）Top five other receivables by debtors as at the end of the period
Unit： Yuan
| Name of company | Nature | Closing balance | Aging | Percentage in total balance of other receivables at the end of the period | Balance of provisions for bad debts at the end of the period |
| Company 1 | Current account | 6,450,000.00 | Within 1 year | 11.98% | 322,500.00 |
| Company 2 | Security | 3,235,857.35 | Within 1 year | 6.01% | 161,792.87 |
| Company 3 | Security | 2,891,766.12 | Within 1 year | 5.37% | 144,588.31 |
| Company 4 | Current account | 2,741,965.00 | 1 to 2 years | 5.09% | 274,196.50 |
| Company 5 | Others | 2,607,879.67 | Within 1 year | 4.85% | 130,393.98 |
| Total | -- | 17,927,468.14 | -- | 33.31% | 1,033,471.66 |
7. Inventories
Whether the New ASBEs on Revenue have been adopted
□ Yes √ No
（1）Classification of inventories
Unit： Yuan
| Item | Closing balance | Opening balance |
| Carrying amount | Allowance for impairment | Book value | Carrying amount | Allowance for impairment | Book value | |
| Raw materials | 1,205,608.56 | 1,205,608.56 | 518,892.98 | 518,892.98 | ||
| Total | 1,205,608.56 | 1,205,608.56 | 518,892.98 | 518,892.98 |
8. Contractual assets
Unit： Yuan
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Contractual assets with provision for bad debts according to the general model of expected credit losses | 85,924,076.82 | 2,466,778.63 | 83,457,298.19 | 71,077,664.24 | 1,608,046.69 | 69,469,617.55 |
| Total | 85,924,076.82 | 2,466,778.63 | 83,457,298.19 | 71,077,664.24 | 1,608,046.69 | 69,469,617.55 |
Other notes: The Company’s contractual assets are comprised of subsidiaries: Frontage Holdings Corporation andDreamCIS Inc.
If the provision for bad debts of contractual assets is made in accordance with the general model of expected credit losses,please disclose the information about provision for bad debts with reference to the way of disclosure of other receivables:
□ Applicable √ Not applicable
Provisions for impairment of contractual assets in the period
Unit： Yuan
| Item | Provision for the period | Reversal for the period | Cancellation or write-off for the period | Reason |
| Contractual assets with provision for bad debts made by portfolio of credit risk characteristics | 858,731.94 | |||
| Total | 858,731.94 | -- |
9. Other current assets
Whether the New ASBEs on Revenue have been adopted
□ Yes √ No
Unit： Yuan
| Item | Closing balance | Opening balance |
| Remaining VAT credit, input tax to be credited, input tax to be certified | 2,373,381.90 | 4,082,012.71 |
| Prepaid corporate income tax | 8,066,286.67 | 10,634,302.17 |
| Wealth management products | 68,827,202.74 | 587,400.00 |
| Other prepaid taxes | 1,466,094.52 | |
| Total | 80,732,965.83 | 15,303,714.88 |
10. Long-term equity investments
Unite： Yuan
| Investee | Opening balance (book value) | Changes in the period | Closing balance (book value) | Balance of provision for impairment at the end of the period | |||||||
| Increased investment | Decreased investment | Profit/loss for investment by equity method | Adjustment to other comprehensive income | Other changes to equity | Declared cash dividend or profit | Provision for impairment | Others | ||||
| I. Joint Venture | |||||||||||
| II. Associate | |||||||||||
| Frontage Laboratories (Suzhou) Co., Ltd. | 8,443,802.40 | 10,925,629.34 | 2,481,826.94 | ||||||||
| FJ Pharma LLC | 4,758,032.96 | -1,053,761.19 | 69,735.15 | 3,774,006.92 | |||||||
| Teddy Lab | 18,284,826.43 | 400,000.00 | 5,376,844.36 | 23,261,670.79 | |||||||
| Hangzhou Yibai Healthcare Co., Ltd. | 46,905,872.19 | 10,687,500.00 | -23,355,563.72 | 12,862,808.47 | |||||||
| EPS Tigermed (Suzhou) Co., Ltd. | 9,464,740.49 | -127,445.68 | 9,337,294.81 | ||||||||
| EPS Tigermed (Nantong) Co., Ltd. | 15,436,168.73 | 167,507.04 | 15,603,675.77 | ||||||||
| Mosim Co., Ltd. | 42,090,212.10 | 6,742,908.62 | 3,960,000.00 | 44,873,120.72 | |||||||
| Sub-total | 103,293,443.20 | 42,090,212.10 | 22,013,129.34 | -9,767,683.63 | 69,735.15 | 3,960,000.00 | 109,712,577.48 | ||||
| Total | 103,293,443.20 | 42,090,212.10 | 22,013,129.34 | -9,767,683.63 | 69,735.15 | 3,960,000.00 | 109,712,577.48 |
11. Other non-current financial assets
Unit： Yuan
| Item | Closing balance | Opening balance |
| Financial assets at fair value through profit or loss | 2,250,473,669.34 | 1,481,093,167.41 |
| Including: Shares in listed companies | 134,957,845.68 | 12,643,481.41 |
| Medical funds | 1,075,212,505.72 | 806,852,568.11 |
| Equity in non-listed companies | 1,040,303,317.94 | 661,597,117.89 |
| Designated financial assets at fair value through profit or loss | ||
| Including: Investment in debt instruments | ||
| Others | ||
| Total | 2,250,473,669.34 | 1,481,093,167.41 |
12. Fixed assets
Unit： Yuan
| Item | Closing balance | Opening balance |
| Fixed assets | 252,236,673.28 | 214,171,314.51 |
| Total | 252,236,673.28 | 214,171,314.51 |
（1）Fixed assets
Unit： Yuan
| Item | Buildings | General equipment | Special equipment | Transportation equipment | Total |
| I. Book value： | |||||
| 1. Opening balance | 106,129,538.68 | 57,864,340.54 | 241,876,110.45 | 9,800,027.55 | 415,670,017.22 |
| 2. Increment | 17,347,771.88 | 8,597,083.81 | 85,408,480.06 | 1,113,008.37 | 112,466,344.12 |
| （1）Purchase | 4,982,655.06 | 47,117,232.27 | 466,303.33 | 52,566,190.66 | |
| （2）Transferred from construction in progress | 295,921.27 | 3,459,789.32 | 3,755,710.59 | ||
| （3）Increment from business combination | 17,076,571.88 | 3,240,889.35 | 31,204,895.58 | 649,997.43 | 52,172,354.24 |
| （4）Exchange differences arising from the translation of a foreign operation | 271,200.00 | 77,618.13 | 3,626,562.89 | -3,292.39 | 3,972,088.63 |
| 3.Decrement | 3,781,169.43 | 12,589,476.14 | 4,053,530.55 | 20,424,176.12 | |
| （1）Disposal or write-off | 2,773,854.18 | 8,792,696.39 | 489,356.02 | 12,055,906.59 | |
| （2）Decrease from business disposal | 1,007,315.25 | 3,796,779.75 | 3,564,174.53 | 8,368,269.53 | |
| 4. Closing balance | 123,477,310.56 | 62,680,254.92 | 314,695,114.37 | 6,859,505.37 | 507,712,185.22 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 13,489,819.91 | 34,083,026.84 | 147,714,389.39 | 6,211,466.57 | 201,498,702.71 |
| 2. Increment | 5,595,320.58 | 8,883,987.70 | 53,702,034.65 | 1,483,067.04 | 69,664,409.97 |
| （1）Provision | 3,761,487.04 | 6,327,173.95 | 26,302,138.93 | 1,104,444.62 | 37,495,244.54 |
| （2）Increment from business combination | 1,820,951.54 | 2,588,731.81 | 24,794,195.89 | 382,170.18 | 29,586,049.42 |
| （3）Exchange differences arising from the translation of a foreign operation | 12,882.00 | -31,918.06 | 2,605,699.83 | -3,547.76 | 2,583,116.01 |
| 3. Decrement | 2,005,232.17 | 9,738,322.24 | 3,944,046.33 | 15,687,600.74 |
| （1）Disposal or write-off | 1,819,827.88 | 8,642,495.88 | 969,532.81 | 11,431,856.57 | |
| （2）Decrease from business disposal | 185,404.29 | 1,095,826.36 | 2,974,513.52 | 4,255,744.17 | |
| 4. Closing balance | 19,085,140.49 | 40,961,782.37 | 191,678,101.80 | 3,750,487.28 | 255,475,511.94 |
| III. Provision for impairment | |||||
| 1. Opening balance | |||||
| 2. Increment | |||||
| （1）Provision | |||||
| 3. Decrement | |||||
| （1）Disposal or write-off | |||||
| 4. Closing balance | |||||
| IV. Book value | |||||
| 1. Book balance at the end of the period | 104,392,170.07 | 21,718,472.55 | 123,017,012.57 | 3,109,018.09 | 252,236,673.28 |
| 2. Book balance at the beginning of the period | 92,639,718.77 | 23,781,313.70 | 94,161,721.06 | 3,588,560.98 | 214,171,314.51 |
13. Construction in progress
Unit： Yuan
| Item | Closing balance | Opening balance |
| Construction in progress | 22,309,114.80 | |
| Total | 22,309,114.80 |
（1）Construction in progress
Unit： Yuan
| Item | Closing balance | Opening balance |
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Equipment to be installed | 22,309,114.80 | 22,309,114.80 | ||||
| Total | 22,309,114.80 | 22,309,114.80 |
14. Right-of-use assets
Unit： Yuan
| Item | Special equipment | Venue lease | Total |
| 1．Original book value | |||
| （1）Opening balance | 57,623,696.10 | 92,974,828.06 | 150,598,524.16 |
| （2）Increment | 4,604,322.88 | 21,116,462.18 | 25,720,785.06 |
| — Purchase | 3,655,570.45 | 20,520,288.04 | 24,175,858.49 |
| —Exchange differences arising from the translation of a foreign operation | 948,752.43 | 596,174.14 | 1,544,926.57 |
| （3）Decrement | |||
| —Disposal or write-off | |||
| （4）Closing balance | 62,228,018.98 | 116,691,142.59 | 178,919,161.57 |
| 2．Accumulated depreciation | |||
| （1）Opening balance | 16,906,462.14 | 16,906,462.14 | |
| （2）Increment | 4,486,689.23 | 6,259,613.67 | 10,746,302.90 |
| —Provision | 4,134,502.23 | 6,208,917.27 | 10,343,419.50 |
| — Exchange differences arising from the translation of a foreign operation | 352,187.00 | 50,696.40 | 402,883.40 |
| （3）Decrement | |||
| —Disposal or write-off | |||
| （4）Closing balance | 21,393,151.37 | 6,259,613.67 | 27,652,765.04 |
| 3．Provision for impairment | |||
| （1）Opening balance | |||
| （2）Increment | |||
| —Provision | |||
| （3）Decrement | |||
| —Disposal or write-off | |||
| （4）Closing balance | |||
| 4．Book value |
| （1）Book value at the end of the period | 40,834,867.61 | 110,431,528.92 | 151,266,396.53 |
| （2）Book value at the beginning of the period | 40,717,233.96 | 92,974,828.06 | 133,692,062.02 |
15. Intangible assets
（1）Intangible assets
Unit： Yuan
| Item | Lad use rights | Patent | Non-patent technology | Others | Customer relations | Total |
| I. Original book value | ||||||
| 1. Opening balance | 18,989,327.59 | 33,553,536.56 | 52,542,864.15 | |||
| 2. Increment | 206,790.41 | 35,551,050.90 | 40,926,000.00 | 76,683,841.31 | ||
| （1）Purchase | 13,717,258.58 | 13,717,258.58 | ||||
| （2） Internal R&D | ||||||
| （3）Increment from business combination | 21,875,198.34 | 40,926,000.00 | 62,801,198.34 | |||
| （4）Exchange differences arising from the translation of a foreign operation | 206,790.41 | -41,406.02 | 165,384.39 | |||
| 3. Decrement | ||||||
| （1）Disposal | ||||||
| 4. Closing balance | 19,196,118.00 | 69,104,587.46 | 40,926,000.00 | 129,226,705.46 | ||
| II. Accumulated amortisation | ||||||
| 1. Opening balance | 1,020,927.38 | 23,701,810.21 | 24,722,737.59 |
| 2. Increment | 130,331.16 | 6,872,878.36 | 1,051,794.40 | 8,055,003.92 | ||
| （1）Provision | 130,331.16 | 4,586,017.17 | 1,051,794.40 | 5,768,142.73 | ||
| （2）Increment from business combination | 2,305,103.47 | 2,305,103.47 | ||||
| （3）Exchange differences arising from the translation of a foreign operation | -18,242.28 | -18,242.28 | ||||
| 3. Decrement | ||||||
| （1）Disposal | ||||||
| 4. Closing balance | 1,151,258.54 | 30,574,688.57 | 1,051,794.40 | 32,777,741.51 | ||
| III. Provision for impairment | ||||||
| 1. Opening balance | ||||||
| 2. Increment | ||||||
| （1）Provision | ||||||
| 3. Decrement | ||||||
| （1）Disposal | ||||||
| 4. Closing balance | ||||||
| IV. Book value | ||||||
| 1. Book value at the end of the period | 18,044,859.46 | 38,529,898.89 | 39,874,205.60 | 96,448,963.95 |
| 2. Book value at the beginning of the period | 17,968,400.21 | 9,851,726.35 | 27,820,126.56 |
The intangible assets through internal R&D of the Company as a proportion to the balance of intangible assets at the end ofthe period
16. Goodwill
（1）Original book value of goodwill
Unit： Yuan
| Investee or item generating goodwill | Opening balance | Increment due to | Decrement due to | Closing balance | ||
| Business combination | Exchange differences arising from the translation of a foreign operation | Disposal | Others | |||
| Business combination with MacroStat, which is not under common control | 11,512,365.34 | 11,512,365.34 | ||||
| Business combination of the subsidiary Hongkong Tigermed with Taiwan Tigermed, which is not under common control | 872,275.08 | 872,275.08 | ||||
| Business combination of the subsidiary Hongkong Tigermed with Tigermed-BDM, which is not under common control | 15,090,831.90 | 15,090,831.90 | ||||
| Business combination of the subsidiary Hongkong Tigermed with Frontage Holdings, which is not under common control | 268,001,862.20 | 268,001,862.20 | ||||
| Business combination with Taizhou Kanglihua, which is not under common control | 24,527,230.75 | 24,527,230.75 | ||||
| Business combination with Suntone, which is not under common control | 18,956,442.52 | 18,956,442.52 | ||||
| Business combination with DreamCIS, which is not under common control | 133,700,419.06 | 133,700,419.06 | ||||
| Business combination with BMD, which is not under common control | 141,620,000.48 | 141,620,000.48 | ||||
| Business combination with Tigermed-Jyton, which is not under common control | 456,865,395.18 | 456,865,395.18 | ||||
| Business combination with Opera, which is not under common control | 2,900,093.42 | 2,900,093.42 |
| Business combination with Beijing Yaxincheng, which is not under common control | 99,349,722.56 | 99,349,722.56 | ||||
| Business combination with Frontage Suzhou, which is not under common control | 27,645,694.99 | 27,645,694.99 | ||||
| Business combination with BRI, which is not under common control | 6,988,171.96 | 6,988,171.96 | ||||
| Business combination with RMI, which is not under common control | 8,876,809.88 | 8,876,809.88 | ||||
| Total | 1,074,046,915.93 | 142,860,399.39 | 18,956,442.52 | 1,197,950,872.80 |
（2）Provision for impairment of goodwill
Unit： Yuan
| Investee or item generating goodwill | Opening balance | Increment due to | Decrement due to | Closing balance | ||
| Provision | Disposal | |||||
| Business combination with Taizhou Kanglihua, which is not under common control | 6,120,000.00 | 6,120,000.00 | ||||
| Business combination with Suntone, which is not under common control | 1,000,000.00 | 1,000,000.00 | ||||
| Business combination with DreamCIS Inc., which is not under common control | 5,000,000.00 | 5,000,000.00 | ||||
| Business combination with BMD, which is not under common control | 29,000,000.00 | 29,000,000.00 | ||||
| Total | 41,120,000.00 | 1,000,000.00 | 40,120,000.00 |
Information about the asset group or combination of asset groups to which the goodwill belongs
（1）The scope of appraisal of MacroStat on the appraisal base date is the asset group related to goodwill of MacroStat,which is consistent with the asset group determined at the goodwill impairment test on the acquisition date. The scope of theappraisal covers assets related to goodwill.
（2）The scope of appraisal of Taiwan Tigermed Consulting Co., Ltd. on the appraisal base date is the asset group relatedto goodwill of Taiwan Tigermed Consulting Co., Ltd., which is consistent with the asset group determined at the goodwillimpairment test on the acquisition date. The scope of the appraisal covers assets related to goodwill.
（3）The scope of the appraisal of Tigermed-BDM on the appraisal base date is the asset group related to goodwill ofTigermed-BDM, which is consistent with the asset group determined at the goodwill impairment test on the acquisition date.The scope of the appraisal covers assets related to goodwill.
（4）The scope of appraisal of Frontage Holdings on the appraisal base date is the asset group related to goodwill ofFrontage Holdings, which is consistent with the asset group determined at the goodwill impairment test on the acquisitiondate. The scope of the appraisal covers assets related to goodwill.
（5）The scope of appraisal of Taizhou Kanglihua on the appraisal base date is the asset group related to goodwill ofTaizhou Kanglihua, which is consistent with the asset group determined at the goodwill impairment test on the acquisitiondate. The scope of the appraisal covers assets related to goodwill.
（6）The scope of appraisal of DreamCIS Inc. on the appraisal base date is the asset group related to goodwill of DreamCISInc., which is consistent with the asset group determined at the goodwill impairment test on the acquisition date. The scopeof the appraisal covers assets related to goodwill.
（7）The scope of appraisal of BMD on the appraisal base date is the asset group related to goodwill of BMD, which isconsistent with the asset group determined at the goodwill impairment test on the acquisition date. The scope of theappraisal covers assets related to goodwill.
（8）The scope of appraisal of Tigermed-Jyton on the appraisal base date is the asset group related to goodwill ofTigermed-Jyton, which is consistent with the asset group determined at the goodwill impairment test on the acquisition date.The scope of the appraisal covers assets related to goodwill.
（9）The scope of appraisal of Opera on the appraisal base date is the asset group related to goodwill of Opera, which isconsistent with the asset group determined at the goodwill impairment test on the acquisition date. The scope of theappraisal covers assets related to goodwill.
（10）The scope of appraisal of Beijing Yaxincheng on the appraisal base date is the asset group related to goodwill ofBeijing Yaxincheng, which is consistent with the asset group determined at the goodwill impairment test on the acquisitiondate. The scope of the appraisal covers assets related to goodwill.
（11）The scope of appraisal of Frontage Suzhou on the appraisal base date is the asset group related to goodwill ofFrontage Suzhou, which is consistent with the asset group determined at the goodwill impairment test on the acquisition date.The scope of the appraisal covers assets related to goodwill.
（12）The scope of appraisal of RMI Laboratories, LLC on the appraisal base date is the asset group related to goodwill ofRMI Laboratories, LLC, which is consistent with the asset group determined at the goodwill impairment test on theacquisition date. The scope of the appraisal covers assets related to goodwill.
（13）The scope of the appraisal of BRI Biopharmaceutical Research, Inc on the appraisal base date is the asset grouprelated to goodwill of BRI Biopharmaceutical Research, Inc, which is consistent with the asset group determined at thegoodwill impairment test on the acquisition date. The scope of the appraisal covers assets related to goodwill.
Process of goodwill impairment test, key parameters (such as forecast growth rate, steady growth rate, profit margin,discount rate, forecast period, etc. in estimating the present value of future cash flows) and recognition of goodwillimpairment are illustrated as follows:
On the balance sheet date, the Company conducted impairment test on the goodwill formed by the above businesscombinations with and acquisitions of enterprises not under common control, and adopted the asset group related togoodwill to estimate its future cash flow present value method and fair value method in estimating the recoverable amount.The Company’s management prepares cash flow forecasts derived from the most recent financial budgets for the next fiveyears (the “Budget Period”) and extrapolates cash flows for the following years. The cash flows beyond the Budget Periodare assumed to be stable. In estimating the future cash flows, the Company makes estimates based on the future strategicobjectives, business development and operation plans of the asset group, and takes into account factors including historicalsales data, expected changes in market demand and expected changes in product prices. In determining the discount rateadopted for the recoverable amount, the Company has taken into account the factors including the industry return on assetsof the asset group and the expected changes in the risk interest rate of external funds, and adjusted and determined throughanalysis of the relevant data from the selected comparable companies.
（1）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition ofMacroStat. After testing, the goodwill arising from the acquisition of the above subsidiary was not impaired at the end of theperiod.
（2）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition ofTaiwan Tigermed Consulting Co., Ltd. After testing, the goodwill arising from the acquisition of the above subsidiary wasnot impaired at the end of the period.
（3）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition ofTigermed-BDM. After testing, the goodwill arising from the acquisition of the above subsidiary was not impaired at the endof the period.
（4）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition ofFrontage Holdings. After testing, the goodwill arising from the acquisition of the above subsidiary was not impaired at theend of the period.
（5）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition ofTaizhou Kanglihua. After testing, the goodwill arising from the acquisition of the above subsidiary was not impaired at theend of the period.
（6）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition ofDreamCIS Inc. After testing, the goodwill arising from the acquisition of the above subsidiary was not impaired at the endof the period.
（7）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition of BMD.After testing, the goodwill arising from the acquisition of the above subsidiary was not impaired at the end of the period.
（8）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition ofTigermed-Jyton. After testing, the goodwill arising from the acquisition of the above subsidiary was not impaired at the endof the period.
（9）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition of Opera.After testing, the goodwill arising from the acquisition of the above subsidiary was not impaired at the end of the period.
（10）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition ofBeijing Yaxincheng. After testing, the goodwill arising from the acquisition of the above subsidiary was not impaired at theend of the period.
（11）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition ofFrontage Suzhou. After testing, the goodwill arising from the acquisition of the above subsidiaries was not impaired at theend of the period.
（12）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition of RMILaboratories, LLC. After testing, the goodwill arising from the acquisition of the above subsidiary was not impaired at theend of the period.
（13）At the end of the period, the Company performed impairment test on the goodwill arising from the acquisition of BRIBiopharmaceutical Research, Inc. After testing, the goodwill arising from the acquisition of the above subsidiary was notimpaired at the end of the period.
17. Long-term deferred expenses
Unit： Yuan
| Item | Opening Balance | Increment | Amount of amortisation | Other decreases | Closing balance |
| Costs of improvements to fixed assets under leases | 8,388,383.48 | 16,427,331.40 | 3,446,999.87 | 1,981,575.25 | 19,387,139.76 |
| Technology usage expenses | 964,225.14 | 537,627.12 | 426,598.02 | ||
| Rental fees | 83,400.00 | 3,200.00 | 80,200.00 | ||
| Total | 9,436,008.62 | 16,427,331.40 | 3,987,826.99 | 2,061,775.25 | 19,813,737.78 |
18. Deferred income tax assets / deferred income tax liabilities
（1）Non-offset deferred income tax assets
Unit： Yuan
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Provision for impairment of assets | 91,530,587.21 | 16,360,233.44 | 68,530,483.68 | 14,021,859.77 |
| Share-based payment | 202,955,330.26 | 53,815,201.31 | ||
| Accrued expenses | 17,099,907.37 | 2,478,430.22 | 6,595,260.47 | 989,289.07 |
| Deferred income | 13,952,902.29 | 3,648,596.69 | ||
| Others | 52,903,863.82 | 15,173,639.63 | 15,529,573.27 | 4,142,078.47 |
| Total | 378,442,590.95 | 91,476,101.29 | 90,655,317.42 | 19,153,227.31 |
（2）Non-offset deferred income tax liabilities
Unit： Yuan
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Assets evaluation increment from business combination of enterprises not under common control | 69,450,458.65 | 13,123,399.78 | ||
| Changes in fair value of other non-current financial assets | 120,859,120.66 | 18,128,868.10 | 116,585,524.53 | 17,487,828.68 |
| Accelerated depreciation of fixed assets permitted by tax laws | 73,449,909.18 | 14,465,413.28 | 49,323,990.79 | 12,007,748.11 |
| Gains on investment | 7,886,986.08 | 2,129,486.25 | ||
| Total | 263,759,488.49 | 45,717,681.16 | 173,796,501.40 | 31,625,063.04 |
（3）Deferred income tax assets or liabilities presented on a net basis after offsetting
Unit： Yuan
| Item | Offsetting amount of deferred income tax assets and liabilities at the end of the reporting | Closing balance of deferred income tax assets or liabilities after offsetting | Offsetting amount of deferred income tax assets and liabilities at the beginning of the reporting | Opening balance of deferred income tax assets or liabilities after offsetting |
| Deferred income tax assets | 91,476,101.29 | 19,153,227.31 | ||
| Deferred income tax liabilities | 45,717,681.16 | 31,625,063.04 |
19. Other non-current assets
Whether the New ASBEs on Revenue have been adopted
□ Yes √ No
Unit： Yuan
| Item | Closing balance | Opening balance |
| Prepaid purchases of fixed assets and intangible assets | 9,605,518.89 | 6,414,357.23 |
| Others | 783,032.40 | 780,937.50 |
| Long-term receivables | 734,762.13 | |
| Total | 11,123,313.42 | 7,195,294.73 |
Other notes：
Long-term receivables will expire on May 31, 2021 at an interest rate of 6%.
20. Short-term borrowings
（1）Classification of short-term borrowings
Unit： Yuan
| Item | Closing balance | Opening balance |
| Secured borrowings | 350,029,223.19 | |
| Unsecured borrowings | 513,742,523.36 | 602,834,093.20 |
| Total | 863,771,746.55 | 602,834,093.20 |
21. Trade payable
（1）Trade payable
Unit： Yuan
| Item | Closing balance | Opening balance |
| Cost of trade payable | 74,122,075.34 | 43,081,478.04 |
| Long-term assets | 1,069,387.60 | 946,062.28 |
| Total | 75,191,462.94 | 44,027,540.32 |
（2）Significant trade payable aged over one year
Unit： Yuan
| Item | Closing balance | Reasons for default or carry forward |
| Company 1 | 137,986.20 | Unsettled |
| Company 2 | 191,702.55 | Unsettled |
| Company 3 | 144,860.44 | Unsettled |
| Total | 474,549.19 | -- |
22. Receipts in advance
Whether the New ASBEs on Revenue have been adopted
□ Yes √ No
（1）Receipts in advance
Unit： Yuan
| Item | Closing balance | Opening balance |
| Service payment | 257,952,288.76 | 261,643,274.74 |
| Total | 257,952,288.76 | 261,643,274.74 |
（2）Significant receipts in advance with an aging of over 1 year
Unit： Yuan
| Item | Closing balance | Reasons for default or carry forward |
| Company 1 | 12,125,289.44 | The amount of receipt in advance is greater than the project progress |
| Company 2 | 2,287,144.08 | The amount of receipt in advance is greater than the project progress |
| Company 3 | 2,010,301.67 | The amount of receipt in advance is greater than the project progress |
| Company 4 | 1,445,798.96 | The amount of receipt in advance is greater than the project progress |
| Company 5 | 1,414,119.26 | The amount of receipt in advance is greater than the project progress |
| Total | 19,282,653.41 | -- |
23. Contractual liabilities
Unit： Yuan
| Item | Closing balance | Opening balance |
| Obligation to transfer goods or provide services to a customer due to a consideration received or receivable | 140,288,059.36 | 119,150,065.69 |
| Total | 140,288,059.36 | 119,150,065.69 |
24. Staff remuneration payable
（1）Staff remuneration payable
Unit： Yuan
| Item | Opening balance | Increment | Decrement | Closing balance |
| I. Short-term remuneration | 66,636,727.93 | 1,080,178,044.21 | 1,025,491,640.73 | 121,323,131.41 |
| II. Post-employment benefit – Defined Contribution Plan | 1,311,945.63 | 59,316,132.03 | 59,297,755.51 | 1,330,322.15 |
| Total | 67,948,673.56 | 1,139,494,176.24 | 1,084,789,396.24 | 122,653,453.56 |
（2）Short-term remuneration
Unit： Yuan
| Item | Opening balance | Increment | Decrement | Closing balance |
| 1. Salaries, bonuses, allowances, and subsidies | 55,432,134.90 | 968,968,667.65 | 914,764,096.52 | 109,636,706.03 |
| 2. Staff welfare | 77,530.21 | 31,733,299.83 | 31,788,826.90 | 22,003.14 |
| 3. Social security contributions | 494,578.19 | 28,323,946.24 | 27,574,281.71 | 1,244,242.72 |
| Including:Medical insurance | 439,760.47 | 25,333,620.76 | 24,638,661.62 | 1,134,719.61 |
| Work injury insurance | 12,850.32 | 1,073,385.16 | 1,059,400.30 | 26,835.18 |
| Maternity insurance | 41,967.40 | 1,916,940.32 | 1,876,219.79 | 82,687.93 |
| 4. Housing fund | 573,346.97 | 34,779,669.75 | 34,767,227.72 | 585,789.00 |
| 5. Union fund and staff education fund | 9,525,342.61 | 13,782,587.09 | 13,556,655.87 | 9,751,273.83 |
| 6. Short-term absences paid | 530,807.99 | 273,735.87 | 804,543.86 | |
| 7. Other short-term remuneration | 2,987.06 | 2,316,137.78 | 2,236,008.15 | 83,116.69 |
| Total | 66,636,727.93 | 1,080,178,044.21 | 1,025,491,640.73 | 121,323,131.41 |
（3）Defined Contribution Plan
Unit： Yuan
| Item | Opening balance | Increment | Decrement | Closing balance |
| 1. Primary endowment insurance | 1,289,068.66 | 58,055,523.52 | 58,068,871.75 | 1,275,720.43 |
| 2. Unemployment insurance | 22,876.97 | 1,260,608.51 | 1,228,883.76 | 54,601.72 |
| Total | 1,311,945.63 | 59,316,132.03 | 59,297,755.51 | 1,330,322.15 |
25. Taxes payable
Unit： Yuan
| Item | Closing balance | Opening balance |
| VAT | 28,226,972.43 | 16,242,635.49 |
| Corporate income tax payable | 70,292,967.23 | 56,861,637.25 |
| Individual income tax payable | 8,908,776.10 | 3,070,382.99 |
| City maintenance and construction tax payable | 1,895,211.77 | 778,601.32 |
| Housing property tax | 1,563,281.60 | 1,224,335.56 |
| Education surcharge tax | 1,477,516.04 | 621,286.40 |
| Land appreciation tax | 48,960.00 | |
| Stamp duty | 22,242.62 | 94,488.90 |
| Total | 112,386,967.79 | 78,942,327.91 |
26. Other payables
Unit： Yuan
| Item | Closing balance | Opening balance |
| Interests payable | 1,788,386.25 | |
| Dividends payable | 2,753,709.82 | 1,443,558.82 |
| Other payables | 182,327,741.75 | 40,818,766.84 |
| Total | 185,081,451.57 | 44,050,711.91 |
（1）Interests payable
Unit： Yuan
| Item | Closing balance | Opening balance |
| Interests of short-term borrowings | 1,788,386.25 | |
| Total | 1,788,386.25 |
（2）Dividends payable
Unit： Yuan
| Item | Closing balance | Opening balance |
| Ordinary shares dividends | 1,467,326.47 | 1,443,558.82 |
| Restricted shares dividends | 1,286,383.35 | |
| Total | 2,753,709.82 | 1,443,558.82 |
（3）Other payables
1） Other payables by nature
Unit： Yuan
| Item | Closing balance | Opening balance |
| From entity | 21,379,320.13 | 31,043,932.01 |
| From individual | 7,390,866.32 | 6,398,205.87 |
| Security | 299,447.50 | 353,590.00 |
| Others | 6,867,682.57 | 3,023,038.96 |
| Restricted stock repurchase | 146,390,425.23 | |
| Total | 182,327,741.75 | 40,818,766.84 |
2）Other significant payables with aging over 1 year
Unit： Yuan
| Item | Closing balance | Reasons for default or carry forward |
| Company 1 | 4,971,205.24 | Unsettled |
| Company 2 | 1,622,763.35 | Unsettled |
| Company 3 | 360,000.00 | Unsettled |
| Company 4 | 200,000.00 | Unsettled |
| Company 5 | 116,193.40 | Unsettled |
| Total | 7,270,161.99 | -- |
27. Non-current liabilities due within one year
Unit： Yuan
| Item | Closing balance | Opening balance |
| Long-term borrowings due within one year | 4,542,631.72 | 18,301,820.91 |
| Lease liabilities due within one year | 28,824,234.41 | 17,065,926.01 |
| Other long-term liabilities due within one year | 10,294,800.00 | |
| Total | 33,366,866.13 | 45,662,546.92 |
Other notes：
（1） For details of RMB1,054,427.08 which is part of the long-term borrowings due within one year, please see Note7 under section (28) Long-term borrowings.
（2） RMB3,488,204.64, which is part of the long-term borrowings due within one year, was mainly borrowed byFrontage Holdings, a subsidiary of the Company, from Wells Fargo Bank on September 20, 2017 for a loan term of threeyears and the repayment method of US$666,660.00 per year. The balance of non-current liabilities due within one yearamounted to $500,015, which was equivalent to RMB3,488,204.64;
（3） For details of RMB28,824,234.41, which is part of the lease liabilities due within one year, please refer to Note 7under section (29) Lease liabilities.
28. Long-term borrowings
（1）Classification of long-term borrowings
Unit： Yuan
| Item | Closing balance | Opening balance |
| Secured borrowings | 3,431,702.95 | |
| Unsecured borrowings | 36,500,000.00 | |
| Total | 36,500,000.00 | 3,431,702.95 |
Explanation on classification of long-term borrowings：
The Company borrowed RMB37,500,000.00 from Hangzhou Kaiyuan Sub-branch of Industrial and Commercial Bank ofChina Limited on August 16, 2019 with a loan term of three years and repayment method was to repay the principal ofRMB1,000,000.00 and the principal of 35,500,000.00 in the first year and in the third year respectively. The balance oflong-term borrowings stood at RMB36,500,000.00, and the balance of non-current liabilities due within one year amountedto RMB1,054,427.08 (interest inclusive).
29. Lease liabilities
Unit：Yuan
| Item | Closing balance | Opening balance |
| Lease liabilities | 146,574,634.91 | 123,590,172.25 |
| Non-current liabilities due within one year | -28,824,234.41 | -17,065,926.01 |
| Total | 117,750,400.50 | 106,524,246.24 |
30. Long-term payables
Unit： Yuan
| Item | Closing balance | Opening balance |
| Long-term payables | 20,342,856.26 | |
| Total | 20,342,856.26 |
（1）Long-term payables by nature
Unit： Yuan
| Item | Closing balance | Opening balance |
| Sean Yu | 8,745,066.09 | |
| Philip Tiller | 7,155,054.07 | |
| David and J&J | 4,442,736.10 | |
| Total | 20,342,856.26 |
Other notes：
As of December 31, 2019, long-term payables are the fair value of contingent consideration for BRI and RMI laboratoriesacquired for biopharmaceutical research.
31. Share capital
Unit：Yuan
| Opening balance | Increase / decrease in the period（+、-） | Closing balance | |||||
| Issue of new shares | Bonus issue | Conversion of capital reserves into share capital | Others | Sub-total | |||
| Total shares | 500,176,537.00 | 249,559,635.00 | -228,573.00 | 249,331,062.00 | 749,507,599.00 | ||
Other notes：
（1）The Company issued bonus shares to all shareholders by way of 5 shares for every 10 shares held by them, thusincreasing its share capital by RMB249,559,635.00.
（2）The Company cancelled restricted shares due to resignation of employees, thus reducing its share capital byRMB228,573.00.
32. Capital reserves
Unit： Yuan
| Item | Opening balance | Increment | Decrement | Closing balance |
| Capital premium（Share premium） | 1,315,398,965.71 | 624,051,991.21 | 291,230,791.89 | 1,648,220,165.03 |
| Other capital reserves | 7,250,397.49 | 52,832,595.44 | 60,082,992.93 | |
| Total | 1,322,649,363.20 | 676,884,586.65 | 291,230,791.89 | 1,708,303,157.96 |
Other notes, including the increase or decrease in the current period and explanation of the reasons for the change：
1. Changes in capital premium：
（1） The Company issued bonus shares to all shareholders by way of 5 shares for every 10 shares held by them, thusreducing its capital reserves by RMB249,559,635.00；
（2） The listing of the subsidiary Frontage Holdings has resulted in increased capital reserves byRMB614,890,531.85；
（3） The acquisition of minority interests in the subsidiary Tiger-Xinze has resulted in increased capital reserves byRMB1,616,977.98；
（4） The acquisition of minority interests in the subsidiary Tigermed-BDM has resulted in increased capital reservesby RMB6,745,033.66；
（5） The acquisition of minority interests in the subsidiary Tigermed-IntelliPV has resulted in reduced capitalreserves by RMB11,381,764.39；
（6） The acquisition of minority interests in the subsidiary Fantastic Bioimaging has resulted in reduced capitalreserves by RMB5,555,586.38; the minority in Fantastic Bioimaging increased their capital and reduced their capitalreserves by RMB1,372,885.14.
（7） Acquisition of minority interests in subsidiary Beijing Kanglihua, increasing capital reserves by RMB760,479.35；
（8） Acquisition of minority interests in subsidiary Tigermed Swiss AG, reducing capital reserves by RMB103,538.33；
（9） Acquisition of minority interests in subsidiary Hangzhou Yuding, increasing capital reserves by RMB38,968.37；
（10） Dilution of equity through increase of capital by minority shareholders of subsidiary Shehezi Tai’er, reducingcapital reserves by RMB14,363.28；
（11） Dilution of equity through increase of capital by minority shareholders of subsidiary Taiyu Phase II, reducingcapital reserves by RMB513,842.54.
（12） Cancellation of restricted shares due to resignation of employees, reducing the capital reserves byRMB5,840,802.06 ；
（13） The reissue of treasury stocks was used as the initial restricted stock equity incentive of 3,827,763.00 shares,
with the average stock price of RMB44.24/share and the grant price of RMB39.83, reducing the capital reserves byRMB16,888,374.77.
2. Other notes on changes in capital reserves: the Company's equity-settled share-based payment increased the capitalreserves by RMB52,832,595.44.
33. Treasury stocks
Unit： Yuan
| Item | Opening balance | Increment | Decrement | Closing balance |
| Repurchased shares | 248,124,987.77 | 61,847,562.40 | 263,193,707.81 | 46,778,842.36 |
| Restricted shares | 152,459,800.29 | 6,069,375.06 | 146,390,425.23 | |
| Total | 248,124,987.77 | 214,307,362.69 | 269,263,082.87 | 193,169,267.59 |
Other notes, including the increase or decrease in the current period and explanation of the reasons for the change：
（1） The aggregate number of shares repurchased by the Company through centralised bidding was 1,572,959, with atotal payment of RMB61,847,562.40；
（2） The Company reissued treasury shares to employees under the first restricted shares and employee stockownership plan, and wrote off RMB263,193,707.81 of treasury stock in the current period；
（3） According to the 19th meeting of the third session the board of directors in 2019, 3,827,763 restricted shareswere granted to the incentive participants, with a grant price of RMB39.83 per share, totalling RMB152,459,800.29；
（4） This year, the Company had 18 first-time incentive participants who resigned and were no longer qualified toparticipate incentive. The Company repurchased and cancelled those restricted shares that have been granted but notunlocked, which totalled totalled RMB6,069,375.06.
34. Other comprehensive income
Unit： Yuan
| Item | Opening balance | Amount in current period | Closing balance | |||||
| Amount for the period before tax | Less: transferred amount into income statement from other comprehensive income | Less： transferred amount into retained income from other comprehensive income | Less: income tax expense | The after-tax amount attributed to the parent company | The after-tax amount attributed to minority shareholders | |||
| II. Other comprehensive income to be reclassified to profit or loss | -2,479,308.80 | 38,413,151.55 | 28,778,690.27 | 9,634,461.28 | 26,299,381.47 | |||
| The differences from translation of foreign currencies in financial statements | -2,479,308.80 | 38,413,151.55 | 28,778,690.27 | 9,634,461.28 | 26,299,381.47 | |||
| Other comprehensive income | -2,479,308.80 | 38,413,151.55 | 28,778,690.27 | 9,634,461.28 | 26,299,381.47 |
35. Surplus reserve
Unit： Yuan
| Item | Opening balance | Increment | Decrement | Closing balance |
| Statutory surplus reserve | 94,593,086.07 | 43,959,651.32 | 138,552,737.39 | |
| Total | 94,593,086.07 | 43,959,651.32 | 138,552,737.39 |
36. Undistributed profit
Unit： RMB
| Item | Current period | Previous period |
| Closing balance before the adjustment | 1,010,702,290.44 | 668,973,483.95 |
| Adjustment on opening balance (“+” for increase, “-” for decrease) | 162,225,296.97 | -12,489,325.03 |
| Opening balance after the adjustment | 1,172,927,587.41 | 656,484,158.92 |
| Add: net profit for the year attributable to the shareholders of the parent company | 841,634,823.38 | 472,183,931.65 |
| Less: statutory surplus reserve | 43,959,651.32 | 17,930,492.73 |
| Ordinary shares dividends payable | 174,638,411.15 | 100,035,307.40 |
| Undistributed profit at the end of the period | 1,795,964,348.32 | 1,010,702,290.44 |
Notes on adjustments to undistributed profit at the beginning of the period：
1) Due to retroactive adjustment of ASBEs and related new regulations, undistributed profits at the beginning of the periodwere affected by RMB162,225,296.97.
2) Due to changes in accounting policies, undistributed profits at the beginning of the period were affected by RMB0.00.
3) Due to correction of significant accounting errors, undistributed profit at the beginning of the period was affected byRMB0.00.
4) Due to changes of consolidation scope being under common control, undistributed profit at the beginning of the periodwas affected by RMB0.00.
5) Due to other adjustments, undistributed profit at the beginning of the period was affected by RMB0.00.
37. Operating income and operating costs
Unit： Yuan
| Item | Amount in current period | Amount in previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 2,793,154,006.76 | 1,499,646,811.12 | 2,298,030,160.69 | 1,306,532,943.56 |
| Other businesses | 10,155,280.89 | 758,730.92 | 2,629,545.93 | 2,380,410.68 |
| Total | 2,803,309,287.65 | 1,500,405,542.04 | 2,300,659,706.62 | 1,308,913,354.24 |
Whether the New ASBEs on Revenue have been adopted
□ Yes √ No
38. Taxes and surcharges
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| City maintenance and construction tax | 5,003,088.95 | 3,259,441.38 |
| Education surcharge | 3,930,436.10 | 2,674,976.06 |
| Property tax | 434,641.71 | 1,256,072.26 |
| Land use tax | 97,920.00 | |
| Vehicle and vessel tax | 360.00 | 120.00 |
| Stamp duty | 1,634,533.73 | 1,996,854.16 |
| Total | 11,003,060.49 | 9,285,383.86 |
39. Selling expenses
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| Staff remuneration | 55,597,916.09 | 36,184,767.11 |
| Business promotion | 13,092,049.23 | 8,017,223.50 |
| Travel expenses | 2,560,626.08 | 2,532,489.73 |
| Entertainment expenses | 1,827,815.43 | 1,954,255.81 |
| Service expenses | 450,769.65 | 147,892.14 |
| Other expenses | 7,542,346.95 | 5,617,804.06 |
| Total | 81,071,523.43 | 54,454,432.35 |
40. Management expenses
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| Staff remuneration | 145,076,150.62 | 132,303,866.55 |
| Office facilities and site expenses | 35,313,721.66 | 37,830,438.52 |
| Depreciation and amortisation | 11,432,575.92 | 7,437,288.58 |
| Travel expenses | 12,843,703.61 | 12,077,944.42 |
| Consulting fees | 38,905,520.29 | 52,701,905.40 |
| System usage fees | 7,176,783.56 | 7,964,291.96 |
| Office expenses | 6,505,030.87 | 6,263,019.14 |
| Entertainment expenses | 10,804,922.15 | 7,302,108.06 |
| Insurance premiums | 5,026,169.99 | 6,424,183.25 |
| Communication expenses | 4,521,749.02 | 3,157,705.60 |
| Amortisation of intangible assets | 2,344,215.15 | 1,766,635.59 |
| Service expenses | 3,514,116.80 | 3,290,915.70 |
| Other expenses | 29,429,806.50 | 33,064,827.85 |
| Share-based payment | 36,748,463.29 | 2,612,718.83 |
| Total | 349,642,929.43 | 314,197,849.45 |
41. Research and development expenses
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| Staff remuneration | 114,839,286.81 | 81,557,883.82 |
| Depreciation and amortisation | 3,894,058.47 | 3,562,710.93 |
| Service expenses | 902,857.65 | 190,509.46 |
| Other expenses | 4,413,105.34 | 2,714,249.12 |
| Total | 124,049,308.27 | 88,025,353.33 |
42. Financial expenses
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| Interest expenses | 40,403,063.38 | 19,364,580.03 |
| Interest income | -25,461,633.69 | -7,801,808.04 |
| Exchange gains and losses | -6,271,755.86 | -4,749,843.81 |
| Others | 888,270.93 | 579,870.29 |
| Total | 9,557,944.76 | 7,392,798.47 |
43. Other income
Unit： Yuan
| Source of other income | Amount in current period | Amount in previous period |
| Special Fund for Talent Reward | 734,802.00 | 1,596,593.00 |
| Rent Subsidy | 870,500.00 | |
| 5050 Plan Subsidy | 2,100,000.00 | |
| 2018 Gazelle Company Grants | 4,645,100.00 | |
| Special Fund for Central Foreign Trade Development in 2019 (Development of International Service Outsourcing) | 1,675,500.00 | |
| Special Fund for Industrial Development | 628,950.00 | |
| The Provincial Key Enterprise Research Institute Supporting Subsidy Fund | 500,000.00 | |
| Xuhui Government Tax Refund | 490,000.00 | |
| 2018 Subsidies for R&D Investments of SMEs in Hangzhou | 452,000.00 | |
| Municipal Subsidy for Service Industry Fund Development | 300,000.00 | |
| 2018 Special Financial Fund for Industrial and Information Development of Provinces and Cities | 138,750.00 | |
| Industrial Innovation Support Fund Subsidy | 20,000.00 | |
| Tax Contribution Award | 20,000.00 | |
| Job Stability Fund | 11,496.00 | |
| Reward for Outsourcing Offshore Business | 14,200.00 | |
| Subsidy for 2019 R&D Institutions of Key Enterprises Of Pudong New Area Science and Technology Development Fund | 1,600,000.00 | |
| VAT Input Tax Deduction | 2,385,424.54 | |
| Handling Charges Deducted for Individual Income Tax | 198,365.86 | |
| Total | 13,814,588.40 | 4,567,093.00 |
44. Gains on investment
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| From long-term equity investment accounted for under the equity method | -9,767,683.63 | -4,462,980.73 |
| From disposal of long-term equity investment | 44,122,151.65 | 4,624,054.38 |
| From disposal of financial assets available for sale | 116,136,725.97 | |
| From remeasurement of remaining equity interest upon loss of control at fair value | 32,444,545.45 | |
| From the excess of the fair value of the identifiable net assets of investee companies on acquisition of the investment over the cost of investment in the Company’s subsidiaries, associates, and joint ventures | 41,488,162.45 | |
| From investments in financial assets at fair value through profit or loss for the current period | 1,011,579.53 | |
| From other non-current financial assets | 17,601,866.43 | |
| From disposal of other non-current financial assets | 52,567,172.86 | |
| From wealth management products | 1,371,800.46 | 1,544,444.66 |
| Total | 179,828,015.67 | 118,853,823.81 |
45. Gains from change in fair value
Unit： Yuan
| Sources of income from changes in fair value | Amount in current period | Amount in previous period |
| Trading financial assets | 3,703,624.11 | |
| Including：from derivative financial instruments | 3,703,624.11 | |
| Trading financial liabilities | 1,450,500.00 | |
| Other non-current financial assets at fair value through profit or loss | 184,996,027.19 | |
| Total | 184,996,027.19 | 5,154,124.11 |
46. Impairment loss of credit
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| Bad debt loss of other receivables | 5,752,409.56 | |
| Bad debt loss of bills receivables | -427,456.21 | |
| Bad debt loss of trade receivable | -25,166,164.93 | |
| Bad debt loss of prepayments | -486,173.81 | |
| Bad debt loss of contractual assets | -858,731.94 | |
| Total | -21,186,117.33 |
47. Impairment loss of assets
Whether the New ASBEs on Revenue have been adopted
□ Yes √ No
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| I. Losses of bad debts | -17,962,641.19 | |
| III. Impairment loss of financial assets available for sale | -14,000,000.00 | |
| XIII. Impairment loss of goodwill | -19,000,000.00 | |
| Total | -50,962,641.19 |
48. Gains from disposal of assets
Unit： Yuan
| Source of gains from disposal of assets | Amount in current period | Amount in previous period |
| From disposal of fixed assets | -384,766.63 | -151,707.39 |
49. Non-operating income
Unit： Yuan
| Item | Amount in current period | Amount in previous period | Amounts included in current non-recurring profit and loss |
| Government subsidies | 4,985,391.63 | 6,003,005.10 | 4,985,391.63 |
| Business combination cost less than the portion of fair value of the identifiable net assets obtained -concord | 4,925,994.57 | ||
| Others | 914,976.28 | 1,191,571.03 | 914,976.28 |
| Total | 5,900,367.91 | 12,120,570.70 | 5,900,367.91 |
Government subsidies included in current profits and losses：
Unit： Yuan
| Subsidy items | Issuing body | Reason for issuing | Nature | Whether the subsidy had an effect on profits/losses of the year | Whether it was a special subsidy | Amount incurred in the current period | Amount incurred in the previous period | Pertinent to assets/Pertinent to revenue |
| Special Fund of the Finance Bureau for Enterprise Development | Shanghai Municipal Finance Bureau | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 230,000.00 | Pertinent to revenue | |
| Binjiang Finance Bureau 2017 Annual Science and Technology Innovation Award Funds | Hangzhou Binjiang District State Taxation Bureau | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 200,000.00 | Pertinent to revenue | |
| Enterprise Scale Award Subsidy | Jiaxing Municipal Development and Reform Commission | Subsidy | Government subsidies granted as incentive for listing | No | No | 100,000.00 | Pertinent to revenue | |
| Jiaxing Municipal Service Industry Development Fund Subsidy | Jiaxing Municipal Development and Reform Commission | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 50,000.00 | Pertinent to assets |
| Subsidies for Top Ten Innovation Awards | Jiaxing Municipal Development and Reform Commission | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 50,000.00 | Pertinent to revenue | |
| 2017 Award for Tax Contribution of over 5 Million | Jiaxing Technology Management Committee | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 20,000.00 | Pertinent to revenue | |
| Hangzhou Employment Administration Stable Employment Subsidy | Hangzhou Employment Management Service Bureau | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 100,347.45 | 27,211.70 | Pertinent to revenue |
| Funding for Gazelle Companies | Hangzhou Binjiang District Development, Reform and Economic Bureau | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 750,500.00 | Pertinent to revenue |
| Subsidies for High Growth Enterprises in the 13th Five-Year Plan | Pudong New Area | Subsidy | Subsidies for engaging in specific sectors and industries encouraged and supported by the state (obtained in accordance with the provisions of national policies) | No | No | 1,450,000.00 | Pertinent to revenue | |
| Special Financial Subsidy for the 13th Five-Year Plan of Pudong New Area Expo Area Development Management Committee | Special Fund Account of Shanghai Pudong New Area Expo Area Development Management Committee | Subsidy | Subsidies obtained for R&D, technological update and transformation | No | No | 980,000.00 | Pertinent to revenue | |
| Discount Fund for Technology Export | Shanghai Municipal Commission of Commerce | Subsidy | 为避免上市公司亏损而给予的政府补助 | No | No | 580,000.00 | Pertinent to revenue | |
| Incubation Support Fund | Hangzhou High-tech Industrial Development Zone Technology Entrepreneurship Service Center | Subsidy | Subsidies obtained for R&D, technological update and transformation | No | No | 564,300.00 | Pertinent to revenue |
| Municipal Finance Bureau 2018 Import Discount Subsidy | Shanghai Municipal Commission of Commerce | Subsidy | Government subsidies to avoid losses of listed companies | No | No | 229,583.00 | Pertinent to revenue | |
| Refund of withholding fees | Hangzhou Local Taxation Bureau Hi-tech (Binjiang) Taxation Bureau | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 28,044.89 | 557,959.25 | Pertinent to revenue |
| 2017 Rent Subsidy for Incubators in Entrepreneurship Development Arena | Hangzhou Municipal Finance Bureau | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 113,800.00 | Pertinent to revenue | |
| Stable Social Employment Insurance Subsidy | Hangzhou Employment Management Service Bureau | Subsidy | Government subsidies to avoid losses of listed companies | No | No | 75,531.15 | Pertinent to revenue | |
| 2017 Enterprise Growth Promotion Awards | CPC Working Committee of Puyan Street, Binjiang District, Hangzhou City | Subsidy | Government incentives for listed companies | No | No | 10,000.00 | Pertinent to revenue |
| 2017 Puyan Street Key Enterprise Award | CPC Working Committee of Puyan Street, Binjiang District, Hangzhou City | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 10,000.00 | Pertinent to revenue | |
| Sponsorship Fee of Shanghai Copyright Association | Shanghai Copyright Association | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 2,520.00 | Pertinent to revenue | |
| VAT Billing System Maintenance Fee Return | Hangzhou Binjiang District State Taxation Bureau | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 560.00 | 1,600.00 | Pertinent to revenue |
| Binjiang District Accounting Settlement Center Industry Support Fund | Binjiang District Accounting and Settlement Center | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 1,362,900.00 | Pertinent to revenue |
| Financial Support for Promoting the Development of Trade and Service Industry in Pudong New Area during the 13th Five-Year Plan | Shanghai Pudong New Area Expo Area Development Management Committee | Subsidy | Subsidies for engaging in specific sectors and industries encouraged and supported by the state (obtained in accordance with the provisions of national policies) | No | No | 1,230,000.00 | Pertinent to revenue | |
| 2018 Special Fund for Foreign Trade Development | Shanghai Municipal Finance Bureau | Subsidy | Subsidies for engaging in specific sectors and industries encouraged and supported by the state (obtained in accordance with the provisions of national policies) | No | No | 660,000.00 | Pertinent to revenue | |
| Special Funds for Talent Incentive | Hangzhou High-tech Industrial Development Zone (Binjiang) Finance Bureau | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 197,946.00 | Pertinent to revenue |
| The Sixth Batch of National High-tech Enterprise Recognition Awards in 2019 by Technology and Information Bureau | Suzhou Industrial Park Enterprise Development Service Center | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 100,000.00 | Pertinent to revenue | |
| Special Finance Fund for Industry and Information Development | Economic and Information Bureau of Hangzhou High-tech Industrial Development Zone | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 11,250.00 | Pertinent to revenue | |
| Supporting Funds for Biopharmaceutical Industry Development Project Area | Economic and Information Bureau of Hangzhou High-tech Industrial Development Zone | Subsidy | Government subsidies to avoid losses of listed companies | No | No | 11,250.00 | Pertinent to revenue |
| Binjiang District Economic and Information Bureau Industrial Support Special Account Biomedical Project Municipal Support | Binjiang Economic and Information Bureau | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 8,175.00 | Pertinent to revenue | |
| Wuzhong District Social Security Bureau Stable Job Subsidy | Suzhou Municipal Bureau of Human Resources and Social Security | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 10,270.29 | Pertinent to revenue | |
| Social Security Household Stable Job Subsidy | Shanghai Municipal Human Resources and Social Security Bureau | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 54,648.00 | Pertinent to revenue |
| Financial Support Funds for Pudong New Area's Economic Development | Shanghai Zhangjiang High-tech Park Administrative Committee | Subsidy | Due to compliance with local government policies such as attracting investment and other local support policies | No | No | 1,180,000.00 | Pertinent to revenue | |
| State Service Trade Subsidy in 2019 | Shanghai Municipal Commission of Commerce | Subsidy | Subsidies for engaging in specific sectors and industries encouraged and supported by the state (obtained in accordance with the provisions of national policies) | No | No | 30,000.00 | Pertinent to revenue |
50. Non-operating expenses
Unit： Yuan
| Item | Amount in current period | Amount in previous period | Amounts included in current non-recurring profit and loss |
| External donation | 1,030,000.00 | 1,180,000.00 | 1,030,000.00 |
| Others | 355,263.13 | 719,550.11 | 355,263.13 |
| Total | 1,385,263.13 | 1,899,550.11 | 1,385,263.13 |
51. Income tax expenses
（1）Income tax expense statement
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| Income tax expense for the period | 137,484,344.18 | 95,251,852.52 |
| Deferred income tax expense | -23,644,869.56 | 4,023,227.17 |
| Total | 113,839,474.62 | 99,275,079.69 |
（2）Adjustment process between accounting profit and income tax expense
Unit： Yuan
| Item | Amount in current period |
| Total profit | 1,089,161,831.31 |
| Income tax expense calculated in accordance with statutory/applicable tax rate | 135,582,749.87 |
| Effect of different tax rate applicable to subsidiaries | -7,966,316.66 |
| Effect of adjustments to previous years’ income tax | 7,393,450.93 |
| Effect of current unrecognised deductible temporary difference or deductible loss arising from deferred tax income assets | -7,214,862.34 |
| Effect of additional deductible expenses | -13,955,547.18 |
| Income tax expenses | 113,839,474.62 |
52. Other comprehensive income
For details, please refer to Note 34 under Section 12.XII.
53. Items in cash flow statement
（1）Other cash received relating to operating activities
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| Interest income | 21,789,716.01 | 4,030,235.56 |
| Government subsidy | 16,414,555.49 | 10,570,098.10 |
| Non-operating income | 914,976.28 | 1,191,571.03 |
| Other income | 14,153,610.01 | 43,064,730.66 |
| Rental income | 56,250.02 | 115,666.67 |
| Total | 53,329,107.81 | 58,972,302.02 |
（2）Other cash paid relating to operating activities
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| Selling, management, and R&D expenses | 165,235,766.30 | 137,225,498.67 |
| Financial expenses | 888,270.93 | 579,870.29 |
| Other expenses | 4,665,269.77 | 39,156,918.22 |
| Non-operating expenses | 1,385,263.13 | 1,899,550.11 |
| Total | 172,174,570.13 | 178,861,837.29 |
（3）Other cash received relating to investment activities
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| Recovered restricted Monetary fund at the beginning of the year | 8,323,973.87 | |
| Interest income from borrowings between enterprises | 2,649,452.05 | |
| Total | 10,973,425.92 |
（4）Other cash received relating to financing activities
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| From ESOP payment | 93,845,532.75 | |
| From restricted stock payment | 152,459,800.29 | |
| From recovery of loans | 13,632,772.48 | |
| Total | 259,938,105.52 |
（5）Other cash paid relating to financing activities
Unit： Yuan
| Item | Amount in current period | Amount in previous period |
| Cash paid for capital deduction | 30,163,321.60 | 14,269,906.85 |
| Cash paid for share repurchase | 67,916,937.46 | 248,124,987.77 |
| Listing expenses | 69,190,036.33 | |
| Finance lease | 13,046,968.27 | |
| Total | 180,317,263.66 | 262,394,894.62 |
54. Supplemental information on cash flow statement
（1）Supplemental information on cash flow statement
Unit： Yuan
| Supplemental information | Amount in current period | Amount in previous period |
| 1．Net profit adjusted to cash flows relating to operating activities： | -- | -- |
| Net profit | 975,322,356.69 | 506,797,168.16 |
| Add：Credit impairment loss | 21,186,117.33 | |
| Provision for impairment of assets | 50,962,641.19 | |
| Depreciation of fixed assets, depletion of oil and gas assets and depreciation of productive biological assets | 37,495,244.54 | 53,104,645.56 |
| Amortisation of intangible assets | 5,768,142.73 | 5,089,381.46 |
| Amortisation of long-term deferred expenses | 3,987,826.99 | 3,007,747.27 |
| Loss on disposals of fixed assets, intangible and other long-term assets (gain is represented by “-“) | 384,766.63 | 151,707.39 |
| Loss on change in fair value (gain is represented by “-“) | -184,996,027.19 | -5,154,124.11 |
| Financial expenses (gain is represented by “-“) | 34,131,307.52 | 14,614,736.22 |
| Loss on investment (gain is represented by “-“) | -179,828,015.67 | -118,853,823.81 |
| Decrease in deferred income tax assets (increase is represented by “-“) | -72,178,479.09 | 2,554,171.48 |
| Increase in deferred income tax liabilities (decrease is represented by “-“) | 14,092,618.12 | 1,469,055.69 |
| Decrease in inventory (increase is represented by “-“) | -504,694.09 | -504,863.79 |
| Decrease in operating receivables (increase is represented by “-“) | -282,891,298.67 | -180,702,324.19 |
| Increase in operating payables (decrease is represented by “-“) | 114,818,274.99 | 189,579,098.99 |
| Others | 40,769,794.68 | 127,501.14 |
| Net cash flows from operating activities | 527,557,935.51 | 522,242,718.65 |
| 2．Significant investing and financing activities not involving cash receipts and payment： | -- | -- |
| 3．Net movement in cash and cash equivalents： | -- | -- |
| Cash at the end of the period | 2,037,086,066.70 | 698,186,379.43 |
| Less：Cash at the beginning of the period | 698,186,379.43 | 525,226,190.29 |
| Net increase in cash and cash equivalents | 1,338,899,687.27 | 172,960,189.14 |
（2）Net cash paid for acquisition of subsidiaries in the current period
Unit： Yuan
| Amount | |
| Cash or cash equivalents paid for business combination in the current period | 89,119,410.00 |
| Including： | -- |
| Beijing Yaxincheng | 43,200,000.00 |
| Frontage Suzhou | 14,433,800.00 |
| BRI | 15,570,300.00 |
| RMI | 15,915,310.00 |
| Less：Cash and cash equivalents held by the subsidiary on the date of acquisition | 17,173,146.27 |
| Including： | -- |
| Beijing Yaxincheng | 5,836,825.21 |
| Frontage Suzhou | 10,241,927.66 |
| BRI | 421,957.45 |
| RMI | 672,435.95 |
| Including： | -- |
| Net cash paid for acquisition of subsidiaries | 71,946,263.73 |
（3）Net cash received from disposal of subsidiaries in the current period
Unit： Yuan
| Amount | |
| Cash or cash equivalents received from disposal of subsidiaries in the current period | 38,000,000.00 |
| Including： | -- |
| Jyton Testing | 10,000,000.00 |
| Suntone | 28,000,000.00 |
| Antengene Investment Limited | |
| uniAcme | |
| Less：Cash and cash equivalents held by subsidiaries on the date of loss of control | 5,097,058.23 |
| Including： | -- |
| Jyton Testing | 186,904.78 |
| Shanghai Shengtong | 3,377,561.63 |
| Antengene Investment Limited | 1,331,578.35 |
| uniAcme | 201,013.47 |
| Including： | -- |
| Net cash received from disposal of subsidiaries | 32,902,941.77 |
（4）Composition of cash and cash equivalents
Unit： Yuan
| Item | Closing balance | Opening balance |
| I. Cash | 2,037,086,066.70 | 698,186,379.43 |
| Including：Cash on hand | 52,029.89 | 88,274.65 |
| Bank deposits readily available on demand | 2,005,976,226.21 | 696,243,743.42 |
| Other Monetary fund available on demand | 31,057,810.60 | 1,854,361.36 |
| III. Balance of cash and cash equivalents at the end of the period | 2,037,086,066.70 | 698,186,379.43 |
55. Assets with restriction on ownership or right of use
| Item | Closing book value（Yuan、number of shares） | Reason for restriction |
| Monetary fund | 2,092,860.00 | Lease security deposit |
| Bills receivable | 26,474,679.00 | Secured by Frontage Laboratories, Inc. |
| Fixed assets | 45,281,768.51 | Secured by Frontage Laboratories, Inc. |
| Intangible assets | 4,408,476.97 | Secured by Frontage Laboratories, Inc. |
| Monetary fund | 3,126,897.13 | Lease security deposit |
| Monetary fund | 25,399,915.30 | Secured by Frontage Laboratories, Inc. |
| Trade receivable | 95,875,948.14 | Secured by Frontage Laboratories, Inc. |
| Prepayments | 4,996,026.84 | Secured by Frontage Laboratories, Inc. |
| Other receivables | 8,275,456.84 | Secured by Frontage Laboratories, Inc. |
| Other current assets | 28,531,691.52 | Secured by Frontage Laboratories, Inc. |
| Long-term equity investments | 130,160,182.57 | Secured by Frontage Laboratories, Inc. |
| Construction in progress | 14,970,985.33 | Secured by Frontage Laboratories, Inc. |
| Right-of-use assets | 92,016,901.05 | Secured by Frontage Laboratories, Inc. |
| Deferred income tax assets | 66,994,879.60 | Secured by Frontage Laboratories, Inc. |
| Other non-current financial assets | 1,400,000.00 shares | Equity secured by EPS Holdings Inc. |
| Long-term equity investments | 308,040,085.00 shares | Equity secured by Frontage Holdings Corporation |
56. Monetary assets in foreign currencies
（1）Monetary assets in foreign currencies
Unit： Yuan
| Item | Closing balance in foreign currency | Translation rate | Closing balance translated in to RMB |
| Monetary fund | -- | -- | 1,602,837,747.12 |
| Including：US dollar | 222,016,237.85 | 6.9762 | 1,548,829,677.11 |
| Euro | 330,800.54 | 7.8155 | 2,585,371.60 |
| Hong Kong dollar | 1,077,771.31 | 0.8958 | 965,467.54 |
| Korean won | 5,825,332,832.00 | 0.0060 | 35,138,407.64 |
| Indian rupee | 6,245,450.84 | 0.0979 | 611,429.64 |
| Taiwan dollar | 6,049,185.79 | 0.2326 | 1,407,040.61 |
| Swiss franc | 70,459.39 | 7.2028 | 507,504.89 |
| Singapore dollar | 109,684.66 | 5.1739 | 567,497.46 |
| Australian dollar | 220,078.50 | 4.8843 | 1,074,929.42 |
| Canadian dollar | 2,048,908.52 | 5.3421 | 10,945,474.21 |
| Romanian leu | 57,484.41 | 1.6337 | 93,912.28 |
| Malaysian ringgit | 65,368.37 | 1.6986 | 111,034.72 |
| Trade receivable | -- | -- | 391,720,889.72 |
| Including：US dollar | 41,970,918.78 | 6.9762 | 292,797,523.57 |
| Euro | |||
| Hong Kong dollar | 10,675,932.36 | 0.8958 | 9,563,500.21 |
| Korean won | 9,884,444,667.00 | 0.0060 | 59,622,970.23 |
| Indian rupee | 17,274,145.30 | 0.0979 | 1,691,138.82 |
| Taiwan dollar | 39,030,011.14 | 0.2326 | 9,078,380.59 |
| Australian dollar | 3,032,605.47 | 4.8843 | 14,812,154.90 |
| Romanian leu | 511,619.79 | 1.6337 | 835,833.25 |
| Canadian dollar | 621,363.91 | 5.3421 | 3,319,388.15 |
| Other receivables | 17,983,636.48 | ||
| Including：US dollar | 1,306,993.62 | 6.9762 | 9,117,848.89 |
| Korean won | 968,256,672.67 | 0.0060 | 5,840,524.25 |
| Hong Kong dollar | 95,632.04 | 0.8958 | 85,667.18 |
| Indian rupee | 2,492,673.14 | 0.0979 | 244,032.70 |
| Taiwan dollar | 334,975.00 | 0.2326 | 77,915.19 |
| Australian dollar | 2,000.00 | 4.8843 | 9,768.60 |
| Canadian dollar | 488,175.00 | 5.3421 | 2,607,879.67 |
| Interests receivable | 5,229,264.57 | ||
| Including：US dollar | 749,586.39 | 6.9762 | 5,229,264.57 |
| Short-term borrowings | 350,029,223.19 | ||
| Including：US dollar | 50,174,768.96 | 6.9762 | 350,029,223.19 |
| Trade payable | 35,976,506.13 | ||
| Including：US dollar | 4,625,421.57 | 6.9762 | 32,267,865.95 |
| Korean won | 449,626,223.00 | 0.0060 | 2,712,145.38 |
| Hong Kong dollar | 214,001.51 | 0.8958 | 191,702.55 |
| Taiwan dollar | 19,000.00 | 0.2326 | 4,419.40 |
| Australian dollar | 64,048.90 | 4.8843 | 312,834.04 |
| Romanian leu | 163,116.03 | 1.6337 | 266,482.66 |
| Canadian dollar | 41,380.01 | 5.3421 | 221,056.15 |
| Staff remuneration payable | 26,972,988.07 | ||
| Including：US dollar | 2,440,796.93 | 6.9762 | 17,027,487.52 |
| Romanian leu | 69,830.00 | 1.6337 | 114,081.27 |
| Korean won | 1,579,428,027.19 | 0.0060 | 9,527,109.86 |
| Hong Kong dollar | 339,706.86 | 0.8958 | 304,309.42 |
| Other payables | 12,771,032.03 |
| Including：US dollar | 1,038,856.18 | 6.9762 | 7,247,268.49 |
| Korean won | 402,960,750.31 | 0.0060 | 2,430,659.25 |
| Indian rupee | 56,240.20 | 0.0979 | 5,505.92 |
| Taiwan dollar | 1,910,437.00 | 0.2326 | 444,367.65 |
| Australian dollar | 7,237.69 | 4.8843 | 35,351.05 |
| Canadian dollar | 488,175.00 | 5.3421 | 2,607,879.67 |
| Dividends payable | 1,467,326.47 | ||
| Including：US dollar | 210,333.20 | 6.9762 | 1,467,326.47 |
| Non-current liabilities due within one year | 32,312,439.05 | ||
| Including：US dollar | 4,186,798.63 | 6.9762 | 29,207,944.59 |
| Korean won | 514,670,832.23 | 0.0060 | 3,104,494.46 |
| Long-term payables | 20,342,856.26 | ||
| Including：US dollar | 2,916,036.85 | 6.9762 | 20,342,856.26 |
| Long-term borrowings | -- | -- | |
| Including：US dollar | |||
| Euro | |||
| Hong Kong dollar | |||
（2） Description of overseas business entities, including for material overseas business entities, disclosoure of theiroverseas principle place of business, functional currencies and the basis of selection thereof; and where any change inthe functional currencies, disclosoure of the reasons therefore.
√ Applicable □ Not applicable
（1） Hong Kong Tigermed, a wholly-owned subsidiary established by the Company, mainly operates in Hong Kong, andits functional currency is Hong Kong dollar.
（2） HK Healthcare a wholly-owned subsidiary established by the Company, mainly operates in Hong Kong, and itsfunctional currency is Hong Kong dollar.
（3） Tigermed MacroStat llc, a subsidiary established by Hong Kong Tigermed, mainly operates in the USA, and itsfunctional currency is US dollar.
（4） Tigermed Clinical Research Co. Ltd., a subsidiary established by Hong Kong Tigermed, mainly operates in Canada,and its functional currency is Canadian dollar.
（5） Tigermed Australia Pty Ltd, a subsidiary established by Hong Kong Tigermed, mainly operates in Australia, and itsfunctional currency is Australian dollar.
（6） Tigermed Malaysia SDN BHD, a subsidiary established by Hong Kong Tigermed, mainly operates in Australia, andits functional currency is Malaysian ringgit.
（7） Singapore Tigermed PTE. LTD., a subsidiary established by Hong Kong Tigermed, mainly operates in Singapore, andits functional currency is Singaporean dollar.
（8） Tigermed Taiwan, a subsidiary acquired by Hong Kong Tigermed, mainly operates in Taiwan, and its functionalcurrency is Taiwanese dollar.
（9） Bright Sky Resources Investment Ltd., a subsidiary established by Hong Kong Tigermed, mainly operates in BVI, andits functional currency is US dollar.
（10） Blue Sky Resources Investment Ltd., a subsidiary established by Hong Kong Tigermed, mainly operates in BVI, andits functional currency is US dollar.
（11） TG Sky Investment Ltd., a subsidiary established by Hong Kong Tigermed, mainly operates in BVI, and itsfunctional currency is US dollar.
（12） Tigermed Swiss AG, a subsidiary established by Hong Kong Tigermed, mainly operates in Switzerland, and itsfunctional currency is Swiss franc.
（13） Tigermed India Pvt. Ltd., a subsidiary established by Hong Kong Tigermed, mainly operates in India, and itsfunctional currency is Indian rupee.
（14） Tigermed-BDM, a subsidiary acquired by Hong Kong Tigermed, mainly operates in New Jersey, USA, and itsfunctional currency is US dollar.
（15） Opera Contract Research Organization S.R.L., a subsidiary acquired by Hong Kong Tigermed, mainly operates inRomania, and its functional currency is Romanian leu.
（16） DreamCIS, a subsidiary acquired by Hong Kong Tigermed, mainly operates in South Korea, and its functionalcurrency is Korean won.
（17） Tigermed USA INC., a wholly-owned subsidiary established by the Company, mainly operates in the USA, and itsfunctional currency is US dollar.
（18） Frontage Holdings, a company Hong Kong Tigermed holds shares of, mainly operates in the USA, and its functionalcurrency is US dollar.
（19） TG Mountain Investment Co., a company Hong Kong Tigermed holds shares of, mainly operates in BVI, and itsfunctional currency is US dollar.
（20） TG Sky Growth Investment Ltd., a company Hong Kong Tigermed holds shares of, mainly operates in BVI, and itsfunctional currency is US dollar.
57. Government subsidies
（1）Information on government subsidies
Unit： Yuan
| Type | Amount | Item presented | Amount included in the current profit or loss |
| Special Fund for Talent Reward | 734,802.00 | Other income | 734,802.00 |
| Refund for Witholding Fees | 28,044.89 | Non-operating income | 28,044.89 |
| Hangzhou Employment Administration Stable Employment Subsidy | 100,347.45 | Non-operating income | 100,347.45 |
| VAT Billing System Maintenance Fee Return | 560.00 | Non-operating income | 560.00 |
| 2018 Gazelle Company Grants | 4,645,100.00 | Other income | 4,645,100.00 |
| Special Fund for Central Foreign Trade Development in 2019 (Development of International Service Outsourcing) | 1,675,500.00 | Other income | 1,675,500.00 |
| The Second Batch of 2019 Subsidies for R&D Institutions of Key Enterprises of Pudong New Area Science and Technology Development Fund | 800,000.00 | Other income | 800,000.00 |
| The Third Batch of 2019 Subsidies for R&D Institutions of Key Enterprises of Pudong New Area Science and Technology Development Fund | 800,000.00 | Other income | 800,000.00 |
| Special Fund for Industrial Development | 628,950.00 | Other income | 628,950.00 |
| The Provincial Key Enterprise Research Institute Supporting Subsidy Fund | 500,000.00 | Other income | 500,000.00 |
| Xuhui Government Tax Refund | 490,000.00 | Other income | 490,000.00 |
| 2018 Subsidies for R&D Investments of SMEs in Hangzhou | 452,000.00 | Other income | 452,000.00 |
| Municipal Subsidy for Service Industry Fund Development | 300,000.00 | Other income | 300,000.00 |
| 2018 Special Financial Fund for Industrial and Information Development of Provinces and Cities | 138,750.00 | Other income | 138,750.00 |
| Industrial Innovation Support Fund Subsidy | 20,000.00 | Other income | 20,000.00 |
| Tax Contribution Award | 20,000.00 | Other income | 20,000.00 |
| Job Stability Fund | 11,496.00 | Other income | 11,496.00 |
| Reward for Outsourcing Offshore Business | 9,100.00 | Other income | 9,100.00 |
| Binjiang District Accounting Settlement Center Industry Support Fund | 1,362,900.00 | Non-operating income | 1,362,900.00 |
| Financial Support for Promoting the Development of Trade and Service Industry in Pudong New Area during the 13th Five-Year Plan | 1,230,000.00 | Non-operating income | 1,230,000.00 |
| 2018 Special Fund for Foreign Trade Development | 660,000.00 | Non-operating income | 660,000.00 |
| Special Funds for Talent Incentive | 197,946.00 | Non-operating income | 197,946.00 |
| The Sixth Batch of National High-tech Enterprise Recognition Awards in 2019 by Technology and Information Bureau | 100,000.00 | Non-operating income | 100,000.00 |
| Special Finance Fund for Industry and Information Development | 11,250.00 | Non-operating income | 11,250.00 |
| Supporting Funds for Biopharmaceutical Industry Development Project Area | 11,250.00 | Non-operating income | 11,250.00 |
| Binjiang District Economic and Information Bureau Industrial Support Special Account Biomedical Project Municipal Support | 8,175.00 | Non-operating income | 8,175.00 |
| Reward for Outsourcing Offshore Business | 5,100.00 | Other income | 5,100.00 |
| Wuzhong District Social Security Bureau Stable Job Subsidy | 10,270.29 | Non-operating income | 10,270.29 |
| Social Security Household Stable Job Subsidy | 54,648.00 | Non-operating income | 54,648.00 |
| Financial Support Funds for Pudong New Area's Economic Development | 1,180,000.00 | Non-operating income | 1,180,000.00 |
| State Service Trade Subsidy in 2019 | 30,000.00 | Non-operating income | 30,000.00 |
VIII. Change in scope of business combination
1. Business combination of enterprises not under common control
（1）Business combination of enterprises not under common control in the current period
Unit： Yuan
| Acquiree | Time of equity acquisition | Cost of equity acquisition | Shareholding ratio | Method of equity acquisition | Acquisition date | Basis of date of acquisition | Income of the acquiree from acquisition date to the end of the period | Net profit of the acquiree from acquisition date to the end of the period |
| Beijing Yaxincheng Medical InfoTech Co., Ltd. | July 31, 2019 | 106,560,000.00 | 55.00% | Cash | July 31, 2019 | Payment of acquisition fee and business registration | 31,377,785.57 | 5,550,273.92 |
| Frontage Laboratories (Suzhou) Co, Ltd. | October 31, 2019 | 14,433,800.00 | 75.00% | Cash | October 31, 2019 | Payment of acquisition fee and business registration | 5,417,607.11 | 541,785.63 |
| RMI Laboratories, LLC | October 31, 2019 | 16,045,260.00 | 100.00% | Cash | October 31, 2019 | Payment of acquisition fee | 2,885,384.48 | 1,502,417.05 |
| BRI Biopharmaceutical Research, Inc | December 13 2019 | 15,859,804.70 | 100.00% | Cash | December 31, 2019 | Payment of acquisition fee | 486,083.80 | -99,428.04 |
（2）Cost of business combination and goodwill
Unit： Yuan
| Cost of business combination | Beijing Yaxincheng | Frontage Suzhou | RMI | BRI |
| -- Cash | 43,200,000.00 | 14,433,800.00 | 16,045,260.00 | 15,859,804.70 |
| -- Contingent fair value | 15,900,122.25 | 4,396,582.62 |
| -- Fair value as at acquisition date of equity held prior to acquisition date | 75,600,000.00 | 27,266,315.56 | ||
| Total cost of business combination | 118,800,000.00 | 41,700,115.56 | 31,945,382.25 | 20,256,387.32 |
| Less: Share of fair value of the identifiable net assets acquired | 19,450,277.44 | 14,054,420.57 | 23,068,566.88 | 13,340,824.44 |
| Amount of goodwill / cost of business combination less than the share of fair value of the identifiable net assets acquired | 99,349,722.56 | 27,645,694.99 | 8,876,815.37 | 6,915,562.88 |
（3）Identifiable assets and liabilities of acquirees as at the acquisition dates
Unit： Yuan
| Beijing Yaxincheng | Frontage Suzhou | RMI | BRI | |||||
| Fair value as at acquisition date | Book value as at acquisition date | Fair value as at acquisition date | Book value as at acquisition date | Fair value as at acquisition date | Book value as at acquisition date | Fair value as at acquisition date | Book value as at acquisition date | |
| Assets： | 53,505,853.16 | 28,525,581.28 | 44,310,402.84 | 30,810,402.84 | 28,552,439.41 | 5,530,979.41 | 19,440,275.77 | 867,073.61 |
| Monetary fund | 5,836,825.21 | 5,836,825.21 | 10,241,927.66 | 10,241,927.66 | 672,435.95 | 672,435.95 | 421,957.45 | 421,957.45 |
| Receivables | 16,127,779.49 | 16,127,779.49 | 6,498,167.88 | 7,305,637.53 | 3,782,780.14 | 3,782,780.14 | 2,051,962.73 | 2,051,962.73 |
| Inventories | 204,709.61 | 204,709.61 | ||||||
| Fixed assets | 16,353,923.23 | 5,673,651.35 | 9,722,806.99 | 9,722,806.99 | 1,075,763.32 | 1,075,763.32 | 2,384,367.49 | 2,384,367.49 |
| Intangible assets | 14,300,000.00 | 13,674,539.30 | 174,539.30 | 23,021,460.00 | 10,581,137.40 | 7,935.24 | ||
| Contractual assets | 1,215,351.71 | 1,215,351.71 | ||||||
| Prepayments | 813,206.76 | 813,206.76 | ||||||
| Other receivables | 74,118.47 | 74,118.47 | 3,307,815.27 | 3,307,815.27 | 2,580,789.38 | 2,580,789.38 | ||
| Deferred income tax assets | 865,145.74 | 57,676.09 | ||||||
| Liabilities： | 18,141,712.36 | 14,394,671.58 | 25,571,175.42 | 23,546,175.42 | 5,483,867.04 | 263,380.64 | 6,172,060.41 | 3,774,419.42 |
| Payables | 1,671,883.17 | 1,671,883.17 | 12,428,727.02 | 12,428,727.02 | 263,380.64 | 263,380.64 | 3,391,940.06 | 3,391,940.06 |
| Deferred income tax liabilities | 3,747,040.78 | 2,025,000.00 | 5,220,486.40 | 2,406,719.24 | 9,078.25 | |||
| Receipts in advance | 4,097,732.97 | 4,097,732.97 | ||||||
| Staff remuneration payable | 51,970.13 | 51,970.13 | ||||||
| Taxes payable | 957,510.56 | 957,510.56 | 123,859.79 | 123,859.79 | ||||
| Other payables | 7,615,574.75 | 7,615,574.75 | 775,585.48 | 775,585.48 | ||||
| Contractual liabilities | 10,218,003.12 | 10,218,003.12 | 373,401.11 | 373,401.11 | ||||
| Net assets | 35,364,140.80 | 14,130,909.70 | 18,739,227.42 | 7,264,227.42 | 23,068,572.37 | 5,267,598.77 | 13,268,215.36 | 5,092,654.19 |
| Less：minority interests | 15,913,863.36 | 6,358,909.37 | 4,684,806.86 | 1,816,056.86 | ||||
| Net assets acquired | 19,450,277.44 | 7,772,000.34 | 14,054,420.57 | 5,448,170.57 | 23,068,572.37 | 5,267,598.77 | 13,268,215.36 | 5,092,654.19 |
（4）Gains or losses arising from remeasurement of equity held before the acquisition date at fair valueWhether there was transaction for achieving combination of enterprises through several transactions in stages resulting inobtaining control during the reporting period
□ Yes √ No
2. Disposal of subsidiaries
Whether there was loss of control over subsidiaries on a single disposal
√ Yes □ No
Unit： Yuan
| Name of subsidiary | Consideration for disposal of equity | Proportion of equity disposal | Way of equity disposal | Date of losing right of control | Basis for dertermining the date of losing right of control | The difference between the disposal price and the share of the subsidiary’s net assets at the level of the consolidated financial statement corresponding to the disposal of the investment | Proportion of remaining stocks at the date of loss of control | Book value of remaining equity on the date of lossing control | Fair value of remaining equity on the date of lossing control | Gains or losses arising from remeasurement of remaining equity at fair value | Basis for determining the fair value of remaining equity at the date of lossing control and major assumption | Amount of gains or losses transferring from other comprehensive income relating to equity investment of former s ubsidiary |
| 上海晟通國際物流有限公司Shanghai Shengtong International Logistics Co., Ltd. | 28,000,000.00 | 20.00% | Sales of equity | February 28, 2019 | Receipt of equity paymentand business registration | 25,739,261.16 | 35.00% | 19,555,454.55 | 49,000,000.00 | 29,444,545.45 | Transaction price |
| Hangzhou Tigermed Jietong Inspection Technology Co., Ltd. | 10,000,000.00 | 50.00% | Disposal of equity interests | June 30, 2019 | Receive equity payment, business registration | 13,046,962.86 | 30.00% | 3,000,000.00 | 6,000,000.00 | 3,000,000.00 | Transaction price |
Whether there was disposal of investment in subsidiary through several transactions in stages resulting in loss of controlduring the reporting period
□ Yes √ No
3. Changes in scope of consolidation for other reasons
Explain the changes in the scope of consolidation caused by other reasons (for example, establishment if new subsidiaries,liquidation of subsidiaries, etc.) and related circumstances:
1. In January 2019, the Company transferred 100% equity interests of Antengene Investment Limited;
2. In February 2019, the Company invested in the establishment of Tigermed USA INC., in which the Company has ashareholding of 100.00%;
3. In February 2019, the Company's subsidiary Tigermed USA INC. invested in the establishment Tigermed America
LLC, in which the Company has a shareholding of 100.00%;
4. In September 2019, the Company invested in the establishment of HK Healthcare, in which the Company has ashareholding of 100.00%;
5. In September 2019, the Company's subsidiary Hongkong Tigermed invested in the establishment of TG Mountain
Investment Co, in which the Company has a shareholding of 100.00%;
6. In September 2019, the Company's subsidiary Hongkong Tigermed invested in the establishment of TG Sky GrowthInvestment Ltd, in which the Company has a shareholding of 100.00%;
7. In October 2019, the Company's subsidiary Frontage Holdings invested in the establishment of Frontage Luohe, in
which Frontage Holdings’ has a shareholding of 100.00%;
8. In October 2019, the Company transferred 100% equity interests of Hangzhou Tigermed Cloud Hospital Management
Co., Ltd. (杭州泰格雲醫院管理有限公司).IX. INTERSTS IN OTHER ENTITIES
1. Interests in subsidiaries
(1) Composition of enterprise Groups
| Namer of subsidiary | Principal place of business | Place of registration | Business nature | Shareholding | Method of acquisition | |
| Direct | Indirect | |||||
| 美斯達（上海）醫藥開發有限公司MacroStat (China) Clinical Research Co., Ltd (“MacroStat”) | Shanghai | Room 801, 802, 901, 902, No. 232 Liangjing Road, China (Shanghai) Pilot Free Trade Zone | Data analysis | 100.00% | Business combination of enterprises not under common control | |
| 杭州思默醫藥科技有限公司Hangzhou Simo Co., Ltd. | Hangzhou | Room 1503, 15th Floor Dongguan Building, No. 618 Jiangnan Avenue, Changhe Street, Binjiang District, Hangzhou, Zhejiang Province (independent declaration) | SMO services | 100.00% | Establishment | |
| 嘉興泰格數據管理有限公司Jiaxing Tigermed Data Management Co., Ltd. | Jiaxing | No. 28 Huixin Road, Nanhu District, Jiaxing City, Zhejiang Province | Data management and statistical analysis | 100.00% | Establishment | |
| 上海泰格醫藥科技有限公司Shanghai Tigermed Consulting Co Ltd | Shanghai | Room 206, No. 10, Alley 225, Chaling Road, Xuhui District, Shanghai | Technology development, consulting, transfer | 100.00% | Business combination of enterprises under common control | |
| 廣州泰格醫學研究所有限公司Tigermed Research Institute Co., Ltd. | Guangzhou | Room B, 3rd Floor, Yueyun Building, No. 3 Zhongshan 2nd Road, Yuexiu District, Guangzhou | Central laboratory service | 100.00% | Establishment | |
| 杭州泰格益坦醫藥科技有限公司Hangzhou Tigermed-IntelliPV Co., Ltd | Hangzhou | Room 9412, Building 9, No. 1, Weiye Road, Puyan Street, Binjiang District, Hangzhou | Pharmacovigilance and drug safety services | 100.00% | Establishment |
| 泰格新澤醫藥技術（嘉興）有限公司Tiger-Xinze Medical Technology (Jiaxing) Co., Ltd. | Jiaxing | 7th Floor, Building 1, No. 28, Huixin Road, Daqiao Town, Nanhu District, Jiaxing City, Zhejiang Province | Technology development, technology consultation | 100.00% | Establishment | |
| 無錫泰格醫藥科技有限公司Wuxi Tigermed Consulting Co., Ltd. | Wuxi | D401-4, Building 530, University Science Park, No. 18 Qingyuan Road, Xinwu District, Wuxi City | Clinical research service R&D；technology development, technology consultation, technology trasfer；translation service；data processing | 100.00% | Establishment | |
| 泰州康利華醫藥科技有限公司Taizhou Kanglihua Pharmaceutical Technology Co., Ltd | Taizhou | No. C004, 9th Floor, Building G26, East Side of Tai Road, North Side of Xinyang Road, China Medical City, Taizhou | Pharmaceutical R&D | 100.00% | Business combination of enterprises not under common control | |
| 北醫仁智（北京）醫學科技發展有限公司Beijing Medical Development Co., Ltd | Beijing | 810, 8th Floor, Building 1, No. 20 Chaoyangmenwai Street, Chaoyang District, Beijing | Medical research | 100.00% | Establishment | |
| 泰州泰格捷通醫藥科技有限公司Taizhou Tigermed-Jyton Medical Tech. Co. Ltd. | Taizhou | No. A002, 9th Floor, Building G26, East Side of Tai Road, North Side of Xinyang Road, China Medical City, Taizhou | Drug development, medical device technology development and services | 100.00% | Business combination of enterprises not under common control |
| 杭州泰格股權投資合夥企業（有限合夥）Hangzhou Tigermed Equity Investment Partnership | Hangzhou | Room 915, 9th Floor, Main Building, Hengxin Building, 588 Jiangnan Avenue, Binjiang District, Hangzhou | Business services, equity investment, venture capital | 99.40% | 0.60% | Establishment |
| 杭州泰蘭醫藥科技有限公司Hangzhou Talent MedConsulting Co., Ltd. | Hangzhou | Room 1507, 15th Floor, Dongguan Building, 618 Jiangnan Avenue, Changhe Street, Binjiang District, Hangzhou, Zhejiang Province | Third-party training and audit services | 85.00% | Establishment | |
| 杭州英放生物科技有限公司Fantastic Bioimaging Co., Ltd. | Hangzhou | Room 1605, Dongguan Building, No. 618, Jiangnan Avenue, Changhe Street, Binjiang District, Hangzhou, Zhejiang Province (independent declaration) | Medical imaging data analysis and judgement services | 67.50% | Establishment | |
| 北京雅信誠醫學信息科技有限公司Beijing Yaxincheng Medical InfoTech Co., Ltd. | Beijing | 102, 1st Floor, Building 1, Courtyard 1, No.20A, Xidawang Road, Chaoyang District, Beijing | Medical translation | 55.00% | Business combination of enterprises not under common control | |
| 嘉興易迪希計算機技術有限公司Jiaxing Clinflash Computer Technology Co., Ltd. | Jiaxing | 3rd Floor, Building 1, No. 28, Huixin Road, Nanhu District, Jiaxing City, Zhejiang Province | Clinical trials management software R&D | 50.10% | Establishment |
| 杭州泰煜投資諮詢有限公司Hangzhou Taiyu Investment Consulting Co., Ltd. | Hangzhou | Room 1504, 15th Floor, Dongguan Building, 618 Jiangnan Avenue, Binjiang District, Hangzhou | Investment consultation, investment management | 51.00% | Establishment | |
| 嘉興益新泰格醫藥科技有限公司EPS Tigermed (Jiaxing) Co., Ltd. | Jiaxing | Building 1, No. 28, Huixin Road, Nanhu District, Jiaxing City, Zhejiang Province | Clinical research service R&D | 51.00% | Establishment | |
| 北京泰格興融投資管理有限公司Beijing Tigermed Xingrong Investment Management Co., Ltd. | Beijing | 9-18, Building 6, Ronghui Garden, Core Economic Zone, Shunyi District, Beijing | Equity investment management and consulting | 51.00% | 9.69% | Establishment |
| 北京康利華諮詢服務有限公司Beijing Canny Consulting Inc. | Beijing | Room 2405, Building 60, Middle East Fourth Ring Road, Chaoyang District, Beijing | Investmetn consultation, medical technology consultation | 39.57% | 51.00% | Business combination of enterprises not under common control |
| 杭州煜鼎股權投資管理合夥企業（有限合夥）Hangzhou Yuding Equity Investment Management Partnership (Limited Partnership) | Hangzhou | Room 2125, 21st Floor, Chuagxin Building, 3850 Jiangnan Avenue, Puyan Street, Binjiang District, Hangzhou | Equity investment management and consulting | 45.90% | Establishment |
| 漯河泰煜安康投資管理中心（有限合夥）Luohe Taiyu Ankang Investment Management Center (Limited Partnership) | Henan | North of Xin'an Street, Xin'an Town, Wuyang County | Equity investment management and consulting | 35.70% | Establishment | |
| 石河子市泰爾股權投資合夥企業（有限合夥）Shihezi Tai’er Equity Investment Partnership | Xinjiang | No. 20370, No. 21 Beiba Road, Shihezi Development Zone, Xinjiang | Equity investment, venture capital investment | 0.06% | Establishment | |
| 杭州泰譽二期股權投資基金合夥企業（有限合夥）Hangzhou Taiyu Phase II Equity Investment Partnership | Hangzhou | Room 226, Building 2, Xiaocheng Tiandi Commercial Center, Hangzhou Economic and Technological Development Zone, Zhejiang Province | Equity investment, venture capital investment | 28.84% | Establishment | |
| 仁智（蘇州）醫學研究有限公司Beijing Medical Development (Suzhou) Co., Ltd | Suzhou | G26, 3rd Floor, A1 North Building, 218 Xinghu Street, Suzhou Industrial Park | Medical R&D | 100.00% | Business combination of enterprises not under common control | |
| 北京捷通康諾醫藥科技有限公司Beijing Jyton and Kannel Medical Tech. Co., Ltd. | Beijing | 811B, 8th Floor, Building 1, No. 20 Chaoyangmenwai Avenue, Chaoyang District, Beijing | Drug development, medical device technology development and services | 100.00% | Business combination of enterprises not under common control |
| JYTON-GOWIN MEDICAL TECHNOLOGY CO.,LTD | Beijing | 807, 8th Floor, Building 1, No. 20 Chaoyangmenwai Avenue, Chaoyang District, Beijing | Drug development, medical device technology development and services | 100.00% | Business combination of enterprises not under common control | |
| Jyton Emergo (Beijing) Medical Technology Co., Ltd. | Beijing | 804, 8th Floor, Building 1, No. 20 Chaoyangmenwai Avenue, Chaoyang District, Beijing | Drug development, medical device technology development and services | 100.00% | Business combination of enterprises not under common control | |
| 北京醫捷通科技有限公司Beijing Ejyton Tech. Co., Ltd. | Beijing | 809, 8th Floor, Building 1, No. 20 Chaoyangmenwai Avenue, Chaoyang District, Beijing | Drug development, medical device technology development and services | 100.00% | Business combination of enterprises not under common control | |
| Beijing Yaxincheng Business Service Co., Ltd. | Beijing | 102-02, 1st Floor, Building 1, Courtyard 1, No. 20A, Xidawang Road, Chaoyang District, Beijing | Medical translation | 55.00% | Business combination of enterprises not under common control | |
| Khorgas Yaxincheng Information Technology Co., Ltd. | Xinjiang | Room 206, 2nd Floor, Building 6, Huayang Community, Horgoslan New Road, Horgo, Ili Prefecture, Xinjiang | Medical translation | 55.00% | Business combination of enterprises not under common control |
| Xi’an Laisai Translation Co., Ltd. | Xian | Room 1702&1703, 17th Floor, Unit 2, Building 1, Wangzuo International City, No. 1, Tangyan Road, High-tech Zone, Xi'an, Shaanxi Province | Medical translation | 55.00% | Business combination of enterprises not under common control | |
| Luohe Yukang Investment Center Partnership | Henan | Xin'an Street, Xin'an Town, Wuyang County | Equity investment, venture capital investment | 25.64% | 0.61% | Establishment |
| Shihezishi Taiyu Equity Investment Partnership | Xinjiang | No. 20339, No. 21 Beiba Road, Shihezi Development Zone, Xinjiang | Equity investment, venture capital investment | 13.33% | 0.46% | Establishment |
| Frontage Laboratories (Shanghai) Co., Ltd. | Shanghai | No. 13, Alley 67, Li Bing Road, China (Shanghai) Pilot Free Trade Zone | Bioanalytical services, clinical research services | 51.45% | Business combination of enterprises not under common control | |
| Frontage Laboratories (Luohe) Co., Ltd. | Henan | 200 meters south of the intersection of Taibaishan Road and Longjiang Road, Yuncheng District, Luohe City | CMC services | 51.45% | Business combination of enterprises not under common control | |
| Frontage Laboratories (Suzhou) Co, Ltd. | Suzhou | Building 2, No. 1336 Yuehu Road, Yuexi Street, Wuzhong Economic Development Zone, Suzhou | CMC services | 38.59% | Business combination of enterprises not under common control |
| Chengdu Xinsheng Tigermed Technology Company Limited | Chengdu | Chengdu Tianfu International Biological City (No. 18, Section 2, Biological City Middle Road, Shuangliu District) | Clinical research service R&D | 100.00% | Establishment | |
| Hongkong Tigermed Co.,Limited | Hong Kong | Hong Kong | Technology development, services, consultation and clinical trials, data management and statistical analysis | 100.00% | Establishment | |
| Hong Kong Tigermed Healthcare Technology Co., Limited | Hong Kong | Hong Kong | Equity investment management and consulting | 100.00% | Establishment | |
| Tigermed USA INC. | USA | USA | Consultation | 100.00% | Establishment | |
| Tigermed America LLC | USA | USA | Consultation | 100.00% | Establishment | |
| Frontage Holdings Corporation | Cayman Islands | Cayman Islands | Drug clinical research, biologics, bioanalytical | 51.45% | Business combination of enterprises not under common control | |
| Frontage Laboratories, Inc. | USA | USA | Bioanalytical, CMC and DMPK services | 51.45% | Business combination of enterprises not under common control | |
| Croley Martell Holdings, Inc | USA | USA | Investment holding | 51.45% | Business combination of enterprises not under common control |
| Concord Holdings, LLC | USA | USA | Investment holding | 51.45% | Business combination of enterprises not under common control | |
| Concord Biosciences, LLC | USA | USA | Safety and toxicology services | 51.45% | Business combination of enterprises not under common control | |
| RMI Laboratories, LLC | USA | USA | Safety and toxicology services | 51.45% | Business combination of enterprises not under common control | |
| 11736655 Canada, Ltd | Canada | Canada | Clinical trial research services | 51.45% | Business combination of enterprises not under common control | |
| BRI Biopharmaceutical Research, Inc | Canada | Canada | Clinical trial research services | 51.45% | Business combination of enterprises not under common control | |
| DreamCIS Inc. | Korea | Korea | Clinical trial research services&EDC | 87.75% | Business combination of enterprises not under common control | |
| Taiwan International Pharmaceutical Co., Ltd | Taiwan | Taiwan | Biotechnology services and R&D | 87.50% | Business combination of enterprises not under common control | |
| Tigermed-BDM Inc. | USA | USA | Data management, data statistical, SAS management | 100.00% | Business combination of enterprises not under common control |
| Tigermed India Data Solutions Private Limited | India | India | Clinical research service R&D | 51.00% | Establishment | |
| Opera Contract Research Organization S.R.L. | Romania | Romania | Clinical research service R&D | 51.17% | Business combination of enterprises not under common control | |
| Tigermed Clinical Research Co., Ltd. | Canada | Canada | Clinical research service R&D | 100.00% | Establishment | |
| Tigermed Australia Pty Limited | Australia | Australia | Clinical research service R&D | 100.00% | Establishment | |
| Tigermed Malaysia SDN. BHD. | Malaysia | Malaysia | Clinical research service R&D | 99.00% | Establishment | |
| Singapore Tigermed Pte. Ltd. | Singapore | Singapore | Clinical research service R&D | 100.00% | Establishment | |
| Tigermed Swiss AG | Switzerland | Switzerland | Clinical research service R&D | 100.00% | Establishment | |
| Bright Sky Resources Investment Ltd | BVI | BVI | Equity investment management and consulting | 100.00% | Establishment | |
| Blue Sky Resources Investment Ltd. | BVI | BVI | Equity investment management and consulting | 100.00% | Establishment | |
| TG Sky Investment Ltd. | BVI | BVI | Equity investment management and consulting | 100.00% | Establishment | |
| TG Mountain Investment Co | Cayman Islands | Cayman Islands | Equity investment management and consulting | 100.00% | Establishment |
| TG Sky Growth Investment Ltd | BVI | BVI | Equity investment management and consulting | 100.00% | Establishment | |
| Tigermed macrostat llc | USA | USA | Clinical research service R&D | 100.00% | Establishment |
（2）Significant non-wholly owned subsidiaries
Unit： RMB
| Name of subsidiary | Shareholding proportion of minority shareholders | Profits and losses attributable to minority shareholders in the current period | Dividends declared for payment to minority shareholders in the current period | Closing balance of minority interests |
| Frontage Holdings Corporation | 48.55% | 48,817,251.55 | 898,216,975.45 | |
| DreamCIS Inc. | 12.25% | 3,096,334.02 | 7,903,455.74 |
（3）Key financial information of significant non-wholly owned subsidiaries
Unit： Yuan
| Name of subsidiary | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Frontage Holdings Corporation | 1,696,504,625.69 | 536,482,326.66 | 2,232,986,952.35 | 202,290,295.09 | 175,807,952.23 | 378,098,247.32 | 300,612,329.37 | 243,508,701.39 | 544,121,030.76 | 183,298,378.22 | 37,682,485.12 | 220,980,863.34 |
| DreamCIS Inc | 138,294,018.68 | 12,325,012.52 | 150,619,031.20 | 83,680,891.87 | 2,406,436.73 | 86,087,328.60 | 102,080,147.84 | 3,594,016.21 | 105,674,164.05 | 68,482,424.91 | 68,482,424.91 | |
Unit： Yuan
| Name of subsidiary | Current period | Preceding period | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Frontage Holdings Corporation | 703,366,906.48 | 114,034,262.43 | 133,953,058.60 | 132,447,929.01 | 562,644,530.92 | 59,032,879.63 | 70,583,896.16 | 178,019,993.47 |
| DreamCIS Inc | 134,388,993.97 | 25,281,562.00 | 24,488,651.14 | 23,039,356.73 | 118,943,272.66 | 23,150,686.90 | 23,217,396.90 | 30,409,616.18 |
2. Transactions resulting in changes in shares of owners’ equity in subsidiaries while remaining control over thesubsidiaries
(1) Explanation of changes in shares of owners’ equity in subsidiaries
1. Acquisition of 16.69% minority interests in IntelliPV, a subsidiary of the Company;
2. Acquisition of 4.50% minority interests in Fantastic Bioimaging, a subsidiary of the Company.
（2）Impact on minority interests and owners’ equity attributable to the Parent Company
Unit： Yuan
| Fantastic Bioimaging | IntelliPV | |
| --Cash | 6,753,240.00 | 13,440,000.00 |
| Total acquisition cost/disposal consideration | 6,753,240.00 | 13,440,000.00 |
| Less: Share of net assets of subsidiary based on acquired/disposed equity ratio | 1,197,653.62 | 2,058,235.61 |
| Differences | 5,555,586.38 | 11,381,764.39 |
| Including: Adjustment to capital reserve | 5,555,586.38 | 11,381,764.39 |
3. Interests in joint venture arrangements or associates
(1) Combined financial information of immaterial joint ventures and associates
Unit： Yuan
| Closing balance/balance for the current period | Opening balance/ balance for the preceding period | |
| Joint ventures： | -- | -- |
| Total carrying amount of investment | 109,712,577.48 | 103,293,443.20 |
| Total of the following items calculated by shareholding ratio | -- | -- |
| Associates: | -- | -- |
| Total of the following items calculated by shareholding ratio | -- | -- |
| -- Net profit | -9,767,683.63 | -4,462,980.73 |
| -- Total comprehensive income | -9,767,683.63 | -4,462,980.73 |
X. RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTSThe Company is exposed to various financial risks in the course of operation: credit risks, market risks and liquidity risks.The Board of Directors is responsible for the overall risk management objectives and policies and assumes ultimateresponsibility for risk management objectives and policies. The Board of Directors checks the effectiveness of theprocedures which have been implemented and the reasonability of the overall risk management objectives and policies. Theinternal auditors also audit the risk management objectives and policies and record the results to the audit committee.The objective of the Company’s overall risk management is to strike a proper balance between risk and profit, to minimisethe negative impact of risk on operating results.
(I) Credit risksCredit risk refers to the risk that one party to a financial instrument fails to perform its obligations and causes financiallosses to the other. The Company is mainly facing customer credit risk caused by credit sales. Before the signing of the newcontract, the Company will evaluate the credit risk of the new customer, including the external credit rating and, in somecases, the bank credit certificate (when this information is available). The company sets a credit limit for each customer,which is the maximum amount that does not require additional approval.The Company ensures that the Company’s overall credit risk is within control of the Company through quarterly monitoringof existing customer credit ratings and monthly review of trade receivable aging analysis. When monitoring the customer’scredit risk, they are grouped according to their credit characteristics. Customers rated as “high-risk” will be placed on the listof restricted customers, and the Company can only sell them on the premise of additional approval, otherwise they must berequired to pay in advance.
(II) Market risksThe market risk of financial instruments refers to the risk that the fair value of financial instruments or future cash flowsfluctuate due to changes in market prices, including foreign exchange risk and interest rate risk.
(1) Interest rate risk
Interest rate risk refers to the risk that the fair value of financial instruments or future cash flows fluctuate due to changes inmarket interest rates. The interest rate risk faced by the Company mainly comes from long-term bank loans and bondspayable. The Company's current policy is to repay in advance as much as possible given adequate recovered funds. Tomaintain this ratio, the Company may use interest rate swaps to achieve the expected interest rate structure. Although thepolicy does not enable the Company to completely avoid the risk that the interest rate paid exceeds the current marketinterest rate, nor can it completely eliminate the cash flow risk associated with fluctuations in interest payments, howeverthe management believes that the policy achieves a reasonable balance between these risks.As of December 31, 2019, given other variables remaining unchanged, if the borrowing rate calculated at floating rates rises
or falls by 100 basis points, the Company's net profit will decrease or increase by 4,040,306.34 yuan. The managementbelieves that the 100 basis points reasonably reflect the reasonable range in which interest rates may change in the comingyear.
(2) Foreign exchange risk
Foreign exchange risk refers to the risk that the fair value of financial instruments or future cash flows fluctuate due tochanges in foreign exchange rates. The Company tries to match the revenue and cost in foreign currencies in order to reducethe exchange rate risk. In addition, the Company may also sign forward foreign exchange contracts or currency swapcontracts to achieve the purpose of avoiding exchange rate risk. In current and previous period, the Company does not signany contract of forward exchange agreement and currency swap agreement.The main foreign exchange risk is the financial assets and financial liabilities denominated in USD. The amount of thefinancial assets and liabilities in foreign currencies converted into RMB is as follows:
| Item | Closing balance | Opening balance | ||||
| USD equivalent of RMB | Won equivalent of RMB | Total | USD equivalent of RMB | Won equivalent of RMB | Total | |
| Monetary fund | 1,548,829,677.11 | 35,138,407.64 | 1,583,968,084.75 | 165,545,698.52 | 43,230,384.86 | 208,776,083.38 |
| Trade receivable | 292,797,523.57 | 59,622,970.23 | 352,420,493.80 | 194,040,785.00 | 47,825,868.84 | 241,866,653.84 |
| Other receivables | 9,117,848.87 | 5,840,524.25 | 14,958,373.12 | 19,659,360.91 | 4,573,542.88 | 24,232,903.79 |
| Interests receivable | 5,229,264.57 | 5,229,264.57 | 815,862.90 | 50,225.00 | 866,087.90 | |
| Sub-total of financial assets in major foreign currencies | 1,855,974,314.12 | 100,601,902.12 | 1,956,576,216.24 | 380,061,707.33 | 95,680,021.58 | 475,741,728.91 |
| Short-term borrowings | 350,029,223.19 | 350,029,223.19 |
| Trade payable | 32,267,868.74 | 2,712,145.38 | 34,980,014.12 | 18,145,905.06 | 5,628,770.16 | 23,774,675.22 |
| Staff remuneration payable | 16,710,692.49 | 9,527,109.86 | 26,237,802.35 | 9,822,106.71 | 8,155,102.06 | 17,977,208.77 |
| Other payables | 7,247,268.49 | 2,430,659.25 | 9,677,927.74 | 13,166,911.83 | 1,011,631.83 | 14,178,543.66 |
| Dividends payables | 1,467,326.47 | 1,467,326.47 | 1,443,558.82 | 1,443,558.82 |
| Non-current liabilities due within one year | 29,207,944.59 | 3,104,494.46 | 32,312,439.05 | 28,596,620.91 | 28,596,620.91 | |
| Long-term borrowings | 3,431,702.95 | 3,431,702.95 |
| Long-term payables | 20,342,856.26 | 20,342,856.26 | 19,417,649.99 | 19,417,649.99 |
| Sub-total of financial liabilities in major foreign currencies | 457,273,180.23 | 17,774,408.95 | 475,047,589.18 | 94,024,456.27 | 14,795,504.05 | 108,819,960.32 |
| Total | 1,398,701,133.89 | 82,827,493.17 | 1,481,528,627.06 | 286,037,251.06 | 80,884,517.53 | 366,921,768.59 |
As of December 31, 2019, given all other variables remaining unchanged, if RMB to USD appreciates or depreciates by 5%,the Company’s net profit will increase or decrease by 74,076,431.35 Yuan. The management considers that 5% resonablyreflects the resonable range in which RMB to USD may change in the coming year.
(3) Other price risks
The Company holds equity investments in other listed companies, and the management is of the view that the market pricerisks arising from such investment activities are tolerable.The Company holds equity investments in other listed companies as follows:
| Item | Closing balance | Opening balance |
| Other non-current financial assets | 2,250,473,669.34 | 1,481,093,167.41 |
| Total | 2,250,473,669.34 | 1,481,093,167.41 |
As of December 31, 2019, given all other variables remaining unchanged, if the value of the equity instruments increase ordecrease by 5%, the net profit of the Company will increase or decrease by 112,523,683.47 Yuan. The managementconsiders that 5% resonably reflects the resonable range in which the value of equity instruments may change in the comingyear.
(III) Liquidity riskLiquidity risk is the risk that an enterprise will encounter difficulty in meeting obligations that are settled by delivering cashor another financial asset. The Company’s policy is to ensure it has sufficient cash to settle the debts when they fall due. TheCompany’s finance department centralised control on liquidity risk. Through monitoring cash balance, readily realizablemarketable securities and the rolling forecasts of cash flow for the next 12 months, the finance department will ensure it hassufficient fund to settle its debts under all reasonable foreseeable circumstances.The maturity profile of the Company’s financial assets and financial liabilities at each balance sheet date based on
contractual undiscounted payments is analysed below:
Unit：RMB0,000
| Item | Closing balance | ||
| Within one year | Above one year | Total | |
| Short-term borrowings | 86,377.17 | 86,377.17 | |
| Trade payable | 6,872.77 | 646.38 | 7,519.15 |
| Other payables | 17,324.27 | 908.50 | 18,232.77 |
| Non-current liabilities due within one year | 3,336.69 | 3,336.69 |
| Long-term borrowings | 3,650.00 | 3,650.00 | |||
| Long-term payables | 2,034.29 | 2,034.29 | |||
| Total | 119,595.19 | 1,554.88 | 121,150.07 | ||
| Item | Opening balance | ||||
| Within one year | Above one year | Total | |||
| Short-term borrowings | 60,283.41 | 60,283.41 | |
| Trade payable | 4,298.31 | 104.44 | 4,402.75 |
| Other payables | 3,966.84 | 438.23 | 4,405.07 |
| Non-current liabilities due within one year | 4,566.25 | 4,566.25 | |
| Long-term borrowings | 343.17 | 343.17 | |
| Total | 73,114.82 | 885.84 | 74,000.66 |
XI. FAIR VALUE DISCLOSURE
1. Closing fair value of assets and liabilities measured at fair value
Unit: RMB
| Item | Fair value at the end of the period | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| I. Continuing fair value measurement | -- | -- | -- | -- |
| (1) Other non-current financial assets | 134,957,845.68 | 2,115,515,823.66 | 2,250,473,669.34 | |
| 1. Financial assets at fair value through profit or loss | 134,957,845.68 | 2,115,515,823.66 | 2,250,473,669.34 | |
| (2) Investments in equity instruments | 134,957,845.68 | 2,115,515,823.66 | 2,250,473,669.34 | |
| Total assets continuously measured at fair value | 134,957,845.68 | 2,115,515,823.66 | 2,250,473,669.34 | |
| II. Non-continuing fair value measurement | -- | -- | -- | -- |
2. Basis for determining the market value of items continuously and non-continuously measured at Level 1fair valueLevel 1 fair value measurement refers to measurement based on the quoted price for identical assets or liabilities in an activemarket.
3. For items continuously and non-continuously measured at Level 2 fair value, the valuation techniques used as wellas qualitative and quantitative information on important parameters
| Item | Closing fair value | Valuation techniques | Unobservable input value | Correlation between changes in unobservable input value and fair value |
| Investment in equity instruments | 1,040,303,317.94 | Market multiple adjusted after discount for lack of marketability | Discount for lack of marketability | The higher the discount, the lower the valuation |
| Equity value distribution model | Priority, probability of initial public offering | The higher the priority, the higher the valuation of preferred stocks; the higher the probability, the higher the valuation of common stocks | ||
| Recent transaction price inversion method | Due to timing, sales conditions and agreement terms, differences in the size and nature of similar businesses may cause the fair value estimate of the price to vary substantially | The higher the value of similar transactions, the higher the valuation | ||
| Investment in unlisted funds measured at fair value | 1,075,212,505.72 | Net asset value of related investments | Net assets | The higher the net asset value, the higher the valuation |
4. For items continuously measured at Level 3 fair value, adjustment between opening and closing carrying amountas well as sensitivity analysis on unobservable parameters
| Item | Opening balance | Gains (losses) recognised in the period | Purchase, exchange rate change, selling and settlement | Closing balance | For assets held at the end of the reporting period, unrealised gains or changes for the current period included in profit or loss | ||
| Change of fair value through profit or loss | Purchase | Exchange changes | Selling | ||||
| ◆Other non-current financial assets | 1,468,449,686.00 | 187,706,407.70 | 625,136,891.15 | 2,825,050.35 | 168,602,211.54 | 2,115,515,823.66 | 187,706,407.70 |
| Financial assets at fair value through profit or loss | 1,468,449,686.00 | 187,706,407.70 | 625,136,891.15 | 2,825,050.35 | 168,602,211.54 | 2,115,515,823.66 | 187,706,407.70 |
| —Investments in equity instruments | 1,468,449,686.00 | 187,706,407.70 | 625,136,891.15 | 2,825,050.35 | 168,602,211.54 | 2,115,515,823.66 | 187,706,407.70 |
| Total | 1,468,449,686.00 | 187,706,407.70 | 625,136,891.15 | 2,825,050.35 | 168,602,211.54 | 2,115,515,823.66 | 187,706,407.70 |
| Including: Profit or loss relating to financial assets | 187,706,407.70 | 187,706,407.70 |
5. Fair value of assets and liabilities not measured at fair value
As of December 31, 2019, the Management of the Company considered that financial assets and liabilities measured atamortised cost in the financial statements mainily include: bills receivable, trade receivable, other receivables, short-termborrowings, trade payable, other payables, long-term borrowings etc.The Management of the Company was of the opinion that the carrying amount of non-long-term financial assets andfinancial liabilities in the financial statements approximated the fair value of those assets and liabilities.
XII. RELATED PARTIES AND RELATED PARTIES TRANSACTIONS
1. Parent Company of the Company
| Name of Parent Company | Place of registration | Business nature | Registered capital | Percentage of shareholding in the Company held by the Parent Company | Percentage of voting rights in the Company held by the Parent Company |
Information of the Parent Company of the CompanyThe de facto controller of the Company are Mr. Ye Xiaoping (葉小平) and Ms. Cao Xiaochun (曹曉春): Mr. Ye Xiaoping(葉小平) holds 177,239,541.00 shares in the Company representing a shareholding of 23.65%; Ms. Cao Xiaochun (曹曉春) holds 64,161,774.00 shares in the Company representing a shareholding of 8.56%.
2. Subsidiaries of the Company
Please refer to Note “IX. Interests in other entities” for details of subsidiaries of the Company.
3. Joint ventures and associates of the Company
Please refer to Note “IX. Interests in other entities” for details of material joint ventures and associates of the Company.
Information of the Company’s other joint ventures or associates that had transactions with the Company in current period, orbalances resulted from transactions with the Company in the prior period is as follows:
| Name | Relationship with the Company |
| 上海觀合醫藥科技有限公司Teddy Clinical Research Laboratory (Shanghai) Limited | Associate |
| FJ Pharma LLC | Associate |
| 上海謀思醫藥科技有限公司Mosim Co., Ltd. | Associate |
| 杭州頤柏健康管理有限公司Hangzhou Yibai Health Management Co., Ltd. | Associate |
| 蘇州益新泰格醫藥科技有限公司 EPS Tigermed (Suzhou) Co., Ltd. | Associate |
| 益新泰格（南通）醫藥科技有限公司EPS Tigermed (Nantong) Co., Ltd. | Associate |
4. Information of other related parties
| Name | Relationship with the Company |
| Hangzhou Wangji Health Technology Co., Ltd. | Investee |
| 蘇州康乃德生物醫藥有限公司Suzhou Connect Biopharmaceuticals, Limited | Ye Xiaoping (葉小平), the de facto controller, acts as its director |
| Hangzhou Wangji Cloud Hospital Management Co., Ltd. | Cao Xiaochun (曹曉春), the de facto controller, acts as its executive director |
| 杭州帕琦斯醫藥科技有限公司 | Cao Xiaochun (曹曉春), the de facto controller, acts as its executive director |
| 金華康潤生物技術有限公司 | Cao Xiaochun (曹曉春), the de facto controller, acts as its executive director |
| Frontage Clinical Services, Inc. | Investee of Frontage Labs, a subsidiary of the Company |
| Song Li（李松） | Chief executive of Frontage Labs, a subsidiary of the Company |
| Kang Pengcheng (康鵬程) | Shareholder of Beijing Canny Consulting Inc.(北京康利華), a level II subsidiary of the Company |
| Shanghai Shengtong International Logistics Co., Ltd | Investee |
| Shanghai Shengtong Pharmaceutical Supply Chain Management Co., Ltd. | Investee |
| Hangzhou Tigermed Jietong Inspection Technology Co., Ltd. | Investee |
| Hangzhou Tigermed Cloud Hospital Management Co., Ltd. | Cao Xiaochun (曹曉春), the de facto controller, acts as its executive director |
| Coland Pharmaceutical Company Limited | Ye Xiaoping (葉小平), the de facto controller, acts as its executive supervisor |
| 蘇州滬雲新藥研發股份有限公司 | Cao Xiaochun (曹曉春), the de facto controller, acts as its director (resigned) |
| 蘇州澤璟生物製藥股份有限公司Suzhou Zelgen Biopharmaceuticals Co., Ltd. | Cao Xiaochun (曹曉春), the de facto controller, acts as its director (resigned in February 2019) |
5. Related parties transactions
(1) Related party transactions for purchase and sales of goods/receipt and provision of servicesPurchase of goods/receipt of services
Unit: Yuan
| Related party | Type of transaction | Amount for the current period | Approved transaction limit | Whether the transaction limit has been exceeded or not | Amount for the prior period |
| 上海觀合醫藥科技有限公司Teddy Clinical Research Laboratory (Shanghai) Limited | Clinical trial solutions, clinical-related and laboratory services | 8,512,896.94 | No | 6,382,380.04 |
| FJ Pharma, LLC. | Clinical trial solutions, clinical-related and laboratory services | 518,977.50 | No | ||
| Frontage Clinical Services, Inc. | Clinical trial solutions, clinical-related and laboratory services | 7,473,276.00 | No | 3,644,092.80 | |
| Shanghai Shengtong Pharmaceutical Supply Chain Management Co., Ltd. | Clinical trial solutions, clinical-related and laboratory services | 640,202.83 | No | ||
| 上海謀思醫藥科技有限公司Mosim Co., Ltd. | Clinical trial solutions, clinical-related and laboratory services | 13,520,153.40 | No |
Sales of goods/ provision of services
Unit: Yuan
| Related party | Type of transaction | Amount for the current period | Amount for the prior period |
| 上海國創醫藥有限公司Coland Pharmaceutical Company Limited | clinical trial solutions, clinical-related and laboratory services | 3,372,374.11 | 4,931,543.66 |
| 杭州望吉健康科技有限公司 | clinical trial solutions, clinical-related and laboratory services | 2,663,793.64 | 3,547,496.03 |
| 蘇州康乃德生物醫藥有限公司Suzhou Connect Biopharmaceuticals, Limited | clinical trial solutions, clinical-related and laboratory services | 6,577,219.87 | 1,839,832.37 |
| Hangzhou Wangji Health Technology Co., Ltd. | clinical trial solutions, clinical-related and laboratory services | 12,051.63 | |
| 杭州帕琦斯醫藥科技有限公司 | clinical trial solutions, clinical-related and laboratory services | 5,821.70 | |
| 蘇州澤璟生物製藥股份有限公司Suzhou Zelgen Biopharmaceuticals Co., Ltd. | clinical trial solutions, clinical-related and laboratory services | 17,539,468.50 | 20,049,165.90 |
| 上海觀合醫藥科技有限公司Teddy Clinical Research Laboratory (Shanghai) Limited | clinical trial solutions, clinical-related and laboratory services | 51,420.64 | |
| 上海謀思醫藥科技有限公司Mosim Co., Ltd. | clinical trial solutions, clinical-related and laboratory services | 496,557.43 | |
| 蘇州益新泰格醫藥科技有限公司(Suzhou) Tigermed | clinical trial solutions, clinical-related and laboratory services | 3,068.18 | |
| 蘇州滬雲新藥研發股份有限公司 | clinical trial solutions, clinical-related and laboratory services | 529,230.63 | |
| Frontage Clinical Services, Inc | clinical trial solutions, clinical-related and laboratory services | 488,724.58 | 484,427.21 |
（2）Lease in related party transaction
The Company as lessee:
Unit: Yuan
| Lessor | Type of leased assets | Rental income recognised for the current period | Rental income recognised for the prior period |
| Kang Pengcheng (康鵬程) | Office buildings | 731,275.97 | 710,286.00 |
（3）Guarantee in related party transactions
The Company as guarantor
Unit: Yuan
| Guaranteed party | Guaranteed amount | Commencement date | Maturity date | Whether the guarantee has been executed |
| 上海晟通國際物流有限公司Shanghai Shengtong International Logistics Co., Ltd | 2,780,000.00 | June 27, 2019 | January 26, 2020 | No |
| 上海晟通國際物流有限公司Shanghai Shengtong International Logistics Co., Ltd | 3,090,000.00 | July 16, 2019 | January 20, 2020 | No |
| 上海晟通國際物流有限公司Shanghai Shengtong International Logistics Co., Ltd | 3,000,000.00 | July 23, 2019 | January 20, 2020 | No |
| 上海晟通國際物流有限公司Shanghai Shengtong International Logistics Co., Ltd | 490,000.00 | July 26, 2019 | January 20, 2020 | No |
| 上海晟通國際物流有限公司Shanghai Shengtong International Logistics Co., Ltd | 2,380,000.00 | July 25, 2019 | January 20, 2020 | No |
(4) Borrowings from or lending to related parties
Unit: Yuan
| Related party | Borrowed/lent amount | Commencement date | Maturity date | Remarks |
| Borrowed amount | ||||
| Song Li（李松） | 10,294,800.00 | August 11, 2014 | May 18, 2019 | Repaid |
| Lent amount | ||||
| Hangzhou Tigermed Jietong Inspection Technology Co., Ltd. | 8,740,000.00 | May 21, 2018 | December 31, 2019 | Repaid |
| Hangzhou Tigermed Jietong Inspection Technology Co., Ltd. | 1,260,000.00 | January 21, 2019 | December 31, 2019 | Repaid |
| Frontage Clinical Services, Inc. | 17,648,446.40 | September 29, 2016 | September 1, 2019 | Repaid |
6. Balance due to or from related parties
(1) Balance due from related parties
Unit: Yuan
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Accounts receivable | |||||
| 上海國創醫藥有限公司Coland Pharmaceutical Company Limited | 4,051,464.56 | 202,482.26 | 3,771,212.91 | 254,518.37 | |
| FJ Pharma, LLC. | 118,761.50 | 5,938.07 | |||
| 杭州望吉健康科技有限公司 | 6,188,928.98 | 3,044,135.98 | 4,146,138.45 | 254,601.75 | |
| 蘇州康乃德生物醫藥有限公司Suzhou Connect Biopharmaceuticals, Limited | 1,166,881.51 | 58,317.88 | 6,712.24 | 335.61 | |
| Hangzhou Wangji Health Technology Co., Ltd. | 24,720.00 | 11,829.56 | 24,730.86 | 1,870.50 | |
| Frontage Clinical Services, Inc | 3,109,425.24 | 2,517,797.99 | 4,079,286.29 | 795,011.08 | |
| 杭州帕琦斯醫藥科技有限公司 | 6,171.00 | 308.41 | |||
| 上海謀思醫藥科技有限公司Mosim Co., Ltd. | 20,000.02 | 999.56 | |||
| 蘇州澤璟生物製藥股份有限公司Suzhou Zelgen Biopharmaceuticals Co., Ltd. | 19,964,879.72 | 996,040.85 | 23,416,340.92 | 1,456,248.21 | |
| Prepayments | |||||
| Kang Pengcheng (康鵬程) | 4.57 | ||||
| Shanghai Shengtong Pharmaceutical Supply Chain Management Co., Ltd. | 2,432,680.00 | ||||
| Other receivables |
| Shanghai Shengtong Pharmaceutical Supply Chain Management Co., Ltd. | 2,741,965.00 | 274,196.50 | |||
| FJ Pharma, LLC. | 123,149.46 | 6,157.47 | |||
| 上海晟通國際物流有限公司Shanghai Shengtong International Logistics Co., Ltd | 38,329.83 | 16,855.64 | |||
| Hangzhou Wangji Health Technology Co., Ltd. | 1,000,000.00 | 198,800.00 | 11,310,000.00 | 3,774,000.00 | |
| Frontage Clinical Services, Inc | 3,260,302.67 | 163,015.13 | 17,650,675.77 | 3,529,800.75 |
（2）Payables
Unit: Yuan
| Item | Related party | Closing balance | Opening balance |
| Trade payable | |||
| 上海觀合醫藥科技有限公司Teddy Clinical Research Laboratory (Shanghai) Limited | 2,481,696.82 | 1,550,184.96 | |
| Frontage Clinical Services, Inc | 10,275.94 | 27,267.49 | |
| Other payables | |||
| 上海觀合醫藥科技有限公司Teddy Clinical Research Laboratory (Shanghai) Limited | 853,781.31 | 2,475,819.61 | |
| Shanghai Shengtong Pharmaceutical Supply Chain Management Co., Ltd. | 4,035.00 | ||
| Receipts in advance | |||
| 上海觀合醫藥科技有限公司Teddy Clinical Research Laboratory (Shanghai) Limited | 10,000.00 | 10,000.00 | |
| 上海國創醫藥有限公司Coland Pharmaceutical Company Limited | 2,410,854.63 | 61,124.35 |
| Hangzhou Wangji Health Technology Co., Ltd. | 211,575.80 | 500,000.02 | |
| 蘇州康乃德生物醫藥有限公司Suzhou Connect Biopharmaceuticals, Limited | 2,312,360.25 | 3,434,554.63 | |
| 杭州帕琦斯醫藥科技有限公司 | 121,080.50 | 114,909.50 | |
| 金華康潤生物技術有限公司 | 78,192.20 | ||
| 蘇州澤璟生物製藥股份有限公司Suzhou Zelgen Biopharmaceuticals Co., Ltd. | 234,435.86 | ||
| Non-current liabilities due within one year | |||
| Song Li | 10,294,800.00 |
XIII. SHARE-BASED PAYMENT
1. Overall share-based payment
√ Applicable □Not applicable
Unit: Yuan
| Total equity instruments granted during the period | 367,336,445.02 |
| Total equity instruments exercised during the period | 0.00 |
| Total equity instruments expired during the period | 10,385,499.61 |
2. Equity-settled share-based payment
√ Applicable □Not applicable
Unit: Yuan
| Method for determining the fair value of equity instruments on the date of grant | The Black-Scholes model is used for determining the fair value of equity instruments on the date of grant by Hangzhou Tigermed, Fantastic Bioimaging, and Frontage Holdings Corporation, and the average method is used for determining the fair value of equity instruments on the date of grant by DreamCis Inc. |
| Basis for determining the number of available equity instruments | At each balance sheet date during the vesting period, the best estimate is made based on the latest information such as changes in the number of exerciseable rights, and the number of equity instruments with expected exercisable rights is revised. |
| Reasons for significant difference between estimation made during the current period and the previous period | Nil |
| Accumulated amount of equity-settled share-based payment included in capital reserve | 94,465,866.52 |
| Total expenses recognised for the period arising from equity-settled share-based payment | 40,769,736.63 |
XIV. COMMITMENTS AND CONTINGENCIES
1. Significant commitments
Significant commitments subsisting at balance sheet date
（1）Hongkong Tigermed, a subsidiary of the Company, entered into a loan contract and a pledge contract dated December11 2019 with Goldman Sachs International Bank for an amount USD50,000,000.00, of which USD17,845,068.00 was usedto purchase shares of EPS Holdings, which was secured by pledges of 308,040,085 shares of Frontage Holdings (1521.HK)and 1,400,000 shares of EPS Holdings (4282.JP).
（2）Frontage Holdings, a subsidiary of the Company, borrowed USD2 million from 美國國富銀行 on September 20,2017, for a period of three years. The annual repayable amount for the loan was USD666,660.00. The balance of non-currentliabilities due within one year was USD500,015.00, which wasequivalent to RMB3,488,204.64.
2. Contingencies
(1) Significant contingencies subsisting on the balance sheet date
On August 29, 2019, 浙江天松醫療器械股份有限公司(Zhejiang Tiansong Medical Equipment Company Limited)(hereinafter referred to as "Tiansong Medical") filed a lawsuit against 捷通康諾 (Jyton and Kannel) as a defendant,arguing that 捷通康諾 (Jyton and Kannel) delayed implementation of the "Agreement" signed by both parties. It appliedfor the judgment that 捷通康諾 (Jyton and Kannel) returned the advance payment of 744,000 yuan and compensated theloss of 1,586,659 yuan. On November 10, 2019, the Tonglu County People's Court issued a "Civil Judgment" ([2019] Zhe0122 Minchu No. 2583), ruling that 捷通康諾 (Jyton and Kannel) returned Tiansong Medical 's advance payment of600,000 yuan. 捷通康諾 (Jyton and Kannel) filed an appeal with the Hangzhou Intermediate People's Court on November28, 2019. The case is still pending for the second trial.
(2) The Company should also indicate even if it has no significant contingencies for disclosureThere was no material contingency to be disclosed.
XV. SUBSEQUENT EVENTS
1. Profit distribution
Unit: RMB
| Profits or dividends proposed for distribution | 208,069,192.57 |
| Profits or dividends declared for distribution after consideration and approval | 208,069,192.57 |
2. Descriptions of other subsequent events
(1) On April 2, 2020, the Company convened the third extraordinary general meeting for 2020, at which the "Proposal onthe Company's Issuance of H Shares and Listing on the Main Board of The Stock Exchange of Hong Kong Limited andConversion to Joint Stock Limited Company Through Overseas Offering of Shares (《關於公司發行H股股票並在香港聯合交易所有限公司主機板上市及轉為境外募集股份有限公司的議案》)" and the “Proposal on the Company's Plan forIssuance of H Shares and Listing on the Main Board of The Stock Exchange of Hong Kong Limited (《關於公司發行H股股票並在香港聯合交易所有限公司主機板上市方案的議案》)” were reviewed and approved.
(2) DreamCIS Inc., a subsidiary of the Company, received a notice from the Korea Stock Exchange on March 26, 2020 inthe effect that DreamCIS Inc. had been approved for listing by the Korea Stock Exchange.
(3) In January 2020, the Company entered into an equity transfer agreement with Yang Jin, Liu Jili and 南京謀康科技合夥企業（有限公司）. Pursuant to the agreement, the Company agreed to acquire 27% interests in 上海謀思醫藥科技有限公司 (Mosim Co., Ltd.). Following the share transfer, the Company holds 60% interests and has completed the businessregistration for the transfer. The Company has consolidated 上海謀思醫藥科技有限公司 (Mosim Co., Ltd.) in itsfinancial statements.
XVI. NOTES TO PRINCIPAL ITEMS OF THE PARENT COMPANY’S FINANCIAL STATEMENTS
1. Trade receivable
(1) Trade receivable shown by classification
Unit: RMB
| Type | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Carrying value | Book balance | Bad debt provision | Carrying value | |||||
| Amount | Percentage | Amount | Provision ratio | Amount | Percentage | Amount | Provision ratio | |||
| Including： | ||||||||||
| Trade receivable for which provision for bad debt is made on group basis | 655,966,035.61 | 100.00% | 37,085,802.61 | 5.65% | 618,880,233.00 | 392,377,214.99 | 100.00% | 12,007,288.23 | 3.06% | 380,369,926.76 |
| Including： | ||||||||||
| Trade receivable for which provision for bad debt is made on credit risk characteristic basis | 655,966,035.61 | 100.00% | 37,085,802.61 | 5.65% | 618,880,233.00 | 392,377,214.99 | 100.00% | 12,007,288.23 | 3.06% | 380,369,926.76 |
| Total | 655,966,035.61 | 100.00% | 37,085,802.61 | 5.65% | 618,880,233.00 | 392,377,214.99 | 100.00% | 12,007,288.23 | 3.06% | 380,369,926.76 |
Provision for bad debts made on group basis:
Unit: RMB
| Name | Closing balance | ||
| Book balance | Provision for bad debt | Provision ratio | |
| Trade receivable for which provision for bad debt is made on credit risk characteristic basis | 655,966,035.61 | 37,085,802.61 | 5.65% |
| Total | 655,966,035.61 | 37,085,802.61 | -- |
If provision for bad debts of trade receivable was made using the general approach of expected credit loss, please disclosethe information on provision for bad debts with reference to the disclosures of other trade receivable:
√ Applicable □ Not applicable
Disclosure by age
Unit: RMB
| Aging | Book balance |
| Within 90 days | 79,219,860.91 |
| 90 to180 days | 10,312,895.97 |
| 180 days to 1 year | 2,554,216.12 |
| Above 1 year | 3,503,833.28 |
| Not yet invoiced | 560,375,229.33 |
| Total | 655,966,035.61 |
(2) Provision, retrieval and reversal of provision for bad debts for the period
Provisions for bad debts for the period:
Unit: RMB
| Type | Opening balance | Movement during the period | Closing balance | |||
| Provision | Retrieval and reversal | Write-off | Others | |||
| Trade receivable for which provision for bad debts is made on credit risk characteristics basis | 30,118,567.59 | 6,967,235.02 | 37,085,802.61 | |||
| Total | 30,118,567.59 | 6,967,235.02 | 37,085,802.61 | |||
(3) Top five trade receivable according to closing balance of debtors
Unit: RMB
| Name of debtor | Closing balance | Percentage of closing balance of total trade receivable | Balance of bad debt allowance |
| Debtor 1 | 67,621,389.51 | 10.31% | 3,417,957.29 |
| Debtor 2 | 58,038,171.51 | 8.85% | 2,900,605.46 |
| Debtor 3 | 36,490,249.60 | 5.56% | 1,823,693.17 |
| Debtor 4 | 35,491,547.78 | 5.41% | 2,111,528.16 |
| Debtor 5 | 23,398,053.50 | 3.57% | 1,169,377.32 |
| Total | 221,039,411.90 | 33.70% |
2. Other receivables
Unit: RMB
| Item | Closing balance | Opening balance |
| Interests receivable | 1,060,780.97 | |
| Dividends receivable | 3,960,000.00 | 4,087,748.46 |
| Other receivables | 41,224,571.45 | 60,054,931.49 |
| Total | 45,184,571.45 | 65,203,460.92 |
(1) Interests receivable
1) Classification of interests receivable
Unit: RMB
| Item | Closing balance | Opening balance |
| Fixed deposits | 754,523.44 | |
| Other interests | 306,257.53 | |
| Total | 1,060,780.97 |
2) Provision for bad debt
□ Applicable; √ Not applicable
(2) Dividends receivable
1）Classification of dividends receivable
Unit: RMB
| Item (or investee company) | Closing balance | Opending balance |
| 泰州康利華醫藥科技有限公司Taizhou Kanglihua Pharmaceutical Technology Co., Ltd | 4,087,748.46 | |
| 上海謀思醫藥科技有限公司Mosim Co., Ltd. | 3,960,000.00 | |
| Total | 3,960,000.00 | 4,087,748.46 |
2) Provision for bad debt
□ Applicable √ Not applicable
(3) Other receivables
1) Classification of other receivables by nature
Unit: RMB
| Nature | Closing book balance | Opening book balance |
| Current account | 43,061,527.17 | 64,123,643.93 |
| Security | 3,869,550.08 | 3,104,458.71 |
| Reserve | 785,787.47 | 1,576,162.06 |
| Others | 1,758,109.22 | 1,423,258.10 |
| Total | 49,474,973.94 | 70,227,522.80 |
2) Provision for bad debts
Unit: RMB
| Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit loss for the next 12-month | Lifetime expected credit loss (without credit impairment) | Lifetime expected credit loss (with credit impairment) | ||
| Balance at January 1, 2019 | 10,172,591.31 | 10,172,591.31 | ||
| Balance at January 1, 2019 during the period | —— | —— | —— | —— |
| Provision for the period | -1,922,188.82 | -1,922,188.82 | ||
| Balance at December 31, 2019 | 8,250,402.49 | 8,250,402.49 |
Movement of book balance of significant change in provision for the period
□ Applicable √ Not applicable
Disclosure by age
Unit: RMB
| Aging | Book balance |
| 1 year (inclusive) | 14,038,918.22 |
| 1 to 2 years | 6,122,072.30 |
| 2 to 3 years | 27,033,896.75 |
| Above 3 years | 2,280,086.67 |
| 3 to 4 years | 1,064,068.49 |
| 4 to 5 years | 560,877.95 |
| Above 5 years | 655,140.23 |
| Total | 49,474,973.94 |
3) Provision, retrieval or reversal of provision for bad debts for the period
Provisions for bad debts for the period:
Unit: RMB
| Type | Opening balance | Movement during the period | Closing balance | |||
| Provision | Retrieval or reversal | Write-off | Others | |||
| Other receivables for which provision for bad debts is made on credit risk characteristics basis | 10,172,591.31 | -1,922,188.82 | 8,250,402.49 | |||
| Total | 10,172,591.31 | -1,922,188.82 | 8,250,402.49 |
4）Balance of top five other receivables at the end of the period by debtor
Unit: RMB
| Name | Nature | Closing balance | Aging | Proportion to the total amount of closing balance of other receivables | The balance of provision for bad debts as at the end of period |
| Debtor 1 | Current account | 27,434,811.88 | Within 3 years | 55.45% | 1,371,740.59 |
| Debtor 2 | Current account | 6,450,000.00 | Within 1 year | 13.04% | 322,500.00 |
| Debtor 3 | Current account | 2,741,965.00 | Within 2 years | 5.54% | 137,098.25 |
| Debtor 4 | Current account | 1,818,771.12 | Within 2 years | 3.68% | 90,938.56 |
| Debtor 5 | Security | 1,282,040.10 | Above 1 year | 2.59% | 64,102.01 |
| Total | -- | 39,727,588.10 | -- | 80.30% | 1,986,379.41 |
3. Long-term equity investment
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investment in subsidiaries | 2,395,933,778.59 | 35,120,000.00 | 2,360,813,778.59 | 2,058,045,223.84 | 36,120,000.00 | 2,021,925,223.84 |
| Investment in associates and joint ventures | 105,938,570.56 | 105,938,570.56 | 90,091,607.84 | 90,091,607.84 | ||
| Other equity instruments | 8,557,214.34 | 8,557,214.34 | ||||
| Total | 2,510,429,563.49 | 35,120,000.00 | 2,475,309,563.49 | 2,148,136,831.68 | 36,120,000.00 | 2,112,016,831.68 |
（1）Investment in subsidiaries
Unit: RMB
| Investee | Opening balance (Carrying amount) | Increase/Decrease | Closing balance (Carrying amount) | Closing balance of provision for impairment | |||
| Investments increased | Investments decreased | Provision for impairment | Others | ||||
| 上海泰格醫藥科技有限公司Frontage Shanghai, Shanghai Tigermed Co Ltd | 6,820,979.79 | 6,820,979.79 | |||||
| 嘉興泰格數據管理有限公司Jiaxing Tigermed Data Management Co., Ltd. | 176,083,600.00 | 176,083,600.00 | |||||
| 美斯達（上海）醫藥開發有限公司MacroStat (China) Clinical Research Co., Ltd | 26,231,806.00 | 26,231,806.00 | |||||
| 杭州思默醫藥科技有限公司Hangzhou Simo Co.,Ltd. | 17,627,000.00 | 17,627,000.00 | |||||
| 廣州泰格醫學研究所有限公司Tigermed Research Institute Co., Ltd. | 10,055,000.00 | 10,055,000.00 | |||||
| Hongkong Tigermed Co., Limited | 526,381,265.18 | 526,381,265.18 | |||||
| 上海晟通國際物流有限公司Shanghai Shengtong International Logistics Co., Ltd | 29,730,000.00 | 30,730,000.00 | -1,000,000.00 | ||||
| 杭州英放生物科技有限公司Fantastic Bioimaging Co., Ltd. | 2,940,000.00 | 6,753,240.00 | 9,693,240.00 | ||||
| 杭州泰蘭醫藥科技有限公司Hangzhou Talent MedConsulting Co., Ltd. | 5,857,749.24 | 878,662.38 | 4,979,086.86 | ||||
| Jiaxing Clinflash Computer Technology Co., Ltd. | 501,000.00 | 501,000.00 | |||||
| 泰格新澤醫藥技術（嘉興）有限公司Tiger-Xinze Medical Technology (Jiaxing) Co., Ltd. | 1,018,132.50 | 4,791,420.00 | 5,809,552.50 | ||||
| 泰州康利華醫藥科技有限公司Taizhou Kanglihua Pharmaceutical Technology Co., Ltd | 19,380,000.00 | 19,380,000.00 | 6,120,000.00 |
| 杭州泰格益坦醫藥科技有限公司Hangzhou Tigermed-IntelliPV Co., Ltd | 10,274,000.00 | 13,440,000.00 | 23,714,000.00 | ||||
| 杭州泰煜投資諮詢有限公司Hangzhou Taiyu Investment Consulting Co., Ltd. | 1,020,000.00 | 1,020,000.00 | |||||
| 石河子泰譽股權投資合夥企業（有限合夥）Shihezi Taiyu Equity Investment Partnership | 18,097,991.13 | 1,123,810.70 | 16,974,180.43 | ||||
| 北醫仁智（北京）醫學科技發展有限公司Beijing Medical Development Co., Ltd. | 125,000,000.00 | 125,000,000.00 | 29,000,000.00 | ||||
| Hangzhou Tigermed Jietong Inspection Technology Co., Ltd. | 8,000,000.00 | 8,000,000.00 | |||||
| 漯河煜康投資中心（有限合夥）Luohe Yukang Investment Center Partnership | 30,000,000.00 | 8,096,735.77 | 21,903,264.23 |
| 杭州泰格股權投資合夥企業（有限合夥）Hangzhou Tigermed Equity Investment Partnership | 464,156,700.00 | 242,082,653.60 | 706,239,353.60 | ||||
| 泰州泰格捷通醫藥科技有限公司Taizhou Tigermed-Jyton Medical Tech. Co., Ltd. | 540,000,000.00 | 540,000,000.00 | |||||
| Hangzhou Tigermed Cloud Hospital Management Co., Ltd. | 200,000.00 | 200,000.00 | |||||
| 嘉興益新泰格醫藥科技有限公司EPS Tigermed (Jiaxing) Co., Ltd. | 1,530,000.00 | 1,530,000.00 | |||||
| 北京泰格興融投資管理有限公司Beijing Tigermed Xingrong Investment Management Co., Ltd. | 1,020,000.00 | 1,020,000.00 | |||||
| 北京雅信誠醫學信息科技有限公司Beijing Yaxincheng Medical InfoTech Co., Ltd. | 118,800,000.00 | 118,800,000.00 | |||||
| Tigermed USA Inc | 1,050,450.00 | 1,050,450.00 |
| Total | 2,021,925,223.84 | 386,917,763.60 | 49,029,208.85 | -1,000,000.00 | 2,360,813,778.59 | 35,120,000.00 |
（2）Investment in associates and joint ventures
Unit: RMB
| Investee | Opening balance (Book value) | Increase/Decrease | Closing balance(Book value) | Closing balance of provision for impairment | |||||||
| Investments increased | Investments decreased | Investment income or loss recognised under equity method | Adjustments to other comprehensive income | Other changes in equity | Cash dividends or profits declared | Provision for impairment | Others | ||||
| I. Joint ventures | |||||||||||
| II. Associates | |||||||||||
| 杭州頤柏健康管理有限公司Hangzhou Yibai Health Management Co., Ltd. | 46,905,872.19 | 10,687,500.00 | -23,355,563.72 | 12,862,808.47 | |||||||
| 蘇州益新泰格醫藥科技有限公司(Suzhou) Tigermed | 9,464,740.49 | -127,445.68 | 9,337,294.81 | ||||||||
| 益新泰格（南通）醫藥科技有限公司EPS Tigermed | 15,436,168.73 | 167,507.04 | 15,603,675.77 | ||||||||
| 上海觀合醫藥科技有限公司Teddy Clinical Research Laboratory (Shanghai) Limited | 18,284,826.43 | 400,000.00 | 5,376,844.36 | 23,261,670.79 | |||||||
| 上海謀思醫藥科技有限公司Mosim Co., Ltd. | 42,090,212.10 | 6,742,908.62 | 3,960,000.00 | 44,873,120.72 | |||||||
| Sub-total | 90,091,607.84 | 42,090,212.10 | 11,087,500.00 | -11,195,749.38 | 3,960,000.00 | 105,938,570.56 | |||||
| Total | 90,091,607.84 | 42,090,212.10 | 11,087,500.00 | -11,195,749.38 | 3,960,000.00 | 105,938,570.56 |
4. Operating income and operating cost
Unit: RMB
| Item | Current period | Preceding period | ||
| Revenue | Cost | Revenue | Cost | |
| Main operation | 1,158,795,430.23 | 789,418,727.44 | 889,760,768.78 | 620,985,342.98 |
| Other operation | 18,496,570.19 | 13,930,843.50 | 7,409,938.26 | 6,174,268.49 |
| otal | 1,177,292,000.42 | 803,349,570.94 | 897,170,707.04 | 627,159,611.47 |
Whether new revenue standard been applied or not
□ Yes √ No
5. Investment income
Unit: RMB
| Item | Current period | Preceding period |
| Investment income from long-term equity investments under cost method | 188,420,577.80 | 88,550,064.83 |
| Investment income from long-term equity investments under equity method | -11,195,749.38 | 7,813,623.94 |
| Investment income from disposal of long-term equity investments | 23,649,650.15 | 792,000.00 |
| Investment income from disposal of available-for-sale financial assets | 5,045,284.88 | |
| Gains from remeasurement of the remaining equity at fair value after the loss of control | 32,444,545.45 | |
| Gains arising from the difference between the investment cost for acquisition of subsidiaries, associates and joint ventures by an enterprise and the fair value of the identifiable net assets of the invested entity at the time of acquisition | 12,240,000.00 | |
| Investment income from financial assets at fair value through profi t or loss | 1,785,179.53 | |
| Investment income from other non-current financial assets through profi t or loss | 5,551,606.40 | |
| Investment income from disposal of other non-current financial assets | 24,457,445.50 | |
| Total | 275,568,075.92 | 103,986,153.18 |
XVII. SUPPLEMENTAL INFORMATION
1. Breakdown of non-recurring profit or loss for the current period
√ Applicable □ Not applicable
Unit: RMB
| Item | Amount | Explanation |
| Profit/loss on disposal of non-current assets | 43,737,385.02 | Mainly due to the disposal of long-term equity investments and fixed assets and other long-term assets during the reporting period. |
| Government grant recognised in current profit or loss, except for those acquired in the ordinary course of business and granted on fixed amount basis or enjoyed on continuous fixed amount basis subject to certain standards | 16,216,189.63 | Mainly due to the government subsidies received during the reporting period. |
| Gains arising from the difference between the investment cost for acquisition of subsidiaries, associates and joint ventures by an enterprise and the fair value of the identifiable net assets of the invested entity at the time of acquisition | 41,488,162.45 | Mainly attributable to the investment income generated from the Company's newly added subsidiaries during the reporting period. |
| Profit/loss from entrusted investment or management of assets | 1,371,800.46 | Mainly attributable to the income generated from the Company's wealth management products during the reporting period. |
| Apart from hedging instruments relating to the normal operations of the Company, profit or loss from change in fair value of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities and derivative financial liabilities, and investment income from disposal of held-for-sale financial assets, derivative financial assets, held-for-sale financial liabilities, derivative financial liabilities and other debt investment | 277,841,928.30 | Mainly due to the investment income recognised during the holding and disposal of other non-current financial assets of the Company during the reporting period, the gains from changes in fair value of other non-current assets; after losing control, the remaining equity is remeasured at fair value. |
| Other non-operating income and expenses save for the above | -470,286.85 | |
| Less: Effect of income tax | 23,682,926.62 | |
| Effect of minority interests | 72,987,320.63 | |
| Total | 283,514,931.76 | -- |
Notes for the Company’s non-recurring gains or losses as defined in the Explanatory Announcement on InformationDisclosure for Companies Offering Their Securities to the Public No.1 – Non-recurring Gains or Losses and thenonrecurringgains or losses as illustrated in the Explanatory Announcement on Information Disclosure for CompaniesOffering Their Securities to the Public No.1 – Non-recurring Gains or Losses defined as its recurring gains or losses.
□ Applicable √ Not applicable
2. ROE and earning per share
| Profit for the reporting period | Weighted-average return on net assets | Earning per share | |
| Basic earning per share (yuan/share) | Diluted earning per share (yuan/share) | ||
| Net profit attributable to common stockholders of the Company | 23.65% | 1.13 | 1.13 |
| Net profit attributable to common stockholders of the Company after non-recurring profit or loss | 15.69% | 0.75 | 0.75 |
Section 13 Documents available for Inspection
1. The financial statements bearing signatures and seals of Ms. Cao Xiaochun, legal representative, Mr. Gao Jun,person-in-charge of accounting affairs and Mr. Yu Guoyun, head of accounting department.
2. Originals of auditors’ reports bearing seals of the accounting firm and signatures and seals of the certified publicaccountants.
3. The text of 2019 annual report signed by Ms. Cao Xiaochun, legal representative.
4. Originals of all the Company’s documents and originals of announcements, which have been disclosed on thewebsites designated by CSRC during the reporting period.
5. Other relevant information.