lnterim Report 2022
为明天 为健康
Joincare Pharmaceutical Group Industry Co., Ltd.
FOR THE HEALTH FOR THE FUTURE
Stock abbreviation:健康元Stock code:600380
【Mission】For the health, For the future【Vision】Attentively Develop High-quality Medicines and lnnovative Medicines【Core Values】Putting People at the first place, Valuing Workmanship and Quality,
Pursuing Innovation and lntegrity, Promoting Cooperation and Sharing
I The Board of Directors (the“Board”), the Board of Supervisors and directors, supervisors and senior management of theCompany hereby warrant the truthfulness, accuracy and completeness of the contents of the interim report (the“Report”),and that there are no false representations, misleading statements or material omissions contained in the Report, andseverally and jointly accept responsibility.II All the directors of the Company attended the Board meeting.III The interim report of the Company is unaudited.IV Mr. Zhu Baoguo (朱保国), the person-in-charge of the Company, and Mr. Qiu Qingfeng (邱庆丰), the person-in-chargeof the Company’s accounting work and the person-in-charge of the accounting department (the head of the accountingdepartment), declare that they hereby warrant the truthfulness, accuracy and completeness of the financial statementscontained in the Report.V Profit distribution plan or plan for conversion of capital reserve to share capital approved by the Board during the
Reporting PeriodNot applicableVI Risk declaration for the forward-looking statements√ Applicable?□ N/AThe Report contains forward-looking statements which involve the future plans, development strategies, etc. of theCompany, yet do not constitute substantive undertakings of the Company to investors. Investors should exercise cautionprior to making investment decisions.VII Whether there is non-operating use of funds by the controlling shareholder and their related parties
NoVIII Whether there is a violation of the prescribed decision-making procedures to provide external guaranteesNoIX Whether more than half of directors cannot warrant the truthfulness, accuracy and completeness of the Report disclosedby the CompanyNoX Significant risk warningsThere is no exceptionally significant risk that will have a material impact on the productions and operations of theCompany during the Reporting Period. The Company has described various risks related to productions and operationsthat the Company may face and the corresponding response measures taken. Please refer to“Risks”in Chapter 3“Management Discussion and Analysis”.XI Others
□ Applicable
√ N/AXII The Report is prepared in both Chinese and English. In case of any discrepancies between two versions, the Chinese
version shall prevail.
Important Notice
FOR THE HEALTH FOR THE FUTURE
lnterim Report 2022
Table ofContents
Financial Highlights 2Chapter 1 Definitions 4Chapter 2 Company Profile and Major Financial Indicators 7Chapter 3 Management Discussion and Analysis 12Chapter 4 Corporate Governance 35Chapter 5 Environmental and Corporate Social Responsibility 40Chapter 6 Major Events 67Chapter 7 Changes in Equity and Shareholders 82Chapter 8 Information on Preferred Shares 87Chapter 9 Information on Bonds 89Chapter 10 Financial Statements 91
List of documents availablefor inspection
The Financial Statements signed and sealed by the person-in-charge ofthe Company, the person-in-charge of the Company’s accounting workand the person-in-charge of the accounting department (the head of theaccounting department)The original copies of all documents and announcements of the Companywhich have been disclosed to the public on the website designated byCSRC during the Reporting Period
85.65
0.4235
0.4232
8.01
8.04
78.35
0.3514
0.3504
6.87
5.98
1. Major nancial indicators (RMB100 million)
2. Principal businesses (RMB100 million)
Reporting PeriodSame Period ofLast Year
Revenues
EPS (RMB/share)EPS-Diluted (RMB/share)
Net prot attributableto shareholders of the
listed company
Net prot attributable to shareholdersof the listed company after deductingthe extraordinary gain or loss
Chemical pharmaceuticalsTraditional Chinese medicineHealth care productsDiagnostic reagents and equipmentChemical APIs and intermediates
6.06%
5.14
4.07%
3.46
0.64%
0.55
56.51%
47.99
32.64%
27.72
9.31%
16.57%34.47%
20.52%
20.78%
Revenuesfrom principalbusinesses:
84.92
Financial Highlights
Interim Report 2022
3. Segment growth (RMB100 million)
Chemical pharmaceuticalsBy segment
By product
Revenue
Revenue
Growth
Growth
Gastroenterology
Chemical APIs andintermediates
17.81
27.72
-8.16%
6.82%
3.28%
259%
36.26%
22.70%
-18.74%-11.43%
13.44
5.14
6.83
3.46
5.61
2.64
PsychiatryRespiratoryAnti-infectionGonadorelinhormone
Diagnostic reagentsand equipment
Traditional Chinesemedicine
Definitions
Interim Report 2022
In this Report, unless the context otherwise requires, the following expressions shall have the following meanings:
Definitions of common termsCSRCRefers toChina Securities Regulatory CommissionSSERefers toShanghai Stock ExchangeSZSERefers toShenzhen Stock ExchangeBaiyeyuan or the ControllingShareholder
Refers toShenzhen Baiyeyuan Investment Co., Ltd.* (深圳市百业源投资有限公司)Company or the CompanyRefers toJoincare Pharmaceutical Group Industry Co., Ltd.*
(健康元药业集团股份有限公司)GDRRefers toGlobal Depositary ReceiptsGMPRefers toGood Manufacturing PracticeGSPRefers toGood Supply PracticeBERefers toBioequivalenceBLARefers toBiologics License ApplicationWHORefers toWorld Health OrganizationCDERefers toCenter for Drug EvaluationEUARefers toEmergency Use AuthorizationsKOLRefers toKey Opinion LeaderMVRRefers toMechanical Vapor RecompressionQCRefers toQuality ControlLivzon GroupRefers toLivzon Pharmaceutical Group Inc.* (丽珠医药集团股份有限公司)Haibin PharmaRefers toShenzhen Haibin Pharmaceutical Co., Ltd.* (深圳市海滨制药有限公司)Xinxiang HaibinRefers toXinxiang Haibin Pharmaceutical Co., Ltd.* (新乡海滨药业有限公司)Taitai PharmaceuticalRefers toShenzhen Taitai Pharmaceutical Co., Ltd.* (深圳太太药业有限公司)Joincare HaibinRefers toJoincare Haibin Pharmaceutical Co., Ltd.* (健康元海滨药业有限公司)Taitai GenomicsRefers toShenzhen Taitai Genomics Inc. Co., Ltd.* (深圳太太基因工程有限公司)Jiaozuo JoincareRefers toJiaozuo Joincare Bio Technological Co., Ltd.* (焦作健康元生物制品有限公司)Joincare Daily-UseRefers toJoincare Daily-Use & Health Care Co., Ltd.* (健康元日用保健品有限公司)TopsinoRefers toTopsino Industries Limited* (天诚实业有限公司)Fenglei Electric PowerRefers toShenzhen Fenglei Electric Power Investment Co., Ltd.* (深圳市风雷电力投资有
限公司)
Chapter 1Definitions
Definitions of common termsHealth PharmaceuticalRefers toHealth Pharmaceutical (China) Co., Ltd.* (健康药业(中国)有限公司)Hiyeah IndustryRefers toShenzhen Hiyeah Industry Co., Ltd.* (深圳市喜悦实业有限公司)Shanghai FrontierRefers toShanghai Frontier Health Pharmaceutical Technology Co., Ltd.* (上海方予健康
医药科技有限公司)Appraisal InstitutionRefers toGuangdong Taitai Forenstic Test Institute* (广东太太法医物证司法鉴定所)Hong Kong PharmaceuticalRefers toHong Kong Health Pharmaceutical Industry Company Limited* (香港健康药业
有限公司)Health InvestmentRefers toHealth Investment Holdings Ltd.Joincare Special MedicineFood
Refers toJoincare (Guangdong) Special Medicine Food Co., Ltd.* (健康元(广东)特医食品
有限公司)Livzon MABRefers toLivzon MABPharm Inc.* (珠海市丽珠单抗生物技术有限公司)Livzon DiagnosticsRefers toZhuhai Livzon Diagnostics Inc.* (珠海丽珠试剂股份有限公司)Xinbeijiang PharmaceuticalRefers toLivzon Group Xinbeijiang Pharmaceutical Manufacturing Inc.* (丽珠集团新北江
制药股份有限公司)Ningxia PharmaceuticalRefers toLivzon Group (Ningxia) Pharmaceutical Manufacturing Co., Ltd.* (丽珠集团(宁夏)
制药有限公司)Gutian FuxingRefers toGutian Fuxing Pharmaceutical Co., Ltd.* (古田福兴医药有限公司)Fuzhou FuxingRefers toLivzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd.* (丽珠集团福州福兴医药
有限公司)Livzon HechengRefers toZhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd.* (珠海保税
区丽珠合成制药有限公司)Livzon LiminRefers toLivzon Group Limin Pharmaceutical Manufacturing Factory* (丽珠集团利民制药
厂)Livzon PharmaceuticalFactory
Refers toLivzon Group Livzon Pharmaceutical Factory* (丽珠集团丽珠制药厂)Shanghai LivzonRefers toShanghai Livzon Pharmaceutical Manufacturing Co., Ltd.* (上海丽珠制药有限公
司)Sichuan GuangdaRefers toSichuan Guangda Pharmaceutical Manufacturing Co., Ltd.* (四川光大制药有限
公司)Jiaozuo HechengRefers toJiaozuo Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd.* (焦作丽珠合
成制药有限公司)Jinguan Electric PowerRefers toJiaozuo Jinguan Jiahua Electric Power Co., Ltd.* (焦作金冠嘉华电力有限公司)Tianjin TongrentangRefers toTianjin Tongrentang Group Co., Ltd.* (天津同仁堂集团股份有限公司)LivzonBioRefers toZhuhai Livzon Biotechnology Co., Ltd.* (珠海市丽珠生物医药科技有限公司)
National COVID-19 VaccineWorking Group
Refers toWorking group for vaccine development under the State Council joint
prevention and control mechanism against COVID-19COVID-19Refers toA new coronavirus (SARS-CoV-2)COVID-19 pandemic orpandemic
Refers toThe outbreak of the disease caused by a new coronavirus called SARS-CoV-2Ruihua Certified PublicAccountants
Refers toRuihua Certified Public Accountants (Special General Partnership)Reporting PeriodRefers toFrom 1 January 2022 to 30 June 2022End of the Reporting PeriodRefers to30 June 2022Currency or unitRefers toRMB unless otherwise specified
*For identification purpose only
CompanyProfile andMajor Financial
Indicators
I Company profileChinese name of the Company健康元药业集团股份有限公司Abbreviation of the Chinese name健康元English name of the CompanyJoincare Pharmaceutical Group Industry Co., Ltd.Abbreviation of the English nameJoincareLegal representative of the CompanyZhu BaoguoII Contact persons and contact details
Board SecretaryRepresentative of Securities AffairsNameZhao Fengguang (赵凤光)Li Hongtao(李洪涛), Luo Xiao(罗逍)AddressJoincare Pharmaceutical Group Building, No. 17,
Langshan Road, North District, Hi-tech Zone,
Nanshan District, Shenzhen
Joincare Pharmaceutical Group Building, No. 17,Langshan Road, North District, Hi-tech Zone,Nanshan District, ShenzhenTelephone0755-86252656, 0755-862523880755-86252656, 0755-86252388Fax0755-862521650755-86252165E-mailzhaofengguang@joincare.comlihongtao@joincare.com, luoxiao@joincare.comIII Introduction of the Company’s basic informationRegistered addressJoincare Pharmaceutical Group Building, No. 17, Langshan Road, North District, Hi-tech
Zone, Nanshan District, ShenzhenHistorical changes inregistered address
Registered at B5, Hengfeng Industrial City, Hezhou Community, Huangtian Village, Xin’an
Town, Bao’an County on 18 December 1992
Changed its registered address to 4-5/F, Dongpeng Building, Shangmeilin Industrial Area,
Futian District, Shenzhen on 25 May 1994
Changed its registered address to 24/F, Block B, Fujian Building, Caitian South Road, Futian
District, Shenzhen on 4 July 1995
Changed its registered address to 23/F, Diwang Building, Shun Hing Square, No. 333,
Shennan East Road, Shenzhen on 20 June 1997
Changed its registered address to Taitai Pharmaceutical Industrial Building, the 5th
Industrial Area, Nanshan District, Shenzhen on 22 September 2000
Changed its registered address to 23/F, Diwang Building, Shun Hing Square, No. 5002,
Shennan East Road, Luohu District, Shenzhen on 4 June 2003
Changed its registered address to Joincare Pharmaceutical Group Building, No. 17,
Langshan Road, North District, Hi-tech Zone, Nanshan District, Shenzhen on 29 January
2008
Changed its registered address to Joincare Pharmaceutical Group Building, No. 17,
Langshan Road, North District, Hi-tech Zone, Nanshan District, Shenzhen on 27 November
2012Office addressJoincare Pharmaceutical Group Building, No. 17, Langshan Road, North District, Hi-tech
Zone, Nanshan District, ShenzhenPostal code of Office address518057Website http://www.joincare.comE-mailjoincare@joincare.comIndex for query of changesduring the Reporting Period
There was no change during the Reporting Period
Chapter 2Company Profile and Major Financial Indicators
Interim Report 2022
IV Introduction of changes in information disclosure and places for inspection
Name of designated newspapers for informationdisclosure by the Company
China Securities Journal, Securities Times, Securities Daily,and Shanghai Securities NewsWebsite for publication of the interim report http://www.sse.com.cnPlace for inspection of the interim report of the CompanyOffice address of the CompanyIndex for query of changes during the Reporting PeriodThere was no change during the Reporting PeriodV Company stock profileClass of stockListed onStock AbbreviationStock codeStock abbreviation prior to changeA ShareShanghai Stock Exchange健康元600380太太药业, S健康元
VI Other relevant information
□ Applicable?
√ N/AVII Principal accounting data and financial indicators of the Company(I) Principal accounting data
Unit: Yuan Currency: RMB
Principal accounting dataReporting Period Same Period Last Year
Increase/(decrease) forthe Reporting Period ascompared to the sameperiod last year(From January to June)(%)Revenues8,564,945,285.557,835,372,274.669.31Net profit attributable to Shareholders ofthe listed company
801,268,519.50687,347,494.5316.57Net profit attributable to Shareholders ofthe listed company after deducting theextraordinary gain or loss
803,994,432.03597,892,327.4334.47Net cash flow from operating activities1,902,953,224.79745,787,513.36155.16
End of theReporting PeriodEnd of the Last Year
Increase/decreaseas at the end of theReporting Period ascompared to the end of
last year
(%)
Net assets attributable to Shareholders ofthe listed company
11,922,666,818.9311,820,293,656.690.87Total assets32,181,512,667.2931,103,900,389.293.46
(II) Major Financial Indicators
Major Financial IndicatorsReporting Period Same Period Last Year
Increase/decrease forthe Reporting Period ascompared to the sameperiod last year(From January to June)(%)EPS (RMB/share)0.42350.351420.52EPS Diluted (RMB/share)0.42320.350420.78Basic earnings per share after deductingthe extraordinary gain or loss (RMB/share)
0.42490.305738.99Weighted average return on net assets (%)6.656.04Increased by 0.61
percentage pointWeighted average return on net assets afterdeducting the extraordinary gain or loss (%)
6.675.26Increased by 1.41
percentage pointsDescription of principal accounting data and financial indicators of the Company√ Applicable?□ N/AAt the end of the Reporting Period, the net profit attributable to Shareholders of the listed company after deducting theextraordinary gain or loss was RMB804 million, representing a year-on-year increase of 34.47%, mainly due to the growth ofthe sales revenues from the chemical pharmaceuticals and APIs products during the Reporting Period, which is the maindriver of the growth of the net incomes. The net cash flow from operating activities was RMB1, 903 million, representinga year-on-year increase of 155.16%, mainly due to an increase of cash collections of sales revenues during the ReportingPeriod.VIII Differences in accounting data under domestic and foreign accounting standards
□ Applicable?
√ N/A
Interim Report 2022
IX Items and amounts of extraordinary gains and losses√ Applicable?□ N/A
Unit: Yuan Currency: RMBItems of Extraordinary Gains and LossesAmountsNotes (If applicable)
Gains and losses on disposal of non-current assets3,731,885.55Proceeds from disposal of fixed assetsGovernment grants as included in the profit or loss ofcurrent period (Note: Government grants that are closelyrelated to the normal business, in compliance with therelevant policies and continuously entitled with specificamount according to certain standards are not included)
94,185,202.59Government grants through profit and
loss for the Period
Gains and losses on fair value changes derived from holdingof financial assets held for trading, derivative financial assets,financial liabilities held for trading, derivative financialliabilities, and investment income generated on disposal offinancial assets held for trading, derivative financial assets,financial liabilities held for trading, derivative financialliabilities and other debt investments, except for effectivehedging activities related to the ordinary operating businessof the Company
-98,936,528.71Gains or losses arising from changes in
fair value of financial assets/liabilitiesheld for trading, and investment gainsfrom holding and disposal of financialassets/liabilities held for trading
Reversals of provision for impairment of accounts receivableand contract assets with individual impairment test
158,470.77Reversal of accounts receivable tested
for impairment individuallyOther non-operating Revenues and non-operatingexpenditures apart from the above items
-2,270,691.97Other non-operating Revenues and
non-operating expenditures apart from
the above itemsLess: Effect of income tax10,439,515.79Effect of the above items on income taxEffect of minority equity (after tax)-10,845,265.03The portion of the above items to which
minority shareholders are entitledTotal-2,725,912.53Explanations for classifying items of extraordinary gains and losses defined in the Explanatory Announcement No. 1 forPublic Company Information Disclosures – Extraordinary gains and losses as items of recurring profit or loss
□ Applicable?
√ N/A
X Others
□ Applicable?
√ N/A
ManagementDiscussion and
Analysis
Interim Report 2022
I Description of the industry in which the Company operates and principalbusinesses of the Company during the Reporting Period(I) Principal businesses and products of the CompanyThe Company is primarily engaged in the R&D, production and sale of pharmaceutical products and health care products.Pursuant to the Guidelines for the Industry Classification of Listed Companies (2012 Revision) issued by CSRC, the Companyoperates in the pharmaceutical manufacturing industry (C27).At present, the business scope of the Company covers chemical pharmaceuticals, traditional Chinese medicine, chemicalactive pharmaceutical ingredients (APIs) and intermediates, diagnostic reagents and equipment, and health care products,etc. The comprehensive products portfolio provides more market opportunities and greater room for development for theCompany. Below diagram sets forth the main products of the Company:
Chapter 3Management Discussion and Analysis
LevosalbutamolHydrochloride NebuliserSolution (丽舒同)
Leuprorelin AcetateMicrospheres forInjection (贝依)
Ilaprazole Sodium forInjection (壹丽安)
Meropenem for Injection(倍能)
Fluvoxamine MaleateTablets (瑞必乐)Perospirone HydrochlorideTablets (康尔汀)Ilaprazole Enteric-Coated Tablets (壹丽安)
Voriconazole forInjection (丽福康)Bismuth PotassiumCitrate Capsules (丽珠得乐)Bismuth PotassiumCitrate Tablets/Tinidazole Tablets/Clarithromycin Tablets(丽珠维三联)
Urofollitropin forInjection (丽申宝)Recombinant HumanChoriogonadotropin alfafor Injection (丽得宝)Budesonide Suspensionfor Inhalation (雾舒)Compound IpratropiumBromide Solution forInhalation (舒坦琳)Ipratropium BromideSolution for Inhalation(丽雾安)
Diagnostic Kit for IgM / IgGAntibody to Coronavirus(2019-nCoV) (Lateral Flow)
Eagle’s American GinsengTeaJingxin Menocare EssenceAutoimmunity multipledetection platformMeropenem TrihydrateD-7ACA7-ACAMilbemycin oximeAcarboseMevastatinDaptomycinPhenylalanineVancomycin HydrochlorideImipenem and Cilastatin Sodium
Cold medicineAnti-viral GranulesAnti-tumor medicineShenqi Fuzheng Injection
Intelligent MeshNeblizer
Respiratory
Chemical pharmaceuticals
Traditional Chinesemedicine
Chemical APIs andintermediates
Diagnostic reagentsand equipment
Health care products
Assistedreproduction
GastroenterologyAnti-infectionPsychiatry
(II) Business model of the CompanyWith the stable operation and rapid development over the years, the Company has become an integrated pharmaceuticalgroup which is driven by scientific research and innovation and integrates the R&D, production, sale and service ofpharmaceutical and health care products. It has complete systems of R&D, procurement, production and sale. Mainbusiness functions of the Company are as follows:
1. R&D
Taking independent R&D as the mainstay and combining external introduction and cooperative development, theCompany has been emphasizing cutting-edge technology and unmet clinical needs. Focusing on innovative medicinesand high-barrier complex formulation, the Company has established an efficient R&D innovation management model. Interms of independent innovation, the Company has diversified, multi-dimensional R&D organizations with mature R&Dteams for chemical pharmaceuticals, traditional Chinese medicine, biologics, APIs, diagnostic reagents and health careproducts. Based on technology platform construction, the Company has built a clear product R&D pipeline centeringon key areas such as respiration, tumor immunity and psychiatry. In terms of cooperative innovation, the Companyhas launched technical cooperation with domestic and foreign scientific research institutions by way of commissioneddevelopment or cooperative development, and introduced new technologies and products that meet the strategical goalof the Company through technology transfer or licensing to implement industrial transformation, so as to reinforce andstrengthen our position and strategy in leading fields and emerging fields.
2. Procurement
In terms of procurement, the Company pays close attention to effectiveness, quality and cost of procurement and hasestablished long-term and stable partnership with many suppliers. Active pharmaceutical ingredients, supplementarymaterials, and packaging materials is purchased and stocked up by manufacturers according to production schedules.The Company has developed strict quality standards and procurement management systems and required subordinatemanufacturers to make procurements in accordance with the GMP. Meanwhile, the Company established long-termstrategic partnerships with bulk material suppliers, and strengthened the management of supply quality and cost controlbased on strict quality standards. The Company has established an internal evaluation system and files of market prices soas to promptly master market information for procurement through comparisons of quality and price.
3. Production
In terms of production, the Company adopts the principle of market demand-oriented approach. Specifically, the SalesDepartment of the Company investigated market demands, made sales plans, and comprehensively considered factorssuch as the product inventory quantity and capacity of production lines of the Company so as to determine the monthlyproduction quantities and specifications. Moreover, the purchase orders of raw materials are determined according to theproduction schedule and the inventory levels of raw materials. The final production plans are issued upon approval of themanagement of the Company and implemented by the Production Technology Department of the Company.The Company carried out production in strict compliance with the GMP. The Company and its affiliates have establisheda sound quality management system and implemented the qualified person system. In terms of quality control, theCompany established a strict and sound production quality assurance system, and was geared to international standardsand subject to international certification while in compliance with national standards. The Company conducted annualGMP self-inspection, ISO9001 internal and external audits, and was subject to various external audits. It actively pursuedthe internationally advanced GMP management, and implemented whole-process quality control over supplier selection,audit, incoming material inspection, production process, product release from factory, and market tracking with goodsystem operation.
Interim Report 2022
4. Sales
(1) Drug formulation products
End customers of drug formulation products (including Chemical pharmaceuticals, traditional Chinese medicine) of theCompany are mainly hospitals, clinics, and retail pharmacies. In line with the pharmaceutical industry practice and thesales model of most peers in the industry, the Company has conducted sales of drug formulation products through drugdistribution enterprises. The Company carried out selection and centralized management of qualified drug distributionenterprises (with Drug Supply Certificate, GSP Certification, etc.) according to their distribution capability, marketfamiliarity, financial strength, credit record, and operation scale. General sales process: After end customers place purchaseorders to distribution enterprises, drug distribution enterprises will send those orders to the Company according to theirinventories, distribution agreements and conditions; then, the Group will deliver products to drug distribution enterprisesand do the revenues recognitions.
(2) APIs and intermediates
Main target customers of APIs are large pharmaceutical manufacturers. The selling prices are determined based on a set ofcomprehensive factors such as costs of production, inventory levels, industry rivalry and market conditions. The detailedprocess of price determination are as follows: The sales and marketing department conduct weekly or bi-weekly meetingsto analyze the current market conditions and the trends and drivers of prices; the selling prices are determined based on aset of comprehensive factors such as market trends, costs of production, inventory levels; the selling prices will be effectiveonce are reported by the sales department to our management team and get approvals.Specific sales methods of APIs include: ① Domestic market: The Company directly signs product sales contracts with largemanufacturers to directly sell products to customers. Meanwhile, the Company also sells products through distributors. ②Overseas market: The Company directly sells products in the overseas market and also sells products through distributorsin areas with high risks. At present, products of the Company are mainly exported to over 60 countries and regions in Asia,Europe, North America, and Africa.
(3) Diagnostic reagents and equipment
Diagnostic reagents and equipment sold by the Company are both in-house manufactured and imported. Main endcustomers are hospitals, centers for disease control and prevention, and health departments. The Company mainly sellsthose products in combination with direct sales and sales through drug distribution enterprises.The Company has an experienced sales team responsible for the sales of diagnostic reagents and equipment andprovision of marketing support for some drug distribution enterprises. The Company carried out selection and centralizedmanagement of qualified drug distribution enterprises (with Drug Supply Certificate, GSP Certification, etc.) according totheir distribution capability, market familiarity, financial strength, credit record, and operation scale.
(4) Health care products
The sales model of health care products is mainly distributor management model. Product promotion, price control, andchannel carding are managed and improved with the distributor distribution channel and terminal coverage capability.At present, the Company has set up 27 provincial branches and 92 subordinate offices across China and maintainedlong-term partnership with distributors with better area coverage capability for stable strategic alliance and commondevelopment. The Company has cooperated with about 103 primary distributors in total, including 78 businesses in drugproduction line and around 25 businesses in food production line with over 150,000 subordinate secondary businessesand terminal businesses in drug and food production lines. Products are well managed and promoted through the tieredmarketing channel. In addition to the traditional distribution management model, the Company realizes segment growththrough coordinated marketing in E-commerce channel.
(III) Analysis of industry developmentAs a national strategic and emerging industry which concerns national economy and the people’s livelihood,pharmaceutical industry is an integral part of the national economy. According to theDevelopment Plan of thePharmaceutical Industry during the “14th Five-Year Plan"
Period, the overall development level of the pharmaceuticalindustry is expected to reach a new level. During the“13th Five-Year Plan”period, the added value of the pharmaceuticalindustry above designated scale increased by 9.5% annually, 4.2 percentage points higher than the overall industrialgrowth rate, and its proportion in the whole industrial added value increased from 3.0% to 3.9%. The revenue and totalprofits of enterprises above designated scale increased by 9.9% and 13.8% annually, ranking high among all industries.At the same time, the scale of leading pharmaceutical manufacturing enterprises has further expanded, contributing tothe steady increase of the industrial concentration. In the first half of 2022, reforms in the pharmaceutical and health caresystem have deepened further, the environment for innovation continues to improve, and the pharmaceutical industrycontinues to make progress in the direction of further transformation and upgrading and high-quality development thatencourages innovation. As the aging population of our nation grows and the level of urbanization keeps on increasing, thepharmaceutical industry of our nation, in the long run and as a whole, will show a continuous upward development trend.Meanwhile, we should also pay attention to the severe challenges and universal impacts brought by the COVID-19pandemic and the ever-mutating COVID-19 variants on national life and the production and operation of pharmaceuticalenterprises. In the first half of 2022, the domestic outbreak of COVID-19 occurred and spread repeatedly. Especially in someareas, outbreak emergencies were declared and cases of successive variants reported. In the short term, the preventionand control of domestic pandemic remains rigorous.Data of National Bureau of Statistics shows that in the first half of 2022, enterprises in the pharmaceutical manufacturingindustry above designated scale in China have realized revenues of RMB1,400.78 billion, representing a year-on-yeardecrease of 0.6%; operating costs of RMB815.96 billion, representing a year-on-year increase of 10.3%; total profits ofRMB220.95 billion, representing a year-on-year decrease of 27.6%.(IV) Industry status of the CompanyThrough years of development, the Company has become an integrated pharmaceutical enterprise covering multipleareas including chemical pharmaceuticals, chemical APIs and intermediates, traditional Chinese medicine, diagnosticreagents and equipment as well as health care products. Chemical pharmaceuticals are the largest revenue generator ofthe Company, among which drugs for alimentary tract medicine, anti-infective drugs and gonadorelin hormone drugsare traditional competitive products of the Company, with key products securing a long-term position in national drugformulation market segment, and respiratory and psychiatrical medicine have been the focus of the Company, with keyproducts maintaining a strong sales growth momentum.During the Reporting Period, the Company, with solid strength in R&D and production and steady marketing presence,ranked Top 9 in“2021 Annual Ranking of Top 100 Chinese Chemical Drug Enterprises”under“2021 Annual Ranking of Top100 Enterprises in Pharmaceutical Industry in China” of menet.com.cn.(V) Performance drivers in the Reporting PeriodIn the first half of 2022, the Company actively implemented sales planning, promoted marketing and reinforced salesspecialization amid domestic localized outbreaks and stricter industry supervision and access policies. In addition, theCompany increased digital marketing and enhanced delicacy management. That is how we can realize steady growthof main business revenue and consolidate the foundation and ability of sustainable development of enterprises. Duringthe Reporting Period, sales of main varieties in key specialist areas, especially in fields of respiratory system, psychiatry,gonadorelin hormone of the Company kept steady growth, and contribution of sales revenue of key formulation productsto overall revenues was continuously improved. In addition, the sales revenue of API segment grew noticeably with anobvious increase of gross profit rate as the Company taken measures to integrate resources, adjust product mix, reinforceinternational certification while actively using advanced technologies including synthetic biology and continuousproduction to ensure green production.
Interim Report 2022
II Analysis of core competitive strengths during the Reporting Period√ Applicable?□ N/A
1. Leading PRC integrated pharmaceutical company under continuous innovation and development
The Company is primarily engaged in the R&D, production and sale of pharmaceutical products and health care products.The business scope of the Company covers chemical pharmaceuticals, chemical APIs and intermediates, traditionalChinese medicine, diagnostic reagents and equipment, as well as health care products, allowing the Company to establishcompetitive advantages across various therapeutic areas such as respiratory, anti-infection, assisted reproduction,gastroenterology, psychiatry, and tumor immunity. 1) Innovative R&D drives growth: The Company has developed andlaunched a number of innovative medicine products and high-barrier complex formulation products, strengtheningthe Group’s product portfolio and drug candidates in the pipeline. 2) The Company has first-tier commercializationability, and its sales network covers all provinces in China and over 80 overseas countries and regions in the world. TheCompany emphasizes scientific promotion and evidence-based marketing. By building a professional marketing team,the Company has established a comprehensive marketing system, and market education and brand building have beendeeply strengthened through digital marketing. Leveraging our comprehensive sales channels, broad market coverage,leading digital marketing and brand awareness, the Company is able to sell the products at scale in an efficient manner.
3) Cross-industry and multi-specialist innovative R&D and coordinated development: On the one hand, the Company
actively adapts to the changes in the pharmaceutical market and constantly adjusts its product strategy and R&D directionaccording to policies and clinical needs. This will realize the continuous iteration and upgrade of the main products;On the other hand, the Company fully utilizes external scientific research and commercial resources, such as strategiccollaboration with Chinese Academy of Sciences, Tencent Quantum Lab and other scientific research institutes andinnovative companies, and invests in cutting-edge biotechnology companies to expand the Company’s product portfolioand R&D pipeline and realize the Company’s sustainable development.
2. Strong R&D capabilities, diversified product portfolio and leading commercialisation capabilities
Focusing on innovative medicines and high-barrier complex formulation, the Company has formed diversified productportfolio. With the huge clinical demand and high product quality, it has established market competitive advantagesin many pharmaceutical segments. The Company’s chemical pharmaceuticals cover gastroenterology diseases, assistedreproduction, infectious diseases, respiratory diseases, psychiatric diseases, tumor and other disease treatment fields,among which alimentary tract proton pump inhibitor (PPI) medicines, gonadorelin hormone drugs, and inhalationformulation for respiratory diseases have an advantageous market position. Relying on APIs, the Company’s core products,together with our chemical APIs and intermediates, form an integrated and stable pharmaceutical industry chain of“APIs-integration drug formulations”. Meanwhile, the Company actively develops overseas markets, and our products aremarketed and distributed worldwide, facilitating strategic cooperation with many internationally renowned pharmaceuticalcompanies. In addition, the Company also has a number of traditional Chinese medicine and in vitro diagnostic reagentproducts, and has accumulated resources and extensive brand influence in health care products for many years.
3. Making breakthroughs in the key R&D and industrialization technologies of Complex formulation
The technology platform, which has been developed over the years in the field of innovative medicines and high-barriercomplex formulation, enables the Company to address the complex process problems in the R&D and productionof relevant drugs. Guided by clinical value, the Company develops R&D projects with high short-term certainty andcutting-edge technologies with long-term growth potential (such as AI-driven drug molecular design, proteolysis targetedchimeric (PROTAC), synthetic biology, gene-editing and cellular treatment, etc.). All in all, the Company’s R&D systemcovers through-cycle of drug development and production. Based on the mature R&D platform of innovative medicinesand high-barrier complex formulation, the Company has designed extensive pipeline in fields with significant clinicaldemand such as respiration, gastroenterology, assisted reproduction, psychiatry and tumor.
4. Stable management and R&D team with expertise, long-term vision and commitment to social
responsibilityThe Company has a stable, visionary and experienced, results-oriented management team and an outstanding talent team.Outstanding leaders are the key to the Company’s rapid development. The founder of the Company has over 30 years ofexpertise in the pharmaceutical industry as well as a global vision and a strategic mindset. With a deep industry insight, thefounder has led us developing platform technologies centered on high-barrier complex formulation, which has establishedleading position of the Group with sustainable development in the broader healthcare industry. The senior managementteam of the Company has over 20 years of industry experience on average, with an average of more than 10 years of servicein the Company, and has a thorough understanding of market demand, industry development and growth opportunities.Each key R&D field of the Company is led by industry-leading scientists and accompanied by an efficient R&D managementteam. In addition, the Company has upheld the core value of“Putting People First, Valuing Workmanship and Quality,Pursuing Innovation and Truth, Promoting Cooperation and Sharing”and laid emphasis on talent team training to builda diversified reserve of talents with global vision, advanced knowledge, strong implementation capability and sense ofself-reliance. Driven by the corporate culture of pursuing excellence, the talent team works diligently and conscientiouslyto jointly contribute to the sustainable development of the enterprise through teamwork and collaboration.III Discussion and analysis of business conditions
1. Main business conditions during the Reporting Period
During the Reporting Period, the Company realized revenues of RMB8,565 million, representing a year-on-year increaseof approximately 9.31%; a net profit attributable to shareholders of the listed company of RMB801 million, representing ayear-on-year increase of approximately 16.57%, and a net profit attributable to shareholders of the listed company afterdeducting the extraordinary gains or loss of RMB804 million, representing a year-on-year increase of approximately 34.47%.Business development of various segments of the Company is as follows:
(1) Livzon Group (excluding Livzon MAB)
As at the end of the Reporting Period, the Company directly and indirectly held 44.80% equity interest in Livzon Group(000513.SZ, 01513.HK). During the Reporting Period, Livzon Group (excluding Livzon MAB) realized revenues of RMB6,296million, and a net profit attributable to shareholders of the listed company of about RMB513 million. For the details ofbusiness conditions of Livzon Group, please refer to the 2022 Interim Report of Livzon Group.
(2) Livzon MAB
As at the end of the Reporting Period, the Company held 55.92% equity interest in Livzon MAB and the amount affectingthe Company’s net profit attributable to the parent company for the current period was approximately RMB-140 million.During the Reporting Period, Livzon MAB focused on promoting the application on conditional marketing approval ofthe Recombinant SARS-CoV-2 Fusion Protein Vaccine (重组新型冠状病毒融合蛋白疫苗) (“V-01”) project. Livzon MAB hascompleted the Phase III clinical master analysis report for sequential immunization and basic immunization, submittedrelated application materials to CDE, and apply sequential EUA (Emergency Use Authorization) with National COVID-19Vaccine Working Group. In terms of overseas registrations, Livzon MAB has submitted the EUA filings in the Philippines,Indonesia and Malaysia, and has completed the submission of registration filings for the export of stock solution toPakistan; Livzon MAB actively communicated with WHO on the EUL (Emergency Use Listing) application for V-01. Inaddition, in response to the global trend of COVID-19 pandemic and the prevalence of COVID-19 variants, Livzon MABdeveloped several vaccines against the variants and related bivalent vaccines, and carried out animal and clinical trialresearch related to enhanced immunization/sequential immunization.
Interim Report 2022
Meanwhile, Livzon MAB continued to focus on new molecules, new targets and differentiated molecular designs in thefields of tumors, immune diseases and assisted reproduction. During the Reporting Period, Livzon MAB has made phasedprogress in the R&D of the following projects: Recombinant Human Choriogonadotropin alfa for Injection (注射用重组人绒促性素) was approved for marketing in 2021 and was already on sale, which is the first generic drug in China,and Livzon MAB has been promoting overseas registrations and has submitted applications for overseas registrationin Uzbekistan, Tajikistan and Nigeria; the BLA application of Tocilizumab Solution for Injection (托珠单抗注射液) (i.e.Recombinant Humanized Anti-human IL-6R Monoclonal Antibody Solution for Injection (重组人源化抗人IL-6R单克隆抗体注射液) is under review by CDE, and it successfully passed the on-site verification of drug registration and the registrationinspection report has been received. In addition, Livzon MAB has been actively promoting the PQ (Pre-qualification) withWHO. The phase Ib clinical interim analysis for psoriasis indication for Recombinant Anti-human IL-17A/F HumanizedMonoclonal Antibody for Injection (重组抗人IL-17A/F人源化单克隆抗体注射液) was completed, both high, medium andlow dose groups demonstrated good efficacy and safety; phase II clinical subjects were enrolled with efficacy and safetyunder observation. In addition to advancing projects in the clinical phase, Livzon MAB is also exploring through R&D inareas such as bispecific antibodies and cell therapy.
(3) Joincare (excluding Livzon Group and Livzon MAB)
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized revenues of RMB2,371 million,up about 35.81% compared with the same period last year; and realized a net profit attributable to shareholders of listedcompanies of RMB421 million, a year-on-year increase of approximately 45.25%. Joincare realized a net profit attributableto shareholders of the listed company after deducting the extraordinary gains and losses of RMB414 million, representing ayear-on-year increase of approximately 56.39%. Key results of the main therapeutic fields and core products are as follows:
① Prescription medicines
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized sales revenues of RMB1,060million from prescription drug segment, representing a year-on-year increase of approximately 67.76%. Among them, thesales revenues and year-on-year change of key therapeutic areas are as follows: the revenue generated from the field ofrespiratory totaled RMB561 million, representing a year-on-year increase of approximately 259%; the revenue generatedfrom the field of anti-infection totaled RMB488 million, representing a year-on-year increase of 4.75%.In the first half of 2022, the Company continued to accelerate construction of the national sales team in respiratory line,established a three-level fine marketing development system of regional manager, provincial manager, and developmentmanager, actively took various measures to speed up the development of key products in hospitals: 1. Enhanced thecoverage and fulfillment rate of evaluation indicators; the development speed of respiratory variety was obviouslyaccelerated; more than 1,400 hospitals above grade II were newly developed; 2. Realized rapid coverage and sales growthof the variety by taking the opportunity that Levosalbutamol Hydrochloride Nebuliser Solution (盐酸左沙丁胺醇雾化吸入溶液) was included in the list of drugs for negotiation led by National Healthcare Security Administration; 3. Continuedto advance the construction of digital marketing platforms, accelerated the marketing process through digital means andcomprehensively communicated the brand via the platform of“Talk from A Respiratory Specialist”(呼吸专家说); 4. Withthree inhalation formulation being successfully included to the fifth batch of the volume-based procurement organisedby the PRC Government, the Company has rapidly tapped into the domestic sales market and improved market share forinhalation formulation products.During the Reporting Period, R&D of inhalation formulations of the Company went well. The following products madephased progress: Levosalbutamol Hydrochloride Nebuliser Solution (盐酸左沙丁胺醇雾化吸入溶液) (3mL: 1.25mg);Terbutaline Sulphate Solution for Nebulization (硫酸特布他林雾化吸入用溶液) has been approved for marketing;Tobramycin Inhalation Solution (妥布霉素吸入溶液) (class 2.4) was successfully completed additional research, theproduct is under review and pending for approval; Fluticasone Propionate Suspension for Inhalation (丙酸氟替卡松雾化吸入用混悬液) has completed the application for market approval; Salmeterol Xinafoate and Fluticasone PropionatePowder for Inhalation (沙美特罗替卡松吸入粉雾剂) has received the notice of clinical trials and rapidly initiated phaseIII clinical trials; Indacaterol Maleate Powder for Inhalation (马来酸茚达特罗吸入粉雾剂) expedited its PD-BE study.Meanwhile, the Company acquired rights of XYP-001 in the Greater China, an innovative inhalation formulation withindependent intellectual property rights, through license-in, further enriching the Company’s inhalation formulationpipeline. The Company submitted for the first time an application for registration of a medical device to accompany theinhalation product, achieving a new breakthrough in the medical device field and forming a synergy with the inhalationformulation to strengthen the Company’s core competitiveness in the field of respiratory diseases. Class 2 new drug XYP-001 has completed preclinical study.
② APIs and intermediates
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized sales income of RMB1,150 millionfrom APIs and intermediates, representing a year-on-year increase of approximately 21.80%.During the Reporting Period, in the API segment, Joincare continued to strengthen safety and environmental protectionconstruction and drive lean production. Production and yield of key products were improved through furtherenhancement of technical innovation of production process. Production costs were stable with a slight decline againstthe backdrop of continued rise of bulk commodities prices and increased pressure from procurement cost of raw materialsin the first half of 2022. In terms of marketing, Joincare actively expanded domestic and international markets for thekey product 7-ACA by optimising strategic cooperation channels and strengthening in-depth cooperation with strategiccustomers. Leveraging the advantages in the upstream and downstream industry chains, we continued to increaseour market share. The export share of Meropenem Trihydrate (美罗培南混粉) has repeatedly set a new high. Despiteincreased competition in the market this year, the Company continued to strengthen its position in the market throughmaking plans in advance, and the sales of Meropenem Trihydrate remained steady growth based on a higher base in thesame period of previous year. In addition, the Company actively expanded overseas business, applying the registration forMeropenem Trihydrate and Meropenem Crude (美罗培南粗品) in Japanese market and Italy market, respectively.In terms of API R&D, the Company focuses on two frontier fields to carry out key scientific research. Firstly, conductingresearch on genetic component design, functional genome mining, synthetic pathway analysis, metabolic networkoptimization, gene circuit reconstruction and systems metabolic engineering of industry host microorganism byusing gene editing, synthetic biology, systems biology, protein directed evolution, high-throughput screening andother technology platforms. The Company has obtained more than 520 potential cephalosporin C (头孢菌素 C, CPC)high-yielding mutant strains from over 38,000 acremonium chrysogenum (产黄支顶孢霉) strains in the initial screening,and has conducted small trials, pilot fermentation and scale-up verification in production, which made the average CPCyield per unit increased steadily. Secondly, the Company fueled innovation in small and large molecule drug-relatedexpression component splicing, molecular structure simulation, synthetic route design, structure and function predictionand heterologous expression of high-value medicinal products by combining machine learning, bioinformatics, customizeddesign in genome scale and other technological tools. The collaborative project with Tencent Quantum Lab made goodprogress. We have jointly developed deep learning-based algorithm architecture for predicting potential biosynthetic geneclusters (BGCs) and have jointly applied for one national invention patent.
③ Health care products and OTC
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized revenues of RMB151 million fromhealth care products and OTC segment, representing a year-on-year decrease of approximately 5.79%.In the first half of 2022, despite that the offline channels were affected by external factors including the resurgenceof COVID-19 pandemic and national health insurance policies, the Company’s health care products and OTC segmentremained a solid performance through continuous brand building with online channels. During the Reporting Period, ourhealth care products and OTC segment built brand reputation with a user-centric approach and consolidated positioningof each brand in sub-segments. Additionally, the segment further explored the channel strategy that integrates onlineand offline channels and leads to a coordinated development. For brand marketing, through in-depth cooperationwith professional KOLs, the Company delivered scientific knowledge and concepts on health care in the form of livebroadcasts and short videos, thus building our brand image and reputation as a professional health care enterprise. Duringthe Reporting Period, with focus on our key brands, we have built a content platform, on which we spread scientificknowledge to promote interaction among our brand, consumers and professional KOLs, thereby increasing brandexposure and sales conversions.
Interim Report 2022
2. Business plans in the second half of 2022
In the second half of 2022, the major tasks in various business segments of the Company are set out as follows:
(1) R&D Center
In terms of innovative R&D, the Company will continue to improve its target management and appraisal mechanism toincrease R&D efficiency, ensure the R&D progress of core products to rapidly drive product transformation, especially witha focus on promoting the launch application of tobramycin inhalation solution and Recombinant SARS-CoV-2 FusionProtein Vaccine (V-01). Meanwhile, we will increase innovation effort to improve R&D innovation efficiency throughactively using digital and intelligent new technology and model. The Company will actively develop micro and nanoinjectables, long-acting formulation, liposomes and other high-barrier complex formulation platforms while continuingto promote the original technology platform with edges through various means including independent development,external introduction and collaborative development. Meanwhile, the Company will integrate its resources and fully utilizethe edges of its own APIs advantages to couple with the R&D of drug formulation products with the aim of forming anintegrated industrial chain. In addition, the Company will continue to strengthen internal and external training and theintroduction of senior R&D personnel to promote the overall R&D capacity of the team and enhance the comprehensiveR&D strength of the enterprise.
(2) Production Center
The Company will ensure workplace safety and product quality by constant improving quality management system andimplementing product quality-centered risk control. While emphasizing checking raw and auxiliary materials, productionsites and production process according to these six systems in GMP to identify workplace safety risks, the Companywill continuously optimize the production process by introducing green synthetic technology and synthetic biologytechnology, and develop the employee training system for improving their professional skills to further ensure productstability and quality. The Company will keep reducing costs and improving efficiency through introducing advancedtechnology and equipment, production optimization, system improvement and lean management, to effectively improvethe production and operation. The Company will adhere to green development, uphold and promote the concept ofgreen, healthy and sustainable development. To effectively implement energy conservation, emission reduction andgreen production, the Company will enhance the environmental protection and quality standards and requirements,set environmental protection targets, and strengthen monitoring of energy consumption, pollutant emissions and otherenvironmental information in the production and operation. The Company will also keep optimizing production capacity,advance the construction of Pingshan Haibin Factory and the new production line as planned, follow up the establishmentof supporting facilities and capacity planning, and improve the technology transformation capacity of new products tomeet the increased market demand for new and existing products.
(3) Sales Center
The key work deployments in marketing of prescription drugs are as follows: 1. Strengthen team building and improvecomprehensive quality through expanding the terminal sales team, attracting excellent talents to join the sales team,making brand building a goal, and enhancing the practical capability and comprehensive quality of marketing teamsnationwide; 2. Continue to strengthen integration of terminal resources, focus on establishing national benchmarkareas, benchmark hospitals and benchmark sales teams, include key hospitals above grade II in appraisal system, andcomprehensively enhance the coverage and fulfillment rate of evaluation indicators; 3. Make continuous efforts inbusiness, production, terminal and other links and quickly increase market share and raise brand awareness in all aspects;
4. Continue to advance construction of digital marketing platform and support for terminal market activities, effectively
combine online and offline methods, and enhance in-depth brand recognition on the doctor side and patient side; 5.Follow up in real time national medical reform-related policies, strengthen clinical and pharmaco-economic research ofproducts after marketing, and actively respond to medical insurance policy adjustment and volume-based procurement.As Meropenem for injection being included in the national list for the seventh batch of volume-based procurement, theCompany will leverage the strength in integrating APIs drug formulation to expedite the development of and expandmarket for other products.
In terms of marketing and promotion of APIs and intermediates, the Company will further strengthen construction of salesteam, make full use of OKR and strengthen management by objectives, to build a vigorous and highly efficient sales team;continue to promote strategic cooperation, pursue further development in segments, actively develop customer resources,maintain partnership, give full play to the strength of the company brand, and establish a long-term, stable and win-wincooperation model with strategic partners. Moreover, the Company will build good brand reputation in global marketthrough close cooperation with world-class enterprises. In addition, the Company will pay close attention to changes inexchange rate and market conditions and promptly adjust sales strategies.In the second half of the year, the Company will constantly consolidate the advantages of the offline channels in healthcare products and OTC segment, and improve the word-of-mouth marketing of the brands at the same time. For thebrand building, the Company will further promote specialized content and brand value to enhance customers’ awarenessof our brands and continuously strengthen the core competiveness of the brands. Besides, the Company will also pushforward new product launches and iterations of core brands such as“Taita”leveraging the Company’s edges in R&D,manufacturing and marketing integration industry chain. For the marketing system construction, the Company willupgrade the“online + offline”synergistic and coordinated marketing model. We will highlight the refined operation of newmedia and mainstream e-commerce platforms while paying continued efforts to reform the offline team structure, deepenthe distribution channel, integrate the key and chain stores, and empower the Company with resources. The Companywill continue to improve online self-operated channels such as platforms of WeChat Mall, TikTok e-commerce, Tmall andJingdong(JD). In addition, the Company will increase investment in the refined operation throughout the entire customerlifecycle to enhance its data-based marketing capabilities and achieve accurate access of target users. In doing so, theCompany will be able to establish a marketing-closed loop covering targeted penetration, accessing, attracting new users,repurchase and in-depth operation.
(4) Functions and strategies
The key function works of the Company are as follows: Firstly, we will continue to improve the organizational structureand institutions in subsidiaries of the Group to increase the management efficiency and fully advance lean management.Secondly, we will continue to strengthen talent and policy construction, implement the management by objective (MBO)system with OKRs and KPIs in tandem, conduct quarterly rolling dynamic tracking and adjustment under close cooperationand full support of every department so as to provide powerful service and support for R&D, production and sales. Thirdly,we will continue to drive corporate cultural construction, increase efforts to communicate corporate culture and put theminto practices in the Group and its subsidiaries to strengthen the cohesion. Fourthly, we actively give full play to resourceadvantages of internal and external business cooperation, make investment strategies, and introduce innovative productsand technologies to improve strategic planning of the Company. Fifthly, we actively fulfill corporate social responsibility,endeavor to improve corporate governance level, and promote high-quality and sustainable development.Material changes in business conditions of the Company during the Reporting Period and matters occurred during theReporting Period that had and are expected to have significant impacts on business conditions of the Company
□ Applicable?
√ N/A
Interim Report 2022
IV Overview of business operations during the Reporting Period
(I) Analysis of principal businesses1 Table for analysis of changes in items related to financial statements
Unit: Yuan Currency: RMB
Item
Amount in the current
period
Amount in the same
period of last yearChange
(%)
Revenues8,564,945,285.557,835,372,274.669.31Operating costs3,054,392,703.202,743,005,734.9311.35Selling expenses2,512,369,792.452,499,949,757.300.50Administrative expenses529,828,311.93397,921,091.1733.15Financial expenses-130,401,047.67-41,726,762.77N/AR&D expenses707,433,078.44622,962,388.4113.56Net cash flow from operating activities1,902,953,224.79745,787,513.36155.16Net cash flow from investing activities-433,259,385.19-1,173,747,818.24N/ANet cash flow from financing activities-656,811,058.44-1,475,233,697.43N/AReasons for changes in administrative expenses: Mainly due to the provision of incentive fund under Medium to Long-termPartner Share Ownership Scheme for the current period and the provision of appraisal bonuses.Reasons for changes in financial expenses: Mainly due to the increase in interest income for the current period ascompared to the previous period.Reasons for changes in net cash flow from operating activities: Mainly due to the increase in payment collection duringthe current period.Reasons for changes in net cash flow from investing activities: Mainly due to the payment of the consideration for theequity of Tianjin Tongrentang Group Co., Ltd. (天津同仁堂集团股份有限公司) in the previous period.Reasons for changes in net cash flow from financing activities: Mainly due to new and additional long-term borrowingsduring the current period.2 Details of material changes in business type, components or source of profits during the current period
□ Applicable?
√ N/A
3 Analysis of revenues and costsPrincipal businesses by industry, product and region
Unit: Yuan Currency: RMBPrincipal business by industry
By industryRevenuesOperating costs
Grossprofitmargin
YoY changein revenues
YoY changein operatingcosts
YoY changein gross profitmargin(%)(%)(%)(%)Industry and commerce8,486,018,063.453,000,716,833.6964.649.0911.07Decreased by 0.63
percentage pointService industry6,029,696.272,232,496.6962.9740.6891.66Decreased by 9.85
percentage pointPrincipal business by productsBy productsRevenuesOperating costs
Grossprofitmargin
YoY changein revenues
YoY changein operating
costs
YoY changein gross profitmargin(%)(%)(%)(%)
Chemical pharmaceuticals4,799,253,426.28925,086,073.1980.728.2310.05Decreased by 0.32
percentage pointsChemical APIs andintermediates
2,771,577,889.051,743,742,075.6537.0822.7014.88Increased by 4.28
percentage pointsTraditional Chinese medicine514,402,423.73146,937,126.6971.44-18.74-12.99Decreased by 1.89
percentage pointsDiagnostic reagents andequipment
346,042,443.87164,056,563.1552.59-11.434.54Decreased by 7.24
percentage pointsHealth care products54,741,880.5120,894,995.0161.83-12.3020.77Decreased by 10.45
percentage pointsPrincipal business by region
By regionRevenuesOperating costs
Grossprofitmargin
YoY changein revenues
YoY changein operatingcosts
YoY changein gross profit
margin(%)(%)(%)(%)
Domestic6,974,358,565.542,065,054,349.0970.396.9612.22Decreased by 1.39
percentage pointsOverseas1,517,689,194.18937,894,981.2938.2020.178.74Increased by 6.50
percentage pointsDescription of principal businesses by industry, product and regionDuring the Reporting Period, the Company’s principal businesses generated revenues of RMB8,492 million, representinga year-on-year increase of RMB709 million or 9.10%. Chemical pharmaceuticals achieved revenue of RMB4.799 billion,representing an increase of 8.23% year-on-year. Among them, the sales revenue in the field of gastroenterology reachedRMB1.781 billion, dropping by 8.16% year-on-year; the sales revenue in the field of gonadorelin hormones amounted toRMB1.344 billion, increasing by 6.82% year-on-year; the sales revenue in the field of anti-infection was RMB683 million,increasing by 3.28% year-on-year; the sales revenue in the field of respiratory reached RMB561 million, a year-on-yearincrease of 259%; the sales revenue of psychiatry products was RMB264 million, a year-on-year increase of 36.26%.Chemical APIs and intermediates recorded revenue of RMB2.772 billion, a year-on-year increase of 22.70%.The growth of the Company’s revenues of principal businesses was primarily due to the Company’s continuous efforts inpromoting marketing reforms, fully facilitating the mass market product channels and accelerating sales in the key areaof Chemical pharmaceuticals. In addition, the sales revenue of API segment grew noticeably with an obvious increase ofgross profit rate as the Company taken measures to integrate resources, adjust product portfolio, reinforce internationalcertification while actively using advanced technologies including synthetic biology and continuous production to ensuregreen production.
Interim Report 2022
4. Investment in R&D
(1) Table for investment in R&D
Unit: Yuan Currency: RMBExpensed investment in R&D during the Period707,433,078.44Capitalized investment in R&D during the Period97,081,498.87Total investment in R&D804,514,577.31Total amount of investment in R&D as a percentage of revenues (%)9.39
(2) Description
During the Reporting Period, total investment in R&D of the Company amounted to RMB804.5146 million, representinga year-on-year growth of 15.39%, accounting for 9.39% of total revenues. During the Reporting Period, the Company’sinvestment in R&D was mainly used for R&D of new products and upgrading and reconstruction of project technology. Asbiologics, inhalation formulations and other projects entered the clinical stage, investment in R&D increased as comparedwith the same period of last year.During the Reporting Period, the general R&D efforts of the Company in different segments were as follows:
(1) Chemical pharmaceuticals
① High-barrier complex formulation: There were a total of 43 projects under research, of which, 2 had been launched to
the market, 2 had been applied for production, 6 were under the clinical/BE study and 3 had been applied for clinicaltrials. The progress of the major projects was as follows:
Inhalation formulations: Levosalbutamol Hydrochloride Nebuliser Solution (盐酸左沙丁胺醇雾化吸入溶液)(3ml:1.25mg) and Terbutaline Sulfate Nebuliser Solution (硫酸特布他林雾化吸入用溶液) had been launched formarket; Tobramycin Inhalation Solution (妥布霉素吸入溶液) (class 2.4) was successfully completed additionalresearch, the product is pending for review and approval; Fluticasone Propionate Inhalation Suspension (丙酸氟替卡松雾化吸入用混悬液) had been applied for marketing authorization; Salmeterol Xinafoate and Fluticasone PropionatePowder for Inhalation (沙美特罗替卡松吸入粉雾剂) had received the notice of clinical trials and started the phase IIIclinical study immediately; Indacaterol Maleate Powder for Inhalation (马来酸茚达特罗吸入粉雾剂) had started PD-BEstudy; Formoterol Fumarate Inhalation Aerosol (富马酸福莫特罗吸入气雾剂) had started phase I clinical research.Class 2 new drug XYP-001 has completed preclinical study.Sustained-release microspheres: Triptorelin Acetate Microspheres for Injection (注射用醋酸曲普瑞林微球) (1-monthsustained release) had been applied for marketing authorization and completed the on-site verification of researchand production; Aripiprazole Microspheres for Injection (注射用阿立哌唑微球) (1-month sustained release) wasundergoing phase I multiple-dose clinical trials; Octreotide Acetate Microspheres for Injection (注射用醋酸奥曲肽微球) (1-month sustained release) and Leuprorelin Acetate Microspheres for Injection (注射用醋酸亮丙瑞林微球)(3-month sustained release) had carried out the BE pre-trial; Triptorelin Pamoate Microspheres for Injection (注射用双羟萘酸曲普瑞林微球) prepared to commence phase I clinical trials; Alarelin Microspheres for Injection (注射用丙氨瑞林微球) (1-month sustained release) had completed process scale-up research and was undergoing ethical reviewfor phase I clinical trials; Goserelin Acetate Sustained-release Implant (醋酸戈舍瑞林缓释植入剂) had carried out thebridging study of pilot-scale production.
② Conventional formulations: There were a total of 41 projects under research, 5 projects had applied for production and
4 projects were under the clinical/BE study. Among others, Cetrorelix Acetate for Injection (注射用醋酸西曲瑞克) hadbeen submitted a response to the deficiency letter for registration application in the United States; Blonanserin Tablets(布南色林片) and Lurasidone Hydrochloride Tablets (盐酸鲁拉西酮片) had been applied for marketing authorization;new indications of Ilaprazole Sodium for injection (注射用艾普拉唑钠) had completed phase III clinical trials andsubmitted application materials; LZ001, an innovative anti-tumor drug, had received the notice of clinical trials andwas undergoing phase I clinical trial; Semaglutide Injection (司美格鲁肽注射液) and Progesterone Injection (黄体酮注射液) had been submitted clinical trial application, which was accepted by CDE and is under review.
③ Consistency evaluation: There were a total of 17 projects under research. Imipenem and Cilastatin Sodium for Injection
(注射用亚胺培南西司他丁钠) and Cefodizime Sodium for Injection (注射用头孢地嗪钠) had been submitted relevantmaterials and were under review; the professional review of Bismuth Potassium Citrate Capsule (枸橼酸铋钾胶囊) hadbeen completed and the review conclusion was pending; Rabeprazole Sodium Enteric-Coated Tablets (雷贝拉唑钠肠溶片) was undergoing BE trials.
(2) Biologics
There were a total of 7 projects under research, of which 1 project had been marketed, 1 project had applied forconditional market launch, 1 project had applied for BLA, 2 projects were in the phase Ib/II clinical trials and 2 projectswere in the phase I clinical trial.Recombinant Human Choriogonadotropin alfa for Injection (注射用重组人绒促性素) was approved for launching inthe market in China in 2021, and the work related to overseas registration is being promoted; Recombinant SARS-CoV-2Fusion Protein Vaccine(V-01) (重组新型冠状病毒融合蛋白疫苗(V-01)) had been applied for sequential emergencyuse to the National COVID-19 Vaccine Working Group (国家疫苗专班), and a conditional market launch applicationhad been submitted to the National Medical Products Administration (国家药品监督管理局), which were both underreview; the BLA of Tocilizumab Solution for Injection (托珠单抗注射液) had been accepted by CDE and was under CDEreview; Recombinant Humanized Anti-PD-1 Monoclonal Antibody for Injection (注射用重组人源化抗PD-1单克隆抗体) and Recombinant Anti-human IL-17A/F Humanized Monoclonal Antibody for Injection (重组抗人IL-17A/F人源化单克隆抗体注射液) were undergoing phase Ib/II clinical trials; and Recombinant Tumor Enzyme Specific Interferonα-2bFc Fusion Protein for Injection (注射用重组肿瘤酶特异性干扰素α-2b Fc融合蛋白) and Recombinant Human FollicleStimulating Hormone for Injection (重组人促卵泡激素注射液) were undergoing phase I clinical trials.
(3) APIs and intermediates
There were a total of 35 projects under research, of which 19 were New Product R&D Projects and 16 wereTech-transformation Projects of Existing Products. For New Product R&D Projects, the API of Fluticasone Furoate (糠酸氟替卡松) had been approved for launching in the market, and the registration application for the API of CaspofunginAcetate (醋酸卡泊芬净) had been submitted. For Technological Upgrading Projects of Existing Products, the keyproject Cephalosporin C-High Producing Strains (头孢菌素C高产菌株) was progressing smoothly. After screening, thestrains had been completed the scale production verification, and the average unit yield had been steadily increased;based on the development and selection of new L-phenylalanine – High Producing Strains (L-苯丙氨酸新型高产菌株) driven by IBT technology, a standard molecular genetics element database had been established and strainmodification and selection was proceeding.
(4) Traditional Chinese Medicine (TCM)
There were 8 projects under research for new TCM, of which, SXSHL gel, an new improved traditional Chinesemedicine, had completed pre-clinical trial experiment research, and its application materials were being preparedand collected. Exploratory clinical trial had been completed for TGDX Granules, a class 1.1 new traditional Chinesemedicine, and it were being statistically analyzed.
(5) Diagnostic reagents and equipment
There were 98 projects under research, of which, 12 were in the clinical trial stage (including the projects underreview). For reagent development platform, Two products, namely, Antigen Detection Kit for SARS-CoV-2 (2019-nCOV)(Latex Method) (新型冠状病毒(2019-nCoV)抗原检测试剂盒(乳胶法)) and Assay Kit for Immunoglobulin G4(Chemiluminescence Method) (免疫球蛋白G4测定试剂盒(化学发光法)(IgG4)) had obtained the domestic registrationcertificate. 12 projects including Rapid Test for Influenza A/B Antigen (Lateral Flow) (甲型乙型流感抗原检测试剂盒(胶体金法)), Diagnostic Kit for Chlamydia Pneumoniae IgM Antibody (Fluorescence Immunochromatography) (肺炎衣原体IgM抗体检测试剂(荧光免疫层析法)), Passive Particle Agglutination Test for Detection of Antibodies to TreponemaPallidum (梅毒螺旋体抗体检测试剂盒(凝集法)), Diagnostic Kit for Measurement of Antibodies to MycoplasmaPneumonia (Passive Particle Agglutination) (肺炎支原体抗体检测试剂盒(被动凝集法)) had started clinical trials. 9projects including Diagnostic Kit for IgM Antibody to Mycoplasma Pneumonia (Chemiluminescence Immunoassay) (肺炎支原体抗体检测试剂盒(化学发光法)), Livzon Interferon-Gamma Release Assays (IGRA) Test Kit (ChemiluminescenceImmunoassay) (结核感染 T 细胞测定试剂盒(化学发光法)), Three Tests of ABO Blood Types (Percolation Method) (ABO血型三项(渗滤法)), and Four Tests of Diabetes were in the registration application stage, of which, Three tests of ABOBlood Types (filtration assay) (ABO 血型三项(渗滤法)) and Diagnostic Kit for IgM Antibody to Mycoplasma Pneumonia(Chemiluminescence Immunoassay) (肺炎支原体抗体IgM检测试剂盒(化学发光法)) were in the process of submittingsupplementary materials for registration. Another batch of projects was under R&D. In regard to the equipment R&Dplatform, second-generation model of irradiator (辐照仪) had completed the registration inspection and entered thestage of registration submission. The Molecular all-in-one Machine (分子一体机) and Molecular POCT project (分子POCT 项目) had entered the stage of the prototype trial production.
Interim Report 2022
(II) Description of material changes in profits arising from non-principal businesses
√ Applicable?□ N/A
Unit: Yuan Currency: RMB
ItemAmount
Proportion oftotal profitsCause
Sustainable
or notInvestment income51,014,159.002.81%Primarily due to changes in gains or
losses of the associates in which theinvestments are made and gains fromthe settlement of forward settlementcontracts upon maturity.
No
Gains or losses fromchanges in fair value
-95,479,537.15-5.26%Primarily due to fluctuations in market
value of the securities investment held.
NoImpairment of assets-27,834,495.93-1.53%Primarily due to the impairment
provision for inventories.
NoNon-operating income4,470,914.880.25%It is primarily income from waste
disposal, etc.
NoNon-operating expenses6,741,606.850.37%It is primarily donation expenses and
loss on retirement of fixed assets.
NoOther gains97,242,254.035.35%It is primarily government subsidies
received.
Yes
(III) Analysis of assets and liabilities
√ Applicable?□ N/A
1. Analysis of assets and liabilities
Unit: Yuan
Item
Ending amount
of the period
Ending amountof the period tothe total assets
Ending amount
of last year
Ending amountof last year tothe total assets
Change in theending amountof the period tothat of last year Cause(%)(%)(%)
Financial assets heldfor trading
99,806,543.320.31184,638,344.310.59-45.94Primarily due to fluctuations in
market value of the securitiesinvestment held.Other receivables50,888,736.710.1688,053,825.120.28-42.21Primarily due to the receipt of
Yunfeng’s payment during thecurrent period.Non-current assetsdue within one year
38,498.840.00317,381.230.00-87.87Primarily due to the recovery of
finance lease payments.Other current assets51,971,077.280.1683,986,214.370.27-38.12Primarily due to the decrease in
the amount of VAT credits as a
result of the refund thereof.Long-termreceivables
82,574.690.00266,904.130.00-69.06Primarily due to the recovery of
finance lease payments.Construction inprogress
1,138,204,863.103.54742,998,743.752.3953.19Mainly due to the increase in
investment for construction of
new plants and workshops of
subsidiaries.
Item
Ending amountof the period
Ending amountof the period tothe total assets
Ending amountof last year
Ending amountof last year tothe total assets
Change in theending amountof the period tothat of last year Cause(%)(%)(%)
Financial liabilitiesheld for trading
10,791,038.400.03143,302.240.007,430.26Primarily due to fluctuations in
foreign exchange forward.Contract liabilities100,704,258.240.31234,140,702.290.75-56.99Primarily due to some contract
performance
obligations during the the
current period, which satisfies
the conditions for revenue
recognition and results in the
carrying forward of revenue.Taxes payable420,134,507.001.31270,618,183.410.8755.25Primarily due to the increase in
corporate income tax payable
and individual income tax
payable withheld from the
dividend distribution.Other currentliabilities
7,166,683.800.0215,626,224.290.05-54.14Primarily due to the decrease
in pending output tax as the
contract payment collected in
advance in the current period
meets the revenue recognition
conditions and is carried
forward.Long-termborrowings
2,403,726,004.587.47826,780,252.782.66190.73Primarily due to the adjustment
from short-term borrowings
to long-term borrowings of
subsidiaries after debt structure
adjustment during the the
current period.Treasury shares742,977,205.722.31222,644,454.500.72233.71Primarily due to share
repurchases during the current
period.Othercomprehensiveincomes
-37,611,311.23-0.125,387,545.970.02-798.12Primarily due to the changes
in other comprehensive gains
during the current period as a
result of the disposal of Galaxy
Securities.
2. Overseas assets
√ Applicable?□ N/A
(1) Asset size
Among them: Overseas assets were 41.35 (Unit: 100 million Currency: RMB), representing 12.85% of the total assets.
(2) Statement on high proportion of overseas assets
□ Applicable?
√ N/A
Interim Report 2022
3. Restrictions on assets entitlements as at the end of the Reporting Period
√ Applicable?□ N/A
Unit: Yuan Currency: RMBItem
Carrying value at theend of the periodCause for restriction
Other monetary funds1,151,193.00Letters of credit, bank acceptances and forward exchange settlement
deposits, etc.Notes receivable526,815,981.78Notes pool business and pledge of notes receivableTotal527,967,174.78
4. Others
□ Applicable?
√ N/A(IV) Analysis of investmentOverall analysis of external equity investments√ Applicable?□ N/ADuring the Reporting Period, the Company carried out strategic investments according to development plans andschedules as follows:
1. Major equity investments
√ Applicable □?N/A
(1) The capital injection to Jiangsu Atom Bioscience and Pharmaceutical Co., Ltd.
On 31 December 2021, Zhuhai Livzon Pharmaceutical Equity Investment Management Co., Ltd. ((珠海市丽珠医药股权投资管理有限公司)“Livzon Equity Investment Company”), a wholly-owned subsidiary of Livzon Group, made the capitalinjection to Jiangsu Atom Bioscience and Pharmaceutical Co., Ltd. (“Atom Bioscience”) with its own funds of RMB30 million.After the capital injection, Livzon Equity Investment Company held 7.4858% equity interest in Atom Bioscience and thecapital verification process have been completed on 18 March 2022. Up to now, the industrial and commercial registrationhas been completed.
(2) Establishment of Livzon Biologics (Malaysia) Sdn. bhd.
On 12 January 2022, Livzon Biologics Hong Kong Limited, a controlled subsidiary of Livzon Group, established LivzonBiologics (Malaysia) Sdn. bhd with a registered capital of 100 Malaysian ringgit wholly held by Livzon Biologics Hong KongLimited. The new company was mainly engaged in all businesses of manufacturers, producers, importers, exporters, buyers,sellers, distribution agents and distributors of patents, pharmaceutical products, medicines, nutrition products, health careproducts, drugs and vaccines as well as all related objects, compounds and materials.
2. Major non-equity investment
□?Applicable
√?N/A
3. Financial assets measured at fair value
√?Applicable □?N/AAs of the end of the Reporting Period, for details of the Company’s financial assets measured at fair value, please refer toNote 9“Fair Value”in Chapter X“Financial Statements”.
(V) Sale of major assets and equity
□ Applicable?
√ N/A
(VI) Analysis of major controlled and invested companies√ Applicable?□ N/A
Unit: 10,000 YuanCompany
Nature ofbusinessMain product and service
RegisteredcapitalAsset sizeNet assetsRevenues
Operating
profitNet profit
TaitaiPharmaceutical
IndustryR&D, production and sales of oral
liquids, tablets (hormones), aerosols(hormones containing), inhalationformulations (solution for inhalation)(hormones containing), nasal spray(hormones containing), and TCMextraction workshop; production andsales of health care products.
10,00053,587.9033,706.0113,268.075,142.794,425.65
TaitaiBiotechnology
IndustryWholesale and retail of skincare
products, cosmetics, and otherdaily necessities; domestic business,material supply and marketingindustry, R&D of health care products
500202.0083.5949.49-24.24-40.75
Haibin PharmaIndustryPowder injection (including
penicillin), tablets, hard capsules,APIs, and sterile APIs. Import andexport businesses and domestictrade (excluding commodities underexclusive rights, commodities underspecial government control, andmonopolized commodities)
70,000248,684.58138,997.5288,054.2617,803.7315,021.27
Xinxiang HaibinIndustryManufacturing and sale of
pharmaceutical products,intermediates and other chemicalproducts
17,000106,658.7034,849.9538,513.874,237.383,646.69
HealthPharmaceutical
IndustryProduction and sale of self-produced
Eagle’s food, health care products,traditional Chinese medicinedecoction pieces, and drug products
HKD7,31712,463.319,491.621,180.61-369.30-349.99
Shanghai FrontierIndustryR&D of new pharmaceutical
products, health care products,medical devices, diagnostic reagents,pharmaceutical intermediates,and provision of relevant technicalconsulting, technical service andtechnical transfer
5,00017,294.4310,073.803,943.08-38.23-129.25
Hiyeah IndustryCommerceInvestment in industry, domestic
commerce, material supply andmarketing industry, and economicinformation consulting
17,800641.81592.383.67-15.46-15.46JoincareDaily-Use
CommerceWholesale of health care products,
ginseng tea, ginseng lozenges,ginseng capsules, and stereotypedpackaged food (including health careproducts)
2,5003,860.343,854.010.00-0.07-0.07
Interim Report 2022
Company
Nature ofbusinessMain product and service
RegisteredcapitalAsset sizeNet assetsRevenues
OperatingprofitNet profit
Taitai GenomicsIndustryScreening of human disease-specific
genes, R&D, production, sale andtechnical consulting service ofgenetic engineering drugs anddiagnostic reagents, wholesaleof medical devices, and in vitrodiagnostic reagents (except fordiagnostic reagents under specialmanagement)
5,0003,633.223,633.220.173.563.56
Appraisalinstitution
CommerceForensic evidence identification–1,001.66925.5594.34-17.25-19.62Fenglei ElectricPower
InvestmentInvestment in power, industry,
domestic commerce, and materialsupply and marketing industry
10,00029,271.9714,276.360.0085.5285.52Hong KongPharmaceutical
InvestmentInvestment and tradeHKD133,916.15766.760.0086.3386.33Jiaozuo JoincareIndustryR&D, production and sale of
pharmaceutic formulations, chemicalAPIs, biological APIs, pharmaceuticalintermediates, and biologicalproducts
50,000251,058.39165,231.0075,906.1613,580.3311,428.09
TopsinoCommerceInvestment and tradeHKD89,693186,120.66104,710.390.0021,358.7421,358.74HealthInvestment
InvestmentAccording to law where it was
registered
USD52,713.792,713.790.000.000.00Joincare HaibinIndustryR&D, production, storage, transport
and sale of chemical APIs (includingintermediates) and pharmaceuticformulations. Import and exportbusinesses and domestic trade(excluding commodities underexclusive rights, commodities underspecial government control, andmonopolized commodities)
50,00085,709.3864,283.3031,445.2221,813.7418,926.78
Joincare SpecialMedicine Food
IndustryR&D, production and sale of formula
food, health care products and foodfor special medical use
2,0002,072.70160.870.00–103.43–71.67Livzon GroupIndustryDrug R&D, production,
manufacturing and sale
93,4962,293,772.911,398,682.69630,256.52132,515.18111,750.25Notes:
1. The companies listed above are companies where the Company directly or indirectly held 100% equity interest, except
for Livzon Group and Shanghai Frontier; financial data thereof are data of individual accounting statements andthat attributed to parent companies; as there are transactions between subsidiaries or between a subsidiary and theCompany, data of individual accounting statements is not separately analyzed.
2. For business conditions of Livzon Group, please refer to the 2022 Interim Report of Livzon Pharmaceutical Group Inc.
(VII) Structured entities controlled by the Company
□ Applicable?
√ N/A
V Other matters for disclosure(I) Potential risks√ Applicable?□ N/A
1. Risks of changes in industrial policies
The pharmaceutical manufacturing industry is significantly affected by changes in industrial policies. The pharmaceuticalindustry will face great challenge in development in the future with continuous deepening of medical reform,advancement of supply-side structural reform in the industry, revision of Drug Administration Law, acceleration ofconsistency evaluation of generic drugs, adjustment of the new edition of Medical Insurance Catalogue, expansionof volume-based procurement, and other industrial policies that have been successively launched. In July 2022, theCompany’s key product Meropenem for Injection (注射用美罗培南) was selected in the seventh batch of volume-basedprocurement organised by the PRC Government. This is expected to be implemented in November 2022 and will have agreat impact on the sales price and market share of this product.Response measures: The Company will pay close attention to industry dynamics and reform, cope with major changes inpolicies of the pharmaceutical industry through early layout, transformation and compliance, and actively strengthen newproduct R&D and innovation and constantly improve its core competitive strengths. Meanwhile, the Company is activelyengaged in the access to the national reimbursement drug list and negotiation, and continue to increase the coverageof hospitals and sales, to realize the objective of“price for quantity”, so as to reduce the impact of price adjustment onthe Company’s steady growth. Moreover, the volume-based drug procurement is becoming a regular practice. In theface of the seventh batch of volume-based drug procurement and the possible impact on the business performance ofthe Company, the Company will continue to strengthen innovation and improve its competitiveness, to ensure soundoperation. With the Company’s new high-barrier complex formulation, represented by inhalation formulations, appearingon the market one after another, commercialization will gradually enter a stable contribution period. The Company’sproduct structure will be further optimized, and the reliance on a single product will also gradually reduce. The Companywill make continued efforts to innovate and develop innovative medicines and high-barrier complex formulation with highadded value that are urgently needed for clinical research, explore the types of existing products with market potentialand technical barriers, actively reevaluate key medicines after their marketing and assess the consistency of relevantmedicines, continuously optimize the product structure, and actively explore and expand overseas markets.
2. Market risk
With advancement of supply-side structural reform in the pharmaceutical manufacturing industry and two invoicepolicy in circulation domain, pharmaceutical market structure is deeply changed. With the gradual standardizationand centralization of the market, competition in the pharmaceutical industry becomes increasingly fierce. Affected byincreasingly stricter drug regulation, policy-based drug price reduction, price cutting during bidding, medical insurancepremium control, and minimum procurement commitment of the pharmaceutical industry in current stage, bid winningprice of drugs will be further lowered, competition among enterprises in the industry will be intensified, and price war willoccur frequently, thus the Company will be at the risk of drug price reduction.Response measures: The Company will establish a more reasonable market system through strict compliance operationso as to maintain its dominant position and core competitive strengths, and ensure that it can achieve sustainable andsteady development and improve its profitability by reinforcing marketing. Meanwhile, the Company will offset the impactof product price reduction by means of price supplement based on quantity, and optimize technical process and reduceproduction costs through internal exploration and transformation. Moreover, the Company will speed up the R&D andmarketing of new products, spread risks of the Company while expanding the range of existing products in segmentmarkets, improve sales and form new profit growth point by increasing product varieties in the future.
Interim Report 2022
3. Risk of environmental protection
The Company is an integrated pharmaceutical manufacturing enterprise. During production, it implements relevantchemical synthesis process and uses a large number of acid and alkali and other chemical components, which areinflammable, explosive, toxic, irritant and corrosive, and have hidden hazards of fire, explosion and poisoning, posingcertain risks to the production and operation of the Company. As environmental protection policies and regulations havebeen constantly issued in recent years, environmental protection standards have become more stringent, and the statehas strengthened its control over pollutants, risks of environmental protection of the Company are increasing.Response measures: The Company has always obeyed the safety work concept of“Putting People First”and the guidelineof“Safety First, Precaution Crucial and Comprehensive Treatment”. It will strengthen the construction of safe productioninfrastructure and ensure a sound environment for safe production of the Company through regular internal audit ofsafety and environment systems and employee safety education and training. The Company will carry out discharge aftertreatment and reaching standards in accordance with environmental protection provisions, actively accept supervision andinspection of environmental protection authorities, and try to reduce emission and increase expenditures in environmentalprotection by improving production process and promptly updating environmental protection technology.
4. Risk in purchase price and supply of raw materials
There is a larger fluctuation in the supply price of some raw materials of the Company due to changes in material prices,especially the materials of traditional Chinese medicine, causing greater volatility or rise in production costs of theCompany. Meanwhile, the quantity and category of raw material suppliers of the Company are various, thus quality of finalproducts of the Company will be directly affected by the selection of raw material suppliers and the guarantee and controlof quality of raw materials.Response measures: In terms of selection of suppliers, the Company will conduct an open tendering and bidding basedon the principle of selecting qualified suppliers, strengthen audit of suppliers, and eliminate the adulteration of adversesuppliers. The Quality Assurance Department and Supply Department of the Company will directly conduct process controlof products provided by suppliers of key raw materials and carry out quality inspection and control of final products.
5. Risk of R&D for new drugs
New drug R&D is characterized by high input, high risk and long period. The State has frequently issued drug R&D relatedpolicies in recent years to further enhance approval work requirements of new drugs for marketing, thus bringing certainrisks for new drug R&D of the Company. Meanwhile, promotion of drugs after marketing is affected by national regulations,industry policies, market environment and competitive intensity, causing that income obtained after marketing of newdrugs cannot reach the expected income, making the Company at risk of product R&D.Response measures: The Company will focus on innovative medicines and high-barrier complex formulation, payattention to unmet clinical needs, and continuously invest in innovative research and development. The Companywill further improve the R&D and innovation systems, introduce and develop high-end talents, proactively carry outcooperation and introduction of overseas innovative medicines, strengthen market research and evaluation of varieties,reinforce the process regulation and risk management of the initiation of R&D projects, and concentrate efforts and makekey breakthroughs in the R&D of core products. At the same time, the Group’s advantages in APIs will be fully utilized toreinforce the integration of API and drug formulations to ensure the long-term sustainable development of the Company.
6. Risk of the normalization of COVID-19 pandemic
The COVID-19 pandemic brought certain impact on China’s overall economic performance. As the demand for prescriptionmedicines irrelevant to the pandemic dropped due to the decline of outpatients and inpatients in medical institutions,the sales of some products were lower than expected, and the Company’s production and operations were affected toa certain extent. Since March 2022, the COVID-19 pandemic has broken out in Shanghai with the emergence of mutantstrains, and outbreaks have occurred and repeated across the country. As of 30 June 2022, the COVID-19 pandemicgenerally remained stable nationwide. In the first half of 2022, China implemented pandemic prevention and control ona continuing basis and promoted vaccination against the virus in an orderly manner. According to data on the officialwebsite of the National Health Commission, as of 30 June 2022, 31 provinces (autonomous regions and municipalities) andXinjiang Production and Construction Commission had reported a total of 3,402.622 million doses of vaccines vaccinated.Response measures: In response to the sporadic outbreaks, the Company responded to the government’s demand at thefirst time, actively carried out epidemic prevention and control, strictly implemented relevant measures and coordinatedepidemic prevention and control, production and operation. During the outbreak in Shanghai, the Company arranged andadjusted the R&D tasks in advance and transferred the experimental projects to the teams of Guangzhou and Shenzhen.The progress of the Company’s R&D projects was not materially affected, and a multi-location and seamless working modewas realized. In general, the Company during the Reporting Period was under normal operation, and the overall impactof the COVID-19 pandemic on its business was relatively slight. The extent of its subsequent impact will depend on theprevention and control of the pandemic on a global scale, the time of continuation, the prevention and control of thepandemic, and the responsive measures of enterprises. The Company will continue to pay attention to the development ofthe pandemic and any possible impact on the financial conditions and operating results of the Company, while adoptingvarious measures at the same time to mitigate the adverse effect of the pandemic on corporate operations, to ensurethat the production and operation activities are performed in a steady and orderly manner. Measures include improvingoperational management, controlling various operational risks, and promoting innovation and collaboration. In the face ofthe new global market pattern brought out by COVID-19, the Company will strengthen the export advantages of featuredAPIs, set up an Internet operation center, strengthen online promotion of some formulations, and accelerate the overseasclinical progress of COVID-19 vaccine, so as to contribute to the global supply of COVID-19 vaccines and actively fulfill itssocial responsibilities.(II) Other matters for disclosure
□ Applicable?
√ N/A
CorporateGovernance
I Introduction of General MeetingsMeeting sessionsDate of meeting
Query index ofdesignated websiteDisclosure dateMeeting resolution
2022 First ExtraordinaryGeneral Meeting
11 February 2022 www.sse.com.cn12 February 2022Eight (8) resolutions were
considered and approved,including the Resolution onChanging Certain ProjectsInvested with Proceeds andthe Resolution on Revisionof Certain Clauses of Articlesof Association. See theAnnouncement on Resolutionsof Joincare PharmaceuticalGroup Industry Co., Ltd. at the2022 First Extraordinary GeneralMeeting (Lin 2022-014) fordetails2021 Annual GeneralMeeting
18 May 2022 www.sse.com.cn19 May 2022Fourteen (14) resolutions were
considered and approved,including the 2021 AnnualWork Report of the SupervisoryCommittee, the Resolution onElection of Mr. Xing Zhiwei asSupervisor of the Company,2021 Annual Work Report of theBoard of Directors, 2021 AnnualProfit Distribution Scheme, and2021 Annual Report of JoincarePharmaceutical Group IndustryCo., Ltd. (Full Text and Abstract).See the Announcementon Resolutions of JoincarePharmaceutical Group IndustryCo., Ltd. at the 2021 AnnualGeneral Meeting (Lin 2022-051)for detailsHolders of Preferred Shares with Resumed Voting Rights Requesting to Hold Extraordinary GeneralMeeting
□ Applicable?
√ N/ADescription of General Meetings
□ Applicable?
√ N/A
Chapter 4Corporate Governance
Interim Report 2022
II Changes in directors, supervisors and senior management of the Company√ Applicable?□ N/ANamePositionChangeXie YouguoSupervisorResignedXing ZhiweiSupervisorElectedDescription of changes in directors, supervisors and senior management of the Company√ Applicable?□ N/ADuring the reporting period, the Supervisory Committee of the Company received a written resignation letter from Mr.Xie Youguo, a Supervisor of the Company. Mr. Xie Youguo applied for resignation from this position of Supervisor due topersonal reasons. He continued to hold other positions in the Company even if resigned as supervisor. Before the newsupervisor was elected at the General Meeting of the Company, Mr. Xie Youguo continued to perform his duties as asupervisor. In order to ensure the normal operation of the Supervisory Committee, the Company held the ninth Meetingof the eighth Session of the Supervisory Committee to consider and approve the“the Resolution on Election of Mr. XingZhiwei as Supervisor of the Company”on 22 April 2022. please see the“Announcement of Joincare Pharmaceutical GroupIndustry Co., Ltd. on the Resignation of Supervisors and the By-election of Supervisors (Lin 2022-046) for details. On 18 May2022, the Company held the 2021 Annual General Meeting to consider and approve the aforesaid resolution to elect Mr.Xing Zhiwei as a supervisor of the eighth session of the Supervisory Committee of the Company for a term commencingfrom the date of consideration and approval at the General Meeting to the date of expiry of the term of the eighth sessionof the Supervisory Committee.
III Profit distribution plan and plan for conversion of capital reserve into sharecapitalProfit distribution plan and plan for conversion of capital reserve into share capital proposed for the firstsix months of 2022Distribution or conversion or notNoNumber of bonus shares to be distributed for every ten shares (share)N/AAmount to be distributed for every ten shares (RMB) (tax inclusive)N/ANumber of shares to be converted into share capital for every ten shares (share)N/ADescription of profit distribution plan and plan for conversion of capital reserve into share capital N/A
IV Equity incentive scheme, employee share ownership scheme or other employeeincentives of the Company and their effect(I) Matters related to equity incentive scheme have been disclosed in the Provisional Announcements with
no progress or change in subsequent implementation√ Applicable?□ N/AOverviewQuery index
The third exercise period under the first grant of the2018 Share Options Incentive Scheme of the Companystarted on 21 December 2021 until 20 December 2022by way of independent exercise. The second exerciseperiod under the reserved grant of share options startedon 23 September 2021 until 22 September 2022 by wayof independent exercise. The total number of shareoptions exercised was 4,005,170 from 1 January 2022 to 31March 2022. As at 31 March 2022, the number of optionscumulatively exercised and completing share transferregistration under the first grant and reserved grant of the2018 Share Options Incentive Scheme of the Company was28,835,036.
See the Announcement on 2022 Q1 Independent ExerciseResults of the 2018 Share Options Incentive Scheme ofJoincare Pharmaceutical Group Industry Co., Ltd. & Changesin Shares (Lin 2022-038) disclosed by the Company on 2April 2022 for details.
The Resolution on the Second Phase Share OwnershipScheme under Medium to Long-term Business PartnerShare Ownership Scheme of the Company (Draft) andits Summary and the Resolution on the General Meetingfor Granting Mandate to the Board to Deal with MattersRelated to the Second Phase Share Ownership Schemeunder Medium to Long-term Business Partner ShareOwnership Scheme of the Company were consideredand approved at the Congress of Workers and Staff, the10th Meeting of the 8th Session of the Board, and the 9thMeeting of the 8th Session of the Supervisory Committeeon 22 April 2022.The said resolutions were considered and approved at the2021 Annual General Meeting on 18 May 2022.
See the Announcement on Resolutions of JoincarePharmaceutical Group Industry Co., Ltd. at the Congressof Workers and Staff (Lin 2022-044), Announcement onResolutions of Joincare Pharmaceutical Group IndustryCo., Ltd. at the 10th Meeting of the 8th Session of theBoard (Lin 2022-047), Announcement on Resolutions ofJoincare Pharmaceutical Group Industry Co., Ltd. At the 9thMeeting of the 8th Session of the Supervisory Committee(Lin 2022-045), and the Second Phase Share OwnershipScheme under Medium to Long-term Business PartnerShare Ownership Scheme of Joincare Pharmaceutical GroupIndustry Co., Ltd. (Draft) and its Summary disclosed by theCompany on 25 April 2022 for details.See the Announcement on Resolutions of JoincarePharmaceutical Group Industry Co., Ltd. at the 2021 AnnualGeneral Meeting (Lin 2022-051) disclosed by the Companyon 19 May 2022 for details.The Resolution on Revision of the Second Phase ShareOwnership Scheme under Medium to Long-termBusiness Partner Share Ownership Scheme of JoincarePharmaceutical Group Industry Co., Ltd. (Draft) and itsSummary was considered and approved at the 11thMeeting of the 8th Session of the Board and at the 10thMeeting of the 8th Session of the Supervisory Committeeon 31 May 2022.
See the Announcement on Resolution in Relation toRevision of the Second Phase Share Ownership Schemeunder Medium to Long-term Business Partner ShareOwnership Scheme of Joincare Pharmaceutical GroupIndustry Co., Ltd. (Draft) and its Summary (Lin 2022-053),and the Second Phase Share Ownership Scheme underMedium to Long-term Business Partner Share OwnershipScheme of Joincare Pharmaceutical Group Industry Co., Ltd.(Revised Draft) and its Summary disclosed by the Companyon 1 June 2022 for details.
Interim Report 2022
OverviewQuery indexOn 1 June 2022, the First Holders’ Meeting of the SecondPhase Share Ownership Scheme of Medium to Long-termBusiness Partners was held by the Company. This meetingconsidered and approved the Resolution on Establishingthe Management Committee of the Second Phase ShareOwnership Scheme of the Company, the Resolution onElecting Members of the Management Committee of theSecond Phase Share Ownership Scheme and the Resolutionon Authorizing the Management Committee of the SecondPhase Share Ownership Scheme of the Company to HandleMatters Related to the Employee Share Ownership Scheme.
See the Announcement on Resolutions of JoincarePharmaceutical Group Industry Co., Ltd. at the First Holders’Meeting of the Second Phase Share Ownership Schemeof Medium to Long-term Business Partners (Lin 2022-056)disclosed by the Company on 2 June 2022 for details.
As of 7 June 2022, the Second Phase Share OwnershipScheme of the Company has purchased a total of 6,275,372shares by way of secondary market centralized biddingtrading, representing 0.33% of the total share capital ofthe Company (1,911,733,078 shares), with a total turnoverof RMB75,740,661.60 and an average transaction price ofapproximately RMB12.07 per share. Then the Company hascompleted the purchase of the underlying shares for theSecond Phase Share Ownership Scheme.
See the Announcement of Joincare Pharmaceutical GroupIndustry Co., Ltd. on Completing the Purchase of Shares forthe Second Phase Share Ownership Scheme under Mediumto Long-term Business Partner Share Ownership Scheme(Lin 2022-059) disclosed by the Company on 8 June 2022for details.
The Resolution on Adjusting the Exercise Price of the 2018Share Options Incentive Scheme of the Company wasconsidered and approved at the 14th Meeting of the 8thSession of the Board and at the 12th Meeting of the 8thSession of the Supervisory Committee on 30 June 2022.Due to profit distribution, the exercise price under the firstgrant was adjusted to RMB7.59 per share, while that underthe reserved grant was adjusted to RMB10.01 per share.
See the Announcement on Adjusting the Exercise Price ofthe 2018 Share Options Incentive Scheme of the Companyby Joincare Pharmaceutical Group Industry Co., Ltd. (Lin2022-069) disclosed by the Company on 1 July 2022 fordetails.
The number of options exercised in total was 807,589from 1 April 2022 to 30 June 2022. As at 30 June 2022, thenumber of options cumulatively exercised and completingshare transfer registration under the first grant andreserved grant of the 2018 Share Options Incentive Schemeof the Company was 29,642,625.
See the Announcement on 2022 Q2 Independent ExerciseResults of the 2018 Share Options Incentive Scheme ofJoincare Pharmaceutical Group Industry Co., Ltd. & Changesin Shares (Lin 2022-071) disclosed by the Company on 2July 2022 for details.
(II) Incentives not disclosed in the Provisional Announcements or with subsequent progress
Equity incentives
□ Applicable?
√ N/AOthers
□ Applicable?
√ N/AEmployee share ownership scheme
□ Applicable?
√ N/AOther incentive program
□ Applicable?
√ N/A
Environmentaland Corporate
SocialResponsibility
Interim Report 2022
I Environmental information
(I) Environmental Issues of Companies and Their Major Subsidiaries Belonging to Key Pollutant DischargingUnits as Announced by the Environmental Protection Department√ Applicable?□ N/A
1. Pollution discharge information
√ Applicable?□ N/Ai. Jiaozuo Joincare
Name ofcompany orsubsidiary
Name of majorpollutants and
specific pollutants
Mode ofdischarge
Number ofdischargeoutlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant dischargestandardsimplemented
Totalamount ofdischarge
Total amount
of discharge
approved
Excessivedischarge(mg/L)(mg/L)(t/a)(t/a)
JiaozuoJoincare
Chemical oxygendemand
Continuous1Master outlet
for sewage
114.33220351.99942.1NilAmmonia nitrogenContinuous15.393547.38105.3Nilii. Taitai Pharmaceutical
Name ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischargeoutlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant discharge
standardsimplemented
Totalamount ofdischarge
Total amount
of discharge
approved
Excessivedischarge(mg/L)(mg/L)(t/a)(t/a)
TaitaiPharmaceutical
Chemical oxygendemand
Intermittent1Master outlet
for sewage
46.53450.212/NilBiochemicaloxygen demand
11500.0047/NilSuspended solids42500.014/NilpH value7.836-9//NilSulfur dioxideIntermittent1Discharge
outlet of boilerexhaust gas
1.4500.0084/NilNitrogen oxide14.951500.089/NilParticulate matter9.34200.056/Nil
Chapter 5Environmental and Corporate Social Responsibility
iii. Haibin PharmaName ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischarge
outlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant dischargestandardsimplemented
Totalamount ofdischarge
Total amount
of dischargeapproved
Excessivedischarge(mg/L)(mg/L)(t/a)(t/a)
Haibin PharmaChemical oxygen
demand
Intermittent1Master outlet
for sewage
545001.5541.65NilAmmonia nitrogen 1Master outlet
for sewage
0.8450.0233.7485NilParticulate matter1Discharge
outlet of boilerexhaust gas
1.4200.02/NilSulfur dioxide1Discharge
outlet of boilerexhaust gas
5500.08/NilNitrogen oxide 1Discharge
outlet of boilerexhaust gas
201500.33/NilVolatile organiccompounds
2Discharge
outlet ofprocess organicexhaust gasand tank farmexhaust gas
7.7600.55.544Nil
iv. Xinxiang Haibin
Name ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischargeoutlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant discharge
standardsimplemented
Totalamount ofdischarge
Total amount
of dischargeapproved
Excessivedischarge(mg/L)(mg/L)(t/a)(t/a)
XinxiangHaibin
Chemical oxygendemand
Continuous1Master outlet
for sewage
51.12204.0514.81NilAmmonia nitrogenContinuous 8.05350.561.66Nilv. Fuzhou FuxingName ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischargeoutlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant discharge
standardsimplemented
Totalamount ofdischarge
Total amount
of discharge
approved
Excessivedischarge(mg/L)(mg/L)(t)(t/a)
Fuzhou FuxingChemical oxygen
demand (COD)
Intermittent1The northwest
side of thefactory
14.531007.27124.5NilAmmonia nitrogen 0.23150.1218.7NilNote: The discharge concentration represents the actual discharge concentration, and the standards implementedrepresent the standards for discharge to the environment by Jiangyin sewage plant (江阴污水处理厂) (i.e. COD≤ 100mg/L,ammonia nitrogen ≤ 15mg/L), and the agreed standard for discharge of COD and ammonia nitrogen from the company toJiangyin sewage plant shall be ≤ 500mg/L and ≤ 60mg/L, respectively. The data was obtained from Fuqing EnvironmentalProtection Bureau.
Interim Report 2022
vi. Xinbeijiang PharmaceuticalName ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischargeoutlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant discharge
standardsimplemented
Totalamount ofdischarge
Total amountof dischargeapproved
Excessivedischarge(mg/L)(mg/L)(t)(t/a)
XinbeijiangPharmaceutical
Chemical oxygendemand
Intermittent1Sewage
treatmentworkshop
78.524031.71NilNilAmmonia nitrogen 2.7701.10NilNilNote: The discharge concentration represents the concentration of discharge into Qingyuan Henghe Sewage TreatmentPlant (清远横荷污水处理厂), while the standard adopted for discharge represents the standard stipulated in the pollutantdischarge license of the company, i.e. COD≤ 240mg/L, ammonia nitrogen ≤ 70mg/L. The data was obtained fromQingyuan Environmental Protection Bureau.vii. Livzon HechengName ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischargeoutlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant discharge
standardsimplemented
Totalamount ofdischarge
Total amountof discharge
approved
Excessivedischarge(mg/L)/(mg/m
)(mg/L)/(mg/m
)(t)(t/a)
Livzon HechengChemical oxygen
demand
Intermittent1Wastewater
treatmentstation
85.5851927.969/NilAmmonia
nitrogen (NH
-N)
8.128400.6748/NilSulfur dioxideOrganized
continuousemission
3Boiler room3500.044/NilNitrogen oxide3Boiler room74.851501.2078/NilParticulate matter3Boiler room1.43200.0187/NilHydrogen chloride7Workshop2.291000.7063/NilNon-methanehydrocarbons
7Workshop11.41603.79077.76NilNon-methanehydrocarbons
1RTO5.25600.2670NilNitrogen oxide1RTO302001.8892/NilSulfur dioxide1RTO32000.1889/NilNotes:
1. The discharge concentration of pollutants in waste water represents the average concentration by online monitoring
from the master discharge outlet by the company into South District Sewage Treatment Plant, while the standardadopted for discharge represents the standard stipulated in the pollutant discharge license of the company, i.e. COD≤192mg/L, ammonia nitrogen≤ 40mg/L.
2. The discharge concentration of pollutants in the discharge outlet of waste gas represents the average concentration
detected by a qualified third party engaged, of which the boiler exhaust adopted the Emission Standard for BoilerAtmospheric Pollutants in Guangdong Province (《广东省锅炉大气污染物排放标准》) (DB44/765-2019), the workshopand wastewater treatment station emission complied with the Air Pollutant Discharge Standards for PharmaceuticalIndustry (《制药工业大气污染物排放标准》) (GB37823-2019).
viii. Gutian FuxingName ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischarge
outlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant dischargestandardsimplemented
Totalamount ofdischarge
Total amount
of discharge
approved
Excessivedischarge(mg/L)(mg/L)(t)(t/a)
Gutian FuxingChemical oxygen
demand
Continuous1The southeast
side of thefactory
46.551206.209108NilAmmonia nitrogen 9.93351.2731.5NilNote: The discharge concentration represents the concentration of ultimate discharge into the environment, while thestandard adopted for discharge represents the standard stipulated in the pollutant discharge license of the company, i.e.COD≤ 120mg/L, ammonia nitrogen≤ 35mg/L.ix. Livzon Limin
Name ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischargeoutlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant discharge
standardsimplemented
Totalamount ofdischarge
Total amount
of discharge
approved
Excessivedischarge(mg/L)(mg/L)(t)(t/a)
Livzon LiminChemical oxygen
demand
Intermittent1Wastewater
treatmentstation
23.51102.9NilNilAmmonia nitrogen 0.3892150.05NilNilNote: The waste water of Livzon Limin was discharged into Shaoguan Second Sewage Treatment Plant (韶关市第二污水处理厂) and the standard adopted for pollutant discharge represented the standard stipulated in the pollutant dischargelicense of the company, i.e. COD≤ 110mg/L, ammonia nitrogen ≤ 15mg/L, while the data detected by a third partyinspection firm was adopted as the discharge concentration.x. Livzon Pharmaceutical FactoryName ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischargeoutlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant discharge
standardsimplemented
Totalamount ofdischarge
Total amount
of discharge
approved
Excessivedischarge(mg/L)(mg/L)(t)(t/a)
LivzonPharmaceuticalFactory
Chemical oxygendemand
Intermittent1Wastewater
treatmentstation
18.481201.15NilNilAmmonia nitrogen 1Wastewater
treatmentstation
0.11200.007NilNilNote: The discharge concentration of pollutants in the wastewater discharge outlet represents the average concentrationdetected by a qualified third party engaged, by implementing the strictest of Schedule 2 Water Pollutant DischargeConcentration Limits for Newly-Built Enterprises (表2 新建企业水污染物排放浓度限值) of the Emission Standard forPharmaceutical Industrial Water Pollutants from Mixing and Formulation Category (《混装制剂类制药工业水污染物排放标准》) (GB21908-2008), Schedule 2 Water Pollutant Discharge Concentration Limits for Newly-Built Enterprises (表2 新建企业水污染物排放浓度限值) of Discharge Standards for Biopharmaceutical Industrial Wastewater (《生物工程类制药工业水污染物排放标准》) (GB21907-2008), or the level 1 of phase II standard of Guangdong Provincial Capping on PollutedEffluents Discharge (《广东省水污染物排放限值》) (DB44/26-2001).
Interim Report 2022
xi. Ningxia PharmaceuticalName ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischarge
outlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant dischargestandardsimplemented
Totalamount ofdischarge
Total amountof dischargeapproved
Excessivedischarge(mg/L)/(mg/m
)(mg/L)/(mg/m
)(t)(t/a)
NingxiaPharmaceutical
Chemical oxygendemand
Continuous1Sewage
treatmentworkshop onnorth side offactory zone
12120067.5NilNilAmmonia nitrogen1.3250.74NilNilSulfur dioxide1
Boiler workshopon north side offactory zone
5320019.61156.816NilNitrogen oxide 9220035.77156.816NilParticulate matter 8302.9223.522NilVolatile organiccompounds
94 outlets for
fermentation,3 outlets forrefinery and2 outlets forsewage
2.71001.2579.535Nil
Notes:
(1) The discharge concentration of wastewater represents the concentration of ultimate discharge to the environmental
protection control center of Ningxia Xin’an Technology Co., Ltd. (宁夏新安科技有限公司) (“Xin’an Company”),the standard adopted for pollutant discharge was the standard stipulated in the pollutant discharge license of thecompany and the amount of discharge was calculated by the amount received by Xin’an Company. In respect of thetotal amount of approved discharge, since Ningxia Pharmaceutical adopted indirect discharge, the local governmentof Ningxia canceled the limitation of total discharge of chemical oxygen demand and ammonia nitrogen of allindirect discharge enterprises, and the total amount index was directly allocated to sewage treatment plants in thepharmaceutical industrial park established by the government after the renewal of the pollution discharge license.
(2) The emission concentration of boiler exhaust gas represents the self-monitoring average concentration throughout
the year, the standard adopted for discharge was the standard stipulated in the pollutant discharge license ofthe company and the amount of discharge was calculated by the amount indicated by online monitoring. Theconcentration of volatile organic compounds (VOCs) represents the concentration of ultimate discharge to theenvironment (self-monitoring concentration), the adopted standard was the standard limits stipulated in Schedule I ofthe Air Pollutant Discharge Standards for Pharmaceutical Industry (《制药工业大气污染物排放标准》) (GB37823-2019)and the amount of discharge was calculated by the amount of exhaust gas emissions and the discharge concentrationrecorded by the monitoring report.xii. Jiaozuo HechengName ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischargeoutlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant discharge
standardsimplemented
Totalamount ofdischarge
Total amount
of discharge
approved
Excessivedischarge(mg/L)(mg/L)(t)(t/a)
JiaozuoHecheng
Chemical oxygendemand
Continuous1Master outlet
in industrialwastewaterworkshop
94.2012203.9760.8NilAmmonia nitrogen 3.24350.1388.8NilNote: The discharge concentration and the total amount of discharge represent the concentration and total amount ofultimate discharge into the downstream sewage treatment plant, and the source is online monitoring data.
xiii. Shanghai Livzon
Name ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischarge
outlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant discharge
standardsimplemented
Totalamount ofdischarge
Total amountof dischargeapproved
Excessivedischarge(mg/L)/(mg/m
)(mg/L)/(mg/m
)(t)(t/a)Shanghai LivzonChemical oxygen
demand
Intermittent1Master outlet in
the park
425001.12NilNilAmmonia nitrogen 5.35400.12NilNilParticulate matterOrganized and
intermittentdischarge
2No. 5 and 6
outlet on theroof
––––NilVolatile organiccompounds
8No. 1, 2, 3, 4, 7, 8,
9 and 10 outletson the roof
2.45600.0032.145NilNote: The discharge concentration was the average of monthly third-party monitoring data, and the amount of dischargewas the cumulative sum of monthly discharge. The discharge of VOCs and particulate were in accordance with the AirPollutant Discharge Standards for Pharmaceutical Industry (《制药工业大气污染物排放标准》) (GB37823-2019), and thedischarge of COD and Ammonia nitrogen were implemented in accordance with the comprehensive sewage dischargestandard DB31/199-2018. Shanghai Livzon was among other key pollutant discharge units, but not among the keypollutant discharge units of water environment and atmospheric environment.xiv. Livzon MABName ofcompany orsubsidiary
Name of majorpollutants andspecific pollutants
Mode ofdischarge
Number ofdischargeoutlets
Distributionof dischargeoutlets
Dischargeconcentration
Pollutant discharge
standardsimplemented
Totalamount ofdischarge
Total amountof dischargeapproved
Excessivedischarge(mg/L)(mg/L)(t)(t/a)Livzon MABChemical oxygen
demand
Intermittent1Wastewater
treatmentstation
18.481200.78NilNilAmmonia nitrogen 1Wastewater
treatmentstation
0.11200.005NilNilNote: The discharge concentration of pollutants in the wastewater discharge outlet represents the average concentrationdetected by a qualified third party engaged, by implementing the strictest of Schedule 2 Water Pollutant DischargeConcentration Limits for Newly-Built Enterprises (表2 新建企业水污染物排放浓度限值) of the Emission Standard forPharmaceutical Industrial Water Pollutants from Mixing and Formulation Category (《混装制剂类制药工业水污染物排放标准》) (GB21908-2008), Schedule 2 Water Pollutant Discharge Concentration Limits for Newly-Built Enterprises (表2 新建企业水污染物排放浓度限值) of Discharge Standards for Biopharmaceutical Industrial Wastewater (《生物工程类制药工业水污染物排放标准》) (GB21907-2008), or the level 1 of phase II standard of Guangdong Provincial Capping on PollutedEffluents Discharge (《广东省水污染物排放限值》) (DB44/26-2001).
Interim Report 2022
2. Construction and operation of pollution preventive facilities
√ Applicable?□ N/AName of companyor subsidiaryConstruction and operation of pollution preventive facilitiesJiaozuo JoincareExhaust gas: The treatment process of“water spray + acid spray + alkali spray + mist eliminator+ dry filter + adsorption concentrator + RCO”was adopted for fermentation exhaust gas. Thetreatment process of“bag type dust collector” was adopted for proportioning process dust-laden exhaust gas. The treatment process of“secondary alkali spray”was adopted for exhaustgas treatment facilities in wastewater treatment station. The treatment process of“alkaliadsorption”was adopted for process acid waste gas. The treatment process of“tertiary finnedcondenser + bag type dust collector + secondary alkali spray + RTO”/“-20°condensation +activated carbon adsorption device (including regenerating device) + RTO”/“adsorption device(including regenerating device)+ secondary alkali spray + biological uptake + secondary alkalispray”/“secondary alkali spray + biological uptake + secondary alkali spray”was adopted for processorganic exhaust gas. All of them enable stable and up-to-standard discharge of exhaust gas.Wastewater: The treatment process of“regulating pool + hydrolysis acidification pool + UASB +(CASS + air flotation)/modified A/O + secondary settling tank + coagulating sedimentation”wasprimarily adopted. Standard wastewater outlets were set; online automatic monitoring controlsystem was installed at outlets for real-time monitoring of COD, ammonia nitrogen, total nitrogen,pH, and flow. At present, wastewater treatment process sections can be stably operated. Moreover,indicators of wastewater factors are stable and satisfy the discharge standard.TaitaiPharmaceutical
No new facilities were set up. Pollution preventive facilities functioned properly and ensured up-to-standard discharge.Haibin PharmaPollution treatment facilities functioned properly and ensured up-to-standard discharge. A set of
laboratory exhaust gas treatment system was newly built.Xinxiang HaibinWastewater: The wastewater treatment system with daily processing capacity of 600 tons through
A/O process designed by East China University of Science and Technology started operation in
April 2016 and has been functioning properly in the first half of 2022. Moreover, indicators can
be stable and satisfy the required discharge standard. A set of MVR concentration wastewater
treatment plant was added in April 2020, which has been functioning properly in the first half
of 2022. From the second half of 2021 to March 2022, a set of lift aerator system and a set of
magnetic levitation blower were added in the biochemical system, and they have been put into
operation and functioning properly. A new sewage anaerobic treatment system was built in the
first half of 2022 and is currently under commissioning.
Exhaust gas: The 40,000 m?/h regenerative oxidation exhaust gas treatment system designed
by Jiangsu Ruiding started operation on 2 November 2019 and has been functioning properly
in the first half of 2022. Moreover, factors achieved ultra-low discharge. After reconstruction of
dry tail gas self-circulating process, the activated carbon adsorption pre-treatment device for
high concentration waste gas designed by Beijing Rixin Daneng Technology Co., Ltd. has been
functioning properly in the first half of 2022. After alkali spray and water spray, the exhaust gas
from biochemical aerobic process of wastewater treatment was emitted in compliance with
the required standard, which has been functioning properly in the first half year 2022. A set
of tetrahydrofuran membrane recovery system was added for high concentration exhaust gas
treatment of six workshops, which has been functioning properly in the first half year 2022.
The resin adsorption pre-treatment facility of exhaust gas was added and is currently under
construction.
Name of companyor subsidiaryConstruction and operation of pollution preventive facilitiesFuzhou FuxingThe Company strictly complies with the“Three-Simultaneous”system, collects and treats“ThreeWastes (waste water, exhaust gas and solid waste)”according to requirements, and employs anadvanced sewage treatment process known as“regulating pool + hydrolysis acidification tank +SBR + air float”. After the sewage has gone through the above treatment process, all indicators arestable and satisfy the discharge standard. After meeting the discharge standards, the sewage isdischarged to Jiangyin sewage plant operated by Fujian Huadong Water Treatment Co., Ltd. (福建华东水务有限公司) via sewage pipe network at the industrial park area for further treatment. In2022, exhaust gas treatment facilities such as the Fenton pool and the regulating pool were added,and the exhaust gas was treated by secondary spray.XinbeijiangPharmaceutical
The“Three Wastes”were collected and treated effectively in strict compliance with the“ThreeSimultaneous”system. The sewage treatment facilities with an investment amount of over RMB30million have a designed processing capacity of 3,000t/d and adopt the treatment process of“Pretreatment + Aerobic pool + Hydrolysis acidification tank + SBR + Catalytic oxidation + Airfloat”. In the first half of 2022, the third round of environmental protection improvement wasimplemented, including the replacement of biological deodorizer tanks and the addition of spraytowers in sewage stations, the reinstallation of the pretreatment exhaust gas collection pipes,which reduced the disorganized emission of exhaust gas and greatly improved the odor aroundsewage stations; mufflers were installed in sewage stations and discharge outlets of the secondfermentation department to lower the air flow of exhaust gas emissions; MVR circulating pumpsand vapor compressors were enclosed with sound-absorbing cotton panels, which greatly loweredthe noise of the MVR; sound-absorbing cotton panels were also put around many other noisyequipment, so as to control the generation and transmission of noise at source.Livzon HechengThe“Three Wastes”were treated in a centralized and effective manner in strict compliance withthe“Three Simultaneous”system and the maintenance and management of pollution preventivefacilities were enhanced to ensure that emission of pollutants was stable and in compliance withthe required standard. The treatment process of“pre-treatment of drainage from the productionprocess + hydrolytic acidification + up-flow anaerobic sludge blanket (UASB) + advanced oxidation+ CASS process + air float/ozonation advanced treatment”was adopted. Treated sewage wasdischarged through the municipal sewage pipeline network into Zhuhai Leaguer EnvironmentalProtection Co., Ltd. (珠海力合环保有限公司) (water purification plant in the South District).Gutian FuxingAt the same time when the enterprise started production, the“Three Wastes”were collectedand treated effectively in accordance with the requirements of the“Three Simultaneous”systemof environmental protection. This involves a designed sewage treatment capacity of 1,200 t/d, adoption of the advanced“Anarerobic-Oxic activated sludge process (A/O) + SBR + nitrogenremoval by denitrification +Fenton decolorizing + air flotation”wastewater treatment process,6,000 m
of effective reservoir capacity of the treatment system and more than 20 sets of treatmentequipment with 350 KW installed capacity to improve the water treatment process, thus ensuringthat all wastewater treatment indicators are stable and satisfy the discharge standard. Treatedsewage that reaches the grade II discharge standard is directly charged into Minjiang River. Thehazardous wastes of the company are entrusted to qualified companies for compliant disposalaccording to the requirements of environmental impact assessment and acceptance inspectionopinions.
Interim Report 2022
Name of companyor subsidiaryConstruction and operation of pollution preventive facilitiesLivzon LiminThe“Three Simultaneous”system was strictly implemented by the company for the treatmentof“Three Wastes”by collecting and treating the“Three Wastes”effectively. The investment forsewage treatment facilities was over RMB13 million with designed processing capacity of 1,500t/dand adopted the treatment process of“Pre-treatment + Hydrolysis acidification tank + Facultativetank + Aerobic pool + Secondary sedimentation”, and the sewage after treatment was dischargedthrough the municipal pipeline network into Shaoguan Second Sewage Treatment Plant (韶关市第二污水处理厂). In respect of exhaust gas treatment, biomass boilers were all replaced by gasboilers. The technical transformation project of the R&D center has installed waste gas treatmentfacilities such as activated carbon adsorption and acid mist spray tower. In respect of control ofnoise pollution, the company built noise segregation walls to reduce noise pollution.LivzonPharmaceuticalFactory
The“Three Simultaneous”system was strictly implemented by the company for the treatmentof“Three Wastes”by collecting and treating the“Three Wastes”effectively. For wastewater: aninvestment of over RMB10 million was made for phase I and phase II sewage treatment stationwith designed processing capacity of 1,000t/d, which adopted the CASS process for phase Iand the A/O process for phase II, and the sewage after treatment was discharged through themunicipal pipeline network into sewage treatment plants. For waste gas: currently, the companyuses purchased steam and uses the boilers as backups, greatly reducing exhaust gas emissions.The waste gas of the sewage treatment stations is treated by a combination of first-level spraytowers, Ultra Violet (UV) photoion equipment and second-level spray towers.NingxiaPharmaceutical
Through strict enforcement of the“Three Simultaneous”system, the“Three Wastes”were collectedand treated effectively. The designed total processing capacity of sewage treatment was 7,500m
/d (including one plant with capacity of 5,000m
/d and one plant with capacity of 2,500m
/d), andthe actual total treatment amount was 3,100m
/d. After the wastewater had reached the standardstipulated in the pollutant discharge license, it would be discharged through the sewage pipelinenetwork in the industrial park to Xin’an Company. In 2021, the installation and use of exhaust gascollection and treatment facilities for hazardous waste stations were completed, and doramectinfermentation exhaust gas of 101 fermentation workshop was introduced into the specific exhaustgas treatment facility for doramectin fermentation exhaust gas of 102 fermentation workshop, anda primary sedimentation tank was added to the sewage treatment station to lead out exhaust gasfor treatment. Since May 2022, the original exhaust gas treatment facilities of 103-2 fermentationworkshop have been upgraded, mainly by adding a set of process treatment facility known as“sodium hypochlorite spray absorption+ water spray absorption + dual-phase super oxygen water+ micro-nano bubble”. With the upgrade undergoing, the facilities are expected to be completedand put into operation in July 2022.
Name of companyor subsidiaryConstruction and operation of pollution preventive facilities
Jiaozuo HechengThe“Three Wastes”were collected and treated effectively in strict compliance with the“ThreeSimultaneous”system. The designed sewage treatment capacity was 3,000t/d, the treatmentprocess of“hydrolytic acidification tank + anaerobic UASB + aerobic pool + materialized treatment”
was adopted, and the treated wastewater would be discharged through the municipal pipelinenetwork into the sewage treatment plant of Xiuwu Branch of Kangda Water Co., Ltd. (康达水务有限公司修武分公司). The sewage treatment facilities were under normal operation with compliantdischarge. For exhaust gas: In 2021, the company replaced the sewage tertiary spray, added a setof UV photolysis exhaust gas treatment facility for the sewage treatment station and dischargedafter meeting the standard; exhaust gases generated from technical process in the productionzone would be collected and treated by adopting two sets of processes of“water spray + activecarbon and -20°C condensation + water spray +active carbon”and then discharged after reachingthe required standard. For solid waste: hazardous solid wastes would be stored in the hazardouswaste station constructed in compliance with the requirements of“Three Protections”(protectionagainst leaks, erosion and rain) according to the requirements under the (Pilot) Guidelines forStandardized Management of Hazardous Waste in Henan Province (《河南省危险废物规范化管理工作指南(试行)》) for hazardous wastes. In January 2022, the company entered into a self-monitoring and automatic monitoring equipment comparison contract with Henan Sino QualityTesting Technology Co., Ltd (河南中方质量检测技术有限公司) to monitor the discharge outletof the company regularly; in the same month, the company entered into a continuous onlinewater-quality monitoring system maintenance contract with Jiaozuo Lansheng EnvironmentalTechnology Service Co., Ltd. (焦作市蓝晟环保技术服务有限公司), in relation to the provisionof relevant maintenance services to the Company. In April 2022, the company entered into ahazardous waste disposal agreement with Henan Zhonghuanxin Environmental Technology Co.,Ltd. (河南中环信环保科技有限公司) for disposal of hazardous wastes on a regular basis. Othergeneral solid wastes would be disposed of in compliance with the relevant requirements.Shanghai LivzonThe company designed and built a sewage treatment station with a processing capacity of 200m
/din 2018. The company’s sewage was treated by such sewage treatment station and then enteredthe park’s sewage treatment station for secondary treatment, and finally discharged into themunicipal pipeline network. The company had the hazardous waste station in compliance with therequirements of“Three Preventions”to store hazardous waste and appointed a qualified companyfor compliant disposal. The company’s main exhaust outlets were treated with activated carbonadsorption and filtration, and the activated carbon was replaced every half a year to ensure thatthe exhaust gas emission met the standards. In January 2022, the company demolished the solidformulation workshop on the third floor and renovated it into a microsphere workshop, so there isno discharge of particulate matter from the No. 5 and 6 outlets.Livzon MABThe“Three Simultaneous”system was strictly implemented by the company for the treatment of“Three Wastes”by collecting and treating the“Three Wastes”effectively. For wastewater (relying onthe wastewater treatment of the pharmaceutical factory in the park): an investment of over RMB10million was made for phase I and phase II sewage treatment station with designed processingcapacity of 1,000t/d, which adopted the CASS process for phase I and the A/O process for phaseII, and the sewage after treatment was discharged through the municipal pipeline network intosewage treatment plants. For waste gas: currently, the company uses purchased steam and usesthe boilers as backups, greatly reducing exhaust gas emissions. The waste gas of the sewagetreatment stations is treated by a combination of first-level spray towers, UV photoion equipmentand second-level spray towers.
Interim Report 2022
3. Environmental impact assessment of construction projects and other environmental protection administrative licensing
√ Applicable?□ N/AName of companyor subsidiary
Environmental impact assessment of construction projects and other environmentalprotection administrative licensing
Jiaozuo JoincareThe Approval of Environmental Impact Report on New 12T Natural Gas Boiler Project for Jiaozuo
Joincare Pharmaceutical Industry Co., Ltd. (Jiao Huan Shen Ma [2022] No. 2) was granted on 11 May2022.TaitaiPharmaceutical
The preparation of Environmental Impact Report Form for two new products, Efinaconazole andLidocaine Aerosol, is in progress.Haibin PharmaThe pollutant discharge license was changed on March 2022.Xinxiang HaibinApproval of Environmental Impact Report on 20 Tonnes/Year Meropenem Pharmaceutical
Intermediate Project (Yu Huan Jian [2005] No. 84), Opinions on Environmental ProtectionInspection and Acceptance for 20 Tonnes/Year Meropenem Pharmaceutical Intermediate F9Project (Yu Huan Bao Yan [2008] No. 89), Approval of Environmental Impact Report on 100Tonnes/Year Meropenem Pharmaceutical Intermediate Expansion Project (Yu Huan Shen [2014]No. 564), Independent acceptance of the Approval of Environmental Impact Report on 100Tonnes/Year Meropenem Pharmaceutical Intermediate Expansion Project on 24 March 2019,Opinions of Comprehensive Supervision and Enforcement Bureau of High-tech Zone on Approvalof Environmental Impact Report on Technical Center Expansion Project of Xinxiang HaibinPharmaceutical Co., Ltd. (Xin Gao Zong Jian Zi [2020] No. 26), and the reply to the EnvironmentalImpact Assessment Report for the Peinan Series API Development Project of Xinxiang HaibinPharmaceutical Co., Ltd (Xin Huan Shu Shen [2021] No. 24).Fuzhou FuxingThe Environmental Impact Report on the Phase III High-end Antibiotics Project of Livzon Group
Fuzhou Fuxing Pharmaceutical Co., Ltd. was approved on 23 August 2021. The company strictlyimplemented the“Three Simultaneous”system and took environmental protection measuresrequired for environmental assessment, while the environmental protection facilities were undernormal operation. An approval was granted for the application of a new national pollutantdischarge license on 27 December 2017 and the renewal of the national pollutant dischargelicense was completed in December 2020. The company has been discharging pollutants in strictcompliance with the licensing and administrative requirements. The Environmental Impact Reporton the Phase IV High-end Antibiotics Project of Livzon Group Fuzhou Fuxing Pharmaceutical Co.,Ltd. (丽珠集团福州福兴医药有限公司) for this reporting period is under preparation.XinbeijiangPharmaceutical
The Environmental Impact Report on Current Status of Projects of Livzon Group XinbeijiangPharmaceutical Manufacturing Inc. (《丽珠集团新北江制药股份有限公司项目现状环境影响报告书》) was approved and filed on 6 December 2016. With strict enforcement of the“ThreeSimultaneous”system and implementation of the environmental protection measures requiredunder the environmental impact assessment, the environmental protection facilities have beenfunctioning properly. On 29 December 2017, an approval was granted for the application of anew national pollutant discharge license and the work for changing and renewing the pollutantdischarge license was completed in December 2020. The environmental protection policies werestrictly enforced. On 28 April 2022, the company completed the application for the pollutantdischarge license for Shijiao New Factory. On 16 June 2022, the company completed theenvironmental impact assessment of the new plant for the addition of mixed compound veterinarydrugs and obtained the environmental assessment approval (Qingcheng Shen Pi Huan Biao [2022]No. 12).
Name of companyor subsidiary
Environmental impact assessment of construction projects and other environmentalprotection administrative licensingLivzon HechengThe Environmental Impact Assessment Report on Current Status of the Product Structure
and Production Capacity Adjustment Project of Zhuhai FTZ Livzon Hecheng PharmaceuticalManufacturing Co., Ltd. (《珠海保税区丽珠合成制药有限公司产品结构及产能调整项目现状环境影响评价报告》) was approved in December 2016. In 2021, the environmental impact assessmentof 14 new products including paliperidone palmitate (棕榈酸帕利呱酮), aripiprazole (阿立哌唑),bismuth potassium citrate (枸橼酸铋钾), i.e. the Environmental Impact Assessment Report onTechnological Renovation and Expansion Project of Livzon Synthetic Pharmaceutical Co., Ltd. inZhuhai Free Trade Zone (《珠海保税区丽珠合成制药有限公司技改扩建项目环境影响评价报告》),passed expert review and was approved. The company strictly enforced the“Three Simultaneous”
system and implemented environmental protection measures as required under environmentalimpact assessment with normal operation of the environmental protection facilities. In 2021,it was awarded the green card enterprise of environmental credit rating by Zhuhai MunicipalEcology and Environment Bureau. In March 2022, the company completed the filing of the revisedenvironmental emergency contingency plan.Gutian FuxingThe company passed the environmental impact assessment on 30 June 1999 and the inspection
and acceptance upon completion of construction carried out by Environmental Protection Bureauof Fujian Province on 5 June 2000. The company re-prepared its post-environmental impactassessment report in 2019 and passed the inspection and acceptance carried out by experts on11 June 2019. The company strictly enforced the“Three Simultaneous”system and implementedenvironmental protection measures as required under environmental impact assessment withnormal operation of the environmental protection facilities.Livzon LiminThe Environmental Impact Report on the Technological Reform Project for the R&D Center
of Livzon Group Limin Pharmaceutical Manufacturing Factory (《丽珠集团利民制药厂研发中心技改项目环境影响报告表》) was approved on 6 December 2019. The expert meeting ofacceptance was held on 24 April 2021, in which the independent acceptance was completed. TheEnvironmental Impact Report for Workshop II of Small capacity Injection (《小容量注射剂二车间项目环境影响报告表》) was approved on 23 November 2020. On 15 September 2021, the expertmeeting of acceptance was held, in which the independent review was completed. The NationalSewage Permit was updated on 22 October 2021. The“Three Simultaneous”system was strictlyenforced to implement the environmental protection measures required under the environmentalimpact assessment, and the environmental protection facilities were under normal operation.LivzonPharmaceuticalFactory
The Environmental Impact Assessment Report on Expansion Project for Production Line ofRecombinant Human Chorionic Gonadotropin for Injection of Livzon Group Livzon PharmaceuticalFactory (丽珠集团丽珠制药厂) was approved in March 2018. The Environmental ImpactAssessment Report on Expansion Project for Sewage Treatment Stations of Livzon Group LivzonPharmaceutical Factory was approved in April 2019. The Environmental Impact Assessment Reporton Expansion Project for Production Line of lyophilized Powder Injection of Livzon Group LivzonPharmaceutical Factory was approved in November 2020. The Environmental Impact Report Formof P07 New Wet Granulation Line Project of Livzon Group Livzon Pharmaceutical Factory wasapproved on 18 May 2022. The company obtained an updated sewage permit in June 2022. Thecompany will strictly enforce the“Three-simultaneous”system to implement the environmentalprotection measures as required by environmental assessment.
Interim Report 2022
Name of companyor subsidiary
Environmental impact assessment of construction projects and other environmentalprotection administrative licensing
NingxiaPharmaceutical
The environmental protection inspection for completion of doramectin expansion projectwas completed in March 2021. In September 2021, expert review and government filing werecompleted for the environmental impact evaluation of project work upon optimized disposal ofthe company’s solid waste. The company applied to change its pollutant discharge permit andpassed the review of the Pingluo Branch of Shizuishan Municipal Ecology and Environment Bureauin December 2021. The company strictly enforced the“Three Simultaneous”system to implementthe environmental protection measures as required by environmental assessment, while theenvironmental protection facilities were under normal operation.Jiaozuo HechengThe Environmental Impact Assessment Report on Current Status of Jiaozuo Livzon Hecheng
Pharmaceutical Manufacturing Co., Ltd. (《焦作丽珠合成制药有限公司现状环境影响评估报告》) was approved and filed on 15 December 2016. The“Three Simultaneous”system was strictlyenforced, the environmental protection measures as required by environmental assessmentwere implemented and the environmental protection facilities were under normal operation. Theapplication for the national pollutant discharge license was completed in December 2020, theenvironmental protection policies were strictly enforced and various management measures wereimplemented. According to the spirit of the document“Notice of the Office of the Leading Groupof Jiaozuo City’s Pollution Prevention and Control Battle on Doing a Good Job in the Key Work ofAir Pollution Prevention and Control in May 2022”, the company formulated the“one policy for oneenterprise” plan for Jiaozuo Hecheng VOCs emission enterprise in 2022.Shanghai LivzonThe company passed the environmental assessment review of the Leuprorelin Acetate
Microspheres for Injection Industrialization Project (《注射用醋酸亮丙瑞林微球产业化项目》)on 11 October 2010, obtained the approval for the Environmental Impact Report on SupportingEngineering and Laboratory Projects of Shanghai Livzon Pharmaceutical Manufacturing Co.,Ltd. (《上海丽珠制药有限公司配套工程及实验室项目环境影响报告》) on 10 January 2020,and completed the construction and passed the acceptance inspection in September 2020.The company strictly implemented the“Three Simultaneous”system and took environmentalprotection measures required for environmental assessment, while the environmental protectionfacilities were under normal operation.Livzon MABThe Environmental Impact Assessment Report on V-01 Industrialization Project of Livzon Group
Livzon Pharmaceutical Factory (丽珠集团丽珠制药厂V-01产业化项目环境影响报告书) wasapproved in April 2021. The Third Line Environmental Impact Report of the Expanded Preparationof the Large-scale Production Capacity Construction Project of Recombinant SARS-CoV-2 FusionProtein Vaccine (V-01) was approved in March 2022. The company obtained an updated sewagepermit in March 2022. The company strictly implemented the“Three Simultaneous”system andtook environmental protection measures required for environmental assessment.
4. Environmental emergency contingency plan
√ Applicable?□ N/A
Name of companyor subsidiaryEnvironmental emergency contingency plan
Jiaozuo JoincareRevision of the environmental emergency contingency plan of Jiaozuo Joincare Pharmaceutical
Industry Co., Ltd. was completed in May 2022 and was filed in the Macun Branch of EcologicalEnvironment Bureau of Jiaozuo City on 19 May 2022.Revision of the environmental emergency contingency plan for hazardous waste pollution accidentof Jiaozuo Joincare was completed in December 2020.TaitaiPharmaceutical
Review and filing was completed in July 2020.Haibin PharmaThe Environmental Emergency Contingency Plan was filed (File No. 440308-2020-0029M). Trainings
and drills on emergency responses were provided for employees to improve the capability of the
Company for dealing with environmental emergencies.Xinxiang HaibinIn July 2022, the environmental emergency contingency plan has passed expert review and is
under filing.Fuzhou FuxingPursuant to relevant provisions and requirements, the Environmental Emergency Contingency Plan
of Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd. (《丽珠集团福州福兴医药有限公司突
发环境事件应急预案》) was prepared based on the principles of“prevention-oriented, self-help-
oriented, unified command, and division of responsibility”, which has been filed on 15 April 2022
(File No. 350181-2022-024-M).
After environmental emergencies occur, immediate, quick, effective and orderly emergency rescue
actions shall be taken to control and prevent the spread of accident and contamination, protect
the surrounding environment and safeguard life and property of all employees, the company and
nearby communities. In accordance with the contents and requirements of the plan, the company
provides trainings and drills for its employees to get them well-prepared for environmental
emergencies, so that timely rescue can be taken and the accident can be controlled in a short
period of time in case of any environmental emergencies. In May 2022, the second comprehensive
emergency drill for four leakage accidents in the workshop was conducted.XinbeijiangPharmaceutical
Based on the principles of“prevention-oriented, on-alert all the time; classified management, level-
by-level response; cross-department cooperation, responsibility by levels; scientific prevention and
efficient handling”, Xinbeijiang Pharmaceutical re-signed and issued the Environmental Emergency
Contingency Plan of Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc. (《丽珠集团新北
江制药股份有限公司突发环境事件应急预案》) (File No. 441802-2021-0162-H) on 30 September
2021, which has been approved and filed by Qingyuan Municipal Ecology and Environment
Bureau on 22 October 2021. Xinbeijiang Pharmaceutical conducted exercises regularly to identify
environmental factors and sources of hazards, as well as drills on the emergency contingency
plan. An environmental emergency contingency drill was conducted in June 2022 to improve
the operability thereof, and enhance the performance of the emergency rescue staff and the
responsiveness and coordination ability of the rescue team.Livzon HechengPursuant to relevant provisions and requirements, the Environmental Emergency Contingency
Plan of Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd. (《珠海保税区丽珠
合成制药有限公司突发环境事件应急预案》) was prepared based on the principles of“Focus on
Prevention, Aim at Self-rescue, Centralized Command, and Division of Responsibility”, which has
been approved, filed and issued (File No. 440462-2019-001-M). Trainings on emergency response
and handling measures were held regularly for employees to enable implementation of safety
measures in a timely, fast, effective and orderly manner to control and prevent the spread of
accident and contamination when encountering any environmental emergencies, so as to alleviate
or eliminate the impact of the accident and resume production as soon as possible.
Interim Report 2022
Name of companyor subsidiaryEnvironmental emergency contingency planGutian FuxingPursuant to relevant provisions and requirements, the Environmental Emergency Contingency
Plan of Gutian Fuxing Pharmaceutical Co., Ltd. (《古田福兴医药有限公司突发环境事件应急预案》) was prepared based on the principles of“Focus on Prevention, Aim at Self-rescue, CentralizedCommand, and Division of Responsibility”. The contingency plan was approved in May 2017 (FileNo. 352200-2017-005-L) and amended in June 2020, and has passed expert review and completedfiling (File No. 350922-2020-002-M).According to the plan, after environmental emergencies occur, immediate, quick, effective andorderly emergency rescue actions shall be taken to control and prevent the spread of accidentand contamination, protect the surrounding environment and safeguard life and property ofall employees, the company and nearby communities. In accordance with the content andrequirements of the plan, the company provides trainings for its employees to get them well-prepared for environmental emergencies, so that timely rescue can be taken and the accident canbe controlled in a short period of time in case of any environmental emergencies.Livzon LiminThe principles of occupational health and safe environment administrative system were followed,
including occupational protection to ensure health, risk control to ensure safety, preventionand control of pollution to protect the environment, and compliance with discipline and law forcontinuous improvement. Identification of environmental factors was performed seriously andpreventive measures were adopted for significant environmental factors, while the governanceof the“Three Wastes”was strengthened to enhance the ability of control over the“Three Wastes”
and ensure that the discharge of the“Three Wastes”had reached the discharge standards. TheEnvironmental Emergency Contingency Plan of Livzon Group Limin Pharmaceutical ManufacturingFactory (《丽珠集团利民制药厂突发环境事件应急预案》) was prepared in accordance withthe criteria of the environmental management system and the occupational health and safetyadministrative system. The plan was issued in May 2021 (File No. 440203-2021-009-L). According tothe contingency plan, an environmental accident emergency drill was conducted on 24 September2021, and a specific drill summary was made. Identification of environmental factors and sources ofhazards and drills for emergency were conducted internally in the company on a regular basis toimprove the operability of the contingency plan, and enhance the performance of the emergencyrescue staff and the responsiveness and coordination ability of the rescue team.LivzonPharmaceuticalFactory
Pursuant to relevant provisions, the Environmental Emergency Contingency Plan of Livzon GroupLivzon Pharmaceutical Factory (《丽珠集团丽珠制药厂突发环境事件应急预案》) was reformulatedby the company in 2021, and has been approved, filed and issued (File No. 440404-2021-0212-L). The company conducted a fire emergency evacuation drill in the P10 workshop in April 2022to improve employees’ emergency handling ability and alleviate or eliminate the impact of theaccident.NingxiaPharmaceutical
The Environmental Emergency Contingency Plan of Livzon Group (Ningxia) PharmaceuticalManufacturing Co., Ltd. (《丽珠集团(宁夏)制药有限公司突发环境事件应急预案》) was approvedfiled and issued in May 2019 (File No. 640221-2019-005-II). Identification of environmental factorsand sources of hazards and drills for emergency were conducted internally in the company on aregular basis to improve the operability of the contingency plan, and enhance the performanceof the emergency rescue staff and the responsiveness and comprehensive coordination abilityof the rescue team. The Environmental Emergency Contingency Plan was amended in May 2021,and has passed expert review and the review by and the filing with government environmentaldepartment in August 2021.
Name of companyor subsidiaryEnvironmental emergency contingency planJiaozuo HechengThe Environmental Emergency Contingency Plan of Jiaozuo Livzon Hecheng Pharmaceutical
Manufacturing Co., Ltd. (《焦作丽珠合成制药有限公司突发环境事件应急预案》) was preparedin accordance with the relevant provisions and requirements and based on the principles of“prevention-oriented, on-alert all the time; classified management, level-by-level response; cross-department cooperation, responsibility by levels; scientific prevention and efficient handling”. Thecontingency plan was approved, issued and filed in April 2021 (File No. 4108042018005L). TheHazardous Waste Environmental Pollution Emergency Contingency Plan of Jiaozuo Livzon HechengPharmaceutical Manufacturing Co., Ltd. (《焦作丽珠合成制药有限公司危险废物环境污染事故应急预案》) was prepared under the above provisions, requirements and principles as well, whichwas approved and filed in January 2018. Identification of environmental factors and sources ofhazards and drills for emergency were conducted internally in the company on a regular basis toimprove the operability of the contingency plan, and enhance the performance of the emergencyrescue staff and the responsiveness and coordination ability of the rescue team. The companycarried out trainings on the Standard Operating Procedure for Acid Mist Purification Towers andthe Standard Operating Procedure for Hazardous Waste Storage Pollutants in April 2021 and June2021, respectively, according to the relevant requirements of the Hazardous Waste EnvironmentalPollution Emergency Contingency Plan of Jiaozuo Livzon Hecheng Pharmaceutical ManufacturingCo., Ltd. In November 2021, the“Operation Regulations for Exhaust Gas UV Photolysis Equipment”
was added and the“Spray Towers Operation Regulations”was amended, and relevant trainingswere conducted to increase the environmental protection knowledge of staff. In March 2022,the company amended some environmental protection documents, including“EnterpriseEnvironmental Information Disclosure System”,“Discharge Permit System”and“OperatingProcedures for Sewage Treatment”.Shanghai LivzonIn March 2022, the company issued and filed the Environmental Emergency Contingency Plan of
Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd. (《上海丽珠制药有限公司突发环境事件应急预案》) (File No. 02-310115-2022-108-L). The company conducts drills and reviews of the planevery year to improve its emergency response capabilities through such regular trainings.Livzon MABPursuant to relevant provisions, the Environmental Emergency Contingency Plan of Livzon MAB
(《丽珠单抗突发环境事件应急预案》) was prepared by the company in 2022. The companyconducted an emergency response drill for hazardous chemical leakage in the dangerous goodswarehouse in June 2022 to improve employees’ emergency handling ability and alleviate oreliminate the impact of the accident.
5. Environmental self-monitoring program
√ Applicable □N/AName of companyor subsidiaryEnvironmental self-monitoring programJiaozuo JoincareAs required by the self-monitoring program for pollutant discharge licenses, Jiaozuo Joincare
developed the 2022 self-monitoring program for wastewater and waste gas and carried out self-monitoring according to the program. Up to now, Jiaozuo Joincare has completed the self-monitoring for wastewater and waste gas for the first half year of 2022.The company is a key enterprise in terms of soil monitoring, and should carry out self-monitoringof soil once a year as required. Up to now, the company has completed the preparation, reviewand on-site sampling of self-monitoring program.TaitaiPharmaceutical
Wastewater was monitored once a quarter; boiler exhaust gas and plant boundary noise weremonitored once a year and exhaust gases generated from technical process was monitored oncehalf a year.
Interim Report 2022
Name of companyor subsidiaryEnvironmental self-monitoring programHaibin PharmaA third party is entrusted to conduct regular monitoring in compliance with the requirements
of the pollutant discharge licenses and ensure the accuracy, validity and authenticity of themonitoring data. Online wastewater monitoring equipment was installed and connectedto environmental monitoring stations at municipal and district levels in accordance withenvironmental monitoring technical standards to ensure the quality of data transmission.Xinxiang HaibinA self-monitoring program was prepared, exhaust gas and wastewater were self-monitored
quarterly in accordance with the pollutant discharge license, and the annual self-monitoring of soilhas been completed.Fuzhou FuxingAccording to the relevant requirements of the“Measures for Self-Monitoring and InformationDisclosure by Enterprises subject to Intensive Monitoring and Control of the State (TrialImplementation) (《国家重点监控企业自行监测及信息公开办法(试行)》)”and the“TechnicalGuidelines for Self-Monitoring by Pollution Discharge Enterprises in the FermentationPharmaceutical Industry (HJ882-2017) (《排污单位自行监测技术指南发酵类制药工业(HJ882-2017)》)”, the company has completed the establishment of the self-monitoring program basedon its own situation in a timely manner and made the program available to the public after beingexamined by and filed with Fuqing Environment Protection Bureau and Fuzhou EnvironmentProtection Bureau. The analysis methods of the monitoring program comply with the nationalenvironmental monitoring technical standards and methods; the monitoring and analysisinstruments have been examined and calibrated in strict compliance with the relevant nationalrequirements; the automated monitoring equipment has been installed in accordance with therequirements of environmental assessment technical standards, connected to the network ofcompetent environmental protection authorities and passed the acceptance inspection conductedby the competent environmental protection authorities. The automated monitoring equipmentwas sound, and the monitoring information was accurate, valid and authentic. In June 2022, thevolatile organic matters (VOCs) leak detection and repair (LDAR) work in the first half of the yearwas finished. Information publicity website: http://wryfb.fjemc.org.cnXinbeijiangPharmaceutical
According to the relevant requirements of the“Measures for Self-Monitoring and InformationDisclosure by Enterprises subject to Intensive Monitoring and Control of the State (TrialImplementation) (《国家重点监控企业自行监测及信息公开办法(试行)》)”, the company hascompleted the establishment of the self-monitoring program based on its own situation in atimely manner and made the program available to the public after being examined by and filedwith Qingyuan Environment Protection Bureau. The analysis methods of the monitoring programcomply with the national environmental monitoring technical standards and methods; themonitoring and analysis instruments have been examined and calibrated in strict compliance withthe relevant national requirements. The automated monitoring equipment for wastewater (COD,ammonia nitrogen, pH, flow) and waste gas (non-methane hydrocarbons) has been installed inaccordance with the requirement of environmental assessment technical standards, while onlinemonitoring equipment has passed the inspection and acceptance of the relevant environmentalprotection authorities and the connection between online information and national developmentplatform and Qingyuan municipal platform has been completed. The automated monitoringequipment was sound, and the monitoring information was accurate, valid and authentic. A thirdparty is entrusted to conduct LDAR detection and repair every half year in the workshop usingVOCs in compliance with the specification requirements. The fugitive volatile organic compoundsaround the workshop of the first refinery division were monitored every half year, and themonitoring results met the standard in the first half of 2022.
Name of companyor subsidiaryEnvironmental self-monitoring programLivzon HechengThrough self-monitoring, the requirements under the Technical Standards for Application and
Issuance of Pollutant Discharge License for the Pharmaceutical Industry – Active PharmaceuticalIngredient Manufacturing (HJ858.1-2017) (《排污许可证申请与核发技术规范制药工业－原料药制造(HJ858.1-2017)》) were strictly implemented, and the verification and calibration of monitoringanalyzing devices were carried out in strict compliance with relevant provisions. Automatedmonitoring equipment was installed according to the requirements of technical standards forenvironmental detection, while online monitoring equipment for COD, ammonia nitrogen andpH level and online monitoring equipment for non-methane hydrocarbons were installed andconnected with the national development platform as required.Gutian FuxingAccording to the relevant requirements of the“Measures for Self-Monitoring and InformationDisclosure by Enterprises subject to Intensive Monitoring and Control of the State (TrialImplementation) (《国家重点监控企业自行监测及信息公开办法(试行)》)”, the company hascompleted the establishment of the self-monitoring program based on its own situation ina timely manner and made the program available to the public after being examined by andfiled with Ningde Bureau of Ecology and Environment and Ningde Gutian Bureau of Ecologyand Environment. The analysis methods of the monitoring program comply with the nationalenvironmental monitoring technical standards and methods; the monitoring and analysisinstruments have been examined and calibrated in strict compliance with the relevant nationalrequirements; the automated monitoring equipment has been installed in accordance with therequirements of environmental assessment technical standards, connected to the network ofcompetent environmental protection authorities and passed the acceptance inspection conductedby the competent environmental protection authorities. The automated monitoring equipmentwas sound, and the monitoring information was accurate, valid and authentic. In June 2022, aqualified third party was engaged to complete volatile organic matter leak detection and repair(LDAR) and a report was obtained. Information publicity website: http://wryfb.fjemc.org.cnLivzon LiminAn entity with national qualification on inspection was engaged to conduct monitoring strictly
in compliance with the relevant national laws and regulations and standards. In view of its ownspecific conditions, the company appointed the inspection party to carry out water pollutantdetection monitoring every quarter, boiler exhaust gas monitoring every month and VOCs exhaustgas monitoring in R&D center every half year, with every monitoring strictly in compliance with therelevant national requirements to ensure the accuracy, validity and authenticity of the monitoringdata. The inspection acceptance of the online monitoring equipment for COD, ammonia nitrogenwater quality was completed and it was put into use in January 2021, and the equipment wasmonitored every 2 hours. The pollution source sharing data were completed and filed to theShaoguan Ecological Environment Bureau on a timely basis, and the relevant data were announcedto the public after being reviewed by Shaoguan Municipal Bureau Ecology and Environment.LivzonPharmaceuticalFactory
An entity with national qualification on inspection was engaged to conduct monitoring strictlyin compliance with the relevant national laws and regulations and standards. In view of its ownspecific conditions, the company appointed the inspection party to carry out monitoring onsewage and waste gas every month, with every monitoring strictly in compliance with the relevantnational requirements to ensure the accuracy, validity and authenticity of the monitoring data. Theinstallation and commissioning of the online sewage monitoring equipment was completed and itwas put into use at the beginning of 2021.
Interim Report 2022
Name of companyor subsidiaryEnvironmental self-monitoring program
NingxiaPharmaceutical
The company formulated the self-monitoring program for 2021, which was reviewed by and filedwith the Ecological Environment Bureau of Shizuishan City. Monthly and quarterly monitoring wascarried out strictly in accordance with the requirements of the program, which focused primarilyon organized exhaust gas emission, exhaust gas emission from boiler, waste water discharge,underground water, soil, unorganized environmental air monitoring above plant boundary, noiseand recycled water TOC, and volatile organic matter leak detection and repair (LDAR) work wascarried out. The monitoring results would be announced to the public through the System ofNational Pollution Sources Monitoring Information Management and Sharing Platform (《全国污染源监测信息管理与共享平台系统》) and the System of Self-monitoring Information Open Platformfor Enterprises in Shizuishan (《石嘴山市企业自行监测信息公开平台系统》). The automatedmonitoring equipment was connected to the network of the competent environmental protectionauthority and passed the inspection conducted by the competent environmental protectionauthority. The automated monitoring equipment was sound, and the monitoring information wasaccurate, valid and authentic. In the first half of 2021, the RTO exhaust VOCs online monitoringequipment was installed and put into use, and passed the inspection conducted by thegovernment in August 2021. Monitoring was carried out in accordance with the requirements ofthe program in the first half of 2022.Jiaozuo HechengAccording to the relevant requirements of the“Measures for Self-Monitoring and InformationDisclosure by the Enterprises subject to Intensive Monitoring and Control of the State (TrialImplementation)”(《国家重点监控企业自行监测及信息公开办法(试行)》), the companyimplemented and completed the self-monitoring program based on its own specific conditionsin a timely manner and made the program available to the public after being examined by andfiled with relevant competent environmental protection authorities. The analysis methods of themonitoring program comply with the national environmental monitoring technical standards andmethods; the monitoring and analysis instruments have been examined and calibrated in strictcompliance with the relevant national requirements. Volatile organic matter leakage detection andrepair (LDAR) was completed in June 2022. Equipment and facilities such as solvent pipelines andflanges in the workshop were detected, and places with leakage were repaired and rectified. Theautomated monitoring equipment for sewage has been installed online in accordance with therequirement of environmental assessment technical standards. The online monitoring equipmentof COD, ammonia nitrogen, pH, flow and total nitrogen was installed, which has been connectedto the national development platform as required. Monthly and quarterly monitoring was carriedout strictly in accordance with the requirements of the self-monitoring program, which focusedprimarily on organized exhaust gas emission, waste water discharge, plant boundary unorganizedenvironmental air and noise.Shanghai LivzonIn accordance with the General Rules for the Self-Monitoring Technical Guidelines for Pollutant
Discharge Units (《排污单位自行监测技术指南总则》) (HJ819-2017) and the relevant requirements(including those on pollution discharge license), the company organized self-monitoring andinformation disclosure of the pollutants it has discharged, and formulated the Self-monitoringProgram. In 2022, the company monitored main exhaust gas outlets once a month, commondischarge outlets once half year, noise once every quarter and sewage once a month. Themonitoring items and frequency meet the requirements of the pollutant discharge license.Livzon MABEntities with national qualification on inspection were engaged to conduct monitoring strictly in
compliance with the relevant national laws and regulations and standards. By considering its ownspecific conditions, the Company appointed the inspection party to carry out regular monitoringon sewage and waste gas according to the requirements of the implementation plan of thepollutant discharge permit, each time the monitoring would be conducted strictly in compliancewith the relevant national requirements to ensure the accuracy, validity and authenticity of themonitoring data.
6. Administrative penalties imposed for environmental issues during the Reporting Period
□ Applicable?
√ N/A
7. Other environmental information to be disclosed
□ Applicable?
√ N/A(II) Statement on environmental protection measures of companies except for key pollutant discharge units
√ Applicable □N/AThe rest subsidiaries of the Company strictly implemented and obeyed the Environmental Protection Law of the People’sRepublic of China, Cleaner Production Law of the People’s Republic of China and other environmental protection andsafe production laws and regulations. They constantly increased investment in environmental protection, continuouslyinvested in energy conservation and consumption reduction projects, actively promoted cleaner production, improvedcomprehensive utilization efficiency of resources, and reduced and avoided pollutants so as to ensure mental and physicalhealth of employees and the coordinated and sustainable development of economic, environmental and social benefits.
1. Administrative penalties imposed for environmental issues
□ Applicable?
√ N/A
2. Refer to other environmental information disclosed by key pollutant discharge units
□ Applicable?
√ N/A
3. Reason for non-disclosure of other environmental information
□ Applicable?
√ N/A(III) Statement on subsequent progress or change in environmental information disclosed during theReporting Period
□ Applicable?
√ N/A(IV) Relevant information contributing to ecological protection, pollution prevention and control, andfulfillment of environmental responsibilities√ Applicable □N/AName of company
Relevant information contributing to ecological protection, pollution prevention and control,and fulfillment of environmental responsibilitiesJiaozuo JoincareDetection of hidden hazards in soil was completed
LDAR leak detection and repair was completed in the first half of the yearUpdate of the Environmental Emergency Contingency Plan was completedTaitaiPharmaceutical
The low nitrogen burner of the 4T boiler was upgradedHaibin PharmaThe emission concentration of pollutants was reduced through the refined control of the operating
parameters of pollutant treatment facilitiesXinxiang HaibinThe Letter of Undertaking for Environmental Protection was submitted by the Company to the
competent authority
Annual LDAR leak detection and repair was completed
Environmental taxes were paid in full and on timeJoincare HaibinAll wastewater from production was collected and sent to the wastewater treatment station for
treatment, and then sent back to the cooling tower for reuse, so as to realize“zero”discharge of
wastewater.
Interim Report 2022
Name of company
Relevant information contributing to ecological protection, pollution prevention and control,and fulfillment of environmental responsibilities
Fuzhou FuxingLDAR leak detection and repair was completed in the first half of the year; the amendment
and filing of the Environmental Emergency Contingency Plan was completed; preparation of“one policy for one enterprise 2.0”and expert review were completed; the application for thecertificate of provincial green factory was in process; the preparation of the“Environmental ImpactAssessment Report on the Phase IV High-end Antibiotics”was in process; in the environmentalcredit evaluation completed, the company was rated as an environmentally credible enterprise.The monthly and quarterly self-monitoring was completed as required.XinbeijiangPharmaceutical
LDAR leak detection and repair was completed; unorganized emission of VOCs was reduced;a series of exhaust gas and noise control and improvement measures, such as connecting theexhaust gas fan of Workshop II of Refining I to the exhaust gas treatment equipment, were madeto reduce unorganized emission of VOCs; the old biological deodorization tank in the sewagetreatment station was replaced, and 2 new exhaust gas spray towers were introduced; exhaustgas collection and treatment in the sewage treatment station was upgraded; pollutants in exhaustgas were degraded efficiently; silencers were installed in the sewage treatment station and onthe exhaust gas vent of Fermentation II to reduce air-flow noise; fermentation II and the firstfloor of power freezer room were enclosed with brick wall to diminish the impact of noise onthe surrounding environment; other equipment with much noise in the plant was enclosed withsound-absorbing cotton board to reduce noise. The self-monitoring plan of the first half year wascompleted and the results of wastewater, exhaust gas and noise met the emission standards. Aqualified third party is entrusted to dispose of the waste in compliance with laws and regulations.Livzon HechengLDAR leak detection and repair was completed in the first half of the year; unorganized emission
of organic gas was reduced by 1.105 tonnes; the equipment for RTO exhaust was maintainedregularly to ensure its safe operation and the emission of exhaust gas within the emissionstandards; items were washed after the completion of RTO process to reduce sulfur dioxideemissions and smell; qualified units were entrusted to treat hazardous waste with a compliancetreatment rate of 100%; and tail gas treatment facilities were added at gas collection station by theQC Testing and Technical Development Department. The self-monitoring program was completedand environmental responsibilities were fulfilled as required.Gutian FuxingLDAR leak detection and repair was completed; cover and sealing were added to sewage
treatment regulating pool; waste gas was collected and treated so as to avoid odor emit; HV framewas replaced in the sewage treatment workshop; water content of sludge was reduced; totalvolume of sludge was reduced; sludge generated was entrusted to qualified units for treatment;and the entrusted testing of waste water, waste gas, soil and groundwater in 2021 was completed,with the results showing they all met standards. Hazardous waste was entrusted to qualifiedcompanies for compliant treatment to reduce the risk of environmental pollution.Livzon LiminSolid preparations and steam equipment in high-capacity workshop were renovated; steam usage
was reduced; locations of different drugs in the overhead cabin and TCM cabin were adjusted;storage energy consumption of the two cabins was reduced; three idle water pumps of the factorywere used; post-treated waste water was used for watering flowers, trees and grass in the factoryin three lines.LivzonPharmaceuticalFactory
Installation and debugging of online monitoring equipment were completed; a qualified thirdparty was entrusted to detect waste water and waste gas; compliant treatment of hazardouswastes was made to reduce the risk of environmental pollution. Environmental impact assessmentwas conducted for new workshops as required. The facilities at the waste water treatment stationwere renovated to ensure the sewage treatment meets the national standards, and at the sametime, improve the treatment efficiency.
Name of company
Relevant information contributing to ecological protection, pollution prevention and control,and fulfillment of environmental responsibilitiesNingxiaPharmaceutical
LDAR leak detection and repair was completed; field check of“one policy for one enterprise”
for corporate VOCs governance was carried out in cooperation with leaders and experts of theMunicipal Environmental Protection Department; installation of online monitoring equipmentfor RTO exhaust and VOCs was completed; installation of treatment facilities for exhaust gas fromhazardous waste stations, primary sedimentation tank at the sewage treatment station and 101doramectin fermentation workshop, and installation of the dust collection and treatment facilitiesfor the boiler coal conveying system were completed. The environmental protection inspectionfor completion of doramectin expansion project was completed, and the evaluation of projectwork upon optimized disposal of the company’s solid waste was carried out. The amendment ofthe Environmental Emergency Contingency Plan was completed. The monthly and quarterly self-monitoring was completed as required.Jiaozuo HechengAutomatic construction was carried out; LDAR leak detection and repair was completed; green
development evaluation of the pharmaceutical industry in Henan Province was completed; theresult of being No. 8 in the pharmaceutical industry of Henan Province was achieved; treatedwaste gas was replaced to ensure the treatment effect; hazardous waste was entrusted to qualifiedunits for treatment with a compliance treatment rate of 100%; waste gas was entrusted to qualifiedthird party for testing; the facilities of the waste water system were entrusted to a qualifiedthird party for maintenance; the“one policy for one enterprise”as advocated by the MunicipalEnvironmental Protection Bureau for emergency emission reduction in heavily polluted weatherwas implemented.Shanghai LivzonThe company discharged pollutants in strict compliance with standards set out in the pollution
discharge license obtained, developed the annual self-monitoring program for pollution dischargeat the beginning of 2022 and implemented it, and successfully passed the semi-annual and annualreview of corporate pollution discharge by the third party entrusted by government departments.It also completed the annual report on compliance with the pollution discharge license withoutviolation of laws and regulations. Meanwhile, the company further strengthened the dailymonitoring of operation of waste gas treatment facilities and waste water treatment stations,and entrusted a third party to detect the emissions of waste gas and wastewater every month toensure the effective operation of equipment and facilities. The company developed the Plan onComprehensive VOCs Treatment and Emission Reduction in General Enterprises in accordancewith the Notice on Comprehensive Treatment of Volatile Organic Compounds in Key Industriesin the City issued by Shanghai Ecological Environment Department, and used bromogeramine(benzalkonium bromide) solution to replace part of ethanol for disinfection, so as to meet theVOCs emission targets.Livzon MABA qualified third party was entrusted to detect waste water and waste gas; compliant treatment of
hazardous wastes was made to reduce the risk of environmental pollution. Environmental impactassessment was conducted for new workshops as required. Sewage is discharged to the sewagestation of Livzon Pharmaceutical Factory for treatment.
Interim Report 2022
(V) Measures for carbon emission reduction and effect during the reporting period
√ Applicable?□ N/A
Name of companyor subsidiaryMeasures for carbon emission reduction and effect during the reporting period
Jiaozuo Joincare1. The 1# fractional column preheater of the solvent storage tank was upgraded, saving about
200 tonnes of steam per month and about 2,000 tonnes per year, reducing carbon emissionsby about 600 tonnes annually;
2. The structure of the fractional column for distilling isopropanol was adjusted and the number
of distillations was changed, saving 10 tonnes of steam per month and about 120 tonnes peryear, reducing carbon emissions by about 36 tonnes annually;
3. An air suspension blower was replaced, saving 120,000kWh of electricity per year, reducing
carbon emissions by about 60 tonnes.TaitaiPharmaceutical
1. Lighting facilities in the park were replaced with
“energy-saving lamps”in response to the call
of the municipal government, producing prominent energy-saving effect;
2. The high-power motor in the factory was replaced with the efficient energy-saving motor in
accordance with energy-saving requirements of the government and frequency conversion
devices were installed to maximize energy conservation;
3. Low-NOx burner of the 4T boiler was upgraded in response to the call of
“Green Shenzhen”;
4. Employees were organized to learn energy conservation knowledge so as to achieve energy
conservation and emission reduction in routine work by turning off lamps and machines
timely.Haibin PharmaCarbon verification and energy conservation diagnostics were conducted to identify key energy-
consuming equipment, and targeted energy-saving improvements were done thereon to reducecarbon emissions.Xinxiang Haibin1. Centrifugal pumps were replaced with diaphragm pumps during sewage transfer, saving
about 70 kWh of electricity per day and 27,000 kWh per year and reducing carbon emissions
by about 14 tonnes annually;
2. A raw material pre-heater was added to the solvent recovery system, and then mother liquor
raw material can be pre-heated with steam condensate, saving about 12 tonnes of steam per
day and 3,600 tonnes per year and reducing carbon emissions by about 1,080 tonnes annually;
3. The circulating water system used efficient energy-saving pumps to replace the existing
chemical pumps, which is expected to save 774,000 kWh of electricity and reduce carbon
emissions by about 387 tonnes annually.Joincare HaibinThe company purchased energy-saving and power-saving equipment meeting new standards,
developed energy-saving habits and thinking, reduced the use of natural gas in boilers, increasedthe frequency of facility maintenance and pipeline inspection, adopted effective heat preservationmeasures, and encouraged use of pure electric cars for traveling to save fuel.Fuzhou FuxingThe company utilized PV power generation to reduce power consumption. Energy-saving
renovation of high energy consumption pumps were carried out, effectively reducing energyconsumption. Old pumps were replaced by ones with high efficiency motors to save energy. Thecompany vigorously publicized energy conservation and consumption reduction, and called onemployees to promptly turn off lamps, air conditioners and computers in routine work.
Name of companyor subsidiaryMeasures for carbon emission reduction and effect during the reporting period
XinbeijiangPharmaceutical
The company introduced PV power generation to reduce power consumption. Fans of coolingtowers were driven by hydrodynamic kinetic energy rather than motors, achieving the samecooling effect while reducing power consumption. Boiler soft water was preheated throughrunning heat of air compressor and boiler inlet temperature was raised, effectively reducing theconsumption of natural gas. Inner wall of MVR equipment was cleaned at regular intervals, makingthe evaporation rate of sugar water for MVR equipment increase by approximately 40% so as toeffectively reduce the run time of MVR equipment and greatly reduce power consumption. Oldboilers with high energy consumption and high maintenance costs were replaced with new ones,reducing the average steam consumption per ton by 1.06 m
natural gas.Livzon HechengWater cooling units were maintained and renovated so as to use energy in a more reasonable
manner; power consumption for production was saved through a more reasonable productionscheduling of the Production Department; the natural gas was used as the fuel for the canteen andboiler; the roots fans for sewage treatment at the Environmental Protection Center were replacedwith magnetic levitation fans with a relative energy saving rate of 30%, saving about 107,000 kWhof power annually. All employees in the factory were called on to save electricity by turning offlamps and air conditioners after work, and limit the minimum temperature of air conditioners;green travel was promoted; employees were encouraged to take public transportation for businesstrips; commuting buses were provided for employees.Gutian FuxingFour sets of 130 m3/min air compressors were installed to replace the previous more power-
consuming ones so as to reduce power consumption; a set of water cooling unit was replaced toreduce power consumption; all employees were called on to“save every drop of water and everykilowatt hour” by turning off lamps and shutting down equipment after work.Livzon LiminIn the solid agent workshop, the set values of temperature and humidity of the air conditioning
system were appropriately adjusted (within the reference range) to be as close as possible tothe values of the ambient temperature and humidity to reduce steam consumption; the energyconsumption was reduced by the QC Department through control of the number of compressorsof the air conditioning unit in service and parameter setting, and intermittent use of the biologicaltest room; the consumption of natural gas is reduced by using the hot tail water generated bythe distilled water machine in the production workshop to heat the soft water of the boiler; theexhaust devices of the air conditioning system in the R&D center were retrofitted to save powerconsumption.LivzonPharmaceuticalFactory
Incandescent light bulbs were replaced with LED lamps to reduce power consumption. PV invertercabinets and roof PV modules were renovated, which improved PV power generation efficiencyand could save about 600,000 kWh per year. Outsourced steam was introduced to reduce boilercombustion and save energy. Functional departments were required to further tighten energyconservation management, and encourage employees to turn off lights and machines during thelunch break, or when they leave their post, so as to reduce power consumption. The company alsoprovided commuting buses for employees.NingxiaPharmaceutical
Phenylalanine concentration system was renovated, in which the original triple effect thickeningsystem was replaced with MVR thickening system, thus reducing energy consumption by 50%.The boiler system was overhauled and maintained regularly so as to ensure efficient operation ofboiler body and desulfurization and dust removal facilities. Consumption of outsourced steam wasincreased to reduce coal consumption and carbon emission.
Interim Report 2022
Name of companyor subsidiaryMeasures for carbon emission reduction and effect during the reporting periodJiaozuo HechengSteam condensate was recycled to reduce steam use and carbon emission; the packaging
equipment was changed to automatic packaging to increase production efficiency; energyconservation and consumption reduction were vigorously publicized in the company; allemployees were called on to“save every drop of water and every kilowatt hour”; workshop paintwas put unified management to avoid waste; a view mirror was added behind the steam trapvalve to observe steam loss; steam condensate was diverted to the production auxiliary system ofthe hot water tank and the crystallizing tank for use to reduce steam use; the lights in the publicareas and corridors of workshops were changed to voice-controlled or light-controlled onesand workshop lighting was gradually replaced with LED lights; and high energy-consumptionequipment and facilities in workshops were gradually replaced with low energy-consumption orautomatic interlocking ones.Shanghai LivzonThe company further strengthened daily energy conservation management according to existing
energy conservation plan, effectively enhanced energy conservation awareness of employeesthrough inspection and publicity, and encouraged employees to develop the good habit of waterand power conservation. Meanwhile, the company improved more than 10% of peptide yieldby optimizing peptide process so as to reduce power consumption of unit product. The solidpreparation workshop was transformed into a powder injection workshop, which can produce lesswaste while saving electricity; the comfort air conditioning unit (refrigeration) uses the coolingcapacity of the water cooling unit in the power room, and the multi-expansion air conditioningunit is installed outdoors to use air cooling, which can save the cooling capacity and reduce theenergy consumption.Livzon MABThe outsourced steam was introduced to save energy. The company effectively enhanced
energy conservation awareness of employees through inspection and publicity, and encouragedemployees to develop the good habit of water and power conservation. LED lights were usedto reduce electricity consumption. The company encouraged employees to turn off lights andmachines when they leave their post in order to reduce power consumption. The company alsoprovided commuting buses for employees.II Consolidation and expansion of achievements in poverty alleviation and rural
revitalization√ Applicable?□ N/A
1. Industrial revitalization
The Company follows important guiding principles of the CPC Central Committee and the General Secretary. In accordancewith the relevant requirements, we establish and implement the plan of“Revitalization of Astragalus Root (黄芪) Industry”
and adopt the model of“Company + Base”and“Company + Professional Cooperative”, encouraging locals to cultivateand process astragalus root and develop the astragalus root industry based on the local conditions. Making it a pillarindustry for local economy in the long-term and a new path to improve the lives of the people, the Company explores thedevelopment of the featured astragalus root industry to promote the construction of the“Chinese Medicine EcologicalBase”.
The“Revitalization of Astragalus Root Industry”program was initiated in 2017 and is still in operation today. Datong LivzonQiyuan Medicine Co., Ltd. (大同丽珠芪源药材有限公司) (“Datong Livzon”), a subsidiary of the Company’s controlledsubsidiary Livzon Group, built cultivation bases independently in Hunyuan County of Datong City in Shanxi Province andZizhou County of Yulin City in Shaanxi Province. And Datong Livzon cooperated with 12 cooperatives and 3 individualsto jointly build cultivation bases for astragalus root in Tianzhen County of Datong City and Ying County of Shuozhou Cityin Shanxi Province and Yulin City of Shaanxi Province. The total area of the self-built bases and jointly constructed basesis about 33,000 mu and a total of 265 people have been assisted. This program has effectively boosted the economy ofcorresponding areas in Shanxi and Shaanxi.During the reporting period, the planting area of the self-built base in Hunyuan County of Datong City in Shanxi Provinceincreased by 300 mu. And the number of newly hired local workers reached 55. In addition, Datong Livzon cooperatedwith the village committee of Mazhuang Village, Guaner Township, Hunyuan County, Datong City, Shanxi Provinceto initiate the“Joint Construction by Villages and Enterprises”program and built factories in Mazhuang Village for thepreliminary processing of astragalus root.
2. Access to Public Welfare Program for Prevention and Treatment of Chronic Diseases
In order to respond positively to the call of national policies and support consolidation and expansion of achievementsin poverty alleviation and rural revitalization, the Company and its controlled subsidiary Livzon Group have launchedthe“Access to Public Welfare for Chronic Diseases Prevention and Treatment (普惠慢病防治公益项目)”program basedon our own industrial advantages, bringing real health benefits to the grass roots. The program targets at hypertension,hyperlipidemia, cardiovascular and cerebrovascular diseases, and drugs for treatment of chronic diseases have beendonated to remote areas, including Pravastatin Capsules (普伐他汀钠胶囊), Amlodipine Besylate Capsules (苯磺酸氨氯地平胶囊), Valsartan Capsules (缬沙坦胶囊), and Isosorbide Mononitrate Tablets (单硝酸异山梨酯片), which could be worthmillions of RMB. These drugs can really help families in remote areas, make it convenient for patients in the regions to takedrugs nearby, help the families with patients to alleviate medical pressures, and provide timely assistance. Based on actualconditions, the program regularly makes continuous drug donations to remote areas and helps the families with patientsin such regions.Since late 2018 onwards, with the support of local government agencies and relevant authorities at all levels, we havecarried out the“Access to Public Welfare for Chronic Diseases Prevention and Treatment”successively in areas includingChaotian District of Guangyuan City, Songpan County of the Autonomous Prefecture of Aba Zangs and Qiangs, JiangeCounty and Pingwu County in Sichuan Province, Hunyuan County, Guangling County and Lingqiu County of Datong Cityin Shanxi Province, Dongxiang County, Tianzhu County, Linze County and Shandan County in Gansu Province, Xianghainational nature reserve in Jilin Province, Chayu County in Tibet Autonomous Region, Macun District of Jiaozuo City inHenan Province, Huangshan District of Huangshan City in Anhui Province, Suining County of Hunan Province, and FenyiCounty of Jiangxi Province, bringing benefits to many patients. As at the end of the Reporting Period, the Company hasdonated drugs to low-income patients with chronic conditions in the abovementioned regions, which could be worthmillions of RMB.As of 30 June 2022, a total of 18 agreements for the“Public Welfare Program for Prevention and Treatment of ChronicDiseases”program were signed to assist 16 underserved remote areas and 1 state-level nature, more than 6,000 low-incomepatients with chronic conditions helped. In the second half of 2022, it is planned to donate drugs to areas including Gansu,Sichuan, Guizhou, Anhui, and Jilin etc.
Major Events
I Fulfillment of undertakings(I) Undertakings fulfilled during the Reporting Period or not yet fulfilled as of the Reporting Period by theparties to the commitment such as de facto controllers, shareholders, related parties, acquirers of theCompany and the Company√ Applicable?□ N/A
Commitmentbackground
CommitmenttypeSubjectCommitment content
Time andtime limit ofcommitment
Whetherthere isa timelimit forfulfillment
Whethercommitmentis strictlyfulfilled intime
Specificreasonsfor failurein timelyfulfillmentshall be given
Next planshould bestated in caseof failurein timelyfulfillment
Commitmentrelated to initialpublic offering
Settlementof horizontalcompetition
BaiyeyuanShenzhen Baiyeyuan Investment Co., Ltd., the controlling shareholder of the
Company, undertook that it would not be directly or indirectly engaged inor cause subsidiaries and branches under its control to be engaged in anybusiness or activity constituting horizontal competition with the Companyafter the founding of the Company, including but not limited to the research,production and sales of any products that were the same as or similar toproducts under research, production and sales of the Company, and waswilling to undertake compensation responsibility for economic losses to theCompany arising from violation of the said commitment.
30 April 2001,long-term
NoYes––
Settlementof horizoncompetition
Baiyeyuan,de factocontrollersand personsacting-inconcert, andthe Company
Whereas the domestically listed foreign shares of Livzon Group, a controlledsubsidiary of the Company, sought listing on the Main Board of the StockExchange of Hong Kong Limited, in order to fully ensure smooth completionof the said event and in compliance with relevant requirements of theStock Exchange of Hong Kong Limited, the controlling shareholders, defacto controller of the Company and the Company entered into relevantundertakings with Livzon Group as follows: 1. The controlling shareholders,de facto controller and persons acting-in-concert of the Company, theCompany and its controlled subsidiaries except for Livzon Group didnot or would not be, directly or indirectly, engaged in any business thatconstituted competitive relation or potential competitive relation withdrug research, development, production and sale businesses (“RestrictedBusinesses”) of Livzon Group from time to time. For the avoidance ofdoubt, the scope of Restricted Businesses did not cover products that wereresearched, developed, manufactured and sold on the date of relevantletter of undertaking by the controlling shareholders and de facto controllerof the Company, the Company and its controlled subsidiaries except forLivzon Group; 2. If any new business opportunity was found to constitutecompetitive relation with Restricted Businesses, the controlling shareholders,de facto controllers and persons acting-in-concert of the Company, theCompany and its controlling subsidiaries except for Livzon Group wouldinform Livzon Group in written form immediately and firstly provide LivzonGroup with the business opportunity in accordance with reasonable andfair terms and conditions. If Livzon Group gave up the business opportunity,the controlling shareholders and de facto controllers of the Company, theCompany and its controlled subsidiaries except for Livzon Group may acceptthe business opportunity in accordance with the terms and conditions thatwere not superior to those offered to Livzon Group; 3. If assets and businessesthat directly or indirectly constituted competitive relation and potential
10 January2014, long-term
NoYes––
Chapter 6Major Events
Interim Report 2022
Commitmentbackground
CommitmenttypeSubjectCommitment content
Time andtime limit ofcommitment
Whetherthere isa timelimit forfulfillment
Whethercommitmentis strictlyfulfilled intime
Specificreasonsfor failurein timelyfulfillmentshall be given
Next planshould bestated in caseof failurein timelyfulfillmentcompetitive relation with Restricted Businesses were intended to betransferred, sold, leased, licensed to use or otherwise transferred or allowedto use (these Sales and Transfers), the controlling shareholders and de factocontrollers of the Company, the Company and its controlled subsidiariesexcept for Livzon Group would provide the right of first refusal for LivzonGroup under the same condition. If Livzon Group gave up the right of firstrefusal, the controlling shareholders, de facto controllers and persons acting-in-concert of the Company, the Company and its controlled subsidiariesexcept for Livzon Group would carry out these Sales and Transfers to athird party in accordance with main terms that were not superior to thoseoffered to Livzon Group; 4. The controlling shareholders, de facto controllersand persons acting-in-concert of the Company, the Company and itscontrolled subsidiaries except for Livzon Group would not be engaged in orinvolved in any business that might damage the interests of Livzon Groupand other shareholders through the relation with shareholders of LivzonGroup or the identity of shareholders of Livzon Group; 5. The controllingshareholders, de facto controllers and persons acting-in-concert of theCompany, the Company and its controlled subsidiaries except for LivzonGroup would not or cause its contact persons (except for Livzon Group) todirectly or indirectly: (1) induce or attempt to induce any director, seniormanagement or consultant of any member of Livzon Group to terminatehis/her employment with or to be an employee or consultant of LivzonGroup at any time (whichever is applicable), no matter if relevant acts of theperson were against the Employment Contract or Consultancy Agreement(if applicable); (2) Within three years after any person terminated to be thedirector, senior management or consultant of any member of Livzon Group,employ the person who had or might have any confidentiality information orbusiness secret in relation to Restricted Businesses (except for the director,senior management or consultant of the Company and/or its controllingsubsidiaries except for Livzon Group on the date of issuance of relevant letterof undertaking); (3) Recruit or lobby any person carrying out business in anymember of Livzon Group, accept orders, or carry out business separately,through any other person or as any person, firm, or manager, advisor,consultant, employee, agent or shareholder of any company (competitorof any member of Livzon Group), or lobby or persuade the person makingtransaction with Livzon Group or negotiating with Livzon Group on RestrictedBusinesses to terminate its transaction with Livzon Group or reduce its normalbusiness volume with Livzon Group, or ask for more favorable transactionterms to any member of Livzon Group. 6. The controlling shareholders,de facto controllers and persons acting-in-concert of the Company, theCompany and its controlled subsidiaries except for Livzon Group furtherundertook that: (1) They would allow and cause relevant contact persons(except for Livzon Group) to allow independent directors of Livzon Group toreview if the Company and its controlled subsidiaries except for Livzon Groupobeyed the Letter of Undertaking at least once a year; (2) They would provideall the data required for annual review and implementation of the Letterof Undertaking for independent directors of Livzon Group; (3) They wouldallow Livzon Group to disclose the decision on whether the controllingshareholders and de facto controllers of the Company, the Company and itscontrolled subsidiaries except for Livzon Group obeyed and implementedthe Letter of Undertaking reviewed by independent directors of LivzonGroup through the annual report or announcement; (4) The controllingshareholders, de facto controllers and persons acting-in-concert of
Commitmentbackground
CommitmenttypeSubjectCommitment content
Time andtime limit ofcommitment
Whetherthere isa timelimit forfulfillment
Whethercommitmentis strictlyfulfilled intime
Specificreasonsfor failurein timelyfulfillmentshall be given
Next planshould bestated in caseof failurein timelyfulfillment
the Company, the Company (and its controlled subsidiaries except for LivzonGroup) would provide Livzon Group with the Letter of Confirmation inrelation to compliance with clauses of the Letter of Undertaking every yearso as to be included in the annual report of Livzon Group. 7. The controllingshareholders, de facto controllers and persons acting-in-concert of theCompany, and the Company undertake that they would bear correspondinglegal responsibility and consequence arising from violation of any clauserelevant letter of undertaking from the date of issuance thereof by theCompany (or the Company’s controlled subsidiaries except for Livzon Groupor its contact persons). 8. The said undertakings would terminate in caseof the following circumstances (whichever is earlier): (1) The controllingshareholders, de facto controllers and persons acting-in-concert of theCompany, the Company and any of its controlled subsidiaries were notthe controlling shareholders of Livzon Group anymore; (2) Livzon Groupterminated the listing of its shares on the Hong Kong Stock Exchange andother overseas stock exchanges (except that shares of Livzon Group stoppedto be traded temporarily for any reason).Commitmentrelated toseasonedofferings
OthersThe Company
and de factocontrollers
Do not interfere in the operation and management activities of Livzon Groupor encroach on the interests of Livzon Group
From 8 March2016 tothe date ofcompletionof remedialmeasures inconnectionwith thenon-publicoffering ofLivzon Group
YesYes––
OthersBaiyeyuan and
the de factocontroller
Pursuant to the Guiding Opinions on Matters Relating to the Dilution ofCurrent Returns As a Result of Initial Public Offering, Refinancing and MajorAsset Restructuring (Announcement of CSRC [2015] No. 31), the companyshall undertake to adopt specific remedial measures relating to dilution ofcurrent returns as a result of the company’s initial public offering, refinancingof the listed company, or major asset restructuring and shall fulfill suchundertaking. Pursuant to relevant provisions of CSRC, Zhu Baoguo, the defacto controller of Shenzhen Baiyeyuan Investment Co., Ltd., a controllingshareholder:1. Do not intervene in the operation and management activitiesor encroach on the interests of the company; 2. If CSRC issued other newregulatory provisions on the remedial measures in relation to returns andthe relevant undertakings and the aforesaid undertakings did not conformto such provisions from the date of issuance of the undertaking to thecompletion of IPO share allotment, the Company/the de facto controllerwould undertake to issue a supplemental undertaking in accordance with thelatest provisions of CSRC; 3. The Company/the de facto controller undertookto practically take the remedial measures in relation to returns formulated bythe company and fulfill the undertaking concerning the remedial measures.In case of violation of the undertaking, causing losses to the companyor investors, the Company/the de facto controller was willing to assumecompensation responsibilities to the company or investors in accordancewith law. In case of violation of the said undertakings or rejection to fulfillthe said undertakings, as one of the liability subjects relating to the remedialmeasures concerning returns, it was agreed that relevant punishment shallbe imposed on or relevant management measures shall be taken against theCompany/the de facto controller by CSRC, the Shanghai Stock Exchange andother securities regulators in accordance with relevant provisions and rulesset or issued by them.
From 11May 2017 tothe date ofcompletionof remedialmeasures inconnectionwith rightsissue ofJoincare
YesYes––
Interim Report 2022
Commitmentbackground
CommitmenttypeSubjectCommitment content
Time andtime limit ofcommitment
Whetherthere isa timelimit forfulfillment
Whethercommitmentis strictlyfulfilled intime
Specificreasonsfor failurein timelyfulfillmentshall be given
Next planshould bestated in caseof failurein timelyfulfillmentOthersThe CompanyAfter the proceeds for issuance of allotment were in place, the Company
would use them according to the disclosure in the announcement, andcarry out the policies, including deposit in special account, approval byspecially-assigned person, and special use of special funds in accordancewith management measures for proceeds of the Company. The Board ofthe Company would regularly check the progress of projects invested withproceeds, issue a special report on deposit and use of proceeds, engage anaccounting firm during the annual audit to issue an verification report ondeposit and use of proceeds, would be supervised by regulators and sponsorsat any time, and would not make major investment, asset purchase or similarfinancial investment though proceeds in disguise.
From the dateof proceedsfor issuanceof the Rightsissue in placeto the date ofcompletionof use ofproceeds
YesYes––
Othercommitmentsmade to themediumand smallshareholders ofthe company
OthersThe Company1. While transferring tradable shares subject to selling restrictions held by the
company in Livzon Group, the company shall strict obey relevant provisionsof Guidelines of Listed Companies on Transfer of Stock Shares Subject toSelling Restrictions ([2008] No. 15); 2. If the Company had shares subject toselling restrictions held by it in Livzon Group that were planned to be soldthrough the bid trading system of Shenzhen Stock Exchange and reducedmore than 5% shares within six months from the first share reduction, theCompany would pass the Announcement on Sales disclosed by Livzon Groupwithin two trading days before the first share reduction.
17 December2008, long-term
NoYes––
II Non-operating use of funds by the controlling shareholder and their relatedparties during the reporting period
□ Applicable?
√ N/AIII Information on Illegal guarantees
□ Applicable?
√ N/A
IV Audit of interim report
□ Applicable?
√ N/A
V Information on changes and handling of matters related to non-standard auditopinions in the annual report for the previous year
□ Applicable?
√ N/A
VI Matters related to bankruptcy reorganization
□ Applicable?
√ N/A
VII Material Litigation and Arbitration Matters
□During the Reporting Period, the Company had material litigation and arbitration matters.
√ During the Reporting Period, the Company did not have any material litigation or arbitration matters.VIIIInformation on punishment and rectification of the listed company and itsdirectors, supervisors, senior management, controlling shareholders, and de factocontrollers due to violations of laws and regulations
□ Applicable?
√ N/A
IX Integrity of the Company and its controlling shareholders and de facto controllersduring the Reporting Period
□ Applicable?
√ N/AX Substantial related party transactions(I) Related party transactions in the ordinary course of business
1. Provisional Announcements without progress or change in subsequent implementation
√ Applicable?□ N/A
OverviewQuery index
Pursuant to the“Resolution on Related Party Transactions inthe Ordinary Course of Business of the Controlling Subsidiariesof Jiaozuo Joincare and Jinguan Electric Power”consideredand approved at the ninth Meeting of the 8th Session ofthe Board on 29 March 2022, Jiaozuo Joincare intended topurchase no more than RMB270 million (inclusive) of steamand power from Jinguan Electric Power in 2022 so as tosatisfy the demands of Jiaozuo Joincare for steam and powerin the process of production and operation. The independentdirectors of the Company gave prior approval opinions onthe Resolution and gave opinions on the approval at theBoard meeting. Both parties referred to the market price tofix a price of the said related party transactions. During theReporting Period, the actual amount of the said related partytransactions was RMB129.0814 million.
See the Announcement on Resolutions Considered andApproved at the 9th Meeting of the 8th Session of theBoard of Joincare Pharmaceutical Group Industry Co.,Ltd. (Lin 2022-026) and the Announcement of JoincarePharmaceutical Group Industry Co., Ltd. on the RelatedParty Transactions in the Ordinary Course of Businessof the Controlled Subsidiaries of Jiaozuo Joincare andJinguan Electric Power (Lin 2022-032) disclosed by theCompany on China Securities Journal, Securities Times,Securities Daily, Shanghai Securities News and thewebsite of Shanghai Stock Exchange ( www.sse.com.cn)on 31 March 2022 for details.
2. Matters that have been disclosed in the provisional announcements with progress or change in subsequent
implementation
□ Applicable?
√ N/A
3. Matters that have not been disclosed in the provisional announcements
□ Applicable?
√ N/A
(II) Related party transactions relating to assets or equity acquisition and sale
1. Matters that have been disclosed in the provisional announcements without progress or change in subsequent
implementation
□ Applicable?
√ N/A
2. Matters that have been disclosed in the provisional announcements with progress or change in subsequent
implementation
□ Applicable?
√ N/A
3. Matters that have not been disclosed in the provisional announcements
□ Applicable?
√ N/A
4. In case of performance agreement, information on performance realization during the Reporting Period shall be disclosed
□ Applicable?
√ N/A
Interim Report 2022
(III) Substantial related party transactions of joint outbound investment
1. Matters that have been disclosed in the provisional announcements without progress or change in subsequent
implementation
□ Applicable?
√ N/A
2. Matters that have been disclosed in the provisional announcements with progress or change in subsequent
implementation
□ Applicable?
√ N/A
3. Matters that have not been disclosed in the Provisional Announcements
□ Applicable?
√ N/A
(IV) Credits and debts with related parties
1. Matters that have been disclosed in the provisional announcements without progress or change in subsequent
implementation
□ Applicable?
√ N/A
2. Matters that have been disclosed in the provisional announcements with progress or change in subsequent
implementation
□ Applicable?
√ N/A
3. Matters that have not been disclosed in the provisional announcements
√ Applicable?□ N/A
Unit: Yuan Currency: RMB
Related party
Relationshipwithrelatedparty
Provision of funds for related party
Provision of funds for the listed company by
related partyBalance atthe beginningof the period
Amountchanged
Balance at
the endof the period
Balance atthe beginningof the period
Amountchanged
Balance at
the endof the period
Guangdong Blue Treasure Pharmaceutical Co., Ltd.(广东蓝宝制药有限公司)Others25,653,956.55–18,746,863.876,907,092.68379,960.0020,737,717.3321,117,677.33Zhuhai Sanmed Gene Diagnostics Co., Ltd. (珠海市圣美基因检测科技有限公司)Others229,288.83–124,433.99104,854.84Sichuan Healthy Deer Hospital Management Co.,Ltd. and its subsidiaries (四川健康阿鹿医院管理有限公司及其子公司)Others337,395.02234,361.68571,756.708,936.1732,668,386.4532,677,322.62Zhuhai Sanmed Biotech Inc. (珠海圣美生物诊断技术有限公司)Others211,200.0058,955.40270,155.40Shenzhen Youbao Technology Co., Ltd. (深圳市有宝科技有限公司)Others154,500.00311,100.00465,600.00Zhongshan Renhe Health Products Co., Ltd. (中山市仁和保健品有限公司)Others469,895.780.00469,895.78Shenzhen Jiekang Health Care Co., Ltd. (深圳市捷康保健有限公司)Others18,577,246.63–18,577,246.630.00Shenzhen Healthy Deer Information Technology Co.,Ltd. (深圳市健康阿鹿信息科技有限公司)Others4,680.00–4,680.000.00Total45,638,162.81–36,848,807.418,789,355.40388,896.1753,406,103.7853,794,999.95Reason for occurrence of credits and debts with related partiesDuring the Reporting Period, the Company had normal operating fund transactions with related partiesEffect of credits and debts with related parties on the operatingresults and financial position of the Company
The said credits and debts with related parties are operating fund transactions; there was no non-operating use offunds of the Company by shareholders and related parties
(V) Financial businesses among the Company, related financial companies, financial companies controlled bythe Company, and related parties
□ Applicable?
√ N/A
(VI) Other substantial related party transactions
□ Applicable?
√ N/A
(VII) Others
□ Applicable?
√ N/AXI Material contracts and their enforcement
1. Custody, contracting and leasing
□ Applicable?
√ N/A
2. Major guarantees that have been performed and outstanding during the Reporting Period
√ Applicable?□ N/A
Unit: 10,000 Yuan Currency: RMB
External guarantees of the Company (excluding guarantees to its subsidiaries)
Guarantor
Relationshipbetween theGuarantorand thelistedcompany
Securedparty
Amount ofguarantee
Date ofguarantee(date ofsignature ofagreement)
GuaranteeStart date
GuaranteeMaturitydate
Guaranteetype
Fulfilledor not
Overdueor no
Overdueamount
Whetherthere’s acounter-guarantee
Guaranteedfor arelatedpartyor notRelationship
JoincareHeadquarter of
the Company
JinguanElectric Power
4,0002021/7/82021/7/82022/7/8Joint liability
guarantee
NoNo0YesYesAssociated
companyJoincareHeadquarter of
the Company
JinguanElectric Power
5,0002021/7/142021/7/142022/7/14Joint liability
guarantee
NoNo0YesYesAssociated
companyJoincareHeadquarter of
the Company
JinguanElectric Power
3,0002021/8/122021/8/122022/8/12Joint liability
guarantee
NoNo0YesYesAssociated
companyJoincareHeadquarter of
the Company
JinguanElectric Power
3,2002021/9/232021/9/232022/9/22Joint liability
guarantee
NoNo0YesYesAssociated
companyJoincareHeadquarter of
the Company
JinguanElectric Power
3,2002021/10/112021/10/112022/10/11Joint liability
guarantee
NoNo0YesYesAssociated
companyJoincareHeadquarter of
the Company
JinguanElectric Power
3,8002021/10/132021/10/132022/10/12Joint liability
guarantee
NoNo0YesYesAssociated
companyJoincareHeadquarter of
the Company
JinguanElectric Power
3,8402022/2/142022/2/142022/11/30Joint liability
guarantee
NoNo0YesYesAssociated
companyJoincareHeadquarter of
the Company
JinguanElectric Power
4,9602022/2/242022/2/242022/12/26Joint liability
guarantee
NoNo0YesYesAssociated
companyJiaozuoJoincare
Wholly-ownedsubsidiary
JinguanElectric Power
2,0002022/3/282022/3/282022/12/13Joint liability
guarantee
NoNo0YesYesAssociated
companyJoincareHeadquarter of
the Company
JinguanElectric Power
3,0002022/6/82022/6/82023/6/8Joint liability
guarantee
NoNo0YesYesAssociated
companyJoincareHeadquarter of
the Company
JinguanElectric Power
3,0002022/6/222022/6/222023/6/22Joint liability
guarantee
NoNo0YesYesAssociated
companyTotal guaranteed amount occurred during the Reporting Period (excluding guarantees to subsidiaries)16,800.00Total guaranteed amount as of the end of the Reporting Period (A) (excluding guarantees to subsidiaries)39,000.00
Interim Report 2022
Guarantee provided by the Company and its subsidiaries to subsidiariesTotal amount of guarantees to subsidiaries during the Reporting Period231,947.82Total amount of guarantees to subsidiaries as of the end of the Reporting Period (B)227,478.75
Total guaranteed amount of the Company (including guarantees to subsidiaries)Total guaranteed amount (A+B)266,478.75Percentage of total guaranteed amount in the Company’s net assets (%)13.26In which:
Amount of guarantees provided to shareholders, de facto controllers and their related parties (C)0Amount of debt guarantee directly or indirectly provided to a guaranteed party with an asset-liability
ratio exceeding 70% (D)
180,879.39Portion of total guaranteed amount exceeding 50% of net assets (E)0Total guaranteed amount of the above three items (C+D+E)180,879.39Statement on the contingent joint liability that might be assumed in connection with outstanding guaranteeN/AStatement on guaranteesSee X 5(4) Related party guarantees in the notes to financial statements for the said related party guarantees
in details
3. Other material contracts
□ Applicable?
√ N/A
XII Explanation of other significant events
√ Applicable?□ N/A
1. Use of proceeds
Pursuant to the Reply to the Approval of Share Allotment of Joincare Pharmaceutical Group Industry Co., Ltd. issued byCSRC (Zheng Jian Xu Ke [2018] No.1284), the Company allotted 365,105,066 shares to original shareholders. The amountof expect proceeds for the allotment was RMB2,000,000,000 and the total amount of actual proceeds for the allotmentwas RMB1,715,993,800; the deducted distribution expenses were RMB46,253,600; the net amount of proceeds wasRMB1,669,740,200. As at 16 October 2018, the said proceeds were in place and validated by the Capital Verification Reportof Joincare Pharmaceutical Group Industry Co., Ltd. issued by Ruihua Certified Public Accountants (Rui Hua Yan Zi [2018]No.40060006).
(1) Temporary Replenishment of Working Capital with Proceeds
Pursuant to the Resolution on the Temporary Replenishment of Working Capital with Idle Proceeds considered andapproved at the 7th Meeting of the 8th Session of the Board of the Company on 30 December 2021, it was agreed that theCompany temporarily replenished the working capital with no more than RMB700 million of idle proceeds from 1 January2022 to 31 December 2022 so as to improve the use efficiency of proceeds and reduce financial expenses of the Company.For details, please refer to the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the TemporaryReplenishment of Working Capital with Certain Idle Proceeds (Lin 2021-159).As of 30 June 2022, the balance for temporary replenishment of working capital with idle proceeds of the Company wasRMB700 million.
(2) The Alteration of the Projects Invested with Proceeds
Pursuant to the“Resolution on Change of Certain Projects Invested with Proceeds”considered and approved at the 8thMeeting of the 8th Session of the Board of the Company on 24 January 2022, it was agreed that Zhuhai Health IndustryBase Construction Project was changed to the New Product R&D Project, Haibin Pharma Pingshan PharmaceuticalIndustrialization Base Expansion Project and the Information Platform Construction Project. The resolution was approved atthe 2022 1st extraordinary general meeting of the Company on 11 February 2022.
Before this alteration, the projects invested with proceeds for the allotment is as follows:
Unit: 10,000 Yuan
Project name
Total amountof investment
Total amountof proceedsinvestment
Use of proceeds
as at31 December 2021
Balance ofproceeds as at31 December 2021
Zhuhai Health Industry Base ConstructionProject (珠海大健康产业基地建设项目)98,066.8476,974.023,386.2973,587.73Haibin Pharma Pingshan PharmaceuticalIndustrialization Base Project (海滨制药坪山医药产业化基地项目)125,471.3590,000.0066,745.5823,254.42Total223,538.19166,974.0270,131.8796,842.15Given the facts that the“Zhuhai Health Industry Base Construction Project”has been postponed for several times for notmeeting the conditions for commencement, and the market environment and the Company’s business situation havechanged, which resulted in changes in the project feasibility, that the Company has an urgent need of funds for R&Dinvestment and other projects, and that other financing channels are time-consuming and costly, the Company changedthe aforementioned project to the New Product R&D Project, Haibin Pharma Pingshan Pharmaceutical IndustrializationBase Expansion Project and the Information Platform Construction Project. See below for details:
Unit: 10,000 YuanBefore alterationAfter alteration
Project name
Totalamount ofinvestment
Totalamount of
proceedsinvestmentProject name
Totalamount ofinvestment
Totalamount of
proceedsinvestment
Zhuhai Health Industry BaseConstruction Project (珠海
大健康产业基地建设项目)98,066.8476,974.02
New Product R&D Project
(新产品研发项目)110,000.0054,587.73Haibin Pharma PingshanPharmaceutical Industrialization BaseExpansion Project (海滨制药坪山医药产业化基地扩建项目)18,139.3916,000.00The Information PlatformConstruction Project
(信息化平台建设项目)3,000.003,000.00Total98,066.8476,974.02Total131,139.3973,587.73
Interim Report 2022
The details of alteration of the projects invested as follows:
a The New Product R&D ProjectThe total investment amount of the project is RMB1,100,000,000, in which RMB545,877,300 is raised, mainly for theresearch and development of inhalation formulations, complex injections, and new drug delivery devices among others.In particular, the investment is used for acquiring R&D equipment, pre-clinical and clinical R&D inputs. Main productsinvolved in this project are: 1) Respiratory drugs: the main purpose of the project as a part of the Company’s strategiclayout in the respiratory drug market, in a bid to increase sources of profit and enhance the Company’s comprehensivecompetitiveness in the pharmaceutical market; 2) Complex injections: mainly micronano injections. The Company has builta complex injection technology development platform, specializing in the development of special injection products suchas nanocrystals, microcrystals, liposomes and emulsions. The micronano formulations proposed with this platform will bedeveloped based on existing drugs with exact clinical value to further expand the clinical use of the drug; 3) New drugdelivery devices: to be developed based on the progress of R&D of drugs for respiratory diseases, so as to improve theindustrial chain of core products, and enhance the added value and core competitiveness of products to be marketed.b Haibin Pharma Pingshan Pharmaceutical Industrialization Base Expansion ProjectThe total investment amount of this project is RMB181,393,900, in which RMB160,000,000 is raised. Based on theHaibin Pharma Pingshan Pharmaceutical Industrialization Base Project, this project established new production lines ofTobramycin Solution for Inhalation, Fluticasone Propionate Suspension for Inhalation, among others and expanded existingproduction lines of Budesonide Suspension for Inhalation and Levosalbutamol Hydrochloride Nebuliser Solution. Thisproject is implemented for two key reasons: 1) New products are to be marketed, which requires related production lines.With inhalation formulations incorporated in its key layout in recent years, the Company has continuously invested in theR&D of several new products with high clinical value and broad market space. As new products like Tobramycin InhalationSolution and Fluticasone Propionate Suspension for Inhalation are to be marketed, related production lines are necessaryto make preparation for commercial production. 2) The capacity is unable to meet demand of some products: BudesonideSuspension for Inhalation was involved in the fifth batch of national volume-based drug procurement in June 2021,and will be supplied to public hospitals in 7 domestic provinces, meeting 70% of the drug needs according to policies.Levosalbutamol Hydrochloride Nebuliser Solution is the first approved exclusive generic drug in China. As of the date ofthe adoption of this proposal (January 24, 2022), no originator manufacturers or other generic drug manufacturers havebeen approved for market in China. However, the market demand is huge. The original capacity of the above two productsis unable to meet such market demand, making capacity expansion a must.c The Information Platform Construction ProjectThe total investment amount of this project is RMB30,000,000, in which RMB30,000,000 is raised. The investment is usedto purchase information management software and hardware as well as computer room facilities. The project planned toupgrade and improve: (1) the information infrastructure of existing information management system, including disasterrecovery and infrastructure of the server, and security equipment; (2) financial management system, including financialsharing system and tax administration system; (3) group management and control system, including HR system and SAPsystem.For details of the changes in the above-mentioned projects invested with proceeds, please refer to the Announcement ofJoincare Pharmaceutical Group Industry Co., Ltd. on Change of Certain Projects Invested with Proceeds (Lin 2022-007).
In addition, as a result of the changes in the above-mentioned projects invested with proceeds, the Company, TaitaiPharmaceutical, Haibin Pharma, Joincare Haibin, wholly-owned subsidiaries of the Company, together with MinshengSecurities Co., Ltd. and Shenzhen Branch of China Merchants Bank Co., Ltd. Shenzhen Bagualing Sub-branch of IndustrialBank Co., Ltd., Shenzhen Hongwei Sub-branch of Industrial and Commercial Bank of China Limited and ShenzhenUniversity City Sub-branch of China Everbright Bank Co., Ltd. signed a tripartite supervision agreement in relation todeposits in the Special Account for Proceeds. For details, please refer to the Announcement of Joincare PharmaceuticalGroup Industry Co., Ltd. on Signing A Tripartite Supervision Agreement in Relation to Deposits in the Special Account forProceeds (Lin 2022-015).As a result of the changes in the above-mentioned projects invested with proceeds, the special account for the proceeds(account number: 4000029129200529625) related to Zhuhai Health Industry Base Construction Project, the original projectsinvested with proceeds, has been cancelled. A tripartite supervision agreement in relation to deposits in the SpecialAccount for Proceeds signed by the Company, Health Pharmaceutical (a wholly-owned subsidiary of the Company) andMinsheng Securities Co., Ltd. and Shenzhen Hongwei Sub-branch of Industrial and Commercial Bank of China Limited onthe Special Account for Proceeds was terminated accordingly. For details, please refer to the Announcement of JoincarePharmaceutical Group Industry Co., Ltd. on Completion of Cancellation of the Special Account for the Proceeds (Lin2022-016).As at 30 June 2022, the projects invested with proceeds were as follows:
Unit: 10,000 Yuan
Project name
Total amountof investment
Total amount
of proceeds
invested
Use of proceeds
as at 30 June
2022
Balance ofproceeds as at
30 June 2022
Zhuhai Health Industry Base ConstructionProject(珠海大健康产业基地建设项目)–3,386.293,386.29–Haibin Pharma Pingshan PharmaceuticalIndustrialization Base Project(海滨制药坪山医药产业化基地项目)125,471.3590,000.0077,520.6012,479.40New Product R&D Project(新产品研发项目)110,000.0054,587.733,041.3051,546.43Haibin Pharma Pingshan PharmaceuticalIndustrialization Base Expansion Project(海滨制药坪山医药产业化基地扩建项目)18,139.3916,000.004,088.0511,911.95The Information Platform ConstructionProject (信息化平台建设项目)3,000.003,000.00195.612,804.39Total256,610.74166,974.0288,231.8578,742.17
Note: The above-mentioned Zhuhai Health Industry Base Construction Project was terminated.
For details of deposit and actual use of proceeds for the six months ended on 30 June 2022, please refer to the SpecialReport of Joincare Pharmaceutical Group Industry Co., Ltd. on Deposit and Actual Use of Proceeds for the Six MonthsEnded 30 June 2022 disclosed by the Company on 11 August 2022.
Interim Report 2022
2. Matters about share repurchase
Pursuant to the Resolution on Share Repurchase Scheme by Way of Centralized bidding transactions and other resolutionsconsidered and approved at the 6th Meeting of the 8th Session of the Board and the 2021 Fifth Extraordinary GeneralMeeting of the Company on 6 December 2021 and 23 December 2021, it was approved that the Company repurchasedcompany shares by way of Centralized bidding transactions with its own funds; the shares repurchased this timewould be used to reduce the registered capital; the total amount of repurchase funds should be no less than RMB300million (inclusive) and no more than RMB600 million (inclusive); the repurchase price should be no more than RMB15/share (inclusive); the repurchase term should be no more than 12 months from the date when the repurchase schemewas approved by the General Meeting of the Company. For the details, please see the Announcement of JoincarePharmaceutical Group Industry Co., Ltd. on the Share Repurchase Scheme by Way of Centralized Bidding Transactions (Lin2021-145) and the Repurchase Report of Joincare Pharmaceutical Group Industry Co., Ltd. on Share Repurchase by Way ofCentralized Bidding Transactions (Lin 2022-002);On 20 January 2022, the Company initially repurchased 785,992 shares by way of centralized price bidding, representing
0.04% of total share capital of the Company (1,907,727,908 shares); the total amount paid was RMB9.9807 million (including
the transaction costs); see the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Initial ShareRepurchase by Way of Centralized Bidding Transactions (Lin 2022-004) for details;As a result of the cash dividend of the Company for the year 2021, the above price cap of repurchased shares was adjustedto RMB14.85/share; see the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Adjustment of the PriceCap of the Company’s Shares by Way of Centralized Bidding Transactions after the Equity Distribution for the Year 2021 (Lin2022-068);On 7 July 2022, the Company completed the repurchase. The Company cumulatively repurchased 50,959,668 sharesby way of centralized price bidding, representing 2.66% of total share capital of the Company (1,912,540,667 shares);the maximum repurchase price was RMB13.02/share; the minimum repurchase price was RMB10.02/share; the averagerepurchase price was RMB11.77/share; the total amount paid was RMB599,981,715.83 (including commissions);and de-registration of 50,959,668 purchased shares this time was completed on 11 July 2022. For details, see theAnnouncement of Joincare Pharmaceutical Group Industry Co., Ltd. on Implementation Results of Share Repurchase andShare Changes (Lin 2022-076).
3. Overall relocation and expansion project of Sichuan Guangda
On 6 March 2019, the Board of Directors of Livzon Group, a controlling subsidiary of the Company, considered andapproved to enter into the“Investment Agreement for the Overall Relocation and Expansion Project of Sichuan GuangdaPharmaceutical Manufacturing”(《四川光大制药整体搬迁调迁扩建项目投资协议书》) (the“Investment Agreement”) andthe Supplemental Agreement I with Sichuan Chengdu Pengzhou Municipal People’s Government (四川省成都市彭州市人民政府). Pursuant to the Investment Agreement, the Company will inject capital of RMB646 million for investment inconstruction of the overall relocation and expansion project (the“Project”) of Sichuan Guangda, a wholly-owned subsidiaryof the Company. Pursuant to the Supplemental Agreement I, Pengzhou Municipal People’s Government has agreed topay a compensation for demolition of RMB90 million and grant total incentive of not more than RMB125.8 million for theconstruction of new plant to the Company.As of 30 June 2022, the total investment of the specific contracts entered into for the Project amounted to RMB477.4202million, and the sum of subsidies received from government authorities at various levels amounted to RMB137.1799million, the construction works for the warehousing system and the QC main body were completed, the constructionworks for the main body of the extraction workshop and the pre-treatment workshop were implemented, and thefoundation construction works for the granulation workshop, the comprehensive preparation workshop and the packagingworkshop were implemented, and the overall Project was smooth in progress.
4. Invested company Tianjin Tongrentang initial public offering of shares and listing progress
The Shenzhen Stock Exchange suspended the review of listing of Tianjin Tongrentang Group Co., Ltd. (天津同仁堂集团股份有限公司) (“Tianjin Tongrentang”) on 26 January 2022, as CSRC has initiated an investigation against ShineWingCertified Public Accountants (Special General Partnership), the accountant engaged by Tianjin Tongrentang for the initialpublic offering of its shares and listing on the ChiNext Board.Since ShineWing Certified Public Accountants (Special General Partnership), the engaged accountant, has issued thereview report, the Shenzhen Stock Exchange resumed the review of listing of Tianjin Tongrentang on 30 March 2022.Save as disclosed above, please refer to the 2021 Annual Report of the Company for its investment in Tianjin Tongrentang.
5. Livzon Group’s plan to spin off Livzon Diagnostics for A-share listing progress
On 7 August 2020, the Board of Directors of Livzon Group, a majority-controlled subsidiary of the Company, consideredand approved the proposal to spin off its subsidiary Zhuhai Livzon Diagnostics Inc. (hereinafter referred to as LivzonDiagnostics) for A-share listing (hereinafter referred to as spin-off listing). Livzon Diagnostics is mainly engaged in theR&D, production and sale of diagnostic reagents and equipment. As at the end of the Reporting Period, Livzon Group heldapproximately 39.425% of shares of Livzon Diagnostics. After completion of this spin-off, the shareholding structure ofLivzon Group will remain unchanged, and Livzon Group will still maintain control over Livzon Diagnostics. For more details,please see“the Suggestive Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Livzon Group’s PlannedSpin-off of Its Subsidiary Livzon Diagnostics for A-share Listing” (Lin 2020-106).On 16 October 2020, the Stock Exchange of Hong Kong Limited agreed to Livzon Group’s spin-off listing, and agreed toexempt the group from the applicable regulations concerning the assured entitlement related to the spin-off listing. Fordetails, see the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the progress of Livzon Group’sPlanned Spin-off of Its Subsidiary Livzon Diagnostics for A-share Listing (Lin 2020-131).Livzon Diagnostics would go spin-off listing on the ChiNext Board of Shenzhen Stock Exchange pursuant to the Resolutionon the Spin-off of the Subsidiary Zhuhai Livzon Diagnostics Inc. to Go Listing on the ChiNext Board of Shenzhen StockExchange considered and approved at the Board meeting of Livzon Group on 23 October 2020. For details, see theAnnouncement of Joincare Pharmaceutical Group Industry Co., Ltd. on the progress of Livzon Group’s Planned Spin-off ofIts Subsidiary Livzon Diagnostics for A-share Listing (Lin 2020-134).The spin-off listing of Livzon Diagnostics was approved at the 2020 4th extraordinary general meeting of Livzon Group on20 November 2020, and was registered with Guangdong Securities Regulatory Bureau for pre-listing tutoring in November2020. As of the disclosure date of this report, Livzon Diagnostics has submitted the seven issues of reports on progress ofthe tutoring. As of the disclosure date of this report, Livzon Diagnostics has not submitted any application to or registeredwith Shenzhen Stock Exchange or any relevant Chinese regulatory authorities other than those progresses listed above.
6. Progress of the Company planned to issue GDR and list on the Swiss Stock Exchange
On 15 June 2022, the Company held the 12th Meeting of the 8th Session of the Board, at which the Resolution forIssuance of Global Depository Receipts Overseas and Listing on the Swiss Stock Exchange was considered and approved.The resolution is designated to expand international finance channels and promote the international brand image ofthe Company. The Company proposed to issue Global Depository Receipts (“GDR”) overseas and list on the Swiss StockExchange, the details of which set out in the Indicative Announcement of Joincare Pharmaceutical Group Industry Co., Ltd.on Planning to Issue Global Depository Receipts Overseas and List on the Swiss Stock Exchange (Lin 2022-061).
Interim Report 2022
On 22 June 2022, the Company convened the 13rd Meeting of the 8th Session of the Board, at which the Resolution on theCompany’s Issuance of GDR and Listing on the Swiss Stock Exchange and Conversion into a Joint Stock Limited CompanyOffering Shares Overseas, the Resolution on the Company’s Issuance of GDR and Listing on the Swiss Stock Exchangeand other relevant resolutions were considered and approved. For this issuance of GDR, the newly issued RMB ordinaryA shares of the Company are used as the underlying securities. The new underlying A shares represented by GDR do notexceed 191,254,066 shares, including the securities issued due to the exercise of any over-allotment options (if any), anddo not exceed 10% of the total share capital of ordinary share of the Company (1,912,540,667) before this issuance. In theevent that the Company's share capital increases or decreases due to bonus issue, bonus share issue by way of conversionof capital reserve or rights issue, repurchase during the period from the date of the resolution of the Board of Directorsto the issuance date, the number of new underlying A shares represented by GDR shares will be adjusted accordinglyin accordance with relevant regulations. Meanwhile, the Company formulated the Confidentiality and File ManagementPolicy related to Overseas Securities Issuance and Listing of Joincare Pharmaceutical Group Industry Co., Ltd., and revisedthe Articles of Association, Rules of Procedure for General Meetings and other Company rules and regulations involvingGDR. For details, see the Announcement on the Resolutions of Joincare Pharmaceutical Group Industry Co., Ltd. at the 13thMeeting of the 8th Session of the Board (Lin 2022-063) and the Announcement on the Establishment of the Articles ofAssociation and its Appendixes Applicable to the Company upon the Listing of GDR in accordance with the Confidentialityand File Management Policy related to Overseas Securities Issuance and Listing of Joincare Pharmaceutical Group IndustryCo., Ltd. (Lin 2022-064).On 8 July 2022, the Company held the Second Extraordinary General Meeting of 2022, at which related resolutionsconcerning issuance of GDR overseas and listing on the Swiss Stock Exchange were considered and approved. At themeeting we also submitted to the General Meeting to authorize the Board of Directors and its authorized persons to takefull charge of all the matters involved in GDR issuance and listing. For details, see the Announcement on Resolutions ofJoincare Pharmaceutical Group Industry Co., Ltd. at the Second Extraordinary General Meeting of 2022 (Lin 2022-077).On 13 July 2022, the Company submitted the above GDR issuance application documents to CSRC and received theAcceptance Notice from CSRC on 20 July 2022. For details, see the Announcement on GDR Application of JoincarePharmaceutical Group Industry Co., Ltd. Accepted by CSRC (Lin 2022-080).
Changes inEquity andShareholders
Interim Report 2022
I Changes in equity(I) Changes in shares
1. Changes in shares
Unit: sharesBefore the current changeIncrease/decrease (+, -) due to the current changeAfter the current change
NumberPercentage
Issuanceof newshares
Issuanceof bonussharesConversionof capitalreserve toshare capitalOthersSubtotalNumberPercentage(%)(%)
I. Shares subject to selling restrictions
1. Shares held by state government
2. Shares held by state-owned entities
3. Shares held by other domestic holders
Including: Shares held by domesticnon-state-owned entitiesShares held by domestic natural persons
4. Shares held by foreign holders
Including: Shares held by foreign entitiesShares held by foreign natural personsII. Shares not subject to selling restrictions1,907,727,9081004,812,7590004,812,7591,912,540,667100
1. Ordinary shares denominated in Renminbi1,907,727,9081004,812,7590004,812,7591,912,540,667100
2. Domestically listed foreign shares
3. Overseas listed foreign shares
4. Others
III. Total number of shares1,907,727,9081004,812,7590004,812,7591,912,540,667100
2. Description of changes in shares
√ Applicable □N/AThe number of exercisable options during the third exercise period of the first grant under the 2018 Share OptionsIncentive Scheme of the Company was 7.263 million and the exercise period was from 21 December 2021 to 20 December2022. The number of exercisable options during the second exercise period of the reserved grant under the 2018 ShareOptions Incentive Scheme of the Company was 2.935 million, and the exercise period was from 23 September 2021 to 22September 2022 by way of independent exercise.During the Reporting Period, the number of options exercised and completed share transfer registration under the 2018Share Options Incentive Scheme of the Company was totaled 4,812,759.
3. Impact of changes in shares on earnings per share, net assets per share and other financial indicators from the Reporting
Period to the date of disclosure of the interim report (if any)
□ Applicable?
√ N/A
4. Other information deemed necessary by the Company or as required by the securities regulators
□ Applicable?
√ N/A
Chapter 7Changes in Equity and Shareholders
(II) Changes in shares with selling restrictions
□ Applicable?
√ N/AII Shareholders(I) Total number of shareholders:
Total?number?of?ordinary?shareholders?at?the?end?of?the?Reporting?Period95,021Total?number?of?shareholders?of?preferred?shares?with?resumed?voting?rights?at?the?end?of?the?Reporting?PeriodNot?applicable(II) Shareholdings of the Top 10 shareholders and the Top 10 shareholders of tradable shares (or shareholders
without selling restrictions) at the End of the Reporting Period
Unit: sharesShareholdings of the Top 10 shareholders
Name of shareholder (Full name)
Changeduring thereporting
period
Number ofshares heldat the end ofthe PeriodPercentage
Number ofshares heldwith sellingrestrictions
Pledge, mark or lock-up
Nature ofShareholderShare statusNumber(%)
Shenzhen Baiyeyuan Investment Co., Ltd.*0895,653,65346.830Pledge95,679,725Domestic non-state
owned entityHong Kong Securities Clearing Company Limited15,002,871106,964,2975.590UnknownUnknownMight Seasons Limited–14,371,90057,487,4343.010UnknownForeign entity108 portfolio of national social security fund–810,30011,461,7210.600UnknownUnknownHuaxia Life Insurance Co., Ltd. – Proprietary fund163,1009,275,7180.480UnknownUnknown16011 portfolio of basic endowment insurance fund–1,089,4007,960,8340.420UnknownUnknownHe Zhong–50,0007,800,0240.410UnknownDomestic natural
personBosera Funds Management Co., Ltd. – 419 portfolio of socialsecurity funds
–2,143,8006,589,1460.340UnknownUnknownJoincare Pharmaceutical Group Industry Co., Ltd. – theSecond Phase Ownership Scheme under Medium toLong-term Business Partner Share Ownership Scheme
6,275,3726,275,3720.330UnknownOthersAgricultural Bank of China Limited – CSI 500 ExchangeTraded Index Securities Investment Fund
–376,0005,021,2940.260UnknownUnknown
Interim Report 2022
Shareholdings of the Top 10 shareholders without selling restrictionsName of shareholder
Number of tradableshares held withoutselling restrictions
Class and number of sharesClassNumberShenzhen Baiyeyuan Investment Co., Ltd.*895,653,653Ordinary shares
denominated in Renminbi
895,653,653Hong Kong Securities Clearing Company Limited106,964,297Ordinary shares
denominated in Renminbi
106,964,297Might Seasons Limited57,487,434Ordinary shares
denominated in Renminbi
57,487,434108 portfolio of national social security fund11,461,721Ordinary shares
denominated in Renminbi
11,461,721Huaxia Life Insurance Co., Ltd.–Proprietary fund9,275,718Ordinary shares
denominated in Renminbi
9,275,71816011 portfolio of basic endowment insurance fund7,960,834Ordinary shares
denominated in Renminbi
7,960,834He Zhong7,800,024Ordinary shares
denominated in Renminbi
7,800,024Bosera Funds Management Co., Ltd.–419 portfolio ofsocial security funds
6,589,146Ordinary shares
denominated in Renminbi
6,589,146Joincare Pharmaceutical Group Industry Co., Ltd.–theSecond Phase Ownership Scheme under Medium toLong-term Business Partner Share Ownership Scheme
6,275,372Ordinary shares
denominated in Renminbi
6,275,372Agricultural Bank of China Limited–CSI 500 ExchangeTraded Index Securities Investment Fund
5,021,294Ordinary shares
denominated in Renminbi
5,021,294Notes on the special repurchase account among thetop 10 shareholders
As at the end of the Reporting Period, the special repurchaseaccount of the Company (special securities repurchase accountof Joincare Pharmaceutical Group Industry Co., Ltd.) owned62,156,456 shares in total, accounting for 3.25%.Description of the participation of the top 10shareholders and the top 10 shareholders withoutselling restriction in securities margin trading andrefinancing business
He Zhong, a shareholder, held 800,000 shares through anordinary securities account and 7,000,024 shares through acredit guarantee account, namely 7,800,024 shares in total.Description of the above shareholders involved inentrustment/entrusted voting right and waiver ofvoting right
Not applicableDescription of connection or acting-in-concertrelationship of the above shareholders
There was no connection or acting-in-concert relationship
between Shenzhen Baiyeyuan Investment Co., Ltd., a controlling
shareholder of the Company, and other shareholders; whether
there is connection or acting-in-concert relationship among
other shareholders is unknownDescription of holders of preferred shares with resumedvoting rights and number of preferred shares
Not applicableNumber of shares held by the Top 10 shareholders with selling restrictions and selling restrictions
□ Applicable?
√ N/A
(III) Strategic investors or general legal persons who became Top 10 shareholders through placement of new
shares
□ Applicable?
√ N/A
III Information on directors, supervisors, and senior management(I) Changes in shareholdings of current directors, supervisors, and senior management and those whoresigned during the Reporting Period
√ Applicable?□ N/A
Unit: shares
NameTitle
Number ofshares held atthe beginningof the Period
Number ofshares held atthe end of the
Period
Changes inshareholdings
during theReporting PeriodReason for changesYu XiongDirector660,000800,000140,000Exercise of Equity incentiveQiu QingfengDirector537,409717,409180,000Exercise of Equity incentiveLin NanqiDirector1,051,0401,291,040240,000Exercise of Equity incentive
Note: In addition to being a director, Yu Xiong acts as President of the Company, Qiu Qingfeng as the Vice President and CFO of the Company, and Lin Nanqi
as the Vice President of the Company.Description of other information
□ Applicable?
√ N/A
(II) Equity incentive granted to directors, supervisors, and senior management during the Reporting Period
√ Applicable?□ N/A
Unit: shares
NameTitle
Number ofshare options
held at thebeginning of
the Period
Number ofshare optionsgranted duringthe ReportingPeriod
Number ofexercisableshares duringthe Reporting
Period
Number ofshare options
exercised
during the
Period
Number ofshare optionsheld at the end
of the Period
Yu XiongDirector140,0000140,000140,0000Qiu QingfengDirector180,0000180,000180,0000Lin NanqiDirector240,0000240,000240,0000Zhao FengguangSenior management180,0000180,0000180,000Total/740,0000740,000560,000180,000
Note: In addition to being a director, Yu Xiong acts as President of the Company, Qiu Qingfeng as the Vice President and CFO of the Company, and Lin Nanqi
as the Vice President of the Company.(III) Others
□ Applicable?
√ N/AIV Changes in controlling shareholders or de facto controllers
□Applicable
√N/A
Informationon Preferred
Shares
□Applicable
√N/A
Chapter 8Information on Preferred Shares
Information on
Bonds
I Enterprise bonds, corporate bonds, and non-financial enterprise debt financinginstruments
□ Applicable?
√ N/AII Information on convertible corporate bonds
□ Applicable?
√ N/A
Chapter 9Information on Bonds
FinancialStatements
I. Auditor’s report
□ Applicable
√N/A
Chapter 10Financial Statements
lnterim Report 2022
II. Financial statements
Consolidated Balance Sheet
30 June 2022Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMBItemNote30 June 202231 December 2021Current assets:
Cash and bank balancesV.112,653,108,949.1711,729,230,390.98Financial assets held for tradingV.299,806,543.32184,638,344.31Notes receivableV.31,888,473,693.791,977,286,022.02Accounts receivableV.42,895,463,163.962,853,655,551.54Receivables financingPrepaymentsV.5438,456,122.38369,232,546.29Other receivablesV.650,888,736.7188,053,825.12Including: Interest receivables365,873.64 ?? Dividend receivables215,678.92InventoriesV.72,254,220,729.872,078,944,387.68Contract assetsAssets held-for-saleNon-current assets due within one yearV.838,498.84317,381.23Other current assetsV.951,971,077.2883,986,214.37Total current assets20,332,427,515.3219,365,344,663.54Non-current assets:
Debt investmentOther debt investmentLong-term receivablesV.1082,574.69266,904.13Long-term equity investmentV.111,423,034,057.291,419,349,454.84Other equity instrument investmentsV.121,170,558,267.071,408,882,377.42Other non-current financial assetsInvestment propertiesV.136,191,475.436,191,475.43Fixed assetsV.144,742,112,777.954,839,005,169.81Construction in progressV.151,138,204,863.10742,998,743.75Productive biological assetsOil & gas assetsRight-of-use assetsV.1645,641,439.3046,774,759.69Intangible assetsV.17487,393,277.62456,782,094.80Development costV.18858,336,350.91786,993,435.71GoodwillV.19614,468,698.73614,468,698.73Long-term prepaid expensesV.20220,173,833.64200,715,740.93Deferred tax assetsV.21633,378,856.81552,542,866.71Other non-current assetsV.22511,560,279.43663,584,003.80Total non-current assets11,851,136,751.9711,738,555,725.75Total assets32,181,512,667.2931,103,900,389.29
ItemNote30 June 202231 December 2021Current liabilities:
Short-term loansV.231,982,775,000.022,518,484,835.09Financial liabilities held for tradingV.2410,791,038.40143,302.24Notes payableV.251,601,063,168.351,582,386,767.93Accounts payableV.26933,275,211.76871,553,210.51Receipts in advanceContract liabilitiesV.27100,704,258.24234,140,702.29Employee benefits payableV.28375,599,648.25475,430,823.20Taxes payableV.29420,134,507.00270,618,183.41Other payablesV.303,398,357,996.683,292,407,989.79Including: Interest payables ?? Dividend payables24,631,984.466,951,984.46Liabilities held-for-saleNon-current liabilities due within one yearV.3193,190,354.8491,576,066.33Other current liabilitiesV.327,166,683.8015,626,224.29Total current liabilities8,923,057,867.349,352,368,105.08Non-current liabilities:
Long-term loansV.332,403,726,004.58826,780,252.78Bonds payableLease liabilitiesV.3422,599,182.6025,071,794.32Long-term payablesLong-term payroll payableEstimated liabilitiesDeferred incomeV.35472,360,136.25433,543,352.40Deferred tax liabilitiesV.21175,493,047.27208,525,905.39Other non-current liabilitiesV.3684,000,000.0078,000,000.00Total non-current liabilities3,158,178,370.701,571,921,304.89Total liabilities12,081,236,238.0410,924,289,409.97shareholders’ equityShare capitalV.371,912,540,667.001,907,727,908.00Other equity instrumentsIncluding: Preferred shares ?? Perpetual bondsCapital reserveV.382,316,360,798.952,265,357,311.92Less: Treasury sharesV.39742,977,205.72222,644,454.50Other comprehensive incomeV.40-37,611,311.235,387,545.97Special reserveSurplus reserveV.41649,438,942.76640,821,179.08Undistributed profitsV.427,824,914,927.177,223,644,166.22Total shareholders’ equity attributable to the parent11,922,666,818.9311,820,293,656.69Minority shareholder’s equity8,177,609,610.328,359,317,322.63Total shareholders’ equity20,100,276,429.2520,179,610,979.32Total liabilities and shareholders’ equity (or shareholder’s equity)32,181,512,667.2931,103,900,389.29
Person-in-charge of the Company:
Zhu Baoguo
Person-in-charge of the Company’s accounting work:
Qiu Qingfeng
Person-in-charge of the accounting department:
Qiu Qingfeng
lnterim Report 2022
Balance Sheet of the Parent Company
30 June 2022Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMBItemNote30 June 202231 December 2021Current assets:
Cash and bank balances2,118,729,226.611,370,906,734.13Financial assets held for tradingNotes receivable234,490,808.52374,296,302.21Accounts receivable353,134,208.48535,543,070.24Receivable financingPrepayments457,868,974.09201,605,530.55Other receivables1,093,801,818.491,136,237,811.25Including: Interest receivables ?? Dividends receivable769,999,500.00814,041,000.00Inventories725,704.05Contract assetsAssets held-for-saleNon-current assets due within one yearOther current assets9,167,665.159,379,100.23Total current assets4,267,918,405.393,627,968,548.61Non-current assets:
Debt investmentOther debt investmentLong-term receivablesLong-term equity investment3,513,434,646.473,530,939,152.29Other equity instrument investment136,995,826.79372,609,966.35Other non-current financial assetsInvestment properties6,191,475.436,191,475.43Fixed assets46,653,548.9045,139,232.27Construction in progress11,625,599.557,890,737.14Productive biological assetsOil & gas assetsRight-of-use assets10,132,677.6312,470,703.77Intangible assets15,181,241.4115,316,963.24Development cost26,092,293.1221,304,063.68GoodwillLong-term prepaid expenses722,794.65900,737.50Deferred income tax assets157,391,273.73134,711,371.96Other non-current assets54,055,428.7254,866,150.94Total non-current assets3,978,476,806.404,202,340,554.57Total assets8,246,395,211.797,830,309,103.18
ItemNote30 June 202231 December 2021Current liabilities:
Short-term loans100,000,000.00450,436,811.38Financial liabilities held for tradingNotes payable484,246,155.59358,526,972.01Accounts payable257,392,547.42461,763,867.32Receipts in advanceContract liabilities21,785,124.5231,637,971.91Employee benefits payable81,504,877.3295,624,280.17Taxes payable18,276,040.2017,190,533.60Other payables1,759,567,632.80810,207,330.35Including: Interest payables ?? Dividends payableLiabilities held-for-saleNon-current liabilities due within one year45,424,338.6144,954,632.42Other current liabilities3,255,248.492,140,860.88Total current liabilities2,771,451,964.952,272,483,260.04Non-current liabilities:
Long-term loans610,000,000.00160,000,000.00Bonds payableLease liabilities4,955,487.047,683,561.03Long-term payablesLong-term payroll payableEstimated liabilitiesDeferred income47,145,500.0040,796,000.00Deferred tax liabilities47,219.3429,371,338.01Other non-current liabilitiesTotal non-current liabilities662,148,206.38237,850,899.04Total liabilities3,433,600,171.332,510,334,159.08Shareholders’ equity:
Share capital1,912,540,667.001,907,727,908.00Other equity instrumentsIncluding: Preferred shares ?? Perpetual bondsCapital reserve1,641,909,016.941,605,482,128.64Less: Treasury shares742,977,205.72222,644,454.50Other comprehensive income-3,879,108.5277,015,953.08Special reserveSurplus reserve560,836,994.38552,219,230.70Undistributed profits1,444,364,676.381,400,174,178.18Total shareholders’ equity attributable to the parent4,812,795,040.465,319,974,944.10Total liabilities and shareholders’ equity8,246,395,211.797,830,309,103.18Person-in-charge of the Company:
Zhu Baoguo
Person-in-charge of the Company’s accounting work:
Qiu Qingfeng
Person-in-charge of the accounting department:
Qiu Qingfeng
lnterim Report 2022
Consolidated Income Statement
January to June, 2022Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
ItemNoteFirst half of 2022First half of 2021
I. Revenue from operationsV.438,564,945,285.557,835,372,274.66Including: Operating revenues8,564,945,285.557,835,372,274.66II. Total operating costs6,767,945,476.666,312,457,301.60Including: Cost of operationsV.433,054,392,703.202,743,005,734.93Taxes and surchargesV.4494,322,638.3190,345,092.56Selling expensesV.452,512,369,792.452,499,949,757.30Administrative expensesV.46529,828,311.93397,921,091.17Research and development expensesV.47707,433,078.44622,962,388.41Financial expensesV.48-130,401,047.67-41,726,762.77Including: Interest expenses60,979,386.6838,708,820.91 ?Interest income117,501,999.5078,035,350.84Add: Other incomeV.4997,242,254.03131,455,378.87Investment income (“-” for loss)V.5051,014,159.0046,810,627.37Including: Gains from investments in associates and joint ventures41,208,487.809,750,424.27Gain from derecognition of financial assets at amortized cost (“-” for loss)Gain from net exposure of hedging (“-” for loss)Gains from changes of fair value (“-” for loss)V.51-95,479,537.1533,316,547.15Credit impairment loss (“-” for loss)V.52-2,805,440.83-9,485,295.67Assets impairment loss (“-” for loss)V.53-27,834,495.93-28,878,059.99Gain from disposal of assets (“-” for loss)V.54-510,518.9117,927,771.94III. Operating profit (“-” for loss)1,818,626,229.101,714,061,942.73Add: Non-operating incomeV.554,470,914.884,641,364.71Less: Non-operating expensesV.566,741,606.856,039,971.44IV. Total profit (“-” for loss)1,816,355,537.131,712,663,336.00Less: Income tax expensesV.57271,175,329.55244,565,734.30V. Net profit (“-” for net loss)1,545,180,207.581,468,097,601.70(I) Classified by continuity of operations:
Including: Net profit from continuing operations (“-” for net loss)1,545,180,207.581,468,097,601.70 ?Net profit from discontinued operations (“-” for net loss)(II) Classified by attribution to ownership:
Including: Ne t profit attributable to shareholders of the parent
(“-” for net loss)
801,268,519.50687,347,494.53 ?Net profit attributable to minority interests (“-” for net loss)743,911,688.08780,750,107.17
ItemNoteFirst half of 2022First half of 2021VI. Other comprehensive income – after tax-25,063,137.51-161,118,765.76(I) Other comprehensive income – after tax attributable to shareholders ofthe parent
-42,998,857.20-80,061,071.46
1. Other comprehensive income not reclassified into profit or loss
subsequently
-79,078,918.80-61,841,866.88
(1) Changes in remeasurement of defined benefit plan
(2) Share of other comprehensive income of the equity method
investments
1,109,969.99
(3) Changes in fair value of other equity instruments investment-80,188,888.79-61,841,866.88
(4) Changes in fair value of the Company’s own credit risks
2. Other comprehensive income that will be reclassified into profit or loss
subsequently
36,080,061.60-18,219,204.58
(1) Share of other comprehensive income of associates and joint ventures
under equity method
(2) Changes in the fair value of other debt investments
(3) Reclassification of financial assets recognised as other comprehensive
income
(4) Credit impairment loss of other debt investments
(5) Cash flow hedging reserve (effective part of cash flow hedging profit
and loss)
(6) Translation of foreign currency financial statements36,080,061.60-18,219,204.58
(7) Others
(II) Other comprehensive income – after tax attributable to minorityinterests
17,935,719.69-81,057,694.30VII. Total comprehensive income1,520,117,070.071,306,978,835.94(I) Total comprehensive income attributable to shareholders of the parent758,269,662.30607,286,423.07(II) Total comprehensive income attributable to minority interests761,847,407.77699,692,412.87VIII. Earnings per share(I) Basic earnings per share0.42350.3514(II) Diluted earnings per share0.42320.3504Person-in-charge of the Company:
Zhu Baoguo
Person-in-charge of the Company’s accounting work:
Qiu Qingfeng
Person-in-charge of the accounting department:
Qiu Qingfeng
lnterim Report 2022
Income Statement of the Parent Company
January to June, 2022Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMBItemNoteFirst half of 2022First half of 2021
I. Revenue from operations1,177,100,137.17767,872,298.02Less: Cost of operations788,887,001.95461,788,716.17Taxes and surcharges7,310,543.595,768,988.93Selling expenses347,794,247.66197,183,327.14Administrative expenses106,346,117.9247,548,122.82Research and development expenses30,185,363.0623,202,371.94Financial expenses-7,269,224.74-7,191,444.75Including: Interest expenses7,190,074.411,860,476.04 ?Interest income15,043,357.519,132,475.57Add: Other income874,278.66559,381.42Investment income (“-” for loss)315,106,835.25595,277,628.57Including: Gains from investments in associates and joint ventures576,377.39-1,300,363.73Gain from derecognition of financial assets at amortized cost(“-” for loss)Gain from net exposure of hedging (“-” for loss)Gains from changes of fair value (“-” for loss)Credit impairment loss (“-” for loss)1,514,532.04-100,938.45Assets impairment loss (“-” for loss)Gain from disposal of assets (“-” for loss)II. Operating profit (“-” for loss)221,341,733.68635,308,287.31Add: Non-operating income94,336.1471,272.57Less: Non-operating expenses23,452.93483,009.57III. Total profit (“-” for loss)221,412,616.89634,896,550.31Less: Income tax expenses-22,775,639.8611,595,521.04IV. Net profit (“-” for net loss)244,188,256.75623,301,029.27(I) Net profit from continuing operations (“-” for net loss)244,188,256.75623,301,029.27(II) Net profit from discontinued operations (“-” for net loss)
ItemNoteFirst half of 2022First half of 2021V. Other comprehensive income – after tax-80,895,061.60-22,304,174.23(I) . Other comprehensive income not reclassified into profit or losssubsequently
-80,895,061.60-22,304,174.23
1. Changes in remeasurement of defined benefit plan
2. Share of other comprehensive income of the equity method
investments
3. Changes in fair value of other equity instruments investment-80,895,061.60-22,304,174.23
4. Changes in fair value of the Company’s own credit risks
(II) Other comprehensive income that will be reclassified into profitor loss subsequently
1. Share of other comprehensive income of associates and joint
ventures under equity method
2. Changes in the fair value of other debt investments
3. Reclassification of financial assets recognised as other
comprehensive income
4. Credit impairment loss of other debt investments
5. Cash flow hedging reserve (effective part of cash flow hedging
profit and loss)
6. Translation of foreign currency financial statements
7. Others
Other comprehensive income – after tax attributable to minorityinterestsVI. Total comprehensive income163,293,195.15600,996,855.04VII. Earnings per share(I) Basic earnings per share(II) Diluted earnings per sharePerson-in-charge of the Company:
Zhu Baoguo
Person-in-charge of the Company’s accounting work:
Qiu Qingfeng
Person-in-charge of the accounting department:
Qiu Qingfeng
lnterim Report 2022
Consolidated Cash Flow Statement
January to June, 2022
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
ItemNoteFirst half of 2022First half of 2021I. Cash flows from operating activities:
Cash received from sales of goods or rendering of services9,266,508,015.607,419,412,296.34Tax refund received167,531,739.9161,962,005.91Other cash received relating to operating activitiesV.58320,066,884.87284,172,439.10Sub-total of cash inflows9,754,106,640.387,765,546,741.35Cash paid for goods and services2,686,391,136.111,884,769,945.39Cash paid to and on behalf of employees1,283,240,953.211,116,771,823.55Payments of all types of taxes862,562,844.21867,755,091.60Other cash paid relating to operating activitiesV.583,018,958,482.063,150,462,367.45Sub-total of cash outflows7,851,153,415.597,019,759,227.99Net cash flows from operating activities1,902,953,224.79745,787,513.36II. Cash flows from investing activities:
Cash received from disposal of investments216,970,980.4286,940,226.39Cash received from returns on investments121,544,073.5363,907,310.85Net cash received from disposal of fixed assets, intangible assetsand other long-term assets
931,662.202,121,444.19Cash received from disposal of subsidiaries and other businessunits
3,311,220.53Other cash received relating to investing activitiesV.5812,984,186.5513,361,577.34Sub-total of cash inflows352,430,902.70169,641,779.30Cash paid to acquire fixed assets, intangible assets and other long-term assets
739,956,798.62597,823,351.45Cash paid to acquire investments30,338,557.45744,000,000.00Cash paid to acquire subsidiaries and other business unitsOther cash paid relating to investing activitiesV.5815,394,931.821,566,246.09Sub-total of cash outflows785,690,287.891,343,389,597.54Net cash flows from investing activities-433,259,385.19-1,173,747,818.24III. Cash flows from financing activities:
Cash received from capital contribution61,420,564.63474,991,831.37Including: Cash received from investment by minority interests ofsubsidiaries
22,444,277.37428,234,715.52Cash received from borrowings3,620,437,809.481,211,215,105.43Cash received relating to other financing activitiesV.583,124,846.382,809,612.35Sub-total of cash inflows3,684,983,220.491,689,016,549.15Cash repayments of amounts borrowed2,583,795,608.091,282,584,146.53Cash payments for interest expenses and distribution of dividendsor profits
1,219,425,266.741,158,748,844.24Including: Dividend paid to minority interests of subsidiaries900,571,289.90842,390,603.13Other cash payments relating to financing activitiesV.58538,573,404.10722,917,255.81Sub-total of cash outflows4,341,794,278.933,164,250,246.58Net cash flows from financing activities-656,811,058.44-1,475,233,697.43IV. Effect of foreign exchange rate changes on cash and cashequivalents
105,379,819.98-26,647,873.71V. Net increase in cash and cash equivalents918,262,601.14-1,929,841,876.02Add: Opening balance of cash and cash equivalent11,697,518,141.1812,122,781,311.49VI. Closing balance of cash and cash equivalent12,615,780,742.3210,192,939,435.47
Person-in-charge of the Company:
Zhu Baoguo
Person-in-charge of the Company’s accounting work:
Qiu Qingfeng
Person-in-charge of the accounting department:
Qiu Qingfeng
Cash Flow Statement of Parent Company
January to June, 2022Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMBItemNoteFirst half of 2022First half of 2021I. Cash flows from operating activities:
Cash received from sales of goods or rendering of services1,627,134,774.34689,547,745.88Tax refund receivedOther cash received relating to operating activities1,361,915,765.88253,368,418.30Sub-total of cash inflows2,989,050,540.22942,916,164.18Cash paid for goods and services1,220,271,835.02411,827,084.87Cash paid to and on behalf of employees171,079,267.1183,143,842.68Payments of all types of taxes59,188,798.2949,857,359.03Other cash paid relating to operating activities747,239,926.63464,776,999.67Sub-total of cash outflows2,197,779,827.051,009,605,286.25Net cash flows from operating activities791,270,713.17-66,689,122.07II. Cash flows from investing activities:
Cash received from disposal of investments216,970,980.42Cash received from returns on investments403,351,191.73592,402,254.45Net cash received from disposal of fixed assets, intangible assetsand other long-term assets
13,000.0077,600.00Cash received from disposal of subsidiaries and other businessunitsOther cash received relating to investing activities158,470.77Sub-total of cash inflows620,493,642.92592,479,854.45Cash paid to acquire fixed assets, intangible assets and other long-term assets
3,688,331.002,023,634.00Cash paid to acquire investments319,037,191.00Cash paid to acquire subsidiaries and other business unitsOther cash paid relating to investing activitiesSub-total of cash outflows3,688,331.00321,060,825.00Net cash flows from investing activities616,805,311.92271,419,029.45III. Cash flows from financing activities:
Cash received from capital contribution38,976,287.2646,757,115.85Cash received from borrowings750,000,000.00–Cash received relating to other financing activities2,214,629.881,598,029.40Sub-total of cash inflows791,190,917.1448,355,145.25Cash repayments of amounts borrowed650,000,000.00500,000,000.00Cash payments for interest expenses and distribution of dividendsor profits
281,112,849.39289,069,487.47Other cash payments relating to financing activities520,332,751.22229,511,622.91Sub-total of cash outflows1,451,445,600.611,018,581,110.38Net cash flows from financing activities-660,254,683.47-970,225,965.13IV. Effect of foreign exchange rate changes on cash and cashequivalents
1,150.86-302.33V. Net increase in cash and cash equivalents747,822,492.48-765,496,360.08Add: Opening balance of cash and cash equivalent1,370,906,734.131,369,821,002.61VI. Closing balance of cash and cash equivalent2,118,729,226.61604,324,642.53
Person-in-charge of the Company:
Zhu Baoguo
Person-in-charge of the Company’s accounting work:
Qiu Qingfeng
Person-in-charge of the accounting department:
Qiu Qingfeng
lnterim Report 2022
Consolidated Statement of Changes in Owner’s Equity
January to June, 2022
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
Item
First half of 2022Owner’s equity attributable to the parent company
Minorityinterests
Totalshareholders’
equityShare capitalOther equity instruments
Capitalreserve
Less:
Treasuryshares
Othercomprehensiveincome
Specialreserve
Surplusreserve
General riskreserve
Undistributed
profitsSubtotalPreferred
sharePerpetualbondsOthersI. Balance at end of previous year1,907,727,908.002,265,357,311.92222,644,454.505,387,545.97640,821,179.087,223,644,166.2211,820,293,656.698,359,317,322.6320,179,610,979.32Add: Changes in accounting policiesCorrection of prior period errorsBusiness combination under common controlOthersII. Balance in beginning of period1,907,727,908.002,265,357,311.92222,644,454.505,387,545.97640,821,179.087,223,644,166.2211,820,293,656.698,359,317,322.6320,179,610,979.32III. Movement over the period (“-” for loss)4,812,759.0051,003,487.03520,332,751.22-42,998,857.208,617,763.68601,270,760.95102,373,162.24-181,707,712.31-79,334,550.07(I) Total comprehensive income-42,998,857.20801,268,519.50758,269,662.30761,847,407.771,520,117,070.07(II) Capital contribution or reduction from shareholders4,812,759.0034,163,528.26520,332,751.22-481,356,463.9616,410,217.23-464,946,246.73
1. Capital contribution from ordinary shareholders4,812,759.0034,163,528.26520,332,751.22-481,356,463.9616,410,217.23-464,946,246.73
2. Capitals invested by other equity instrument holders
3. Increase in shareholders’ equity resulted from share-
based payments
4. Others
(III) Appropriation of profits-277,557,631.65-277,557,631.65-967,251,289.90-1,244,808,921.55
1. Transfer to surplus reserve
2. Transfer to general risk reserve
3. Distributions to shareholders-277,557,631.65-277,557,631.65-967,251,289.90-1,244,808,921.55
4. Others
(IV) Transfer within shareholders’ equity8,617,763.6877,559,873.1086,177,636.7886,177,636.78
1. Capital reserve converting into share capital (or capital)
2. Surplus reserve converting into share capital (or capital)
3. Surplus reserve cover the deficit
4. Changes of equity from the revaluation of defined benefit
plan
5. Other comprehensive income transfer to retained
earnings
8,617,763.6877,559,873.1086,177,636.7886,177,636.78
6. Others
(V) Specific reserve
1. Appropriation for the period
2. Used in the period (
“-” for loss)(VI) Others16,839,958.7716,839,958.777,285,952.5924,125,911.36IV. Balance at end of period1,912,540,667.002,316,360,798.95742,977,205.72-37,611,311.23649,438,942.767,824,914,927.1711,922,666,818.938,177,609,610.3220,100,276,429.25
Item
First half of 2021Owner’s equity attributable to the parent company
Minorityshareholder’sequity
Totalshareholders’equityShare capitalOther equity instruments
Capitalreserve
Less:
Treasuryshares
Othercomprehensive
income
Specialreserve
SurplusreserveGeneral riskreserveUndistributedprofitsSubtotalPreferredsharesPerpetualbondsOthersI. Balance at end of previous year1,952,780,764.002,533,288,674.28253,637,154.50116,300,559.28515,941,465.196,231,451,582.2611,096,125,890.518,140,772,186.4919,236,898,077.00Add: Changes in accounting policiesCorrection of prior period errorsBusiness combination under common controlOthersII. Balance in beginning of period1,952,780,764.002,533,288,674.28253,637,154.50116,300,559.28515,941,465.196,231,451,582.2611,096,125,890.518,140,772,186.4919,236,898,077.00III. Movement over the year (“-” for loss)5,812,453.0090,832,636.74229,511,622.91-80,061,071.46475,713,532.40262,785,927.77-114,422,359.65148,363,568.12(I) Total comprehensive income-80,061,071.46687,347,494.53607,286,423.07699,692,412.871,306,978,835.94(II) Capital contribution or reduction from shareholders5,812,453.0042,329,998.05229,511,622.91-181,369,171.86-96,353,455.66-277,722,627.52
1. Capital contribution from ordinary shareholders5,812,453.0040,944,662.85229,511,622.91-182,754,507.06-96,353,455.66-279,107,962.72
2. Capitals invested by other equity instrument holders
3. Increase in shareholders’ equity resulted from share-
based payments
1,385,335.201,385,335.201,385,335.20
4. Others
(III) Appropriation of profits-288,675,388.05-288,675,388.05-840,923,997.09-1,129,599,385.14
1. Transfer to surplus reserve
2. Transfer to general risk reserve
3. Distributions to shareholders-288,675,388.05-288,675,388.05-840,923,997.09-1,129,599,385.14
4. Others
(IV) Transfer within shareholders’ equity77,041,425.9277,041,425.9294,885,363.55171,926,789.47
1. Capital reserve converting into share capital (or capital)
2. Surplus reserve converting into share capital (or capital)
3. Surplus reserve cover the deficit
4. Changes of equity from the revaluation of defined benefit
plan
5. Other comprehensive income transfer to retained
earnings
77,041,425.9277,041,425.9294,885,363.55171,926,789.47
6. Others
(V) Specific reserve
1. Appropriation for the period
2. Used in the period (
“-” for loss)(VI) Others48,502,638.6948,502,638.6928,277,316.6876,779,955.37IV. Balance at end of period1,958,593,217.002,624,121,311.02483,148,777.4136,239,487.82515,941,465.196,707,165,114.6611,358,911,818.288,026,349,826.8419,385,261,645.12
Person-in-charge of the Company:
Zhu Baoguo
Person-in-charge of the Company’s accounting work:
Qiu Qingfeng
Person-in-charge of the accounting department:
Qiu Qingfeng
lnterim Report 2022
Statement of Changes in Owner’s Equity of the Parent Company
January to June, 2022Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
Item
First half of 2022Sharecapital
Other equity instruments
Capitalreserve
Less:
Treasuryshares
Othercomprehensiveincome
Specialreserve
SurplusreserveUndistributedprofits
Totalshareholders’
equityPreferredshare
PerpetualbondsOthersI. Balance at end of previous year1,907,727,908.001,605,482,128.64222,644,454.5077,015,953.08552,219,230.701,400,174,178.185,319,974,944.10Add: Changes in accounting policiesCorrection of errorsOthersII. Balance in beginning of period1,907,727,908.001,605,482,128.64222,644,454.5077,015,953.08552,219,230.701,400,174,178.185,319,974,944.10III. Movement over the period(“-” for loss)
4,812,759.0036,426,888.30520,332,751.22-80,895,061.608,617,763.6844,190,498.20-507,179,903.64(I) Total comprehensive income-80,895,061.60244,188,256.75163,293,195.15(II) Capital contribution or reductionfrom shareholders
4,812,759.0034,163,528.26520,332,751.22-481,356,463.96
1. Capital contribution from
shareholders
4,812,759.0034,163,528.26520,332,751.22-481,356,463.96
2. Capitals invested by other equity
instrument holders
3. Increase in shareholders’ equity
resulted from share-based payments
4. Others
(III) Appropriation of profits-277,557,631.65-277,557,631.65
1. Transfer to surplus reserve
2. Distributions to shareholders-277,557,631.65-277,557,631.65
3. Others
(IV) Transfer within shareholders’equity
8,617,763.6877,559,873.1086,177,636.78
1. Capital reserve converting into share
capital (or capital)
2. Surplus reserve converting into
share capital (or capital)
3. Surplus reserve cover the deficit
4. Changes of equity from the
revaluation of defined benefit plan
5. Other comprehensive income
transfer to retained earnings
8,617,763.6877,559,873.1086,177,636.78
6. Others
(V) Specific reserve
1. Appropriation for the period
2. Used in the period (
“-” for loss)(VI) Others2,263,360.042,263,360.04IV. Balance at end of period1,912,540,667.001,641,909,016.94742,977,205.72-3,879,108.52560,836,994.381,444,364,676.384,812,795,040.46
Item
First half of 2021Sharecapital
Other equity instruments
Capitalreserve
Less:
Treasuryshares
Othercomprehensive
income
Specialreserve
Surplusreserve
Undistributed
profits
Totalshareholders’equityPreferredshare
PerpetualbondsOthersI. Balance at end of previous year1,952,780,764.002,169,622,381.22253,637,154.50110,581,751.29427,339,516.81564,932,141.194,971,619,400.01Add: Changes in accounting policiesCorrection of errorsOthersII. Balance in beginning of year1,952,780,764.002,169,622,381.22253,637,154.50110,581,751.29427,339,516.81564,932,141.194,971,619,400.01III. Movement over the period(“-” for loss)
5,812,453.0046,862,278.46229,511,622.91-22,304,174.23334,625,641.22135,484,575.54(I) Total comprehensive income-22,304,174.23623,301,029.27600,996,855.04(II) Capital contribution or reductionfrom shareholders
5,812,453.0042,329,998.05229,511,622.91-181,369,171.86
1. Capital contribution from
shareholders
5,812,453.0040,944,662.85229,511,622.91-182,754,507.06
2. Capitals invested by other equity
instrument holders
3. Increase in shareholders’ equity
resulted from share-based payments
1,385,335.201,385,335.20
4. Others
(III). Profit distribution–-288,675,388.05-288,675,388.05
1. Transfer to surplus reserve
2. Distributions to shareholders-288,675,388.05-288,675,388.05
3. Others
(IV) Transfer within shareholders’equity
1. Capital reserve converting into share
capital (or capital)
2. Surplus reserve converting into
share capital (or capital)
3. Surplus reserve cover the deficit
4. Changes of equity from the
revaluation of defined benefit plan
5. Other comprehensive income
transfer to retained earnings
6. Others
(V) Specific reserve
1. Appropriation for the period
2. Used in the period (
“-” for loss)(VI) Others4,532,280.414,532,280.41IV. Balance at end of period1,958,593,217.002,216,484,659.68483,148,777.4188,277,577.06427,339,516.81899,557,782.415,107,103,975.55
Person-in-charge of the Company:
Zhu Baoguo
Person-in-charge of the Company’s accounting work:
Qiu Qingfeng
Person-in-charge of the accounting department:
Qiu Qingfeng
lnterim Report 2022
Joincare Pharmaceutical Group Industry Co., Ltd
Notes to the financial statements
(All amounts in RMB Yuan unless otherwise stated)I Company Profile
1. Overview
√ Applicable □ N/AThe Company is formerly known as Shenzhen Aimier Food Co., Ltd. (深圳爱迷尔食品有限公司), was a Sino-foreign jointventure officially established on 18 December 1992 with the approval from Shenzhen Administration for Industry andCommerce.On 24 November 1999, the Company was reorganized as a joint stock limited company.On 6 February 2001, the Company was approved by the China Securities Regulatory Commission to issue domesticallylisted shares (A shares) to the public. On 8 June 2001, shares of the Company were listed and traded on Shanghai StockExchange.As of 30 June 2022, the total share capital of the Company was RMB1,912,540,667 and the total number of shares of theCompany was 1,912,540,667. The controlling shareholder of the Company is Shenzhen Baiyeyuan Investment Co., Ltd. (深圳市百业源投资有限公司), and the ultimate controlling party is Zhu Baoguo (朱保国).The Company is engaged in the integrated pharmaceutical industry.The Company and its subsidiaries primarily engaged in the R&D, production and sale of pharmaceutical productsand healthcare products, which covered drug preparation products, active pharmaceutical ingredients (“APIs”) andintermediates, diagnostic reagents and equipment as well as healthcare products.The financial statements and notes to the financial statements of the Company were approved at the 15th Meeting of the8th Session of the Board on 10 August 2022.
2. Scope of consolidated financial statements
√ Applicable □ N/AThe information of subsidiaries included in the scope of consolidation for the first six months of 2022 refer to Note VII“Equity in other entities”and the information of the changes in scope of consolidation during the period refer to Note VI“Changes in scope of consolidation”.
II Basis of Preparation for the Financial Statements
1. Basis of preparation
The Company’s financial statements have been prepared on the going-concern basis.
2. Continuing operation
√ Applicable □ N/AThe financial statements have been prepared in accordance with the Accounting Standards for Business Enterprisesissued by the Ministry of Finance of People’s Republic of China (“MOF”) and its application guidance, interpretations andthe other related provisions (collectively, the“Accounting Standards for Business Enterprises”). In addition, the Companyalso discloses relevant financial information in accordance with the Information Disclosure and Presentation Rules forCompanies Offering Securities to the Public No. 15 – General Provisions on Financial Reporting (2014 Revision) issued bythe China Securities Regulatory Commission.The financial statements have been prepared on the going-concern basis.The Company’s accounting is measured on an accrual basis. Except for certain financial instruments, the financialstatements are generally measured at historical cost. Non-current assets held for sale are stated at the lower of fair valueless estimated selling costs and their original carrying amount if they qualify as held for sale. In case of asset impairment,the Company shall make provisions for impairment in accordance with applicable provisions.III Significant Accounting Policies and Accounting EstimatesSpecific accounting policies and accounting estimate tips:
√ Applicable □ N/AThe Company determines the depreciation of fixed assets, amortisation of intangible assets, capitalisation condition ofR&D expenses and revenue recognition policies on the basis of its production and operation characteristics. Details ofaccounting policies are set out in Note III. 16, Note III. 20, Note III. 21 and Note III. 28.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements comply with the Accounting Standards for Business Enterprises, which gave a true and completeview of the consolidated and the Company’s financial positions as at June 30, 2022, and the consolidated and theCompany’s operating results and the consolidated and the Company’s cash flows and other relevant information for the 6months period ending June 30, 2022.
2. Accounting period
The fiscal year of the Company is from 1 January to 31 December in each calendar year.
3. Business cycle
√ Applicable □ N/AThe Company’s operating cycle is 12 months.
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (“RMB”). Overseas subsidiaries of theCompany usually recognise HK dollar, Macau Pataca and US dollar as their functional currencies according to the primaryeconomic environment of which these subsidiaries operate. The Company prepares its financial statements in RMB.
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5. Accounting treatment for business combinations involving enterprises under common control and
business combinations involving enterprises not under common control√ Applicable □ N/A
(1). Business combinations involving enterprises under common control
For the business combination involving entities under common control, the assets acquired and liabilities assumed aremeasured based on their carrying amounts in the consolidated financial statements of the ultimate controlling party asat the combination date, except the adjustment made due to different accounting policies. The difference between thecarrying amount of the consideration paid for the combination and the net assets acquired is adjusted against sharepremium in the capital reserve, with any excess adjusted against retained earnings.Business combination involving enterprises under common control and achieved in a number of transactionsIn the separate financial statements, the initial investment cost will be recognised at the carrying amount of the Company’sshare in the combined party’s net assets in the consolidated financial statements of the ultimate controlling party onthe date of combination. The difference between the initial investment cost and the sum of the carrying amount of theinvestment held and the carrying amount of consideration paid for the combination at the combination date is adjustedagainst share premium in the capital reserve, with any excess adjusted against retained earnings.In the consolidated financial statements, the assets acquired and liabilities assumed are measured based on their carryingamounts in the consolidated financial statements of the ultimate controlling party as at the combination date, exceptthe adjustment made due to different accounting policies. The difference between sum of the carrying amount of theinvestment held and the carrying amount of the consideration paid for the combination and the carrying amount of thenet assets acquired is adjusted against share premium in the capital reserve, with any excess adjusted against retainedearnings. For long-term equity investment held before the control over the combined party is obtained, profit or loss,other comprehensive income and other changes to equity interest attributable to the owners recognised from the laterof the acquisition of the original equity interest and the date when the combing party and the combined party are placedunder common control until the date of combination shall be offset against retained profit at the beginning of the periodof the comparative financial statements or profit or loss of the period respectively.
(2). Business combinations involving enterprises not under common control
For the business combinations involving enterprises not under common control, the combination cost shall be the fairvalue of the assets transferred, liabilities incurred or assumed, and equity securities issued by the acquirer for acquisition ofcontrol in the acquiree on the acquisition date. The assets, liabilities and contingent liabilities acquired or assumed on thedate of acquisition are recognised at fair value.Where the combination cost exceeds the fair value of the acquiree’s identifiable net assets in the business combination,the difference is recognised as goodwill and is subsequently measured at cost less accumulated impairment provisions.Where the combination cost is less than the fair value of the acquiree’s identifiable net assets in the business combination,the difference shall be included in profit or loss for the period after review.
Business combination involving enterprises not under common control and achieved in a number of transactionsIn the separate financial statements, the initial cost of the investment is the sum of the carrying amount of the acquiree’sequity investment held before the acquisition date and the additional investment cost on the acquisition date. In respectof the equity investment held prior to the acquisition date, other comprehensive income will not be recognised usingequity method on the acquisition date, and such investment will be accounted for on the same accounting treatment asdirect disposal of relevant asset or liability by the investee at the time of disposal. Shareholder’s equity recognised due tothe changes of other shareholder’s equity other than the changes of net loss and profit, other comprehensive income andprofit distribution shall be transferred to profit or loss for current period when disposed. If the equity investment held priorto the acquisition date is measured at fair value, the cumulative changes in fair value recognised in other comprehensiveincome shall be transferred to profit or loss for current period when accounted for using cost method.In the consolidated financial statements, the combination cost is the sum of consideration paid on the acquisition dateand fair value of the acquiree’s equity held prior to the acquisition date. The equity of the acquirees held before theacquisition date is re-measured at the fair value of the equity on the acquisition date and the differences between the fairvalue and the carrying amount are recognised in the income for the current period; in respect of any other comprehensiveincome attributable to the equity interest in the acquiree held prior to the acquisition date and any changes of othershareholder’s equity shall be transferred to investment profit or loss for current period on the acquisition date, exceptfor the other comprehensive income incurred due to the changes arising from remeasuring net assets or net liabilities ofdefined benefit plan attributable to the acquiree.
(3). Transaction fees attribution during the combination
The intermediary and other relevant administrative expenses such as audit, legal and valuation advisory for businesscombinations are recognised in profit or loss when incurred. Transaction costs of equity or debt securities issued as theconsiderations of business combination are included in the initial recognition amounts.
6. Preparation of consolidated financial statements
√ Applicable □ N/A
(1) Scope of consolidation
The scope of consolidated financial statements is determined based on control. Control means the Company hasexposures or rights to variable returns from its involvement with the investee and the ability to affect those returnsthrough power over such investee. Subsidiaries are the entities controlled by the Company (including enterprises, adividable part of investees and structured entities).
(2) Method for preparation of the consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and its subsidiaries, andare prepared by the Company in accordance with other relevant information. In preparing the consolidation financialstatements, the Company and its subsidiaries are required to apply consistent accounting policy and accounting period,intra-group transactions and balances shall be offset.A subsidiary or a business acquired through a business combination involving entities under common control in thereporting period shall be included in the scope of the consolidation of the Company from the date when it is undercontrol of the ultimate controlling party, and then its operating results and cash flows will be included in the consolidatedincome statement and the consolidated cash flow statement, respectively.
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For a subsidiary or a business acquired through a business combination involving entities not under common control inthe reporting period, its income, expenses and profits are included in the consolidated income statement, and its cashflows are included in the consolidated cash flow statement from the acquisition date to the end of the reporting date.The shareholders’ equity of the subsidiaries that are not attributable to the Company shall be presented undershareholders’ equity in the consolidated balance sheet as minority interests. The portion of net profit or loss of subsidiariesfor the period attributable to minority interest is presented in the consolidated income statement under the“profit orloss of minority interest”. When the amount of loss attributable to the minority shareholders of a subsidiary exceeds theminority shareholders’ portion of the opening balance of owners’ equity of the subsidiary, the excess amount shall beallocated against minority interest.
(3) Purchase of the minority stake in the subsidiary
The difference between the long-term equity investments costs acquired by the purchase of minority interests andthe share of the net assets that the subsidiaries have to continue to calculate from the date of purchase or the dateof consolidation in proportion to the new shareholding ratio, and the difference between the disposal of the equityinvestment without losing control over its subsidiary and the disposal of the long-term equity investment correspondingto the share of the net assets of the subsidiaries from the date of purchase or the date of consolidation, shall be adjustedto the capital reserve (or share premium), if the capital reserve is not sufficient, any excess will be adjusted to retainedearnings.
(4) Treatment of loss of control of subsidiaries
Where the Company loses its control over the original subsidiary due to the disposal of some equity investment orother reasons, the remaining equity is re-measured at its fair value on the date when the Company loses its control.The difference between the sum of the consideration acquired due to the disposal of the equity and the fair value ofthe remaining equity, and the Company’s share in the sum of carrying value of net assets of the original subsidiary andgoodwill calculated on an ongoing basis from the acquisition date based on the original shareholding proportion isrecognised in the investment income for the current period when the control is lost.Other comprehensive income in relation to the original subsidiary’s equity investment are transferred to profit or loss forthe current period when control ceases, except for those arising from re-measuring net assets or net liabilities of definedbenefit plan by the investee.
(5) Treatment of disposal through several transactions until the loss of control of subsidiaries
Where the Company disposes of the equity interests in the subsidiary through several transactions until it loses control,and the transaction terms, conditions and economic effects satisfy one or several of the following circumstances, suchseveral transactions shall be deemed as a basket of transactions in accounting treatment:
① Such transactions are entered into simultaneously or upon the consideration of the mutual impacts;
② No complete commercial result will be realised without such transactions as a whole;
③ The occurrence of one transaction depends on the occurrence of at least another transaction;
④ The result of an individual transaction is not economical, but it would be economical after taken into account of other
transactions in the series.
In the separate financial statements, where the Company disposes of the equity investment in the subsidiary throughseveral transactions until the loss of control, and such transactions are not regarded as“a basket of transactions”, thecarrying amount of the long-term equity investment involving each disposal will be carried forward, with the differencebetween the disposal price and the carrying amount of the long-term equity investment involving the disposal beingaccounted into the investment incomes for the current period; where the transactions constitute“a basket of transactions”,the difference between the consideration of each disposal and the carrying amount of the long-term equity investmentinvolving the disposal before the loss of the control, is recognised as the other comprehensive income and will be carriedforward to the profit or loss for the current period when the control is lost.In the consolidated financial statements, where the Company disposes of the equity investment in the subsidiary throughseveral transactions until the loss of control, the measurement of the remaining equity interest and the accountingtreatment of the losses and gains of the disposal will be made with reference to the“Treatment of loss of control ofsubsidiaries”as described above. For the difference between the consideration of each disposal before the loss of thecontrol and the carrying amount of the Company’s share in the net assets involving the disposal of such subsidiarycalculated on an on-going basis from the acquisition date, the treatment will be made as follows:
① In case the transactions are
“a basket of transactions”, such difference is recognised as the other comprehensiveincome and will be carried forward to the profit or loss for the current period when the control is lost.
② In case the transactions are not
“a basket of transactions”, such difference is accounted into the capital reserve (orshare premium) as equity, and shall not be carried forward to the profit or loss for the current period when the controlis lost.
7. Classification of joint arrangement and accounting treatment for joint operation
√ Applicable □ N/AA joint arrangement is an arrangement jointly controlled by two or more parties. The Company’s joint arrangement isclassified into the joint operation and the joint venture.
(1) Joint operation
A joint operation is a joint arrangement whereby the Company have rights and obligations to the relevant assets andliabilities.The Company recognises the following items in relation to its interest in a joint operation, and makes correspondingaccounting treatment in accordance with relevant accounting standards:
A. The solely-held assets, and the share of any assets held jointly;B. The solely-assumed liabilities, and its share of any liabilities incurred jointly;C. Its revenue from the sale of its share of the output arising from the joint operation;D. Its share of the revenue from the sale of the output by the joint operation;E. The solely-incurred expenses, including its share of any expenses incurred jointly.
(2) Joint ventures
A joint venture is a joint arrangement whereby the Company only entitled to the net assets of the arrangements.The Company’s investment in joint ventures is accounted for using the equity method according to the rules of the long-term equity investment.
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8. Standards for determination of cash and cash equivalents
Cash and cash equivalents of the Company include cash on hand, bank deposit readily available for payment and thoseinvestments held by the Company that are short-term (normally due in three months since the acquisition date), highlyliquid, readily convertible into known amounts of cash and subject to an insignificant risk of change in value.
9. Foreign currency transactions and translation of financial statements in foreign currency
√ Applicable □ N/A
(1) Foreign currency transactions
Foreign currency transactions incurred by the Company are translated to the functional currency at the spot exchangerates on the date of the transactions upon initial recognition.Monetary items denominated in foreign currencies are translated to functional currency at the spot exchange rate on thebalance sheet date. Exchange differences arising from the differences between the spot exchange rate prevailing at thebalance sheet date and those spot rates used on initial recognition or at the previous balance sheet date are recognisedin profit or loss for the current period; non-monetary items denominated in foreign currencies that are measured athistorical cost are translated using the spot exchange rate on the transaction date. Non-monetary items denominated inforeign currencies that are measured at fair value are translated using the spot exchange rate on the date the fair valueis determined; the resulting exchange differences between the amounts in functional currency upon translation and inoriginal functional currency are recognised in profit or loss for the current period.
(2) Translation of financial statements in foreign currency
At the balance sheet date, when translating the foreign currency financial statements of overseas subsidiaries, the assetsand liabilities in the balance sheet are translated at the spot exchange rate at the balance sheet date; all items except for“Retained earnings” of the shareholders’ equity are translated at the spot exchange rate on the transaction date.The revenue and expenses in profit or loss are translated at the spot exchange rate on the transaction date.All items in the statement of cash flows are translated at the spot exchange rate on the transaction date. The effect ofexchange difference on cash is adjusted and separately presented as“Effect of changes in foreign exchange rates on cashand cash equivalents” in the cash flow statement.The exchange differences arising from translation of the financial statements are presented as the“other comprehensiveincome” in the shareholders’ equity of the balance sheet.When the Company disposes of the overseas operation and loses control, the differences arising from the translation ofthe financial statements in foreign currency that have been presented under the shareholders’ equity in the balance sheetand involving such overseas operation are carried forward to the profit or loss for the current period in whole or in theproportion of the disposal of the overseas operation.
10. Financial instruments
√ Applicable □ N/AFinancial instruments are contracts creating financial assets of a party and financial liabilities or equity instruments of otherparties.
(1) Recognition and De-recognition of financial instruments
A financial asset or financial liability is recognised when the Company becomes one of the parties under a financialinstrument contract.The financial assets will be derecognised if any of the following conditions is satisfied:
① The contractual right to receive the cash flow of the financial assets is terminated;
② The financial assets have been transferred and the transferred financial asset satisfies the following conditions of
derecognition.If the current obligation of a financial liability (or a part thereof) has been discharged, the financial liability (or that part ofthe financial liability) will be derecognised. When the Company (as the debtor) and the lender have signed an agreementwhich uses a new financial liability to replace the existing financial liability, and the contract terms of the new financialliability are substantially different with the original financial liability, the original financial liability shall be de-recognised,and the new financial liability shall be recognised at the same time.The regular transactions of the financial assets are recognised and derecognised at the transaction date.
(2) Classification and measurement of financial assets
The Company classifies financial assets into three categories: financial assets at amortised cost; financial assets at fair valuethrough other comprehensive income; and financial assets at fair value through profit or loss based on the business modelfor managing financial assets and their contractual cash flow characteristics upon initial recognition.Financial assets at amortised costThe Company shall classify financial assets that meet the following conditions and are not designated as financial assets atfair value through profit or loss for the current period as financial assets measured at amortised cost:
A. The Company’s business model for managing the financial assets is to collect contractual cash flow;B. The terms of the financial asset contract stipulate that the cash flow generated on a specific date is only the paymentfor principal and interest accrued on the outstanding principal.After initial recognition, these financial assets are measured at amortised cost using the effective interest method. Gainsor losses arising from financial assets which are measured at amortised cost and not part of any hedging relationship areincluded in the profit and loss of the current period upon de-recognition, amortisation using the effective interest method,or impairments recognition.Financial assets at fair value through other comprehensive incomeThe Company shall classify financial assets that meet the following conditions and are not designated as financial assetsmeasured at fair value through profit or loss for the current period as financial assets measured at fair value through othercomprehensive income.A. The Company’s business model for managing the financial assets is both to collect contractual cash flows and to sell thefinancial assets;B. The terms of the financial asset contract stipulate that the cash flow generated on a specific date is only the paymentfor principal and interest accrued on the outstanding principal.
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After initial recognition, these financial assets are subsequently measured at fair value. Interest, impairment losses orgains and exchange losses and gains calculated using the effective interest method are recognised in profit or loss for thecurrent period, while other gains or losses are recognised in other comprehensive income. The cumulative profit or losspreviously included in other comprehensive income will be transferred to the profit or loss for the current period uponderecognition of the financial assets.Financial assets at fair value through profit or loss for the current periodIn addition to the above financial assets which are measured at amortised cost or at fair value a through othercomprehensive income, the Company classifies all other financial assets as financial assets measured at fair value throughprofit or loss for the current period. When initial recognition, in order to eliminate or significantly reduce accountingmismatches, the Company irrevocably designates some financial assets that should have been measured at amortised costor at fair value through other comprehensive income as financial assets at fair value through profit or loss for the currentperiod.After initial recognition, these financial assets are subsequently measured at fair value, and the profits or losses (includinginterest and dividend income) generated from which are recognised in profit or loss for the current period, unless thefinancial assets are part of the hedging relationship.However, with respect to non-trading equity instrument investments, the Company may irrevocably designate them asfinancial assets measured at fair value through other comprehensive income at initial recognition. The designation is madeon the basis of individual investment, and the relevant investment conforms to the definition of equity instruments fromthe issuer’s point of view.After initial confirmation, financial assets are subsequently measured at fair value. Dividend income that meets therequirements is recognised in profit and loss, and other gains or losses and changes in fair value are recognised in othercomprehensive gains. When derecognised, the accumulated gains or losses previously recognised in other comprehensivegains are transferred from other comprehensive gains to retained earnings.The business model of managing financial assets refers to how the Company manages financial assets to generatecash flow. The business model decides whether the source of cash flow of financial assets managed by the Companyis to collect contract cash flow, sell financial assets or both of them. Based on objective facts and the specific businessobjectives of financial assets management decided by key managers, the Company determines the business model offinancial assets management.The Company evaluates the characteristics of the contract cash flow of financial assets to determine whether the contractcash flow generated by the relevant financial assets on a specific date is only to pay principal and interest based onthe amount of unpaid principal. Among them, principal refers to the fair value of financial assets at the time of initialconfirmation; interest includes the consideration of time value of money, credit risk related to the amount of unpaidprincipal in a specific period, and other basic borrowing risks, costs and profits. In addition, the Company evaluates theterms and conditions of the contracts that may lead to changes in the time distribution or amount of cash flow in financialasset contracts to determine whether they meet the requirements of the above contract cash flow’s characteristics.Only when the Company changes its business model of managing financial assets, all the financial assets affected shall bereclassified on the first day of the first reporting period after the business model changes, otherwise, financial assets shallnot be reclassified after initial confirmation.Financial assets are measured at fair value on initial recognition. The relevant transaction cost of financial assets at fairvalue through profit or loss is directly recognised in profit or loss for the current period, and that of other types of financialassets is included in the initially recognised amount. Trade receivables or notes receivable arising from sales of goodsor rendering services, without significant financing component, are initially recognised based on the transaction priceexpected to be entitled by the Company.
(3) Classification and measurement of financial liabilities
On initial recognition, the Company’s financial liabilities are classified into financial liabilities at fair value through profit orloss and financial liabilities at amortised cost. For financial liabilities not classified as financial liabilities at fair value throughprofit or loss, the relevant transaction costs are included in the initially recognised amount.Financial liabilities at fair value through profit or lossFinancial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilitiesdesignated at fair value through profit or loss upon initial recognition. Such financial liabilities are subsequently measuredat fair value, all gains and losses arising from changes in fair value and dividend and interest expense relative to thefinancial liabilities are recognised in profit or loss for the current period.Financial liabilities at amortised costOther financial liabilities are subsequently measured at amortised cost using the effective interest method; gains andlosses arising from derecognition or amortisation is recognised in profit or loss for the current period.Distinction between financial liabilities and equity instrumentsThe financial liability is the liability that meets one of following criteria:
① Contractual obligation to deliver cash or other financial instruments to another entity.
② Under potential adverse condition, contractual obligation to exchange financial assets or financial liabilities with other
parties.
③ A contract that will or may be settled in the entity’s own equity instruments and is a non-derivative for which the
entity is or may be obliged to deliver a variable number of the entity’s own equity instruments.
④ A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset
for a fixed number of the entity’s own equity instruments.An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of itsliabilities.If the Company cannot unconditionally avoid fulfilling a contractual obligation by delivering cash or other financial assets,the contractual obligation meets the definition of financial liability.If a financial instrument must or are able to be settled by the Company’s own equity instrument, the Company shouldconsider whether the Company’s equity instrument as the settlement instrument is a substitute of cash or other financialassets or the residual interest in the assets of the Company after deducting all of its liabilities. If the former, the tool is theCompany’s financial liability; if the latter, the tool is the equity instrument of the Company.
(4) Derivative financial instruments and embedded derivatives
The Company’s derivative financial instruments include forward foreign exchange contracts, and are initially measuredat fair value on the date of the derivative contract signed and are subsequently measured at fair value. A derivative withpositive fair value shall be recognised as an asset, otherwise that with negative fair value shall be recognised as a liability.Any profit or loss arising from changes of fair value and not compliance with the accounting provision of hedge shall berecognised as profit or loss for current period.
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For the hybrid instrument which includes embedded derivatives, where the host contract is a financial asset, requirementsin relation to the classification of financial assets shall apply to the hybrid instrument as a whole. Where the host contractis not a financial asset, and the hybrid instrument is not measured at fair value and its changes are included in the profitand loss for the current period for accounting purposes, there is no close relation between the embedded derivativesand the host contract in terms of economic features and risks, and the instrument that has the same condition with theembedded derivatives and exists independently meets the definition of derivatives, the embedded derivatives shall beseparated from the hybrid instrument and treated as a separate derivative financial instrument. If it is unable to separatelymeasure the embedded derivatives upon acquisition or on the subsequent balance sheet date, the hybrid instrumentshall be entirely designated as the financial assets or financial liabilities measured at fair value and whose movements areincluded in the profit and loss of the current period.
(5) Fair value of the financial instrument
The methods for determining the fair value of the financial assets or financial liabilities are set out in Note III. 11.
(6) Impairment of financial assets
The following items are subject to impairment accounting and recognition of loss allowances based on expected creditlosses:
A. Financial assets measured at amortised cost;B. Receivables and debt investments that are measured at fair value through other comprehensive income;C. Contract assets as defined in the Accounting Standard for Business Enterprises No. 14 – Revenue;D. Lease receivables;E. Financial guarantee contracts, except for those carried at fair value through profit or loss, those which the transfer offinancial assets does not satisfy the derecognition condition or those formed as a result of continued involvement ofthe transferred financial assets.Measurement of expected credit loss (ECLs)The ECL is a weighted average of credit losses on financial instruments weighted at the risk of default. Credit loss is thedifference between all receivable contractual cash flows according to the contract and all cash flows expected to bereceived by the Company discounted to present value at the original effective interest rate, i.e. the present value of allcash shortfalls.The Company takes into account reasonable and valid information on past events, current conditions and forecasts offuture economic conditions, with the risk of default as the weight, to calculate the probabilistic weighted amount of thepresent value of the difference between the cash flow receivable from contract and the expected cash flow to be receivedand recognise the expected credit loss.The Company respectively measures the expected credit losses of financial instruments by different stages. If the creditrisk of the financial instrument does not increase significantly since the initial recognition, it would be classified in Stage1, the Company would measure loss allowance according to the future 12-month expected credit losses. If the credit riskof a financial instrument has significantly increased since the initial recognition but not yet credit-impaired, it would beclassified in Stage 2, the Company would measure loss allowance according to the lifetime expected credit losses of thatinstrument. If the financial instrument has credit-impaired since the initial recognition, it would be classified in Stage 3,and the Company would measure loss allowance according to the lifetime expected credit losses of that instrument.
For financial instruments with lower credit risk on the balance sheet date, the Company assumes that its credit risk hasnot increased significantly since the initial recognition, and measures loss allowance according to the 12-month expectedcredit losses.Lifetime ECLs are the ECLs that result from all possible default event over the expected life of a financial instrument. Future12-month ECLs are the portion of ECL that results from default events on a financial instrument that are possible withinthe 12 months after the balance sheet date (or the expected life of the instrument, if it is less than 12 months).The maximum period considered when estimating ECLs is the maximum contractual period over which the Company areexposed to credit risk (including the option to renew).For the financial instruments classified in Stage 1 and Stage 2 and those with lower credit risk, the Company wouldmeasure the interest income by the book balance (that is, without deduction for credit allowance) and the effectiveinterest rate. For financial instruments classified in Stage 3, the Company would measure the interest income by theamortised cost (that is, book balance less impairment allowance) and the effective interest rate.For notes receivable, trade receivables and contract assets, regardless whether it has significant financing components ornot, the Company has always measured its loss allowance at an amount equal to lifetime expected credit losses.If the expected credit losses of one individual financial asset cannot be estimated at a reasonable cost, the Companyclassifies notes receivable and trade receivables into portfolios based on credit risk characteristics, and measures expectedcredit losses on portfolios basis to determine portfolios by the following basis:
A. Notes receivable? Bills receivable portfolio 1: Bank acceptance bills? Bills receivable portfolio 2: Commercial acceptance billsB. Accounts receivables? Accounts receivables portfolio 1: Amount due from domestic customers? Accounts receivables portfolio 2: Amount due from overseas customers? Accounts receivables portfolio 3: Receivables of consolidated companiesContract assetsContract assets portfolio: Sale of productsFor bills receivable classified as portfolio, the Company measures expected credit losses based on the risk exposures ofdefault and lifetime expected credit losses rate with reference to the historical credit loss experience, current situation andforecasts of future economic conditions.For accounts receivables classified as portfolio, the Company measures expected credit losses through preparing a tableof concordance between the aging of trade receivables and lifetime expected credit losses rate with reference to thehistorical credit loss experience, current situation and forecasts of future economic conditions.
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Other receivablesThe Company classifies other receivables into certain portfolios based on credit risk characteristics, and measures expectedcredit losses on portfolios basis to determine portfolios by the following basis:
? Other receivables portfolio 1: Receivables of export tax refund? Other receivables portfolio 2: Receivables of deposits under guarantee and security deposits and lease expenses? Other receivables portfolio 3: Other receivables? Other receivables portfolio 4: Receivables of consolidated companiesFor other receivables classified as portfolio, the Company measures expected credit losses based on the risk exposures ofdefault and future 12-month or lifetime expected credit losses rate.Long-term receivablesThe Company’s long-term receivables include finance lease receivables and equity transfer receivables.The Company classifies finance lease receivables and equity transfer receivables into certain portfolios based on credit riskcharacteristics, and measures expected credit losses on portfolios basis to determine portfolios by the following basis:
A. Finance lease receivables? Portfolio of finance lease receivables: other receivablesB. Other long-term receivables? Portfolio of other long-term receivables: equity transfer receivablesFor finance lease receivables and equity transfer receivables, the Company measures expected credit losses based on therisk exposures of default and lifetime expected credit losses rate with reference to the historical credit loss experience,current situation and forecasts of future economic conditions.For other receivables and long-term receivables other than finance lease receivables and equity transfer receivables thatare classified as portfolio, the Company measures expected credit losses based on the risk exposures of default and future12-month or lifetime expected credit losses rate.Debt investments and other debt investmentsFor debt investments and other debt investments, the Company measures expected credit losses based on the nature ofinvestments, counterparties and various types of risk exposures and the risk exposures of default and future 12-month orlifetime expected credit losses rate.Assessment of significant increase in credit riskBy comparing the risk of default of financial instruments occurring on the balance sheet date and on the initial recognitiondate, the Company determines the relative changes in risk of default over the expected life of financial instruments andassesses whether the credit risk of financial instruments have increased significantly since the initial recognition.
When determine whether credit risks have significantly increased since the initial recognition, the Company considersinformation that is reasonable and supportable, including forward-looking information that is available without undue costor effort. The information considered by the Company includes:
? Failure to make payments of principal or interest on debtors’ contractually due dates;? An actual or expected significant deterioration in a financial instrument’s external or internal credit rating (if any);? An actual or expected significant deterioration in the operating results of debtors;? Existing or forecast changes in the technological, market, economic or legal environment that have significant adverseeffect on the debtors’ abilities to repay to the Company.Depending on the nature of the financial instruments, the Company assesses whether credit risks have significantlyincreased on either an individual financial instrument basis or a collective financial instrument basis. When the assessmentis performed on a collective financial instrument basis, the Company can classify the financial instruments based on theshared credit risk characteristics, such as past due information and credit risk ratings.The Company determines that the credit risk on a financial instrument has increased significantly if it is more than 30 dayspast due.Credit-impaired financial assetsThe Company assesses whether financial assets at amortised cost and debt investments measured at fair value throughother comprehensive income are credit-impaired at balance sheet date. A financial asset is ’credit-impaired’ when one ormore events that have an adverse impact on the estimated future cash flows of the financial asset have occurred. Evidencethat a financial asset is credit-impaired includes the following observable information:
? Significant financial difficulty of the issuer or debtor;? A breach of contract by debtor, such as a default or delinquency in interest or principal payments;? For economic or contractual reasons relating to the borrower’s financial difficulty, the Company having granted to the
borrower a concession that would not otherwise consider;? It is probable that the borrower will enter bankruptcy or other financial reorganization;? The disappearance of an active market for that financial asset because of financial difficulties.Presentation of allowance for ECLThe Company re-measures the ECLs on each balance sheet date to reflect changes in the financial instruments’ creditrisk since initial recognition, and the increase or reversal of the loss provision resulted therefrom is recognised as animpairment gain or loss in profit or loss. For financial assets measured at amortised cost, the loss provision is offset againsttheir carrying amounts in the balance sheet. For debt investments at FVOCI, the Company recognises the loss provision inother comprehensive income and does not deduct the carrying amount of the financial assets.
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Write-offThe gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realisticprospect of recovery. A write-off constitutes a derecognition event. This is generally the case the Company determinesthat the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amountssubject to the write-off. However, financial assets that are written off could still be subject to enforcement activities inorder to comply with the Company’s procedures for recovery of amounts due.Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit orloss in the period in which the recovery occurs.
(7) Transfer of financial assets
Transfer of financial assets refers to the transfer or delivery of financial assets to the other party (the transferee) other thanthe issuer of financial assets.The Company derecognises a financial asset only if it transfers substantially all the risks and rewards of ownership of thefinancial asset to the transferee; the Company should not derecognise a financial asset if it retains substantially all the risksand rewards of ownership of the financial asset.The Company neither transfers nor retains substantially all the risks and rewards of ownership, shows as the followingcircumstances: if the Company has forgone control over the financial assets, derecognise the financial assets and verify theassets and liabilities; if the Company retains its control of the financial asset, the financial asset is recognised to the extentof its continuing involvement in the transferred financial asset and recognise an associated liability is recognised.
(8) Offsetting financial assets and financial liabilities
When the Company has the legal right to offset recognised financial assets and financial liabilities, and the legal right canbe executed at present, and the Company has a plan to settle the financial assets and financial liabilities at the same timeor at net amount, the financial assets and financial liabilities can be presented on the balance sheet after offsetting. Exceptfor the above circumstances, financial assets and financial liabilities cannot be offset and shall be presented separately onthe balance sheet.
11. Fair value measurement
The fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date.The Company measures the relevant assets or liability at fair value supposing the orderly transaction of asset selling orliability transferring incurring in a principal market of relevant assets or liabilities. In the absence of a principal market forthe asset or liability, the Company assumes that the transaction takes place at the most advantageous market of relevantasset or liability. A principal market (or the most advantageous market) is the transaction market that the Company canenter into at measurement date. The Company implements the hypothesis used by the market participants to realise themaximum economic benefit in assets or liabilities pricing.If there exists an active market for the financial assets or financial liabilities, the Company uses the quotation on the activemarket as its fair value. For those in the absence of active market, the Company uses valuation technique to recognise itsfair value. However, under limited circumstances, the Company may use all information about the results and operationof the investee obtained after the date of initial recognition to determine whether cost represents fair value. Cost mayrepresent the best estimate of fair value of the relevant financial asset within the scope of distribution, and such costrepresents the appropriate estimate of fair value within the scope of distribution.
For non-financial assets measured at fair value, the Company should consider the capacity of the market participantsto put the assets into optimal use thus generating the economic benefit, or the capacity to sell assets to other marketparticipants who can put the assets into optimal use and generate economic benefit.The Company implements the valuation technique suitable for the current condition and supported by enough availabledata and other information, gives priority in use of relevant observable inputs, only the observable inputs cannot beobtained or impracticable before using unobservable inputs.For the assets and liabilities measured or disclosed at fair value on financial statements, fair value hierarchies arecategorized into three levels as the lowest level input that is significant to the entire fair value measurement: Level 1:
inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities. Level 2: inputs are inputs otherthan quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3:
inputs are unobservable inputs for the asset or liability.At each balance sheet date, the Company re-evaluates the assets and liabilities recognised to be measured at fair value onthe financial statements to make sure whether conversion occurs between fair value hierarchies.
12. Inventories
√ Applicable □ N/A
(1) Classification of inventories
The Company’s inventories include raw materials, packaging materials, finished goods, work-in-progress, low-valueconsumables, subcontracting materials, inventory goods and expendable biological assets.
(2) Method of costing
The method of costing of the Company’s inventories: Cost of finished goods are measured at planned cost, and materialcost differences are carried forward at the end of the period to adjust planned cost to actual cost; other inventories aremeasured at actual cost on acquisition and raw materials received are accounted for by the weighted-average method;low-value consumables and packaging materials are amortised in full upon the use.
(3) Method in the determination and the basis of provision for diminution in net realisable value of inventories
On the balance sheet date, the inventories are calculated at the lower of cost and the net realisable value. When thenet realisable value is lower than the cost, the provision for diminution in value of inventories is made on an item-by-item basis at the excess of the cost of the inventory over its net realisable value. For large volume inventories with lowunit price, the provision for diminution in the value of inventories is made by categories. Inventories that are related to aproduct line manufactured and sold in the same region, have the same or similar end use or purpose, and are difficult tomeasure separately from other items are consolidated the provision for diminution in the value of inventories.
(4) Inventory system
The Company maintains a perpetual inventory system.
(5) Amortisation methods of consumables
Low-value consumables and packaging materials of the Company are amortised in full when used.
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13. Assets held for sale
√ Applicable □ N/A
(1) Category and measurement of non-current assets or the disposal group held for sale
Non-current assets and disposal groups are classified as held for sale if the Company recovers its book value mainly byselling (including the exchange of nonmonetary assets with commercial substance) rather than continuing to use it.The aforesaid non-current assets do not include investment property measured with the basis of fair value; the biologicalassets measured with the basis of fair value less selling costs; the assets formed by employee benefits; financial assets andthe right arising from deferred income tax assets and insurance contracts.A disposal group is a group of assets to be disposed through sale or other means as a whole in a single transaction, andliabilities directly associated with those assets that will be transferred in the transaction. In certain circumstance, disposalgroups include the goodwill obtained through business combination.Non-current assets and disposal groups that meet the following conditions are classified as held for sale: according to thepractice of disposing of this type of assets or disposal groups in a similar transaction, a non-current asset or disposal groupis available for immediate sale at its present condition; the sale is likely to occur, that is, a decision has been made on a saleplan and a determined purchase commitment is made, and the sale is expected to be completed within one year. Wherethe loss of control over the subsidiaries is due to the sales of investment in subsidiaries, no matter whether the Companyretains part of the equity investment after selling or not, the investment in subsidiaries shall be classified as held for salein the separate financial statements when it satisfies the conditions for category of held for sale; all assets and liabilities ofsubsidiaries shall be classified as held for sale in the consolidated financial statements.The difference between carrying amount of non-current assets or disposal groups classified as held for sale and the netamount of fair value less selling costs shall be recognised as impairment loss on assets upon initial measurement or whensuch noncurrent assets or disposal groups are remeasured at the balance sheet date. For the amount of impairment losson assets recognised in disposal groups, the carrying amount of disposal groups’ goodwill shall be offset against first,and then offset against the carrying amount of non-current assets according to the proportion of carrying amount of theindividual non-current assets in the disposal groups.If on a subsequent balance sheet date, the net amount of the fair value of a held-for-sale disposal group less its sellingcosts increases, the amount reduced previously shall be recovered, and reversed in the asset impairment loss recognisedon the noncurrent asset which is applicable to the measurement requirements of Held-For-Sale Standards after the non-current asset is classified into held-for-sale category. The reversed amount is credited to current profit or loss. The carryingvalue of goodwill which has been offset cannot be reversed.No depreciation or amortisation is provided for the non-current assets in the held-for-sale and the assets in the disposalgroup held for sale. The interest on the liabilities and other costs in the disposal group held for sale is recognisedcontinuously. As far as all or part of investment in the associates and joint ventures is concerned, for the part classified intothe held-for-sale category, the accounting with equity method shall be stopped, while the remaining part (which is notclassified into the held for – sale category) shall still be accounted for using the equity method. When the Company losesthe significant influence on the associates and joint venture due to the sale, the use of equity method shall be ceased.
When certain non-current asset or disposal group classified into the held-for-sale category no longer meets theclassification criteria for held-for-sale category, the Company shall stop classifying it into the held-for-sale category andmeasure it according to the lower of the following two amounts:
① The carrying amount of the asset of disposal group before it was classified into the held-for-sale category after being
adjusted with the depreciation, amortisation or impairment that could have been be recognised if it was not classifiedinto the held-for-sale category;
② The recoverable amount.
(2) Discontinued operation
Discontinued operation refers to the component meeting one of the following conditions that has been disposed of bythe Company or classified by the Company into the held-for-sale type and can be identified separately:
① The component represents an independent principal business or a separate principal business place.
② The component is a part of the related plan for the contemplated disposal of an independent principal business or a
separate principal business place.
③ The component is a subsidiary acquired exclusively for the purpose of resale.
(3) Presentation
The Company presents the non-current assets held for sale and the assets in the disposal group held for sale under“assetsclassified as held for sale”, and the liabilities in the disposal group held for sale under“liabilities classified as held for sale”inthe balance sheet.The Company presents the profit and loss for continuing operation and profit and loss for discontinued operation in theincome statement, respectively. The impairment loss and reversal amount and disposal profit and loss of the non-currentassets held for sale or disposal group not meeting the definition of discontinued operation will be presented as the profitand loss of continuing operation. The operating profit and loss (such as impairment loss and reversal amount) and disposalprofit and loss of the discontinued operation will be presented as the profit and loss of the discontinued operation.The disposal group proposed for retirement rather than sale and meeting the condition about the relevant component inthe definition of the discontinued operation will be presented as discontinued operation from the date of retirement.For the discontinued operation reported in the current period, the information formerly presented as profit and loss ofcontinuing operation will be presented as the profit and loss of discontinued operation for the comparable accountingperiod in the financial statement of the current period. If the discontinued operation no longer meets the classificationcriteria for held for – sale category, the information formerly presented as profit and loss of discontinued operation will bepresented as the profit and loss of continuing operation for the comparable accounting period in the financial statementof the current period.
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14. Long-term equity investment
√ Applicable □ N/AThe long-term equity investment includes the equity investment in the subsidiary, joint ventures and associates. Theinvestee over which the Company has significant influence is the associates of the Company.
(1) Determination of initial investment cost
The long-term equity investment resulting from corporate merger: For the long-term equity investment resulting frommerger of companies under the same control, the carrying amount of the ownership equity of the merged party obtainedon the merger date presented in the consolidated financial statement of the final controlling party will be used as theinvestment cost. For the long-term equity investment resulting from merger of companies under different controls, themerger cost will be used as the investment cost of the long-term equity investment.The long-term equity investment obtained by other means: For the long-term equity investment obtained by paying cash,the actually paid purchase price will be used as the initial investment cost. For the long term equity investment obtainedby issuing equity securities, the fair value of the issued equity securities will be used as the initial investment cost.
(2) Subsequent measurement and recognition method of profit or loss
The investment in subsidiary will be accounted for using cost method, unless the investment meets the criteria of held-for-sale category. The investment in associates and joint venture will be accounted with equity method.For the long-term equity investment accounted for using cost method, except for the price actually paid upon theinvestment or the cash dividend or profit in the consideration that has been declared but not released, the cash dividendor profit declared and distributed by the investee is recognised as the investment income and recorded into the profit andloss for the current period.For the long-term equity investment accounted for using equity method, the investment cost of the long-term equityinvestment shall not be adjusted if the initial investment cost of the long-term equity investment is higher than theCompany’s share in the fair value of the identifiable net value of the investee at the time of investment; if the initialinvestment cost of the long-term equity investment is lower than the Company’s share in the fair value of the identifiablenet value of the investee at the time of investment, the carrying amount of the long-term equity investment will beadjusted, with the difference recorded into the profit and loss for the current period of investment.When accounted for using the equity method, return on investment and other comprehensive income are recognisedaccording to the share in the investee’s realised net profit or loss and other comprehensive income respectively, and thecarrying amount of the long-term equity investment is adjusted. The carrying amount of the long-term equity investmentwill be deducted according to the profit distribution declared by the investee or cash dividend attributable to theCompany. The carrying amount of long term equity investment will be adjusted for changes to equity interest attributableto the owners of the investee other than net profit or loss, other comprehensive income and profit distribution, andrecorded into capital reserve (other capital reserve). The Company’s share of the net profit or loss of the investees will berecognised after adjustment of the net profit of the investees according to the accounting policy and accounting period ofthe Company on the basis of fair value of all identifiable assets of the investee on acquisition.If the Company is able to exert significant influence or implement joint control (which does not constitute control) onthe investee through additional investment or other reason, the sum of the fair value of the original equity plus theadditional investment cost will be used as the initial investment cost, which will be accounted for with equity method, onthe conversion date. The difference between the fair value of the original equity on the conversion date and its carryingamount, and the accumulated change of fair value recorded into other comprehensive income will be transferred into theprofit and loss for the current period, which will be accounted for using equity method.
If an entity loses joint control or has no significant influence over investees due to the elimination of parts of the equityinvestment, the surplus equity after disposal shall be recognised in accordance with“Accounting Standards for BusinessEnterprises No. 22 – Recognition and Measurement of Financial Instruments”, and the difference between fair value andcarrying amount should be recognised as profit or loss for current period. Other comprehensive income of original equityinvestment recognised under equity method shall be recognised in accordance with the same foundation used by theinvestees when dispose the relevant assets or liabilities directly in the termination of equity method. Other changes ofowners’ equity related to the original equity investment shall be transferred into profit or loss for current period.If an entity loses control over investees due to the elimination of parts of the equity investment, the surplus owners’ equitythat is able to implement joint control or have significant influence over investees shall be measured at equity methodand are deemed to be recognised under equity method since the acquisition date. The surplus owners’ equity that areunable to implement joint control or have no significant influence over investees shall be processed in accordance with“Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments”, and thedifference between fair value and carrying amount at the day of loss of control shall be recognised as profit or loss forcurrent period.If the shareholding ratio of the Company is reduced due to the increase of capital of other investors, and thus the controlis lost, but the joint control or significant influence can be exerted on the invested entity, the Company should recognisenet asset according to the new shareholding ratio. The difference between the original book value of the long-term equityinvestment corresponding to the decrease in the shareholding ratio should be included in the current profit and loss; then,according to the new shareholding ratio, the equity method is used to adjust the investment.The Company recognises the unrealised profit or loss of intra-transaction between the joint ventures or associates thatbelongs to itself according to the proportion of the shares and recognises the investment income or loss after offset.However, the loss arising from the unrealised intra-transaction between the Company and investees, which belongs to theimpairment loss of assets transferred, cannot be offset.
(3) Basis of determining common control and significant influence on the investee
Joint control is the contractually agreed sharing of control over an arrangement under which the decisions relating to anyactivity require the unanimous consent of the parties sharing control. In determining whether there is a joint control, thefirst judge is to determine whether the relevant arrangement is controlled collectively by all the parties involved or thegroup of the parties involved. Secondly, and then determine whether the decisions related to the basic operating activitiesshould require the unanimous consent of the parties involved. If the parties involved or the group of the parties involvedmust act consistently to determine the relevant arrangement, it is considered that the parties involved or the group of theparties involved control the arrangement. If two or more parties involve in the collectively control of certain arrangement,it shall not be considered as joint control. Protection of rights shall not be considered in determining whether there is jointcontrol.Significant influence refers to the power to participate in the decision making process for financial and operational policiesof the investees without control or common control over the formulation of such policies. When determining whether ithas significant influence over the investee, the influence of the voting shares of the investee held by the investor directlyand indirectly and the potential voting rights held by the investor and other parties which are exercisable in the currentperiod and converted to the equity of the investee, including the warrants, stock options and convertible bonds that areissued by the investee and can be converted in the current period, shall be taken into account.
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When the Company owns directly or indirectly through its subsidiaries more than 20% (including 20%) but less than 50%of the voting shares of the investee, it is generally considered to have significant influence over the investee, unless thereis clear evidence that it cannot participate in the production and operation decisions of the investee and does not have asignificant influence under such circumstances. When the Company owns less than 20% (excluding) of the voting sharesof the investee, it is generally not considered to have significant influence on the investee unless there is clear evidencethat it can participate in the production and operation decisions of the investee and have significant influence under suchcircumstances.
(4) Held-for-sale equity investment
Refer to Note III. 13 for the relevant accounting treatment of the equity investment to joint ventures or associates all orpartially classified as assets held for sale.The surplus equity investments that are not classified as assets held for sale shall be accounted for using equity method.The equity investment to joint ventures or associates already classified as held for sale no longer meets the conditions ofassets held for sale shall be adjusted retroactively using equity method from the date of being classified as assets held forsale.
(5) Impairment test and impairment provision
Refer to note III. 22 for investment to subsidiaries, associates and joint ventures and the impairment provision of assets.
15. Investment properties
Investment properties are properties held to earn rental or capital appreciation or both. The investment properties of theCompany include land use rights that have already been leased out, land use rights that are held for the purpose of saleafter capital appreciation, buildings that have already been leased out, etc.Investment properties of the Company are measured initially at cost upon acquisition, and subject to depreciation oramortisation in the relevant periods according to the relevant provisions on fixed assets or intangible assets.The Company adopts the cost model for subsequent measurement of the investment properties. The method for assetimpairment provision is set out in note III. 22.The balance after the disposal income from the disposal, transfer, scrapping or destruction of the investment propertiesdeducts the book value and the relevant taxes shall be recorded into the profit and loss for the current period.
16. Fixed assets
(1) Conditions for recognition of fixed assets
√ Applicable □ N/AThe Company’s fixed assets represent the tangible assets held by the Company using in the production of goods,rendering of services, rent and for operation and administrative purposes with useful life over one year.The fixed asset can be recognised only when the economic benefit related to the fixed asset is probable to flow into thecompany and the cost of the fixed asset can be reliably measured.The Company’s fixed assets are initially measured at the actual cost at the time of acquisition.
(2) Method of depreciation
√ Applicable □ N/ACategoryUseful years (year)Residual rate %Annual depreciationProperties and Buildings205%-10%4.5%-4.75%Machine and equipment105%-10%9%-9.5%Transportation equipment55%-10%18%-19%Electric equipment and others5-105%-10%18%-19%Where, for the fixed assets for which depreciation provision is made, to determine the depreciation rate, the accumulatedamount of the fixed asset depreciation provision that has been made shall be deducted.
(3) Refer to note III. 22 for the impairment testing and the impairment provision of fixed assets.
(4) Recognition basis, valuation and depreciation method of financial leased fixed assets
When the Company’s leased fixed assets meet one or more of the following criteria, it is recognized as finance leased fixedassets:
① At the expiration of the lease term, the ownership of the leased assets is transferred to the Company.
② The Company has the option to purchase leased assets. The agreed purchase price is expected to be much lower than
the fair value of the leased asset when the option is exercised. Therefore, it can be reasonably determined that theCompany will exercise this option on the lease start date.
③ Even if the ownership of the asset is not transferred, the lease term occupies most of the useful life of the leased asset.
④ The present value of the Company’s minimum lease payment on the lease start date is almost equivalent to the fair
value of the leased assets on the lease start date.
⑤ The leased assets are of special nature, and only our company can use them if they don’t undergo major
transformation.For fixed assets leased by finance leases, the lower of the fair value of the leased assets on the lease start date and thepresent value of the minimum lease payment shall be the entry value. The minimum lease payment is taken as the entryvalue of the long-term payable, and the difference is taken as the unrecognized financing expense. In the process of leasenegotiation and signing of the lease contract, the initial direct costs attributable to the lease item, such as handling fees,attorney fees, travel expenses, stamp duty, etc., are included in the value of the leased asset. The unrecognized financingcosts shall be amortized by the effective interest method during each period of the lease term.The fixed assets acquired by finance lease adopt the same policy as self-owned fixed assets to calculate the depreciationof leased assets. If it can be reasonably determined that the ownership of the leased asset will be obtained at the end ofthe lease term, depreciation shall be accrued on the useful life of the leased asset; if it cannot be reasonably determinedthat the ownership of the leased asset will be obtained at the end of the lease term, depreciation is accrued in the shorterof the lease period and the useful life of the leased asset.
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(5) The Company reviews the useful life and estimated net residual value of fixed asset and the depreciation method applied
annually at each of the period end.The useful lives of fixed asset are adjusted if their expected useful lives are different from the original estimates; theestimated net residual values are adjusted if they are different from the original estimates.
(6) Overhaul costs
The overhaul costs occurred in regular inspection of fixed assets are recognised in the cost of property, plant andequipment if there is undoubted evidence to confirm that they meet the recognition criteria of fixed assets, otherwise,the overhaul costs are recognised in profit or loss for the current period. Property, plant and equipment are depreciatedduring the intervals of the regular overhaul.
17. Construction in progress
√ Applicable □ N/AConstruction in progress is measured at actual cost. Actual cost comprises necessary project expenditure incurred duringconstruction, borrowing cost that are eligible for capitalisation and other necessary cost incurred to bring the fixed assetsready for their intended use.Construction in progress is transferred to fixed assets when the assets are ready for their intended use.For provision for impairment of construction in progress, refer to note III. 22.In the balance sheet, the ending balance of construction materials is presented under“construction in progress”.
18. Borrowing costs
√ Applicable □ N/A
(1) Recognition principle of capitalisation of borrowing costs
For borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset,they shall be capitalised and included in the cost of related assets; other borrowing costs are recognised as expensesand included in profit or loss when incurred. Capitalisation of such borrowing costs can commence only when all of thefollowing conditions are satisfied:
① Expenditures for the asset incurred, capital expenditure includes the expenditure in the form of cash payment, transfer
of non-cash assets or the interest bearing liabilities for the purpose of acquiring or constructing assets eligible forcapitalisation;
② Borrowing costs incurred;
③ Activities relating to the acquisition, construction or production of the asset that are necessary to prepare the asset for
its intended use or sale have commenced.
(2) Capitalisation period of borrowing costs
Capitalisation of such borrowing costs ceases when the qualifying assets being acquired, constructed or produced becomeready for their intended use or sale. The borrowing cost incurred after that is recognised as an expense in the period inwhich they are incurred and included in profit or loss for the current period.Capitalisation of borrowing costs is suspended during periods in which the acquisition, construction or production of aqualifying asset is interrupted abnormally and when the interruption is for a continuous period of more than 3 months; theborrowing costs in the normally interrupted period continue to capitalise.
(3) Calculation of the capitalisation rate and amount of borrowing costs
The interest expense of the specific borrowings incurred at the current period, deducting any interest income earned fromdepositing the unused specific borrowings in bank or the investment income arising from temporary investment, shallbe capitalised. The capitalisation rate of the general borrowing is determined by applying the weighted average effectiveinterest rate of general borrowings, to the weighted average of the excess amount of cumulative expenditures on theasset over the amount of specific borrowings.During the capitalisation period, exchange differences on foreign currency special borrowings shall be capitalised;exchange differences on foreign currency special borrowings shall be recognised as current profits or losses.
19. Biological assets
√ Applicable □ N/A
(1) Determination of biological assets
Biological assets refer to assets comprising living animals and plants. No biological asset shall be recognised unless itmeets the conditions as follows simultaneously:
① An enterprise possesses or controls the biological asset as a result of past transaction or event;
② The economic benefits or service potential concerning this biological asset are likely to flow into the enterprise;
③ The cost of this biological asset can be measured reliably.
(2) Classification of biological assets
The Company’s biological assets are consumable biological assets which include traditional Chinese medical herbal plantspecies.The consumable biological assets refer to the biological assets held for sale, or biological assets to be harvested asagricultural products in the future, consisting of growing traditional Chinese medical herbal plant species. The consumablebiological asset is initially measured at cost. The cost of any consumable biological assets by way of self-planting, self-cultivating, self-breading is the necessary cost directly attributable to this asset prior to the harvest, consisting ofborrowing costs that meet the conditions of capitalisation. The subsequent expenses for the maintenance, protection andcultivation of a consumable biological asset after the harvest shall be included in the current profits or loss.The cost of a consumable biological asset shall, at the time of harvest or sale, be carried over at its book value by theweighted average method.
(3) Impairment of biological assets
If the net realisable value of the consumable biological assets is lower than their carrying amount, provision of impairmentloss is made and recognised in the profit or loss for the current period as the excess of the carrying amount over thenet realisable value. If the factors affecting the impairment of consumable biological assets no longer exist, the amountof write-down shall be resumed and shall be reversed from the original provision for the impairment loss before beingrecognised in the profit or loss for the current period.
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20. Intangible assets
(1) Pricing methods, useful lives and impairment tests
√ Applicable □ N/AAn intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by the Company.An intangible asset is recognised only when all of the following conditions are satisfied: It is probable that the economicbenefits associated with the intangible assets will flow to the enterprise; The cost of the intangible asset can be reliablymeasured. Intangible assets are initially measured at actual cost.The Company’s intangible assets include land use rights, patents and proprietary technologies, software, trademark rights,etc.Intangible assets are initially measured at historical cost, and the Company shall make judgement to determine the usefullife of intangible assets upon acquisition. Intangible assets with finite useful life are amortised in the profit or loss overthe estimated useful life, using the method that reflects the expected realisation of economic benefits associated withthe asset, and if the expected realisation cannot be reliably determined, it is amortised using the straight-line method.Intangible assets with indefinite useful life is not amortised.Amortisation of intangible assets with finite useful life is as follows:
CategoryExpected useful lifeLand use rightsUseful life specified in the land use right certificatePatent and technical know-howProtection period or benefit period stipulated by relevant national laws and regulationsTrademark rightsTen yearsOthersBenefit periodThe useful life for an intangible asset with a finite useful life and the method of amortisation are reviewed at least onceat the end of each financial year. If the useful life and amortisation method for the intangible assets are different from theprevious estimate, the change of amortisation is recognised prospectively as the change of accounting estimate.When the Company estimates an intangible asset can no longer bring future economic benefits to the Company at theend of a period, the carrying amount in which should be reversed to profit or loss for the current period.Please refer to note III. 22 for the provision of impairment of intangible assets.
21. Research and development expenditures
√ Applicable □ N/AExpenditures on an internal research and development project are classified into expenditures on the research phase andexpenditures on the development phase.Expenditures on the research phase shall be recognised in profit or loss for the current period when incurred.Expenditures on the development phase will be capitalised only when all of the following conditions are satisfied: it istechnically feasible to complete the intangible asset so that it will be available for use or sale; the Company intends tocomplete the intangible asset and use or sell it; it can be demonstrated how the intangible asset will generate economicbenefits, including proving that the intangible assets or the products produced by it will have markets, or the intangibleassets for internal use will be useful; there are adequate technical, financial and other resources to complete thedevelopment and the Company is able to use or sell the intangible assets; and expenditures on the development phaseattributable to the intangible assets can be reliably measured. The development expenditures that do not satisfy the aboveconditions shall be recognised in profit or loss for the current period.
Our research and development projects enter the development stage after meeting the above conditions and forming theproject through the technical and economic feasibility studies.Capitalised expenditures on the development phase are shown as development expenditures on the balance sheet andreclassified as intangible assets on the date the project meets the intended purpose.Capitalisation conditions for specific research and development projects are as follows:
① For research and development projects that are not required to obtain clinical approvals, the period from the
beginning of research and development to the pilot phase is treated as the research phase, and all expendituresshall be recognised in profit or loss for the current period when incurred; the period from the pilot phase to theobtaining of production approvals is treated as the development phase, and all expenditures shall be recognised asdevelopment expenditures and reclassified as intangible assets after the obtaining of production approvals.
② For research and development projects that require clinical approval, the period from the beginning of research and
development to the obtaining of clinical approval is treated as the research phase, and all expenditures incurredshall be recognised in profit or loss for the current period when incurred; the period from the obtaining of clinicalapproval to the obtaining of production approval is treated as the development phase, and the expenditures shallbe recognised as development expenditures and reclassified as intangible assets after the obtaining of productionapproval.
③ External technology transfer fees and the cost of purchasing clinical approvals can be recognised directly as
development expenditures, and subsequent expenditures are accounted for in accordance with ① and ② above.
④ The Company reviews the latest research and development status of each project at the end of each year and if the
research and development project no longer qualifies for the development stage, the corresponding developmentexpenditure are recognised in profit or loss for the current period.
⑤ Where it is impossible to differentiate the expenditures on the research phase and the expenditures on the
development phase, all the research and development expenditures are recognised in profit or loss for the currentperiod.Please refer to note III. 22 for the impairment testing methodology and impairment provision for intangible assets.
22. Impairment of assets
√ Applicable □ N/AThe impairment of subsidiaries, associates and joint ventures in the long-term equity investments, investment propertiessubsequently measured at cost, fixed assets, construction in progress, right-of-use assets, intangible assets, etc. (Excludinginventories, investment properties measured at fair value, deferred income tax assets and financial assets) are determinedas follows:
At the balance sheet date, the Company determines whether there may be evidence of impairment, if there is any, theCompany will estimate the recoverable amount for impairment, and then test for impairment. For goodwill arising from abusiness combination, intangible assets with indefinite useful life and the intangible assets that have not yet ready for useare tested for impairment annually regardless of whether such evidence exists.The recoverable amount of an asset is determined by the higher amount of fair value deducting disposal costs and netpresent value of future cash flows expected from the assets. The Company estimates the recoverable amount based onindividual asset; for individual asset which is difficult to estimate the recoverable amount, the recoverable amount of theasset group is determined based on the asset group involving the asset. The identification of the asset group is based onwhether the cash flow generated from the asset group is independent of the major cash inflows from other assets or assetgroups.
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When the asset or asset group’s recoverable amount is lower than its carrying amount, the Company reduces its carryingamount to its recoverable amount, the reduced amount is included in profit or loss, while the provision for impairment ofassets is recognised.In terms of impairment test of the goodwill, the carrying amount of the goodwill, arising from business combination, shallbe allocated to the related asset group in accordance with a reasonable basis at acquisition date. Those that are difficultto be allocated to related assets shall be allocated to related asset group. Related assets or assets group refer to thosethat can benefit from the synergies of business combination and are not larger than the Company’s recognised reportingsegment.When there is an indication that the asset and asset group are prone to impair, the Company should test for impairmentfor asset and asset group excluding goodwill and calculate the recoverable amount and recognise the impairment lossaccordingly. The Company should test for impairment for asset or the asset group including goodwill and compare theasset or asset group’s recoverable amount with its carrying amount, provision for impairment of assets shall be recognisedwhen the recoverable amount of assets is lower than its carrying amount.Once impairment loss is recognised, it cannot be reversed in subsequent accounting periods.
23. Long-term deferred expenses
√ Applicable □ N/AThe Company’s long-term deferred expenses measured at cost actually incurred and evenly amortised on straight-linebasis over the expected beneficial period. For the long-term deferred expense items that cannot benefit in subsequentaccounting period, their amortised value is recognised through profit or loss.
24. Employee compensation
(1) The scope of employee compensation
Employee compensation are all forms of remuneration and compensation given by the Company in exchange for servicerendered by employees or the termination of employment. Employee compensation include short-term employeecompensation, post-employment benefits, termination benefits and other long-term employee benefits. Employeecompensation include benefits provided to employees’ spouses, children, other dependants, survivors of the deceasedemployees or to other beneficiaries.According to liquidity, employment compensations are presented separately as“accrued payroll”item and“long-termemployment compensation payable” item in the balance sheet.
(2) Short-term employee compensation
√ Applicable □ N/ADuring the accounting period in which the employees render the related services, wages, bonuses, social securitycontributions (including medical insurance, injury insurance, maternity insurance, etc.) and house funding are recognisedas liability and included in the profit or loss for the current period or related asset costs. If the liability cannot be whollysettled within twelve months after the end of the annual reporting period in which the employees render the relatedservice and have significant financial impact, the liability shall be measured as the discounted amounts.
(3) Post-employment benefits
√ Applicable □ N/APost-employment benefit plans mainly includes defined contribution plans and defined benefit plans. Defined contributionplans include the basic pension insurance, unemployment insurance, etc., and the contributions to defined contributionplans are recognised and included in profit or loss for the current period or related asset costs.
(4) Termination benefits
√ Applicable □ N/AThe liability of employee compensation arising from termination benefits is recognised and included in profit or loss forthe current period in the earlier date of the followings: The Company cannot unilaterally withdraw the offer of terminationbenefits because of an employment termination plan or a curtailment proposal; the Company recognises costs orexpenses related to the restructuring that involves the payment of termination benefits.For the implementation of the internal retirement plan for employees, the economic compensation before the officialretirement date is a termination benefit. The wage of and social insurance contributions for the internally retired employeewhich would have incurred from the date on which the employee cease rendering services to the Company to thescheduled retirement date will be included in the profit or loss for the current period. Economic compensation after theofficial retirement date (such as normal pension) should be treated as post-employment benefits.
(5) Other long-term employee benefits
√ Applicable □ N/AWhen other long-term employee benefits provided to the employees by the Company are satisfied the conditions of adefined contribution plan, those benefits shall be accounted for in accordance with the relevant provisions of the abovedefined contribution plans. When the benefits are satisfied the conditions of a defined benefit plan, those benefits shallbe accounted for in accordance with the relevant provisions of the above defined benefit plans, except that the“changein remeasurement of the net liability or net assets of the defined benefit plans”in the cost of the related employeecompensation shall be included in profit or loss for the current period or related asset costs.
25. Provision for liabilities
√ Applicable □ N/AAn obligations related to a contingency is recognised as a provision when all of the following conditions are satisfied:
(1) The obligation is a present obligation of the Company;
(2) It is probable that an outflow of economic benefits will be required to settle the obligation;
(3) The amount of the obligation can be measured reliably.
Provisions are initially measured at the best estimate of the payment to settle the associated obligations and consider therelevant risk, uncertainty and time value of money. If the impact of time value of money is significant, the best estimateis determined as its present value of future cash outflow. The Company reviews the carrying amount of provisions at thebalance sheet date and adjusts the carrying amount to reflect the best estimate.If the expenses for clearing of provisions is fully or partially compensated by a third party, and the compensated amountcan be definitely received, it is recognised separately as asset. The compensated amount recognised shall not be greaterthan the carrying amount of the liability recognised.
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26. Share-based payment and equity instruments
√ Applicable □ N/A
(1) Accounting treatment of share-based payment
Share-based payments are transactions in which equity instruments are granted or liabilities are assumed on the basisof equity instruments in order to obtain services from employees or other parties. Share-based payment is classified intoequity-settled share-based payment and cash-settled share-based payment.
① Equity-settled share-based payment
Equity-settled share-based payment is measured at the fair value of the equity instruments granted to employees. Ifvesting is conditional upon completion of services in the pending period or fulfilment of performance conditions, at eachbalance sheet date during the pending period, based on the best estimates of the number of vested equity instruments,the services received for the period are recognised as the costs or expenses on a straight-line basis. Instruments which arevested immediately upon the grant are included in relevant costs or expenses at the fair value of equity instruments onthe date of grant and capital reserves are increased accordingly.At each balance sheet date during the pending period, the Company makes the best estimate and revises the numberof equity instruments expected to be exercisable based on subsequent information such as changes in the number ofexercisable employees obtained from the latest available information. The effect of the above estimates is recognised asthe relevant cost or expense in the current period, and capital surplus is adjusted accordingly.For the equity instruments granted under an equity-settled share-based payment for services from other parties, if the fairvalue of services received from other parties can be measured reliably, the fair value of the equity instruments is measuredat the fair value of services from other parties on the grant date; if the fair value of services received from other partiescannot be measured reliably but the fair value of the equity instruments can be measured reliably, the fair value of theequity instruments on the date on which services are received shall be recognised as related costs or expenses, with acorresponding increase in owners’ equity.
② Cash-settled share-based payment
Cash-settled share-based payments are measured at the fair value of the liabilities (share-based or other equity instrument-based) assumed by the Company. Instruments which are vested immediately upon the grant are included in relevantcosts or expenses at the fair value of liabilities assumed by the Company on the date of grant and liabilities are increasedaccordingly. If vesting is conditional upon completion of services in the pending period or fulfilment of performanceconditions, at each balance sheet date during the pending period, based on the best estimates of the vesting situation,the services received for the period are recognised as the costs or expenses and corresponding liabilities at fair value ofthe liabilities assumed by the Company.At each balance sheet date and settlement date before the relevant liabilities are settled, the fair value of liabilities is re-measured and the resulting changes are included in the profit and loss for the current period.
(2) Accounting treatment for amendment and termination of share-based payments
When the Company modifies the share-based payment plan, and if such modification increases the fair value of the equityinstruments granted, the increase in services received will be recognised accordingly following the increase in fair valueof the equity instruments; if such modification increases the number of equity instruments granted, the increase in fairvalue of the equity instruments is recognised as a corresponding increase in service achieved. The increase in fair value ofthe equity instruments refers to the difference in fair value on the date of modification before and after the modificationin respect of the equity instruments. If the modification reduces the total fair value of the share-based payments oradopts any form that is unfavorable to employees to modify the terms and conditions of the share-based payment plan,accounting treatment will be continued to be conducted in respect of the services received and the modification will bedeemed to have never occurred, unless the Company had cancelled part or all of the equity instruments granted.
During the pending period, if the equity instruments granted are cancelled (except for failure to meet the non-marketconditions of the vesting conditions), the Company will undertake an accelerated vesting in respect of the cancelled equityinstruments that had been granted, include the remaining amount that shall be recognised during the pending period inthe current profit and loss immediately and recognise capital reserve accordingly. Where employees or other parties arepermitted to choose to fulfil non-vesting conditions but have not fulfilled during the pending period, the Company willtreat the granted equity instruments as cancelled.
(3) Accounting treatment for share-based payments involving the Company and the shareholders or the de facto controller of
the CompanyFor share-based payment transactions involving the Company and the shareholders or the de facto controller of theCompany, the settlement enterprise and the enterprise receiving services (one under the Company while another externalto the Company) shall follow the requirements below to conduct accounting treatment in the Company’s consolidatedfinancial statements:
① For settlement enterprises settling through their own equity instruments, such share-based payment transaction will be
treated as equity-settled share-based payment; except for this, such share-based payment transaction will be treated ascash-settled share-based payment.Where a settlement enterprise is an investor of an enterprise receiving services, the fair value of the equity instruments onthe date of grant or the fair value of the liabilities that shall be assumed are recognised as long-term equity investment inthe enterprise receiving services, at the same time, capital reserve (other capital reserve) or liabilities are recognised.
② Where an enterprise receiving services has no settlement obligations or grants its own equity instruments to employees,
such share-based payment transaction will be treated as equity-settled share-based payment; where an enterprisereceiving services has settlement obligations and grants equity instruments (other than its own) to employees, such share-based payment transaction will be treated as cash-settled share-based payment.For a share-based payment transaction occurring among enterprises under the Company where the enterprise receivingservices and the settlement enterprise are not the same enterprise, such share-based payment transaction shall berecognised and measured in each of the respective financial statements of the enterprise receiving services and thesettlement enterprise by reference to the above principles.
27. Preferred shares, perpetual bonds and other financial instruments
√ Applicable □ N/A
(1) Classification of financial liabilities and equity instruments
The Company classifies the financial instrument or its components as financial assets, financial liabilities or equityinstruments at the initial recognition based on the contract terms of the issued financial instrument and the economicsubstance it reflects, instead of only in legal form, and combine the definition of financial assets, financial liabilities andequity instruments.
(2) Accounting treatment of preferred shares, perpetual bonds and other financial instruments
The financial instruments issued by the Company are initially recognised and measured in accordance with thefinancial instrument standards; thereafter, interest or dividends are accrued or distributed on each balance sheet dateand processed in accordance with relevant specific accounting standards for enterprises. That is, on the basis of theclassification of the financial instrument issued, the accounting treatment of interest expenses or dividend distributionsof the instrument is determined. For financial instruments classified as equity instruments, interest expenses or dividenddistributions are treated as profit distribution of the Company, and repurchases and cancellations are treated as changes inequity; for financial instruments classified as financial liabilities, interest expenses or dividend distributions are in principletreated according to borrowing costs, and gains or losses arising from repurchase or redemption are credited to profit orloss for the current period.
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The transaction costs such as charges and commissions incurred by the Company when issuing financial instruments, ifclassified as debt instruments and measured at amortised cost, are included in the initial measurement amount of theissued instrument; if classified as equity instruments, are deducted from equity.
28. Revenue
√ Applicable □ N/AThe Company shall recognise revenue when the Company satisfies the performance obligation of the contract, that is, thecustomer obtains control of relevant goods or services.When the contract contains two or more performance obligations, on the effective date of the contract, the Companyallocates the transaction price to each performance obligation based on the percentage of respective unit price of a goodor service guaranteed by each performance obligation, and the revenue is measured according to the transaction priceallocated to each performance obligation.If one of the following conditions is fulfilled, the Company satisfies a performance obligation over time; otherwise, itsatisfies a performance obligation at a point in time:
① When the customer simultaneously receives and consumes the benefits provided by the Company when the Company
performs its obligations under the contract.
② When the customer is able to control the commodity in progress in the course of performance by the Company under
the contract.
③ The product produced by the Company under the contract is irreplaceable and the Company has the right to payment
for performance completed to date during the term of the contract.For a performance obligation satisfied over time, the Company shall recognise revenue over time by measuring the processtowards complete satisfaction of the performance obligation. When the progress of performance cannot be reasonablydetermined, if the costs incurred by the Company are expected to be recoverable, the revenue will be recognised to theextent of the costs incurred until the progress of performance can be reasonably determined.For a performance obligation satisfied at a point in time, the Company shall recognise revenue when the customer obtainscontrol of relevant goods or services. When determining whether the customer has obtained control of the goods andservices, the Company will consider the following indications:
① The Company has the current right to receive payment for the goods or services, which is when the customers have
the current payment obligations for the goods.
② The Company has transferred the legal title of the goods to the client, which is when the client possesses the legal
title of the goods.
③ The Company has transferred the physical possession of goods to the customer, which is when the customer obtains
physical possession of the goods.
④ The Company has transferred all of the substantial risks and rewards of ownership of the goods to the customer, which
is when the client obtains all of the substantial risks and rewards of ownership of the goods to the customer.
⑤ When the customer has accepted the goods or services.
⑥ When other information indicates that the customer has obtained control of the goods.
A contract asset represents the Company’s right to consideration in exchange for goods or services that it has transferredto a customer when that right is conditioned on factors other than passage of time, for which the loss allowances forexpected credit loss is recognised (see Note III. 10(6)). The Company shall present any unconditional (i.e. if only the passageof time is required) rights to consideration separately as a receivable. A contract liability is the Company’s obligation totransfer goods or services to a customer for which the Company has received consideration (or the amount is due) fromthe customer.
The contract assets and liabilities under the same contract shall be shown on a net basis. If the net amount stated in debitbalance, it will be presented under the items of“Contract assets”or“Other non-current assets”according to its mobility; Ifthe net amount stated in credit balance, it will be presented under the items of“Contract liabilities”or“Other non-currentliabilities” according to its mobility.The Company enters into sales contracts with customers. Revenue from sales is recognised according to the invoicedamount upon the delivery of goods to the designated carrier or purchaser according to the orders received fromcustomers; revenue from export sales is recognised mainly by adopting FOB mode according to custom declaration uponmaking declaration for goods and completing the export procedures.
29. Contract costs
√ Applicable □ N/AContract costs are either the incremental costs of obtaining a contract with a customer or the costs to fulfil a contract witha customer.Incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customerthat it would not have incurred if the contract had not been obtained e.g. an incremental sales commission. The Companyrecognises as an asset the incremental costs of obtaining a contract with a customer if it expects to recover those costs.Other costs of obtaining a contract are expensed when incurred.If the costs to fulfil a contract with a customer are not within the scope of inventories or other accounting standards,the Company recognises an asset from the costs incurred to fulfil a contract only if those costs meet all of the followingcriteria:
① The costs relate directly to an existing contract or to a specifically identifiable anticipated contract, including direct
labour, direct materials, allocations of overheads (or similar costs), costs that are explicitly chargeable to the customerand other costs that are incurred only because the Company entered into the contract;
② The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy)
performance obligations in the future;
③ The costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets recognised for the costs to fulfil a contract(the“assets related to contract costs”) are amortised on a systematic basis that is consistent with the transfer to thecustomer of the goods or services to which the assets relate and recognised in profit or loss for the current period.The Company recognises an impairment loss in profit or loss to the extent that the carrying amount of an asset related tocontract costs exceeds:
① Remaining amount of consideration that the Company expects to receive in exchange for the goods or services to
which the asset relates;
② The cost estimated to be happened for the transfer of related goods or services.
The costs of contract performance recognised as assets, if the amortisation period is less than one year or a normaloperating cycle upon the initial recognition, are presented as“Inventories”item, and if the amortisation period is morethan one year or a normal operating cycle upon the initial recognition, are presented as“Other non-current assets” item.The contract obtaining costs recognised as assets, if the amortisation period is less than one year or a normal operatingcycle upon the initial recognition, are presented as“Other current assets”item, and if the amortisation period is more thanone year or a normal operating cycle upon the initial recognition, are presented as“Other non-current assets” item.
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30. Government grants
√ Applicable □ N/AA government grant shall be recognised only when the enterprise can comply with the conditions attaching to the grantand the enterprise can receive the grant.If a government grant is in the form of a transfer of a monetary asset, the item is measured at the amount received. If agovernment grant is in the form of a transfer of a non-monetary asset, the item is measured at fair value, when fair value isnot reliably determinable, the item is measured at a nominal amount of RMB1.Government grant related to assets represents the government grant received for acquisition and construction of longterm assets, or forming long term assets in other ways. Except for these, all are government grant related to income.Regarding to the government grant not clearly defined in the official documents and can form long term assets, the partof government grant which can be referred to the value of the assets is classified as government grant related to assetsand the remaining part is government grant related to income. For the government grant that is difficult to distinguish,the entire government grant is classified as government grant related to income.The government grant related to assets is recognised as deferred income and would be transferred to profit or loss inreasonable and systematic manner within the period of use of the relevant assets. The government grant related toincome which is used to compensate the relevant costs or losses incurred should be recognised in the profit or loss for thecurrent period; the government grant related to income which is used to compensate the relevant costs or losses for thesubsequent period is recognised as deferred income and shall be recognised in profit or loss during the relevant cost orloss confirmation period. Government grants measured in nominal terms are directly included in the profit or loss for thecurrent period. The Company has adopted a consistent approach to the same or similar government grant business.The government grants related to daily activities are recognised as other gains in accordance with the substance ofeconomic business. Government grants that are not related to daily activities are recognised as non-operating income andexpenses.If the recognised government grants need to be refunded, adjust the carrying amount of assets when the carryingamount of assets is offset at the time of initial recognition; the balance of deferred income is offset against the carryingamount of the balance of deferred income and the excess is recognised in the profit or loss for the current period. Othercircumstances, it is directly recognised in the profit or loss for the current period.
31. Deferred tax assets and deferred tax liabilities
√ Applicable □ N/A
(1) Current tax
At the balance sheet date, for the current tax liabilities (or assets) arising from the current period and the previous period,should be measured by the tax of the estimated payable (returnable) amount which be calculated according to theregulations of the tax law. The amount of the tax payable which is based by the calculation of the current tax expenses,are according to the result measured from the corresponding adjustment of the pre-tax accounting profit of the currentperiod which in accord to the relevant regulations of the tax law.
(2) Deferred tax assets and deferred tax liabilities
The difference between the carrying amount of an asset or liability and its tax basis, as well as the temporary differencesarising from differences between the carrying amount and tax basis of items that are not recognised as assets and liabilitiesbut in accordance with the tax law, can be recognised as deferred tax assets and deferred tax liabilities by adopting thebalance sheet liability method.
No deferred tax liability is recognised for a temporary difference arising from the initial recognition of goodwill the initialrecognition of assets or liabilities due to a transaction other than a business combination, which affects neither accountingprofit nor taxable profit (or deductible loss). Besides, no deferred tax assets well be recognised for the taxable temporarydifferences related to the investments in subsidiaries, associates and joint ventures, if the Company can control the timeof the reverse of temporary differences as well as the temporary differences are unlikely to be reversed in the foreseeablefuture. Except for the above exceptions, the Company recognises all deferred income tax liabilities arising from othertaxable temporary differences.The deductible temporary differences the initial recognition of assets or liabilities arising from transactions that areneither a business combination, nor do they affect accounting profits and taxable income (or deductible losses), will notbe recognised as related deferred income tax assets. In addition, as for the taxable temporary differences associated withinvestments in subsidiaries, associates and joint ventures, if the Company is able to control the timing of the reversal of thetemporary differences, and the temporary differences may not be reversed in the foreseeable future, the related deferredincome tax assets will also not be recognised. Except for the above exceptions, the Company recognises a deferred taxasset arising from other deductible temporary differences, to the extent that it is probable that taxable income will beavailable against which the deductible temporary differences.The Company recognises a deferred tax asset for the carry-forward of deductible losses and tax credits to subsequentperiods, to the extent that it is probable that future taxable profits will be available against which deductible losses and taxcredits can be utilised.At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected toapply to the period when the asset is realised or the liability is settled in accordance with the provisions of the tax law.At the balance sheet date, the Company reviews the carrying amount of a deferred tax asset. If it is probable that sufficienttaxable profits will not be available in future periods to allow the benefit of the deferred tax asset to be utilised, thecarrying amount of the deferred tax asset is reduced. Any such reduction in amount is reversed when it becomes probablethat sufficient taxable profits will be available.
(3) Tax expenses
The tax expenses comprise current tax and deferred tax.The rest current tax and deferred tax expenses or revenue should be included into current gains and losses expect forthe current tax and the deferred tax related to the transaction and events that be confirmed as other comprehensiveincome or be directly included in the shareholders’ equity which should be included in other comprehensive incomeor shareholders’ equity as well as the book value for adjusting the goodwill of the deferred income tax occurs from thebusiness combination.
(4) Offset of tax
The current tax assets and liabilities of the Company should be listed by the written-off net amount which intend toexecute the net amount settlement as well as the assets acquiring and liabilities liquidation at the same time while ownsthe legal rights of settling the net amount.The deferred tax assets and liabilities of the Company should be listed as written-off net amount when having the legalrights of settling the current tax assets and liabilities by net amount and the deferred tax and liabilities is relevant to thetax which be collected from the same taxpaying bodies by the same tax collection and administration department or isrelevant to the different taxpaying bodies but during each period which there is significant reverse of the deferred incomeassets and liabilities in the future and among which the involved taxpaying bodies intend to settle the current income taxand liabilities by net amount or are at the same time acquire the asset as well as liquidate the liabilities.
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32. Leases
(1) Identification of leases
At the inception of a contract, the Company, as a lessee or lessor, assesses if the customer in a contract has the rightto obtain substantially all the economic benefits from use of the identified assets and the right to direct the use of theidentified assets in the period of use. The Company would identify that a contract is a lease, or contains a lease if a partyof the contract transfers the right to control the use of one or more identified assets for a period of time in exchange forconsideration.
(2) The Company as the lessee
At the inception of a lease, the Company recognises all its leases as the right-of-use assets and lease liabilities, except forthe short-term leases and the leases of low-value assets which are treated with a simplified approach.For the accounting policies on the right-of-use assets, please refer to Note III. 33.Lease liabilities are initially measured based on the present value of outstanding lease payment at the inception of alease, discounted using the interest rate implicit in the lease or the incremental borrowing rate. Lease payment include:
fixed payments and in-substance fixed payments, less any lease incentives (if there is a lease incentive); variable leasepayment that are based on an index or a rate; the exercise price of a purchase option if the lessee is reasonably certain toexercise that option; payments of penalties for terminating the lease option, if the lease term reflects that the lessee willexercise that option; and amounts expected to be payable under the guaranteed residual value provided by the lessee.The Company shall subsequently calculate the interest expenses of lease liabilities over the lease term at the fixed periodicinterest rate, and include it into the profit or loss for the current period. Variable lease payments not included in themeasurement of lease liabilities are charged to profit or loss in the period in which they actually arise.Short-term leaseShort-term lease refers to the lease that the lease term does not exceed 12 months from the inception of a lease, and thelease that includes the option of purchase is not a short-term lease.The Company recognises the amount of lease payments of short-term lease in the cost of the related asset or the profit orloss for the current period, on a straight-line method over each period of the lease term.Leases of low-value assetsFor the Leases of low-value assets, the Company chooses to adopt the above simplified treatment method in accordancewith the specific conditions of each lease.The Company recognised the lease payments for the leases of low-value assets in the relevant asset cost or the profit orloss for the current period on a straight-line basis over each period of the lease term.
(3) The Company as the lessor
When the Company is the lessor, the lease that substantially transfers all the risks and rewards related to the ownership ofassets is recognised as a finance lease, and leases other than finance leases are recognised as operating leases.
(4) Accounting treatment method of operating lease
√ Applicable □ N/AFor the rental of operating leases, the Company recognises it in the profit or loss for the current period on a straight –line basis over each period of the lease term. The initial direct cost incurred in connection with an operating lease shall becapitalised and amortised on the same basis for recognition of rental income during the lease term, and shall be includedin instalments in the profit or loss for the current period. The variable lease payment, which is obtained in connection withan operating lease and not included in the lease receivables, shall be included in the profit and loss for the current periodwhen they actually occur.
(5) Accounting treatment method of finance leases
√ Applicable □ N/AIn a financial lease, the Company uses the net investment in leases as the carrying amount of finance lease receivablesat the inception of a lease. The net investment in leases is the sum of the unguaranteed residual value and the presentvalue of the outstanding lease payment at the inception of a lease, discounted using the interest rate implicit in the lease.The Company, as the lessor, calculates and recognises the interest income over each period of the lease term at a fixedperiodic interest rate. Variable lease payments not included in the measurement of the lease liability, which are obtainedby the Company as a lessor, are recognised in profit or loss as incurred.The termination of recognition and impairment of financial lease receivables is accounted for in accordance withthe provisions of“Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of FinancialInstrument”and“Accounting Standards for Business Enterprises No. 23 – Transfer of Financial Assets”.
33. Right-of-use assets
√ Applicable □ N/A
(1) Recognition condition of right-of-use assets
The right-of-use assets of the Company are defined as the right of underlying assets in the lease term for the Company asa lessee.Right-of-use assets are initially measured at cost as at the commencement date of the lease, which consists of: the amountof the initial measurement of the lease liability; any lease payments made at or before the commencement date of thelease less any lease incentives received if any; initial direct expenses incurred by the Company as a lessee; costs to beincurred by the Company as a lessee in dismantling and removing a leased asset, restoring the site on which it is locatedor restoring the leased assets to the condition required by the terms and conditions of the lease. The Company as alessee recognises and measures the costs of demolition and restoration according to“Accounting Standards for BusinessEnterprises No.13 – Contingencies”, and subsequently adjusts for any remeasurement of lease liability.
(2) Depreciation method of right-of-use assets
The Company calculates depreciation on a straight-line basis. Right-of-use assets in which the Company as a lessee isreasonably certain to obtain ownership of the underlying leased assets at the end of the lease term are depreciatedover the remaining useful life. Otherwise, right-of-use assets are depreciated over the shorter of the lease term and itsremaining useful life.
(3) For methods of impairment testing and provision for impairment for right-of-use assets, please refer to note III. 22.
34. Repurchase of shares
Prior to cancellation or transfer of shares repurchased, the Company recognises all expenditures arising from sharerepurchase as cost of treasury shares in the treasury share account. Considerations and transaction fee incurred from therepurchase of shares shall lead to the elimination of owners’ equity and does not recognise profit or loss when shares ofthe Company are repurchased, transferred or cancelled.The difference between the actual amount received and the carrying amount of the treasury stock are recognised ascapital reserve when the treasury stocks are transferred, if the capital reserve is not sufficient to be offset, the excessamount shall be recognised to offset surplus reserve and undistributed profit. When the treasury stocks are cancelled, thecapital shall be eliminated according to the number of shares and par value of cancellation shares, the difference betweenthe actual amount received and the carrying amount of the treasury stock are recognised as capital reserve, if the capitalreserve is not sufficient to be offset, the excess amount shall be recognised to offset surplus reserve and undistributedprofit.
lnterim Report 2022
35. Restricted Shares
If the Company grants the restricted shares to incentive participants under the Share Options Incentive Scheme,the incentive participants subscribe for the shares first. If the unlocking conditions stipulated in the Share OptionsIncentive Scheme cannot be fulfilled subsequently, the Company repurchases the shares at the predetermined price.If the registration and other capital increase procedures for the restricted shares issued to employees are completed inaccordance with relevant regulations, the Company recognises share capital and capital reserve (or capital premium)based on the subscription money received from the employees on the grant date; and recognises treasury shares andother payables for repurchase obligation.
36. Other significant accounting judgements and estimates
√ Applicable □ N/ASignificant accounting estimates and critical assumptions adopted by the Company are continually evaluated based onhistorical experience and other factors, including expectations of future events that are believed to be reasonable. Thesignificant accounting estimates and critical assumptions that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next accounting year are set out below:
(1) Classification of financial assets
Significant judgements involved in determining the classification of financial assets include analysis of business mode andcharacteristics of the contractual cash flows.Factors considered by the Company in determining the business model of financial assets management for a groupof financial assets include past experience on how financial asset’s performance is evaluated and reported to keymanagement personnel, how risks affecting the performance of financial asset are assessed and managed and howmanagers of related businesses are compensated.When assessing whether the contractual cash flows of financial assets are consistent with basic lending arrangement, theCompany adopts the following significant judgements: whether the time distribution or amounts of the principal withinthe duration may change due to early repayment and other reasons; whether the interest includes only the time value ofmoney, credit risk, other basic lending risks and the consideration for cost and profit. For example, the amounts of earlyrepayment only reflect principal unpaid, the interest based on principal unpaid and reasonable compensation paid forearly termination of a contract.
(2) Measurement of ECL for accounts receivables
The Company calculates ECL of accounts receivables according to their exposure at default and ECL rate, and determinesECL rate based on probability of default and loss given default. When determining ECL rate, the Company adopts data likehistorical credit loss experience in combination with current situation and forward-looking information to adjust historicaldata. When considering forward-looking information, the Company uses indicators including the risk of economicdownturn, external market environment, technology environment and changes on customer situation. The Companyperiodically monitors and reviews assumptions relevant to the measurement of ECL.
(3) Impairment of goodwill
The Company evaluates whether goodwill is impaired at least once a year. This requires an estimate of the value in use ofthe asset groups to which the goodwill is allocated. In estimating the value in use, the Company needs to estimate thefuture cash flows generated from the asset groups and also to choose an appropriate discount rate in order to calculatethe present value of the future cash flows.
(4) Development costs
Determining the amounts to be capitalised requires the management to make assumptions regarding the expected futurecash flows generated from the relevant assets, discount rates to be applied and the expected period of benefits.
(5) Deferred tax assets
The deferred income tax assets will be recognised for all unused tax losses to the extent that it is probable that there willbe sufficient taxable profits against which the loss is utilised. This requires the management to exert numerous judgmentsto estimate the timing and amount of the future taxable profits so as to determine the amount of deferred income taxassets to be recognised with reference to the tax planning strategy.
(6) Revenue recognition
As stated in note III. 28, the Company makes the following significant accounting judgements and estimates in terms ofrevenue recognition: identifying customer contracts; estimating the recoverability of the considerations that are entitledto be obtained by transferring goods to customers; identifying the performance obligation in the contract; estimating thevariable consideration in the contract and cumulative revenue recognised where it is highly probable that a significantreversal therein will not occur when the relevant uncertainty is resolved; assessing whether there is a significant financingcomponent in the contract; estimating the individual selling price of the individual performance obligation in the contract,etc. The Company makes judgments primarily based on historical experiences and works. Changes in these significantjudgments and estimates may have significant impacts on the operating income, operating costs, and profit or loss of thecurrent or subsequent periods.
(7) Determination of the fair value of unlisted equity investment
The fair value of unlisted equity investments represents the expected future cash flows discounted at the prevailingdiscount rate of items with similar terms and risk characteristics. It requires the Company to estimate the expected futurecash flows and discount rates, and therefore there is uncertainty. Under limited circumstances, if the information usedto determine the fair value is insufficient, or the possible estimated amount of fair value is widely distributed, and costrepresents the best estimate of the fair value within such scope, the cost may represent an appropriate estimate of the fairvalue within such distribution scope.
37. Changes in significant accounting policies and accounting estimates and correction to accounting errors
(1) Changes in significant accounting policies
√ Applicable □ N/AThe Ministry of Finance (MOF) issued the Interpretation No. 15 of Accounting Standards for Business Enterprises(“Interpretation No. 15”) in December 2021.According to Interpretation No. 15, if the Company sells the products or by-products produced before the fixed assetsreach the status of intended use or during the research and development process (hereinafter collectively referred to as“revenue in trial operation”), in accordance with the“Accounting Standards for Business Enterprises No. 14 – Revenue”,“Accounting Standards for Business Enterprises No. 1 – Inventories”and other regulations, the relevant sale revenue andcosts of the trial operation shall be accounted for separately and included in the profit or loss for the current period, ratherthan the net amount of sale revenue after offsetting relevant costs of the trial operation sales write-off against the cost offixed assets or research and development expenditures.Interpretation No. 15 clarifies the judgment on onerous contracts. When judging an onerous contract, the costs of contractperformance includes the incremental cost of performing the contract and the direct attributed amount of other costsrelevant to the performance of the contract.Interpretation 15 came into effect on January 1, 2022, and the Company adopts the prospective method to account forthe above changes in accounting policies.The adoption of Interpretation No. 15 has not had a material impact on the Company’s financial position and results ofoperations.
(2) Changes in significant accounting estimates
□ Applicable
√ N/A
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VI. Taxation
1. Major taxes and their tax rates
√ Applicable □ N/A
Tax categoryBasis of taxationStatutory tax rateValue added taxTaxable revenue3%, 6%, 13%Urban maintenance and construction taxTurnover tax to be paid1%, 5%, 7%Education surchargesTurnover tax to be paid3%Local education surchargeTurnover tax to be paidNote 1Enterprise income taxTurnover tax to be paidNote 2Note 1: The Company and its subsidiaries that are incorporated in Shenzhen and Zhuhai shall pay local education surcharges that are charged as 2% of theturnover tax payable. Other subsidiaries shall pay local education surcharges according to the tax rate as specified at their places of incorporation on the basisof turnover tax payable.Note 2: The implementation of enterprise income tax rate is as follows:
Disclosure of taxpayers (if any) with different rates of enterprise income tax√ Applicable □ N/A
TaxpayerRate of enterprise income tax
(%)Hong Kong Health Pharmaceutical Industry Company Limited, LivzonPharmaceutical Biotechnology Co., Ltd., Lian (Hong Kong) Co., Ltd., Livzon BiologicsHong Kong Limited
16.5
Companhia de Macau Carason Limitada, Li Zhu (Macau) Limitada
0 or 12 (Tax rate is 12% where thetaxable income is MOP600,000 or
more; for those with taxableincome less than MOP600,000,they are exempted from
income taxes.)Shenzhen Taitai Pharmaceutical Co., Ltd., Shenzhen Haibin Pharmaceutical Co.,Ltd., Xinxiang Haibin Pharmaceutical Co., Ltd., Jiaozuo Joincare Bio TechnologicalCo., Ltd, Shanghai Frontier Health Medicine Technology Co., Ltd., GuangzhouJoincare Respiratory Medicine Engineering Technology Co., Ltd, Joincare HaibinPharmaceutical Co., Ltd., Livzon Group and subsidiaries of Livzon Group, LivzonGroup Limin Pharmaceutical Manufacturing Factory, Livzon Group LivzonPharmaceutical Factory, Zhuhai FTZ Livzon Hecheng Pharmaceutical ManufacturingCo., Ltd., Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd., Livzon GroupXinbeijiang Pharmaceutical Manufacturing Inc., Sichuan Guangda PharmaceuticalManufacturing Co., Ltd., Zhuhai Livzon Diagnostics Inc., Livzon Group FuzhouFuxing Pharmaceutical Co., Ltd., Shanghai Livzon Biotechnology Co., Ltd., LivzonGroup (Ningxia) Pharmaceutical Manufacturing Co., Ltd., Zhuhai Lihe MedicalDiagnostic Product Company Limited, Zhuhai Livzon Traditional Chinese MedicineModernization Technology Co., Ltd.
Livzon MAB Pharm (US) Inc.21Health Investment Holdings Ltd, Joincare Pharmaceutical Group Industry Co.,Ltd.,Livzon International Ventures, Livzon International Ventures I, Livzon InternationalVentures II.
0 (Note 1)Other subsidiaries25
Note 1: Companies registered in the British Virgin Islands and the Cayman Islands are not subject to enterprise income tax.
2. Tax incentives
√ Applicable □ N/A
(1) Preferential value added tax
In accordance with the Announcement on Value Added Tax on Biological Products Sold by Pharmaceutical OperationEnterprises issued by the State Administration of Taxation (Announcement of State Administration of Taxation 2012 No. 20)and the Notice of the Ministry of Finance, the General Administration of Customs, the State Administration of Taxation andthe State Drug Administration on the Value-Added Tax Policies for Anti-Cancer Drugs (Caishui [2018] No. 47), the biologicalproducts sold by the Company are subject to value added tax at 3% by the simple approach.
(2) Preferential enterprise income tax
The Company’s subsidiaries, Shenzhen Taitai Phamaceutical Co., Ltd, Shenzhen Haibin Phamaceutical Co., Ltd, XinxiangHaibin Phamaceutical Co., Ltd and Shanghai Frontier Health Medicine Technology Co., Ltd are entitled to enjoy preferentialincome tax policies applicable to high and new technology enterprises for 3 years with effective from 2020, and JoincareHaibin Pharmaceutical Co., Ltd is entitled to enjoy preferential income tax policies applicable to high and new technologyenterprises for 3 years with effective from 2021. Jiaozuo Joincare Bio Technological Co., Ltd., Guangzhou JoincareRespiratory Drug Engineering Technology Co., Ltd. have reapplied for recognition of high and new technology enterprisesin the period. Livzon Group and its subsidiaries – Livzon Group Limin Pharmaceutical Manufacturing Factory, Livzon GroupLivzon Pharmaceutical Factory, Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd., Shanghai LivzonPharmaceutical Manufacturing Co., Ltd., Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd. and Sichuan GuangdaPharmaceutical Manufacturing Co., Ltd. are entitled to enjoy preferential income tax policies applicable to high and newtechnology enterprises for 3 years with effective from 2020; Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc.and Zhuhai Livzon Diagnostics Inc. have reapplied for recognition of high and new technology enterprises in the period;Shanghai Livzon Biotechnology Co., Ltd. are entitled to preferential income tax policies applicable to high and newtechnology enterprises for 3 years with effective from 2021. Livzon Group (Ningxia) Pharmaceutical Manufacturing Co.,Ltd. was approved to enjoy the enterprise taxation preference of the Encouraged Industries in Western China. The abovecompanies were subject to enterprise income tax rate of 15% for the period.In accordance with Article 27 of the Enterprise Income Tax Law of the People’s Republic of China and Article 86 of theRegulations for the Implementation of the Enterprise Income Tax Law of the People’s Republic of China, the business ofplanting Chinese herbal medicines engaged by the subsidiaries of the Livzon, Datong Livzon Qiyuan Medicine Co., Ltd. andLongxi Livzon Shenyuan Medicine Co., Ltd. are exempted from enterprise income tax.According to the Notice of the Ministry of Finance and the State Administration of Taxation on the Preferential EnterpriseIncome Tax Policies of the Guangdong-Macao In-depth Cooperation Zone of Hengqin (Cai Shui [2022] No. 19), qualifiedindustrial enterprises located in the Guangdong-Macao In-depth Cooperation Zone of Hengqin will be subject to areduced enterprise income tax rate of 15%. Zhuhai Lihe Medical Diagnostic Product Company Limited and ZhuhaiLivzon Traditional Chinese Medicine Modernization Technology Co., Ltd. met relevant conditions, and were subject to anenterprise income tax rate of 15% for the Period.According to the preferential tax policies for small low-profit enterprises, the portion of annual taxable income of a smalllow profit enterprise which does not exceed RMB1 million is subject to enterprise income tax at a tax rate of 2.5%; theportion over RMB1 million but not exceeding RMB3 million is subject to enterprise income tax at a tax rate of 10%.
3. Others
□ Applicable
√ N/A
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V. Notes to the items of consolidated financial statements
1. Cash and bank balances
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Items
Balance at Endof the Period
Balance at Beginning
of the PeriodCash on hand190,985.30225,179.98Bank deposits12,498,359,889.5511,554,754,721.43Other monetary funds154,558,074.32174,250,489.57Total12,653,108,949.1711,729,230,390.98Including: total overseas deposits1,543,366,154.881,309,853,620.27Other descriptions:
① Other monetary funds are mainly deposits for investments, deposits under guarantee of letter of guarantee, issuing
letters of credit and foreign exchange forward contracts, etc.
② Restricted funds relating to issuing letters of credit and foreign exchange forward contracts, etc. in other monetary
funds were deducted from cash and cash equivalents in the cash flow statement. Apart from these restricted funds,there is no other charge, pledge or lock up on the balance of cash at bank and on hand that may limit its use, is keptoutside China and may have probable risks in its collection. Below are the details of the use of restricted monetaryfunds:
Item30 June 202231 December 2021
Deposits for letter of credit188,710.111,788,607.74Deposits for bank acceptance bills377.936,004,457.37Deposits for other business962,104.963,949,531.92Total1,151,193.0011,742,597.03
2. Financial assets held for trading
√ Applicable □ N/A
(1) Classification
Unit: Yuan Currency: RMBItem
Balance at theEnd of the Period
Balance at theBeginning of the Period
Financial asset measured at fair value through profit or loss99,806,543.32184,638,344.31Including:
Debt instrument investments953,678.89940,162.94Equity instrument investments98,802,998.87176,321,853.05Derivative financial assets49,865.567,376,328.32Total99,806,543.32184,638,344.31
Other descriptions:
√ Applicable □ N/A
① The Company’s investments in equity instruments and debt instruments for financial assets held for trading at the
End of the Period were listed for trading on Shenzhen Stock Exchange, Hong Kong Stock Exchange and NASDAQ inthe United States. The fair value was determined based on the closing price on the last trading day in the ReportingPeriod.
② Derivative financial assets represent foreign currency forward contracts, futures contracts and gains from unexpired
contracts measured at fair value which were recognised as financial assets as at the balance sheet date. No restrictive financial asset measured at fair value through profit or loss was included in the closing balance. No hedging instruments in the closing balance and no hedging transactions have occurred during the period.
3. Notes receivable
(1) Classified presentation of notes receivable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Category
Balance at the Endof the Period
Balance at theBeginning of the Period
Bank acceptance bills1,888,954,693.791,977,767,022.02bad debts-481,000.00-481,000.00Total1,888,473,693.791,977,286,022.02
(2) Notes receivable pledged at period end
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Category
Amount pledged
at period end
Bank acceptance bills526,815,981.78Total526,815,981.78As at 30 June 2022, bank acceptance bills with carrying amount of RMB526,815,981.78 (31 December 2021:
RMB870,153,979.75) have been used as pledge for opening of bills.
(3) Bills endorsed or discounted to other parties but not yet expired at balance sheet date
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Category
Derecognised amount
at the End ofthe Period
Amount notderecognised atthe End of the Period
Bank acceptance bills not yet mature but already endorsed407,822,740.990.00Bank acceptance bills not yet mature but already discounted429,075,183.950.00Total836,897,924.940.00In the current period, the Company discounted bank acceptance bills of RMB714,219.83 thousand (previous year:
RMB76,908.32 thousand), including discounted bank acceptance bills of RMB285,144.65 thousand that have expired,and bank acceptance bills not yet mature but already discounted of RMB429,075.18 thousand. Since the major risks andrewards such as interest rate risk related to these bank acceptance bills have been transferred to the bank, the Companyderecognizes the discounted unexpired bank acceptance bills. Factoring expenses incurred was RMB6,657.46 thousand(previous year: RMB506.78 thousand).
lnterim Report 2022
(4) Bills transferred into account receivables for non-performance by the issuer as at balance sheet date of the period
□ Applicable
√ N/A
(5) Disclosure by method of provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Category
Balance at the End of the PeriodBalance at the Beginning of the PeriodBook balanceProvision for bad debts
Carrying value
Book balanceProvision for bad debts
Carrying valueAmountRatioAmountExpectedcredit lossrateAmountRatioAmount
Expectedcredit lossrate(%)(%)(%)(%)
Provision for bad debtson individual item
481,000.000.03481,000.00100.000.00481,000.000.02481,000.00100.000.00Including:
Bank acceptance bills481,000.000.03481,000.00100.000.00481,000.000.02481,000.00100.000.00Provision for bad debtson portfolio basis
1,888,473,693.7999.970.000.001,888,473,693.791,977,286,022.0299.980.000.001,977,286,022.02Including:
Bank acceptance bills1,888,473,693.7999.970.000.001,888,473,693.791,977,286,022.0299.980.000.001,977,286,022.02Total1,888,954,693.79100.00481,000.000.031,888,473,693.791,977,767,022.02100.00481,000.000.021,977,286,022.02Provision for bad debts on individual item:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Name
Balance at the End of the PeriodBook balance
Provision for
bad debts
Expected credit
loss rateReason of provision
(%)Henan Jiuzhoutong PharmaceuticalCo., Ltd.
431,000.00431,000.00100.00Expected to be uncollectibleOther customers50,000.0050,000.00100.00Expected to be uncollectibleTotal481,000.00481,000.00100.00/Descriptions of provision for bad debts made individually:
□ Applicable
√ N/AProvision for bad debt on a collective basis:
□ Applicable
√ N/AIf the provision for bad debts is made in accordance with the general model of expected credit losses, please refer to otherreceivables disclosure:
□ Applicable
√ N/A
(6) Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMBCategory
Beginningbalance
Changes for the current period
Closing balanceProvisionRecoveryor reversal
Removal/
write-off
Provision for bad debts481,000.000.000.000.00481,000.00Total481,000.000.000.000.00481,000.00Significant recovery or reversal of bad debt provision for the current period:
□ Applicable
√ N/A
(7) Actual write-off of notes receivable in the period
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
4. Accounts receivable
(1) Disclosed by aging
√ Applicable □ N/A
Unit: Yuan Currency: RMB
AgingBalance at the End of the PeriodSubtotal within 1 year:2,922,163,126.081-2 years12,655,577.052-3 years2,497,810.033-4 years12,108,874.224-5 years3,007,544.08Over 5 years13,998,361.28Total2,966,431,292.74According to the credit policy of the Company, the Company usually grants a credit period ranging from 30 to 90 days tocustomers.
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(2) Disclosure by method of provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Category
Balance at the End of the PeriodBalance at the Beginning of the PeriodBook balanceProvision for bad debts
Carrying value
Book balanceProvision for bad debts
Carrying valueAmountRatioAmountExpectedcredit loss
rateAmountRatioAmount
Expectedcredit lossrate(%)(%)(%)(%)Provision for bad debtson individual item
9,709,854.020.335,513,168.8256.784,196,685.209,709,854.020.335,513,168.8256.784,196,685.20Including:
Receivables fromdomestic customers
9,709,854.020.335,513,168.8256.784,196,685.209,709,854.020.335,513,168.8256.784,196,685.20Receivables fromoverseas customers
0.000.000.000.000.000.000.000.000.000.00Provision for bad debtson portfolio basis
2,956,721,438.7299.6765,454,959.962.212,891,266,478.762,916,387,527.1699.6766,928,660.822.292,849,458,866.34Including:
Receivables fromdomestic customers
2,334,525,444.6678.7057,869,210.592.482,276,656,234.072,333,938,533.5079.7658,705,544.562.522,275,232,988.94Receivables fromoverseas customers
622,195,994.0620.977,585,749.371.22614,610,244.69582,448,993.6619.918,223,116.261.41574,225,877.40Total2,966,431,292.74100.0070,968,128.782.392,895,463,163.962,926,097,381.18100.0072,441,829.642.482,853,655,551.54Provision for bad debt on individual item:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Name
Closing balanceBook balance
Provisionfor bad debts
Expected credit
loss rateReason of provision
(%)Purchase of goods9,709,854.025,513,168.8256.78Not expected to be recoverableTotal9,709,854.025,513,168.8256.78/Descriptions of Provision for bad debt on individual item:
□ Applicable
√ N/AProvision for bad debts on portfolio basis:
√ Applicable □ N/A
Provision for bad debts on portfolio basis: Receivables from domestic customers
Unit: Yuan Currency: RMBAging
Closing balanceAccountreceivables
Provision for
bad debt
Expected credit
loss rate
(%)Within 1 year:2,299,967,132.0234,989,010.811.521 to 2 years (inclusive of 2 years)12,655,577.052,215,019.0917.502 to 3 years (inclusive of 3 years)2,497,810.031,590,936.1963.693 to 4 years (inclusive of 4 years)3,715,503.813,421,392.0992.084 to 5 years (inclusive of 5 years)2,662,504.282,625,934.9498.63Over 5 years13,026,917.4713,026,917.47100.00Total2,334,525,444.6657,869,210.592.48Standards of provision for bad debts on portfolio basis and descriptions thereof:
□ Applicable
√ N/AProvision for bad debts on portfolio basis: Receivables from overseas customers
Unit: Yuan Currency: RMBAging
Closing balanceAccountreceivables
Provision for
bad debt
Expected credit
loss rate(%)Within 1 year:622,195,994.067,585,749.371.221 to 2 years (inclusive of 2 years)0.000.000.002 to 3 years (inclusive of 3 years)0.000.000.003 to 4 years (inclusive of 4 years)0.000.000.004 to 5 years (inclusive of 5 years)0.000.000.00Over 5 years0.000.000.00Total622,195,994.067,585,749.371.22Standards of provision for bad debts on portfolio basis and descriptions thereof:
□ Applicable
√ N/AIf the provision for bad debts is made in accordance with the general model of expected credit losses, please refer to otherreceivables disclosure:
□ Applicable
√ N/A
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(3) Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Category
Beginning
balance
Changes for the current period
ClosingbalanceProvisionRecoveryor reversal
Removal/write-offOthersProvision for bad debts72,441,829.64933,002.920.002,400,580.01-6,123.7770,968,128.78Total72,441,829.64933,002.920.002,400,580.01-6,123.7770,968,128.78At 30 June 2022 and 31 December 2021, the Company had no overdue but not impaired accounts receivable.Significant recovery or reversal of bad debt provision for the current period:
□ Applicable
√ N/A
(4) Actual write-off of accounts receivable in this period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemAmount written-off
Accounts receivable actually written off2,400,580.01Significant accounts receivable that are written off:
□ Applicable
√ N/ADescriptions of write-off of accounts receivable:
□ Applicable
√ N/A
(5) Accounts receivable due from the top five debtors
√ Applicable □ N/AAs of 30 June 2022, the total amount of the top five debtors in closing balance is RMB304,945,004.71, accounting for
10.28% of the total amount of closing balance of accounts receivable, and the corresponding closing balance of provision
for bad debts is total RMB3,946,783.44.
(6) Accounts receivable derecognized due to the transfer of financial assets.
□ Applicable
√ N/A
(7) Assets or liabilities formed by the continuing involvement of transferred accounts receivables.
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
5. Prepayments
(1) Disclosure of prepayments by aging analysis
√ Applicable □ N/A
Unit: Yuan Currency: RMBAging
Balance at the End of the PeriodBalance at the Beginning of the PeriodAmountRatioAmountRatio
%%Within 1 year416,455,356.3894.98354,340,559.2095.971 to 2 years16,468,966.323.768,031,100.502.172 to 3 years2,993,038.530.686,323,201.421.71Over 3 years2,538,761.150.58537,685.170.15Total438,456,122.38100369,232,546.29100.00
(2) Prepayments due from the top five debtors
√ Applicable □ N/AAs of 30 June 2022, the total amount of the top five prepayments in closing balance is RMB88,652,518.54, accounting for
20.22% of the total amount of closing balance of prepayments.
Other descriptions:
□ Applicable
√ N/A
6. Other receivables
Line items√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at the End of
the Period
Balance at theBeginning of the Period
Interest receivable0.00365,873.64Dividends receivable215,678.920.00Other receivables50,673,057.7987,687,951.48Total50,888,736.7188,053,825.12Other descriptions:
□ Applicable
√ N/AInterest receivable
(1) Classification of interest receivable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at the End of
the Period
Balance at theBeginning of the Period
Interest on fixed deposits0.00365,873.64Total0.00365,873.64
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(2) Significant overdue interest
□ Applicable
√ N/A
(3) Provision made for bad debts
□ Applicable
√ N/AOther receivables
□ Applicable
√ N/ADividends receivable
(1) Dividends receivable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at the End
of the Period
Balance at theBeginning of the PeriodKunlun Energy Company Limited215,678.920.00Total215,678.920.00
(2) Significant dividends receivable aged over 1 year
□ Applicable
√ N/A
(3) Provision made for bad debts
□ Applicable
√ N/AOther receivables
□ Applicable
√ N/AOther receivables
(1) Disclosed by aging
√ Applicable □ N/A
Unit: Yuan Currency: RMB
AgingBalance at the End of the PeriodSubtotal within 1 year44,761,237.211 to 2 years5,991,763.202 to 3 years4,250,801.613 to 4 years1,811,358.864 to 5 years724,672.76Over 5 years32,060,805.56Provision for bad debt-38,927,581.41Total50,673,057.79
(2) Disclosure by nature
√ Applicable □ N/A
Unit: Yuan Currency: RMBItem
Balance at the End of
the Period
Balance at theBeginning of the PeriodSecurity deposits, deposits and rental fees11,815,897.5111,003,281.04Reserved fund and advances21,260,877.2817,870,245.40Related party balances2,811,088.8620,323,903.96External entities balances16,196,803.7422,421,780.76Tax refund on exports13,916,376.4117,708,111.60Treasury bonds and security deposits17,968,386.0417,968,386.04Capital reduction0.0024,078,925.22Amounts of exercised options2,429,180.848,463,240.98Others3,202,028.523,327,263.14Total89,600,639.20143,165,138.14
(3) Information of provision for bad debts
√ Applicable □ N/AAt the End of the Period, provision for bad debts on those in first stage:
CategoryBook balance
Expected credit
loss rate in thenext 12 months
Provision
for bad
debts
CarryingamountReason(%)
Provision for bad debts onindividual item
2,429,180.840.000.002,429,180.84Amounts of exercised options2,429,180.840.000.002,429,180.84Expected to
be recoveredCapital reduction0.000.000.000.00Provision for bad debts on portfoliobasis
0.000.000.000.00Total2,429,180.840.000.002,429,180.84At the End of the Period, provision for bad debts on those in second stage:
CategoryBook balance
Expected creditloss rate forthe lifetime
Provision for
bad debts
CarryingamountReason(%)Provision for bad debts on individualitem
0.000.000.000.00Provision for bad debts on portfoliobasis
58,926,446.3918.1310,682,569.4448,243,876.95Export tax refund receivable13,916,376.412.01280,211.7113,636,164.70Security deposits, deposits and rentalreceivable
11,815,897.5128.663,386,116.928,429,780.59Other receivables33,194,172.4721.147,016,240.8126,177,931.66Total58,926,446.3918.1310,682,569.4448,243,876.95
lnterim Report 2022
At the End of the Period, provision for bad debts on those in third stage:
CategoryBook balance
Expected credit
loss rate forthe lifetime
Provision forbad debts
CarryingamountReason(%)Provision for bad debts onindividual item
28,245,011.97100.0028,245,011.970.00Other receivables28,245,011.97100.0028,245,011.970.00Not expected to
be recoverableProvision for bad debts onportfolio basis
0.000.000.000.00Total28,245,011.97100.0028,245,011.970.00As of 31 December 2021, information of provision for bad debts:
As of 31 December 2021, Provision for bad debts on those in first stage:
CategoryBook balance
Expected creditloss rate in thenext 12 months
Provision forbad debts
CarryingamountReason(%)Provision for bad debts onindividual item
32,542,166.200.000.0032,542,166.20Amounts of exercised options8,463,240.980.000.008,463,240.98Expected to
be recoveredCapital reduction24,078,925.220.000.0024,078,925.22Expected to
be recoveredProvision for bad debts onportfolio basis
0.000.000.000.00Total32,542,166.200.000.0032,542,166.20As of 31 December 2021, Provision for bad debts on those in second stage:
CategoryBook balance
Expected credit
loss rate forthe lifetime
Provision for
bad debts
CarryingamountReason(%)
Provision for bad debts onindividual item
0.000.000.000.00Provision for bad debts onportfolio basis
63,594,020.8013.288,448,235.5255,145,785.28Export tax refund receivable17,708,111.601.12198,927.6917,509,183.91Security deposits, deposits andrental receivable
11,003,281.0426.332,897,272.698,106,008.35Other receivables34,882,628.1615.345,352,035.1429,530,593.02Total63,594,020.8013.288,448,235.5255,145,785.28
As of 31 December 2021, Provision for bad debts on those in third stage:
CategoryBook balance
Expected creditloss rate forthe lifetime
Provision forbad debts
CarryingamountReason(%)Provision for bad debtson individual item
47,028,951.14100.0047,028,951.140.00Other receivables47,028,951.14100.0047,028,951.140.00Not expected to
be recoverableProvision for bad debtson portfolio basis
0.000.000.000.00Total47,028,951.14100.0047,028,951.140.00
(4) Accrual, recovery or reversal of bad debt provision during the period
Unit: Yuan Currency: RMB
Provision for bad debt
First stageSecond stageThird stage
TotalExpected creditloss within12 months
Expected creditloss for lifetime(no creditimpairment
occurred)
Expected creditloss for lifetime(credit impairment
has occurred)
Beginning balance0.008,448,235.5247,028,951.1455,477,186.66Movement of beginningbalance during the period– transfer to second stage0.000.000.000.00– transfer to third stage0.000.000.000.00– Reverse to second stage0.000.000.000.00– Reverse to first stage0.000.000.000.00Provision for the period0.002,030,908.68-158,470.771,872,437.91Reversal in the period0.000.000.00Transfer in the period0.000.000.000.00Write-off in the period0.000.0018,556,821.6318,556,821.63Other movement0.00203,425.24-68,646.77134,778.47Closing balance0.0010,682,569.4428,245,011.9738,927,581.41Descriptions of the significant changes in the gross carrying amount of other receivables for which the changes in lossallowance occur for the current period:
□ Applicable
√ N/AProvision for bad debts in the current period and the basis for assessing whether the credit risk of financial instruments hasincreased significantly:
□ Applicable
√ N/A
lnterim Report 2022
(5) Actual written-off of other receivables in this period
□ Applicable
√ N/A
Unit: Yuan Currency: RMBItemAmount written offOther receivables actually written off18,715,292.40Significant other receivables that are written off:
□ Applicable
√ N/ADescriptions of write-off of other receivables:
□ Applicable
√ N/A
(6) Other receivables due from the top five debtors
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Name of entityNature
OtherreceivablesClosing balanceAging
Proportion to
total otherreceivables (%)
Provision forbad debtsClosing balance
Hua Xia Securities Co., Ltd.Treasury bonds
and securitydeposits
17,968,386.04Over 5 years20.0517,968,386.04Tax refund on exportsExport tax refund13,916,376.41Within 1 year15.53280,211.71Guangzhou YinheSunshine BiologicalProducts Co., Ltd.
Loan5,000,000.00Over 5 years5.585,000,000.00China SecuritiesDepository and ClearingCorporation Limited(Shenzhen Branch)
Amount of
exercised options
2,429,180.84Within 1 year2.710.00
Guangdong Blue TreasurePharmaceutical Co., Ltd.
Balance with
associates
2,282,237.68Within 1 year2.5538,113.37Total/41,596,180.97/46.4223,286,711.12
(7) Receivables involving government subsidies
□ Applicable
√ N/A
(8) Other receivables derecognised due to the transfer of financial assets
□ Applicable
√ N/A
(9) Assets or liabilities formed by the continuing involvement of transferred other receivables:
□ Applicable
√ N/AOther descriptions
□ Applicable
√ N/A
7. Inventories
(1) Inventories by category
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at the End of the PeriodBalance at the Beginning of the PeriodBook balance
Provision for
diminutionin value
CarryingamountBook balance
Provision fordiminutionin value
CarryingamountRaw materials541,490,235.4822,310,365.15519,179,870.33553,234,567.8816,068,254.74537,166,313.14Packaging materials150,276,691.497,259,384.01143,017,307.48125,197,237.917,099,883.19118,097,354.72Goods in process andProprietary semi-finished goods
630,272,047.082,853,223.04627,418,824.04538,151,968.972,891,675.04535,260,293.93Low-value consumables73,877,997.9128,804.4973,849,193.4261,806,078.47217,760.9061,588,317.57Finished goods and stockgoods
907,382,619.1834,085,747.72873,296,871.46834,035,538.2630,182,179.43803,853,358.83Sub-contracting materials1,178,080.360.001,178,080.362,251,074.260.002,251,074.26Consumptive biological assets12,645,273.430.0012,645,273.4312,342,303.960.0012,342,303.96Goods in transit1,583,709.350.001,583,709.358,385,371.270.008,385,371.27Total2,318,706,654.2866,537,524.412,252,169,129.872,135,404,140.9856,459,753.302,078,944,387.68
(2) Provision for diminution in value of inventories and provision for diminution in value of contract performance costs
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at the
Beginningof the Period
Increase during the PeriodDecrease during the Period
Balance at the
End of thePeriodProvisionOthersReversal orwritten-offOthers
Raw materials16,068,254.748,816,432.520.002,574,322.110.0022,310,365.15Packaging materials7,099,883.192,947,801.960.002,788,301.140.007,259,384.01Goods in process and Proprietary semi-finished goods
2,891,675.04197,665.950.00236,117.950.002,853,223.04Low-value consumables217,760.90445.910.00189,402.320.0028,804.49Finished goods and stock goods30,182,179.4316,846,294.760.0012,942,726.470.0034,085,747.72Total56,459,753.3028,808,641.100.0018,730,869.990.0066,537,524.41
lnterim Report 2022
Provision for decline in value of inventories
Item
Basis in determination of net recoverable amount/residual value and cost to be incurred
Reason for reversal or written-offof provision for decline in value ofinventories/Provision for impairmentof contract performance cost
Raw materialsThe estimated selling price less the estimated costs
of completion, selling expenses and related taxes
Processing, sale of finished goods anddiscardPackaging materialsThe estimated selling price less the estimated costs
of completion, selling expenses and related taxes
Processing, sale of finished goods anddiscardGoods in process andProprietary semi-finishedgoods
The estimated selling price less the estimated costsof completion, selling expenses and related taxes
Processing of finished goods anddiscardLow-value consumablesThe estimated selling price less the related taxesUsed or discardFinished goods and stockgoods
The estimated selling price less the estimatedselling expenses and related taxes
Sale and discard
(3) Descriptions at the End of the Period of inventories including capitalised amount of borrowing costs
□ Applicable
√ N/A
(4) Description of amortization amount of contract performance cost in the current period
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
8. Non-current assets due within one year
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at theBeginning of
the Period
Long-term receivables due within one year38,498.84317,381.23Total38,498.84317,381.23Significant debt investments and other debt investments at the end of the period:
□ Applicable
√ N/A
9. Other current assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at the
Beginning of
the Period
Input VAT pending deduction/Input tax pending for verification32,216,866.0253,179,328.86Prepaid income tax18,454,794.3230,667,849.83Others1,299,416.94139,035.68Total51,971,077.2883,986,214.37
10. Long-term receivables
(1) Descriptions of long-term receivables
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at the End of the PeriodBalance at the Beginning of the Period
Range ofdiscount rateBookbalance
Provision for
bad debts
Carryingvalue
Bookbalance
Provision forbad debts
CarryingvalueFinancing lease payments121,073.530.00121,073.53584,285.360.00584,285.364.75%Less: Long-term receivables duewithin one year
38,498.840.0038,498.84317,381.230.00317,381.23Total82,574.690.0082,574.69266,904.130.00266,904.13
(2) Provision for bad debts
□ Applicable
√ N/A
(3) Long-term receivables derecognized due to the transfer of financial assets
□ Applicable
√ N/A
(4) Assets or liabilities formed by the continuing involvement of transferred long-term receivables
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
11. Long-term equity investment
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Investee
Balance attheBeginningof thePeriod
Movement during the Period
Balance atthe End ofthe Period
Closingbalance ofprovision
forimpairmentAdditions
ininvestment
Decrease
ininvestment
Investment
gain orloss under
equity
method
Adjustment
in othercomprehensive
income
Changesof other
equityAnnounceddistribution
of cashdividendor profit
Provision
forimpairmentOthers
I. SubsidiariesZhongshan Renhe HealthProducts Co., Ltd.
6,337,823.350.000.000.000.000.000.000.000.006,337,823.356,337,823.35Guangzhou HiyeahIndustry Co., Ltd.
1,949,893.450.000.000.000.000.000.000.000.001,949,893.451,949,893.45Subtotal8,287,716.800.000.000.000.000.000.000.000.008,287,716.808,287,716.80II. AssociatesLivzon Medical ElectronicEquipment (Plant) Co., Ltd.
1,200,000.000.000.000.000.000.000.000.000.001,200,000.001,200,000.00Guangdong Blue TreasurePharmaceutical Co. Ltd.
78,029,592.180.000.008,449,190.920.000.000.000.000.0086,478,783.100.00Shenzhen City YoubaoTechnology Co., Ltd.
1,222,398.890.000.0059,159.960.000.000.000.000.001,281,558.850.00AbCyte Therapeutics Inc.15,154,709.960.000.00-267,465.900.000.000.000.000.0014,887,244.060.00
lnterim Report 2022
Investee
Balance attheBeginningof thePeriod
Movement during the Period
Balance atthe End ofthe Period
Closingbalance ofprovision
forimpairmentAdditions
ininvestment
Decreaseininvestment
Investmentgain orloss under
equitymethod
Adjustmentin othercomprehensiveincomeChangesof other
equity
Announceddistribution
of cashdividendor profit
ProvisionforimpairmentOthersL&L Biopharma, Co. Ltd.14,886,838.460.000.00-377,548.720.000.000.000.000.0014,509,289.740.00Zhuhai Sanmed BiotechInc.*
83,155,557.160.000.00-12,522,892.780.000.000.000.000.0070,632,664.380.00Aetio Biotheraphy, Inc.16,028,488.480.000.00-309,835.550.000.000.000.000.0015,718,652.930.00Jiangsu Atom Bioscienceand Pharmaceutical Co.,Ltd.
67,908,607.9830,000,000.000.00-850,773.320.000.000.000.000.0097,057,834.660.00Tianjin Tongrentang GroupCo., Ltd.*
751,549,763.920.000.0046,004,235.142,476,997.860.0051,920,000.000.000.00748,110,996.920.00Infinite IntelligencePharmaceutical Co. Ltd.
19,937,909.640.000.00-656,809.940.000.000.000.000.0019,281,099.700.00Jiaozuo Jinguan JiahuaElectric Power Co., Ltd.
284,619,909.010.000.00855,150.060.000.000.000.000.00285,475,059.070.00Ningbo NingrongBiomedical Co., Ltd.
27,464,098.710.000.00-203,057.330.000.000.000.000.0027,261,041.380.00Feellife Health Inc.12,734,373.220.000.00749,101.620.000.000.000.000.0013,483,474.840.00Novastage Pharmaceuticals(Shenzhen), Ltd.
18,080,883.210.0018,080,883.210.000.000.000.000.000.000.000.00Jiangsu BainingYingchuang MedicalTechnology Co., Ltd.
28,576,324.020.000.00280,033.640.000.000.000.000.0028,856,357.660.00Subtotal1,420,549,454.8430,000,000.0018,080,883.2141,208,487.802,476,997.860.0051,920,000.000.000.001,424,234,057.291,200,000.00Total1,428,837,171.6430,000,000.0018,080,883.2141,208,487.802,476,997.860.0051,920,000.000.000.001,432,521,774.099,487,716.80Other descriptions:
Note 1. In January 2022, Zhuhai Lizhu pharmaceutical Equity Investment Management Co., Ltd., a subsidiary of Livzongroup, increased the capital of Jiangsu Atom Bioscience and Pharmaceutical Co., Ltd. by 30 million. After the capitalincrease, the shareholding ratio was 7.4858%, and the industrial and commercial registration has been completed.Note 2. In January 2022, the company signed an equity transfer agreement with Tang Jiansheng to transfer all the equity ofXinling Pharmaceutical Technology (Shenzhen) Co., Ltd. to Tang Jiansheng. The equity transfer payment has been receivedand the industrial and commercial registration has been completed.
12. Other equity instrument investments
(1) Descriptions of other equity investment
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at theBeginning of the
PeriodChina Galaxy Securities Co., Ltd.0.00212,384,666.97Shanghai Yunfeng Xinchuang Equity Investment Center69,006,351.5894,040,236.88Shanghai JingYi Investment Center67,979,475.2166,175,062.50Qianhai Equity Investment Fund264,930,500.00264,930,500.00Apricot Forest, Inc137,711,800.01137,711,800.01PANTHEON D,L.P.7,924,639.913,715,566.69Zhuhai China Resources Bank Co., Ltd.164,395,200.00164,395,200.00GLOBAL HEALTH SCIENCE222,393,107.44235,133,216.46SCC VENTURE VI 2018-B,L.P.6,963,959.646,615,626.07Nextech V Oncology S.C.S., SICAV-SIF32,640,308.8230,667,263.04Yizun Biopharmaceutics (Shanghai) Co., Ltd.59,999,953.4159,999,953.41ELICIO THERAPEUTICS, INC.33,557,014.2131,878,510.16CARIAMA THER APEUTICS INC.33,555,357.8331,876,936.63Beijing Luzhu Biotechnology Co., Ltd.41,944,015.6741,944,015.67Shanghai Keentai Biotechnology Co., Ltd.12,000,000.0012,000,000.00Others15,556,583.3415,413,822.93Total1,170,558,267.071,408,882,377.42
lnterim Report 2022
(2) Descriptions of investments in non-trading equity instruments
√ Applicable □ N/A
Item
Dividendincomerecognized for
the Period
Cumulativegains
Cumulativelosses
Amounttransferredfrom othercomprehensiveincome toretainedearning
Reason for thedesignation
Reason fortransfer asfair valuethrough othercomprehensive
incomeChina Galaxy Securities Co., Ltd.0.000.000.0094,089,666.09non-tradingDisposalShanghai Yunfeng Xinchuang EquityInvestment Center
0.000.000.00-7,912,029.31non-tradingDisposalShanghai JingYi Investment Center0.000.000.000.00non-tradingQianhai Equity Investment Fund8,713,730.740.000.000.00non-tradingApricot Forest, Inc0.000.000.000.00non-tradingPANTHEON D,L.P.0.000.000.000.00non-tradingZhuhai China Resources Bank Co., Ltd.0.000.000.000.00non-tradingGLOBAL HEALTH SCIENCE0.000.000.000.00non-tradingSCC VENTURE VI 2018-B,L.P.0.000.000.000.00non-tradingNextech V Oncology S.C.S., SICAV-SIF0.000.000.000.00non-tradingYizun Biopharmaceutics (Shanghai) Co.,Ltd.
0.000.000.000.00non-tradingELICIO THERAPEUTICS, INC.0.000.000.000.00non-tradingCARIAMA THER APEUTICS INC.0.000.000.000.00non-tradingBeijing Luzhu Biotechnology Co., Ltd.0.000.000.000.00non-tradingShanghai Keentai Biotechnology Co.,Ltd.
0.000.000.000.00non-tradingOthers0.000.000.000.00non-tradingTotal8,713,730.740.000.0086,177,636.78Other descriptions:
□ Applicable
√ N/A
13. Investment properties
Measurement of investment properties
(1) Investment properties measured at cost
Unit: Yuan Currency: RMBItemHousing and buildingsTotalI. Book value:
1. Beginning balance61,914,754.2861,914,754.28
2. Increase0.000.00
3. Decrease0.000.00
4. Closing balance61,914,754.2861,914,754.28II. Accumulated depreciation and amortisation
1. Beginning balance55,723,278.8555,723,278.85
2. Increase0.000.00
(1) Amortisation for the period0.000.00
3. Decrease0.000.00
(1) Disposal0.000.00
4. Closing balance55,723,278.8555,723,278.85III. Provision for impairment
1. Beginning balance0.000.00
2. Increase0.000.00
(1) Provision0.000.00
3. Decrease0.000.00
(1) Disposal0.000.00
4. Closing balance0.000.00IV. Carrying amount
1. Carrying value at period end6,191,475.436,191,475.43
2. Carrying value at beginning of the period6,191,475.436,191,475.43
(2) Investment properties whose title certificate has not completed:
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
14. Fixed assets
Line items√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at the
Beginning of
the Year
Fixed assets4,742,112,777.954,839,005,169.81Fixed assets for disposal0.000.00Total4,742,112,777.954,839,005,169.81
lnterim Report 2022
Fixed assets
(1) Details of fixed assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Housing andbuildings
Machinery andequipmentMotor vehicles
Electronicequipmentand othersTotal
I. Book value:
1. Beginning balance3,976,199,210.915,119,816,758.02108,015,330.21783,366,162.989,987,397,462.12
2. Increase16,987,642.59145,528,062.212,686,703.9847,333,758.14212,536,166.92
(1) Purchase1,640,224.6666,081,533.522,100,072.2036,776,040.68106,597,871.06
(2) Transfer from construction in progress15,347,417.9379,446,528.690.0010,520,893.09105,314,839.71
(3) Others0.000.00586,631.7836,824.37623,456.15
3. Decrease1,401,442.2027,348,770.543,975,785.059,397,644.2142,123,642.00
(1) Disposal or scrap1,401,442.2027,348,770.543,975,785.059,397,644.2142,123,642.00
(2) Others0.000.000.000.000.00
4. Closing balance3,991,785,411.305,237,996,049.69106,726,249.14821,302,276.9110,157,809,987.04II. Accumulated depreciation
1. Beginning balance1,633,263,266.382,850,461,052.5076,499,140.97478,176,262.365,038,399,722.21
2. Increase88,591,976.23167,264,766.795,243,765.5836,872,592.45297,973,101.05
(1) Provision88,591,976.23167,264,766.794,664,718.4836,835,768.08297,357,229.58
(2) Other increase0.000.00579,047.1036,824.37615,871.47
3. Decrease553,160.8115,980,583.163,652,520.208,504,096.6428,690,360.81
(1) Disposal or scrap553,160.8115,980,583.163,652,520.208,504,096.6428,690,360.81
(2) Others0.000.000.000.000.00
4. Closing balance1,721,302,081.803,001,745,236.1378,090,386.35506,544,758.175,307,682,462.45III. Provision for impairment
1. Beginning balance26,564,784.4564,186,228.2641,578.6519,199,978.74109,992,570.10
2. Increase0.000.000.000.000.00
(1) Provision0.000.000.000.000.00
3. Decrease0.001,967,903.150.009,920.311,977,823.46
(1) Disposal or scrap0.001,967,903.150.009,920.311,977,823.46
4. Closing balance26,564,784.4562,218,325.1141,578.6519,190,058.43108,014,746.64IV. Carrying amount
1. Carrying value at period end2,243,918,545.052,174,032,488.4528,594,284.14295,567,460.314,742,112,777.95
2. Carrying value at beginning of the
period
2,316,371,160.082,205,169,477.2631,474,610.59285,989,921.884,839,005,169.81
(2) Fixed assets with temporary idle
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemBook value
Accumulateddepreciation
Provision forimpairment
CarryingamountNote
Housing and buildings23,926,279.9914,477,225.445,155,770.804,293,283.75Machinery and equipment176,823,529.41127,444,897.4836,626,874.8512,751,757.08Electronic equipment and others3,125,233.362,677,764.68174,034.89273,433.79Total203,875,042.76144,599,887.6041,956,680.5417,318,474.62
(3) Fixed assets held under finance leases
□ Applicable
√ N/A
(4) Fixed assets leased out under operating leases
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemCarrying Amount
Housing and buildings1,755,573.68
(5) Fixed assets without property certificate
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemCarrying Amount
Reason for pending forcertificate of ownershipHousing and buildings263,540,166.29Application in progressOther descriptions
□ Applicable
√ N/ADisposal of fixed assets
□ Applicable
√ N/A
15. Construction in progress
Line items√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at the
Beginning of
the Period
Construction in progress1,137,740,068.11742,533,534.23Construction materials464,794.99465,209.52Total1,138,204,863.10742,998,743.75
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Construction in progress
(1) Descriptions of construction in progress
√ Applicable □ N/A
Unit: Yuan Currency: RMBItem
Balance at the End of the PeriodBalance at the Beginning of the PeriodBook balance
Provision for
impairmentNet book valueBook balance
Provision forimpairmentNet book value
Haibin Pharma Pingshang NewFactory
214,422,917.600.00214,422,917.60144,364,877.420.00144,364,877.42Guangda New Factory Project244,731,213.540.00244,731,213.54179,745,064.480.00179,745,064.48Fuxing Company Phase I & IIProjects and others
55,792,535.390.0055,792,535.3936,580,114.830.0036,580,114.83Project of Shijiao New Factory67,954,038.810.0067,954,038.8161,845,397.730.0061,845,397.73Transformation Project ofPharmaceutical FactoryWorkshop
38,783,326.130.0038,783,326.1319,579,452.170.0019,579,452.17Construction Project forMicrosphere Workshop (includingGose) of Livzon Group LivzonPharmaceutical Factory
46,447,337.040.0046,447,337.0415,616,651.120.0015,616,651.12
P06 Construction Projectof Livzon Group LivzonPharmaceutical Factory
90,092,594.580.0090,092,594.5883,020,966.010.0083,020,966.01Project of lyophilized powderinjection workshop
120,126,722.320.00120,126,722.3270,673,332.620.0070,673,332.62P09 Construction Projectof Livzon Group LivzonPharmaceutical Factory
129,454,273.320.00129,454,273.3254,924,595.610.0054,924,595.61P04/P05 Construction Projectof Livzon Group LivzonPharmaceutical Factory
469,262.410.00469,262.41257,441.660.00257,441.66Technology transformationproject for Microsphere Phase IIof Shanghai Livzon
25,856,843.520.0025,856,843.5210,123,776.540.0010,123,776.54Others103,778,343.91169,340.46103,609,003.4565,971,204.50169,340.4665,801,864.04Total1,137,909,408.57169,340.461,137,740,068.11742,702,874.69169,340.46742,533,534.23
(2) Changes in significant construction in progress
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Project itemBudget
Balance
at theBeginning
of the
PeriodIncrease
Transferto fixedassets
Otherdecrease
Balance
at theEndof thePeriodProportionofcumulativeinput tobudget Progress
Cumulativeamount ofinterestcapitalised
Interestcapitalisation
rate for the
year
Including:
interestcapitalisedin the yearSource of fund(%)(%)(%)
Haibin Pharma Pingshang New Factory1,037,000,000.00144,364,877.42123,347,091.2420,905,937.3632,383,113.70214,422,917.6070.08Completion of some
projects
0.000.000.00Self-funding and
funds raisedGuangda New Factory Project646,000,000.00179,745,064.4864,986,149.060.000.00244,731,213.5437.88Under construction0.000.000.00Self-fundingFuxing Company Phase I & II Projects andothers
378,090,800.0036,580,114.8342,774,239.6223,561,819.060.0055,792,535.3978.39Completion of some
projects
0.000.000.00Self-fundingProject of Shijiao New Factory377,005,000.0061,845,397.736,108,641.080.000.0067,954,038.8161.50Completion of some
projects
0.000.000.00Self-funding and
funds raisedTransformation Project of PharmaceuticalFactory Workshop
306,558,388.4819,579,452.1738,569,073.7819,365,199.820.0038,783,326.1350.60Completion of some
projects
0.000.000.00Self-fundingConstruction Project for MicrosphereWorkshop (including Gose) of Livzon GroupLivzon Pharmaceutical Factory
262,445,000.0015,616,651.1235,779,491.044,948,805.120.0046,447,337.0467.59Completion of some
projects
0.000.000.00Self-funding and
funds raisedP06 Construction Project of Livzon GroupLivzon Pharmaceutical Factory
117,710,000.0083,020,966.017,071,628.570.000.0090,092,594.5876.54Under construction0.000.000.00Self-fundingProject of lyophilized powder injectionworkshop
143,500,000.0070,673,332.6249,453,389.700.000.00120,126,722.3283.71Under construction0.000.000.00Self-funding and
funds raisedP09 Construction Project of Livzon GroupLivzon Pharmaceutical Factory
296,580,000.0054,924,595.6189,157,562.2014,627,884.490.00129,454,273.3298.82Under construction0.000.000.00Self-fundingP04/P05 Construction Project of LivzonGroup Livzon Pharmaceutical Factory
126,880,000.00257,441.66211,820.750.000.00469,262.410.37Under construction0.000.000.00Self-fundingTechnology transformation project forMicrosphere Phase II of Shanghai Livzon
40,500,000.0010,123,776.5415,733,066.980.000.0025,856,843.5263.84Under construction0.000.000.00Self-fundingOthers65,971,204.5071,708,326.3321,905,193.8611,995,993.06103,778,343.910.000.000.00Self-fundingTotal3,732,269,188.48742,702,874.69544,900,480.35105,314,839.7144,379,106.761,137,909,408.570.000.000.00–
Other decrease is mainly transferred to long-term deferred expenses.
(3). Provision for impairment of construction in progress in the current period
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
lnterim Report 2022
16. Right-of-use assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Housing andbuildingsTotalI. Book value:
1. Beginning balance69,960,518.2769,960,518.27
2. Increase16,013,133.1616,013,133.16
(1) Leasing16,013,133.1616,013,133.16
3. Decrease4,538,405.424,538,405.42
4. Closing balance81,435,246.0181,435,246.01II. Accumulated depreciation
1. Beginning balance23,185,758.5723,185,758.57
2. Increase16,158,894.0516,158,894.05
(1) Provision16,158,894.0516,158,894.05
3. Decrease3,550,845.913,550,845.91
4. Closing balance35,793,806.7135,793,806.71III. Provision for impairment
1. Beginning balance0.000.00
2. Increase0.000.00
3. Decrease0.000.00
4. Closing balance0.000.00IV. Carrying amount
1. Carrying value at period end45,641,439.3045,641,439.30
2. Carrying value at beginning of the period46,774,759.6946,774,759.69Other descriptions:
As of 30 June 2022, the Company recognised lease expenses related to short-term leases and the leases of low value assetsof RMB2,392,800.
17. Intangible assets
(1) Details of intangible assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemLand use rights
Patent andtechnicalknow-howSoftware
TrademarkrightsOthersTotal
I. Book value
1. Beginning balance413,762,737.87519,813,876.6779,232,390.6962,769,716.9810,985,294.531,086,564,016.74
2. Increase24,832,070.2925,738,583.679,145,484.510.000.0059,716,138.47
(1) Purchase24,832,070.290.009,145,484.510.000.0033,977,554.80
(2) Internal R&D0.0025,738,583.670.000.000.0025,738,583.67
3. Decrease0.000.000.000.000.000.00
(1) Disposal0.000.000.000.000.000.00
(2) Change in scope of
consolidation
0.000.000.000.000.000.00
4. Closing balance438,594,808.16545,552,460.3488,377,875.2062,769,716.9810,985,294.531,146,280,155.21II. Accumulated amortisation
1. Beginning balance122,997,170.29369,635,517.0356,287,892.3562,765,196.555,584,191.37617,269,967.59
2. Increase4,542,730.5520,616,662.203,396,062.32235.86549,264.7229,104,955.65Provision4,542,730.5520,616,662.203,396,062.32235.86549,264.7229,104,955.65
3. Decrease0.000.000.000.000.000.00
(1) Disposal0.000.000.000.000.000.00
(2) Change in scope of
consolidation
0.000.000.000.000.000.00
4. Closing balance127,539,900.84390,252,179.2359,683,954.6762,765,432.416,133,456.09646,374,923.24III. Provision for impairment
1. Beginning balance981,826.9411,530,127.410.000.000.0012,511,954.35
2. Increase0.000.000.000.000.000.00Provision0.000.000.000.000.000.00
3. Decrease0.000.000.000.000.000.00
4. Closing balance981,826.9411,530,127.410.000.000.0012,511,954.35IV. Carrying amount
1. Carrying value at period end310,073,080.38143,770,153.7028,693,920.534,284.574,851,838.44487,393,277.62
2. Carrying value at beginning of
the period
289,783,740.64138,648,232.2322,944,498.344,520.435,401,103.16456,782,094.80The proportion of intangible assets created due to the internal R&D in the balance of intangible assets at the End of thePeriod is 22.76%.
lnterim Report 2022
(2) Intangible assets pending for certificates of ownership
√ Applicable □ N/A
Unit: Yuan Currency: RMBItemCarrying amountReasons for pending title certificateLand use rights4,101,535.62Application in progressOther descriptions√ Applicable □ N/AThe land use rights represent the state-owned land use rights obtained by the Company in accordance with PRC laws inChina, and the term of grant will be 50 years commencing from the date of obtaining the land use rights.
18. Development Costs
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theBeginning of
the Period
Increase for the PeriodDecrease for the Period
Balance atthe End ofthe PeriodInternaldevelopmentcostsOther increase
Recognized asintangible assets
Recognised in
profit or loss
in the year
Chemical pharmaceuticals179,411,666.3456,328,213.560.0025,738,583.6751,139,662.12158,861,634.11Biologics213,102,130.1114,538,062.230.000.000.00227,640,192.34Vaccine314,172,937.6267,659,803.790.000.000.00381,832,741.41APIs and others80,306,701.6414,869,016.050.000.005,173,934.6490,001,783.05Total786,993,435.71153,395,095.630.0025,738,583.6756,313,596.76858,336,350.91Other descriptions:
Item
Time for commencement ofcapitalisationSpecific basis of capitalisation
Progress of research anddevelopment at year end
Chemical pharmaceuticalsClinical trialObtain approval for clinical trialClinical stageBiologicsClinical trialObtain approval for clinical trialClinical stageVaccineClinical trialObtain approval for clinical trialClinical stageAPIs and othersPilot stagePilot related informationPost-pilot stage
19. Goodwill
(1) Book value of goodwill
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Name of investee or matter fromwhich goodwill arose
Balance at theBeginning ofthe Period
Increase for the PeriodDecrease for the Period
Balance atthe End ofthe PeriodFormation by
businesscombinationOthersDisposalOthersShanghai Livzon Pharmaceutical Manufacturing Co., Ltd.2,045,990.120.000.000.000.002,045,990.12Zhuhai FTZ Livzon Hecheng PharmaceuticalManufacturing Co., Ltd.
3,492,752.580.000.000.000.003,492,752.58Sichuan Guangda Pharmaceutical Manufacturing Co., Ltd.13,863,330.240.000.000.000.0013,863,330.24Livzon Group Xinbeijiang Pharmaceutical ManufacturingInc.
7,271,307.030.000.000.000.007,271,307.03Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd.46,926,155.250.000.000.000.0046,926,155.25Livzon Group Livzon Pharmaceutical Factory47,912,269.660.000.000.000.0047,912,269.66Livzon Group395,306,126.410.000.000.000.00395,306,126.41Shenzhen Haibin Pharmaceutical Co., Ltd.91,878,068.720.000.000.000.0091,878,068.72Joincare Daily-Use & Health Care Co., Ltd.1,610,047.910.000.000.000.001,610,047.91Shenzhen Taitai Pharmaceutical Co., Ltd.635,417.230.000.000.000.00635,417.23Health Pharmaceuticals (China) Limited23,516,552.650.000.000.000.0023,516,552.65Shenzhen Hiyeah Industry Co., Ltd6,000,000.000.000.000.000.006,000,000.00Jiaozuo Joincare Bio Technological Co., Ltd.92,035.870.000.000.000.0092,035.87Total640,550,053.670.000.000.000.00640,550,053.67
(2) Provision for impairment of goodwill
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Investee or matters formed the goodwill
Balance atthe Beginning ofthe Period
Increase for the PeriodDecrease for the PeriodBalance at
the End ofthe PeriodProvisionOthersDisposalOthersLivzon Group Xinbeijiang PharmaceuticalManufacturing Inc.
7,271,307.030.000.000.000.007,271,307.03Livzon Group Fuzhou FuxingPharmaceutical Co., Ltd.
11,200,000.000.000.000.000.0011,200,000.00Shenzhen Hiyeah Industry Co., Ltd6,000,000.000.000.000.000.006,000,000.00Joincare Daily-Use & Health Care Co., Ltd.1,610,047.910.000.000.000.001,610,047.91Total26,081,354.940.000.000.000.0026,081,354.94
(3) Relevant information regarding the asset portfolio and set of asset portfolios to which the goodwill belongs
√ Applicable □ N/AGoodwill of the Company arose from its business combination involving enterprises not under common control inprevious years.
lnterim Report 2022
(4) Descriptions of the process of goodwill impairment testing, key parameters (such as the growth rate of the forecast period,
the growth rate of the stable period, the profit rate, the discount rate and the forecast period, etc. when the present valueof future cash flows are expected, if applicable) and the recognition method of the impairment losses on goodwill√ Applicable □ N/AOn the balance sheet date, the Company conducts an impairment test on goodwill. When estimating the recoverableamount of input costs, it uses a assets group related to goodwill to estimate the present value of future cash flows.The estimated future cash flow of asset groups is calculated according to the five-year financial budget plan made by themanagement, the cash flows in the years beyond the five-year budget plan remain stable.Key assumptions of discounted future cash flow for goodwill impairment test are as follows:
For the calculation of estimated present value of future cash flow of the asset groups related to goodwill of Livzon Group,key assumptions are a gross margin of 63.24%-63.43% and a business revenue growth rate of 0-9.07% as well as a cashflow discount rate of 12.99%. The management took into account historical conditions and predictions for future marketdevelopment in making the above assumptions.For the calculation of estimated present value of future cash flow of the asset groups related to goodwill of ShenzhenHaibin Pharmaceutical Co., Ltd. (深圳市海滨制药有限公司), key assumptions are a gross margin of 58.33%-59.13% anda business revenue growth rate of 0-5.27% as well as a cash flow discount rate of 11.78%. The management took intoaccount historical conditions and predictions for future market development in making the above assumptions.As tested, the management of the Company expects that no impairment provision is needed during the period.
(5) The impact of goodwill impairment test
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
20. Long-term deferred expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theBeginning ofthe PeriodIncreaseAmortisation
Otherdecrease
Balance atthe End ofthe Period
Renovation costs of offices26,940,700.021,624,869.151,752,302.840.0026,813,266.33Renovation costs of plants78,337,095.2331,014,325.7712,732,418.830.0096,619,002.17Plants reconstructionproject
60,368,163.710.001,461,035.720.0058,907,127.99Certification costs of GMPproject
311,654.790.0060,320.280.00251,334.51Others34,758,127.1811,637,488.168,812,512.700.0037,583,102.64Total200,715,740.9344,276,683.0824,818,590.370.00220,173,833.64
21. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offsetting
√ Applicable □ N/A
Unit: Yuan Currency: RMBItem
Balance at the End of the PeriodBalance at the Beginning of the Period
Deductibletiming differences
Deferredtax assets
Deductibletiming differences
Deferredtax assetsProvision for impairment of assets319,543,705.4253,265,222.24323,372,877.2654,704,601.96Accrued expenses943,927,069.68168,472,108.29945,774,497.50166,481,490.01Deductible tax loss628,988,008.18106,750,561.99497,850,865.2984,167,365.69Deferred income388,228,236.5662,715,785.49375,321,674.1060,145,851.14Unrealised gains from intra-company transactions
802,993,093.55120,336,149.12560,934,298.6384,185,529.66Changes in fair value of otherequity instrument investments
133,008,102.6733,252,025.67146,653,568.4036,663,392.10Deductible difference arising fromshare incentive expenses
78,252,770.2911,864,488.7877,872,943.6311,933,224.52Changes in fair value of financialassets held for trading
17,654,550.122,938,251.936,918,505.671,158,336.82Other deductible temporarydifference
374,001,517.0373,784,263.30282,821,670.9053,103,074.81Total3,686,597,053.50633,378,856.813,217,520,901.38552,542,866.71
(2) Deferred tax liabilities before offsetting
√ Applicable □ N/A
Unit: Yuan Currency: RMBItem
Balance at the End of the PeriodBalance at the Beginning of the PeriodTaxable timing
difference
Deferredtax liabilities
Taxable timing
difference
Deferredtax liabilities
Changes in fair value of financialassets held for trading
16,507,990.792,556,409.2919,970,547.943,215,329.05Accelerated depreciation of fixedassets
744,846,785.16112,897,099.81752,180,706.08114,114,492.09Changes in fair value of otherequity instrument investments
230,707,941.3339,248,538.17359,110,036.6570,405,084.25Unrealised gains from intra-company transactions
105,940,000.0020,791,000.00105,940,000.0020,791,000.00Total1,098,002,717.28175,493,047.271,237,201,290.67208,525,905.39
(3) Deferred income tax assets or liabilities listed as net amount after offset
□ Applicable
√ N/A
lnterim Report 2022
(4) Details of unrecognized deferred tax assets
√ Applicable □ N/A
Unit: Yuan Currency: RMBItem
Balance at theEnd of the Period
Balance at theBeginning ofthe PeriodDeductible temporary difference194,378,204.58175,707,417.84Deductible tax losses1,682,454,124.291,365,909,940.62Total1,876,832,328.871,541,617,358.46
(5) Expiry of deductible tax losses in subsequent period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Year
Balance at theEnd of the Period
Balance at theBeginning of
the PeriodNote
2022129,386,282.89129,386,282.402023182,300,762.40182,300,761.962024385,139,111.62385,138,859.922025254,439,677.09254,360,863.532026393,596,990.55389,994,598.372027232,550,613.100.00Indefinite105,040,686.6424,728,574.44Total1,682,454,124.291,365,909,940.62Other descriptions:
□ Applicable
√ N/A
22. Other non-current assets
√ Applicable □ N/A
Unit: Yuan Currency: RMBItem
Balance at the End of the PeriodBalance at the Beginning of the PeriodBook Balance
Provision for
impairment
CarryingamountBook Balance
Provision for
impairment
Carryingamount
Term deposit and interests53,140,277.780.0053,140,277.7852,127,500.000.0052,127,500.00VAT carry forward7,172,520.860.007,172,520.8656,384,552.600.0056,384,552.60Prepayment for acquisition ofproject and equipment
400,810,146.410.00400,810,146.41491,703,933.590.00491,703,933.59Prepayment for acquisition oftechnical know-how
50,437,334.380.0050,437,334.3863,368,017.610.0063,368,017.61Total511,560,279.430.00511,560,279.43663,584,003.800.00663,584,003.80
23. Short-term loans
(1) Short-term loans by category
√ Applicable □ N/A
Unit: Yuan Currency: RMBItem
Balance at theEnd of the Period
Balance at the
Beginning ofthe Period
Unsecured loans1,982,775,000.021,666,838,964.15Guaranteed loans0.00851,645,870.94Total1,982,775,000.022,518,484,835.09
(2) Overdue short-term loans
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
24. Financial liabilities held for trading
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance atthe Beginning
of the PeriodIncreaseDecrease
Balance atthe End ofthe Period
Financial liabilities held for trading143,302.2410,647,736.160.0010,791,038.40Including:
Derivative financial liabilities143,302.2410,647,736.160.0010,791,038.40Total143,302.2410,647,736.160.0010,791,038.40Other descriptions:
Derivative financial liabilities represent foreign currency forward contracts. The loss from unexpired onerous contractsmeasured at fair value on balance sheet date was recognised as financial liabilities held for trading.
25. Notes payable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Type
Balance at theEnd of the Period
Balance at the
Beginning of
the Period
Bank acceptance bills1,601,063,168.351,582,386,767.93Total1,601,063,168.351,582,386,767.93The total of bills payable due but not yet paid during the period is RMB0.00.
lnterim Report 2022
26. Accounts payable
(1) Presentations of accounts payable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at the
Beginning ofthe PeriodWithin 1year849,420,487.04809,539,858.35Over 1 year83,854,724.7262,013,352.16Total933,275,211.76871,553,210.51
(2) Significant accounts payable aged aging over one year
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
27. Contract liabilities
(1) Descriptions of contract liabilities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at the
Beginning of
the Period
Within 1 year71,225,218.75208,025,612.34Over 1 year29,479,039.4926,115,089.95Total100,704,258.24234,140,702.29
(2) Significant changes in the carrying amount during the Reporting Period and reasons therefor
□ Applicable
√ N/AOther descriptions:
√ Applicable □ N/AAs at the End of the Period, there was no significant contract liabilities with Aging for more than 1 year at the end ofthe period. The amount of contract liabilities at beginning of the period recognised as revenue during the period isRMB190,765,419.73.
28. Employee benefits payables
(1) Descriptions of employee benefits payables
√ Applicable □ N/A
Unit: Yuan Currency: RMBItem
Balance at the
Beginning ofthe PeriodIncreaseDecrease
Balance atthe End ofthe PeriodI. Short-term employee benefits473,806,357.401,148,748,952.641,248,238,817.59374,316,492.45II. Post-employment benefits -Definedcontribution plans
341,723.8067,046,246.8967,387,556.89413.80III. Termination benefits1,282,742.0090,466.0090,466.001,282,742.00Total475,430,823.201,215,885,665.531,315,716,840.48375,599,648.25
(2) Descriptions of Short-term employee benefits
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at the
Beginning of
the Period
Increasefor the Period
Decreasefor the Period
Balance atthe End ofthe Period
I Salaries, bonus and allowances325,123,978.13980,622,250.711,078,207,277.75227,538,951.09II Staff welfare5,352,134.6629,556,528.1929,832,718.535,075,944.32III Social insurances569,488.7525,771,265.8925,962,009.81378,744.83Including: 1. Medical insurance467,562.9122,989,302.0523,178,174.82278,690.14
2. Work injury insurance62,711.371,277,241.351,281,491.5758,461.15
3. Maternity insurance39,214.471,504,722.491,502,343.4241,593.54IV Housing fund1,493,719.8825,479,834.8625,474,436.461,499,118.28V Union funds and staff education541,564.602,863,628.633,002,375.04402,818.19VI Stock Ownership Plan Special Fund140,725,471.3884,455,444.3685,760,000.00139,420,915.74Total473,806,357.401,148,748,952.641,248,238,817.59374,316,492.45
(3) Defined contribution plans
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theBeginning of
the PeriodIncreaseDecrease
Balance atthe End ofthe Period
Post-employment benefitsIncluding: 1. Basic pension insurance303,582.0765,273,430.4065,576,598.67413.80
2. Unemployment insurance38,141.731,772,816.491,810,958.220.00Total341,723.8067,046,246.8967,387,556.89413.80Other descriptions:
√ Applicable □ N/A
lnterim Report 2022
The Company participates in pension insurance and unemployment insurance plans established by the governmentin accordance with relevant requirements. According to the plans, the Company makes contributions to these plans inaccordance with relevant requirements of the local government. Save for the above contributions, the Company no longerundertakes further payment obligation. The corresponding cost is charged to the profit or loss for the current period orthe cost of relevant assets when it occurs.
29. Taxes payable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at theBeginning ofthe PeriodValue added tax112,926,445.6691,860,518.74Enterprise income tax209,788,306.89145,106,168.70Individual income tax64,079,500.849,991,974.56Urban maintenance and construction tax11,360,588.5410,047,715.71Property tax8,707,755.512,178,644.31Land use tax3,042,691.511,716,626.70Stamp duty846,515.07676,792.62Education surcharges7,097,530.946,594,414.24Others2,285,172.042,445,327.83Total420,134,507.00270,618,183.41
30. Other payables
Line items√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at the
Beginning of
the Period
Dividends payable24,631,984.466,951,984.46Other payables3,373,726,012.223,285,456,005.33Total3,398,357,996.683,292,407,989.79Dividends payable√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at the
Beginning of
the Period
Common shares dividend20,174.4620,174.46Dividends payable – Qingyuan Xinbeijiang (Group) Company1,200,710.001,200,710.00Dividends payable – Other legal persons and individual shares of subsidiaries12,351,300.003,311,300.00Dividends payable – Staff shares of subsidiaries11,059,800.002,419,800.00Total24,631,984.466,951,984.46
Other payables
(1) Other payables by nature
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at the
Beginning of
the Period
Office expenses60,537,028.8866,603,733.56Security deposits84,212,943.4085,316,947.15Business promotion expenses1,625,250,668.491,385,121,675.36Technology transfer fee10,000,000.0010,000,000.00Accrued expenses1,546,261,405.351,696,272,218.54Others47,463,966.1042,141,430.72Total3,373,726,012.223,285,456,005.33The obligations of repurchasing restricted shares of the directors, the senior management and their spouses amountedRMB0.00 at the End of the Period.
(2) Significant other payables aged over 1 year
□ Applicable
√ N/AOther descriptions:
√ Applicable □ N/AOf which, the breakdown of accrued expenses was as follows:
Item30 June 202231 December 2021
Reason foroutstandingat the Endof the Period
Utility bill27,466,692.8223,611,733.95UnpaidResearch expenses28,761,380.34122,637,625.45UnpaidBusiness development and promotion expenses1,413,316,758.371,459,695,485.76UnpaidAudit and information disclosure expenses5,270,541.094,893,299.88UnpaidOthers71,446,032.7385,434,073.50UnpaidTotal1,546,261,405.351,696,272,218.54
31. Non-current liabilities due within one year
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at theBeginning of
the Period
Lease liabilities due within one year22,846,465.9521,295,233.00Long-term loans and interest due within one year70,343,888.8970,280,833.33Total93,190,354.8491,576,066.33
lnterim Report 2022
32. Other current liabilities
√ Applicable □ N/A
Unit: Yuan Currency: RMBItem
Balance at theEnd of the Period
Balance at the
Beginning of
the PeriodOutput VAT pending for transfer7,166,683.8015,626,224.29Total7,166,683.8015,626,224.29Change of short-term bonds payable
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
33. Long-term loans
(1) Classification of long-term loans
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at the
Beginning of
the Period
Unsecured loans989,343,888.89897,061,086.11Guaranteed loans1,484,726,004.580.00Less: Long-term loans due within one year70,343,888.8970,280,833.33Total2,403,726,004.58826,780,252.78Other descriptions, including interest rate range:
√ Applicable □ N/AThe interest rate range of credit loan is 2.60% – 3.20%, and the interest rate range of guaranteed loan is 2.70% – 3.60%.
34. Lease liabilities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at theBeginning of
the Period
Lease payments payable45,445,648.5546,367,027.32Lease liabilities due within one year-22,846,465.95-21,295,233.00Total22,599,182.6025,071,794.32Other descriptions:
Interest expenses accrued on lease liabilities during the 6-month period ended 30 June 2022 was RMB805,700, which wasrecorded in financial expenses-Interest expense.
35. Deferred income
Deferred income√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theBeginning of
the PeriodIncreaseDecrease
Balance atthe End ofthe Period
Reason offormation
Government grants433,543,352.4080,953,200.0042,136,416.15472,360,136.25/Total433,543,352.4080,953,200.0042,136,416.15472,360,136.25/Projects involving government grants:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Projects with grants
Beginning
balance
Additionsin the period
Charged toNon-operating
income for
the period
Transferto otherincome
Othermovement
Closingbalance
Related to assets/Related to income
Research and development funds for new drug for Class ITreatment of Necrosis Factor in Human Tumour from HumanSource (I类治疗用人源化抗人肿瘤坏死因子α单克隆抗体新药研制资金)
8,000,000.000.0005,924,000.002,076,000.000.00Related to incomeInnovation capacity building of technology center (antibodylaboratory) (技术中心创新能力建设(抗体药物实验室))
166,439.460.00037,665.180.00128,774.28Related to incomeScientific technology award and subsidy for technologicalinnovative project (科学技术奖及科技创新项目资助)
2,200,000.000.0000.000.002,200,000.00Related to incomeZhuhai industrial enterprise“cloud and platform”servicecoupons supporting funds (珠海市工业企业“云上平台”服务券支持资金)
89,431.860.00012,770.430.0076,661.43Related to incomeChina Postdoctoral Science Foundation subsidy funds (中国博士后科学基金会资助经费)
80,000.000.0000.000.0080,000.00Related to incomeStructure-efficiency optimization of marine microorganismsand evaluation of antitumor activity (海洋微生物构效优化与抗肿瘤活性评价)
312,366.270.000216,622.020.0095,744.25Related to incomeLaboratory project of respiratory system inhalationpreparation engineering laboratory project (呼吸系统吸入制剂工程实验室项目)
3,501,550.000.000808,050.000.002,693,500.00Related to assetsConstruction of a recycling production base for carbapenemproducts (碳青霉烯类系列产品循环化生产基地建设)
3,625,000.000.0000.000.003,625,000.00Related to assetsConstruction of an integrated production line for fullyautomatic blister-type dry powder inhalant micro-filling andwinding (全自动泡罩型干粉吸入剂微量灌封与卷绕一体化生产线建设)
927,666.660.000121,000.020.00806,666.64Related to assetsChange in National Science and Technology Major Project*Research funding for lipid injection * Baiyunshan Hanfangtransfer (国家重大专项项目变更*注射脂质研究经费*白云山汉方转入)
150,000.000.000150,000.000.000.00Related to assetsResearch on common key technologies for the large-scaledevelopment of new inhalation preparations (新型吸入制剂规模化发展共性关键技术研究)
365,700.000.0000.000.00365,700.00Related to assetsLarge-scale development subsidy for new inhalationpreparations (新型吸入制剂规模化发展补助)
2,262,600.000.0000.000.002,262,600.00Related to assetsProject Subsidy of Marine mollusk kinetic protein (海洋软体动物动能蛋白项目补助)
23,840,000.000.0000.000.0023,840,000.00Related to assetsNew inhalation drug formulation creation project (新型吸入给药制剂创制项目)
67,248,400.006,349,500.0000.000.0073,597,900.00Related to assetsZhimu total sapogenin project (知母总皂甙元项目)8,900,000.000.0000.000.008,900,000.00Related to assetsGlucocorticoid inhalation suspension project (糖皮质混悬液项目)
3,600,000.004,000,000.0000.000.007,600,000.00Related to assets
lnterim Report 2022
Projects with grants
Beginning
balance
Additionsin the period
Charged toNon-operatingincome forthe period
Transferto otherincome
Othermovement
Closingbalance
Related to assets/Related to income
Financial appropriations for small molecule peptide projects(收 Financial allocation 用于小分子肽项目)
319,999.800.00040,000.020.00279,999.78Related to assetsRadix Rhapontici total sterone project (漏芦总甾酮项目)2,500,000.000.0000.000.002,500,000.00Related to assetsR&D of active substances with bone and joint repair andhealth care functions (具有骨关节修复与保健功能的活性物质研发)
957,649.920.00059,853.120.00897,796.80Related to assetsKey technology research and development of budesonidenebulized inhalation solution (布地奈德雾化吸入溶液关键技术研发)
2,508,333.330.000175,000.020.002,333,333.31Related to assetsReturn of land holding tax (土地使用税返还)3,567,661.420.000703,111.260.002,864,550.16Related to assetsSubsidies for the development of pharmaceutical APIsindustry (医药原料药行业发展支持资金补助)
40,741,354.940.0000.000.0040,741,354.94Related to assetsInnovation Coupon (Jingjin Filter Press Equipment) (收创新券(景津压滤设备))
233,332.790.0000.000.00233,332.79Related to assetsXinxiang High-tech Project Fund Support (新乡高新技术项目资金扶持)
1,861,111.080.00028,198.680.001,832,912.40Related to assetsResearch on Common Co-construction Technology ofPharmaceutical Inhalation Preparations (开发区财政局拔款创业领军人才项目:药品吸入制剂共性共建技术的研究)
2,800,000.000.0000.000.002,800,000.00Related to assetsResearch and development of respiratory system drug andclinical research technology service platform project talentfunding (呼吸系统药物研发和临床研究技术服务平台项目人才经费)
1,500,000.000.0000.000.001,500,000.00Related to assetsScience and technology help the economy key specialprojects (科技助力经济重点专项)
500,000.000.0000.000.00500,000.00Related to assetsCity Service Development Special project (市服务发展专项)800,000.000.0000.000.00800,000.00Related to assetsPatent funding (专利资助)200,000.000.0000.000.00200,000.00Related to assets2020 Shanghai Professional Technology Platform CapacityEnhancement Project (2020 年度上海市专业技术平台能力提升项目立项)
1,000,000.000.0000.000.001,000,000.00Related to assetsHigh-growth small and micro innovation enterprises (高成长小微科创企业)
400,000.000.0000.000.00400,000.00Related to assetsResearch and development subsidy forω-3-Fish Oil Mediumand Long Chain Fat Emulsion Injection (ω-3 鱼油中/长链脂肪乳注射液研究开发补助)
350,000.000.000350,000.000.000.00Related to assetsR&D and industrialization of innovative Ilaprazole Series (艾普拉唑系列创新药物研发及产业化)
16,078,166.250.0002,455,000.320.0013,623,165.93Related to assetsFund for industrialization of prolonged-action microspherepreparation (长效微球制剂的产业化款项)
12,550,000.000.0000.000.0012,550,000.00Related to assetsConstruction project for industrialization of prolonged-actionmicrosphere preparation (phase I) (长效微球制剂产业化建设项目(一期工程))
20,719,505.480.0001,202,654.940.0019,516,850.54Related to assetsProject subsidy from the Ministry of Industry and InformationTechnology (工业和信息化部项目补助款)
2,400,000.000.0000.000.002,400,000.00Related to assetsProject subsidy from the Ministry of Industry and InformationTechnology (工业和信息化部项目补助款)
1,366,750.000.000115,500.000.001,251,250.00Related to assetsConstruction of Drug Conformity Evaluation Research CenterPlatform (药物一致性评价研究中心平台建设)
1,040,000.140.00079,999.980.00960,000.16Related to assetsR&D and Commercialisation of Mouse Nerve Growth Factorfor Injection (注射用鼠神经生长因子研发及产业化)
40,045,946.930.0005,280,044.640.0034,765,902.29Related to assetsDemonstration project on the application of solarphotovoltaic architecture (太阳能光电建筑应用示范项目)
2,455,499.430.000551,000.040.001,904,499.39Related to assetsSubsidy for the Tender of Technology Upgrade Project forPVC Soft Bag Supported by Provincial Finance Departments(省财政支持技改招标项目补助金 PVC 软袋)
2,703,484.560.000204,182.880.002,499,301.68Related to assetsTechnical transformation project of Shenqi Fuzheng Injectionwith flexible bag (软袋(参芪扶正注射液)技改项目)
15,676,470.620.0001,911,764.700.0013,764,705.92Related to assets
Projects with grants
Beginningbalance
Additionsin the period
Charged toNon-operatingincome forthe period
Transferto otherincome
Othermovement
Closingbalance
Related to assets/Related to income
Provision for technology transformation funds andsubsequent grants (技术改造资金拨款及事后补奖)
5,459,555.720.000564,781.680.004,894,774.04Related to assetsProvision for technology transformation funds andsubsequent grants (技术改造资金拨款及事后补奖)
7,359,670.810.000891,684.240.006,467,986.57Related to assetsElectricity distribution transformer performance enhancementfor energy-saving and emission reduction projects ((节能减排项目))配电变压器能效提升)
380,000.000.00024,000.000.00356,000.00Related to assetsR&D and industrialization team of chemical drug liquidpreparation (化药液体制剂研发与产业化团队)
1,534,833.44234,000.00028,999.920.001,739,833.52Related to assetsInnovation capacity building of technology center (antibodylaboratory) (技术中心创新能力建设(抗体药物实验室))
4,802,478.800.000222,877.680.004,579,601.12Related to assetsAchievement transfer of blood screening (BCI) nucleic aciddetection testing (血液筛查(BCI)核酸检测试剂成果转化)
3,961,282.440.0000.000.003,961,282.44Related to assetsTechnological upgrading and transformation projects ofworkshop for acarbose (APIs forα-glucosidase inhibitor) (α-葡萄糖苷酶抑制剂类原料药阿卡波糖生产车间工艺升级技术改造项目)
464,285.800.00053,571.420.00410,714.38Related to assetsR&D and industrialization of Statins (降血脂他汀类药物的研发与产业化)
30,000.480.00014,999.940.0015,000.54Related to assetsScientific technology award and subsidy for technologicalinnovative project (科学技术奖及科技创新项目资助)
28,566.200.00028,566.200.000.00Related to assetsCommissioner workstation (特派员工作站)85,000.000.00030,000.000.0055,000.00Related to assetsIndustrial revitalisation supporting funds (产业振兴扶持资金)2,445,500.010.000579,000.000.001,866,500.01Related to assetsPhase IV clinical study of innovative drug Ilaprazole (创新药物艾普拉唑 IV 期临床研究)
8,210,800.000.0008,210,800.000.000.00Related to assetsGovernment grant for industrial transformation (工业转型政府扶持资金)
308,333.750.00099,999.960.00208,333.79Related to assetsNew industrialization development grant (新型工业化发展奖金)
3,584,066.380.000175,000.020.003,409,066.36Related to assetsPolicy fund for leading industrial enterprises loan Interests (工业龙头企业贷款贴息政策资金)
366,666.570.000100,000.020.00266,666.55Related to assetsSupporting funds for five advantageous industrial clustersand one high-tech industry (五优一新扶持资金)
300,000.200.00049,999.980.00250,000.22Related to assetsCapital project for innovation and entrepreneurship teamfunding program (创新创业团队资助计划资金项目)
12,500,000.000.0000.000.0012,500,000.00Related to assets2020 Zhuhai City Innovation and Entrepreneurship Team(Nanocrystalline) (2020 年度珠海市创新创业团队(纳米晶))
1,500,000.000.0000.000.001,500,000.00Related to assetsFund for R&D and industrialization of innovative Ilaprazoleseries (R&D and industrialization of innovative IlaprazoleSeries (艾普拉唑系列创新药物研发及产业化))项目资金)
5,600,000.000.0005,600,000.000.000.00Related to assetsKey projects of industrial core and key technologies of Zhuhai(Ryanodex) (珠海市产业核心和关键技术攻关方向项目(丹曲林钠))
3,000,000.000.0000.000.003,000,000.00Related to assetsData-driven industrial chain collaboration platformdemonstration project (数据驱动的产业链协同平台示范项目)
3,650,000.000.000365,000.000.003,285,000.00Related to assetsFund for key projects of industrial core and key technologiesof Zhuhai (2nd batch) (珠海市产业核心和关键技术攻关方向项目资金(第二批))
2,000,000.000.0000.000.002,000,000.00Related to assetsInnovative drug of Ilaprazole sodium for injection (创新药注射用艾普拉唑钠针剂)
2,400,000.000.0000.000.002,400,000.00Related to assetsTechnological transformation projects of new Cefuroxime (新型头孢粉针剂技术改造项目)
1,533,100.000.0000.000.001,533,100.00Related to assetsAdvanced Pharmaceutical Manufacturing InternetBenchmarking Project (先进药品制造互联网标杆项目)
675,000.000.00045,000.000.00630,000.00Related to assetsCleaner Production Audit Project (清洁生产审核项目)180,000.080.0004,999.980.00175,000.10Related to assetsGreen factory (绿色工厂)1,131,666.710.00064,999.980.001,066,666.73Related to assetsHCG project construction (HCG 项目建设)3,387,835.840.000197,824.980.003,190,010.86Related to assets
lnterim Report 2022
Projects with grants
Beginning
balance
Additionsin the period
Charged toNon-operating
income for
the period
Transferto otherincome
Othermovement
Closingbalance
Related to assets/Related to income
Sewage treatment system upgrade project (污水处理系统升级改造项目)
64,239.920.0004,015.020.0060,224.90Related to assetsR&D and industrialization of Recombinant Human ChorionicGonadotropin for Injection (注射用重组人绒促性素研发及产业化)
1,137,500.000.00075,000.000.001,062,500.00Related to assetsSubsidies for online monitoring equipment and installationsof coalfired boilers (燃煤锅炉在线监控设备装置补助)资金)
82,500.000.00011,250.000.0071,250.00Related to assetsFunds for joint R&D and industrialization of integratedplatform for molecular diagnostics (集成一体化分子诊断平台的合作研发及产业化)资金)
181,632.120.0000.000.00181,632.12Related to assetsProject supporting fund for the first batch of special funds forscientific and technological innovation in 2019 (2019 年度第一批科技创新专项资金立项配套资助)
600,000.000.0000.000.00600,000.00Related to assetsProvincial industrial innovation (provincial enterprisetechnology center) project in 2019 (2019 年度省产业创新(省级企业技术中心)项目)
1,046,533.330.0000.000.001,046,533.33Related to assetsPre-appropriation of special grants for industrialization ofdiagnostic reagents for COVID-19 (新型冠状病毒检测试剂产业化项目补助金预拨)
4,116,415.650.0000.000.004,116,415.65Related to assetsXiangzhou District equipment purchase subsidy supportingfunds ((香洲区采购设备补贴扶持资金(疫情防控专项资金)
11,467.250.0000.000.0011,467.25Related to assetsZhuhai innovation and enterprising team and high-leveltalent enterprising project Phase I funds (珠海市创新创业团队和高层次人才创业项目首期资金)
12,000,000.000.0000.000.0012,000,000.00Related to assetsDevelopment and Industrialization of Cyclosporine Self-Emulsifying Soft Capsule Formulation with High Technology(高技术屏障的环孢素自乳化软胶囊制剂的开发及产业化研究)
0.00240,000.0002,000.000.00238,000.00Related to assetsGuangdong Provincial Key Laboratory of Characteristic DrugResearch and Development Enterprises (广东省特色药物研发企业重点实验室)
0.001,000,000.0008,333.330.00991,666.67Related to assetsOverall relocation and deployment expansion project (整体搬迁调迁扩建项目)
20,000,000.0030,000,000.0000.000.0050,000,000.00Related to assets2022 Special funds for the reconstruction of the industrialbase of the central government and the high-qualitydevelopment of the manufacturing industry (2022 年中央财政产业基础再造和制造业高质量发展专项资金)
0.0032,740,000.0000.000.0032,740,000.00Related to assetsSubsidy Fund LZM009 for National Science and TechnologyMajor Special Projects (国家科技重大专项项目后补助资金LZM009)
0.004,744,900.0002,171,293.530.002,573,606.47Related to assetsXiangzhou District actively responds to the impact of theepidemic and stabilizes the innovation-driven technologyindustry sub-item (香洲区积极应对和疫情影响保稳创新驱动科技工业分项)
0.001,644,800.0000.000.001,644,800.00Related to assetsEnvironmental protection bureau RTO project special funds(环保局 RTO 项目资金)
179,999.960.00010,000.020.00169,999.94Related to assetsStrategic emerging industries in 2014 (sustained releasemicrospheres) (2014 年战略性新兴产业(缓释微球))
16,700,000.000.0000.000.0016,700,000.00Related to assetsTotal433,543,352.4080,953,200.00040,060,416.152,076,000.00472,360,136.25
Other descriptions:
□ Applicable
√ N/A
36. Other non-current liabilities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance atthe Beginning of
the PeriodThe overall relocation and expansion project of Sichuan GuangdaPharmaceutical Manufacturing
84,000,000.0078,000,000.00Total84,000,000.0078,000,000.00
37. Share capital
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the
Beginning of
the Period
Changes for the Period (+ -)
Balance atthe End ofthe PeriodIssuance ofnew shares
Conversion from
capital reserveOthersSubtotalI. Tradable shares subject to sellingrestrictions
1. Domestic legal person shares000000
2. Domestic natural person shares000000
3. Overseas legal person shares000000Tradable shares subject to sellingrestrictions in aggregate
000000II. Tradable shares
1. Ordinary shares denominated in RMB1,907,727,9084,812,759004,812,7591,912,540,667
2. Domestically listed foreign shares000000Tradable shares in aggregate1,907,727,9084,812,759004,812,7591,912,540,667III. Total number of shares1,907,727,9084,812,759004,812,7591,912,540,667Other descriptions:
The increase in share capital in this period was due to the exercise of stock options.
38. Capital reserve
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at the
Beginning of
the PeriodIncreaseDecrease
Balance at theEnd of the Period
Capital premium (Share premium)2,152,860,227.8444,936,885.690.002,197,797,113.53Other capital reserve112,497,084.089,042,659.922,976,058.58118,563,685.42Total2,265,357,311.9253,979,545.612,976,058.582,316,360,798.95Other descriptions, including changes for the current period and reasons therefor:
lnterim Report 2022
Reasons for increase in capital premium: 1) 4,812,759 shares of the Company’s stock options were exercised, increasing thecapital premium by RMB34,163,528.26; 2) The Company’s subsidiary Livzon’s stock options are exercised, according to theshareholding ratio of the Company, the corresponding increase in the share capital premium of RMB7,130,961.18; 3) Afterthe stock options are exercised,the difference between the pre-taxable expenses and the accrued expenses will reduce theincome tax payable by RMB3,642,396.25, and the share capital premium will be increased accordingly;Reasons for increase in Other capital reserves: The equity incentive fee accrued by the Livzon Group and its subsidiarieswas RMB9,042,659.92.Reasons for decrease in Other capital reserves: The exercise of the stock options of the incentive plan and repurchase ofthe subsidiary Livzon Group lead to changes in the Company’s shareholding ratio and changes in other equity instrumentinvestment; thus the capital reserve decreased by RMB2,976,058.58.
39. Treasury shares
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theBeginning of
the PeriodIncreaseDecrease
Balance atthe End ofthe PeriodRepurchase of shares due to ShareOwnership Scheme and ShareOptions Incentive Scheme
222,644,454.500.000.00222,644,454.50Repurchase of shares to be cancelled0.00520,332,751.220.00520,332,751.22Total222,644,454.50520,332,751.220.00742,977,205.72Other descriptions, including changes for the current period and reasons therefor:
The reason for decreases in the ending balances of Repurchase of A Shares due to Share Ownership Scheme and theCompany repurchased 44,696,643 shares totally through centralized bidding transactions by the Company.
40. Other comprehensive income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at the
Beginning of
The Period
For the Period
Balance at the
End of the
PeriodAmountbefore tax
Less:
transferred to
profit or loss
in current
periodor retained
earnings
Less: Incometax expenses
Amountattributable toparent company
after tax
Amountattributable to
minority
interests
after tax
I. Other comprehensive income notreclassified into profit or loss subsequently
102,556,982.189,039,908.2086,177,636.783,693,873.01-79,078,918.80-1,752,682.7823,478,063.37
1. Other comprehensive income not
reclassified to profit or loss under equitymethod
6,658,847.652,476,997.860.000.001,109,969.991,367,027.877,768,817.64
2. Changes in fair value of other equity
instrument investments
95,898,134.536,562,910.3486,177,636.783,693,873.01-80,188,888.79-3,119,710.6515,709,245.73
Item
Balance at theBeginning ofThe Period
For the Period
Balance at theEnd of thePeriodAmountbefore tax
Less:
transferred toprofit or lossin currentperiodor retainedearnings
Less: Incometax expenses
Amountattributable toparent company
after tax
Amountattributable tominorityinterestsafter taxII. Other comprehensive income thatwill be reclassified into profit or losssubsequently
-97,169,436.2055,768,464.080.000.0036,080,061.6019,688,402.47-61,089,374.60Including: Other comprehensive incomethat will be transferred to profit or lossunder equity method
37,989.910.000.000.000.000.0037,989.91Translation difference of foreign currencyfinancial statements
-97,207,426.1255,768,464.0800.0000.00036,080,061.6019,688,402.47-61,127,364.52Total of other comprehensive income5,387,545.9764,808,372.2886,177,636.783,693,873.01-42,998,857.2017,935,719.69-37,611,311.23
41. Surplus reserve
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theBeginning of
the PeriodIncreaseDecrease
Balance at theEnd of the
Period
Statutory surplus reserve599,506,581.718,617,763.680.00608,124,345.39Discretionary surplus reserve40,210,642.440.000.0040,210,642.44Reserve funds1,103,954.930.000.001,103,954.93Total640,821,179.088,617,763.680.00649,438,942.76
42. Undistributed profits
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Retained earnings in previous period before adjustments7,223,644,166.226,231,451,582.26Adjustments to opening balance of retained earnings (increase +, decrease -)0.000.00Opening balance of retained earnings after adjustments7,223,644,166.226,231,451,582.26Add: Net profit attributable to parent company for the current period801,268,519.50687,347,494.53Gains from disposal of other equity instruments investment86,177,636.7877,041,425.92Less: Appropriation of statutory surplus reserve8,617,763.680.00Appropriation of discretionary surplus reserve0.000.00Appropriation for dividends to ordinary shares277,557,631.65288,675,388.05Dividend converted to share capital of ordinary shares0.000.00Closing balance of undistributed profits7,824,914,927.176,707,165,114.66
lnterim Report 2022
43. Operating income and operating cost
(1) The information of operating income and operating cost
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
For the PeriodFor the Previous PeriodIncomeCostIncomeCost
Primary operations8,492,047,759.723,002,949,330.387,783,517,167.362,702,753,651.01Other operations72,897,525.8351,443,372.8251,855,107.3040,252,083.92Total8,564,945,285.553,054,392,703.207,835,372,274.662,743,005,734.93Other descriptions:
(2) Breakdown information of principal activities income
① Segregation by products
Item
For the PeriodFor the Previous PeriodIncomeCostIncomeCostChemical pharmaceuticals4,799,253,426.28925,086,073.194,434,234,171.70840,614,882.95Chemical APIs and Intermediates2,771,577,889.051,743,742,075.652,258,879,617.331,517,873,006.34Traditional Chinese medicine514,402,423.73146,937,126.69633,012,054.83168,867,289.58Diagnostic reagents and equipment346,042,443.87164,056,563.15390,683,579.78156,931,989.53Health care products54,741,880.5120,894,995.0162,421,585.0117,301,631.46Industry and Commerce Subtotal8,486,018,063.453,000,716,833.697,779,231,008.652,701,588,799.86Service industry6,029,696.272,232,496.694,286,158.711,164,851.15Total8,492,047,759.723,002,949,330.387,783,517,167.362,702,753,651.01
② Segregation by operating location
Item
For the PeriodFor the Previous PeriodIncomeCostIncomeCostDomestic6,974,358,565.542,065,054,349.096,520,552,394.491,840,235,327.71Overseas1,517,689,194.18937,894,981.291,262,964,772.87862,518,323.30Total8,492,047,759.723,002,949,330.387,783,517,167.362,702,753,651.01
③ Segregation by timing of revenue recognition
Item
For the PeriodFor the Previous PeriodIncomeCostIncomeCostCommodities (recognised at a pointof time)
8,492,047,759.723,002,949,330.387,783,517,167.362,702,753,651.01Total8,492,047,759.723,002,949,330.387,783,517,167.362,702,753,651.01
④ Information of top five customers of business revenue
Period
Total operating incomeof the top five customers
Proportion to primary operating
income in the period
(%)
January to June 2022784,737,990.719.24January to June 2021630,159,477.018.10
⑤ Segregation by other operations
Item
For the PeriodFor the Previous PeriodIncomeCostIncomeCost
Sales of raw materials32,752,345.8420,358,443.9312,758,350.5611,496,878.44Processing fee1,336,854.96546,940.371,140,976.90396,907.15Rental fees5,928,780.42930,025.575,089,008.6689,288.66Power fee6,434,386.876,293,501.066,555,922.196,473,672.50Others26,445,157.7423,314,461.8926,310,848.9921,795,337.17Total72,897,525.8351,443,372.8251,855,107.3040,252,083.92
44. Taxes and surcharges
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious PeriodUrban construction tax40,929,152.7337,829,206.02Education surcharge30,058,369.5828,856,430.50Property tax11,993,989.5911,683,354.15Land use tax5,195,628.855,029,764.24Stamp duty and others6,145,497.566,946,337.65Total94,322,638.3190,345,092.56Other descriptions:
The bases of calculations for major taxes and surcharges are set out in Note IV. Taxation.
45. Selling expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Marketing and promotional expenses2,183,934,600.062,221,503,601.12Staff salaries260,162,330.69203,807,784.32Entertainment and travel expenses20,988,461.2327,758,220.54Conference fees8,609,021.926,762,806.37Others38,675,378.5540,117,344.95Total2,512,369,792.452,499,949,757.30
lnterim Report 2022
46. Administrative expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious PeriodStaff salaries276,280,216.68163,036,323.73Depreciation and amortization52,062,021.0355,667,766.18Loss on suspension of operations83,168,875.9431,970,734.79Shares incentive expenses10,488,471.0913,424,119.37Advisory, consultancy and information disclosure fees12,483,135.1014,019,770.61Quality project expenses11,250,121.7817,217,491.18Office, entertainment and travelling expenses22,601,820.0527,835,340.08Repair of utilities, transportation and miscellaneous expenses16,250,836.9119,422,163.38Recruitment and staff training expenses2,548,844.214,669,835.42Others42,693,969.1450,657,546.43Total529,828,311.93397,921,091.17
47. R&D expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Material fee146,857,218.55144,814,730.87Staff salaries207,091,826.90187,188,506.60Shares incentive expenses9,799,989.00175,632.62Testing fee205,299,479.02182,107,386.82Depreciation and amortization67,800,559.3455,398,138.72Others70,584,005.6353,277,992.78Total707,433,078.44622,962,388.41
48. Finance expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Interest expenses60,979,386.6838,708,820.91Interest income-117,501,999.50-78,035,350.84Exchange gains and losses-77,672,355.34-6,123,814.35Bank charges and others3,793,920.493,723,581.51Total-130,401,047.67-41,726,762.77
49. Other income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Related to assets/Related to incomeGovernment grants33,869,358.5224,627,144.39Related to assetsGovernment grants60,315,844.07104,833,852.88Related to incomeHandling fees for tax withholding3,025,074.111,994,381.60Tax refund on super-deduction31,977.330.00Total97,242,254.03131,455,378.87Other descriptions:
For specific information on government grants, please refer to Note V. 62. Government grants for details.
50. Investment income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious PeriodInvestment income from financial assets held for trading during the holdingperiod
306,527.5675,810.76Investment income from disposal of financial assets held for trading-3,456,991.5622,232,401.40Dividend income from other equity instrument investments8,713,730.7412,328,961.74Long-term equity investments income under equity method41,208,487.809,750,424.27Investment income from disposal of long-term equity investments4,242,404.462,423,029.20Total51,014,159.0046,810,627.37
51. Gains from changes in fair value
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Sources of gains from changes in fair valueFor the Period
For thePrevious Period
Financial assets held for trading-89,596,630.7233,851,438.22Including: Debt instruments investment13,515.9517,055.84 Equity instruments investment-80,056,904.1843,142,356.83 Derivative financial assets-9,553,242.49-9,307,974.45Financial liabilities held for trading-5,882,906.43-534,891.07Including: Derivative financial liabilities-5,882,906.43-534,891.07Total-95,479,537.1533,316,547.15
lnterim Report 2022
52. Credit impairment loss
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious PeriodBad debts of notes receivable0.000.00Bad debts of accounts receivable-933,002.92-8,839,388.74Bad debts of other receivables-1,872,437.91-645,906.93Total-2,805,440.83-9,485,295.67
53. Asset impairment losses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious PeriodI. Losses on bad debts0.000.00II. Losses on decline in value of inventories and on impairment of contractperformance costs
-27,834,495.93-28,787,578.96III. Losses on impairment of long-term equity investments0.000.00IV. Losses on impairment of property0.000.00V. Losses on impairment of fixed assets0.00-90,481.03VI. Losses on impairment of project materials0.000.00VII. Losses on impairment of construction in progress0.000.00VIII. Losses on impairment of bearer biological assets0.000.00IX. Losses on impairment on oil and gas assets0.000.00X. Losses on impairment of intangible assets0.000.00XI. Losses on impairment of goodwill0.000.00XII. Others0.000.00Total-27,834,495.93-28,878,059.99
54. Gains on disposal of assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious PeriodGain from disposal of fixed assets (“-” for Loss)-510,518.91664,575.34Gain from disposal of intangible assets (“-” for Loss)0.0017,263,196.60Total-510,518.9117,927,771.94
55. Non-operating income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Amount included
in non-recurringgains and lossesGain from retirement of non-current assets774,200.18662,808.97774,200.18Including: Gain from disposal of fixed assets774,200.18662,808.97774,200.18Income from scraps1,368,658.801,887,207.651,368,658.80Waiver of payables651,801.74390,917.12651,801.74Compensation income122,240.5352,270.26122,240.53Others1,554,013.631,648,160.711,554,013.63Total4,470,914.884,641,364.714,470,914.88Government grants included in current profit or loss
□ Applicable
√ N/A
56. Non-operating expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Amount included
in non-recurringgains and losses
Loss on retirement of non-current assets2,249,701.492,965,842.312,249,701.49Including: Loss from disposal of fixed assets2,249,701.492,965,842.312,249,701.49Donation expenses3,675,341.692,336,297.533,675,341.69Others816,563.67737,831.60816,563.67Total6,741,606.856,039,971.446,741,606.85
57. Income tax expenses
(1) Table of income tax expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Current income tax357,374,828.74210,262,491.71Deferred income tax-86,199,499.1934,303,242.59Total271,175,329.55244,565,734.30
lnterim Report 2022
(2) Reconciliation between income tax expenses and accounting profits
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the PeriodProfit before tax1,816,355,537.13Income tax expenses calculated at statutory (or applicable) tax rates454,088,884.28Impact from tax preferential rate in certain subsidiaries7,080,084.10Effect of tax reduction and exemption-265,360,638.45Effect of non-deductible costs, expenses and losses2,596,350.93Effect of deductible tax losses for which no deferred tax assets were recognised in prior periods-661,040.08Effect of deductible tax losses or deductible temporary differences for which no deferred tax assetwas recognised in the current period
76,086,577.35Others-2,654,888.58Income tax expenses271,175,329.55Other descriptions:
□ Applicable
√ N/A
58. Notes to cash flows statement
(1) Other cash received relating to operating activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious PeriodGovernment grants135,472,208.17142,823,778.95Interest income99,798,243.5877,872,010.67Security deposits18,200,506.4026,683,882.26Current accounts and others66,595,926.7236,792,767.22Total320,066,884.87284,172,439.10
(2) Other cash paid relating to operating activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Business promotion expenses2,410,016,519.702,370,624,490.78Research and development expenses314,240,104.94388,887,165.89Bank charges3,538,284.903,723,581.51Letter of credit and bank acceptance bill deposit, etc.1,164,843.9213,196,993.75Current accounts and others10,960,309.5228,848,576.74Other expenses paid279,038,419.08345,181,558.78Total3,018,958,482.063,150,462,367.45
(3) Other cash received relating to investing activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Tiantong Securities bankruptcy distribution158,470.770.00Security deposits6,825,715.7813,359,977.34Compensation for demolition6,000,000.000.00Others0.001,600.00Total12,984,186.5513,361,577.34
(4) Other cash paid relating to investing activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious PeriodSecurity deposits5,303,620.21165,000.00Foreign exchange forward contract losses10,091,161.611,397,587.39Others150.003,658.70Total15,394,931.821,566,246.09
(5) Other cash received relating to financing activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Collection and advance payment of individual income tax3,124,846.382,809,612.35Total3,124,846.382,809,612.35
(6) Other cash paid relating to financing activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Repurchase of shares520,433,907.64396,161,155.31Capital reduction in minority interests in subsidiary0.00324,225,000.00Rent16,902,285.660.00Collection and advance payment of individual income tax1,237,210.802,531,100.50Total538,573,404.10722,917,255.81
lnterim Report 2022
59. Supplemental to cash flow statement
(1) Supplemental to cash flow statement
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Supplemental informationFor the Period
For thePrevious Period
1. Reconciliation of net profit to cash flow from operating activities:
Net profit1,545,180,207.581,468,097,601.70Add: Assets impairment loss27,834,495.9328,878,059.99Credit impairment loss2,805,440.839,485,295.67Depreciation of fixed assets297,357,229.58270,738,090.75Amortization of right-of-use assets16,158,894.050.00Amortization of intangible assets29,104,955.6526,718,305.93Long-term prepaid expenses amortization24,818,590.3721,713,671.84Losses on disposal of fixed assets, intangible assets and other long-termassets (Gain as in“-”)
510,518.91-17,927,771.94Loss on retirement of fixed assets (Gain as in“-”)1,475,501.312,303,033.34Losses on changes in fair value (Gain as in“-”)95,479,537.15-33,316,547.15Financial expenses (Gain as in“-”)4,262,214.3843,511,052.15Investment losses (Gain as in“-”)-51,014,159.00-46,810,627.37Decrease in deferred tax assets (Increase as in“-”)-84,323,187.1519,964,526.43Increase in deferred tax liabilities (Decrease as in“-”)-1,876,312.045,245,308.28Decrease in inventories (Increase as in“-”)-201,059,238.14-73,016,408.46Decrease in operating receivables (Increase as in“-”)559,085,768.30-1,194,193,008.38Increase in operating payables (Decrease as in“-”)-393,594,247.88209,621,503.66Others30,747,014.964,775,426.92Net cash flows from operating activities1,902,953,224.79745,787,513.36
2. Significant investment or finance activities not involving cash:
Conversion of debt into capital0.000.00Convertible bonds mature within one year0.000.00Fixed assets acquired under finance leases0.000.00
3. Net increase/(decrease) in cash and cash equivalents:
Cash and bank balance as at end of period12,615,780,742.3210,192,939,435.47Less: cash and bank balance at beginning of period11,697,518,141.1812,122,781,311.49Add: cash equivalents at end of period0.000.00Less: cash equivalents at beginning of period0.000.00Net increase in cash and cash equivalents918,262,601.14-1,929,841,876.02
(2) Net cash paid for acquisition of subsidiaries during the period
□ Applicable
√ N/A
(3). Net cash received from disposal of subsidiaries during the period
□ Applicable
√ N/A
(4). Details of cash and cash equivalents
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at theBeginning of
the Period
I. Cash12,615,780,742.3211,697,518,141.18Including: Cash on hand190,985.30225,179.98Cash at bank readily available for payment12,498,359,889.5511,554,754,721.43Other monetary fund readily available for payment117,229,867.47142,538,239.77II. Cash equivalents0.000.00Including: bonds investment mature within 3 months0.000.00III. Cash and cash equivalents as at closing balance12,615,780,742.3211,697,518,141.18Other descriptions:
√ Applicable □ N/ACash and cash equivalents do not include any cash and cash equivalents that are restricted in use.
60. Ownership or using rights of assets subject to restriction
√ Applicable □ N/A
Item
Carrying value at
period endReason of restrictionOther monetary funds1,151,193.00Security deposits of letters of credit, bank
acceptance bills and forward settlementNotes receivable526,815,981.78Bills pool business, pledge notes receivableTotal527,967,174.78/
lnterim Report 2022
61. Items in foreign currencies
(1). Items in foreign currencies
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance in foreigncurrency at year endConversion rate
Equivalent RMB balance
at year end
Cash and bank balancesIncluding: HKD769,925,909.500.85519658,432,938.55
Euro77,484.747.0084543,044.05USD206,543,479.616.71141,386,195,909.06MOP5,036,397.920.82954,177,692.07JPY97,062,652.000.0491364,769,270.47GBP1,940.108.136515,785.63Accounts receivable––Including: USD93,908,294.246.7114630,256,125.96
Euro207,750.007.008401,455,995.10MOP1,272,858.450.82951,055,836.08Other receivables––Including: USD23,247.316.7114156,022.00
HKD3,318,534.670.855192,837,977.66MOP581,188.000.8295482,095.45Accounts payable––Including: USD408,078.536.71142,738,778.25
Euro5,665.417.008439,705.46JPY123,464,265.530.0491366,066,540.15Other payables––Including: HKD1,387,073.220.855191,186,211.15
USD4,551,101.166.711430,544,260.33
(2). Descriptions of overseas operating entities, including disclosure of the main overseas
Business locations, functional currency and the basis for selection of important overseas operating entities, and the reasonsfor changes in functional currency (if any)
□ Applicable
√ N/A
62. Government grants
(1) Basic information of government grants
√ Applicable □ N/A
Unit: Yuan Currency: RMB
CategoryAmountLine item
Amount includedin profit or loss forthe current period
Related to assets33,869,358.52Other income33,869,358.52Related to income60,315,844.07Other income60,315,844.07
(2) Return of government grants
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemsAmountReasonsResearch and development funds for new drug for Class I Treatmentof humanized anti-TNF –α monoclonal antibody (I类治疗用人源化抗人肿瘤坏死因子α单克隆抗体新药研制资金)
2,076,000.00Remaining funds returned
in project settlementOther descriptions
(1). Government grants recorded as deferred income and measured at gross amount method subsequently
Projects with grantsCategory
Beginning
balanceAdditions inthe period
Transfer toprofit or loss
Othermovement
ClosingbalanceItem presentedin incomestatement
Related toassets/Related toincome
Research and development funds for new drug for Class ITreatment of Necrosis Factor in Human Tumour from HumanSource (I 类治疗用人源化抗人肿瘤坏死因子α 单克隆抗体新药研制资金)
Financial allocation8,000,000.000.005,924,000.002,076,000.000.00Other incomeRelated to
incomeInnovation capacity building of technology center (antibodylaboratory) (技术中心创新能力建设(抗体药物实验室))
Financial allocation166,439.460.0037,665.180.00128,774.28Other incomeRelated to
incomeScientific technology award and subsidy for technologicalinnovative project (科学技术奖及科技创新项目资助)
Financial allocation2,200,000.000.000.000.002,200,000.00Other incomeRelated to
incomeZhuhai industrial enterprise“cloud and platform”service couponssupporting funds (珠海市工业企业“云上平台”服务券支持资金)
Financial allocation89,431.860.0012,770.430.0076,661.43Other incomeRelated to
incomeChina Postdoctoral Science Foundation subsidy funds (中国博士后科学基金会资助经费)
Financial allocation80,000.000.000.000.0080,000.00Other incomeRelated to
incomeStructure-efficiency optimization of marine microorganisms andevaluation of antitumor activity (海洋微生物构效优化与抗肿瘤活性评价)
Financial allocation312,366.270.00216,622.020.0095,744.25Other incomeRelated to
incomeLaboratory project of respiratory system inhalation preparationengineering laboratory project (呼吸系统吸入制剂工程实验室项目)
Financial allocation3,501,550.000.00808,050.000.002,693,500.00Other incomeRelated to assetsConstruction of a recycling production base for carbapenemproducts (碳青霉烯类系列产品循环化生产基地建设)
Financial allocation3,625,000.000.000.000.003,625,000.00Other incomeRelated to assetsConstruction of an integrated production line for fully automaticblister-type dry powder inhalant micro-filling and winding (全自动泡罩型干粉吸入剂微量灌封与卷绕一体化生产线建设)
Financial allocation927,666.660.00121,000.020.00806,666.64Other incomeRelated to assetsChange in National Science and Technology Major Project*Research funding for lipid injection * Baiyunshan Hanfangtransfer (国家重大专项项目变更*注射脂质研究经费*白云山汉方转入)
Financial allocation150,000.000.00150,000.000.000.00Other incomeRelated to assetsResearch on common key technologies for the large-scaledevelopment of new inhalation preparations (新型吸入制剂规模化发展共性关键技术研究)
Financial allocation365,700.000.000.000.00365,700.00Other incomeRelated to assetsLarge-scale development subsidy for new inhalation preparations(新型吸入制剂规模化发展补助)
Financial allocation2,262,600.000.000.000.002,262,600.00Other incomeRelated to assetsProject Subsidy of Marine mollusk kinetic protein (海洋软体动物动能蛋白项目补助)
Financial allocation23,840,000.000.000.000.0023,840,000.00Other incomeRelated to assetsNew inhalation drug formulation creation project (新型吸入给药制剂创制项目)
Financial allocation67,248,400.006,349,500.000.000.0073,597,900.00Other incomeRelated to assetsZhimu total sapogenin project (知母总皂甙元项目)Financial allocation8,900,000.000.000.000.008,900,000.00Other incomeRelated to assetsGlucocorticoid inhalation suspension project (糖皮质混悬液项目)
Financial allocation3,600,000.004,000,000.000.000.007,600,000.00Other incomeRelated to assetsFinancial appropriations for small molecule peptide projects (收Financial allocation 用于小分子肽项目)
Financial allocation319,999.800.0040,000.020.00279,999.78Other incomeRelated to assetsRadix Rhapontici total sterone project (漏芦总甾酮项目)Financial allocation2,500,000.000.000.000.002,500,000.00Other incomeRelated to assets
lnterim Report 2022
Projects with grantsCategory
BeginningbalanceAdditions inthe period
Transfer toprofit or loss
Othermovement
ClosingbalanceItem presentedin incomestatement
Related toassets/Related toincome
R&D of active substances with bone and joint repair and healthcare functions (具有骨关节修复与保健功能的活性物质研发)
Financial allocation957,649.920.0059,853.120.00897,796.80Other incomeRelated to assetsKey technology research and development of budesonidenebulized inhalation solution (布地奈德雾化吸入溶液关键技术研发)
Financial allocation2,508,333.330.00175,000.020.002,333,333.31Other incomeRelated to assetsReturn of land holding tax (土地使用税返还)Financial allocation3,567,661.420.00703,111.260.002,864,550.16Other incomeRelated to assetsSubsidies for the development of pharmaceutical APIs industry(医药原料药行业发展支持资金补助)
Financial allocation40,741,354.940.000.000.0040,741,354.94Other incomeRelated to assetsReceiving Innovation Coupon (Jingjin Filter Press Equipment) (收创新券(景津压滤设备))
Financial allocation233,332.790.000.000.00233,332.79Other incomeRelated to assetsXinxiang High-tech Project Fund Support (新乡高新技术项目资金扶持)
Financial allocation1,861,111.080.0028,198.680.001,832,912.40Other incomeRelated to assetsResearch on Common Co-construction Technology ofPharmaceutical Inhalation Preparations (开发区财政局拔款创业领军人才项目:药品吸入制剂共性共建技术的研究)
Financial allocation2,800,000.000.000.000.002,800,000.00Other incomeRelated to assetsResearch and development of respiratory system drug andclinical research technology service platform project talentfunding (呼吸系统药物研发和临床研究技术服务平台项目人才经费)
Financial allocation1,500,000.000.000.000.001,500,000.00Other incomeRelated to assetsScience and technology help the economy key special projects(科技助力经济重点专项)
Financial allocation500,000.000.000.000.00500,000.00Other incomeRelated to assetsCity Service Development Special (市服务发展专项)Financial allocation800,000.000.000.000.00800,000.00Other incomeRelated to assetsPatent funding (专利资助)Financial allocation200,000.000.000.000.00200,000.00Other incomeRelated to assets2020 Shanghai Professional Technology Platform CapacityEnhancement Project (2020 年度上海市专业技术平台能力提升项目立项)
Financial allocation1,000,000.000.000.000.001,000,000.00Other incomeRelated to assetsHigh-growth small and micro innovation enterprises (高成长小微科创企业)
Financial allocation400,000.000.000.000.00400,000.00Other incomeRelated to assetsResearch and development subsidy forω-3-Fish Oil Medium andLong Chain Fat Emulsion Injection (ω-3 鱼油中/长链脂肪乳注射液研究开发补助)
Financial allocation350,000.000.00350,000.000.000.00Other incomeRelated to assetsR&D and industrialization of innovative Ilaprazole Series (艾普拉唑系列创新药物研发及产业化)
Financial allocation16,078,166.250.002,455,000.320.0013,623,165.93Other incomeRelated to assetsFund for industrialization of prolonged-action microspherepreparation (长效微球制剂的产业化款项)
Financial allocation12,550,000.000.000.000.0012,550,000.00Other incomeRelated to assetsConstruction project for industrialization of prolonged-actionmicrosphere preparation (phase I) (长效微球制剂产业化建设项目(一期工程))
Financial allocation20,719,505.480.001,202,654.940.0019,516,850.54Other incomeRelated to assetsProject subsidy from the Ministry of Industry and InformationTechnology (工业和信息化部项目补助款)
Financial allocation2,400,000.000.000.000.002,400,000.00Other incomeRelated to assetsProject subsidy from the Ministry of Industry and InformationTechnology (工业和信息化部项目补助款)
Financial allocation1,366,750.000.00115,500.000.001,251,250.00Other incomeRelated to assetsConstruction of Drug Conformity Evaluation Research CenterPlatform (药物一致性评价研究中心平台建设)
Financial allocation1,040,000.140.0079,999.980.00960,000.16Other incomeRelated to assetsR&D and Commercialisation of Mouse Nerve Growth Factor forInjection (注射用鼠神经生长因子研发及产业化)
Financial allocation40,045,946.930.005,280,044.640.0034,765,902.29Other incomeRelated to assetsDemonstration project on the application of solar photovoltaicarchitecture (太阳能光电建筑应用示范项目)
Financial allocation2,455,499.430.00551,000.040.001,904,499.39Other incomeRelated to assetsSubsidy for the Tender of Technology Upgrade Project for PVCSoft Bag Supported by Provincial Finance Departments (省财政支持技改招标项目补助金 PVC 软袋)
Financial allocation2,703,484.560.00204,182.880.002,499,301.68Other incomeRelated to assetsTechnical transformation project of Shenqi Fuzheng Injectionwith flexible bag (软袋(参芪扶正注射液)技改项目)
Financial allocation15,676,470.620.001,911,764.700.0013,764,705.92Other incomeRelated to assetsProvision for technology transformation funds and subsequentgrants (技术改造资金拨款及事后补奖)
Financial allocation5,459,555.720.00564,781.680.004,894,774.04Other incomeRelated to assets
Projects with grantsCategory
Beginningbalance
Additions inthe period
Transfer toprofit or loss
Othermovement
Closingbalance
Item presentedin incomestatement
Related toassets/Related toincomeProvision for technology transformation funds and subsequentgrants (技术改造资金拨款及事后补奖)
Financial allocation7,359,670.810.00891,684.240.006,467,986.57Other incomeRelated to assetsElectricity distribution transformer performance enhancement forenergy-saving and emission reduction projects ((节能减排项目))配电变压器能效提升)
Financial allocation380,000.000.0024,000.000.00356,000.00Other incomeRelated to assetsR&D and industrialization team of chemical drug liquidpreparation (化药液体制剂研发与产业化团队)
Financial allocation1,534,833.44234,000.0028,999.920.001,739,833.52Other incomeRelated to assetsInnovation capacity building of technology center (antibodylaboratory) (技术中心创新能力建设(抗体药物实验室))
Financial allocation4,802,478.800.00222,877.680.004,579,601.12Other incomeRelated to assetsAchievement transfer of blood screening (BCI) nucleic aciddetection testing (血液筛查(BCI)核酸检测试剂成果转化)
Financial allocation3,961,282.440.000.000.003,961,282.44Other incomeRelated to assetsTechnological upgrading and transformation projects ofworkshop for acarbose (APIs forα-glucosidase inhibitor) (α-葡萄糖苷酶抑制剂类原料药阿卡波糖生产车间工艺升级技术改造项目)
Financial allocation464,285.800.0053,571.420.00410,714.38Other incomeRelated to assetsR&D and industrialization of Statins (降血脂他汀类药物的研发与产业化)
Financial allocation30,000.480.0014,999.940.0015,000.54Other incomeRelated to assetsScientific technology award and subsidy for technologicalinnovative project (科学技术奖及科技创新项目资助)
Financial allocation28,566.200.0028,566.200.000.00Other incomeRelated to assetsCommissioner workstation (特派员工作站)Financial allocation85,000.000.0030,000.000.0055,000.00Other incomeRelated to assetsIndustrial revitalisation supporting funds (产业振兴扶持资金)Financial allocation2,445,500.010.00579,000.000.001,866,500.01Other incomeRelated to assetsPhase IV clinical study of innovative drug Ilaprazole (创新药物艾普拉唑 IV 期临床研究)
Financial allocation8,210,800.000.008,210,800.000.000.00Other incomeRelated to assetsGovernment grant for industrial transformation (工业转型政府扶持资金)
Financial allocation308,333.750.0099,999.960.00208,333.79Other incomeRelated to assetsNew industrialization development grant (新型工业化发展奖金)Financial allocation3,584,066.380.00175,000.020.003,409,066.36Other incomeRelated to assetsPolicy fund for leading industrial enterprises loan Interests (工业龙头企业贷款贴息政策资金)
Financial allocation366,666.570.00100,000.020.00266,666.55Other incomeRelated to assetsSupporting funds for five advantageous industrial clusters andone high-tech industry (五优一新扶持资金)
Financial allocation300,000.200.0049,999.980.00250,000.22Other incomeRelated to assetsCapital project for innovation and entrepreneurship teamfunding program (创新创业团队资助计划资金项目)
Financial allocation12,500,000.000.000.000.0012,500,000.00Other incomeRelated to assets2020 Zhuhai City Innovation and Entrepreneurship Team(Nanocrystalline) (2020 年度珠海市创新创业团队(纳米晶))
Financial allocation1,500,000.000.000.000.001,500,000.00Other incomeRelated to assetsFund for R&D and industrialization of innovative Ilaprazole series(R&D and industrialization of innovative Ilaprazole Series (艾普拉唑系列创新药物研发及产业化))项目资金)
Financial allocation5,600,000.000.005,600,000.000.000.00Other incomeRelated to assetsKey projects of industrial core and key technologies of Zhuhai(Ryanodex) (珠海市产业核心和关键技术攻关方向项目(丹曲林钠))
Financial allocation3,000,000.000.000.000.003,000,000.00Other incomeRelated to assetsData-driven industrial chain collaboration platformdemonstration project (数据驱动的产业链协同平台示范项目)
Financial allocation3,650,000.000.00365,000.000.003,285,000.00Other incomeRelated to assetsFund for key projects of industrial core and key technologies ofZhuhai (2nd batch) (珠海市产业核心和关键技术攻关方向项目资金(第二批))
Financial allocation2,000,000.000.000.000.002,000,000.00Other incomeRelated to assetsInnovative drug of Ilaprazole sodium for injection (创新药注射用艾普拉唑钠针剂)
Financial allocation2,400,000.000.000.000.002,400,000.00Other incomeRelated to assetsTechnological transformation projects of new Cefuroxime (新型头孢粉针剂技术改造项目)
Financial allocation1,533,100.000.000.000.001,533,100.00Other incomeRelated to assetsAdvanced Pharmaceutical Manufacturing Internet BenchmarkingProject (先进药品制造互联网标杆项目)
Financial allocation675,000.000.0045,000.000.00630,000.00Other incomeRelated to assetsCleaner Production Audit Project (清洁生产审核项目)Financial allocation180,000.080.004,999.980.00175,000.10Other incomeRelated to assetsGreen factory (绿色工厂)Financial allocation1,131,666.710.0064,999.980.001,066,666.73Other incomeRelated to assetsHCG project construction (HCG 项目建设)Financial allocation3,387,835.840.00197,824.980.003,190,010.86Other incomeRelated to assetsSewage treatment system upgrade project (污水处理系统升级改造项目)
Financial allocation64,239.920.004,015.020.0060,224.90Other incomeRelated to assets
lnterim Report 2022
Projects with grantsCategory
Beginning
balance
Additions inthe period
Transfer toprofit or loss
Othermovement
ClosingbalanceItem presentedin incomestatement
Related toassets/Related toincomeR&D and industrialization of Recombinant Human ChorionicGonadotropin for Injection (注射用重组人绒促性素研发及产业化)
Financial allocation1,137,500.000.0075,000.000.001,062,500.00Other incomeRelated to assetsSubsidies for online monitoring equipment and installations ofcoalfired boilers (燃煤锅炉在线监控设备装置补助)资金)
Financial allocation82,500.000.0011,250.000.0071,250.00Other incomeRelated to assetsFunds for joint R&D and industrialization of integrated platformfor molecular diagnostics (集成一体化分子诊断平台的合作研发及产业化)资金)
Financial allocation181,632.120.000.000.00181,632.12Other incomeRelated to assetsProject supporting fund for the first batch of special funds forscientific and technological innovation in 2019 (2019 年度第一批科技创新专项资金立项配套资助)
Financial allocation600,000.000.000.000.00600,000.00Other incomeRelated to assetsProvincial industrial innovation (provincial enterprise technologycenter) project in 2019 (2019 年度省产业创新(省级企业技术中心)项目)
Financial allocation1,046,533.330.000.000.001,046,533.33Other incomeRelated to assetsPre-appropriation of special grants for industrialization ofdiagnostic reagents for COVID-19 (新型冠状病毒检测试剂产业化项目补助金预拨)
Financial allocation4,116,415.650.000.000.004,116,415.65Other incomeRelated to assetsXiangzhou District equipment purchase subsidy supportingfunds ((香洲区采购设备补贴扶持资金(疫情防控专项资金)
Financial allocation11,467.250.000.000.0011,467.25Other incomeRelated to assetsZhuhai innovation and enterprising team and high-level talententerprising project Phase I funds (珠海市创新创业团队和高层次人才创业项目首期资金)
Financial allocation12,000,000.000.000.000.0012,000,000.00Other incomeRelated to assetsDevelopment and Industrialization of Cyclosporine Self-Emulsifying Soft Capsule Formulation with High Technology (高技术屏障的环孢素自乳化软胶囊制剂的开发及产业化研究)
Financial allocation0.00240,000.002,000.000.00238,000.00Other incomeRelated to assetsGuangdong Provincial Key Laboratory of Characteristic DrugResearch and Development Enterprises (广东省特色药物研发企业重点实验室)
Financial allocation0.001,000,000.008,333.330.00991,666.67Other incomeRelated to assetsOverall relocation and deployment expansion project (整体搬迁调迁扩建项目)
Financial allocation20,000,000.0030,000,000.000.000.0050,000,000.00Other incomeRelated to assets2022 Special funds for the reconstruction of the industrial base ofthe central government and the high-quality development of themanufacturing industry (2022 年中央财政产业基础再造和制造业高质量发展专项资金)
Financial allocation0.0032,740,000.000.000.0032,740,000.00Other incomeRelated to assetsSubsidy Fund LZM009 for National Science and Technology MajorSpecial Projects (国家科技重大专项项目后补助资金 LZM009)
Financial allocation0.004,744,900.002,171,293.530.002,573,606.47Other incomeRelated to assetsXiangzhou District actively responds to the impact of theepidemic and stabilizes the innovation-driven technologyindustry sub-item (香洲区积极应对和疫情影响保稳创新驱动科技工业分项)
Financial allocation0.001,644,800.000.000.001,644,800.00Other incomeRelated to assetsEnvironmental protection bureau RTO project special funds (环保局 RTO 项目资金)
Financial allocation179,999.960.0010,000.020.00169,999.94Other incomeRelated to assetsStrategic emerging industries in 2014 (sustained releasemicrospheres) (2014 年战略性新兴产业(缓释微球))
Financial allocation16,700,000.000.000.000.0016,700,000.00Other incomeRelated to assetsTotal433,543,352.4080,953,200.0040,060,416.152,076,000.00472,360,136.25
(2) Government grants recognized in income for the period by gross method
Projects with grantsCategory
Amountrecognised inprofit or lossin prior period
Amountrecognised inprofit or lossin the period
Presented in incomestatement
Related to assets/Related to income
Social security subsidy (社保补助)Financial allocation61,986.600.00Other incomeRelated to incomePatent grant (专利补助)Financial allocation10,000.002,500.00Other incomeRelated to incomeJob stabilization subsidyFinancial allocation23,920.00577,232.17Other incomeRelated to incomeOthersFinancial allocation124,712.032,600.00Other incomeRelated to incomeMaternity benefits (生育津贴)Financial allocation222,116.49278,357.04Other incomeRelated to incomeIntellectual Property Rights ProtectionFunding (知识产权维权资助)
Financial allocation0.0058,000.00Other incomeRelated to incomeTalent quality improvement project (人才素质提升工程项目款)
Financial allocation0.00100,000.00Other incomeRelated to incomeNanshan Bole Award (南山伯乐奖)Financial allocation0.0020,000.00Other incomeRelated to incomePay the 2021 talent housing subsidy –the remaining RMB20,000 subsidize thecompany (支付21年人才住房补贴－余下两万补贴公司)
Financial allocation0.002,000.00Other incomeRelated to income
BISFinancial allocation0.00175,000.02Other incomeRelated to assets2022 High-tech Enterprise CultivationFunding (2022年高新技术企业培育资助)
Financial allocation0.00500,000.00Other incomeRelated to incomeWater Saving Carrier Incentive Fund (节水载体奖励资金)
Financial allocation0.00153,203.50Other incomeRelated to income2022 Industrial“Carbon Peak” Subsidy (2022年工业“碳达峰”补贴)
Financial allocation0.00100,000.00Other incomeRelated to incomeMarine small molecule peptide beautymoisturizing health drink project (海洋小分子肽美容补水保健饮料项目)
Financial allocation40,000.0240,000.02Other incomeRelated to assetsDomestic patent annual fee incentive (国内专利年费奖励)
Financial allocation2,500.000.00Other incomeRelated to incomeShenzhen Economic and Trade BureauElectricity Cost Reduction Subsidy (深圳经贸局用电降成本补助)
Financial allocation387,715.440.00Other incomeRelated to incomeEnterprise R&D investment plan (企业研发投入计划)
Financial allocation1,000,000.000.00Other incomeRelated to incomeBone and joint repair and health care (骨关节修复与保健)
Financial allocation59,853.1259,853.12Other incomeRelated to assetsAmortization of special funds forengineering laboratories (工程实验室专项资金项目摊销)
Financial allocation0.00808,050.00Other incomeRelated to assetsAmortization of special funds for powderspray production line (粉雾生产线专项资金项目摊销)
Financial allocation0.00121,000.02Other incomeRelated to assets2022 High-tech Enterprise CultivationFunding (2022 年高新技术企业培育资助)
Financial allocation0.00500,000.00Other incomeRelated to incomeIndustrial Development Fund (GreenFactory) Project Funding (产业发展资金(绿色工厂)项目资助经费)
Financial allocation0.00200,000.00Other incomeRelated to income
lnterim Report 2022
Projects with grantsCategory
Amountrecognised inprofit or lossin prior period
Amountrecognised inprofit or lossin the period
Presented in incomestatement
Related to assets/Related to income
Industrial Development Fund EnergyManagement System Certification Subsidy(产业发发展资金能源管理体系认证资助)
Financial allocation0.0014,000.00Other incomeRelated to incomeInsurance premium subsidy for export fromJuly to December 2020 (2020 年 07-12 月出口用保险保费资助款)
Financial allocation0.00259,097.00Other incomeRelated to incomeExpansion and improve efficiency (扩产增效)
Financial allocation0.00620,000.00Other incomeRelated to incomeProduction line project funding (生产线项目资助)
Financial allocation0.002,045,300.00Other incomeRelated to incomeProject funding for enterprises that meetthe standards for value-added growth (增加值增速达标企业项目资助)
Financial allocation0.001,145,100.00Other incomeRelated to incomeInsurance premium subsidy for export (出口用保险保费资助款)
Financial allocation0.00110,000.00Other incomeRelated to incomeMajor special project injection lipid researchfunding (重大专项项目注射脂质研究经费)
Financial allocation0.00500,000.00Other incomeRelated to assetsChina Patent Award Supporting Award (中国专利奖配套奖)
Financial allocation0.00200,000.00Other incomeRelated to income“Carbon Peak”work pilot demonstrationproject funding (“碳达峰”工作试点示范项目资助款)
Financial allocation0.00500,000.00Other incomeRelated to incomeElectricity Subsidy (用电补贴)Financial allocation793,292.78625.38Other incomeRelated to incomeInsurance premium subsidy for export (出口用保险保费资助款)
Financial allocation347,965.000.00Other incomeRelated to income2020 Yantian District Enterprise Trial Post(Training Subsidy) Batch 9 (2020 年盐田区企业试岗(培训补贴)第 9 批次)
Financial allocation153,240.000.00Other incomeRelated to incomeThe first batch of funding support for thedevelopment of science and technologyindustries in 2021 (2021 年第一批科技类产业发展资金扶持资助)
Financial allocation200,000.000.00Other incomeRelated to income
One-time employment subsidy (一次性吸纳就业)补贴
Financial allocation62,400.000.00Other incomeRelated to incomeCorporate research and developmentfunding (企业研究开发资助)
Financial allocation871,000.000.00Other incomeRelated to incomeIndustrial added value growth ratecompliance projects (工业增加值增速达标项目)
Financial allocation2,880,000.000.00Other incomeRelated to income2021 Project investment in weak links in theindustrial chain (2021 年产业链薄弱环节投资项目)
Financial allocation3,000,000.000.00Other incomeRelated to incomeShenzhen New Inhalant EngineeringLaboratory Subsidy (深圳新型吸入剂工程实验室补助)
Financial allocation538,700.000.00Other incomeRelated to assets
Projects with grantsCategory
Amountrecognised inprofit or lossin prior period
Amountrecognised inprofit or lossin the period
Presented in incomestatement
Related to assets/Related to income2020 Enterprise R&D Financial SubsidySpecial Subsidy Fund District MatchingFund (2020 年企业研发财政补助专项补助资金区配套资金)
Financial allocation0.001,400,000.00Other incomeRelated to income
Export Credit Insurance (出口信保费)Financial allocation0.00651,400.00Other incomeRelated to incomeSupport enterprise development funds (扶持企业发展资金)
Financial allocation0.001,503,000.00Other incomeRelated to incomeReturn of land holding taxFinancial allocation53,514.87703,111.26Other incomeRelated to assetsConstruction of 500 cubic meters/daywastewater membrane concentrationsystem (建设 500 立方米/日废水膜浓缩系统)
Financial allocation9,708.660.00Other incomeRelated to assets
Subsidy funds allocated by the Bureau ofFinance (财政局拨付补助资金)
Financial allocation649,596.470.00Other incomeRelated to assetsEnterprise R&D Subsidy Fund (企业研发补助资金)
Financial allocation720,000.000.00Other incomeRelated to income2019 SME subsidies (2019 中小开补贴)Financial allocation107,500.000.00Other incomeRelated to incomeExport credit insurance subsidy in thesecond half of 2019 (2019 年下半年(出口信保补贴)资金)
Financial allocation304,900.000.00Other incomeRelated to incomeSubsidies for work-based training (以工代训补贴)
Financial allocation77,547.170.00Other incomeRelated to incomeAdvanced Group and Advanced IndividualSubsidy in 2020 (2020 年度先进集团和先进个人补助)
Financial allocation20,000.000.00Other incomeRelated to incomeRecruitment of social insurance subsidies fornon-employment difficulties in the fourthquarter of 2021 (2021 年第 4 季度招用非就业困难社会保险补贴)
Financial allocation0.0070,242.16Other incomeRelated to incomeRecruitment of social insurance subsidiesfor non-employment difficulties in the firstquarter of 2022 (2022 年第 1 季度招用非就业困难社会保险补贴)
Financial allocation0.0060,501.27Other incomeRelated to income
One-time job retention allowance (一次性留工补助)
Financial allocation0.0025,750.00Other incomeRelated to incomeUnemployment benefits in Guangzhou (广州市失业待遇)
Financial allocation0.0035,942.96Other incomeRelated to incomeSecond tranche of high-level subsidies(40%) in 2019 (2019 年认定高企补贴第二笔(40%))
Financial allocation0.00400,000.00Other incomeRelated to incomeDistrict Innovation Voucher Funding (区创新券资助)
Financial allocation0.0043,400.00Other incomeRelated to incomeInnovative talent support during the“13thFive-Year Plan”period in Pudong NewDistrict (浦东新区“十三五”期间创新型人才扶持)
Financial allocation500,000.000.00Other incomeRelated to income
lnterim Report 2022
Projects with grantsCategory
Amountrecognised inprofit or lossin prior period
Amountrecognised inprofit or lossin the period
Presented in incomestatement
Related to assets/Related to income
One-time job training subsidy (一次性留工培训补助)
Financial allocation0.0029,375.00Other incomeRelated to incomeFunding for pilot demonstration projects ofindustrial carbon peaking work (工业碳达峰工作试点示范项目资助款)
Financial allocation0.00100,000.00Other incomeRelated to incomeSecond batch of special funds for scientificand technological innovation in 2020 (2020年度科技创新专项资金第二批资助)
Financial allocation767,637.000.00Other incomeRelated to incomeOne-time job retention allowance (一次性留工补助)
Financial allocation0.004,000.00Other incomeRelated to incomeLand Support Fund (土地扶持资金)Financial allocation0.0028,198.68Other incomeRelated to assetsWater company refunds differentiatedsewage treatment fee from August toOctober 2021 (水务公司退还 2021 年 8-月-10 月差别化污水处理费)
Financial allocation0.0013,918.10Other incomeRelated to incomeVAT relief for veterans (退役军人减免增值税)
Financial allocation0.0054,750.00Other incomeRelated to income2021 Provincial Special Fund for ForeignEconomic and Trade Development (2021 年度省级外经贸发展专项资金)
Financial allocation0.0020,000.00Other incomeRelated to incomeSpecial funds for corporate R&D financialsubsidies in 2020 (2020 年企业研发财政补助专项资金)
Financial allocation265,000.000.00Other incomeRelated to incomeReturn of land transfer fee (土地出让金返还)
Financial allocation28,198.680.00Other incomeRelated to assetsIncremental value-added tax refund (增值税增量留抵退税)
Financial allocation0.002,781.07Other incomeRelated to incomeExport credit insurance subsidy (出口信保补贴)
Financial allocation258,812.701,110,960.80Other incomeRelated to incomeR&D subsidy (研究开发费补助)Financial allocation2,420,000.00950,440.00Other incomeRelated to incomeResearch and development funds for newdrug for Class I Treatment of Necrosis Factorin Human Tumour from Human Source (I 类治疗用人源化抗人肿瘤坏死因子α 单克隆抗体新药的研制资金)
Financial allocation0.005,924,000.00Other incomeRelated to income
Government Subsidy for Long-actingMicrospheres Major New Drug Creation (长效微球重大新药创制政府补助)
Financial allocation431,665.471,202,654.94Other incomeRelated to assetsR&D and industrialization of innovativeIlaprazole Series (艾普拉唑系列创新药物研发及产业化)
Financial allocation2,455,000.0216,265,800.32Other incomeRelated to assetsConstruction of Drug Conformity EvaluationResearch Center Platform (药物一致性评价研究中心平台建设)
Financial allocation80,000.0079,999.98Other incomeRelated to assetsConformity Evaluation Research of Qualityof Varieties such as Livzon Dele (丽珠得乐等品种质量一致性评价研究)
Financial allocation115,500.00115,500.00Other incomeRelated to assets
Projects with grantsCategory
Amountrecognised inprofit or lossin prior period
Amountrecognised inprofit or lossin the period
Presented in incomestatement
Related to assets/Related to incomeAdvanced Pharmaceutical ManufacturingInternet Benchmarking Project (先进药品制造互联网标杆项目)
Financial allocation45,000.0045,000.00Other incomeRelated to assetsR&D and industrialization of RecombinantHuman Chorionic Gonadotropin forInjection (注射用重组人绒促性素研发及产业化)
Financial allocation75,000.0075,000.00Other incomeRelated to assets
HCG project construction (HCG 项目建设)Financial allocation197,825.00197,824.98Other incomeRelated to assetsFiscal Subsidy and Operating Subsidy (财政补贴及经营运营补贴)
Financial allocation83,032,194.6021,859,039.00Other incomeRelated to incomeR&D and Commercialisation of Mouse NerveGrowth Factor for Injection (注射用鼠神经生长因子研发及产业化)
Financial allocation5,280,044.565,280,044.64Other incomeRelated to assetsProvincial Science and TechnologyInnovation Strategy Special Fund (省科技创新战略专项资金)
Financial allocation444,166.6428,999.92Other incomeRelated to assetsImport interest discount and supportingfunds (进口贴息及配套资金)
Financial allocation0.00211,356.00Other incomeRelated to incomePromoting Imports of Foreign TradeDevelopment Special Fund (外贸经济发展专项资金)
Financial allocation0.001,230,271.00Other incomeRelated to incomeTechnological upgrading andtransformation projects of workshop foracarbose (APIs forα-glucosidase inhibitor)(α-葡萄糖苷酶抑制剂类原料药阿卡波糖生产车间工艺升级技术改造项目)
Financial allocation53,571.4253,571.42Other incomeRelated to assets
Subsidy for the Tender of TechnologyUpgrade Project for PVC Soft Bag Supportedby Provincial Finance Departments (省财政支持技改招标项目补助金 PVC 软袋)
Financial allocation204,182.88204,182.88Other incomeRelated to assets
Technical transformation project of ShenqiFuzheng Injection with flexible bag (软袋(参芪扶正注射液)技改项目)
Financial allocation1,911,764.701,911,764.70Other incomeRelated to assetsDemonstration project on the application ofsolar photovoltaic architecture (太阳能光电建筑应用示范项目)
Financial allocation551,000.02551,000.04Other incomeRelated to assetsSubsidies for high and new technologyenterprises and high and new technologyproducts (高新技术企业及高新技术产品项目补贴)
Financial allocation0.00100,000.00Other incomeRelated to income
Provision for technology transformationfunds and subsequent grants (技术改造资金拨款及事后补奖)
Financial allocation0.003,687,400.00Other incomeRelated to incomeProvision for technology transformationfunds and subsequent grants (技术改造资金拨款及事后补奖)
Financial allocation2,209,246.441,257,556.68Other incomeRelated to assets
lnterim Report 2022
Projects with grantsCategory
Amountrecognised inprofit or lossin prior period
Amountrecognised inprofit or lossin the period
Presented in incomestatement
Related to assets/Related to incomeR&D and industrialization of Statins (降血脂他汀类药物的研发与产业化)
Financial allocation14,999.9414,999.94Other incomeRelated to assetsTechnology transformation of recyclingsystem of Acarbose project (阿卡波糖糖回收系统技术改造项目)
Financial allocation0.00198,909.24Other incomeRelated to assetsCommissioner workstation (特派员工作站)Financial allocation30,000.0030,000.00Other incomeRelated to assetsSpecial Fund and Encouraging funds forEnergy Saving and Emission Reduction (节能减排专项资金及奖励金)
Financial allocation628,000.00150,000.00Other incomeRelated to incomeEnergy-saving and emission reductionprojects (节能减排项目)
Financial allocation43,015.0243,015.02Other incomeRelated to assetsScientific technology award and subsidy fortechnological innovative project (科学技术奖及科技创新项目资助)
Financial allocation1,200,000.001,140,000.00Other incomeRelated to incomeScientific technology award and subsidy fortechnological innovative project (科学技术奖及科技创新项目资助)
Financial allocation305,462.8028,566.20Other incomeRelated to assetsPostdoctoral station establishment andscientific research subsidies (博士后建站和科研补贴)
Financial allocation100,000.000.00Other incomeRelated to incomePatent (Intellectual Property) Support Fund(专利(知识产权)资助资金)
Financial allocation779,370.000.00Other incomeRelated to incomeStructure-efficiency optimization of marinemicroorganisms and evaluation of antitumoractivity (海洋微生物构效优化与抗肿瘤活性评价)
Financial allocation0.00216,622.02Other incomeRelated to income
Policy fund for leading industrial enterprisesloan Interests (工业龙头企业贷款贴息政策资金)
Financial allocation100,000.02100,000.02Other incomeRelated to assetsGovernment grant for industrialtransformation (工业转型政府扶持资金)
Financial allocation99,999.9699,999.96Other incomeRelated to assetsReward Fund for Industry Growth andProduction Expansion (工业保值增长及增产奖励)
Financial allocation0.0042,600.00Other incomeRelated to incomeNew industrialization development funds(新型工业化发展资金)
Financial allocation175,000.02175,000.02Other incomeRelated to assetsIndustrial revitalisation supporting funds (产业振兴扶持资金)
Financial allocation579,000.00579,000.00Other incomeRelated to assetsIndustrial supporting funds (产业扶持资金)Financial allocation143,000.000.00Other incomeRelated to incomeSupporting funds for five advantageousindustrial clusters and one high-techindustry (五优一新扶持资金)
Financial allocation49,999.9849,999.98Other incomeRelated to assetsEmployment Assurance and Re-employment and Attraction to Graduates ofTertiary Academic Institutions Subsidy (企业稳岗及再就业和吸纳高校毕业生补贴款)
Financial allocation769,100.461,690,234.86Other incomeRelated to income
Projects with grantsCategory
Amountrecognised inprofit or lossin prior period
Amountrecognised inprofit or lossin the period
Presented in incomestatement
Related to assets/Related to incomeEnterprise Technology Center InnovationCapacity Development (AntibodyLaboratory) (企业技术中心创新能力建设(抗体药物试验室))
Financial allocation222,877.68222,877.68Other incomeRelated to assets
Enterprise Technology Center InnovationCapacity Development (AntibodyLaboratory) (企业技术中心创新能力建设(抗体药物试验室))
Financial allocation37,665.1837,665.18Other incomeRelated to income
Subsidy for online monitoring equipmentfor coalfired boilers (燃煤锅炉在线监控设备装置补助)
Financial allocation11,250.0011,250.00Other incomeRelated to assetsSpecial funds for key leading enterprises inthe 13th Five-Year Plan (2019) (十三五重点领军企业专项资金(2019 年)
Financial allocation0.005,503,400.00Other incomeRelated to incomeGreen factory (绿色工厂)Financial allocation65,000.0064,999.98Other incomeRelated to assetsSpecial capital replenishment for industrialenterprise Restructuring (工业企业结构调整专项资金)
Financial allocation0.001,000,000.00Other incomeRelated to incomeOthersFinancial allocation29,000.0034,170.43Other incomeRelated to incomeSubsidy for Rental and Property Fee of theInvestment and Promotion Center (投促中心租金及物业费补贴)
Financial allocation67,500.000.00Other incomeRelated to incomeElectricity Incentive Funds (用电奖励资金)Financial allocation301,257.430.00Other incomeRelated to incomeSupporting subsidy for“Talents Plan”
and subsidy for talents introduction andcultivation (“人才计划”配套补贴及引才育才补贴)
Financial allocation150,000.00583,774.23Other incomeRelated to income
Rewards for the integration ofinformatization and industrialization (两化融合奖励)
Financial allocation0.00500,000.00Other incomeRelated to incomeSubsidies for work-based training (以工代训补贴)
Financial allocation23,500.00160,500.00Other incomeRelated to incomeSubsidies for insurance fees (保险费用补贴)Financial allocation0.00144,322.90Other incomeRelated to incomeSpecial Funds for Promoting High-qualityEconomic Development (促进经济高质量发展专项资金)
Financial allocation328,020.000.00Other incomeRelated to incomeGrants to high-growth technologycompanies from Dazhangjiang project A04(大张江项目 A04 对高增长技术企业资助款)
Financial allocation1,500,000.000.00Other incomeRelated to income
Inland Transport Subsidy for ExportEnterprises (出口企业内陆运输补助)
Financial allocation163,000.000.00Other incomeRelated to incomeAchievement transfer of blood screening(BCI) nucleic acid detection testing (血液筛查(BCI)核酸检测试剂成果转化)
Financial allocation6,000,000.000.00Other incomeRelated to assets
lnterim Report 2022
Projects with grantsCategory
Amountrecognised inprofit or lossin prior period
Amountrecognised inprofit or lossin the period
Presented in incomestatement
Related to assets/Related to incomePre-appropriation of special grants forindustrialization of diagnostic reagents forCOVID-19 (新型冠状病毒检测试剂产业化项目补助金预拨)
Financial allocation1,497,000.000.00Other incomeRelated to assets
“Specialized and new” subsidy (“专精特新”补贴)
Financial allocation0.00950,000.00Other incomeRelated to incomeThe Science and Technology Bureau pullsout the second phase of supporting fundsfor the fifth batch of projects in the 2020provincial key field R&D plan (科技局拔2020 年省重点领域研发计划第 5 批项目第二期配套资金)
Financial allocation0.00741,000.00Other incomeRelated to income
Factory rental subsidy in HengqinGuangdong-Macao Deep Cooperation Zone(横琴粤澳深度合作区厂房租金补贴)
Financial allocation0.00345,012.00Other incomeRelated to incomeDevelopment and Industrialization ofCyclosporine Self-Emulsifying Soft CapsuleFormulation with High Technology (高技术屏障的环孢素自乳化软胶囊制剂的开发及产业化研究)
Financial allocation0.002,000.00Other incomeRelated to assets
Guangdong Provincial Key Laboratoryof Characteristic Drug Research andDevelopment Enterprises (广东省特色药物研发企业重点实验室)
Financial allocation0.008,333.33Other incomeRelated to assetsSubsidy Fund LZM009 for National Scienceand Technology Major Special Projects (国家科技重大专项项目后补助资金 LZM009)
Financial allocation0.002,171,293.53Other incomeRelated to assetsData-driven industrial chain collaborationplatform demonstration project (数据驱动的产业链协同平台示范项目)
Financial allocation0.00365,000.00Other incomeRelated to assetsSeveral measures for payment companiesto tide over the difficulties in response tothe new coronavirus pneumonia epidemic-financial support project funds (应对新型冠状病毒肺炎疫情支付企业共渡难关的若干措施-金融支持项目资金)
Financial allocation0.00200,000.00Other incomeRelated to income
Total129,460,997.2794,185,202.59
VI. Change to Consolidation Scope
1. Business combination not involving enterprises under common control
□ Applicable
√ N/A
2. Business combination involving enterprises under common control
□ Applicable
√ N/A
3. Reverse purchase
□ Applicable
√ N/A
4. Disposal of subsidiaries
Was there any circumstance under which a single disposal of the investment in subsidiaries will lose control
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
5. Changes in scope of consolidation due to other reasons
Descriptions of changes in scope of consolidation caused by other reasons (such as establishment of a new subsidiary andliquidation of a subsidiary, etc.) and their relevant information:
√ Applicable □ N/AThe Company’s subsidiary, Livzon Group’s Subsidiaries Livzon Biotechnology Hong Kong Co., Ltd. established LIVZONBIOLOGICS (MALAYSIA) SDN. BHD. on January 12, 2022, with registered capital of Malaysia Ringgit 100, and accounts for itsregistered capital of 100%.
6. Others
□ Applicable
√ N/A
lnterim Report 2022
Vii. Equity in Other Entities
1. Interests in subsidiaries
(1). Group structure
√ Applicable □ N/AName of subsidiary
Main operatinglocation
Place ofregistration
Businessnature
Shareholding %
Acquisition methodDirectIndirectTopsino Industries Limited (Topsino Industries)Hong KongHong KongBusiness1000Set-up by investmentShenzhen Taitai Genomics Inc. Co., Ltd. (TaitaiGenomics)
ShenzhenShenzhenIndustry7525Set-up by investmentShenzhen Taitai Pharmaceutical Industry Co., Ltd.(Taitai Pharmaceutical)
ShenzhenShenzhenIndustry1000Set-up by investmentHealth Investment Holdings Ltd. (Health Investment)The British Virgin
Islands
The British VirginIslands
Investment0100Set-up by investmentJoincare Pharmaceutical Group Industry Co.,Ltd.(BVI)*The British Virgin
Islands
The British VirginIslands
Investment0100Set-up by investmentJoincare Pharmaceutical Group Industry Co.,Ltd.(CAYMAN ISLANDS)
Cayman IslandsCayman IslandsInvestment0100Set-up by investmentXinxiang Haibin Pharmaceutical Co., Ltd.(XinxiangHaibin)
Henan XinxiangHenan XinxiangIndustry0100Set-up by investmentShenzhen Fenglei Electric Power Investment Co., Ltd.(Fenglei Electric Power)
ShenzhenShenzhenInvestment1000Set-up by investmentJiaozuo Joincare Bio Technological Co., Ltd.(JiaozuoJoincare) (Jiaozuo Joincare)
Henan JiaozuoHenan JiaozuoIndustry7525Set-up by investmentShanghai Frontier Health Pharmaceutical TechnologyCo., Ltd.(Shanghai Frontier) *Note 2
ShanghaiShanghaiIndustry650Set-up by investmentShenzhen Taitai Biological Technology Co., Ltd. (TaitaiBiological)
ShenzhenShenzhenIndustry1000Set-up by investmentGuangzhou Joincare Respiratory MedicineEngineering Technology Co., Ltd.(JoincareRespiratory)
GuangzhouGuangzhouIndustry026Set-up by investmentGuangdong Taitai Forenstic Test InstituteShenzhenShenzhenBusiness0100Set-up by investmentJoincare Haibin Pharmaceutical Co., Ltd (JoincareHaibin)
ShenzhenShenzhenIndustry2575Set-up by investmentShenzhen Haibin Pharmaceutical Co., Ltd. (HaibinPharma)
ShenzhenShenzhenIndustry97.872.13Business combination
not under commoncontrolJoincare Daily-Use & Health Care Co., Ltd. (JoincareDaily-Use))
ShenzhenShenzhenBusiness8020Business combination
not under commoncontrolHealth Pharmaceuticals (China) Limited (Health China)ZhuhaiZhuhaiIndustry0100Business combination
not under commoncontrolLivzon Pharmaceutical Group Inc. (Livzon Group)*Note 1 & 2
ZhuhaiZhuhaiIndustry23.6821.12Business combination
not under commoncontrolHong Kong Health Pharmaceutical Industry CompanyLimited
Hong KongHong KongInvestment0100Business combination
not under commoncontrol
Name of subsidiary
Main operatinglocation
Place ofregistration
Businessnature
Shareholding %
Acquisition methodDirectIndirect
Health Pharmaceutical Industry Company LimitedHong KongHong KongInvestment0100Business combination
not under commoncontrolShenzhen Hiyeah Industry Co., Ltd (Hiyeah Industry)ShenzhenShenzhenBusiness97.582.42Business combination
not under commoncontrolGuangzhou Hiyeah Industry Co., Ltd.GuangzhouGuangzhouIndustry0100Business combination
not under commoncontrolZhongshan Renhe Health Products Co., Ltd.ZhongshanZhongshanIndustry0100Business combination
not under commoncontrolShenzhen Jiekang Health Care Co., Ltd.ShenzhenShenzhenIndustry0100Business combination
not under commoncontrolJoincare (Guangdong) Special medicine Food Co., Ltd.ShaoguanShaoguanIndustry1000Set-up by investmentHenan Joincare Biomedical Research Institute Co.,Ltd.*Note 3
JiaozuoJiaozuoIndustry070.13Set-up by investment
*Note 1: Shanghai Frontier Health Pharmaceutical Technology Co., Ltd. (上海方予健康医药科技有限公司) and the Company’s subsidiary Livzon Groupestablished Shanghai Liyu Biomedical Technology Co., Ltd. (上海丽予生物医药技术有限责任公司) on 30 March 2021. Livzon Group holds 55% of the sharesand Shanghai Frontier Health Pharmaceutical Technology Co., Ltd holds 45%.*Note 2: Zhuhai Livzon Biotechnology Co., Ltd. (珠海市丽珠生物医药科技有限公司) is a subsidiary within the scope of Livzon Group’s consolidation. It wasoriginally 100% indirectly held by Livzon Group. In the current period, due to the restructuring of the shareholding structure of the subsidiary, Livzon Groupholds 51% of its shares, the Company holds 33.07% of the shares, and YF Pharmab Limited holds 8.43% of the shares and Hainan Lisheng Juyuan InvestmentPartnership (Limited Partnership) holds 7.50% of the shares.*Note 3: Henan Joincare Biomedical Research Institute Co., Ltd. (河南省健康元生物医药研究院有限公司) is a joint venture established on 26 October 2020by Jiaozuo Joincare Biological Products Co., Ltd. (焦作健康元生物制品有限公司), a subsidiary of the Company, and Livzon Group Xinbeijiang PharmaceuticalCo., Ltd. (丽珠集团新北江制药股份有限公司), a subsidiary of the Company’s Livzon Group. Jiaozuo Joincare Biological Products Co., Ltd. holds 51% of theshares. The investee completed its industrial and commercial registration on 26 October 2020.Other descriptions:
Subsidiaries not included in the scope of consolidation in the current period:
Name of subsidiaryRegistered CapitalActual investmentInterest held
Guangzhou Hiyeah Industry Co., Ltd.3,000,000.003,000,000.00100%Zhongshan Renhe Health Products Co., Ltd.500,000.00500,000.00100%Shenzhen Jiekang Health Care Co., Ltd.4,000,000.004,000,000.00100%Guangzhou Hiyeah Industry Co., Ltd. (广州市喜悦实业有限公司), Zhongshan Renhe Health Products Co., Ltd. (中山市仁和保健品有限公司), are wholly-owned subsidiaries of Shenzhen Hiyeah. They entered the liquidation process in 2008, andhas been out of business for many years, and completed the tax cancellation procedures, so they were not included in thescope of the consolidated.Shenzhen Jiekang Health Care Co., Ltd. (深圳市捷康保健有限公司) is wholly-owned subsidiaries of Shenzhen Hiyeah,which entered the liquidation process in 2008, and has been out of business for many years, and completed thecancellation by Shenzhen Market Supervision and Administration Bureau on May 30, 2022.
lnterim Report 2022
(2). Significant non-wholly owned subsidiaries
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Name of subsidiary
Shareholding ofminority interest
Profit or lossattributable tominority interest
Dividend paid tominority interest
Balance ofminority interestsat period endLivzon Group55.1981%561,572,328.51670,811,289.907,102,295,405.43Descriptions of the difference between the shareholding ratio of minority shareholders and their proportion of votingrights in a subsidiary:
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
(3). Principal financial information of significant non-wholly owned subsidiaries
√ Applicable □ N/A
Unit: 100,000,000 Yuan Currency: RMB
Name of subsidiary
Closing balanceBeginning balanceCurrentassetsNon-current
assets
Total
assets
CurrentliabilitiesNon-currentliabilities
Totalliabilities
Currentassets
Non-current
assets
Totalassets
Currentliabilities
Non-current
liabilities
Totalliabilities
Livzon Group150.1379.24229.3867.5221.9989.51146.7376.99223.7269.2511.3680.61
Name of subsidiary
Current periodPrior Period
RevenueNet profit
TotalComprehensive
income
Cash flow
fromoperatingactivitiesRevenueNet profit
TotalComprehensive
income
Cash flow
fromoperatingactivities
Livzon Group63.0311.1811.5114.2662.3611.8010.326.75
(4). Significant restrictions on the use of enterprise group assets and settlement of enterprise group debts:
□ Applicable
√ N/A
(5). Financial supports or other supports offered for the structured entities included in the scope of consolidated financial
statements:
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
2. Changes in share of owners’ equity in subsidiaries and still controls the subsidiaries
□ Applicable
√ N/A
3. Interests in joint arrangements or associates
√ Applicable □ N/A
(1). Significant joint arrangements or associates
√ Applicable □ N/A
Unit: Yuan Currency: RMBName of jointarrangements orassociates
Main operatinglocation
Place ofregistrationBusiness nature
Shareholding (%)Accounting
treatment of jointinvestmentDirectIndirect
Jiaozuo Jinguan JiahuaElectric Power Co., Ltd.
Jiaozuo City,Henan Province
Jiaozuo City,Henan Province
Electricity production,0.0049Equity methodTianjin TongrentangGroup Co., Ltd.
TianjinTianjinManufacture of medicine0.0040.00Equity method
(2). Key financial information of significant joint arrangements
□ Applicable
√ N/A
(3). Main financial information of significant associates
√ Applicable □ N/A
① Jinguan Electric Power
Unit: Yuan Currency: RMB
Item
Closing balance/
Amount for
the period
Beginning balance/
Amount forthe prior periodJinguan Electric PowerJinguan Electric PowerCurrent assets912,376,226.14900,929,930.10Including: Cash and cash equivalents162,284,264.90151,817,021.98Non-current assets287,103,859.48295,290,603.34Total assets1,199,480,085.621,196,220,533.44Current liabilities622,969,810.80621,231,810.54Non-current liabilities13,525,568.1413,660,568.14Total liabilities636,495,378.94634,892,378.68Net assets562,984,706.68561,328,154.76Including: Minority interests0.000.00 ?Owners’ equity attributable to parent company562,984,706.68561,328,154.76Share of net assets calculated based on shareholding ratio275,862,506.27275,050,795.83Adjustment items Goodwill Unrealized profit on internal transactions Others9,590,852.419,569,113.18Carrying value of equity investment in associates285,453,358.68284,619,909.02Fair value of publicly quoted equity investments of associatesOperating income545,919,608.69326,758,406.59Financial expenses5,790,628.019,179,331.31Income tax expenses0.001,776,961.35Net profit1,656,551.925,330,884.06
lnterim Report 2022
Item
Closing balance/Amount forthe period
Beginning balance/
Amount forthe prior periodJinguan Electric PowerJinguan Electric PowerNet profit from discontinued operationsOther comprehensive incomeTotal comprehensive income1,656,551.925,330,884.06Net cash flows from operating activities120,800,417.88-103,889,799.14Dividends received from joint ventures in the current period
② Tianjin Tongrentang Group Co., Ltd.
Item
Tianjin Tongrentang Group Co., Ltd.
2022.6.30Owners’ equity attributable to parent company624,133,283.11Share of net assets by shareholding249,653,313.24Adjustments Including: Goodwill498,457,683.68 Unrealized profit or loss in internal transactions0.00 Provision for impairment0.00 Others0.00Carrying value of equity investment in associates748,110,996.92Fair value of publicly quoted equity investmentsSuspension from 22 June 2021Continued:
Item
Tianjin Tongrentang Group Co., Ltd.
Amount for the periodOperating income548,022,065.65Dividends received by the company from associates in the current period51,920,000.00Other descriptions:
√ Applicable □ N/AThe Company calculated share of assets by shareholding ratio based on the amount attributable to the parent company inthe associates’ consolidated financial statements. The amounts of associates on the consolidated financial statements takeinto account the fair value of net identifiable assets and liabilities of the associate when acquiring the investment and theeffect of unifying accounting policies.As Tianjin Tongrentang is in the IPO application stage, the above data is based on the performance forecast.
(4). Summary of financial information of other insignificant associates
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Closing balance/Current period
Beginning balance/
Prior period
Associates:
Total carrying amount of investment389,448,001.30326,526,576.36The following amount are calculated on the basis of shareholding ratioNet profit-5,650,897.40-7,855,283.00Other comprehensive income0.000.00Total comprehensive income-5,650,897.40-7,855,283.00
(5). Description of significant restrictions on the ability of joint ventures or associates to transfer funds to the company
□ Applicable
√ N/A
(6). Excess losses incurred by joint ventures or associates
□ Applicable
√ N/A
(7). Unconfirmed commitments related to joint venture investment
□ Applicable
√ N/A
(8). Contingent liabilities related to investments in joint ventures or associates
□ Applicable
√ N/A
4. Important joint operations
□ Applicable
√ N/A
5. Equity in structured entities not included in the scope of consolidated financial statements
Relevant descriptions of structured entities not included in the scope of consolidated financial statements:
□ Applicable
√ N/A
6. Others
□ Applicable
√ N/A
lnterim Report 2022
VIII. Risks Management of Financial Instruments
√ Applicable □ N/AThe major financial instruments of the Company include cash, bills receivable and accounts receivable, other receivables,non-current assets due within one year, other current assets, financial assets held for trading, other equity instrumentinvestments, long-term receivables, bills payable and accounts payable, other payables, short-term borrowings, financialliabilities held for trading, non-current liabilities due within one year, short-term borrowings, bonds payable and long-term payables.. The details of these financial instruments are disclosed in the respective notes. The financial risk of thesefinancial instruments and financial management policies used by the Company to minimize the risk are disclosed asbelow. The management of the Company manages and monitors the exposure of these risks to ensure the above risks arecontrolled in the limited range.
1. Management objectives and policies of risks
The operation activities of the Company are subject to various financial risks: market risks (mainly including foreignexchange risks and interest rate risks), credit risks and liquidity risks. The Company formulates an overall risk managementplan with respect to the unforeseeability of the financial market in order to minimise the potential adverse impacts on thefinancial performance of the Company.
(1) Foreign exchange risks
The Company conducts its operation primarily in China. Substantially all of the transactions were denominated andsettled in Renminbi. However, the Company still has certain imports and exports businesses regarding APIs and diagnosticreagents that are settled in U.S. dollar, Euro and Japanese Yen. The Company’s businesses outside China (mainly in HongKong, India, Europe) are settled in Hong Kong dollars, U.S. dollar and Eurodollar. In addition, the Company will haveforeign currency loans according to the operating needs. In respect of the above, the Company still exposes to certainforeign exchange risks. Taking into account the foreign exchange risks acceptable by the Company, the Company adoptedDerivative instruments to control foreign exchange risk. However, as to the foreign exchange risk in loans, the Companyshall closely monitor the trend of the exchange rate of Renminbi, and timely adjust the extent of borrowings, so as tominimise its risks.Financial assets and liabilities in foreign currencies held by the Company expressed in Renminbi are stated below:
① As at 2022.06.30
Unit: 1,000 Yuan
ItemHKDUSDEURJPYGBPMOPFinancial assets in foreigncurrency –Cash and bank balances658,432.941,386,195.91543.044,769.2715.794,177.69Financial assets held for trading83,917.720.000.000.000.000.00Accounts receivable0.00630,256.131,456.000.000.001,055.84Other receivables2,837.98156.020.000.000.00482.10Other equity instrumentsinvestment
470,537.120.000.000.000.000.00Subtotal:1,215,725.752,016,608.061,999.044,769.2715.795,715.62Financial liabilities in foreigncurrency –
0.000.000.000.000.000.00Accounts payable0.002,738.7839.716,066.540.000.00Other payables1,186.2130,544.260.000.000.000.00Subtotal:1,186.2133,283.0439.716,066.540.000.00
② As at 2021.12.31
Unit: 1,000 YuanItemHKDUSDEURJPYGBPMOPFinancial assets in foreigncurrency –Cash and bank balances516,034.781,296,568.06559.422,406.6216.701,121.33Financial assets held for trading163,071.450.000.000.000.000.00Accounts receivable0.00579,062.084,493.180.000.002,824.85Other receivables2,712.730.000.000.000.00461.23Other equity instrumentsinvestment
480,531.750.000.000.000.000.00Subtotal:1,162,350.711,875,630.145,052.602,406.6216.704,407.41Financial liabilities in foreigncurrency –
0.000.000.000.000.000.00Accounts payable0.00213.2940.900.000.0011.01Other payables2,503.1816,034.630.000.000.000.00Subtotal:2,503.1816,247.9240.900.000.0011.01As at 30 June 2022, in respect of the Company’s financial assets and liabilities denominated in foreign currencies such asHong Kong dollar, U.S. dollar, Euro, Japanese Yen and Macau Pataca, should the value of RMB appreciate or depreciateby 5% against foreign currencies such as Hong Kong dollar, U.S. dollar, Euro, Japanese Yen and Macau Pataca, andother factors remain unchanged, the Company would be subject to an increase or decrease in profit of approximatelyRMB160,212,900 (31 December 2021: approximately RMB151,553,060).
(2). Interest rate risk
The Company’s exposures to interest rate risk are mainly arising from interest-bearing liabilities such as bank borrowingsand bonds payables. The interest rates are affected by the macro monetary policies of China, hence the Company will facethe risks arising from fluctuation of interest rates in the future.The finance department of the head office of the Company continues to monitor the level of interest rate of the Company.The rise in the interest rate will increase the cost of additional interest-bearing liabilities and the interest expenses ofthe Company’s outstanding interest-bearing liabilities of which the interests are calculated at floating rates, and imposematerial adverse impact on the financial results of the Company. The management will make timely adjustment based onthe updated market conditions. The directors of the Company consider that the future changes in the interest rate willhave no material adverse impact on the operating results of the Company.
(3). Credit risk
Credit risk is primarily attributable to cash and cash equivalents, restricted funds, accounts receivables and otherreceivables. In respect of cash at banks, they were placed at several banks with good reputations, for which the credit riskwas limited. In respect of receivables, the Company shall assess the credit limit granted to customers for credit purpose.Moreover, as the customer base of the Company is large, the credit risk on accounts receivables is not concentrated.In terms of bills receivable settlement, external payments are settled with bills receivable with priority and most of theremaining bills are high-quality bills with maturity within three months; thus none expected major credit risk exits. Inaddition, the provision made on the impairment of accounts receivables and other receivables are adequate to managethe credit risk.Among the accounts receivable of the Company, the accounts receivable of the top five customers accounted for 10.28%(31 December 2021: 11.60%); among the other receivables of the Company, the other receivables of the top five customersaccounted for 46.42% (31 December 2021: 60.63%).
lnterim Report 2022
(4). Liquidity risk
The Company adopts prudent liquidity risk management for the sufficient supply of monetary funds and liquidity. Itsecures readily available credit loans from banks mainly by maintaining adequate monetary funds and banking facilities.Apart from indirect financing from banks, a number of financing channels were available, such as direct financing by inter-bank market including short-term financing bills and medium-term financing bills, corporate bonds etc. These instrumentscan effectively reduce the effects of scale of financing and the macro monetary policies of China on indirect bankfinancing, which shall secure adequate funds in a flexible manner.As at the date of the balance sheet, the contractual cash flows of financial assets and financial liabilities are presentedbelow by term of maturity:
① As at 2022.06.30
ItemWithin a year1-2 years2-5 yearsOver 5 yearsTotal
Financial assets:
Cash and bank balances12,653,108,949.170.000.000.0012,653,108,949.17Financial assets held for trading99,806,543.320.000.000.0099,806,543.32Notes receivable1,888,473,693.790.000.000.001,888,473,693.79Accounts receivable2,895,463,163.960.000.000.002,895,463,163.96Other receivables50,888,736.710.000.000.0050,888,736.71Non-current assets due within one year38,498.840.000.000.0038,498.84Long-term receivables0.0082,574.690.000.0082,574.69Subtotal: 17,587,779,585.7982,574.690.000.0017,587,862,160.48Financial liabilities:
Short-term loans1,982,775,000.020.000.000.001,982,775,000.02Financial liabilities held for trading10,791,038.400.000.000.0010,791,038.40Notes payable1,601,063,168.350.000.000.001,601,063,168.35Accounts payable933,275,211.760.000.000.00933,275,211.76Other payables3,398,357,996.680.000.000.003,398,357,996.68Non-current liabilities due within one year93,190,354.840.000.000.0093,190,354.84Lease liabilities0.0012,130,536.9010,468,645.700.0022,599,182.60Long term loans0.00389,000,000.002,014,726,004.580.002,403,726,004.58Subtotal: 8,019,452,770.05401,130,536.902,025,194,650.280.0010,445,777,957.23
② As at 2021.12.31
ItemWithin a year1-2 years2-5 yearsOver 5 yearsTotal
Financial assets:
Cash and bank balances11,729,230,390.980.000.000.0011,729,230,390.98Financial assets held for trading184,638,344.310.000.000.00184,638,344.31Notes receivable1,977,286,022.020.000.000.001,977,286,022.02Accounts receivable2,853,655,551.540.000.000.002,853,655,551.54Other receivables88,053,825.120.000.000.0088,053,825.12Non-current assets due within one year317,381.230.000.000.00317,381.23Long-term receivables0.00266,904.130.000.00266,904.13Subtotal:16,833,181,515.20266,904.130.000.0016,833,448,419.33
ItemWithin a year1-2 years2-5 yearsOver 5 yearsTotal
Financial liabilities:
Short-term loans2,518,484,835.090.000.000.002,518,484,835.09Financial liabilities held for trading143,302.240.000.000.00143,302.24Notes payable1,582,386,767.930.000.000.001,582,386,767.93Accounts payable871,553,210.510.000.000.00871,553,210.51Other payables3,292,407,989.790.000.000.003,292,407,989.79Non-current liabilities due within one year91,576,066.330.000.000.0091,576,066.33Lease liabilities0.0013,186,526.2711,885,268.050.0025,071,794.32Long term loans0.00466,780,252.78360,000,000.000.00826,780,252.78Subtotal:8,356,552,171.89479,966,779.05371,885,268.050.009,208,404,218.99
2. Capital management
The capital management policies are made to keep the continuous operation of the Company, to enhance the return toshareholders, to benefit other stakeholders and to maintain the best capital structure to minimize the cost of capital.For the maintenance or adjustment of the capital structure, the Company might adjust financing method, the amount ofdividends paid to shareholders, return capital to shareholders, issue new shares and other equity instruments or make anasset disposal to reduce the liabilities.The Company monitors the capital structure with gearing ratio (calculated by dividing total liabilities by total assets). On30 June 2022, the Company’s gearing ratio is 37.54% (31 December 2021: 35.12%).
3. Transfer of financial assets
(1). Financial assets which are transferred but have not been derecognised in their entirety
None.
(2). Financial assets which have been transferred and ceased to be recognised but still have involvement with the transferor
As of 30 June 2022, the Company’s carrying amounts of bank acceptance bills undue and endorsed to suppliers forsettling account payables is RMB407,822,740.99 (31 December 2021: RMB186,290,992.91); the Company has no commercialacceptance bills undue and endorsed to suppliers for settling account payables in the period (31 December 2021: Nil).The Company’s bank acceptance bill discounted to bank as at 30 June 2022 is RMB429,075,183.95 (31 December 2021:
RMB67,908,033.05), which are having due dates fall into 1 to 12 months. In accordance with the Negotiable InstrumentsLaw, the holders of the bills have a right of recourse against the Company if payment is refused by the bank of acceptance(the“Continuing Involvement”). In the opinion of the Company, the Company has transferred substantially all risks andrewards. Accordingly, their full carrying amounts and the corresponding account payables have been derecognised. Themaximum loss and the undiscounted cash flows from the Continuing Involvement and repurchasing is equal to theircarrying amounts. In the opinion of the Company, the fair values of the Continuing Involvement are not significant.During the 6-month period ended 30 June 2022, no gain or loss was generated by the Company on the date of transferof the bills. The Company had no current or accumulated gain or loss arising from the continuing involvement in financialassets which had been derecognised. The endorsement was incurred evenly throughout the period.
lnterim Report 2022
IX. Fair Value
1. Closing balance of the fair value of assets and liabilities measured at fair value
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Closing balance of fair valueLevel 1 fair value
measurement
Level 2 fair valuemeasurement
Level 3 fair value
measurementTotalI. Recurring fair value measurement(I) Financial assets held for trading99,756,677.7649,865.560.0099,806,543.32
1. Financial assets at fair value through profit or loss
(1) Debt instruments investment953,678.890.000.00953,678.89
(2) Equity instruments investment98,802,998.870.000.0098,802,998.87
(3) Derivative financial assets0.0049,865.560.0049,865.56
2. Financial asset designated as at fair value through
profit or loss
(1) Investments in debt instruments
(2) Investments in equity instruments
(II) Other debt investments(III) Other investments in equity instruments0.000.001,170,558,267.071,170,558,267.07(IV) Investment properties
1. A land use right that is used to be leased out.
2. A building that is leased out.
3. A land use right held for transfer upon capital
appreciation(V) Biological asset
1. Consumable biological assets
2. Productive biological assets
Total assets measured at fair value on a recurring basis99,756,677.7649,865.561,170,558,267.071,270,364,810.39(VI) Financial liabilities held for trading
1. Financial liabilities at fair value through profit or loss
Including: Issued tradable bonds ?Derivative financial liabilities0.0010,791,038.400.0010,791,038.40Others
2. Financial liabilities designated as at fair value
through profit or lossTotal liabilities measured at fair value on a recurringbasis
0.0010,791,038.400.0010,791,038.40II. Non-recurring fair value measurement(I) Assets held-for-sale0.000.000.000.00Total assets measured at fair value on a non-recurringbasis
0.000.000.000.00Total liabilities measured at fair value on a non-recurring basis
0.000.000.000.00In 6-month period ended 30 June 2022, there were no transfers of the fair value measurements between level 1 and level2 and no transfers into or out of level 3.
2. Basis for determining the market price of continuous and non-continuous level 1 fair value measurement
items√ Applicable □ N/AThe basis for determining the market price of level 1 fair value measurement items is when listed and traded on theShanghai Stock Exchange, Shenzhen Stock Exchange, Hong Kong Stock Exchange and the United States, its fair value isdetermined by the closing price on the last trading day of the reporting period.
3. Valuation techniques and qualitative and quantitative information of key parameters adopted for
continuous and non-continuous level 2 fair value measurement items√ Applicable □ N/AFor the items in level 2 fair value measurement which uses valuation techniques and qualitative and quantitativeinformation of important parameters to determine the fair value. For derivative financial instruments such as foreignexchange forward contracts, the fair value is determined based on the quoted forward exchange rate corresponding tothe expiring contract.Item
Fair value at theEnd of the PeriodValuation techniques
Derivative financial assets49,865.56Calculated and determined based on the quoted forward
exchange rate corresponding to the expiring contractDerivative financial liabilities10,791,038.40Calculated and determined based on the quoted forward
exchange rate corresponding to the expiring contract
4. Valuation techniques and qualitative and quantitative information of key parameters adopted for
continuous and non-continuous level 3 fair value measurement items√ Applicable □ N/AFor the items in level 3 fair value measurement uses valuation techniques and qualitative and quantitative information ofimportant parameters to determine the fair value. For some other equity instruments held, the fair value is based on thecost or the present value of the estimated future net cash flow as the best estimate.
lnterim Report 2022
5. Reconciliation between opening and closing carrying amounts and sensitivity analysis of unobservable
parameters for continuous level 3 fair value measurement items√ Applicable □ N/AItem
Fair value at theend of the periodValuation techniquesOther equity instruments investment-Shanghai Yunfeng XinchuangEquity Investment Centre (上海云锋新创股权投资中心)
69,006,351.58Net assetsOther equity instruments investment-Shanghai JingYi Investment Centre(上海经颐投资中心)
67,979,475.21Net assetsOther equity instruments investment-Qianhai Equity Investment Fund (前海股权投资基金)
264,930,500.00Net assetsOther equity instruments investment-Apricot Forest, Inc (杏树林)137,711,800.01Income methodOther equity instruments investment-Zhuhai China Resources Bank Co.,Ltd. (珠海华润银行股份有限公司)
164,395,200.00Market methodOther equity instruments investment-Yizun Biopharmaceutics (Shanghai)Co., Ltd. (羿尊生物医药(上海)有限公司)
59,999,953.41Recent financing priceOther equity instruments investment-Zhuhai Medpha Biotechnology Co.,Ltd. (珠海麦得发生物科技股份有限公司)
6,971,000.00Recent financing priceOther equity instruments investment-Beijing Luzhu Biotechnology Co.,Ltd. (北京绿竹生物技术股份有限公司)
41,944,015.67Recent financing priceOther equity instruments investment-GLOBAL HEALTH SCIENCE222,393,107.44Net assetsOther equity instruments investment-SCC VENTURE VI 2018-B,L.P.6,963,959.64Net assetsOther equity instruments investment-Nextech V Oncology S.C.S., SICAV-SIF
32,640,308.82Net assetsOther equity instruments investment – Others95,622,595.29CostTotal1,170,558,267.07
6. In case of transfers among levels for the current period, explain the transfer reasons and policies for
determining transfer time point for continuous fair value measurement items
□ Applicable
√ N/A
7. Changes in valuation techniques for the current period and reasons for changes
□ Applicable
√ N/A
8. Fair value of financial assets and liabilities not measured at fair value
□ Applicable
√ N/A
9. Others
□ Applicable
√ N/A
X. Related Parties and Related Party Transactions
1. Information of parent company
√ Applicable □ N/A
Unit: Yuan Currency: RMBName of parent company
Place ofregistrationNature of business
Registered
capital
Shareholdingratio by parentcompany
Voting right
by parentcompany(%)(%)Shenzhen Baiyeyuan InvestmentCo., Ltd.
ShenzhenInvestment and establishment of industry,
domestic commerce, and material supplyand marketing
80,000,000.0046.8346.83Notes to the parent company of the Company:
The parent company of the Company is Shenzhen Baiyeyuan Investment Co., Ltd., which was established on 21 January1999, and its main business scope is investment and establishment of industry, domestic commerce, and material supplyand marketing.The ultimate controller of the Company: Zhu BaoguoOther descriptions:
(1) Registered capital of parent company and its changes
Name of parent company2021.12.31
Increase forthe Period
Decrease for
the Period2022.06.30
Shenzhen Baiyeyuan Investment Co., Ltd.80,000,000.000.000.0080,000,000.00
(2) Shares of the company held by the parent company and its changes
Name of parent company2021.12.31Ratio
Increase forthe Period
Decrease for
the Period2022.06.30Ratio
Shenzhen Baiyeyuan Investment Co., Ltd.895,653,653.0046.95%0.000.00895,653,653.0046.83%
2. Subsidiaries of the Company
Details of subsidiaries refer to Note√ Applicable □ N/APlease refer to notes VII.1. for the details of subsidiaries.
lnterim Report 2022
3. Joint ventures and associates of the Company
For details of the significant joint ventures or associates of the Company, please see the notes.√ Applicable □ N/ADetails of significant joint ventures or associates refer to Note V. 11Note VII. 3.Other joint ventures or associates entered into transactions with the Company during the period, or during the priorperiod with remaining closing balance were as follows:
√ Applicable □ N/AName of joint ventures and associatesRelationship with the CompanyJiaozuo Jinguan Jiahua Electric Power Co., Ltd.AssociateGuangdong Blue Treasure Pharmaceutical Co., Ltd.AssociateNovastage Pharmaceuticals (Shenzhen), Ltd.AssociateShenzhen City Youbao Technology Co., Ltd.AssociateAbCyte Therapeutics Inc.AssociateL&L Biopharma, Co. Ltd.AssociateZhuhai Sanmed Biotech Inc.AssociateAetio Biotherapy IncAssociateJiangsu Atom Bioscience and Pharmaceutical Co., Ltd.AssociateTianjin Tongrentang Group Co., Ltd.AssociateInfinite Intelligence Pharmaceutical Co. Ltd.AssociateZhuhai Sanmed Gene Diagnostics Ltd.Entity controlled by an associateZhuhai Hengqin Weisheng Precision Medicine Technology Co., Ltd.Entity controlled by an associateOther descriptions
□ Applicable
√ N/A
4. Other related parties of the Company
√ Applicable □ N/A
Name of other related partiesRelationship with the CompanyShenzhen Taitelixing Investment Development Co., Ltd.OthersZhuozhou Jingnan Yongle Golf Club Co., Ltd.OthersShenzhen Healthy Deer Information Technology Co., Ltd.OthersSichuan Healthy Deer Hospital Management Co., Ltd. and its subsidiariesOthersZhuhai Medpha Biotechnology Co., Ltd.OthersZhuhai Xianghetai Investment Management Partnership (Limited Partnership)OthersZhuhai Zhong Hui Yuan Investment Partnership (Limited Partnership)OthersZhuhai Liying Investment Management Partnership (Limited Partnership)OthersJiangsu Yiyingjia Medical Technology Co., Ltd.OthersDirectors, Supervisors and other senior management personnelOthers
5. Related party transactions
(1). Sales and purchase of goods, rendering and receipt of services
Purchase of goods, receipt of services√ Applicable □ N/A
Unit: Yuan Currency: RMB
Name of related partiesNature of transactionCurrent periodPrior periodGuangdong Blue Treasure Pharmaceutical Co., Ltd.Raw materials1,458,973.453,122,300.89Sichuan Healthy Deer Hospital Management Co., Ltd. andits subsidiaries
Finished goods0.0012,157.00Jiangsu Yiyingjia Medical Technology Co., Ltd.Finished goods,
Business promotion
368,692.000.00Shenzhen Youbao Technology Co., Ltd.Business promotion871,765.00141,700.00Zhuhai Sanmed Biotech Inc.Testing53,443.400.00L&L Biopharma, Co., Ltd.R&D0.00188,679.24Beijing Infinite Intelligence Pharmaceutical TechnologyCo., Ltd.
R&D339,805.830.00Jiaozuo Jinguan Jiahua Electric Power Co., Ltd.Electricity, steam129,081,366.42103,613,339.79Total132,174,046.10107,078,176.92Sales of goods/rendering of services√ Applicable □ N/A
Unit: Yuan Currency: RMB
Name of related partiesNature of transactionCurrent periodPrior period
Guangdong Blue Treasure Pharmaceutical Co. Ltd.Finished goods, water
and electricity, power
15,282,052.2130,514,098.48Zhuhai Sanmed Biotech Inc.Finished goods, water
and electricity, powerand others
194,261.12292,011.06Zhuhai Sanmed Gene Diagnostics Ltd.Finished goods, water
and electricity, powerand others
325,180.92199,918.70Sichuan Healthy Deer Hospital Management Co., Ltd. andits subsidiaries
Finished goods1,987,679.872,697,554.00Total17,789,174.1233,703,582.24Descriptions of related party transactions with respect to the sales and purchase of goods, rendering and receipt ofservices
□ Applicable
√ N/A
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(2). Related entrusted management/contracting and entrusting management/outsourcing
Table of the entrusted management/contracting of the Company:
□ Applicable
√ N/ADescriptions of related trusteeship/outsourcing
□ Applicable
√ N/ATable of the entrusting management/outsourcing of the Company:
□ Applicable
√ N/ADescriptions of related management/outsourcing
□ Applicable
√ N/A
(3). Related party leases
The Company as a lessor√ Applicable □ N/A
Unit: Yuan Currency: RMB
Name of lesseeType of leased assets
Lease incomerecognized inthe current period
Lease incomerecognized inprior year
Zhuhai Sanmed Biotech Inc.Buildings1,113,149.501,113,149.50Zhuhai Sanmed Gene Diagnostics Ltd.Buildings120,000.00120,000.00Shenzhen Baiyeyuan Investment Co., Ltd.Buildings9,445.889,445.88Novastage Pharmaceuticals (Shenzhen) Ltd.Buildings & Equipment468,302.76163,189.08Shenzhen Taitelixing Investment DevelopmentCo., Ltd.
Buildings9,360.009,360.00Shenzhen Healthy Deer Information TechnologyCo., Ltd.
Buildings8,587.168,587.16Shenzhen City Youbao Technology Co., Ltd.Buildings8,587.168,587.16Total1,737,432.461,432,318.78The Company as a lessee:
□ Applicable
√ N/ADescriptions of related leases
□ Applicable
√ N/A
(4). Related party guarantees
The Company as the guarantor√ Applicable □ N/A
Unit: 10,000 Yuan Currency: RMB
Name of guaranteed partyGuarantee amount
Actual dateof event
Guaranteematurity date
Performancecompleted or notJinguan Electric Power4,0002021/7/82022/7/8NoJinguan Electric Power5,0002021/7/142022/7/14NoJinguan Electric Power3,0002021/8/122022/8/12NoJinguan Electric Power3,2002021/9/232022/9/22NoJinguan Electric Power3,2002021/10/112022/10/11NoJinguan Electric Power3,8002021/10/132022/10/12NoJinguan Electric Power3,8402022/2/142022/11/30NoJinguan Electric Power4,9602022/2/242022/12/26NoJinguan Electric Power2,0002022/3/282022/12/13NoJinguan Electric Power3,0002022/6/82023/6/8NoJinguan Electric Power3,0002022/6/222023/6/22NoThe Company as the guaranteed party
□ Applicable
√ N/ADescriptions of guarantees with related parties√ Applicable □ N/A
① In order to ensure the stable development of production and operation of Jinguan Electric Power, the Company and
its controlling subsidiary Jiaozuo Joincare jointly provided a revolving guarantee facility with balance of no more thanRMB350 million (inclusive) for Jinguan Electric Power (specific guarantors shall be specified in the guarantee contracts)according to“the Resolution on Providing Loan Guarantee for Jinguan Electric Power by the Company and Its ControllingSubsidiary Jiaozuo Joincare”considered and approved at the First Extraordinary General Meeting of the Company on 6July 2016, with the guarantee period starting from the date when the resolution was considered and approved to 31December 2019. Pursuant to“the Resolution on Providing Loan Guarantee for Jinguan Electric Power by the Company andIts Controlling Subsidiary Jiaozuo Joincare”considered and approved at the 2017 Annual General Meeting of the Companyon 22 May 2018, the Company and its controlling subsidiary Jiaozuo Joincare jointly provided a revolving guarantee facilitywith balance of no more than RMB350 million (inclusive) for Jinguan Electric Power (specific guarantors shall be specifiedin the guarantee contracts), with the guarantee period starting from the date when the resolution was considered andapproved to 31 December 2022. In order to ensure the stable development of production and operation of JinguanElectric Power, the revolving guarantee facility with balance of no more than RMB350 million (inclusive) for Jinguan ElectricPower (specific guarantors shall be specified in the guarantee contracts) considered and approved at the 2017 GeneralMeeting of the Company was changed to the revolving guarantee facility with balance of no more than RMB450 million(inclusive) on 10 May 2019 due to the actual business needs of Jinguan Electric Power, with the guarantee period startingfrom the date when the resolution was considered and approved to 31 December 2022. On 18 May 2022, the“Proposalon the Company and its subsidiary Jiaozuo Joincare in Providing Loan Guarantee for Jinguan Electric Power”was reviewedand approved by the Company’s 2021 annual general meeting, the Company and its subsidiary Jiaozuo Joincare jointlyprovided a guarantee for Jinguan Electric Power on its revolving loans facility with a balance of not more than RMB450million (including RMB450 million) (the specific guarantor will be specified in each guarantee contract), and the term isfrom the date of approval of this guarantee proposal at the Company’s annual general meeting to 31 December 2025.
lnterim Report 2022
As at 30 June 2022, the Company provided Jinguan Electric Power with guarantees for loans of RMB390 million; of whichRMB120 million in Shenzhen Branch of Nanyang Commercial Bank, and RMB220 million in Shenzhen Branch of ChinaEverbright Bank, RMB30 million in Shenzhen Branch of Zheshang Bank and RMB20 million in Jiaozuo Branch of China CITICBank.In order to ensure the safety of secured loans, Jinguan Electric Power provided counter guarantees for the said guaranteesprovided by the Company and its subsidiary, Jiaozuo Joincare, based on its owned assets, and undertook that it wouldunconditionally provide mutual guarantees for the Company or its controlling subsidiary designated with total facility ofno more than RMB450 million (inclusive) whenever the Company deemed necessary.
② Another shareholder of Livzon MABPharm Inc. (珠海市丽珠单抗生物技术有限公司) – the Company has issued a
“CounterGuarantee Commitment”, promising that it will share the joint and several guarantee liability to the extent of 33.07% of thescope of guarantee responsibility in relation to the guarantee provided to Livzon MABPharm Inc. (珠海市丽珠单抗生物技术有限公司), and the counter guarantee period will expire on the date when the Company’s guarantee responsibilityexpiry.
③ Zhuhai Zhong Hui Yuan Investment Partnership (Limited Partnership) (珠海中汇源投资合伙企业(有限合伙), being
another shareholder of Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc. (丽珠集团新北江制药股份有限公司)has issued a“Counter Guarantee Commitment”, promising that it will share the joint and several guarantee liability to theextent of 8.44% of the scope of guarantee responsibility incurred by the Company in relation to the guarantee providedto Livzon MABPharm Inc. (珠海市丽珠单抗生物技术有限公司), and the counter guarantee period will expire on the datewhen the Company’s guarantee responsibility expiry.
(5). Lending funds of related parties
□ Applicable
√ N/A
(6). Asset transfer and debt restructuring between related parties
□ Applicable
√ N/A
(7). Remuneration of key management personnel
√ Applicable □ N/A
Unit: 10,000 Yuan Currency: RMB
Item
Amount for thecurrent period
Amount for the
prior period
Remuneration of key management personnel799.59602.26
For the 6-month period ended 30 June 2022
Unit: 10,000 Yuan Currency: RMBItem
Director/SupervisorAllowance
Wages andallowances
Socialsecurity
Housing
fundBonus
SeverancepayOthersTotalDirectors:
Zhu Baoguo (朱保国)162.500.003.421.250.000.000.00167.17Liu Guangxia (刘广霞)162.509.034.511.250.000.000.00177.29Yu Xiong (俞雄)0.00130.000.000.000.000.000.00130.00Qiu Qingfeng (邱庆丰)0.0067.503.601.250.000.000.0072.36Lin Nanqi (林楠棋)0.0067.503.601.250.000.000.0072.36Cui Liguo (崔利国)5.540.000.000.000.000.000.005.54Huo Jing (霍静)5.540.000.000.000.000.000.005.54Qin Yezhi (覃业志)5.540.000.000.000.000.000.005.54Peng Juan (彭娟)5.540.000.000.000.000.000.005.54Supervisors:
Yu Xiaoyun (余孝云)2.4019.233.461.120.000.000.0026.21Peng Jinhua (彭金花)2.400.000.000.000.000.000.002.40Xing zhiwei (幸志伟)0.5732.003.361.050.000.000.0036.98Xie Youguo (谢友国) (Resigned)1.8318.460.000.000.000.000.0020.29Other senior management:
Zhao Fenguang (赵凤光)0.0067.503.601.250.000.000.0072.36Total354.37411.2325.558.440.000.000.00799.59Note: Mr. Zhu Baoguo (朱保国) serves as the chairman of Livzon, a controlled subsidiary of the Company; and Mr. Yu Xiong (俞雄) and Mr. Qiu Qingfeng (邱庆丰) serve as non-executive directors of Livzon. The remuneration presented in above does not include the portion paid by Livzon.
lnterim Report 2022
For the 6-month period ended 30 June 2021
Unit: 10,000 Yuan Currency: RMBItem
Director/SupervisorAllowance
Wages andallowances
Socialsecurity
Housing
fundBonus
Severance
payOthersTotalDirectors:
Zhu Baoguo (朱保国)106.300.002.941.150.000.000.00110.39Liu Guangxia (刘广霞)106.300.002.941.150.000.000.00110.39Qiu Qingfeng (邱庆丰)0.0052.502.941.150.000.000.0056.59Lin Nanqi (林楠棋)0.0052.502.941.150.000.000.0056.59Cui Liguo (崔利国)4.800.000.000.000.000.000.004.80Huo Jing (霍静)4.800.000.000.000.000.000.004.80Qin Yezhi (覃业志)4.800.000.000.000.000.000.004.80Supervisors:
Yu Xiaoyun (余孝云)1.8019.082.851.060.000.000.0024.79Peng Jinhua (彭金花)1.8030.000.001.150.000.000.0032.95Xie Youguo (谢友国)1.8016.780.001.010.000.000.0019.58Other senior management:
Zhao Fenguang (赵凤光)0.00120.000.000.000.000.000.00120.00Yu Xiong (俞雄)0.0052.502.941.150.000.000.0056.59Total232.40343.3617.548.970.000.000.00602.26Note: Mr. Zhu Baoguo serves as the chairman of Livzon, a controlled subsidiary of the Company; and Mr. Yu Xiong and Mr. Qiu Qingfeng serve as non-executive directors of Livzon. The remuneration listed above does not include the part paid by Livzon.
(8). Other related transactions
□ Applicable
√ N/A
6. Receivables and payables with related parties
(1). Receivables from related parties
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemName of related parties
Balance at the End of
the Period
Balance at the Beginning of
the PeriodBook balance
Provisionfor bad debtsBook balance
Provisionfor bad debts
Bills receivablesGuangdong Blue Treasure Pharmaceutical Co., Ltd.4,624,855.000.005,492,960.00379,960.00Accounts receivablesGuangdong Blue Treasure Pharmaceutical Co., Ltd.0.000.0018,889,500.00490,875.00Accounts receivablesZhuhai Sanmed Gene Diagnostics Ltd.104,854.841,006.66224,023.838,578.07Accounts receivablesSichuan Healthy Deer Hospital Management Co.,
Ltd. and its subsidiaries
571,756.7064,688.94337,395.0248,933.97PrepaymentsZhuhai Sanmed Biotech Inc.211,200.000.00211,200.000.00PrepaymentsShenzhen Youbao Technology Co., Ltd.465,600.000.00154,500.000.00Other receivablesZhongshan Renhe Health Products Co., Ltd.469,895.78469,895.78469,895.78469,895.78Other receivablesShenzhen Jiekang Health Care Co., Ltd.0.000.0018,577,246.6318,577,246.63Other receivablesShenzhen Healthy Deer Information Technology
Co., Ltd.
0.000.004,680.0074.38Other receivablesGuangdong Blue Treasure Pharmaceutical Co., Ltd.2,282,237.6838,113.371,271,496.5521,233.99Other receivablesZhuhai Sanmed Biotech Inc.58,955.402,847.550.000.00Other receivablesZhuhai Sanmed Gene Diagnostics Ltd.0.000.005,265.0087.93
(2). Payables to related party
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemRelated parties
Balance at theEnd of the Period
Balance at the
Beginning of
the Period
Bills payablesGuangdong Blue Treasure Pharmaceutical Co., Ltd.21,117,677.33379,960.00Contract liabilitiesSichuan Healthy Deer Hospital Management Co.,
Ltd. and its subsidiaries
47,254.630.00Accounts payablesSichuan Healthy Deer Hospital Management Co.,
Ltd. and its subsidiaries
32,621,131.820.00Other payablesSichuan Healthy Deer Hospital Management Co.,
Ltd. and its subsidiaries
8,936.178,936.17
lnterim Report 2022
XI. Share-based Payment
1. General information about share-based payment
√ Applicable □ N/A
Unit: Share Currency: RMBTotal equity instruments granted during the Current Period by the Company0Total equity instruments exercised during the Current Period by the Company4,812,759Total equity instruments of the Company expired during the Current Period0Range of exercise price of share option of the Company outstanding and remaining term ofcontract as at the End of the Period
Note 1Range of exercise price of other equity instruments of the Company and remaining term ofcontract as at the End of the Period
–Note 1: Share OptionOther description:
① On 13 December 2018,
“the Resolution on 2018 Share Options Incentive Scheme (Draft) and its summary”,“the Resolutionon Administrative Measures for Appraisal System of the 2018 Share Options Incentive Scheme of Livzon PharmaceuticalGroup Inc.”and“the Resolution on the General Meeting for Granting Mandate to the Board to Deal with Matters Regardingthe 2018 Share Options Incentive Scheme”were considered and approved at the 2018 Third Extraordinary GeneralMeeting. On 21 December 2018,“the Resolution in Relation to the Adjustment of the Quantity to be Granted and theList of Incentive Participants of the Grant under 2018 Share Options Incentive Scheme”and“the Resolution on the FirstGrant of Share Options to Incentive Participants”were considered and approved at the 6th Meeting of the 7th Session ofthe Board and the 5th Meeting of the 7th Session of the Supervisory Committee. On 24 January 2019,“the Resolution inRelation to the Adjustment of the Quantity to be Granted and the List of Incentive Participants of the Grant under 2018Share Options Incentive Scheme”was considered and approved at the 7th Meeting of the 7th Session of the Board and the6th Meeting of the 7th Session of the Supervisory Committee, pursuant to which,21 December 2018 was set as the date ofgrant, on which 35.72 million share options were granted to 320 incentive participants at an exercise price of RMB8.21 pershare option.Pursuant to“the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not YetExercised under the 2018 Share Option Incentive Plan”considered and approved at the 12th Meeting of the 7th Sessionof the Board of the Company on 10 June 2019, 3.95 million share options that have been granted but not yet exercised by39 Incentive Participants who resigned due to personal reasons and did not meet the incentive conditions are canceled.After the completion of the cancellation, the number of Incentive Participants for the first grant of the 2018 share optionsincentive scheme of the Company was adjusted from 320 to 281, while the number of share options under the first grantwas adjusted from 35.72 million to 31.77 million.Pursuant to“the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not YetExercised under the 2018 Share Option Incentive Plan”considered and approved at the 17th Meeting of the 7th Session ofthe Board of the Company on 28 October 2019, 2.46 million share options that have been granted but not yet exercised by23 Incentive Participants who resigned due to personal reasons and did not meet the incentive conditions are canceled.After the completion of the cancellation, the number of Incentive Participants for the first grant of the 2018 share optionsincentive scheme of the Company was adjusted from 281 to 258, while the number of share options under the first grantwas adjusted from 31.77 million to 29.31 million.Pursuant to“the Resolution on Fulfillment of Exercise Conditions for the First Exercise Period of the First Grant under the2018 Share Options Incentive Scheme”considered and approved at the 19th Meeting of the 7th Session of the Board of theCompany on 4 December 2019, it was believed that the exercise conditions for the first exercise period of the first grantunder the Incentive Scheme had been achieved, and it was agreed that the 258 incentive participants who had fulfilledthe exercise conditions might exercise the share options on voluntary basis. The number of exercisable share options was
11.724 million, and the exercise period was from 21 December 2019 to 20 December 2020.
Pursuant to“the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not YetExercised under the 2018 Share Option Incentive Plan”considered and approved at the 30th Meeting of the 7th Session ofthe Board of the Company on 14 August 2020, 1.488 million share options that have been granted but not yet exercisedby 23 Incentive Participants under the first grant who resigned due to personal reasons and did not meet the incentiveconditions are canceled. After the completion of the cancellation, the number of Incentive Participants for the first grantof the 2018 share options incentive scheme of the Company was adjusted from 258 to 235, while the number of shareoptions under the first grant was adjusted from 18,928,900 to 17,444,100.Pursuant to“the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not YetExercised under the 2018 Share Option Incentive Plan”considered and approved at the 33rd Meeting of the 7th Sessionof the Board of the Company on 16 November 2020, 96,000 share options that have been granted but not yet exercisedby 2 Incentive Participants under the first grant who resigned due to personal reasons and did not meet the incentiveconditions are canceled. After the completion of the cancellation, the number of Incentive Participants for the first grantof the 2018 share options incentive scheme of the Company was adjusted from 235 to 233, while the number of shareoptions under the first grant was adjusted from 16,940,000 to 16,844,400.As at 30 June 2022, the number of share options exercised for the Period was 24,603,309 and the number of outstandingshare options was 2,368,691.
② Pursuant to
“the Resolution on the Grant of Share Options to Incentive Participants under the Reserved Grant”consideredand approved at the 16th Meeting of the 7th Session of the Board of the Company on 23 September 2019, 23 September2019 was set as the date of grant, on which 8.99 million share options were granted to 187 incentive participants at anexercise price of RMB10.47 per share option.Pursuant to“the Resolution in Relation to the Adjustment of the Quantity to be Granted and the List of IncentiveParticipants of the Reserved Grant under 2018 Share Options Incentive Scheme”considered and approved at the 17thMeeting of the 7th Session of the Board of the Company on 28 October 2019, the number of Incentive Participants forthe Reserved Grant of share options was adjusted from 187 to 186, while the number of share options under the ReservedGrant was adjusted from 8.99 million to 8.97 million.Pursuant to“the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not YetExercised under the 2018 Share Option Incentive Plan”considered and approved at the 30th Meeting of the 7th Session ofthe Board of the Company on 14 August 2020, 1.88 million share options that have been granted but not yet exercised by28 Incentive Participants under the Reserved Grant who resigned due to personal reasons and did not meet the incentiveconditions are canceled. After the completion of the cancellation, the number of Incentive Participants for the ReservedGrant of the 2018 Share Options Incentive Scheme of the Company was adjusted from 186 to 158, while the number ofshare options under the Reserved Grant was adjusted from 8.97 million to 7.09 million.Pursuant to“the Resolution on Fulfillment of Exercise Conditions for the First Exercise Period of the Reserved Grant underthe 2018 Share Options Incentive Scheme”considered and approved at the 31st Meeting of the 7th Session of the Board ofthe Company on 27 August 2020, it was believed that the exercise conditions for the first exercise period of the reservedgrant under the Incentive Scheme had been achieved, and it was agreed that the incentive participants who had fulfilledthe exercise conditions might exercise the share options on voluntary basis. The number of exercisable share options was3,545,000, and the exercise period was from 23 September 2020 to 22 September 2021.Pursuant to“the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not YetExercised under the 2018 Share Option Incentive Plan”considered and approved at the 33rd Meeting of the 7th Session ofthe Board of the Company on 16 November 2020, 450,000 share options that have been granted but not yet exercised by8 Incentive Participants under the Reserved Grant who resigned due to personal reasons and did not meet the incentiveconditions are canceled. After the completion of the cancellation, the number of Incentive Participants for the reservedgrant of the 2018 share options incentive scheme of the Company was adjusted from 158 to 150, while the number ofshare options under the reserved grant was adjusted from 4,616,500 to 4,166,500.As at 30 June 2022, the number of share options exercised for the Period was 5,039,316 and the number of outstandingshare options was 1,440,684.
lnterim Report 2022
(2) Livzon Group, a subsidiary of the Company
Total equity instruments granted during the Current Period by the Company (share)–Total equity instruments exercised during the Current Period by the Company (share)496,836Total equity instruments of the Company expired during the Current Period (share)–Range of exercise price of share option of the Company outstanding and remaining term ofcontract as at the end of the Period
Note 1Range of exercise price of other equity instruments of the Company and remaining term ofcontract as at the end of the Period
Note 2Note 1: Share Option
① On 5 September 2018,
“the Resolution on 2018 Share Options Incentive Scheme (Revised Draft) and its summary”, the“Resolution on Administrative Measures for Appraisal System of the 2018 Share Options Incentive Scheme of LivzonPharmaceutical Group Inc.”and“the Resolution on the General Meeting For Granting Mandate to the Board to Dealwith Matters Regarding the 2018 Share Options Incentive Scheme”were considered and approved at the 2018 ThirdExtraordinary General Meeting, the 2018 Third Class Meeting of A Shareholders and the 2018 Third Class Meeting of HShareholders of Livzon Group. Pursuant to“the Resolution in Relation to the Adjustment of the List of Incentive Participantsof the First Grant and the Quantity to be Granted for the First Grant under 2018 Share Options Incentive Scheme”and“theResolution on the Related Matters of the First Grant of 2018 Share Options Incentive Scheme”considered and approved atthe 19th Meeting of the 9th Session of the Board of Livzon Group on 11 September 2018, 11 September 2018 was set asthe date of grant, on which 17,475,500 Share Options were granted to 1,050 Incentive Participants at an exercise price ofRMB47.01 per share option.Pursuant to“the Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option IncentivePlan”considered and approved at the 32nd Meeting of the 9th Session of the Board of Livzon Group on 18 September2019, 254,995 share options that have been granted but not yet exercised by 17 Incentive Participants who resigned dueto personal reasons and did not meet the incentive conditions are canceled. After the completion of the cancellation,the number of Incentive Participants for the first grant of the 2018 share options incentive scheme of Livzon Group wasadjusted from 1,050 to 1,033, while the number of share options under the first grant was adjusted from 22,718,150 to22,463,155.Pursuant to“the Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option IncentivePlan”considered and approved at the 4th Meeting of the 10th Session of the Board of Livzon Group on 23 October 2020,162,912 share options under the first exercise period held but not yet exercised by 55 Incentive Participants and 1,535,765share options granted and no longer meeting the exercising conditions to 129 Incentive Participants who had resigneddue to personal reasons and were therefore no longer qualified for the incentive are canceled. After the completion ofthe cancellation, the number of Incentive Participants for the first grant of the 2018 Share Options Incentive Scheme ofLivzon Group was adjusted from 1,033 to 904, while the number of share options under the first grant was adjusted from22,463,155 to 20,764,478.Pursuant to“Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option Incentive Plan”
considered and approved at the the 25th meeting of the tenth session of the Board of Livzon Group on 10 November2021, 323,274 share options under the second exercise period held but not yet exercised by 80 Incentive Participants and673,422 share options granted and no longer meeting the exercising conditions to 107 Incentive Participants who wereno longer qualified for the incentive are cancelled. After the completion of the cancellation, the number of IncentiveParticipants for the first grant of the 2018 Share Options Incentive Scheme of the Company was adjusted from 904 to 797,while the number of share options under the first grant was adjusted from 20,764,478 to 19,767,782.As at 30 June 2022, the number of outstanding share options was 4,885,030.
② Pursuant to
“the Resolution relating to Relevant Issues concerning the Reserved Grant under the 2018 Share OptionsIncentive Scheme”considered and approved at the 31st Meeting of the 9th Session of the Board of Livzon Group on 28August 2019, the Board approved 28 August 2019 as the date of grant, on which 2,535,000 share options were granted to145 Incentive Participants and the exercise price was RMB28.87 per A share.Pursuant to“the Resolution relating to Adjusting the List of Incentive Participants under the Reserved Grant of the 2018Share Options Incentive Scheme”considered and approved at the 32nd Meeting of the 9th Session of the Board of LivzonGroup on 18 September 2019, the number of Incentive Participants under the reserved grant of the share option incentiveplan was adjusted from 145 to 170.On 28 October 2019, the Reserved Grant of the share options has completed registration. During the process ofregistration, 1 Incentive Participant was no longer qualified for incentive due to his resignation, and 2 Incentive Participantsvoluntarily gave up the Share Options to be granted by Livzon Group due to personal reasons. Therefore, the number ofIncentive Participants under the Reserved Grant is adjusted from 170 to 167, and the total number of Share Options underthe Reserved Grant is adjusted from 2,535,000 to 2,524,500.Pursuant to“the Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option IncentivePlan”considered and approved at the 4th Meeting of the 10th Session of the Board of Livzon Group on 23 October2020, 309,900 share options granted and no longer meeting the exercising conditions to 10 incentive participants whohad resigned due to personal reasons and were therefore no longer qualified for the incentive are canceled. After thecompletion of the cancellation, the number of Incentive Participants under the Reserved Grant of the 2018 Share OptionsIncentive Scheme of Livzon Group was adjusted from 167 to 157, while the number of share options under the ReservedGrant was adjusted from 2,524,500 to 2,214,600.Pursuant to“Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option Incentive Plan”
considered and approved at the the 25th meeting of the tenth session of the Board of Livzon Group on 10 November2021, 31,150 share options under the first exercise period held but not yet exercised by 7 Incentive Participants and129,400 share options granted and no longer meeting the exercising conditions to 18 incentive participants who wereno longer qualified for the incentive are cancelled. After the completion of the cancellation, the number of IncentiveParticipants under the Reserved Grant of the 2018 Share Options Incentive Scheme of the Company was adjusted from 157to 139, while the number of share options under the Reserved Grant was adjusted from 2,214,600 to 2,054,050.As at 30 June 2022, the number of outstanding share options was 614,199.Note 2: Other equity incentivePursuant to“the Resolution on the Disposal of Certain Equity of a Holding Subsidiary and Connected Transaction”
considered and approved at the 34th Meeting of the 9th Session of the Board of Livzon Group on 8 November 2019, it wasagreed that 9.5% equity interests (totally 8,382,100 shares) in Zhuhai Livzon Diagnostics Inc. (珠海丽珠试剂股份有限公司)held by Livzon Group shall be transferred to Zhuhai Liying Investment Management Partnership (Limited Partnership) (珠海丽英投资管理合伙企业(有限合伙)) at the consideration of RMB21,122,892. Pursuant to the Assets Appraisal Report onthe Valuation of the Shareholders’ Equity as a Whole of Zhuhai Livzon Diagnostics Inc. in Relation to the Proposed EquityTransfer by Livzon Pharmaceutical Group Inc. (Huaya Zhengxin Appraisal Report [2019] No. A02-0011), the valuation ofthe shareholders’ equity as a whole of Zhuhai Livzon Diagnostics Inc. as at 30 June 2019 was RMB647.3075 million, andthe above equity transfer price was lower than its fair value, therefore it constitutes a share-based payment. The totalshare-based payment of the transaction is RMB40.4017 million, which should be amortized within 5 years according tothe partnership agreement and share incentive expenses were recognised due to the share-based payment as a resultof the change in the shareholding of the shareholders of Zhuhai Liying Investment Management Partnership (LimitedPartnership).
lnterim Report 2022
Pursuant to“the Resolution on the Implementation of Employee Equity Incentive Scheme by a Holding Subsidiary”
considered and approved at the 34th Meeting of the 9th Session of the Board of Livzon Group on 8 November 2019, thetotal number of shares of new issuance by Zhuhai Livzon Diagnostics Inc. for implementation of employee equity incentivescheme shall not be more than 4,643,839 shares, and the scheme participants shall contribute a total of RMB11,702,474.28to directly subscribe for the above shares or indirectly subscribe for the such shares through the holding of the limitedpartnership shares of the employee shareholding platform. In December 2019, pursuant to the Capital Increase Agreementof Zhuhai Livzon Diagnostics Inc., the total shares of Zhuhai Livzon Diagnostics Inc. increased from 88,232,932 sharesto 92,876,771 shares with par value of RMB1 per share. The increased number of shares were subscribed for by ZhuhaiHaoxun Enterprise Management Consulting Partnership (Limited Partnership) (珠海豪汛企业管理咨询合伙企业(有限合伙)), Zhuhai Yichen Enterprise Management Consulting Partnership (Limited Partnership) (珠海熠臣企业管理咨询合伙企业(有限合伙)) and Zhuhai Qijing Enterprise Management Consulting Partnership (Limited Partnership) (海启靖企业管理咨询合伙企业(有限合伙)) at the consideration of RMB11,702,474. The subscription price is lower than the fairvalue, therefore it constitutes a share-based payment. The total share-based payment of the transaction is RMB20,709,000,which should be amortized within 5 years according to the Partnership Agreement, and share incentive expenses wererecognized due to the share-based payment as a result of the change in the shares/shareholding of the shareholders ofZhuhai Livzon Diagnostics Inc.On 31 August 2021, the general meeting of LivzonBio considered and approved the Equity Incentive Scheme of ZhuhaiLivzon Biotechnology Co., Ltd. (珠海市丽珠生物医药科技有限公司), granting 66,666,667 restricted shares of LivzonBiologics to incentive participants, among which 42 million shares were granted in the first batch and 24,666,667 shareswere reserved. Incentive participants indirectly subscribed for the above shares through the holding of the limitedpartnership shares of the employee shareholding platform. The subscription price is lower than the fair value, therefore itconstitutes a share-based payment. The total share-based payment of the transaction is RMB33.6 million, which should beamortized during the lock-up period according to the Equity Incentive Scheme of LivzonBio and the Grant Agreement andRMB9,800,000 was amortized in the 6-month period ended 30 June 2022.
2. Equity settled share-based payments
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Method in determining the fair value of equity instruments at the date of grant
Black-Scholes Model,
market price
Basis for determining quantity of exercisable equity instruments–Reasons for significant discrepancies between estimate for the Period and Previous PeriodNoneAccumulated amount of equity settled share-based payments included in capital reserve174,837,926.50Total expense recognised for equity settled share-based payments for the Period20,288,460.09
3. Cash settled share-based payments
□ Applicable
√ N/A
XII. Commitments and Contingencies
1. Significant commitments
√ Applicable □ N/ASignificant commitments to outsiders as of the balance sheet data, and their nature and amount
(1) Capital commitments
Capital commitments entered into but not recognized in the financialstatementsClosing balanceBeginning balance
Commitments in relation to acquisition of long-term assets623,138,265.76582,336,168.87Commitments in relation to external investment8,000,000.008,000,000.00Commitments in relation to research and development expenditures285,490,623.32309,313,880.64
(2) Other commitments
None.
(3) Performance of previous commitments
The Company has duly performed the capital expenditure commitments and the operating lease commitments and theother commitments as at 30 June 2022.
2. Contingencies
(1). Significant contingencies as of the balance sheet date
□ Applicable
√ N/A
(2) .Please also make explanations thereof if the Company has no significant contingency to be disclosed:
√ Applicable □ N/AExcept for the guarantee with related parties mentioned in Note X. 5. (4). As at 30 June 2022, there were no significantcontingencies required to be disclosed by the Company.
3. Others
□ Applicable
√ N/A
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XIII. Events after the Balance Sheet Date
1. Significant non-adjustment events
□ Applicable
√ N/A
2. Profit distribution
□ Applicable
√ N/A
3. Sales returns
□ Applicable
√ N/A
4. Descriptions of other events after the balance sheet date
√ Applicable □ N/A
(1) Share repurchase
On 23 December 2021, the Company’s 5th Extraordinary General Meeting of Shareholders of 2021 reviewed and approvedthe“Plan on Repurchasing the Company’s Shares by Centralized Bidding Transactions”, and plans to repurchase sharesthrough centralized bidding transactions in the Shanghai Stock Exchange trading system, the total amount of fundsfor repurchase shares shall not be less than RMB300 million (inclusive) and not more than RMB600 million (inclusive),and the repurchase price shall not exceed RMB15 per share (inclusive). The repurchased shares will be used to reducethe Company’s registered capital, and the source of repurchase fund are self-funding or self-financing by the Company.The repurchase period is no more than 12 months from the date when the Company’s general meeting of shareholdersconsiders and approves the repurchase plan, that is, from 23 December 2021 to 22 December 2022.As of 7 July 2022, the Company repurchased a total of 50,959,668 shares and paid a total of RMB599,981,715.83 (includingtransaction fees), and de-registration was completed on 11 July 2022.
(2) Issue GDR in the SIX Swiss Exchange
The Company held the 13th meeting of the 8th session of the Board of Directors on 22 June 2022, at which it reviewedand approved the“Proposal on the Company’s Issuance of GDR, Listing on the SIX Swiss Exchange and Conversion toJoint Stock Company Floatation and Listing Abroad”, the Company is planning for overseas issuance of Global DepositoryReceipts (“GDR”) and applying for listing on the SIX Swiss Exchange. GDR is the newly issued A shares of the Company’sRMB ordinary shares as the underlying securities. This proposal still needs to be submitted to the shareholders generalmeeting for approval.As of 10 August 2022, the Company has no other events that needed to be disclosed after the balance sheet date.
(3) Stock option incentive
The company held the 15th meeting of the 8th session of the Board of Directors on 10 August 2022, at which it reviewedand passed the“Proposal on the Company’s 2022 Stock Option Incentive Plan(Draft) and its Abstract”which is still to besubmitted to the general meeting of shareholders of the company for deliberation.
XIV. Other significant events
1. Other significant events
√ Applicable □ N/A
(1). Important supplier
Jiaozuo Xincheng Huai Medicine Co., Ltd. (hereinafter referred to as“Xincheng Company”) is a supplier of Chinese herbsof the Company. The Company purchased Chinese herbs of RMB11.39 million (tax inclusive) from Xincheng Companyduring the 6-month period ended 30 June 2022, accounting for 95.77% of the total amount of purchases of Chinese herbs(excluding Livzon Group). Xincheng Company delivered commodities to the Company according to the Purchase Contractof the Company and issued VAT special invoices after acceptance by the Company. As at 30 June 2022, the balance ofprepayment of the Company to Xincheng Company was RMB13,155,269.50.
(2) Leases
The Company had adopted a simplified approach for short-term leases and leases of low value assets and did notrecognized right-of-use assets and lease liabilities. The expense of short-term leases, leases of low value assets and variablelease payments not included in the measurement of lease liabilities are included in the expenses in the current period asfollows:
ItemAmount for the PeriodShort-term leases2,392,763.95Leases of low value assets0.00Total2,392,763.95As at 30 June 2022, save as the disclosed above, there were no other significant matters required to be disclosed by theCompany.XV.Notes to the Key Components of Financial Statements item of the ParentCompany
1. Notes receivables
Category
Balance at the End of the PeriodBalance at the Beginning of the PeriodBook balance
Provision for
bad debtsCarrying valueBook balance
Provision forbad debtsCarrying valueBank acceptance bills234,490,808.520.00234,490,808.52374,296,302.210.00374,296,302.21Commercial acceptance bill0.000.000.000.000.000.00Total234,490,808.520.00234,490,808.52374,296,302.210.00374,296,302.21
(1) Notes receivable pledged at the end of the period
Category
Amount pledged at theEnd of the PeriodBank acceptance bills126,859,793.46
(2) Notes receivable endorsed or discounted to other parties but not yet expired at balance sheet date
Category
Amountderecognised at
the End ofthe Period
Amount notderecognised at
the End ofthe PeriodBank acceptance bills not yet mature but already endorsed11,214,600.10Bank acceptance bills not yet mature but already discounted154,026,768.58Total165,241,368.68
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(3) There were no bills transferred into accounts receivables for non-performance by the issuer at the End of the Period.
(4) Classification by the method of bad debt provision
Category
Balance at the End of the PeriodBalance at the Beginning of the PeriodBook balance
Provision forbad debtsBook balance
Provision forbad debtsBook balance
Provision for
bad debtsAmountPercentageAmountPercentageAmountAmountPercentageAmountPercentageCarrying value
(%)(%)(%)(%)Provision for bad debt on an individual basisProvision for bad debt on a collective basis234,490,808.52100.000.000.00234,490,808.52374,296,302.21100.000.000.00374,296,302.21Including:
Bank acceptance bills234,490,808.52100.000.000.00234,490,808.52374,296,302.21100.000.000.00374,296,302.21Total234,490,808.52100.000.000.00234,490,808.52374,296,302.21100.000.000.00374,296,302.21
(5) Provision for bad debt made, recovered or reversed during the Period
None
(6) There are no bills receivables actually written-off for the Period.
2. Accounts receivables
(1). Disclosure using the aging analysis method
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Aging
Balance at theEnd of the Period
Within 1 year354,284,687.761-2 years2,155,591.772-3 years335,434.363-4 years520,033.444-5 years383,816.50Over 5 years7,902,586.13Total365,582,149.96
(2). Classification by the method of bad debt provision
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Category
Balance at the End of the PeriodBalance at the Beginning of the PeriodBook balance
Provision forbad debts
Carrying value
Book balance
Provision forbad debts
Carrying valueAmountPercentage AmountExpectedcredit lossrate AmountPercentageAmount
Expectedcredit loss
rate(%)(%)(%)(%)Provision for bad debts on individual basis771,300.680.21771,300.68100.000.00771,300.680.14771,300.68100.000.00Including:
Receivables from domestic customers771,300.680.21771,300.68100.000.00771,300.680.14771,300.68100.000.00Receivables from overseas customers0.000.000.000.000.000.000.000.000.000.00Provision for bad debts on portfolio basis364,810,849.2899.7911,676,640.803.20353,134,208.48548,813,091.1499.8613,270,020.902.42535,543,070.24Including:
Receivables from domestic customers364,810,849.2899.7911,676,640.803.20353,134,208.48548,813,091.1499.8613,270,020.902.42535,543,070.24Receivables from overseas customers0.000.000.000.000.000.000.000.000.000.00Total365,582,149.96100.0012,447,941.483.40353,134,208.48549,584,391.8210014,041,321.582.55535,543,070.24
Provision for bad debts on individual item:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Name
Balance at the End of the PeriodBook balance
Provisionfor bad debts
Expected credit
loss rate
Reason forprovision made(%)Purchase of goods771,300.68771,300.68100.00Not expected to be
recoverableTotal771,300.68771,300.68100.00/Statements of provision for bad debt on individual basis:
□ Applicable
√ N/AProvision for bad debts on portfolio basis:
√ Applicable □ N/AItem on portfolio basis: Due from domestic customers
Unit: Yuan Currency: RMB
Aging
Balance at the End of the PeriodAccountsreceivables
Provision for
bad debtsCarrying Value
(%)Within 1 year354,284,687.763,435,867.570.971-2 years (inclusive of 2 years)2,155,591.77217,779.5910.102-3 years (inclusive of 3 years)335,434.36114,630.3134.173-4 years (inclusive of 4 years)520,033.44400,016.7276.924-5 years (inclusive of 5 years)38,776.7032,021.3682.58Over 5 years7,476,325.257,476,325.25100.00Total364,810,849.2811,676,640.803.20
lnterim Report 2022
Standards of provision for bad debts made by portfolio and descriptions thereof:
□ Applicable
√ N/AIf the provision for bad debts is made in accordance with the general model of expected credit losses, please refer to otherreceivables disclosure:
□ Applicable
√ N/A
(3). Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theBeginning of
the Period
Changes for the current period
Balance atthe End ofthe PeriodProvisionRecoveryor reversal
Removal/write-off
Otherchanges
Accounts receivables14,041,321.58-1,593,380.100.000.000.0012,447,941.48Total14,041,321.58-1,593,380.100.000.000.0012,447,941.48As at 30 June 2022 and 31 December 2021, the Company had no accounts receivables that are past due but not impaired.Significant recovery or reversal of bad debt provision for the current period:
□ Applicable
√ N/A
(4). Accounts receivable actually written off for the current period
□ Applicable
√ N/A
(5). The top five balances of accounts receivable by debtors as at the End of the Period
√ Applicable □ N/AAs of 30 June 2022, the total amount of the top five debtors in closing balance is RMB43,228,720.97, accounting for 11.82%of the total amount of closing balance of accounts receivable, and the corresponding closing balance of provision for baddebts is total RMB432,287.21.
(6). Derecognised accounts receivables in the Company due to the transfer of financial assets.
□ Applicable
√ N/A
(7). Amount of assets or liabilities for which accounts receivable have been transferred but involvement continues in the
Company.
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
3. Other receivables
Line items√ Applicable □ N/A
Unit: Yuan Currency: RMBItem
Balance at theEnd of the Period
Balance at theBeginning of
the PeriodDividends receivable769,999,500.00814,041,000.00Other receivables323,802,318.49322,196,811.25Total1,093,801,818.491,136,237,811.25Other descriptions:
□ Applicable
√ N/A
(1). Dividends receivable
Dividends receivable√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at theEnd of the Period
Balance at theBeginning of
the Period
Topsino749,999,500.00749,999,500.00Haibin Pharma0.0044,041,500.00Fenglei Electric Power20,000,000.0020,000,000.00Provision for bad debts0.000.00Total769,999,500.00814,041,000.00Other receivables
(1) .Disclosure by aging
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Aging
Balance at theEnd of the PeriodSubtotal within 1 year323,737,556.351-2 years247,451.442-3 years149,386.443-4 years146,228.364-5 years0.00Over 5 years19,105,586.00Provision for bad debts-19,583,890.10Total323,802,318.49
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(2) .Disclosure by nature of the amount
√ Applicable □ N/A
Unit: Yuan Currency: RMBItem
Balance at theEnd of the Period
Balance at the
Beginning ofthe Period
Other receivables of each company within the scope of combination322,930,996.47294,833,504.86Capital reduction0.0024,078,925.22Treasury bonds and security deposits17,968,386.0417,968,386.04External entities balances1,656,243.343,763,793.73Security deposits830,582.74848,272.56Others0.0050,500.11Total343,386,208.59341,543,382.52
(3) .Provision made for bad debts
√ Applicable □ N/AAs at the End of the Period, provision for bad debts in first stage:
CategoryBook balance
Expected creditlosses rateover the next
12 months
Provisionfor bad debtsCarrying valueReason(%)Provision for bad debt onindividual item
0.000.000.000.00Capital reduction0.000.000.000.00Provision for bad debt onportfolio basis
322,930,996.470.000.00322,930,996.47Other receivables of eachcompany within the scope ofcombination
322,930,996.470.000.00322,930,996.47Expected to be
recoveredTotal322,930,996.470.000.00322,930,996.47As at the End of the Period, provision for bad debts in second stage:
CategoryBook balance
Expected credit
losses rateover thelifetime
Provisionfor bad debtsCarrying valueReason(%)Provision for bad debt onindividual itemProvision for bad debt onportfolio basis
2,486,826.0864.961,615,504.06871,322.02Receivables of security deposits830,582.7418.94157,320.34673,262.40Other receivables1,656,243.3488.041,458,183.72198,059.62Total2,486,826.0864.961,615,504.06871,322.02
As at the End of the Period, provision for bad debts in third stage:
CategoryBook balance
Expected credit
losses rateover thelifetime
Provisionfor bad debtsCarrying valueReason(%)Provision for bad debt onindividual item
17,968,386.04100.0017,968,386.040.00National debt and Margin17,968,386.04100.0017,968,386.040.00Not expected to
be recoverableProvision for bad debt onportfolio basis
0.000.000.000.00Total17,968,386.04100.0017,968,386.040.00As at 31 December 2021, provision made for bad debts:
As at 31 December 2021, provision for bad debts in first stage:
CategoryBook balance
Expected creditlosses rateover the next
12 months
Provisionfor bad debtsCarrying valueReason(%)Provision for bad debt onindividual item
24,078,925.220.000.0024,078,925.22Capital reduction24,078,925.220.000.0024,078,925.22Expected to be
recoveredProvision for bad debt onportfolio basis
294,833,504.860.000.00294,833,504.86Other receivables of eachcompany within the scope ofcombination
294,833,504.860.000.00294,833,504.86Expected to be
recoveredTotal318,912,430.080.000.00318,912,430.08As at 31 December 2021, provision for bad debts in second stage:
CategoryBook balance
Expected creditlosses rate
over thelifetime
Provisionfor bad debtsCarrying valueReason(%)Provision for bad debt on anindividual basis
0.000.000.000.00Provision for bad debt on acollective basis
4,662,566.4029.561,378,185.233,284,381.17Receivable deposits anddeposits and rental fees
877,102.5617.99157,778.54719,324.02Other receivables3,785,463.8432.241,220,406.692,565,057.15Total4,662,566.4029.561,378,185.233,284,381.17
lnterim Report 2022
As at 31 December 2021, provision for bad debts in the third stage:
CategoryBook balance
Expected credit
losses rateover thelifetime
Provisionfor bad debtsCarrying valueReason(%)Provision for bad debt on anindividual basis
17,968,386.04100.0017,968,386.040.00Treasury bonds and Margin17,968,386.04100.0017,968,386.040.00Not expected to
be recoverableProvision for bad debt on acollective basis
0.000.000.000.00-Total17,968,386.04100.0017,968,386.040.00
(4) Provision for bad debts made, recovered or reversed during the Period
Unit: Yuan Currency: RMB
Provision for bad debts
First stageSecond stageThird stage
TotalExpected creditlosses over thenext 12 months
Expected creditlosses over thelifetime (withoutimpairment of
credit)
Expected creditlosses over the
lifetime (withimpairment of
credit)
Balance at the Beginning of thePeriod
0.001,378,185.2317,968,386.0419,346,571.27Movement of beginning balanceduring the period– Transferred to Second stage0.000.000.000.00– Transferred to third stage0.000.000.000.00– Reversed to second stage0.000.000.000.00– Reversed to first stage0.000.000.000.00Provisions made for the Period0.00237,318.83-158,470.7778,848.06Reversals for the Period0.000.000.000.00Write-off for the Period0.000.000.000.00Settlement for the Period0.000.00-158,470.77-158,470.77Other changes0.000.000.000.00Balance at the End of the Period0.001,615,504.0617,968,386.0419,583,890.10Descriptions of the significant changes in the gross carrying amount of other receivables for which the changes in lossallowance occur for the current period:
□ Applicable
√ N/AProvision for bad debts in the current period and the basis for assessing whether the credit risk of financial instrumentshave increased significantly:
□ Applicable
√ N/A
(5). Actual written-off of other receivables at the End of the Period
□ Applicable
√ N/A
(6) Other receivables due from the top five debtors at the End of the Period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Name of entityNature of receivables
Balance at theEnd of the PeriodAging
Proportion tototal otherreceivables at
the End ofthe Period
Balance ofprovision for baddebts at the End ofthe Period(%)Shenzhen Fenglei ElectricPower Investment Co., Ltd.
Other receivables of eachcompany within thescope of combination
129,956,104.29Within one year37.850.00Joincare Haibin PharmaceuticalCo., Ltd.
Other receivables of eachcompany within thescope of combination
125,587,663.86Within one year36.570.00Topsino Industries LimitedOther receivables of each
company within thescope of combination
36,963,997.56Within one year10.760.00Huaxia Securities Co., LtdTreasury bonds and
security deposits
17,968,386.04Over 5 years5.2317,968,386.04Guangzhou Joincare RespiratoryMedicine EngineeringTechnology Co., Ltd.
Other receivables of eachcompany within thescope of combination
16,177,205.99Within one year4.710.00Total/326,653,357.74/95.1217,968,386.04
(7). Other receivables derecognised due to the transfer of financial assets
□ Applicable
√ N/A
(8). Assets and liabilities generated by the transfer of other receivables and continuing involvement therein
□ Applicable
√ N/AOther descriptions:
□ Applicable
√ N/A
4. Long-term equity investments
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item
Balance at the End of the PeriodBalance at the Beginning of the PeriodBook balance
Provision for
impairmentCarrying valueBook balance
Provision for
impairmentCarrying value
Investments in subsidiaries3,453,138,312.117,010,047.913,446,128,264.203,453,138,312.117,010,047.913,446,128,264.20Investments in associates andjoint ventures
67,306,382.270.0067,306,382.2784,810,888.090.0084,810,888.09Total3,520,444,694.387,010,047.913,513,434,646.473,537,949,200.207,010,047.913,530,939,152.29
lnterim Report 2022
(1). Investments in subsidiaries
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Investee
Balance atthe Beginningof the Year
Increaseduring thePeriod
Decreaseduring the
Period
Balance atthe End ofthe Period
Provision for
impairmentfor the Period
Balance ofprovision for
impairmentat the End of
the PeriodLivzon608,741,654.080.000.00608,741,654.080.000.00Haibin Pharma783,054,186.380.000.00783,054,186.380.000.00Joincare Daily-Use24,116,498.560.000.0024,116,498.560.001,610,047.91Topsino813,552,689.310.000.00813,552,689.310.000.00Taitai Genomics37,500,000.000.000.0037,500,000.000.000.00Taitai Pharmaceutical105,939,709.720.000.00105,939,709.720.000.00Shenzhen Hiyeah170,100,000.000.000.00170,100,000.000.005,400,000.00Fenglei Electric Power100,763,433.060.000.00100,763,433.060.000.00Jiaozuo Joincare375,000,000.000.000.00375,000,000.000.000.00Shanghai Frontier32,500,000.000.000.0032,500,000.000.000.00Taitai Biological4,832,950.000.000.004,832,950.000.000.00Joincare Haibin100,000,000.000.000.00100,000,000.000.000.00Joincare Special medicine Food3,000,000.000.000.003,000,000.000.000.00Livzon Biotechnology *294,037,191.000.000.00294,037,191.000.000.00Total3,453,138,312.110.000.003,453,138,312.110.007,010,047.91
(2). Investment in associates and joint ventures
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Investee
Balance
at theBeginningof the Year
Change during the Period
Balanceat the End ofthe Period
Balance ofprovision
forimpairment
at the End
of thePeriodIncreasedinvestment
Decreasedinvestment
Investment
profit andloss underthe equity
method
Adjustment
in other
com-prehensive
income
Otherequitychanges
Cashdividendor profitdistribution
declared
Provision forImpairmentOthers
II AssociatesNingbo Ningrong Biological Medicine Co.,Ltd.
27,464,098.710.000.00-203,057.330.000.000.000.000.0027,261,041.380.00Feellife Health Inc.10,689,582.150.000.00499,401.080.000.000.000.000.0011,188,983.230.00Novastage Pharmaceuticals (Shenzhen), Ltd.18,080,883.210.0018,080,883.210.000.000.000.000.000.000.000.00Jiangsu Baining Yingchuang MedicalTechnology Co., Ltd
28,576,324.020.000.00280,033.640.000.000.000.000.0028,856,357.660.00Total84,810,888.090.0018,080,883.21576,377.390.000.000.000.000.0067,306,382.270.00
5. Operating income and operating cost
Operating income and operating cost√ Applicable □ N/A
Unit: Yuan Currency: RMBItem
For the PeriodFor the Previous PeriodCostIncomeCostIncomePrincipal activities1,169,331,881.23785,770,845.75759,577,957.14459,140,124.45Other activities7,768,255.943,116,156.208,294,340.882,648,591.72Total1,177,100,137.17788,887,001.95767,872,298.02461,788,716.17Other descriptions:
(2). Descriptions of operating income
① Operating income and operating cost presented by product types
Item
For the PeriodFor the Previous PeriodCostIncomeIncomeCostChemical pharmaceuticals1,091,103,688.17735,913,959.70674,814,842.94406,252,524.34Health care products54,408,929.5535,996,134.4862,009,176.4239,684,403.79Traditional Chinese medicine23,819,263.5013,860,751.5722,753,937.7813,203,196.32Total1,169,331,881.23785,770,845.75759,577,957.14459,140,124.45
② Operating income and operating cost presented by major operating regions
Item
For the PeriodFor the Previous PeriodCostIncomeCostIncomeDomestic1,169,331,881.23785,770,845.75759,577,957.14459,140,124.45Total1,169,331,881.23785,770,845.75759,577,957.14459,140,124.45
③ Operating income and operating cost presented by time of income recognition
Item
For the PeriodFor the Previous PeriodIncomeCostIncomeCostCommodities (transferred at a pointin time)
1,169,331,881.23785,770,845.75759,577,957.14459,140,124.45Total1,169,331,881.23785,770,845.75759,577,957.14459,140,124.45
(3) Descriptions of other activities
Item
For the PeriodFor the Previous PeriodIncomeCostIncomeCost
Rental fees5,325,285.20781,055.726,705,251.571,059,502.41Others2,442,970.742,335,100.481,589,089.311,589,089.31Total7,768,255.943,116,156.208,294,340.882,648,591.72
lnterim Report 2022
6. Investment income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemFor the Period
For thePrevious Period
Long-term equity investments income under cost method310,288,053.40592,353,897.50Long-term equity investments income under equity method576,377.39-1,300,363.73Investment income from disposal of long-term equity investments4,242,404.460.00Dividend income from other equity instrument investments0.004,175,569.86Investment income from disposal of financial assets held for trading0.0048,524.94Total315,106,835.25595,277,628.57
7. Others
□ Applicable
√ N/AXVI. Supporting Information
1. Statement of non-recurring profit or loss
√ Applicable □ N/A
Unit: Yuan Currency: RMB
ItemAmount
Gain or loss on disposal of non-current assets3,731,885.55Return, exemption and discharge of taxes resulting from approving ultra vires, or without formalapproval or incidentally incurred
0.00
Government grants as included in the current profit or loss, however, except for those which areclosely related to the normal business of an enterprise, comply with the policies of the State andare continuously entitled with specific amount or quantity according to certain standards
94,185,202.59Funds occupation fees charged from non-financial enterprises0.00Gains resulting from the investment cost of the enterprise for the purpose of acquisition of thesubsidiaries, joint operation and joint ventures is lower than the fair value of net identifiable assetsof the investee as entitled at the time of receipt of the investment
0.00
Profit or loss from exchange of non-monetary assets0.00Profit or loss from investment or management of assets by the others0.00Provision for impairment of assets accrued due to force majeure factors, such as natural disasters0.00Profit or loss from debts restructuring0.00Enterprise restructuring fees, such as the expenses for employees’ settlement and the integrationfees
0.00
Profit or loss exceeding the fair value and generated from the transaction of which the transactionprice is obviously unfair
0.00
Net profit or loss over the current period of the subsidiaries as a result of business combinationunder common control from the beginning of the year to the date of consolidation
0.00
Profit or loss from contingent issues irrelevant to the Company’s normal business0.00Except for the efficient hedging related to the Company’s normal business, profit or loss fromchanges in fair value as generated from financial assets and financial liabilities held for trading andgains from investment as a result of the disposal of financial assets and financial liabilities held fortrading and debt investments
-98,936,528.71
ItemAmountReversals of provision for impairment of accounts receivable with individual impairment test158,470.77Profit or loss from entrusted loans0.00Gains or losses from changes in the fair values of investment properties that are subsequentlymeasured using the fair value model
0.00
Impact of a one-time adjustment on current profit and loss according to the requirements of taxand accounting laws and regulations
0.00
Custody fees of entrusted operation0.00Other non-operating income and expenses besides the above items-2,270,691.97Other items that conform to the definition of non-recurring profit or loss0.00Less: Effect of income tax10,439,515.79Effect of minority equity (After tax)-10,845,265.03Total-2,725,912.53Provide explanations for classifying non-recurring profit and loss items defined in the Explanatory Announcement No. 1for Public Company Information Disclosures – Non-recurring Profits and Losses, and for classifying non-recurring profitand loss items listed in the Explanatory Announcement No. 1 for Public Company Information Disclosures – Non-recurringProfits and Losses as recurring profit and loss item.
□ Applicable
√ N/A
2. Rate of return on net assets and earnings per share
√ Applicable □ N/AProfit for the Reporting Period
Weighted averagereturn on equity
Earnings per shareBasic EPSDiluted EPS(%)
Net loss attributable to the Company’s ordinary shareholders6.650.42350.4232Net profit attributable to the parent company’s shareholders,excluding non-recurring profit or loss
6.670.42490.4246
3. Differences in accounting data under domestic and foreign accounting standards
□ Applicable
√ N/A
4. Others
□ Applicable
√ N/A
Chairman: Zhu BaoguoDate of Submission Approved by the Board: 10 August, 2022
Revised information
□ Applicable
√ N/A