Important Notice
Ⅰ The Board of Directors (the “Board”), the Board of Supervisors and directors, supervisors andsenior management of the Company hereby warrant the truthfulness, accuracy and completenessof the contents of the interim report (the “Report”), and that there are no false representations,misleading statements or material omissions contained in the Report, and severally and jointlyaccept 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-charge of the Company's accounting work and the person-in-charge of theaccounting department (the head of the accounting department), declare that they hereby warrantthe truthfulness, accuracy and completeness of the financial statements contained in the Report.Ⅴ Profit distribution plan or plan for conversion of capital reserve to share capital approved bythe Board during the Reporting PeriodNot applicableVI Risk declaration for the forward-looking statements
√Applicable □N/A
The Report contains forward-looking statements which involve the future plans, development strategies,etc. of the Company, yet do not constitute substantive undertakings of the Company to investors.Investors should exercise caution prior to making investment decisions.VII Whether there is non-operating use of funds by the controlling shareholder and their relatedpartiesNoVIII Whether there is a violation of the prescribed decision-making procedures to provideexternal guaranteesNoIX Whether more than half of directors cannot warrant the truthfulness, accuracy andcompleteness of the Report disclosed by the CompanyNoX Significant risk warnings
There is no exceptionally significant risk that will have a material impact on the productions andoperations of the Company during the Reporting Period. The Company has described various risksrelated to productions and operations that the Company may face and the corresponding responsemeasures taken. Please refer to “Risks” in Chapter 3 “Management Discussion and Analysis”.XI Others
□Applicable √N/A
Table of Contents
Financial Highlights ...... 5
Chapter 1 Definitions ...... 7
Chapter 2 Company Profile and Major Financial Indicators ...... 9
Chapter 3 Management Discussion and Analysis ...... 13
Chapter 4 Corporate Governance ...... 49
Chapter 5 Environmental and Corporate Social Responsibility ...... 51
Chapter 6 Major Events ...... 85
Chapter 7 Changes in Equity and Shareholders ...... 97
Chapter 8 Information on Preferred Shares ...... 101
Chapter 9 Information on Bonds ...... 102
Chapter 10 Financial statements ...... 103
| List of documents available for inspection | The Financial Statements signed and sealed by the person-in-charge of the Company, the person-in-charge of the Company's accounting work and the person-in-charge of the accounting department (the head of the accounting department) |
| The original copies of all documents and announcements of the Company which have been disclosed to the public on the website designated by CSRC (China Securities Regulatory Commission) during the Reporting Period |
Financial Highlights
Financial Highlights
Chapter 1 Definitions
In this Report, unless the context otherwise requires, the following expressions shall have thefollowing meanings:
| Definitions of common terms | ||
| CSRC | Refers to | China Securities Regulatory Commission |
| SSE | Refers to | Shanghai Stock Exchange |
| Baiyeyuan or the Controlling Shareholder | Refers to | Shenzhen Baiyeyuan Investment Co., Ltd. * (深圳市百业源投资有限公司) |
| Company or the Company | Refers to | Joincare Pharmaceutical Group Industry Co., Ltd. * (健康元药业集团股份有限公司) |
| GDR | Refers to | Global Depository Receipts |
| CDE | Refers to | Center For Drug Evaluation (国家药品监督管理局药品审评中心) |
| FDA | Refers to | U.S Food and Drug Administration |
| GMP | Refers to | Good Manufacturing Practice |
| GSP | Refers to | Good Supply Practice |
| BE | Refers to | Bioequivalence |
| MVR | Refers to | Mechanical Vapor Recompression |
| QC | Refers to | Quality Control |
| ROI | Refers to | Return on Investment |
| R&D | Refers to | Research and Development |
| Livzon Group | Refers to | Livzon Pharmaceutical Group Inc.* (丽珠医药集团股份有限公司) |
| Haibin Pharma | Refers to | Shenzhen Haibin Pharmaceutical Co., Ltd.* (深圳市海滨制药有限公司) |
| Xinxiang Haibin | Refers to | Xinxiang Haibin Pharmaceutical Co., Ltd. * (新乡海滨药业有限公司) |
| Taitai Pharmaceutical | Refers to | Shenzhen Taitai Pharmaceutical Co., Ltd. * (深圳太太药业有限公司) |
| Joincare Haibin | Refers to | Joincare Haibin Pharmaceutical Co., Ltd.* (健康元海滨药业有限公司) |
| Taitai Genomics | Refers to | Shenzhen Taitai Genomics Inc. Co., Ltd. * (深圳太太基因工程有限公司) |
| Jiaozuo Joincare | Refers to | Jiaozuo Joincare Bio Technological Co., Ltd.* (焦作健康元生物制品有限公司) |
| Topsino | Refers to | Topsino Industries Limited * (天诚实业有限公司) |
| Fenglei Electric Power | Refers to | Shenzhen Fenglei Electric Power Investment Co., Ltd. * (深圳市风雷电力投资有限公司) |
| Health China | Refers to | Health Pharmaceutical (China) Co., Ltd. * (健康药业（中国）有限公司) |
| Shanghai Frontier | Refers to | Shanghai Frontier Health Pharmaceutical Technology Co., Ltd. * (上海方予健康医药科技有限公司) |
| Joincare Research Institute | Refers to | Henan Joincare Biomedical Research Institute Co., Ltd.*(河南省健康元生物医药研究院有限公司) |
| Livzon MAB | Refers to | Livzon MABPharm Inc. * (珠海市丽珠单抗生物技术有限公司) |
| Livzon Diagnostics | Refers to | Zhuhai Livzon Diagnostics Inc. * (珠海丽珠试剂股份有限公司) |
| Livzon Xinbeijiang | Refers to | Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc.* (丽珠集团新北江制药股份有限公司) |
| Ningxia Pharmaceutical | Refers to | Livzon Group (Ningxia) Pharmaceutical Manufacturing Co., Ltd.* (丽珠集团（宁夏）制药有限公司) |
| Gutian Fuxing | Refers to | Gutian Fuxing Pharmaceutical Co., Ltd. * (古田福兴医药有限公司) |
| Fuzhou Fuxing | Refers to | Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd.* (丽珠集团福州福兴医药有限公司) |
| Livzon Hecheng | Refers to | Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd. * (珠海保税区丽珠合成制药有限公司) |
| Livzon Limin | Refers to | Livzon Group Limin Pharmaceutical Manufacturing Factory * (丽珠集团利民制药厂) |
| Livzon Pharmaceutical Factory | Refers to | Livzon Group Livzon Pharmaceutical Factory * (丽珠集团丽珠制药厂) |
| Shanghai Livzon | Refers to | Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd. * (上海丽珠制药有限公司) |
| Sichuan Guangda | Refers to | Sichuan Guangda Pharmaceutical Manufacturing Co., Ltd. * (四川光大制药有限公司) |
| Jiaozuo Hecheng | Refers to | Jiaozuo Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd. * (焦作丽珠合成制药有限公司) |
| Jinguan Electric Power | Refers to | Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. * (焦作金冠嘉华电力有限公司) |
| Tianjin Tongrentang | Refers to | Tianjin Tongrentang Group Co., Ltd. * (天津同仁堂集团股份有限公司) |
| COVID-19 pandemic or pandemic | Refers to | The outbreak of the disease caused by a new coronavirus called SARS-CoV-2 |
| Reporting Period | Refers to | From 1 January 2023 to 30 June 2023 |
| End of the Reporting Period | Refers to | 30 June 2023 |
| Currency or unit | Refers to | RMB unless otherwise specified |
*For identification purpose only
Chapter 2 Company Profile and Major Financial Indicators
I Company profile
| Chinese 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 Company | Joincare Pharmaceutical Group Industry Co., Ltd |
| Abbreviation of the English name | Joincare |
| Legal representative of the Company | Zhu Baoguo |
II Contact persons and contact details
| Board Secretary | Representative of Securities Affairs | |
| Name | Zhao Fengguang (赵凤光) | Li Hongtao (李洪涛), Luo Xiao (罗逍) |
| Address | Joincare 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, Shenzhen |
| Telephone | 0755-86252656, 0755-86252388 | 0755-86252656, 0755-86252388 |
| Fax | 0755-86252165 | 0755-86252165 |
| zhaofengguang@joincare.com | lihongtao@joincare.com luoxiao@joincare.com |
III Introduction of the Company's basic information
| Registered address | Joincare Pharmaceutical Group Building, No. 17, Langshan Road, North District, Hi-tech Zone, Nanshan District, Shenzhen |
| Historical changes in registered 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 2012 |
| Office address | Joincare Pharmaceutical Group Building, No. 17, Langshan Road, North District, Hi-tech Zone, Nanshan District, Shenzhen |
| Postal code of Office address | 518057 |
| Website | http://www.joincare.com |
| joincare@joincare.com | |
| Index for query of changes during the Reporting Period | There was no change during the Reporting Period |
IV Introduction of changes in information disclosure and places for inspection
| Name of designated newspapers for information disclosure by the Company | China Securities Journal, Securities Times, Securities Daily, and Shanghai Securities News |
| Website for publication of the interim report | http://www.sse.com.cn |
| Place for inspection of the interim report of the Company | Office address of the Company |
| Index for query of changes during the Reporting Period | There was no change during the Reporting Period |
V Company stock profile
| Class of stock | Listed on | Stock Abbreviation | Stock code | Stock abbreviation prior to change |
| A Share | Shanghai Stock Exchange | 健康元 | 600380 | 太太药业, S健康元 |
| GDR | SIX Swiss Exchange | Joincare Pharmaceutical Group Industry Co., Ltd. | JCARE | / |
VI Other relevant information
□Applicable √N/A
VII Principal accounting data and financial indicators of the Company(I) Principal accounting data
Unit: Yuan Currency RMB
| Principal accounting data | Reporting Period (From January to June) | Same Period of Last Year | Increase/decrease for the Reporting Period as compared to the same period last year (%) |
| Revenues | 8,719,741,599.23 | 8,564,945,285.55 | 1.81 |
| Net profit attributable to Shareholders of the listed company | 815,434,734.90 | 801,268,519.50 | 1.77 |
| Net profit attributable to Shareholders of the listed company after deduction the extraordinary gain or loss | 781,744,142.18 | 803,994,432.03 | -2.77 |
| Net cash flow from operating activities | 1,257,207,685.54 | 1,902,953,224.79 | -33.93 |
| As at the End of the Reporting Period | As at the End of the Last Year | Increase/decrease as at the end of the Reporting Period as compared to the end of last year (%) | |
| Net assets attributable to Shareholders of the listed company | 13,234,183,227.97 | 13,121,820,410.55 | 0.86 |
| Total assets | 36,241,438,930.34 | 35,729,253,651.41 | 1.43 |
(II) Principal Financial Indicators
| Principal Financial Indicators | Reporting Period (From January to June) | Same Period of Last Year | Increase/decrease for the Reporting Period as compared to the same period last year (%) |
| Basic earnings per share (RMB/share) | 0.4264 | 0.4235 | 0.68 |
| Diluted earnings per share (RMB/share) | 0.4251 | 0.4232 | 0.45 |
| Basic earnings per share after deducting the extraordinary gain or loss (RMB/share) | 0.4088 | 0.4249 | -3.79 |
| Weighted average return on net assets (%) | 6.29 | 6.65 | Decreased by 0.36 percentage points |
| Weighted average return on net assets after deducting the extraordinary gain or loss (%) | 6.03 | 6.67 | Decreased by 0.64 percentage points |
Description of principal accounting data and financial indicators of the Company
√Applicable □N/A
The net cash flow from operating activities was RMB1,257 million, representing a year-on-yeardecrease of 33.93%, this decrease was mainly due to the increased collection of promissory notes,decreased cash collections, and increased cash payments for purchasing goods during the ReportingPeriod.
VIII Differences in accounting data under domestic and foreign accounting standards
□Applicable √N/A
IX Items and amounts of extraordinary gains and losses
√Applicable □N/A
Unit Yuan Currency: RMB
| Items of Extraordinary Gains and Losses | Amounts | Notes (If applicable) |
| Gains and losses on disposal of non-current assets | -342,359.46 | Gains from disposal of fixed assets |
| Government grants as included in the profit or loss for the Period, however, except for those which are closely related to the normal business of an enterprise, comply with the policies of the State and are continuously entitled with specific amount or quantity according to certain standards | 123,344,744.28 | Government grants as included in the profit and loss for the Period |
| Gains and losses on fair value changes derived from holding of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities, and investment income generated on disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt investments, except for effective | -45,351,392.03 | Gains and losses arising from changes in fair value of financial assets/liabilities held for trading, and investment gains from holding and disposal of financial assets/liabilities held for trading |
| hedging activities related to the ordinary operating business of the Company | ||
| Other non-operating income and expenses apart from the above items | -5,612,578.23 | Other non-operating income and non-operating expenses apart from the above items |
| Less: Effect of income tax | 12,031,185.95 | Effect of the above items on income tax |
| Effect of minority equity (after tax) | 26,316,635.89 | The portion of the above items to which minority shareholders are entitled |
| Total | 33,690,592.72 |
Explanations for the Company’s extraordinary gain or loss items as defined in the “ExplanatoryAnnouncement No.1 for Public Company Information Disclosures – Extraordinary Gains or Losses”,and the extraordinary gain or loss items as illustrated in the “Explanatory Announcement No.1 for PublicCompany Information Disclosures – Extraordinary Gains or Losses” which has been defined as itsrecurring gain or loss items.
□Applicable √N/A
X Others
□Applicable √N/A
Chapter 3 Management Discussion and Analysis
I Description of the industry in which the Company operates and principal businesses of theCompany during the Reporting Period(I) Principal businesses and products of the CompanyThe Company is primarily engaged in the R&D, production and sales of pharmaceutical products andhealth care products. The business scope of the Company covers chemical pharmaceuticals, biologics,chemical active pharmaceutical ingredients (APIs) and intermediates, traditional Chinese medicine(TCM), diagnostic reagents and equipment, health care products, etc. The enriched product series andmix provide larger market and growth opportunities for the Company. Main products of the Companyare as follows:
(II) Business model of the CompanyWith the stable operation and rapid development over the years, the Company has become an integratedpharmaceutical group that is driven by scientific research and innovation, integrating the R&D,production, sale and service of pharmaceutical and health care products. It has complete systems ofR&D, procurement, production and sale. Main business models of the Company are as follows:
1. R&D
Taking independent R&D as the mainstay and combining external introduction and cooperativedevelopment, the Company has been paying attention to the cutting-edge technology and unmet clinicalneeds, with efforts focused on innovative drugs and high-barrier complex formulations, and hasestablished an efficient R&D innovation management model. In terms of independent innovation, theCompany has a diversified and multi-dimensional R&D organization with mature R&D teams forchemical pharmaceuticals, biologics, TCM drugs, APIs, diagnostic reagents and health care products.Based on technology platform construction, the Company has built a clear product R&D pipelinecentering on key areas such as respiratory, tumor immunity and psychiatry. In terms of cooperativeinnovation, the Company has launched technical cooperation with domestic and foreign scientificresearch institutions by way of commissioned development or cooperative development, and hasintroduced new technologies and products that meet the strategic development goal of the Companythrough technology transfer or license-in to implement industrial transformation, so as to reinforce andstrengthen our position and strategy in the leading and emerging fields.
2. Procurement
In terms of procurement, the Company pays strict attention to effectiveness, quality and cost ofprocurement and has established long-term and stable partnership with many suppliers. Activepharmaceutical ingredients, supplementary materials, and packaging materials were purchased andstocked up by manufacturers according to production schedules. The Company has developed strictquality standards and procurement management systems, and required subordinate manufacturers tomake procurements in accordance with the GMP. Meanwhile, the Company established long-termstrategic partnerships with bulk material suppliers, and strengthened the management of supply qualityand cost control based on strict quality standards. The Company has established an internal evaluationsystem and files of market prices so as to promptly acquire market information for procurement throughcomparisons of quality and price.
3. Production
In terms of production, the Company adopts the principle of market demand-oriented approach payingattention to real market demand. Specifically, the Sales Department of the Company investigated marketdemands, made sales plans, and comprehensively considered factors such as the product inventoryquantity and capacity of production lines of the Company so as to determine the monthly productionquantities and specifications. Moreover, the purchase orders of raw materials are determined accordingto the production schedule and the inventory levels of raw materials. The final production plans areissued upon approval of the management of the Company and implemented by the Production andTechnology Departments of the Company.The Company has been carrying out production in strict accordance with the GMP. The Company andits affiliates have established a sound quality management system and implemented the qualified-person
system. In terms of quality control, the Company has established a strict and sound production qualityassurance system, and is geared to international standards and subject to international certification whilein compliance with national standards. The Company conducts annual GMP self-inspection, ISO9001internal and external audits, and is subject to various external audits. It actively pursued theinternationally advanced GMP management, and implemented whole-process quality control oversupplier selection, audit, incoming material inspection, production process, product release from factory,and market tracking. The system is running well.
4. Sales
(1) Drug formulation products
End customers of drug formulation products (chemical pharmaceuticals, biologics, traditional Chinesemedicine) of the Company are mainly hospitals, clinics, and retail pharmacies. In line with thepharmaceutical industry practice and the sales model of most peers in the industry, the Company hasconducted sales of drug formulation products through drug distribution enterprises. The Companycarried out selection and centralized management of qualified drug distribution enterprises (with DrugSupply Certificate, GSP Certification, etc.) according to their distribution capability, market familiarity,financial strength, credit record, and operation scale. General sales process: After end customers placepurchase orders to distribution enterprises, drug distribution enterprises will send those orders to theCompany according to their inventories, distribution agreements and conditions; then, the Group willdeliver products to drug distribution enterprises and do the revenue recognition.
(2) APIs and intermediates
Main target customers of APIs are large pharmaceutical manufacturers. The selling prices aredetermined based on a set of integrated factors such as costs of production, inventory levels, industryrivalry and market trend. Specific pricing method: The sales and marketing department conduct weeklyor bi-weekly meetings to analyze the current market conditions, the trends and drivers of prices. Theselling prices are determined based on a set of comprehensive factors such as costs of production,inventory levels, industry rivalry and market conditions. The selling prices will be effective once theyare reported by the managers of the sales department to our management team and get approvals.Specific sales methods of APIs include: ① Domestic market: The Company directly signs productsales contracts with large manufacturers to directly sell products to customers. Meanwhile, the Companyalso sells products through distributors. ② Foreign market: The Company directly sells products in theforeign market, and products are sold through distributors in areas with high market and political 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 are sold by the Company both domestically manufactured andimported. Main end customers are hospitals, centers for disease control and prevention, and healthdepartments. The Company mainly sells those products in combination with direct sales and salesthrough drug distribution enterprises.The Company has an experienced sales team responsible for the sales of diagnostic reagents andequipment, with provision of marketing support for some drug distribution enterprises. The Companycarried out selection and centralized management of qualified drug distribution enterprises (with DrugSupply Certificate, GSP Certification, etc.) according to their 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, and channel carding are managed and improved with the distributor distribution channelsand terminal coverage capability. At present, the Company has set up 27 provincial branches and 37subordinate offices across China and maintained long-term partnership with distributors with better areacoverage capability for stable strategic alliance and common development. The Company hascooperated with about 103 first-level/primary distributors in total, including 1,260 businesses in drugdistribution line and approximately 29 businesses in food distribution line, with more than 450,000subordinate secondary businesses and terminal businesses in drug and food distribution lines. Productsare well managed and promoted through the tiered marketing channels. In addition to the traditionaldistribution management model, the Company realizes synergetic development through online channels.At present, the Company has set up official flagship stores on mainstream e-commerce platforms suchas Tmall （天猫）, Jingdong（京东）, Douyin（抖音）, Kuaishou （快手） and Pinduoduo（拼多多）.(III) Analysis of industry developmentThe pharmaceutical industry is a national strategic emerging industry bearing on the national economyand people's livelihood, and an important part of the national economy. According to the “14th Five-Year Plan for the Development of Pharmaceutical Industry”(《“十四五”医药工业发展规划》), theoverall development of the pharmaceutical industry will reach a new level. During the "13th Five-YearPlan" period, the average annual growth rate of the added value of pharmaceutical industry abovedesignated scale was 9.5%, 4.2 percentage points higher than the overall industrial growth rate, and theproportion of the total added value of the pharmaceutical industry to that of all industries increased from
3.0% to 3.9%; the average annual growth rates of the operating revenues and total profit of enterprisesabove designated scale were 9.9% and 13.8%, respectively, being at the forefront of various industriesin terms of growth rates. At the same time, the scale of leading pharmaceutical manufacturers has furtherexpanded with the steadily increasing industry concentration. In the first half of 2023, with the
deepening reform of the national medical and healthcare system and increasing improvement in theinnovation environment, the pharmaceutical industry continued to advance towards high-qualitydevelopment featuring transformation, upgrading and encouraging innovation. As China's populationages and urbanization rates continue to rise, from the long-term and holistic perspective, China'spharmaceutical industry will continue on a promising trajectory.According to data from the National Bureau of Statistics, in the first half of 2023, enterprises in thepharmaceutical manufacturing industry above designated scale in China have realized revenues ofRMB1,249.6 billion, representing a year-on-year decrease of 2.9%; operating costs were RMB713.01billion, representing a year-on-year decrease of 1.8%; total profits reached RMB179.45 billion,representing a year-on-year decrease of 17.1%.(IV) Industry status of the CompanyThrough years of development, the Company has become an integrated pharmaceutical enterprisecovering multiple sectors including chemical pharmaceuticals, chemical APIs and intermediates,traditional Chinese medicine, diagnostic reagents and equipment as well as health care products.chemical pharmaceuticals are the largest revenue generator of the Company, among which drugs forgastroenterology and gonadotropic hormones are traditional competitive products of the Company, withkey products securing a long-term leading position in national pharmaceutical formulation marketsegment, and respiratory and psychiatry products have been the strategic focus of the Company, withkey products maintaining a strong sales growth momentum.During the Reporting Period, the Company, leveraging its robust R&D and production capabilities andsteady marketing presence, the Company ranked Top 10 in “2022 Annual Ranking of Top 100 ChineseChemical Drug Enterprises”.(V) Performance drivers in the Reporting PeriodIn the first half of 2023, amid the macro environment of weak recovery of domestic economy andtightening of industry regulation and access policy, the growth rate in the Company's performanceslowed down due to factors such as a decrease in the volume-based procurement price of its key productMeropenem for injection and intensified competition in the APIs market. During the reporting period,the Company steadfastly the dual-driver strategy of "innovative drugs + high-barrier complexformulations", focusing on unmet clinical needs to accelerate its transformation into an innovativepharmaceutical company. While strengthening its independent R&D capabilities, the Company hadintroduced multiple new medicine projects through external acquisitions and co-development,comprehensively expanding the layout of its R&D pipeline. This strategic approach continuouslyreinforces the company's leading position in areas such as respiratory and gastroenterology.
II Analysis of core competitive strengths during the Reporting Period
√Applicable □N/A
1. PRC’s leading integrated pharmaceutical company under continuous innovation anddevelopmentThe Company is primarily engaged in the R&D, production and sale of pharmaceutical products andhealth care products. The business scope of the Company covers chemical pharmaceuticals, chemicalAPIs and intermediates, traditional Chinese medicine, diagnostic reagents and equipment, as well ashealth care products, enabling the Company to establish an advantageous market position cross varioustherapeutic fields such as respiratory, anti-infection, assisted reproduction, gastroenterology, psychiatry,and tumor immunity. 1) Innovative R&D drives growth: The Company has developed and launched anumber of blockbuster products and high-barrier complex formulation products, strengthening theGroup’s product portfolio and drug candidates in the pipeline. 2) The Company has first-ratecommercialization ability, and its sales network covers all provinces in China and over 80 countries andregions in the world. The Company emphasizes scientific promotion and evidence-based marketing. Bybuilding a professional marketing team, a fine marketing development system has been formed, andmarket education and brand building have been deeply strengthened through digital marketing. Withsuch efforts, a diversified marketing system has been established. Leveraging our well-established saleschannels, broad end-user coverage, leading digital marketing and strong brand awareness, the Companyefficiently realizes large-scale sales post-product approval. 3) Cross-industry and multi-specialistinnovative R&D and coordinated development: On the one hand, the Company actively adapts to thechanges in the pharmaceutical market and constantly adjusts its product strategy and R&D directionaccording to policies and clinical needs, achieving the ongoing iteration and upgrade of main products;On the other hand, the Company fully utilizes external scientific research and commercial resources,such as strategic collaboration with Chinese Academy of Sciences, Tencent Quantum Lab and otherscientific research institutes and innovative companies, and invests in cutting-edge biotechnologycompanies to expand the Company's product matrix and R&D pipeline, ultimately achieving theCompany's sustainable development.
2. Strong R&D capability, diversified product matrix and leading commercialization capabilitiesFocusing on innovative drugs and high-barrier complex formulations, the Company has formeddiversified product matrix. With the huge clinical demand and high product quality, it has establishedmarket competitive advantages in many pharmaceutical segments. The Company's chemicalpharmaceuticals cover gastroenterology diseases, assisted reproduction, infectious diseases, respiratorydiseases, psychiatric and neurological diseases, tumor and other disease treatment fields, among whichalimentary canal proton pump inhibitor (PPI) drugs, gonadotropic hormones drugs, and inhalationformulations for respiratory system diseases have an advantageous market position. Relying on APIs,the Company’s core products, together with chemical APIs and intermediates, form a stablepharmaceutical industry chain of “APIs-formulations vertical integration”. Meanwhile, the Companyactively develops overseas markets, and its products are marketed and distributed worldwide, facilitatingstrategic cooperation with many internationally renowned pharmaceutical companies. In addition, the
Company also has a number of traditional Chinese medicine and in vitro diagnostic reagent products,and has accumulated resources and wide brand influence in health care products for many years.
3. Making breakthroughs in the key R&D and industrialization technologies of complexformulationsThe technology platform, which has been developed over the years in the field of innovative drugs andhigh-barrier complex formulations, enables the Company to address the complex process problems inthe R&D and production of relevant drugs. Guided by clinical value, the Company develops R&Dprojects with high short-term certainty and cutting-edge technologies with long-term growth potential(such as AI-driven drug molecular design, proteolysis targeted chimera (PROTAC), synthetic biology,gene editing and cell therapy). All in all, the Company's R&D system covers through-cycle of drugdevelopment and production. Based on the mature R&D platform of innovative drugs and high-barriercomplex formulations, the Company has designed a rich pipeline in fields with significant clinicaldemand such as respiratory, gastroenterology, assisted reproduction, psychiatry and tumor.
4. A stable senior management and R&D team with expertise, long-term vision and commitmentto corporate social responsibilityThe Company has a stable, visionary and experienced, results-oriented management team and anoutstanding talent team. Outstanding leaders are the key to the Company's rapid development. Thefounder of the Company has over 30 years of expertise in the pharmaceutical industry as well as a globalvision and a strategic mindset. With a deep industry insight, the founder has led us developing platformtechnologies centered on high-barrier complex formulation, which has established leading position ofthe Group with sustainable development in the broader healthcare industryThe senior management team of the Company has over 20 years of industry experience on average, withan average of more than 10 years of service in the Company, and has a thorough understanding of marketdemand, industry development and growth opportunities. Each key R&D field of the Company is ledby industry-leading scientists and accompanied by an efficient R&D management team. In addition, theCompany 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 teamtraining to build a diversified talents pool with global vision, advanced knowledge, strong executioncapability and sense of ownership. Driven by the corporate culture of pursuing excellence, the talentteam works diligently and conscientiously to jointly contribute to the sustainable development of theenterprise 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 RMB8,720 million, representing a year-on-year increase of approximately 1.81%; a net profit attributable to shareholders of the listed company
of RMB815 million, representing a year-on-year increase of approximately 1.77%, and a net profitattributable to shareholders of the listed company after deducting the extraordinary gains or loss ofRMB782 million, representing a year-on-year decrease of approximately 2.77%. Business developmentof 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 44.77% equity interestin Livzon Group (000513.SZ, 01513.HK). During the Reporting Period, Livzon Group (excludingLivzon MAB) realized revenues of RMB6,678 million, representing a year-on-year increase ofapproximately 6.08%; and thus it contributed a net profit of approximately RMB607 million attributableto shareholders of the Company.During the Reporting Period, the sales of the chemical pharmaceuticals segment of Livzon Groupmaintained stable growth, and recorded the stable growth in the proportion and profitability of high-endspecialty APIs in the API segment. The sales of its products in the key therapeutic areas are as follows:
Gastroenterology products realized revenues of RMB1,625 million, representing a year-on-yeardecrease of approximately 7.75%; gonadotropic hormones products realized revenues of RMB1,376million, representing a year-on-year increase of approximately 2.71%; and psychiatry products realizedrevenues of RMB278 million, representing a year-on-year increase of approximately 5.31%.
(2) Livzon MAB
As at the end of the Reporting Period, the Company held 55.90% equity interest in Livzon MAB, whichcontributed the amount of approximately RMB-241 million to the Company's net profit attributable toshareholders of the listed company for the current period.Livzon MAB continued to focus on new molecules, new targets and differentiated molecular designs inthe fields such as autoimmune diseases, vaccines, oncology and assisted reproduction to consistentlypush forward the R&D of key projects. During the Reporting Period, the progress in R&D of biologicalproducts was set out as below:
The application for launch on Tocilizumab Solution for Injection (Atvtia
?) (托珠单抗注射液(安维泰?
)) had been approved for indications include rheumatoid arthritis, cytokine release syndrome (CRS)and juvenile idiopathic arthritis (sJIA). Recombinant Human Choriogonadotropin alfa for Injection (注射用重组人绒促性素) was approved for launching in 2021 and had started sales, which is the firstgeneric drug of its kind in China. Livzon MAB continued to actively promote overseas registrations; thedrug had been approved for launching in Tajikistan, and its submission of registration materials hadbeen completed in Indonesia, Pakistan, five countries in Central and South America and two countriesin Central Asia. Recombinant Human Follitropin Alfa Solution for Injection (重组人促卵泡激素注射液) and Recombinant Anti-human IL-17A/F Humanized Monoclonal Antibody Injection (重组抗人IL-17 A/F人源化单克隆抗体注册液) have conducted phase III clinical trial. Recombinant Anti-human
IL-17A/F Humanized Monoclonal Antibody Injection (重组抗人IL-17 A/F人源化单克隆抗体注册液) is the first drug to be compared with IL-17A marketed drug for positive control phase III clinicaltrial in China. The results of phase II clinical trial show that the product has the clinical advantages offaster onset of action, better and longer duration of efficacy, showing better efficacy as compared withIL-17A single-target agents (IL-17A单靶点药物) and is expected to provide a potentially bettersolution for the psoriasis treatment in China. In July 2023, the Recombinant SARS-COV-2 Bivalent(Original/Omicron XBB) Fusion Protein Vaccine (CHO Cell) (重組新型冠状病毒融合蛋白二价(原型株/Omicron XBB变异株)疫苗(CHO 细胞)) was approved for clinical trial.With the successive approvals for market launch of its products, LivzonMAB has enriched relevantteams such as pharmacovigilance, production quality and production-sales connection, graduallyimproved the GMP system and industrialization capabilities and enhanced the overall operationalcapabilities.
(3) Joincare (excluding Livzon Group and Livzon MAB)
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized revenues ofRMB2,194 million, representing a year-on-year decrease of approximately 7.48%, and realized a netprofit attributable to shareholders of listed companies of RMB445 million, representing a year-on-yearincrease of approximately 5.70%. Joincare realized a net profit attributable to shareholders of the listedcompany after deducting the extraordinary gains and losses of RMB435 million, representing a year-on-year increase of approximately 5.01%. Key results of the main business segments and core productsare as follows:
①Prescription medicines
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized salesrevenues of RMB923 million from prescription drug segment, representing a year-on-year decrease ofapproximately12.88%. Among which, the sales revenues and year-on-year change of key therapeuticareas are as follows: the revenues generated from the field of respiratory totaled RMB809 million,representing a year-on-year increase of 44.08%; the revenues generated from the field of anti-infectiontotaled RMB102 million, representing a year-on-year decrease of 79.17%.In the first half of 2023, the Company continued to accelerate the formation of the national sales teamin respiratory line, and further established the four-level fine management system of regional managers,provincial general managers, provincial managers and development managers. The Company activelytook various measures to accelerate the development of its key products, especially its exclusive product,Tobramycin Inhalation Solution (妥布霉素吸入溶液), and thus drive sales volume of such products:
firstly, it enhanced the assessment of the coverage rate and fulfillment rate, accelerated the developmentof various respiratory products, and in the first half of the year, the Company developed 559 hospitalsabove grade II, so that its respiratory products covered over 3,800 hospitals above grade II; secondly, itseized the opportunity of the inclusion of the Levosalbutamol Hydrochloride Nebulizer Solution (盐酸
左沙丁胺醇雾化吸入溶液) in the regular national reimbursement drug list to continue the rapidcoverage and sales growth; thirdly, it continuously advanced construction of digital marketing platforms,utilizing digital methods to expedite the marketing process and comprehensively promoted the brandvia the platform of “Respiratory Experts' Views” (呼吸专家说); fourthly, it refined the distributionmanagement, and currently, there are 2 main warehouses and 10 regional warehouses nationwide, withthe same day delivery within the province and 2-day delivery in the neighbouring provinces, whicheffectively ensured the timely and efficient distribution of drugs.The key R&D projects of the Company's inhalation formulations made progress in stages: FormoterolFumarate Inhalation Solution (富马酸福莫特罗吸入溶液), Indacaterol Maleate Powder for Inhalation(马来酸茚达特罗吸入粉雾剂), and Fluticasone Propionate Inhalation Suspension (丙酸氟替卡松雾化吸入用混悬液) had been in the stage of launch application review, of which Formoterol FumarateInhalation Solution was approved for launching in July 2023. Salmeterol Xinafoate-FluticasonePropionate Powder for Inhalation (沙美特罗替卡松吸入粉雾剂) was applied for production, whichwas the first domestic generic drug to submit a registration application after the publication of the newinhaled formulation BE guidance principles since 2020. In terms of medical devices, the Companycontinued to develop medical devices compatible with its owned inhalation formulations, Mini360+, amesh nebulizer designed for used with Tobramycin Solution for Inhalation, had obtained the registrationcertificate of Class II medical device. Futhermore, while ploughing into advantageous technologyplatforms such as inhalation formulations, the Company was actively expanding other high-barriercomplex formulation platforms, The successful completion of the bioequivalence study for MeloxicamNanocrystalline Injection (美洛昔康纳米晶注射液) marks a significant breakthrough in thenanocrystalline technology platform.While continuously strengthening independent innovation, the Company also continued to deepen thecore areas of varieties of cooperative development and licensing introduction to leverage on the globaladvantageous resources and cutting-edge technologies to strengthen the Company's commercializationand integration capabilities. During the Reporting Period, the Company made significant progress in thefield of business development (BD), introducing multiple innovative medicines, expanding into otherindications in the respiratory system and accelerating the Company's transformation into an innovativepharmaceutical company. Among these endeavors, TG-1000 is an innovative PA endonuclease inhibitor,capable of effectively inhibiting both influenzas A and B viruses; It has completed Phase II clinicalstudies and is poised to enter Phase III clinical trials. XYP-001, a modified new drug for the treatmentof Idiopathic Pulmonary Fibrosis (IPF), is currently in Phase I clinical trials, continues to advance in itsclinical study efforts.
②APIs and intermediates
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized salerevenues of RMB1,060 million from APIs and intermediates segment, representing a year-on-yeardecrease of approximately 7.82%.
During the Reporting Period, in the API segment, Joincare adhered to the management concept of “greenproduction, cost reduction and efficiency enhancement”, focused on the transformation and upgradingof production equipment, enhanced the establishment of the quality management system andstrengthened the construction of safety and environmental management, guaranteeing the steadyimprovement in the production and yield of key products of the Company. In terms of marketing, theprice of the Company's key product 7-ACA declined, and the Company maintained its advantageposition in market share by strengthening the in-depth cooperation with strategic customers and activelyexpanding domestic and international markets. Another key product, Meropenem Trihydrate (美罗培南混粉), is facing challenges such as intensified international market competition and pricing pressures.The Company had taken active measures to maintain its existing market share, at the same time, theCompany also actively expanded its overseas business to carry out a number of applications for theregistration of Meropenem aseptic powder and crude product so as to enhance the Company'sprofitability. Furthermore, the Company leveraged on its advantages of APIs - formulations verticalintegration, actively expanded the domestic API market. It has established collaborations with severaldomestic manufacturers to minimize the impacts of volume-based drug procurement.In terms of APIs R&D, the Company focused on its R&D activities in two cutting-edge fields, syntheticbiology and biocatalysis: in the construction of synthetic biology platform, the Company furtherstrengthened the research of system biology and synthetic biology mainly against Escherichia coli,filamentous fungi and streptomycetes, completed the research of the modification and screening of over10 genes of high-yield L-phenylalanine strains, and substantially increased the positive rate of theprotoplasmic transformation screening of the filamentous fungi, which significantly shortened theresearch and development cycle of genetic modification experiments for the filamentous fungi likecephalosporium acremonium, and thus laid down a technological foundation for further development ofmulti-genetic modification methods of cephalosporium acremonium. In the construction of biocatalyticplatform, the Company prepared the primary version of SOP for protein structure prediction usingAlphaFold 2, and completed the structure prediction of 60% key proteins on the anabolic pathway ofCPC in cephalosporium acremonium by using the cloud computing platform. Meanwhile, the Companycompleted the computer simulations for key genes by applying a computer-aided protein engineeringtechnology platform. As at the end of the Reporting Period, Joincare Research Institute had applied fora total of 11 national invention patents (with 1 granted), 8 utility model patents (with 4 granted), 1software copyright. Moreover, the Company published 2 high-level academic papers.
③Health care products and OTC drugs
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized revenues ofRMB202 million from health care products and OTC segment, representing a year-on-year increase ofapproximately 33.17%.During the Reporting Period, the Company had established user-centric data-driven digital marketingsystem as the core, leading to steady growth in sales performance. In terms of content marketing, the
Company promoted its performance growth by content marketing and cooperation with top steamers,and the ROI had reached a record high under the model of combining short video and flagship broadcast.Dexamethasone Acetate (意可贴) had a total exposure of 220 million in the first half of the year. Theview counts of video had broken 100 million on Douyin (抖音), the brand word for mouth ulcer rankedfirst on the RED (小红书), and the flagship broadcast for Taitai (太太), Eagle’s (鹰牌) and Jingxin (静心) were gaining popularity. In terms of online sales channels, the Company recovered the right to self-operation on JD.com, expanding the sales channels on Douyin to improve the efficiency of contentconversion, and expand the gift-giving audiences through the development of large-size gift boxes. Interms of offline channel sales, the Company cultivated new users through the cooperation of offlinechains to carry out brand project-based activities and patient education, and it re-deployed the drug linechannels and new retail channels, the targeted cooperating chains for the drug line channels had reachedover 3,900 with more than 1,000 pure sales distributors and 11 national-scale major chain stores, fullycovering the top 50 chain stores. In terms of new offline retail channels, in the first half of the year, theCompany developed its present in five cities in three provinces, covering more than 2,800 outlets withadditional 819 new shops. At the same time, the Company had established the benchmark chains for itsoffline sales channels, such as Walmart, FamilyMart, LAWSON, 7-11 and other convenience storesystem, which significantly increasing the channel penetration rate, and thereby boosting the brand sales.
2.Business plans in the second half of 2023
In the second half of 2023, the major tasks in various business segments of the Company are set out asfollows:
(1) R&D Center
R&D and innovation is the source to maintain corporate vitality and the core driver for the Company’ssustainability. In the second half of 2023, the Company will continuously beef up and improve its in-house development capabilities with a focus on the core fields such as respiratory, gastroenterology,psychiatry, assisted reproduction and antitumor, and firmly and fully execute its dual-drive strategy ofdeveloping platforms of both innovative medicines and high-barrier complex formulation to effectivelyfacilitate the research and clinical development of existing core products including TG-1000, XYP-001,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), to build a differentiated product pipeline. The Company willaccelerate the establishment of R&D platforms, and redouble efforts to advance the commercializationof innovative medicines, inhalation products, sustained-release microspheres, monoclonal antibody drug,micro-nanocrystals formulations and other technology platforms. In addition, by focusing on itsadvantageous fields and paying close attention to the cutting-edge technologies and businessopportunities in the international markets, the Company will enhance external cooperation throughcooperative development, licensing-in and other means, to introduce more innovative drug projects andimprove the construction of product portfolio in its advantageous fields.
(2) Production Center
The Company will ensure workplace safety and product quality by constant improving qualitymanagement system and implementing product quality-centered risk control. While emphasizingchecking raw and auxiliary materials, production sites and production process will also be inspected.According to six detecting systems in GMP to identify workplace safety risks, the Company willcontinuously optimize the production process by introducing green synthetic technology and syntheticbiology technology. Additionally, it will develop the employee training system for improving theirprofessional skills to further ensure product stability and quality. The Company will keep reducing costsand improving efficiency through introducing advanced technology and equipment, productionoptimization, system improvement and lean management, to effectively improve the production andoperation. The Company will adhere to green development, uphold and promote the concept of green,healthy and sustainable development. To effectively implement energy conservation, emission reductionand green production, the Company will enhance the environmental protection and quality standardsand requirements, set environmental protection targets, and strengthen monitoring of energyconsumption, pollutant emissions and other environmental information in the production and operation.The Company will also keep optimizing production capacity, advance the construction of the newproduction line and Jiaozuo Jianfeng Biotechnology Co., Ltd. as planned, follow up the establishmentof supporting facilities and capacity planning, and improve the technology transformation capacity ofnew products to meet 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. Promote the hospitalcoverage of core brands and enhance evaluation for fulfillment rate of absolute indicators to ensure theachievement of goal of the whole year; 2. With the objective of brand building, the company aims toenhance the practical capability and overall quality of marketing teams, continuing to expand andreinforce the sales team of hospital channels and attracting excellent talents to join the sales team; 3.Boost efforts in commerce, production, end-users and other links, rapidly increase market share andraise brand awareness in all aspects; 4. Continue to advance construction of digital marketing platformand support for end-user market activities, effectively combine online and offline methods, and enhancein-depth brand recognition among doctors and patients; 5. Follow up in real time national medicalreform-related policies, strengthen clinical and pharmacoeconomic research of launched products , andactively respond to medical insurance policy adjustments and volume-based procurement. TheCompany will formulate plans and prepare for the National Reimbursement Drug List negotiations ofits key products including Tobramycin Inhalation Solution (妥布霉素吸入溶液), Ilaprazole Sodium forInjection (注射用艾普拉唑纳) and Triptorelin Acetate Microspheres for Injection (注射用醋酸曲普瑞林微球).In terms of marketing and promotion of APIs and intermediates, the Company will further strengthenconstruction of sales team, make full use of OKR and strengthen objectives management, to build avigorous and highly efficient sales team; continue to deepen cooperation with global strategic customers,
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 inglobal market through close cooperation with world-class enterprises. In addition, the Company willpay close attention to changes in exchange rates and market conditions and promptly adjust salesstrategies.On-line sales of our health care products have seen a steady growth since the implementation of digitalmarketing system. In terms of offline channels for drugs, we have completed organizational structurereform, deepened the distribution channels and struck strategic cooperation with top 50 pharmacy chainsin China. The Company will empower its sales through brand campaigns, patient education, benchmarkchains building, new product development and other means, with an aim for increasing yields. In termsof off-line sales of healthcare products, the Company will boost sales by exploring new channels andbuilding benchmark terminals in light of product strategies. For online channels, in addition to furtherimplementing digital marketing system with a focus on enhancing overall operational efficiency, theCompany will drive off-site traffic and enhance on-site linkage, while proactively participating big salesevents and delivering festival gift boxes to boost online sales. In terms of content marketing, in thesecond half of 2023, the Company will strengthen word of mouth marketing, mainly throughrecommendation in social media and endorsement by medical professionals, and constantly expandbrand exposure via vertical KOLs’ livestreaming. In terms of brand marketing and building, we willcontinue to deepen the cooperation with industry associations and professional forums, strengthen theprofessional building of brands, and carry out corresponding joint cooperation in platform promotionand festival marketing to expand brand exposure and enhance brand sales. In addition, we will continueto increase investment in user operations. We have established a special user operation team to attract,activate and operate users through Wecom. We will improve our WeChat digital mall, loyalty pointsand content operation system, cultivate original users through user operation, and develop loyal fansbelonging to the brand.
(4) Functions and strategies
The key function tasks of the Company are as follows: Firstly, we will continue to improve theorganizational structure and institutions in subsidiaries of the Group to increase the managementefficiency and fully advance lean management. Secondly, we will continue to strengthen talent andpolicy construction, implement the management by objective system with OKRs and KPIs in tandem,conduct quarterly rolling dynamic tracking and adjustment under close cooperation and full support ofevery 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 corporateculture and put them into practices in the Group and its subsidiaries to strengthen the cohesion. Fourthly,we actively give full play to resource advantages of internal and external business cooperation, makeinvestment strategies, and introduce innovative products and technologies to improve strategic planning
of the Company. Fifthly, we actively fulfill corporate social responsibility, endeavor to improvecorporate governance level, and promote high-quality and sustainable development.
Material changes in business conditions of the Company during the Reporting Period and mattersoccurred during the Reporting Period that had and are expected to have significant impacts onbusiness conditions of the Company
□Applicable √N/A
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 year | Change (%) |
| Revenues | 8,719,741,599.23 | 8,564,945,285.55 | 1.81 |
| Operating costs | 3,273,420,227.03 | 3,054,392,703.20 | 7.17 |
| Selling expenses | 2,399,063,230.20 | 2,512,369,792.45 | -4.51 |
| Administrative expenses | 434,867,895.32 | 529,828,311.93 | -17.92 |
| Financial expenses | -122,587,587.38 | -130,401,047.67 | N/A |
| R&D expenses | 765,166,559.76 | 707,433,078.44 | 8.16 |
| Net cash flow from operating activities | 1,257,207,685.54 | 1,902,953,224.79 | -33.93 |
| Net cash flow from investing activities | -509,260,181.38 | -433,259,385.19 | N/A |
| Net cash flow from financing activities | -904,436,444.00 | -656,811,058.44 | N/A |
Reasons for changes in net cash flow from operating activities: Mainly due to the increased collectionof promissory notes, decreased cash collections, and increased cash payments for purchasing goodsduring the Reporting Period.Reasons for changes in net cash flow from financing activities: Mainly due to the significant decreasein borrowings during the Period.Details of material changes in business type, components or source of profits during the Period
□ Applicable √N/A
3 Analysis of revenues and costsPrincipal businesses by industry, product and region
Unit: Yuan Currency: RMB
| Principal business by industry | ||||||
| By industry | Revenues | Operating costs | Gross profit margin (%) | YoY change in revenues (%) | YoY change in operating costs (%) | YoY change in gross profit margin (%) |
| Pharmaceutical manufacturing Industry | 8,651,505,930.92 | 3,225,087,576.49 | 62.72 | 1.95 | 7.48 | Decreased by1.92 percentage points |
| Service industry | 1,288,056.69 | 420,402.81 | 67.36 | -78.64 | -81.17 | Increased by 4.39 percentage points |
| Principal business by product | ||||||
| By product | Revenues | Operating costs | Gross profit margin (%) | YoY change in revenues (%) | YoY change in operating costs (%) | YoY change in gross profit margin (%) |
| Chemical pharmaceuticals | 4,477,996,443.20 | 922,208,230.73 | 79.41 | -4.56 | 0.61 | Decreased by 1.06 percentage points |
| Chemical APIs and intermediates | 2,682,754,623.59 | 1,757,162,775.91 | 34.50 | -3.20 | 0.77 | Decreased by 2.58 percentage points |
| Traditional Chinese medicine | 985,591,533.02 | 315,931,826.92 | 67.94 | 91.60 | 115.01 | Decreased by 3.49 percentage points |
| Diagnostic reagents and equipment | 297,994,623.29 | 133,676,710.13 | 55.14 | -13.88 | -18.52 | Increased by 2.55 percentage points |
| Biologics | 113,409,489.23 | 59,602,491.18 | 47.44 | 5.93 | 607.32 | Decreased by 44.68 percentage points |
| Health care products | 87,265,994.18 | 32,129,014.01 | 63.18 | 59.41 | 53.76 | Increased by 1.35 percentage points |
| Principal business by region | ||||||
| By region | Revenues | Operating costs | Gross profit margin (%) | YoY change in revenues (%) | YoY change in operating costs (%) | YoY change in gross profit margin (%) |
| Domestic | 7,274,024,825.06 | 2,345,678,968.90 | 67.75 | 4.30 | 13.59 | Decreased by 2.64 percentage points |
| Overseas | 1,378,769,162.55 | 879,829,010.40 | 36.19 | -9.15 | -6.19 | Decreased by 2.02 percentage points |
Description of principal businesses by industry, product and regionDuring the Reporting Period, the Company’s principal businesses generated revenues of RMB8,653million, representing a year-on-year increase of RMB161 million or 1.89%. Chemical pharmaceuticalsachieved revenues of RMB4,478 million, representing a decrease of 4.56% year-on-year. Among them,the sales revenues in the field of gastroenterology reached RMB1,625 million, dropping by 7.75% year-on-year; the sales revenues in the field of gonadorelin hormones amounted to RMB1,376 million,increasing by 2.71% year-on-year; the sales revenues in the field of respiratory reached RMB809 million,a year-on-year increase of 44.08%; the sales revenues in the field of anti-infection was RMB300 million,dropping by 56.00% year-on-year; the sales revenues of psychiatry products was RMB278 million, ayear-on-year increase of 5.31%. Chemical APIs and intermediates achieved revenues of RMB2,683million, a year-on-year decrease of 3.20%. Traditional Chinese Medicine achieved revenues of RMB986million, a year-on-year increase of 91.60%. Diagnostic reagents and equipment achieved revenues ofRMB298 million, a year-on-year decrease of 13.88%. Biological achieved revenues of RMB113 million,a year-on-year increase of 5.93%. Health care products achieved revenues of RMB87 million, a year-on-year increase of 59.41%.
4. Investment in R&D
(1) Table for investment in R&D
Unit: Yuan Currency: RMB
| Expensed investment in R&D during the Period | 566,960,057.64 |
| Capitalized investment in R&D during the Period | 179,120,655.17 |
| Total investment in R&D | 746,080,712.81 |
| Total amount of investment in R&D as a percentage of revenues (%) | 8.56 |
(2) Description
During the Reporting Period, total investment in R&D of the Company amounted to RMB746.0807million, accounting for 8.56% of total revenues. The Company places a strong emphasis on R&D andinnovation, continuously boosted efforts in independent R&D and improved the efficiency of theconversion of technological results. Meanwhile, the Company strengthened external cooperation andintroduced a number of innovative medicine projects through cooperative development and licensing,among other means, to consolidate its existing competitive edges and enrich its product pipeline. As ofthe disclosure date of this report, the overall R&D efforts of the Company in different segments were asfollows:
1) Chemical pharmaceuticals
① High-barrier complex formulation: There were a total of 50 projects in development, of which, 2had been launched to the market, 6 had been applied for production, 9 were under the clinical/BE studyand 1 had been approved for clinical trials. The progress of the major projects was as follows:
Inhalation formulations: Formoterol Fumarate Inhalation Solution (富马酸福莫特罗吸入溶液) hadbeen launched; Indacaterol Maleate Powder for Inhalation (马来酸茚达特罗吸入粉雾剂), SalmeterolXinafoate-Fluticasone Propionate Powder for Inhalation (沙美特罗替卡松吸入粉雾剂) andFluticasone Propionate Inhalation Suspension (丙酸氟替卡松雾化吸入用混悬液) had been applied forproduction. For class 2 new drug XYP-001, the Company carried out phase I clinical trials.Sustained-release microspheres: The project of Triptorelin Acetate Microspheres for Injection(Weibaoning
?)(注射用醋酸曲普瑞林微球（维宝宁
?
）) (1-month sustained release) for prostate cancerwas approved for market launch; endometriosis project had completed the phase III clinical trial and thecentral precocious puberty indication is under preparation of materials for communication with CDE.Aripiprazole Microspheres for Injection (注射用阿立哌唑微球) (1-month sustained release) completedphase I clinical trial, Octreotide Acetate Microspheres for Injection (注射用醋酸奥曲肽微球) (1-monthsustained release) and Leuprorelin Acetate Microspheres for Injection (注射用醋酸亮丙瑞林微球) (3-month sustained release) were undergoing BE trials; Alarelin Microspheres for Injection (注射用丙氨瑞林微球) (1-month sustained release) had completed phase I clinical trial; Triptorelin Pamoate
Microspheres for Injection (注射用双羟萘酸曲普瑞林微球) (3-month sustained release) was preparedfor phase I clinical trials.Other high-barrier complex formulations: Meloxicam Nanocrystal Injection (美洛昔康纳米晶注射液) was undergoing BE trials. Goserelin Acetate Sustained-release Implant (醋酸戈舍瑞林缓释植入剂) (1-month sustained-release) had carried out the bridging study of pilot-scale and full-scaleproduction.
② Other key projects in development: There were a total of 40 projects in development, of which, 5had been launched to the market, 5 had been applied for production, 6 were under the clinical/BE study.The progress of the major projects was as follows: Long Chain Fat Emulsion Injection (长链脂肪乳注射液) (OO), Biapenem for Injection (注射用比阿培南), Voriconazole for Injection (注射用伏立康唑)and Blonanserin Tablets(布南色林片) were approved for market launch and Ilaprazole Sodium forinjection (注射用艾普拉唑钠) with new indication had been approved; Voriconazole for OralSuspension (伏立康唑干混悬液), Perospirone Hydrochloride Tablets (盐酸哌罗匹隆片), LurasidoneHydrochloride Tablets (盐酸鲁拉西酮片) and Progesterone Injection(黄体酮注射液) had been appliedfor production. For class 1 new drug TG-1000, the Company completed phase II clinical trials and willcarry out phase III clinical study soon. Cetrorelix Acetate for Injection (注射用醋酸西曲瑞克)submitted a reply to the defect letter to the FDA. LZ001, Ilaprazole Enteric-coated Pellets (艾普拉唑微丸肠溶片) and Asenapine Transdermal patch (阿塞那平透皮贴剂) had been approved for phase Iclinical trials. Elagolix Sodium Tablets (艾拉戈利钠片) had been submitted the clinical trial application.
③ Consistency evaluation：There were a total of 10 projects in development, of which 4 projects havebeen approved, 3 projects had made application. Imipenem and Cilastatin Sodium for Injection (注射用亚胺培南西司他丁钠), Cyclosporine Softgels (环孢素软胶囊) (50mg), Vancomycin Hydrochloridefor Injection (注射用盐酸万古霉素) and Bismuth Potassium Citrate Capsule (枸橼酸铋钾胶囊)hadbeen approved; and Bismuth Potassium Citrate Granules (枸橼酸铋钾颗粒) and Rabeprazole SodiumEnteric-coated Tablets (雷贝拉唑钠肠溶片) have applied for registration.2）BiologicsThere were a total of 8 projects in development, of which 2 projects were approved for market launch,1 project was approved for emergency use, 1 project had applied for conditional market launch, 3projects were in the phase III clinical trials and 1 project was in the phase I clinical trial.Therapeutic biological products: Tocilizumab Injection(Atvtia
?
) (托珠单抗注射液(安维泰
?
)) wasapproved for market launch in China; Recombinant Human Choriogonadotropin alfa for Injection (注射用重组人绒促性素) was approved for market launch in China in 2021, and was currently underoverseas registration; Lipustobart for Injection (注射用利普苏拜单抗) was in preparation forapplication for conditional market launch; Phase III clinical trials of Semaglutide Injection (司美格鲁肽注射液) has completed enrollment; Recombinant Anti-human IL-17A/F Humanized MonoclonalAntibody Injection (重组抗人IL-17A/F人源化单克隆抗体注射液) and Recombinant Human
Follitropin AlfaSolution for Injection (重组人促卵泡激素注射液) had commenced the phase IIIclinical trials.Preventive biological products: Recombinant SARS-CoV-2 Fusion Protein Vaccine (Likang
?) (重组新型冠状病毒融合蛋白疫苗（丽康
?）) was approved for emergency use for heterologous boostervaccination in China in June 2022 and was included in the national immunization program in September2022, and has been vaccinated in 27 provinces and cities across the country. Recombinant SARS-CoV-2 Fusion Protein Bivalent (Prototype Strain /Omicron XBB variant) Vaccine (CHO Cell) (重组新型冠状病毒融合蛋白二价（原型株/Omicron XBB变异株疫苗）（CHO 细胞）） obtained drug clinicaltrial approval in July 2023.3）APIs and intermediatesThere were a total of 41 projects in development, of which 24 were new product R&D projects and 17were tech-upgradation projects of existing products. For new product R&D projects, the API ofBiapenem (比阿培南) had been approved for launching, and the registration application for the API ofMeloxicam (美洛昔康) and the API of Caspofungin Acetate (醋酸卡泊芬净)were submitted. Fortechnological upgrading projects of existing products, the key project Cephalosporin C-High ProducingMutant Strains (头孢菌素C高产突变株) was progressing smoothly. After screening, the scaleproduction verification of the strains had been completed, and the average unit yield had been steadilyincreased; in the development and selection project of new L-phenylalanine – High Producing Strains(L-苯丙氨酸新型高产菌株) driven by IBT technology, strain modification and selection wasproceeding and shake-flask cultivation has achieved initial results. In addition, the Company alsocompleted the establishment of Escherichia coli genome missing-at-random platform based on themediation of transposons and CRISPR/Cas9, to screen and evolve L-phenylalanine with the minimumgenome to synthesize advantageous strain in combination with the continuous evolution platform.4）Traditional Chinese medicineThere were a total of 9 projects in the development track for new TCM, of which, SXSHL gel, a newimproved TCM, had completed the preclinical experiment research, and its application materials wereunder preparation and collation. TGDX granules, a class 1.1 new TCM, had completed the in-hospitalpreparations single-centre clinical trial and its clinical trial summary report was finished.5） Diagnostic reagents and equipmentThere were a total of 73 projects in development in diagnostic reagents and equipment, 11 projects atclinical stage (including evaluation), 8 projects in alteration or technical renovation, and 5 projects indevelopment in operation equipment. Livzon Diagnostics’ 8 diagnostic kits for anti-phospholipidsyndrome-related autoantibody were successively approved, further enriching the project list of theimmunochemiluminescence system. So far, a total of 21 supporting diagnostic kits for the single-personchemiluminescence analyzer have been approved. Livzon Interferon-Gamma Release Assays (IGRA)
Test Kit (Chemiluminescence Immunoassay) (结核感染T细胞测定试剂盒（化学发光法）), which isadapted to the high-speed chemiluminescence analyzer, was approved on 10 April, and Passive ParticleAgglutination Test for Detection of Antibodies to Treponema Pallidum (梅毒螺旋体抗体检测试剂盒（凝集法）) and Diagnostic Kit for Measurement of Antibodies to Mycoplasma Pneumonia (PassiveParticle Agglutination) (肺炎支原体抗体检测试剂盒（被动凝集法）) were also approved.(II) Description of material changes in profits arising from non-principal businesses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount | Proportion of total profits (%) | Cause | Sustainable or not |
| Investment income | 56,854,039.45 | 2.91 | Mainly due to changes in the profit and loss from investments in associates and receipt of dividends from other equity instrument investments | No |
| Gains or losses from changes in fair value | -39,314,888.38 | -2.01 | Mainly due to fluctuations in market value of the securities investment held | No |
| Losses of credit impairment | -22,209,391.69 | -1.14 | Mainly due to expected credit losses on accounts receivable | No |
| Impairment of assets | -30,171,594.37 | -1.55 | Mainly due to the impairment provision for inventories | No |
| Non-operating income | 1,757,450.18 | 0.09 | Mainly due to the income from disposal of scrap items | No |
| Non-operating expenses | 7,370,028.41 | 0.38 | Mainly due to donation expenditure, etc. | No |
| Other income | 125,925,260.26 | 6.45 | Mainly due to the government grants received | Yes |
(III) Analysis of assets and liabilities
√Applicable □N/A
1. Analysis of assets and liabilities
Unit: Yuan
| Item | Ending balance of the period | Ending balance of the period to the total assets (%) | Ending balance of last year | Ending balance of last year to the total assets (%) | Change in the ending balance of the period to that of last year (%) | Explanations |
| Other receivables | 105,444,746.96 | 0.29 | 52,535,740.14 | 0.15 | 100.71 | Mainly due to the current announcement of profit distribution plan by the invested equity joint venture, as the dividend payment has not been received as of the balance sheet date. |
| Financial liabilities held for trading | 21,644,248.86 | 0.06 | 755,634.43 | 0.00 | 2,764.38 | Mainly due to the changes in fair value of foreign currency forward contracts. |
| Contract liabilities | 92,547,832.12 | 0.26 | 292,977,730.74 | 0.82 | -68.41 | Mainly due to some contract performance obligations during the current period, which satisfies the conditions for revenue recognition and results in the carrying forward of revenue. |
| Treasury shares | 717,135,581.08 | 1.98 | 347,176,561.29 | 0.97 | 106.56 | Mainly due to the repurchase of A shares of the Company during the Period. |
| Other comprehensive income | 35,886,298.52 | 0.10 | 4,704,473.53 | 0.01 | 662.81 | Mainly due to the translation of the financial statements in foreign currency. |
2. Overseas assets
√Applicable □N/A
(1) Asset size
Among them: Overseas assets were 45.59 (Unit: 100 million, Currency: RMB), representing 12.58% ofthe total assets.
(2) Statement on high proportion of overseas assets
□Applicable √N/A
3. Restrictions on assets entitlements as at the end of the Reporting Period
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Carrying value at the end of the period | Cause for restriction |
| Other monetary funds | 3,713,052.25 | Letters of credit, bank acceptances and forward exchange settlement deposits, etc. |
| Notes receivable | 530,641,682.69 | Notes pool business and pledge of notes receivable |
| Total | 534,354,734.94 |
4. Others
□Applicable √N/A
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
（IV）Analysis of investmentOverall analysis of equity investments
√Applicable □N/A
During the Reporting Period, the Company carried out strategic investments according to development plans and schedules as follows:
1. Major equity investments
√Applicable □N/A
Unit: 10,000 Yuan Currency: RMB
| Name of investee | Principal business | Whether the target is primarily engaged in investment business | Investment method | Investment amount | Percentage of shareholding | In the Consolidation scope of the Company or not | Item on the financial statement (if applicable) | Source of funds | Partner (if applicable | Investment period (if any) | Status as of balance sheet date | Expected return (if any) | Impact of gain or loss for the period | Litigation involved or not | Disclosure date (if any) | Disclosure index (if any) |
| Wuhan Kangli Health Investment Management Co., Ltd. (武汉康丽健康投资管理有限公司) | Engaged in investment activities with its own funds; asset management services invested with its own funds; corporate management; entrepreneurship investment and financing advisory services. | No | New establishment | 100,000 | 66.86% | Yes | Long-term equity investment | Own funds | Livzon Group | Long term | Capital contribution of RMB 100 thousand was completed | - | -0.0017 | No | Please see Note 1 for details | Please see Note 1 for details |
| Lijian (Guangdong) Animal Healthcare Co., Ltd. (丽健 | Engaged in production of veterinary medicine; operation of | No | New establishment | 20,000 | 71.83% | Yes | Long-term equity investment | Own funds | Livzon Group | Long term | Capital contribution of RMB 75 million was completed | - | -284.41 | No | Please see Note 2 for details | Please see Note 2 for details |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
（广东）动物保健有限公司)veterinarymedicine; importand export ofgoods andtechnology andsale ofdisinfectors(excludingdangerouschemicals) andanimal healthproducts;technicaladvisoryservices onanimal breeding,etc.
| Macau Livzon Traditional Chinese Medicine Modernization Technology Co., Ltd. (澳门丽珠中药现代化科技有限公司) | R&D, production, sale, import and export of TCMs, proprietary Chinese medicine, food, medical machinery, chemical and industrial items for daily use, cosmeceuticals, cosmetics and health products, formula food for special medical use and gifts, etc. | No | New establishment | 8.52 | 44.77% | Yes | Long-term equity investment | Own funds | N/A | Long term | Capital contribution was not yet completed | - | - | No | N/A | N/A |
| Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd. (上海中拓医药科技有限公司) | Technical development, technology transfer, technical advisory and technology | No | Acquisition | 2,500 | 22.83% | Yes | Long-term equity investment | Own funds | N/A | Long term | Capital contribution of RMB 22.50 million was completed | - | - | No | N/A | N/A |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| services in the biomedical technology industry, R&D and design of medical devices, R&D of diagnostic preparations, laboratory preparations, etc. | ||||||||||||||||
| Chengdu Jinrui Jiye Biotechnology Co., Ltd. (成都金瑞基业生物科技有限公司) | Import and export of drugs; wholesale of drugs; retail of drugs; sale of healthcare food; general items: technical services, technical development, technical advisory, technical communications, technology transfer and technology promotion; sale of special chemical products (excluding dangerous chemicals); information advisory services (excluding licensed information advisory services); | No | Capital injection | 2,000 | 1.61% | No | Other equity instrument investments | Own funds | Zhuhai Houpu Hefeng Investment Management Partnership (Limited Partnership) (珠海市厚朴合丰投资管理合伙企业(有限合伙)), Shenzhen Jinrui Biological Investment Co., Ltd. (深圳金瑞生物投资有限公司), Lai Xintian, Wei Nongnong, etc. | Long term | Capital contribution of RMB 20.00 million was completed | - | - | No | N/A | N/A |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| information technical advisory services; social and economic advisory services; import and export of technology; technical R&D for biological and chemical products; domestic trade agency; health advisory services (excluding diagnosis and treatment services); corporate management; medical research, test and development | ||||||||||||||||
| Total | / | / | / | 124,508.52 | / | / | / | / | / | / | / | - | -284.4117 | - | - | - |
Note 1: For details, please refer to the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the Establishment of the Joint Venture with Livzon Group, a Controlling Subsidiary (Lin 2022-142)disclosed by the Company on 13 December 2022;Note 2: For details, please refer to the Announcement on Investment in the Establishment of the Joint Venture with Joincare, the Controlling Shareholder and Connected Transaction disclosed by Livzon Group(000513.SZ, 01513.HK) on 17 January 2023.
2. Major non-equity investment
□Applicable√N/A
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
3. Financial assets measured at fair value
√Applicable □N/A
Unit: Yuan Currency: RMB
| Type of asset | Amount at the beginning of the period | Gain or loss on change in fair value for the period | Change in fair value included in equity | Impairment provision for the period | Amount of investment during the period | Amount of disposal / redemption during the period | Other change | Amount at the end of the period |
| Shares | 235,534,124.87 | -13,003,336.17 | 2,137,552.45 | - | 6,183,753.83 | - | - | 230,852,094.98 |
| Funds | 688,053,816.62 | 9,573.79 | -23,706,468.49 | - | - | 5,646,082.27 | - | 658,710,839.65 |
| Derivatives | 5,432,511.57 | -5,432,511.57 | - | - | - | - | - | - |
| Others | 373,954,090.97 | - | - | - | 20,000,000.00 | 31,257.75 | 1,986.75 | 393,924,819.97 |
| Total | 1,302,974,544.03 | -18,426,273.95 | -21,568,916.03 | - | 26,183,753.83 | 5,677,340.02 | 1,986.75 | 1,283,487,754.61 |
Information on investment in securities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Type of securities | Securities code | Securities abbreviation | Initial investment cost | Source of fund | Carrying amount at the beginning of the period | Gain or loss on change in fair value for the period | Change in fair value included in equity | Amount of investment during the period | Amount of disposal during the period | Profit or loss for the period | Carrying amount at the end of the period | Accounting item |
| Shares | 00135 | Kunlun Energy | 4,243,647.64 | Own funds | 4,975,513.90 | 703,882.90 | - | - | - | 260,579.14 | 5,679,396.80 | Financial assets held for trading |
| Shares | 000963 | Huadong Medicine | 39,851.86 | Own funds | 15,425,841.60 | -1,130,569.16 | - | - | - | 95,587.48 | 14,295,272.44 | Financial assets held for trading |
| Shares | BEAM | Beam | 31,117,151.47 | Own | 82,218,236.97 | -12,576,649.91 | - | - | - | - | 69,641,587.06 | Financial |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| (US) | Therapeutics, Inc. | funds | assets held for trading | |||||||||
| Shares | ELTX(US) | Elicio Therapeutics, Inc. | 35,363,302.05 | Own funds | 34,823,014.36 | - | -25,735,299.31 | - | - | - | 9,087,715.05 | Other equity instruments investment |
| Shares | CARM(US) | Carisma Therapeutics, Inc. | 38,807,266.00 | Own funds | 34,821,295.50 | - | 4,515,821.53 | 6,183,753.83 | - | - | 45,520,870.86 | Other equity instruments investment |
| Shares | LLAI（LME） | LungLife Ai, Inc. | 58,837,745.24 | Own funds | 9,615,483.94 | - | -6,473,409.41 | - | - | 3,142,074.53 | Other equity instruments investment | |
| Shares | 02480 | Beijing Luzhu Biotechnology Co., Ltd. | 30,000,000.00 | Own funds | 53,654,738.60 | - | 29,830,439.64 | - | - | - | 83,485,178.24 | Other equity instruments investment |
| Funds | 206001 | Penghua Fund | 150,000.00 | Own funds | 934,289.94 | 9,573.79 | - | - | - | - | 943,863.73 | Financial assets held for trading |
| Others | 27,978.31 | Own funds | 29,271.00 | - | - | - | 31,257.75 | 1,986.75 | - | Financial assets held for trading | ||
| Total | / | 198,586,942.57 | / | 236,497,685.81 | -12,993,762.38 | 2,137,552.45 | 6,183,753.83 | 31,257.75 | 358,153.37 | 231,795,958.71 | / |
Statement of investments in securities
□Applicable √N/A
Information on investment in private equity fund
√Applicable □N/A
The Company had no new private equity fund investments during the reporting period. As at the end of the reporting period, the book balance of private equity fundsinvested by the Company amounted to approximately RMB393 million.
Information on investment in derivatives
√Applicable □N/A
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Unit: Yuan Currency: RMB
| Name of the operator of derivatives investment | Related relationship | Is this a related party transaction | Type of derivatives investment | Initial investment amount of derivatives investment | Commencement date | Maturity date | Investment amount at the beginning of the period | Amount of investment during the period | Amount of disposal during the period | Impairment provision (if any) | Investment amount at the end of the period | Percentage of investment amount to the net assets of the Company at the end of the period (%) | Actual gain or loss for the period |
| Financial institution | Non-related party | No | Forward foreign exchange contract (sell) | 587.60 | 2022/7/5 | 2023/1/30 | 607.17 | 0.00 | 588.55 | 0.00 | 0.00 | 0.00 | -7.15 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (sell) | 2,138.20 | 2022/8/2 | 2023/2/3 | 2,183.36 | 0.00 | 2,145.79 | 0.00 | 0.00 | 0.00 | -21.21 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (sell) | 5,403.44 | 2022/9/5 | 2023/2/24 | 5,376.80 | 0.00 | 5,278.45 | 0.00 | 0.00 | 0.00 | 200.05 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (sell) | 10,670.51 | 2022/10/8 | 2023/4/4 | 10,392.16 | 0.00 | 10,232.19 | 0.00 | 0.00 | 0.00 | 527.26 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (sell) | 11,661.47 | 2022/11/1 | 2023/4/20 | 11,361.13 | 0.00 | 11,332.91 | 0.00 | 0.00 | 0.00 | 328.36 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (sell) | 8,952.88 | 2022/12/2 | 2023/6/26 | 8,939.17 | 0.00 | 8,894.39 | 0.00 | 0.00 | 0.00 | -17.37 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (sell) | 17,187.80 | 2023/1/4 | 2023/7/10 | 0.00 | 17,187.81 | 17,257.98 | 0.00 | 277.47 | 0.01 | -544.67 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (sell) | 31,642.59 | 2023/2/1 | 2023/7/20 | 0.00 | 31,642.59 | 24,818.61 | 0.00 | 7,745.86 | 0.36 | -675.13 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (sell) | 6,316.38 | 2023/3/1 | 2023/7/17 | 0.00 | 6,316.38 | 2,953.20 | 0.00 | 3,606.58 | 0.17 | -110.93 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (sell) | 19,128.56 | 2023/4/3 | 2023/10/16 | 0.00 | 19,128.57 | 7,756.10 | 0.00 | 12,058.96 | 0.55 | -243.45 |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Financial institution | Non-related party | No | Forward foreign exchange contract (sell) | 16,311.15 | 2023/5/5 | 2023/10/16 | 0.00 | 16,311.15 | 3,862.70 | 0.00 | 12,858.51 | 0.59 | -112.92 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (sell) | 14,720.11 | 2023/6/2 | 2023/12/1 | 0.00 | 14,720.11 | 0.00 | 0.00 | 14,881.71 | 0.68 | 0.00 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (buy) | 1,358.88 | 2022/9/22 | 2023/3/21 | 1,355.92 | 0.00 | 1,338.73 | 0.00 | 0.00 | 0.00 | -20.33 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (buy) | 448.42 | 2022/11/14 | 2023/2/15 | 461.69 | 0.00 | 452.26 | 0.00 | 0.00 | 0.00 | -0.40 |
| Financial institution | Non-related party | No | Forward foreign exchange contract (buy) | 5,412.27 | 2022/12/2 | 2023/6/26 | 5,436.52 | 0.00 | 5,411.65 | 0.00 | 0.00 | 0.00 | 117.96 |
Financialinstitution
| Financial institution | Non-related party | No | Forward foreign exchange contract (buy) | 1,667.70 | 2023/1/6 | 2023/7/28 | 0.00 | 1,667.70 | 1,227.53 | 0.00 | 430.66 | 0.02 | -23.94 |
| Total | 153,607.97 | - | - | 46,113.94 | 106,974.30 | 103,551.04 | 0.00 | 51,859.75 | 2.38 | -603.85 | |||
| Source of funds for derivatives investment | Own funds | ||||||||||||
| Litigation involved (if applicable) | Not applicable | ||||||||||||
| Disclosure date of the announcement in relation to the approval of investment in derivatives by the Board (if any) | 7 April 2023 | ||||||||||||
| Disclosure date of the announcement in relation to the approval of derivatives investment by the general meeting of shareholders (if any) | Not applicable | ||||||||||||
Risk analysis of derivatives position held during theReporting Period and explanation of control measures(including but not limited to market risk, liquidity risk,credit risk, operational risk, legal risk, etc.)
| Risk analysis of derivatives position held during the Reporting Period and explanation of control measures (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | To effectively manage the uncertainty of exchange rate fluctuations on assets denominated in foreign currency of the Company, foreign exchange forward contracts and other financial derivatives are employed to lock relevant exchange rates for the purpose of hedging. The Company has formulated the Management System for Financial Derivatives Trading (《金融衍生品交易业务管理制度》) in relation to the operation and control of foreign exchange derivatives: 1. Market risk: the uncertainty of exchange rate fluctuations in the foreign exchange market has led to higher market risk in foreign exchange forward business. Control measures: The Company’s foreign exchange forward business is entered into for hedging exchange rate risk associated with assets denominated in US dollar and lock the future exchange settlement price of such assets. It is designed to be used as a hedging instrument. Such foreign exchange derivatives shall not be used for speculative trading. The principle of prudence and conservation shall be observed so as to effectively prevent market risk. 2. Operational risk: operational risk arises from imperfect internal process, improper operation, system failure and other factors. Control measures: The Company has formulated the corresponding management measures, clearly defined the responsibilities of all parties, improved the review and approval process and established supervisory mechanism, so as to effectively reduce operational risk. 3. Legal risk: The Company’s foreign exchange forward business is subject to applicable laws and regulations, and shall clearly stipulate the relationship of rights and obligations with financial institutions. Control measures: In addition to strengthening the knowledge of laws and regulations and market |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
rules in the Company’s responsible department, the Company’s legal department shall also strictly review various business contracts, agreements and otherdocuments, specify the rights and obligations, and strengthen compliance inspection, so as to ensure that the Company’s investment and operation in derivativeshave met the requirements of applicable laws and regulations as well as the Company’s internal systems.In order to manage the uncertainty risk caused by price fluctuations of bulk commodities on the purchase cost of raw materials of the Company, financial derivativessuch as commodity futures contracts are employed to hedge raw materials. The Company has formulated the Internal Control System for Commodity FuturesHedging Business (《商品期货套期保值业务内部控制制度》) to standardize the management and risk control of commodity futures derivatives: 1. Market risk:
the uncertainty of price changes of bulk commodities has led to greater market risk in futures business. Control measures: The Company’s futures hedging businessshall not carry out speculative trading, the operation principle of prudence and conservation shall be observed, the number of hedging transactions shall be strictlylimited, such that it does not exceed the actual number of spot transactions, and the futures position shall not exceed the spot volume for hedging purpose. 2.Operational risk: operational risk arises from imperfect internal process, improper operation, system failure and other factors. Control measures: The Company hasformulated the corresponding management system, clearly defined the division of responsibilities and approval process, and established an improved supervisorymechanism, so as to effectively reduce operational risk through risk control of business process, decision-making process and transaction process. 3. Legal risk: TheCompany’s commodity futures hedging business is subject to applicable laws and regulations, and shall clearly stipulate the relationship of rights and obligationswith financial institutions. Control measures: In addition to strengthening the knowledge of laws and regulations and market rules in the Company’s responsibledepartment, the Company’s legal department shall also strictly review various business contracts, agreements and other documents, specify the rights and obligations,and strengthen compliance inspection, so as to ensure that the Company’s investment and operation in derivatives have met the requirements of applicable laws andregulations as well as the Company’s internal systems.Change in market price or fair value of the derivativesinvested during the Reporting Period, the specificmethod, related assumptions and parameters used inthe analysis of the fair value of derivatives shall bedisclosed
| Change in market price or fair value of the derivatives invested during the Reporting Period, the specific method, related assumptions and parameters used in the analysis of the fair value of derivatives shall be disclosed | Gains and losses arising from change in fair value of the forward foreign exchange contracts, option contracts and commodity futures contracts during the Reporting Period were RMB-26.3211 million. |
| Explanation as to whether there has been a material change in the accounting policy and accounting principles for the Company’s derivatives during the Reporting Period as compared with the previous reporting period | No |
| Specific opinion of independent Directors on investment in derivatives and risk control of the Company | Due to the growing import and export business of the Company, a large amount of foreign exchange transactions is required. To avoid and prevent foreign exchange risk, we are of the view that the forward foreign exchange derivatives trading business carried out by the Company and its subsidiaries are in line with the actual development needs of the Company. When the Board reviewed this proposal, the relevant decision-making procedures were in compliance with the Company Law, the Securities Law, the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange and other relevant laws and regulations and the provisions in the Articles of Association of the Company. In view of above, we concurred that the Company conducted foreign exchange derivatives trading business with its own funds within the limit approved by the Board. |
(V)Sale of major assets and equity
□Applicable √N/A
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
(VI) Analysis of major controlled and invested companies
√Applicable □N/A
Unit: 10,000 Yuan
| Company | Nature of business | Main product and service | Registered capital | Asset size | Net assets | Revenues | Operating profit | Net profit |
| Taitai Pharmaceutical | Industry | R&D, production and sales of oral liquids, tablets (hormones), aerosols (hormones containing), inhalation preparations (solution for inhalation) (hormones containing), nasal spray (hormones containing), and TCM extraction workshop | 10,000 | 49,560.63 | 39,868.22 | 12,650.94 | 3,420.14 | 3,238.50 |
| Haibin Pharma | Industry | Powder injection (including penicillin), tablets, hard capsules, APIs, and sterile APIs. Import and export businesses and domestic trade (excluding commodities under exclusive rights, commodities under special government control, and monopolized commodities) | 70,000 | 221,744.67 | 163,578.67 | 54,121.86 | 8,124.02 | 5,775.83 |
| Xinxiang Haibin | Industry | Manufacturing and sale of pharmaceutical products, intermediates and other chemical products | 17,000 | 95,579.48 | 40,584.76 | 38,443.15 | 2,677.80 | 2,576.82 |
| Health China | Industry | Production and sale of self-produced Eagle's food, health care food, traditional Chinese medicine decoction pieces, and drug products | HKD7,317 | 14,276.24 | 9,542.04 | 1,644.73 | 341.78 | 189.40 |
| Shanghai Frontier | Industry | R&D of new pharmaceutical products, health care products, medical devices, diagnostic reagents, pharmaceutical intermediates, and provision of relevant technical consulting, technical service and technical transfer | 5,000 | 17,342.56 | 12,114.47 | 4,075.53 | 622.69 | 654.43 |
| Jiaozuo Joincare | Industry | R&D, production and sale of pharmaceutic preparations, chemical APIs, biological APIs, pharmaceutical intermediates, and biological products | 50,000 | 143,617.21 | 98,440.93 | 71,884.81 | 11,644.99 | 10,353.55 |
| Topsino | Commerce | Investment and trade | HKD89,693 | 215,256.66 | 158,256.22 | - | 26,948.00 | 26,836.34 |
| Joincare Haibin | Industry | R&D, production, storage, transport and sale of chemical APIs (including intermediates) and pharmaceutic preparations. Import and export businesses and domestic trade (excluding | 50,000 | 107,090.87 | 95,238.77 | 29,581.31 | 15,193.20 | 13,105.10 |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| commodities under exclusive rights, commodities under special government control, and monopolized commodities) | ||||||||
| Livzon Group | Industry | Drug R&D, production, manufacturing and sale | 93,555 | 2,572,612.72 | 1,424,982.52 | 668,991.81 | 142,843.20 | 117,407.08 |
Notes: 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 thereofare data of individual accounting statements and that attributed to parent companies; as there are transactions between subsidiaries or between a subsidiary and the Company, data of individualfinancial statements are not separately analyzed.
2. For business conditions of Livzon Group, please refer to the 2023 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 pharmaceutical industry will face great challenge in development in the future with continuousdeepening of medical reform, advancement of supply-side structural reform in the industry, revision ofDrug Administration Law, acceleration of consistency evaluation of generic drugs, adjustment of thenew edition of National Reimbursement Drug List, expansion of volume-based procurement, centralizedrectification of the pharmaceutical industry and other industrial policies that have been successivelylaunched. In July 2022, the Company’s key product Meropenem for Injection (注射用美罗培南) wasselected in the seventh batch of volume-based drug procurement organized by the State. This is expectedto be implemented in November 2022 and will have a great impact on the sales price and market shareof this product. Levosalbutamol Hydrochloride Nebulizer Solution (盐酸左沙丁胺醇雾化吸入溶液),a key product of the Company, met the standards on being included in the national volume-basedprocurement. It is expected to have impact on the sales of such product should being included in the listof volume-based procurement.Response measures: The Company will pay close attention to industry dynamics and reforms, copewith major changes in policies of the pharmaceutical industry through early planning, transformationand compliance, and further establish and improve its compliant operation mechanism and system. Itwill actively strengthen new product R&D and innovation and constantly improve its core competitivestrengths. Meanwhile, the Company actively engages in the access to the national reimbursement druglist and negotiation, and continue to increase the coverage of hospitals and sales, to realize the objectiveof “price for quantity”, so as to reduce the impact of price adjustment on the Company’s steady growth.Moreover, the volume-based drug procurement is becoming a regular practice. In the face of the seventhbatch of volume-based drug procurement and the possible impact on the business performance of theCompany, the Company will continue to enhance its innovative efforts, boost its competitive edge, andstrive to ensure the stable operation of the business. With the Company’s new high-barrier complexformulations, represented by inhalation formulations, being launched on the market, commercializationwill gradually enter a stable contribution period. The Company’s product structure will be furtheroptimized, and the reliance on specific products will also gradually reduce.The Company will continue to innovate and develop clinically needed innovative drugs with substantialadded value, as well as high-barrier complex formulations. It will delve into products with marketpotential and technological barriers, actively advance post-market evaluations for key products, and
conduct consistency evaluations for related products. The Company will continuously optimize itsproduct portfolio while actively exploring and expanding into international markets.
2. Market risk
With advancement of supply-side structural reform in the pharmaceutical manufacturing industry andtwo-invoice policy in circulation domain, pharmaceutical market structure is deeply changed. With thegradual standardization and centralization of the market, competition in the pharmaceutical industrybecomes increasingly fierce. Affected by increasingly stricter drug regulation, policy-based drug pricereduction, price cutting during bidding, medical insurance premium control, and minimum procurementcommitment of the pharmaceutical industry in current stage, bid winning price of drugs will be furtherlowered, competition among enterprises in the industry will be intensified, and price war will occurfrequently, thus the Company will be at the risk of drug price reduction.Response measures: The Company will establish a more rational market-oriented system through strictcompliance operation so as to maintain its dominant position and core competitive strengths; and theCompany will ensure the sustainable and steady development and improve its profitability byreinforcing marketing efforts. Meanwhile, the Company will offset the impact of product price reductionby means of increasing sales volumes, and optimize technical process and reduce production coststhrough internal exploration and transformation. Moreover, the Company will speed up the R&D，expedite the process of bringing products to market and spread risks of the Company while expandingthe range of existing products in segment markets In the future, the augmentation of product varietywill drive sales growth and foster new sources of profits.
3. Risk of safety and environmental protection
The Company is an integrated pharmaceutical manufacturing enterprise. During production, itimplements relevant chemical synthesis process and uses a large number of acid and alkali and otherchemical components, which are inflammable, explosive, toxic, irritant and corrosive, and have hiddenhazards of fire, explosion and poisoning, posing certain risks to the production and operation of theCompany. As environmental protection policies and regulations have been constantly issued in recentyears, environmental protection standards have become more stringent, and the state has strengthenedits control over pollutants, and thus 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 guideline of “Safety First, Precaution Crucial and Comprehensive Management”. It willstrengthen the construction of safe production infrastructure and ensure a sound environment for safeproduction of the Company through regular internal audit of safety and environment systems andemployee safety education and training. The Company will carry out discharge after treatment andreaching standards in accordance with environmental protection provisions, actively accept supervisionand inspection of environmental protection authorities, and try to reduce emission and increaseexpenditures in environmental protection by improving production process and promptly updating
environmental protection technology.
4. Risk in price and supply of raw materials
There is a larger fluctuation in the supply price of some raw materials of the Company due to changesin material prices, especially the materials of traditional Chinese medicine, causing greater volatility orrise in production costs of the Company. Meanwhile, the quantity and category of raw material suppliersof the Company are various, thus quality of final products of the Company will be directly affected bythe selection of raw material suppliers and the guarantee and control of quality of raw materials.Response measures: In terms of selection of suppliers, the Company will conduct an open tenderingand bidding based on the principle of selecting qualified suppliers, strengthen audit of suppliers, andeliminate the adulteration of adverse suppliers. The Quality Assurance Department and SupplyDepartment of the Company will directly conduct process control of products provided by suppliers ofkey raw materials and carry out quality inspection and control of final products.
5. Quality control risk
The quality of pharmaceutical products is directly related to people’s lives and health. The requirementsof drug regulatory authorities on the production quality are increasingly strict and pharmaceuticalmanufacturers bear significant responsibility. As pharmaceutical manufacturing involves numerousaspects such as the supply of raw materials, production technique, process control, equipment conditions,production environment, transportation conditions, storage conditions and inspection, the quality controlfor drugs covers the full lifecycle of products.Response measures: The Company rigorously oversees the quality of products, gradually improve andstrengthen the long-term mechanisms on product quality management and the comprehensive qualitymanagement systems. On such basis, the Company will coordinate the work of various relevantdepartments such as the R&D department, the production and quality management department, establishinformation-based systems and improve all SOP processes. It will strengthen process control and riskmanagement on new products, improve the quality of operation and fully guarantee the quality of drugsthrough refining the quality management system. Meanwhile, it will continue to promote outstandingperformance management models, introduce advanced international concepts and methods, strengthenthe application of quality management instruments, and continuously propel and improve theinternational level of the quality management system.
6. 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 issueddrug R&D related policies in recent years to further enhance approval work requirements of new drugsfor marketing, thus bringing certain risks for new drug R&D of the Company. Meanwhile, post-launchpromotion of drugs is influenced by national regulations, industry policies, market environment andcompetitive intensity, potentially leading to lower-than-expected post-launch revenues. This exposes the
company to risks associated with product R&D.
Response measures: The Company will further improve the R&D and innovation systems, introduceand develop high-end talents, proactively carry out cooperation and introduction of overseas innovativemedicines, strengthen market research and evaluation of varieties, reinforce the process regulation andrisk management of the initiation of R&D projects, and concentrate efforts and make key breakthroughsin 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 developmentof the Company.(II) Other matters for disclosure
□Applicable √N/A
Chapter 4 Corporate Governance
I Introduction of general meetings
| Meeting sessions | Date of meeting | Query index of designated website | Disclosure date | Meeting resolution |
| 2023 First Extraordinary General Meeting | 19 May 2023 | www.sse.com.cn | 20 May 2023 | The Resolution on the Proposal on Cancellation of Treasury Shares Previously Repurchased was considered and approved. See the Announcement on Resolutions of Joincare Pharmaceutical Group Industry Co., Ltd. at the 2023 First Extraordinary General Meeting (Lin 2023-056) for details |
| 2022 Annual General Meeting | 9 June 2023 | www.sse.com.cn | 10 June 2023 | Nine (9) resolutions were considered and approved, including the 2022 Annual Work Report of the Supervisory Committee, 2022 Annual Work Report of the Board of Directors, 2022 Annual Profit Distribution Scheme, and 2021 Annual Report of Joincare Pharmaceutical Group Industry Co., Ltd. (Full Text and Abstract). See the Announcement on Resolutions of Joincare Pharmaceutical Group Industry Co., Ltd. at the 2022 Annual General Meeting (Lin 2023-061) for details |
Holders of preferred shares with resumed voting rights requesting to hold extraordinary generalmeeting
□Applicable √ N/A
Description of General Meetings
□Applicable √ N/A
II Changes in directors, supervisors and senior management of the Company
□Applicable √ N/A
Description of changes in directors, supervisors and senior management of the Company
□Applicable √ N/A
III Profit distribution plan and plan for conversion of capital reserve into share capitalProfit distribution plan and plan for conversion of capital reserve into share capital proposedfor the first six months of 2023
| Distribution or conversion or not | No |
| Number of bonus shares to be distributed for every ten shares (share) | N/A |
| Dividend amount to be distributed for every ten shares (RMB) (tax inclusive) | N/A |
| Number of shares to be converted into share capital for every ten shares (share) | N/A |
| Description 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 employee incentives ofthe Company and their effect(I) Matters related to equity incentive scheme have been disclosed in the ProvisionalAnnouncements with no progress or change in subsequent implementation
□Applicable √ N/A
(II) Incentives not disclosed in the Provisional Announcements or with subsequent progressEquity incentives
□Applicable √N/A
Others
□Applicable √N/A
Employee share ownership scheme
□Applicable √N/A
Other incentive program
□Applicable √N/A
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Chapter 5 Environmental and Corporate Social Responsibility
I Environmental information(I) Environmental issues of companies and their major subsidiaries belonging to key pollutant discharging units as announced by the environmentalprotection department
√Applicable □N/A
1. Pollution discharge information
√Applicable □N/A
i.Jiaozuo Joincare
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L) | Pollutant discharge standards implemented (mg/L) | Total amount of discharge (t/a) | Total amount of discharge approved (t/a) | Excessive discharge |
| Jiaozuo Joincare | Chemical oxygen demand | Continuous | 1 | Master outlet for sewage | 119.7 | 220 | 379.24 | 942.1 | Nil |
| Ammonia nitrogen | Continuous | 17.8 | 35 | 56.4 | 105.3 | Nil |
ii. Taitai Pharmaceutical
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L) | Pollutant discharge standards implemented (mg/L) | Total amount of discharge (t/a) | Total amount of discharge approved (t/a) | Excessive discharge |
| Taitai Pharmaceutical | Chemical oxygen demand | Intermittent | 1 | Master outlet for sewage | 40.12 | 345 | 0.143 | 19.34 | Nil |
| Biochemical oxygen demand | 8.15 | 150 | 0.014 | / | Nil | ||||
| Ammonia nitrogen | 0.124 | 35 | 0.0062 | / | Nil | ||||
| Total Nitrogen | 3.32 | 47 | 0.01 | / | Nil |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Total Phosphorus | 1.31 | 5.2 | 0.006 | / | Nil | |||
| Suspended Substance | 4 | 250 | 0.014 | / | Nil | |||
| Sulfur dioxide | Intermittent | 1 | Discharge outlet of boiler exhaust gas | 0.82 | 50 | 0.0055 | / | Nil |
| Nitrogen oxide | 9.80 | 150 | 0.067 | / | Nil | |||
| Particulate matter | 13.4 | 20 | 0.088 | / | Nil |
iii. Haibin Pharma
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L) | Pollutant discharge standards implemented (mg/L) | Total amount of discharge (t/a) | Total amount of discharge approved (t/a) | Excessive discharge |
| Haibin Pharma | Chemical oxygen demand | Intermittent | 1 | Master outlet for sewage | 67 | 500 | 2.24 | 41.65 | Nil |
| Ammonia nitrogen | 0.55 | 45 | 0.018 | 3.7485 | Nil | ||||
| Total Nitrogen | 3.82 | 70 | 0.128 | 5.831 | Nil | ||||
| Total volatile organic compounds | 1 | Discharge outlet of boiler exhaust gas | 2.6 | 100 | 0.0068 | 0.504 | Nil | ||
| Non-methane hydrocarbon | 1 | Discharge outlet of exhaust gas in sewage station | 6 | 60 | 0.159 | 5.04 | Nil |
iv. Xinxiang Haibin
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L) | Pollutant discharge standards implemented (mg/L) | Total amount of discharge (t/a) | Total amount of discharge approved (t/a) | Excessive discharge |
| Xinxiang Haibin | Chemical oxygen demand | Continuous | 1 | Master outlet for sewage | 108.795 | 220 | 8.787 | 14.81 | Nil |
| Ammonia nitrogen | Continuous | 5.374 | 35 | 0.431 | 1.66 | Nil |
v. Fuzhou Fuxing
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L) | Pollutant discharge standards implemented (mg/L) | Total amount of discharge (t) | Total amount of discharge approved (t/a) | Excessive discharge |
| Fuzhou Fuxing | Chemical oxygen demand (COD) | Intermittent | 1 | The northwest side of the factory | 16.00 | 100 | 10.78 | 102.19 | Nil |
| Ammonia nitrogen | 0.06 | 15 | 0.04 | 10.22 | Nil | ||||
| SO2 | Organized | 1 | RTO | 11.3 | 200mg/m3 | 0.636 | 2.6 | Nil | |
| NOx | 1 | RTO | 8.33 | 200mg/m3 | 0.527 | 2.6 | Nil | ||
| VOCs | 7 | RTO, fermentation workshop, environmental friendly sewage station, regulating pool, Workshop 2 (East), Workshop 2 (West), QC department | 3.72 | 60mg/m3 | 2.158 | 30.19 | Nil |
Note: The discharge concentration represents the actual discharge concentration, and the standards implemented represent the standards for discharge to the environment by Jiangyin Sewage Treatment Plant (江阴污水处理厂) (i.e. COD ≤ 100 mg/L, ammonia nitrogen ≤ 15 mg/L), and the agreed standard for discharge from Fuzhou Fuxing to Jiangyin Sewage Treatment Plant shall be the standards for discharge to the environment byJiangyin Sewage Treatment Plant (江阴污水处理厂) (i.e. COD ≤ 500mg/L, ammonia nitrogen ≤ 60mg/L, total phosphorus ≤ 8mg/L, total nitrogen ≤ 70mg/L, SS ≤ 400mg/L) . For the discharge of non-methane totalhydrocarbons, particulate matter, sulfur dioxide, and nitrogen oxides, the adopted standard was the standard limits stipulated in the Air Pollutant Discharge Standards for Pharmaceutical Industry (《制药工业大气污染物排放标准》) (GB 37823-2019).
vi. Livzon Xinbeijiang
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L) | Pollutant discharge standards implemented (mg/L) | Total amount of discharge (t) | Total amount of discharge approved (t/a) | Excessive discharge |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Livzon Xinbeijiang | Chemical oxygen demand | Intermittent | 1 | Sewage treatment workshop | 66.3 | 240 | 34.85 | 213.6 | Nil |
| Ammonia nitrogen | 7.7 | 70 | 4.06 | 24.5 | Nil |
Note: The discharge concentration represents the concentration of discharge into Qingyuan Henghe Sewage Treatment Plant (清远横荷污水处理厂), while the standard adopted for discharge represents the standardstipulated in the pollutant discharge license of the company, i.e. COD ≤ 240 mg/L, ammonia nitrogen ≤ 70 mg/L. The data was obtained from Qingyuan Environmental Protection Bureau. The boiler emission followsthe Emission Standard of Air Pollutants for Boiler 《锅炉大气污染物排放标准》(DB 44/765-2019); the waste gas emission from the workshops follows the Air Pollutant Discharge Standards for PharmaceuticalIndustry (《制药工业大气污染物排放标准》) (GB 37823-2019) and the Emission Standards for Odor Pollutants (《恶臭污染物排放标准》(GB 14554-93).
vii. Livzon Hecheng
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L)/（mg/m3） | Pollutant discharge standards implemented (mg/L)/（mg/m3） | Total amount of discharge (t) | Total amount of discharge approved (t/a) | Excessive discharge |
| Livzon Hecheng | Chemical oxygen demand | Intermittent | 1 | Wastewater treatment station | 78 | 192 | 8.049 | 26.68 | Nil |
| Ammonia nitrogen (NH3-N) | 4.4 | 40 | 0.463 | 5.48 | Nil | ||||
| Sulphur dioxide | Organized continuous emission | 3 | Boiler room | 4 | 50 | 0.059 | / | Nil | |
| Nitrogen oxides | 3 | Boiler room | 61.1 | 150 | 0.48 | / | Nil | ||
| Smoke and dust | 3 | Boiler room | 1.56 | 20 | 0.018 | / | Nil | ||
| Hydrogen chloride | 7 | Workshop | 7.38 | 100 | 2.06 | / | Nil | ||
| Non-methane hydrocarbons | 7 | Workshop | 19.96 | 60 | 6.03 | 77.76 | Nil | ||
| Non-methane hydrocarbons | 1 | RTO | 10.6 | 60 | 1.07 | Nil | |||
| Nitrogen oxides | 1 | RTO | 7.88 | 200 | 0.81 | / | Nil | ||
| Sulphur dioxide | 1 | RTO | 2.5 | 200 | 0.265 | / | Nil |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Notes: 1. The discharge concentration of pollutants in wastewater represents the average concentration by online monitoring from the master discharge outlet by the company into South District Sewage Treatment Plant,while the standard adopted for discharge represents the standard stipulated in the pollutant discharge license of the company, i.e. COD ≤ 192 mg/L, ammonia nitrogen ≤ 40 mg/L.
2. The discharge concentration of pollutants in the discharge outlets of waste gas represents the average concentration detected by a qualified third party engaged, of which the boiler exhaust adopted the EmissionStandards for Boiler Air Pollutants in Guangdong Province (《广东省锅炉大气污染物排放标准》) (DB 44/765-2019), the waste gas of the workshop and wastewater treatment station complied with the Air PollutantDischarge Standards for Pharmaceutical Industry (《制药工业大气污染物排放标准》) (GB 37823-2019).
viii. Gutian Fuxing
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L) | Pollutant discharge standards implemented (mg/L) | Total amount of discharge (t) | Total amount of discharge approved (t/a) | Excessive discharge |
| Gutian Fuxing | Chemical oxygen demand | Continuous | 1 | Southeastern part of the factory zone | 49.382 | 120 | 5.216 | 113.9 | Nil |
| Ammonia nitrogen | 9.595 | 35 | 1.139 | 39.88 | Nil |
Note: Wastewater discharge follows the Discharge Standards of Water Pharmaceutical Industry Fermentation Products Category (《发酵类制药工业水污染物排放标准》)(GB21903-2008). The discharge concentrationrepresents the concentration of ultimate discharge into the environment, while the discharge standards stipulated in the pollutant discharge license are COD ≤ 120 mg/L, ammonia nitrogen ≤ 35 mg/L.
ix. Livzon Limin
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L) | Pollutant discharge standards implemented (mg/L) | Total amount of discharge (t) | Total amount of discharge approved (t/a) | Excessive discharge |
| Livzon Limin | Chemical oxygen demand | Intermittent | 1 | Wastewater treatment station | 13.00 | 110 | 2.364 | Nil | Nil |
| Ammonia nitrogen | 0.28 | 15 | 0.051 | Nil | Nil |
Note: The production process of Livzon Limin is required to comply with the Water Pollution Prevention and Control Law of the PRC ( 《中华人民共和国水污染防治法》), the Air Pollution Prevention and ControlLaw of the PRC ( 《中华人民共和国大气污染防治法》), the Solid Waste Pollution Prevention and Control Law of the PRC ( 《中华人民共和国固体废物污染环境防治法》 ), “Integrated Wastewater DischargeStandard of the PRC National Standard (GB 8978-1996)” (《中华人民共和国国家标准污水综合排放标准（GB 8978-1996）》), the “Emission Standard of Air Pollutants for Boiler (GB13271-2014)” ( 《锅炉大气污染物排放标准（GB 13271-2014）》), the Measures for Pollutant Discharge Permitting Administration (For Trial Implementation) ( 《排污许可管理办法（试行）》 ) and other laws, regulations and industry
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
standards. The wastewater of Limin Factory 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 stipulatedin the pollutant discharge license of the company, i.e. COD ≤ 110 mg/L, ammonia nitrogen ≤ 15 mg/L, while the data detected by third party inspection firm was adopted as the discharge concentration.
x. Livzon Pharmaceutical Factory
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L) | Pollutant discharge standards implemented (mg/L) | Total amount of discharge (t) | Total amount of discharge approved (t/a) | Excessive discharge |
| Livzon Pharmaceutical Factory | Chemical oxygen demand | Intermittent | 1 | Wastewater treatment station | 21.09 | 120 | 1.17 | Nil | Nil |
| Ammonia nitrogen | 1 | Wastewater treatment station | 0.2 | 20 | 0.012 | Nil | Nil |
Note: The discharge concentration of pollutants in the wastewater discharge outlet represents the average concentration detected by a qualified third party engaged, by implementing the strictest of water pollutantdischarge concentration limits for newly-built enterprises of the “Discharge Standard of Water Pollutants for Pharmaceutical Industry Mixing/Compounding and Formulation Category” ( 《混装制剂类制药工业水污染物排放标准》 (GB 21908-2008)), water pollutant discharge concentration limits for newly-built enterprises of the “Discharge Standards of Water Pollutants for Pharmaceutical Industry Bio-pharmaceutical Category”(《生物工程类制药工业水污染物排放标准》 ) (GB 21907-2008), or the level 1 of phase II standard of “Discharge Limits of Water Pollutants” ( 《水污染物排放限值》) (DB 44/26-2001) of Guangdong Province.
xi. Ningxia Pharmaceutical
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration （mg/L）/（mg/m3） | Pollutant discharge standards implemented（mg/L）/（mg/m3） | Total amount of discharge (t) | Total amount of discharge approved (t/a) | Excessive discharge |
| Ningxia Pharmaceutical | Chemical oxygen demand | Continuous | 1 | Sewage treatment workshop on north side of factory zone | 116 | 200 | 58.4 | Nil | Nil |
| Ammonia nitrogen | 0.25 | 25 | 0.12 | Nil | Nil |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Sulfur dioxide | 1 | Boiler workshop on north side of factory zone | 78 | 200 | 20.19 | 156.816 | Nil | |
| Nitrogen oxide | 121 | 200 | 31.17 | 156.816 | Nil | |||
| Particulate matter | 7 | 30 | 1.57 | 23.522 | Nil | |||
| Volatile organic compounds | 9 | 4 outlets for fermentation, 3 outlets for refinery and 2 outlets for sewage | 7.03 | 100 | 4.04 | 79.535 | Nil |
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”) (COD ≤200mg/m?, ammonia nitrogen ≤25mg/m?), the standard adopted for discharge was the standard stipulated in the pollutant discharge license of the company (protocol standard) and the amountof discharge was calculated by the amount received by Xin’an Company. In respect of the total amount of approved discharge, since Ningxia Pharma adopted indirect discharge, the local government of Ningxia cancelledthe limitation of total discharge of chemical oxygen demand and ammonia nitrogen of all indirect discharge enterprises, and the total amount index was directly allocated to sewage treatment plants in the pharmaceuticalindustrial park established by the government after the renewal of the pollution discharge license.
2. The air emission concentration of boilers represents the self-monitoring average concentration throughout the year, the standard adopted for discharge was the emission limits of coal-fired boilers in Schedule 3 ofEmission Standards for Boiler Air Pollutants (《锅炉大气污染物排放标准》表3) (GB13271-2014) (sulfur dioxide ≤ 200mg/m?, nitrogen oxides ≤ 200mg/m?, particulate matter ≤ 30mg/m?) and the amount of dischargewas calculated by the amount indicated by online monitoring. The concentration of volatile organic compounds represents the concentration of ultimate discharge to the environment (self-monitoring concentration), theadopted standard was the standard limits stipulated in Schedule I of the Air Pollutant Discharge Standards for Pharmaceutical Industry (《制药工业大气污染物排放标准》) (GB 37823-2019) and the amount of dischargewas calculated by the amount of waste gas emissions and the discharge concentration recorded by the monitoring report.
xii. Jiaozuo Hecheng
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L) | Pollutant discharge standards implemented (mg/L) | Total amount of discharge (t) | Total amount of discharge approved (t/a) | Excessive discharge |
| Jiaozuo Hecheng | Chemical oxygen demand | Continuous | 1 | Master outlet in industrial wastewater workshop | 97.84 | 220 | 4.274 | 60.8 | Nil |
| Ammonia nitrogen | 4.27 | 35 | 0.151 | 8.8 | Nil |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Note: The discharge concentration and the total amount of discharge represent the concentration and total amount of ultimate discharge into the downstream sewage treatment plant, and the source is online monitoringdata. Replacement of hazardous waste signs and labels in pipelines follows the latest Technical Specifications for the Setting of Hazardous Waste Identification Signs(《危险废物识别标志设置技术规范》).
xiii. Shanghai Livzon
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration （mg/L）/（mg/m3） | Pollutant discharge standards implemented（mg/L）/（mg/m3） | Total amount of discharge (t) | Total amount of discharge approved (t/a) | Excessive discharge |
| Shanghai Livzon | Chemical oxygen demand | Intermittent | 1 | Master outlet in the park | 36.63 | 500 | 4.10 | 6.1738 | Nil |
| Ammonia nitrogen | 1.88 | 40 | 0.21 | 0.8747 | Nil | ||||
| Particulate matter | Organized intermittent discharge | 2 | No. 5 and 6 outlet on the roof | - | - | 0.008 | 0.054 | Nil | |
| Volatile organic compounds | 8 | No. 1-4, 7-10 outlets on the roof | 1.42 | 60 | 0.23 | 0.88325 | Nil |
Note: The discharge concentration was the average of monthly third-party monitoring data, and the amount of discharge was the cumulative sum of monthly discharge. The discharge of VOCs and particulate matter werein accordance with the “Emission Standard of Air Pollutants for Pharmaceutical Industry” (《制药工业大气污染物排放标准》) (GB 37823-2019), and the discharge of COD and ammonia nitrogen were implementedin accordance with the “Integrated Wastewater Discharge Standard” (《污水综合排放标准》)(DB 31/199-2018). Air pollutants discharge follows “Emission Standard of Air Pollutants for Pharmaceutical Industry”(《制药工业大气污染物排放标准》) (DB31/310005-2021),“Integrate Emission Standards of Air Pollutants” (《大气污染物综合排放标准》) (DB31/933-2015) and “Emission Standards for Odor Pollutants” (《恶臭（异味）污染物排放标准》) (DB31/1025-2016). Water pollutant discharge follows the “Pollutant Discharge Standard for the Biopharmaceutical Industry” (《生物制药行业污染物排放标准》) (DB31/373-2010).Shanghai Livzon was among other key pollutant discharge units, but not among the key pollutant discharge units of water environment and atmospheric environment
xiv. Livzon MAB
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L) | Pollutant discharge standards implemented (mg/L) | Total amount of discharge (t) | Total amount of discharge approved (t/a) | Excessive discharge |
| Livzon MAB | Chemical oxygen demand | Intermittent | 1 | Wastewater treatment station | 21.09 | 120 | 1.541 | Nil | Nil |
| Ammonia nitrogen | 1 | Wastewater treatment station | 0.2 | 20 | 0.0146 | Nil | Nil |
Note: The discharge concentration of pollutants in the wastewater discharge outlet represents the average concentration detected by a qualified third party engaged, by implementing the strictest of Water PollutantDischarge Concentration Limits for Newly-Built Enterprises (新建企业水污染物排放浓度限值) of the Emission Standard for Pharmaceutical 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》) (GB 21908-2008), Water Pollutant Discharge Concentration Limits for Newly-Built Enterprises (新建企业水污染物排放浓度限值) of the Discharge Standards forBiopharmaceutical Industrial Wastewater (《生物工程类制药工业水污染物排放标准》) (GB 21907-2008), or the level 1 of phase II standard of Guangdong Provincial Capping on Polluted Effluents Discharge (《水污染物排放限值》) (DB 44/26-2001).
xv. Livzon Diagnostics
| Name of company or subsidiary | Name of major pollutants and specific pollutants | Mode of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration (mg/L) | Pollutant discharge standards implemented (mg/L) | Total amount of discharge (t) | Total amount of discharge approved (t/a) | Excessive discharge |
| Livzon Diagnostics | Chemical oxygen demand | Intermittent | 1 | Sewage treatment station | 16 | 500 | 0.02 | Nil | Nil |
| Ammonia nitrogen | Sewage treatment station | 0.09 | Nil | 0.00012 | Nil | Nil |
Note: The sewage treated by Livzon Diagnostics was discharged into the South District Sewage Treatment Plant in Zhuhai (珠海市南区水质净化厂), and the waste water discharge was carried out in accordance withthe “Discharge Limits of Water Pollutants of Guangdong Province Standards” (《广东省地方标准 水污染物排放限量值》) (DB 44/26-2001).
2. Construction and operation of pollution preventive facilities
√Applicable □N/A
| Name of company or subsidiary | Construction and operation of pollution preventive facilities |
| Jiaozuo Joincare | Exhaust gas: The treatment process of “tertiary spray + mist eliminator + dry filter + adsorption concentrator + RCO” + “secondary alkali spray” was adopted for fermentation exhaust gas. The treatment 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 exhaust gas treatment facilities in wastewater treatment station. The treatment process of “alkali adsorption” was adopted for process acid waste gas. The treatment process of “tertiary finned condenser + 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 alkali spray”/“secondary alkali spray + biological uptake + secondary alkali spray” was adopted for process organic exhaust gas. 15 discharge outlets were constructed. All of them enable stable and up-to-standard discharge through self-monitoring in the first half of 2023. Wastewater: The treatment process of “regulating pool + hydrolysis acidification pool + UASB + (CASS + air flotation) / modified A/O + secondary settling tank + coagulating sedimentation” was primarily adopted. Standard wastewater outlets were set; online automatic monitoring control system was installed at outlets for real-time monitoring of COD, ammonia nitrogen, total nitrogen, pH, fluorion and flow. Wastewater treatment process sections can be stably operated. Moreover, wastewater control factors can be stably emitted in compliance with the required standard. |
| Taitai Pharmaceutical | No new pollution preventive facilities were set up and all facilities functioned properly. |
| Haibin Pharma | No new pollution preventive facilities were set up. All pollution preventive facilities functioned properly and ensured up-to-standard discharge. |
| Xinxiang Haibin | Wastewater: 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 2023. 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 2023. 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 2022. 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 2023. 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 2023. After photo-oxidative catalyzation + alkali spray + water spray treatment with a treatment capacity of 30,000 m?/h, the waste 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 of 2023. 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 of 2023. The resin adsorption pre-treatment facility of exhaust gas was added and is currently under construction. | |
| Fuzhou Fuxing | The company strictly complies with the “Three Simultaneous” system of environmental protection by collecting and treating “Three Wastes (wastewater, waste gas and solid waste)” according to requirements, and employs an advanced wastewater treatment process known as “Regulating pool + Hydrolysis acidification tank + Sequencing Batch Reactor Activated Sludge Process (SBR) and Cyclic Activated Sludge System (CASS) + Air float”. After the wastewater from production has gone through the above treatment process, all indicators are stable and satisfy the discharge standard. After meeting the discharge standards, the wastewater is discharged to Jiangyin Sewage Treatment 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. In 2022, the waste gas treatment facilities for Fenton pool and regulating pool have been added, and the waste gas was treated by secondary spraying. The RTO annual maintenance has been completed in the first half of 2023. In the first half of 2023, the COD concentration was 5634.46mg/L, the ammonia nitrogen concentration was 219.1mg/L; the COD concentration and ammonia nitrogen concentration discharged into Jiangyin Sewage Treatment Plant (江阴污水处理厂) were 219.53mg/L and 25.45mg/L respectively. |
| Livzon Xinbeijiang | The “Three Wastes” were collected and treated effectively in strict compliance with the “Three Simultaneous” system. The sewage treatment facilities with an investment amount of over RMB30 million have a designed processing capacity of 3,000t/d and adopt the treatment process of “Pre-treatment + Aerobic pool + Hydrolysis acidification tank + SBR + Catalytic oxidation + Air float”. The effluent water quality constantly met the standard; the COD concentration of the influent water in the regulating pool was about 2000mg/L, and the actual COD concentration discharged after treatment was about 90mg/L (the discharge standard is ≤ 240mg/L), and the COD treatment efficiency reached 95.5%. The waste gas emitted from sewage treatment was treated using a biological deodorization box + 3-level high-efficiency sodium hypochlorite and lye spray + 1-level alkali spray treatment process; the waste gas emission constantly met the standard. For the organic waste gas, the refining workshop adopts the most advanced RTO treatment process, which conveys the waste gas to the RTO furnace chamber at about 800℃ for high-temperature oxidation and decomposes the volatile organic gases into CO2 and water. In 2023, the fourth round of environmental protection improvement and renovation was carried out, including a series of noise reduction measures such as installing sound-proof glass for the shutters on the third floor of the fermentation department 2, adding an enclosure to the fan on the roof of the refining workshop and enclosing the MVR and RTO areas with sound-absorbing cotton panels. |
| Livzon Hecheng | The “Three Wastes” were treated in a centralized and effective manner in strict compliance with the “Three Simultaneous” system and the maintenance and management of pollution prevention & treatment facilities were enhanced to ensure that pollutant discharge was stable and in compliance with the required standard. For wastewater，the treatment process of “pre-treatment of drainage from the production process + hydrolytic acidification + Upflow Anaerobic Sludge Bed (UASB) + advanced oxidation + Cyclic Activated Sludge System (CASS) process + air floatation/ozonation advanced treatment” was adopted. Treated sewage was discharged into Zhuhai Leaguer Environmental Protection Co., Ltd. (珠海力合环保有限公司) (water purification |
| plant in the South District) through the municipal sewage pipeline network. The waste gas was treated by spray tower, activated carbon adsorption, condensation, liquid nitrogen cryogenic, RTO and other comprehensive treatment technologies to ensure all kinds of pollutants were effectively treated and discharged in compliance with the standards. | |
| Gutian Fuxing | At the same time when the enterprise started production, the “Three Wastes” were collected and treated effectively in accordance with the requirements of the “Three Simultaneous” system of environmental protection. This involves a designed sewage treatment capacity of 1,200t/d, adoption of the advanced “Anaerobic-Oxic activated sludge process (A/O) + SBR + nitrogen removal by denitrification + Fenton decolorizing + air flotation” wastewater treatment process, 6,000 m3 of effective reservoir capacity of the treatment system and more than 20 sets of treatment equipment with 350 KW installed capacity to improve the water treatment process, thus ensuring that all wastewater treatment indicators are stable and satisfy the discharge standard. The COD concentration and ammonia nitrogen of untreated wastewater were 2000mg/L and 400mg/L respectively; the COD concentration and ammonia nitrogen were lowered to 49.382mg/L and 9.59mg/L after treatment, with the removal rate as high as 97.5%. Treated sewage that reaches the grade II discharge standard is directly discharged into Minjiang River. The hazardous waste of the company is entrusted to qualified companies for compliant disposal according to the requirements of environmental impact assessment and acceptance inspection opinions. The boiler exhaust treatment facilities were upgraded, with the high-efficiency waste gas treatment facility of “SNCR denitrification + cyclone dust removal + dry desulfurization + bag dust removal + wet desulfurization” adopted. |
| Livzon Limin | The “Three Simultaneous” system was strictly implemented by the company for the treatment of “Three Wastes” by collecting and treating the “Three Wastes” effectively. The original sewage treatment plant with an investment amount of over RMB13 million has a designed processing capacity of 1,500t/d and adopts the treatment process of “Pre-treatment + Hydrolysis acidification tank + Facultative tank + Aerobic pool + Secondary sedimentation”, and the sewage after treatment was discharged into Shaoguan Second Sewage Treatment Plant (韶关市第二污水处理厂) through the municipal pipeline network. The key pollution indicators are chemical oxygen demand and ammonia nitrogen; the concentrations at water inlets were 3004mg/L and 14mg/L respectively in 2022, while the average discharge concentrations at water outlets were 19.64mg/L and 0.4592mg/L respectively, far lower than the relevant limits stipulated in the pollutant discharge license and the removal rates reached 93.45% and 54.08% respectively. In respect of waste gas treatment, biomass boilers were all replaced by gas boilers. The technical transformation project of the R&D center has installed waste gas treatment facilities such as activated carbon adsorption and acid mist spray tower. The key pollution indicators are sulfur dioxide, nitrogen oxides and particulate matter. The emission concentrations were 0.125mg/m?, 87.1mg/m? and 2.19mg/m? respectively in 2022, far lower than the relevant limits stipulated in the pollutant discharge license. In respect of control of noise pollution, investment was made to construct noise segregation wall to reduce noise pollution. |
| Livzon Pharmaceutical Factory | The “Three Wastes” were collected and treated effectively by the Pharmaceutical Factory. For wastewater: an investment of over RMB10 million was made for phase I and phase II sewage treatment station with a designed processing capacity of 1,000t/d, which adopted the CASS process for phase I and the A/O process for phase II. The indicator of treated wastewater was approximately 50% of the standard limit requirement and the sewage after treatment was |
| discharged into sewage treatment plants through the municipal pipeline network. For waste gas: currently, the company uses purchased steam and uses the boilers as backups, greatly reducing air emissions (sulfur dioxide, nitrogen oxides). The waste gas of the wastewater treatment stations is treated by a combination of first-level spray towers, Ultra Violet (UV) photoion equipment and second-level spray towers, and the treated waste gas was far below the national standard limit requirement. | |
| Ningxia Pharmaceutical | Through strict enforcement of the “Three Simultaneous” system, the “Three Wastes” were collected and treated effectively. The designed total processing capacity of sewage treatment was 7,500 m3/d (including one plant with capacity of 5,000 m3/d and one plant with capacity of 2,500 m3/d), and the actual total treatment amount was 2,800 m3/d. Waste gas treatment: 4 sets of fermentation and 2 sets of refining waste gas treatment adopt the treatment process of “sodium hypochlorite spray + water spray + two-way superoxide water spray + micro-nano bubble spray”; 2 sets of waste water treatment tank odor collection and treatment facilities adopt the treatment process of “three-level spray absorption (level 1: alkaline water spray absorption + level 2: sodium hypochlorite spray absorption + level 3: sulfuric acid spray absorption); 1 set of RTO (regenerative thermal oxidizer) waste gas treatment facility adopts incineration method; two 40-ton circulating fluidized bed boilers (one in operation and one on standby) were in normal operation, adopting the treatment process of “bag dust removal + double alkali desulfurization + alkaline water spraying and demisting”. General solid waste: slag and sludge were entrusted for landfill disposal; styrene-acrylic slag is sold as organic fertilizer; styrene-acrylic mother liquor was outsourced for recycling; styrene-acrylic spent activated carbon and Lova waste activated carbon were sent to boilers for incineration. Hazardous waste: mycophenolic acid and Dora waste slag are put into boilers for incineration; spent activated carbon, waste and empty reagent bottles, waste packaging bags, etc. were all entrusted to qualified companies for disposal. In 2023, the following pollution prevention measures were mostly completed: 1. decommissioning the former Xinbeijiang sewage treatment system to abate the source of malodorous gas generation; 2. carrying out comprehensive cleaning and maintenance of the existing 9 sets (30 units) of waste gas treatment facilities spray tower. |
| Jiaozuo Hecheng | The “Three Wastes” were collected and treated effectively in strict compliance with the “Three Simultaneous” system. The designed sewage treatment capacity was 3,000t/d, the treatment process of “hydrolytic acidification tank + UASB + aerobic pool + materialized treatment” was adopted, the treated wastewater would be discharged 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) through the municipal pipeline network. The sewage treatment facilities were under normal operation with compliant discharge. In 2023, an operation and maintenance contract in relation to online continuous monitoring system for water quality was signed with Jiaozuo Lansheng Environmental Technology Service Co., Ltd. (焦作市蓝晟环保及时服务有限公司). For waste gas: In 2023, dichloride module equipment was added in the recycling section, and the waste gas was discharged after being treated and the standard limit met; The waste gas generated from technical process in the production zone would be collected and treated by adopting two sets of processes of “spray + activated carbon + spray + RTO incineration equipment and -20℃ condensation + dichloride module + spray + activated carbon + spray + RTO incineration equipment” and then discharged after reaching the required standard. Solid waste and hazardous waste would be stored in the hazardous waste station |
| constructed in compliance with the requirements of “Three Protections” (protection against leaks, erosion and rain) according to the requirements under the (Pilot) Guidelines for Standardized 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）》). In 2023, hazardous waste disposal contracts were signed with qualified companies Anyang Zhongdan Environmental Protection Technology Co., Ltd.（安阳中丹环保科技有限公司）, Luoyang Dezheng Waste Resources Reuse Co. Ltd. （洛阳德正废弃资源再利用有限公司）and Qinyang GTC Jidong Environmental Protection Technology Co. Ltd. （沁阳金隅冀东环保科技有限公司） for regular disposal of hazardous waste. Other general solid waste would be disposed of in compliance with the relevant requirements. In January 2023, a self-monitoring and automatic monitoring equipment comparison contract was signed with Henan Chenjian Inspection Technology Co. Ltd. （河南晨颉检验技术有限公司） to regularly monitor the company's discharge outlets. | |
| Shanghai Livzon | The company designed and built a sewage treatment station with a processing capacity of 200 m3/d in 2018. The company’s wastewater was treated by such sewage treatment station and then entered the park’s sewage treatment station for secondary treatment, and finally discharged into the municipal pipeline network. The company had the hazardous waste station in compliance with the requirements of “Three Preventions” to store hazardous waste and appointed a qualified company for compliant disposal. The company’s main discharge outlets were treated with activated carbon adsorption and filtration, and the activated carbon was replaced every half a year to ensure that the air emission met the standards. In January 2022, the company demolished the solid preparation workshop on the third floor and transformed it into a microsphere workshop, and there is no particulate matter emission from the No. 5 and No.6 discharge outlets accordingly. In order to meet the regulatory requirements under the new environmental impact assessment (at least one emission reduction measure to be replaced with a new one), the 4# exhaust stack was upgraded in March 2023，upgrading the secondary activated carbon adsorption equipment and the monitoring platform processing equipment. |
| Livzon MAB | The “Three Simultaneous” system was strictly implemented by Livzon MAB for the treatment of “Three Wastes” by collecting and treating the “Three Wastes” effectively. For wastewater (relying on the wastewater treatment of Pharmaceutical Factory in the park): an investment of over RMB10 million was made for phase I and phase II sewage treatment station with designed processing capacity of 1,000t/d, which adopted the CASS process for phase I and the A/O process for phase II, and the sewage after treatment was discharged into sewage treatment plants through the municipal pipeline network. For waste gas: currently, the company uses purchased steam and takes the boilers as backups, greatly reducing air emissions. The waste gas of the wastewater treatment stations is treated by a combination of first-level spray towers, Ultra Violet (UV) photoion equipment and second-level spray towers. |
| Livzon Diagnostics | The “Three Simultaneous” system was strictly implemented by Livzon Diagnostics. The company has sewage treatment facilities, which started construction in 2017 and were completed and passed the acceptance inspection for use in June 2018. The treatment processes include sedimentation tanks, regulating tanks, anaerobic tanks, contact oxidation, secondary settling tanks, etc. The sewage after being treated and met the standard was discharged into the South District Sewage Treatment Plant (南区水质净化厂) through the municipal sewage pipeline. Hazardous waste and general industrial solid waste generated by Livzon Diagnostics were entrusted to a qualified third-party company for disposal. |
3. Environmental impact assessment of construction projects and other environmentalprotection administrative licensing
√Applicable □N/A
| Name of company or subsidiary | Environmental impact assessment of construction projects and other environmental protection administrative licensing |
| Jiaozuo Joincare | Jiaozuo Joincare was listed in the mandatory clean production directories on key industries in 2023. Currently, the preliminary scheme for this initiative has been finalized. Feasibility analysis and the implementation of the plan are progressing as scheduled. |
| Taitai Pharmaceutical | The Environmental Impact Report for two new products are currently under review. |
| Haibin Pharma | No environmental impact assessment project was required in the first half of 2023; with strict enforcement of the “Three Simultaneous” system in the production process and implementation of the environmental protection measures required under the environmental impact assessment, the environmental protection facilities have been functioning properly. |
| Xinxiang Haibin | Approval of Environmental Impact Report on 20 Tonnes/Year Meropenem Pharmaceutical Intermediate Project (Yu Huan Jian [2005] No. 84), Opinions on Environmental Protection Inspection and Acceptance for 20 Tonnes/Year Meropenem Pharmaceutical Intermediate F9 Project (Yu Huan Bao Yan [2008] No. 89), Approval of Environmental Impact Report on 100 Tonnes/Year Meropenem Pharmaceutical Intermediate Expansion Project (Yu Huan Shen [2014] No. 564), Independent acceptance of Approval of Environmental Impact Report on 100 Tonnes/Year Meropenem Pharmaceutical Intermediate Expansion Project on 24 March 2019, Opinions of Comprehensive Supervision and Enforcement Bureau of High-tech Zone on Approval of Environmental Impact Report on Technical Center Expansion Project of Xinxiang Haibin Pharmaceutical Co., Ltd. (Xin Gao Zong Jian Zi [2020] No. 26) and Reply to the Environmental Impact Assessment Report for the Peinan Series API Development Project of Xinxiang Haibin Pharmaceutical Co., Ltd (Xin Huan Shu Shen [2021] No. 24). It reapplied for the pollutant discharge license in the first half of 2023 and obtained the certificate on 20 June 2023. |
| Fuzhou Fuxing | The “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 Environmental Impact Report on the Phase IV High-end Antibiotics Project of Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd. was approved on 12 October 2022. In March 2023, the second phase, the third phase, the second stage and the third stage of environmental inspection have been completed. The company strictly implements the “Three Simultaneous” system and takes environmental protection measures required for environmental assessment, with the environmental protection facilities under normal operation. Approval was granted for the application of a new national pollutant discharge license on 27 December 2017 and the renewal of the national pollutant discharge license was completed in December 2020. The company has been discharging pollutants in strict compliance with the licensing and administrative requirements. The pollutant discharge license was updated in March 2023 with a validity period from 27 December 2020 to 26 December 2025. |
| Livzon Xinbeijiang | The “Environmental Impact Report on Current Status of Projects of Livzon Group Xinbeijiang Pharmaceutical 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 “Three Simultaneous” system and implementation of the environmental protection measures required under the environmental impact assessment, the environmental protection facilities have been functioning properly. The first application for a new national discharge permit was applied on 29 December 2017, and the renewal of the discharge permit was processed on 29 December 2022, with a validity period until 28 December 2027. The discharge permit for the new plant in Shijiao was changed on 8 May 2023 and is valid until 7 May 2028. |
| Livzon Hecheng | The Environmental Impact Assessment Report on Current Status of the Product Structure and Production Capacity Adjustment Project of Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing 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 assessment for expansion of 14 new products including paliperidone palmitate (棕榈酸帕利哌酮), aripiprazole (阿立哌唑), bismuth potassium citrate (枸櫞酸鉍鉀), i.e. the “Environmental Impact Assessment Report on Technological Renovation and Expansion Project of Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd.” (《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 the expert review, and obtained approval on 20 January 2022. The company strictly enforced the “Three Simultaneous” system and implemented environmental protection measures as required under environmental impact assessment with normal operation of the environmental protection facilities. In 2022, it was awarded the green card enterprise of environmental credit rating by Zhuhai Municipal Ecology and Environment Bureau. In March 2022, the revision and filing of the emergency plan for environmental emergencies was completed. |
| Gutian Fuxing | The company passed the environmental impact assessment on 30 June 1999 and the inspection and acceptance upon completion of construction carried out by Environmental Protection Bureau of Fujian Province on 5 June 2000. The company re-prepared its post-environmental impact assessment report in 2019 and passed the inspection and acceptance carried out by experts on 11 June 2019. The company strictly enforced the “Three Simultaneous” system and implemented the environmental protection measures as required under environmental impact assessment, with normal operation of the environmental protection facilities. In September 2022, the clean production passed the on-site inspection and acceptance of the Ecology and Environment Bureau, and in October 2022, it obtained the inspection and acceptance opinions of the Ningde Environmental Protection Science Research Institute. The existing pollutant discharge license was applied on 26 November 2020 with a validity period from 29 December 2020 to 28 December 2025. |
| Livzon Limin | The 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. A review expert meeting was held on 24 April 2021, and independent review was completed. The Environmental 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, a review expert meeting was held, and independent review was completed. The national |
| pollutant discharge license was updated on 22 October 2021. The “Three Simultaneous” system was strictly enforced to implement the environmental protection measures required under the environmental impact assessment, with normal operation of the environmental protection facilities. In September 2022, Limin Pharmaceutical Manufacturing Factory passed the on-site review on clean production by the expert group. In the future, it will continue to explore the potential of energy conservation and emission reduction, establish and improve the clean production mechanism and continuously enhance the level of clean production. It was recognized as a green enterprise in the environmental credit rating by Shaoguan Municipal Ecology and Environment Bureau consecutively from 2019 to 2022. The pollutant discharge license was renewed in 2021 with a validity period from 22 October 2021 to 21 October 2026. | |
| Livzon Pharmaceutical Factory | The Environmental Impact Report Form for the Newly-added Wet Granulation Line Project P07 of Pharmaceutical Factory (《丽珠集团丽珠制药厂P07新增湿法制粒线项目环境影响报告表》) was approved on 18 May 2022. Pharmaceutical Factory updated the pollutant discharge license in June 2022. The Environmental Impact Report Form for New Boilers and Boiler Low-nitrogen Transformation Project (《新增锅炉及锅炉低氮改造项目环境影响报告表》) was approved on 19 August 2022. The company will strictly enforce the “Three simultaneous” system to implement the environmental protection measures as required by the environmental assessment. The Expansion Project for Production Line of lyophilized Powder Injection of Livzon Group Livzon Pharmaceutical Factory (《丽珠集团丽珠制药厂冻干粉针剂生产线扩建项目》) completed its independent acceptance in June 2022, and the Small-capacity Workshop Construction Project of Livzon Group Livzon Pharmaceutical Factory (《丽珠集团丽珠制药厂小容量车间建设项目》) completed its independent acceptance in August 2022. Pharmaceutical Factory updated the pollutant discharge license in June 2022, with a validity period from 9 June 2022 to 8 June 2027. |
| Ningxia Pharmaceutical | The renewal application for the discharge license was completed in December 2020 and the license is valid until 28 December 2025. The environmental protection inspection for completion of doramectin expansion project was completed in March 2021. In September 2021, expert review and government filing were completed for the environmental impact evaluation of project work upon optimized disposal of the company’s solid waste. The company applied to change its pollutant discharge permit and passed the review of the Pingluo Branch of Shizuishan Municipal Ecology and Environment Bureau in December 2021. In December 2022, the company passed the identification of Shizuishan municipal green plant and prepared an environmental impact assessment report on the increase of phenylalanine production capacity (currently under review by experts). The company reported to the national pollution discharge license management information platform (pollution discharge implementation report) and the ecological environment statistics business system (enterprise environment statistics report) quarterly. In 2022, the company also completed the second round of rectification of non-compliance under the supervision of central environmental protection authorities, independent acceptance and government acceptance. The company strictly enforced the “Three Simultaneous” system to implement the environmental protection measures as required by environmental assessment, and the environmental protection facilities were in normal operation. |
| Jiaozuo Hecheng | The “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 strictly enforced, the environmental protection measures as required by environmental assessment were implemented and the environmental protection facilities were in normal operation. The application for the national pollutant discharge license was completed in December 2020, the environmental protection policies were strictly enforced and various management tasks were implemented. In 2023, the “one enterprise, one policy” plan for Jiaozuo Hecheng, a VOCs discharge enterprise, was formulated in accordance with the “Summer Ozone Pollution Prevention and Control Action Plan” (《夏季臭氧污染防治攻坚战行动方案》 ). In accordance with the “Notice Requirements on Conducting Special Enforcement Inspections for Enterprises in Volatile Organic Compounds Industry” by provincial department in 2023 (《省厅2023年关于开展涉挥发性有机物行业企业专项执法检查的通知要求》), comprehensively self-inspection VOCs inspections were carried out, a list of issues was compiled and active rectifications were made. In March 2023, the current round of clean production audit work was kicked off. |
| Shanghai Livzon | The 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 Supporting Engineering 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 renovation of powder injection workshop 2 had completed in 2022, with the Environmental Impact Statement of Construction Project (《建设项目环境影响报告表》) filed in October 2022 and the Approval Opinion of Shanghai Pudong New Area Ecological Environment Bureau on the Environmental Impact Statement of the Reconstruction and Expansion Project of Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd. (《上海市浦东新区生态环境局关于上海丽珠制药有限公司改扩建项目环境影响报告表的审批意见》) obtained in March 2023. The company strictly implements the “Three Simultaneous” system and takes environmental protection measures required for environmental assessment, with the environmental protection facilities under normal operation. The new Pollutant Discharge License was obtained on 30 May 2023 with a validity period until 29 May 2028. |
| Livzon MAB | The Environmental Impact Assessment Report on the V01 Industrialization Project of Livzon Group Livzon Pharmaceutical Factory was approved in April 2021; the Environmental Impact Report Form for the Expansion Preparation Line 3 of the Large-scale Production Capacity Building Project of Recombinant SARS-CoV-2 Fusion Protein Vaccine (重組新型冠状病毒融合蛋白疫苗) was approved in March 2022. The company updated the pollutant discharge permit in November 2022. The company strictly enforced the “Three Simultaneous” system to implement the environmental protection measures as required by environmental assessment. |
| Livzon Diagnostics | Livzon Diagnostics prepared the “Environmental Impact Report on Engineering and Production Projects of the New Plant” (《新厂工程及生产项目环境影响报告书》) in 2017, which was approved by Zhuhai Environmental Protection Bureau on 6 February 2018. The |
environmental protection acceptance inspection was completed in June 2018. In 2020,according to the Catalogue of Classified Management of Discharge Permit for StationaryPollution Sources (《固定污染源排污许可分类管理名录》)(2019 version) and the Measuresfor Pollutant Discharge Permitting Administration (Trial) (《排污许可管理办法（试行）》),the pollutant discharge license was canceled and the pollutant discharge registration andfilling were carried out.
4. Environmental emergency contingency plan
√Applicable □N/A
| Name of company or subsidiary | Environmental emergency contingency plan |
| Jiaozuo Joincare | Revision 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 Ecological Environment Bureau of Jiaozuo City on 19 May 2022. Revision of the environmental emergency contingency plan for hazardous waste pollution accident of Jiaozuo Joincare was completed in December 2020. |
| Taitai Pharmaceutical | The environmental plan is under reevaluation. It has passed experts’ review and is under environmental protection approval. |
| Haibin Pharma | The 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. In the first half of 2023, two emergency drills for environmental emergencies were held. |
| Xinxiang Haibin | The environmental emergency contingency plan completed filing on 25 August 2022. |
| Fuzhou Fuxing | Pursuant 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. A comprehensive emergency drill was conducted in June 2023 for Phase II Workshop 1 leakage and fire incident. |
| Livzon Xinbeijiang | Based on the principles of “prevention-oriented, On-alert all the time; classified management, Response by Tiers; cross-department cooperation, Responsibility by Levels; Scientific Prevention and Efficient handling”, Livzon Xinbeijiang entered into the issued “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) again on 30 September 2021, which was verified and filed by the Qingyuan Municipal Ecology and Environment Bureau on 22 October 2021. Livzon Xinbeijiang regularly identifies environmental factors and sources of hazards and conducts drills |
| on the emergency contingency plan. An environmental emergency contingency drill was conducted in June 2023 to improve the operability thereof, enhance the performance level of the emergency rescue staff, responsiveness of the rescue team as well as coordination and collaboration of different tasks. | |
| Livzon Hecheng | Pursuant 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 (预防为主、自救为主、统一指挥、分工负责)”, which has been approved for filing and formally announced with file reference number 440462-2019-001-M. Trainings on emergency events and disposal 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 worsening of condition and pollution when encountering any occurrence of environmental emergency cases, so as to alleviate or eliminate the consequences effectively and resume orderly production as soon as possible. |
| Gutian Fuxing | Pursuant 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》） (File No.: 352200-2017-005-L) was prepared based on the principles of “Focus on Prevention, Aim at Self-rescue, Centralized Command and Division of Responsibility (预防为主、自救为主、统一指挥、分工负责)”, which was approved in May 2017. The second amendment of the contingency plan was made in June 2020, which passed expert review and completed filing (File No.: 350922-2020-002-M). The third amendment of the contingency plan was made in June 2023, which passed expert review and completed filing (File No.: 350922-2023-012-M). According to the plan, the company will conduct an emergency drill for sudden hydrochloric acid leakage in August 2023, and after environmental emergency incidents occur, immediate, quick, effective and orderly emergency rescue actions can be taken to control and prevent accidents and the spread of contamination, protect the surrounding environment effectively and ensure the personal life and property safety of all employees, the company and the nearby communities. In accordance with the contents and requirements of the plan, the company provides trainings for its employees. The company is well-prepared for environmental emergency incidents, so that rescue actions could be taken in a timely manner and incidents could be controlled effectively in a short period of time in case of any environmental emergency incidents. |
| Livzon Limin | The principles of occupational health and safety and the environment administrative system were followed, including occupational protection to ensure health, risk control to ensure safety, prevention and control of pollution to protect the environment, and compliance with discipline and law for continuous improvement. Identification of environmental factors was performed seriously and preventive measures were adopted for significant environmental factors, while the governance of 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. The Environmental Emergency Contingency Plan of Livzon Group Limin Pharmaceutical Manufacturing Factory（《丽珠集团利民制药厂突发环境事件应急预案》） (File No.: 440203-2021-009-L) was prepared in accordance with the criteria of the environmental management system and the occupational health and safety administrative system. The plan was issued in May 2021. According to the requirements of the contingency plan, an environmental accident emergency drill was conducted on 24 September 2021, and a specific drill summary was made. Identification of environmental factors and sources of hazards and drills for emergency were conducted internally in the company on a regular basis to improve the operability of the contingency plan, enhance |
| the performance level of the emergency rescue staff, responsiveness of the rescue team as well as coordination and collaboration of different tasks. | |
| Livzon Pharmaceutical Factory | Pursuant to relevant provisions, the Environmental Emergency Contingency Plan of Livzon Group Livzon Pharmaceutical Factory （《丽珠集团丽珠制药厂突发环境事件应急预案》）was updated by Pharmaceutical Factory in 2021, and has been approved for filing approval and announced, with the filing number 440404-2021-0212-L. The Pharmaceutical Factory conducted a special emergency response drill for hazardous waste leakage on 16 June 2023, to train the emergency response team and enhance the emergency response and execution abilities of the participants, further clarify the responsibilities and tasks of relevant personnel, improve the emergency linkage mechanism, improve the awareness of risk prevention and the ability of self-rescue and mutual rescue. |
| Ningxia Pharmaceutical | The Environmental Emergency Contingency Plan of Livzon Group (Ningxia) Pharmaceutical Manufacturing 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 verified, filed and issued in May 2019 (File No.: 640221-2019-005-II). Identification of environmental factors and sources of hazards and drills for emergency were conducted internally in the company on a regular basis to improve the operability of the contingency plan, enhance the performance level of the emergency rescue staff, and enhance the responsiveness and coordination of the rescue team in terms of integrated coordination and collaboration capabilities. The Environmental Emergency Contingency Plan was amended in May 2021, and passed expert review and was reviewed by and filed with government environmental department in August 2021(File No.: 640221-2021-054-H). |
| Jiaozuo Hecheng | The 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 prepared in accordance with the relevant provisions and requirements and based on the principles of “Focusing on Prevention, On-alert all the time; Management by Classification, Response by Tiers, Cooperation among Departments, Responsibility by Levels; Scientific Prevention and Efficient Disposal”. The contingency plan was approved for announcement and filing in April 2021 (File No.: 4108042018005L). The Hazardous Waste Environmental Pollution Emergency Contingency Plan of Jiaozuo Livzon Hecheng Pharmaceutical 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 compiled and was approved for filing in January 2018. Identification of environmental factors and sources of hazards and drills for emergency were conducted internally in the company on a regular basis to improve the operability of the contingency plan, enhance the performance level of the emergency rescue staff, and enhance the responsiveness and coordination of the rescue team in terms of integrated coordination and collaboration capabilities. In 2023, the company newly formulated the Environmental Protection Assessment System (《环保考核制度》), Jiaozuo Livzon EHS Environmental Protection Assessment System (《焦作丽珠EHS环保考核制度》) and Jiaozuo Livzon Potential Safety Hazard Screening Responsibility System (《焦作丽珠隐患排查责任制度》). |
| Shanghai Livzon | In March 2022, 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) was filed by the company. The company conducts drills and reviews of the plan every year to improve its emergency response capabilities through regular training on the plan. On 22 May 2023, Shanghai Livzon completed the filing and registration of the General Emergency Response Plan for Work Safety Incidents (《生产安全事故综合应急预案》) (File No.: 3101150000002023052200058), in order to improve the emergency response capabilities for production safety accidents through training on the emergency response plan. |
| Livzon MAB | Pursuant 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 Livzon MAB in 2022. In April 2023, the company conducted an emergency drill for hazardous waste leakage in the hazardous goods warehouse to enhance emergency response capabilities of staff, so as to alleviate or eliminate the impact of the consequences. |
| Livzon Diagnostics | In accordance with relevant regulations, Livzon Diagnostics carried out a risk assessment of environmental emergencies and emergency resources survey in 2021, and prepared the Environmental Emergency Contingency Plan of Zhuhai Livzon Diagnostics Inc. (《珠海丽珠试剂股份有限公司突发环境事件应急预案》) which was approved for filing and announced. Regular training on emergency response and disposal measures was provided to employees to equip them skills of executing safety measures timely, rapidly, effectively and orderly in environmental emergencies, in order to control and prevent the spread of risk and pollution, reduce or eliminate the impact of the consequences, and resume the production as soon as possible. |
5. Environmental self-monitoring program
√ Applicable □ N/A
| Name of company or subsidiary | Environmental self-monitoring program |
| Jiaozuo Joincare | In accordance with the self-monitoring program for pollutant discharge licenses, Jiaozuo Joincare completed the self-monitoring program for wastewater and waste gas for the year 2023 at the beginning of the year. The self-monitoring activities were carried out in accordance with the self-monitoring plan. As of the end of June, the self-monitoring for wastewater and waste gas for the first half of 2023 has been successfully conducted as scheduled. The company is a key enterprise in terms of soil management, and is required to carry out self-monitoring of soil annually. The company has completed the preparation, on-site sampling and review of self-monitoring program on soil as of June and the samples are under testing currently. |
| Taitai Pharmaceutical | Wastewater was monitored once a quarter; boiler exhaust gas and plant boundary noise were monitored once a year; exhaust gases generated from technical process was monitored once half a year; online monitoring facilities of wastewater and boiler exhaust gas were additionally installed and functioning well. |
| Haibin Pharma | A third party is entrusted to conduct regular monitoring strictly in compliance with the relevant national laws and regulations and local requirements and ensure the accuracy, validity and authenticity of the monitoring data. Online wastewater monitoring equipment was installed and connected to environmental monitoring stations at municipal and district levels in accordance with environmental monitoring technical standards. Data was promptly uploaded on the national monitoring platform. |
| Xinxiang Haibin | A self-monitoring program was prepared, quarterly self-monitoring of exhaust gas and wastewater in accordance with the pollutant discharge license and annual self-monitoring of soil has been completed. |
| Fuzhou Fuxing | According to the relevant requirements of the “Measures for Self-Monitoring and Information Disclosure by Enterprises subject to Intensive Monitoring and Control of the State (Trial Implementation) (《国家重点监控企业自行监测及信息公开办法(试行)》)” and the “Self-monitoring Technology Guidelines for Pollution Sources–Pharmaceutical Industry Fermentation Products Category (HJ 882-2017) (《排污单位自行监测技术指南发酵类制药工业(HJ 882-2017)》)”, the company has completed the establishment of the self-monitoring program based on its own situation in a timely manner and made |
| the program available to the public after being examined by and filed with Fuqing Environment Protection Bureau and Fuzhou Environment Protection Bureau. The analysis methods of the monitoring program comply with the national environmental monitoring technical standards and methods; the monitoring and analysis instruments have been examined and calibrated in strict compliance with the relevant national requirements; the automated monitoring equipment has been installed in accordance with the requirement of environmental assessment technical standards, which are connected to relevant environmental protection authorities and have passed the inspection and acceptance of the relevant environmental protection authorities. The automated monitoring equipment has been functioning properly and the monitoring information is accurate, valid and authentic. In May2023, the work on leakage detection and repair (LDAR) of volatile organic compounds (VOCs) was completed. Information publicity website: http://wryfb.fjemc.org.cn | |
| Livzon Xinbeijiang | According to the relevant requirements of the “Measures for Self-Monitoring and Information Disclosure by Enterprises subject to Intensive Monitoring and Control of the State (Trial Implementation) (《国家重点监控企业自行监测及信息公开办法（试行）》)”, the company has completed the establishment of the self-monitoring program based on its own situation in a timely manner and made the program available to the public after being examined by and filed with Qingyuan Environment Protection Bureau. The analysis methods of the monitoring program comply with the national environmental monitoring technical standards and methods; the monitoring and analysis instruments have been examined and calibrated in strict compliance with the relevant national requirements. The automated monitoring equipment for wastewater (COD, ammonia nitrogen, pH, flow) and waste gas (non-methane hydrocarbons) has been installed in accordance with the requirement of environmental assessment technical standards, and the connection between online information and national development platform and Qingyuan municipal platform has been completed. Online monitoring equipment for wastewater has passed the inspection and acceptance of relevant environmental protection authorities. The automated monitoring equipment has been functioning properly and the monitoring information is accurate, valid and authentic. In accordance with the requirements of the specification, a third party is hired to conduct LDAR every six months for workshops that use VOCs. Livzon Xinbeijiang Pharma conducts monitoring of diffusive volatile organic compounds around the workshop of the first refinery division on a semiannual basis, and the monitoring results for the first half of 2023 met the standards. |
| Livzon Hecheng | Through self-monitoring, the requirements under the Technical Standards for Application and Issuance of Pollutant Discharge License for the Pharmaceutical Industry – Active Pharmaceutical Ingredient 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 monitoring and analysis instruments were examined and calibrated in strict compliance with relevant provisions. The automated monitoring equipment was installed in accordance with the requirements of environmental assessment technical standards, while online monitoring equipment for non-methane hydrocarbons, COD, ammonia nitrogen and pH level were installed and connected with the national development platform as required. In 2022, a third party was entrusted to conduct LDAR inspection, discharge outlet inspection, factory boundary noise monitoring and soil inspection on a regular basis, and all inspection results met the required standards. |
| Gutian Fuxing | According to the relevant requirements of the “Measures for Self-Monitoring and Information Disclosure by Enterprises subject to Intensive Monitoring and Control of the State (Trial Implementation) (《国家重点监控企业自行监测及信息公开办法(试行)》)”, the company has completed the establishment of the self-monitoring program based on its own situation in a timely manner and made the program available to the public after being examined by and filed with Ningde Ecology and Environment |
| Bureau and Ningde Gutian Ecology and Environment Bureau. The analysis methods of the monitoring program comply with the national environmental monitoring technical standards and methods; the monitoring and analysis instruments have been examined and calibrated in strict compliance with the relevant national requirements; the automated monitoring equipment has been installed in accordance with the requirements of environmental assessment technical standards, connected to the network of competent environmental protection authorities and passed the acceptance inspection conducted by the competent environmental protection authorities. The automated monitoring equipment was sound, and the monitoring information was accurate, valid and authentic. In June and December 2022, a qualified third party was engaged on two occasions to complete the leakage detection and repair (LDAR) work of volatile organic compounds and relevant reports were obtained. Information publicity website: http://wryfb.fjemc.org.cn | |
| Livzon Limin | An entity with national qualification on inspection was engaged to conduct monitoring strictly in compliance with the relevant national laws and regulations and standards. By considering its own specific conditions, the company appointed the inspection party to carry out water pollutant detection monitoring every quarter, boiler waste gas monitoring every month and R&D Center VOCs waste gas monitoring every six months, each time the monitoring would be conducted strictly in compliance with the relevant national requirements to ensure the accuracy, validity and authenticity of the monitoring data. The online monitoring equipment for COD and ammonia nitrogen in water passed the acceptance inspection and the equipment was put into operation in January 2021, and it will perform monitoring every 2 hours. Data should be completed and filed to the Pollutant Source Sharing Data Platform of the Shaoguan Municipal Ecology and Environment Bureau on a timely basis, and the relevant data would be announced to the public after being reviewed by the Shaoguan Municipal Ecology and Environment Bureau. |
| Livzon Pharmaceutical Factory | Inspection party with national qualification on inspection was engaged to conduct monitoring strictly in compliance with the relevant national laws and regulations and standards. By considering its own specific conditions, the company appointed the inspection party to carry out monitoring on wastewater and waste gas every month, each time the monitoring would be conducted strictly in compliance with the relevant national requirements to ensure the accuracy, validity and authenticity of the monitoring data. The installation and commissioning of the online sewage monitoring equipment was completed and it was put into use at the beginning of 2021. All test parameters were within normal ranges for the first half of 2023. |
| Ningxia Pharmaceutical | The company formulated the self-monitoring program for 2022, which was reviewed by and filed with Shizuishan Municipal Ecology and Environment Bureau. Monthly and quarterly monitoring was carried out strictly in accordance with the requirements of the program, which focused primarily on organized air emissions, air emissions from boilers, wastewater, underground water, soil, diffusive environmental air, noise and recycled water TOC at plant boundary. The monitoring results would be announced to the public through the System of National 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 Platform for Enterprises in Shizuishan (《石嘴山市企业自行监测信息公开平台系统》). The leakage detection and repair (LDAR) work of volatile organic compounds was carried out. The automated monitoring equipment was passed the inspection and acceptance conducted by the competent environmental protection authority and connected to the network of the competent environmental protection authority. The automated monitoring equipment was sound, and the monitoring data was accurate, valid and authentic. |
| Jiaozuo Hecheng | According to the relevant requirements of the Measures for Self-Monitoring and Information Disclosure by the Enterprises subject to Intensive Monitoring and Control of the State (Trial |
| Implementation) (《国家重点监控企业自行监测及信息公开办法(试行)》), the company implemented and completed the self-monitoring program based on its own situation in a timely manner and made the program available to the public after being examined by and filed with relevant competent environmental protection authorities. The analysis methods of the monitoring program comply with the national environmental monitoring technical standards and methods. The monitoring and analysis instruments have been examined and calibrated in strict compliance with the relevant national requirements. The leakage detection and repair (LDAR) of volatile organic compounds was completed in June 2023. The inspection of equipment and facilities such as solvent pipes and flanges in the workshop was conducted and maintenance and rectification were carried out on the places where there was leakage. According to the requirements of environmental testing technical specifications, the company has installed online automatic sewage monitoring equipment, and also installed online monitoring equipment for COD, ammonia nitrogen, pH value, flow rate and total nitrogen, which were connected to the Guofa platform (国发平台) as required. The company carried out monitoring on a monthly and quarterly basis in strict compliance with the requirements of the self-testing scheme, which focused primarily on organized air emissions, wastewater, diffusive environmental air and noise at plant boundary. | |
| Shanghai Livzon | In accordance with the relevant requirements of 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》) (HJ 819-2017) and the pollutant discharge license, the company organized self-monitoring and information disclosure of the pollutants it has discharged, and formulated the self-monitoring program. In 2022, the company monitors main air emission outlets once a month, common discharge outlets once half a year, noise once every quarter and wastewater once a month. The monitoring items and frequency shall meet the requirements of the pollutant discharge license. The other three enterprises in the park and the third-party sewage treatment company in the park enter into an agreement to install an online monitoring comparator at the main discharge outlet for effective monitoring of sewage discharge. |
| Livzon MAB | The company entrusted an agency with national testing qualifications to carry out monitoring in strict compliance with relevant national laws, regulations and standards. By considering its own specific conditions, the company entrusted the inspection party to carry out monitoring on wastewater and waste gas on a regular basis in accordance with the requirements of the implementation plan of the pollutant discharge permit, and each time the monitoring was conducted strictly in compliance with the relevant national requirements to ensure the accuracy, validity and authenticity of the monitoring data. |
| Livzon Diagnostics | Wastewater: An agency with national testing qualifications was entrusted to carry out monitoring in strict compliance with relevant national laws, regulations and standards. The testing agency conducts quarterly inspections on water quality indicators such as chemical oxygen demand, ammonia nitrogen and suspended solids in strict accordance with the relevant national regulations to ensure the data collected from daily monitoring is accurate, valid, true, and meets the emission standards. Waste gas and noise: An inspection of noise and waste gas at the plant boundary is undertaken annually to ensure the monitoring data is accurate, valid, true, and meets the emission standards. |
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 pollutantdischarge units
√ Applicable □ N/A
The rest subsidiaries of the Company strictly implemented and obeyed the Environmental Protection Law ofthe People's Republic of China, Cleaner Production Law of the People's Republic of China and otherenvironmental protection and safe production laws and regulations. We constantly increased investment inenvironmental protection, continuously invested in energy conservation and consumption reduction projects,actively promoted cleaner production, improved comprehensive utilization efficiency of resources, andreduced and prevented the generation of pollutants, all while safeguarding the mental and physical health ofemployees. These efforts are directed towards achieving a coordinated and sustainable development ofeconomic, 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 duringthe Reporting Period
□ Applicable √ N/A
(IV) Relevant information contributing to ecological protection, pollution prevention and control,and fulfillment of environmental responsibilities
√ Applicable □ N/A
| Name of company | Relevant information contributing to ecological protection, pollution prevention and control, and fulfillment of environmental responsibilities |
| Jiaozuo Joincare | Leak Detection and Repair (LDAR)work in the first half of 2023was completed. |
| Self-monitoring of soil and groundwater, as well as detection and treatment of hidden hazards were carried out in 2023. Carbon emission verification for the year 2022 was completed. | |
| Taitai Pharmaceutical | It was listed on the positive list of enforcement by the Nanshan Management Bureau of the Shenzhen Municipal Bureau of Ecology and Environment. |
| Haibin Pharma | Consumables of exhaust gas prevention and treatment facilities were replaced as scheduled to guarantee the treatment efficiency of exhaust gas; MBR films for waste water treatment were replaced and guaranteed the discharge of waste water under standards. |
| Xinxiang Haibin | The Letter of Undertaking for Environmental Protection was submitted by the Company to the competent authority. LDAR leak detection and repair for the first half of the year was completed. Environmental taxes were paid in full and on time. |
| Joincare Haibin | In terms of the comprehensive utilization of rainwater, it introduced the design concept of sponge city in the design and construction to achieve the maximum use of water resources. It adopted centralized heat supply to reduce the emission of waste gas from boilers. |
| Fuzhou Fuxing | LDAR leak detection and repair was completed; unorganized emission of VOCs was reduced; construction of phase II (Paromomycin, Telavancin, Pentostatin, Teicoplanin and Kanamycin Monosulfate), phase III (Pasiniazid and Polymyxin B), stage II (Emodepside, Dalbavancin and Moxidectin) and stage III (Afoxolaner, Fluralaner, Cyclosporine and Selamectin) were completed and the acceptance inspection on environmental protection was passed in 2023. In the environmental credit evaluation completed, the company was rated as an environmentally credible enterprise. The monthly and quarterly self-monitoring on waste water, waste gas and noise was completed as required. The detection results met the emission standards. The annual maintenance on the equipment for RTO exhaust was completed to ensure its safe operation and the emission of exhaust gas within the emission standards. |
| Livzon Xinbeijiang | Leakage detection and repair (LDAR) was completed as required in the first half and unorganized emission of VOCs was reduced; a series of noise control and improvement measures, such as installing soundproof glass in the louvers on 3/F of Workshop II of Fermentation to block the fermentation and stirring noises and using sound-absorbing cotton panels to surround the MVR to block the noise from the operation of the MVR; other equipment with loud noises in the factory has been surrounded by sound-absorbing cotton panels to reduce noise. The self-monitoring plan of the whole year was completed and the results of waste water, exhaust gas and noise met the emission standards. A qualified third party is entrusted to dispose of the waste in compliance with laws and regulations. |
| Livzon Hecheng | Two rounds of LDAR leak detection and repair were completed in the first half of 2023; unorganized emission of VOCs was reduced; approval for bidding and procurement of the new equipment for RTO exhaust was completed and the equipment is under installment and one of the new and existing equipment for RTO exhaust will be under use while the other will stand by after the completion of installment to ensure its safe operation and the emission of exhaust gas within the emission standards; replacement and upgrading of treatment facilities for exhaust gases generated from technical processes of the refining workshop and 103 workshop were completed; waste water treatment systems were under stable operation and the discharge was within the emission standards; qualified units were entrusted to treat hazardous waste with a compliance treatment rate of 100%. |
| The self-monitoring program was completed and environmental responsibilities were fulfilled as required. | |
| Gutian Fuxing | Volatile organic matter leak detection and repair (LDAR) for the first half of 2023 was completed and a report was obtained; cover and sealing were added to pools with high concentration and primary sedimentation pools for sewage treatment and waste gas was collected and treated so as to avoid odor emit; HV frame was replaced in the sewage treatment workshop; water content of sludge was reduced; total volume of sludge was reduced; sludge generated was entrusted to qualified units for treatment; the collection, recovery, treatment of VOCs were completed and online monitoring facilities was installed and put into operation to reduce the random emission of VOCs; and the entrusted testing of waste water, waste gas, soil and groundwater for the first half of 2023 was completed, with the results showing they all met standards. The construction of the 12-tonne biomass boiler and the upgrading and reconstruction of boiler tail gas treatment facilities were completed. The efficient exhaust gas treatment facilities with “SNCR denitration + cyclone dust removal + dry desulfurization + cloth bag dust removal + wet desulfurization” were adopted. Hazardous waste was entrusted to qualified companies for compliant treatment to reduce the risk of environmental pollution. |
| Livzon Limin | 1. Pollutants were discharged according to the standards in the pollution discharge license and the annual self-monitoring of pollution discharge plan was formulated; a third-party environmental detection company was entrusted to conduct regular environmental test on the factory. Test results showed that there was no excessive discharge for the period of January to June 2023; 2. The measures on energy conservation and emission reduction were formulated according to ESG objectives in 2023; 3. Facilities and equipment at waste water treatment stations were regularly maintained; 4. Post-treated waste water was used for watering flowers, trees and grass in the factory in three lines. The recycling of waste water is expected to be approximately 400 tonnes each month and approximately 4,800 tonnes each year; 5. Soil testing and underground water testing were carried out on hazardous waste warehouses and the test results were in line with the standards; 6. Identification and updating of environmental factors were carried out in the whole factory. A total of 4,304 environmental factors were identified, including 3,442 general environmental factors and 862 key environmental factors; 7. Argumentation on the comprehensive use of waste alcohol was carried out and it will be recycled and reused in waste water treatment stations to improve the treatment effect of waste water. The fees on supplementing carbon resources at waste water treatment stations were approximately RMB148,200 each year and the fees on the treatment of waste alcohol at TCM workshops I, II and III were approximately RMB35,910. Relevant fees were approximately RMB184,110 for the whole year. |
| Livzon Pharmaceutical Factory | Online monitoring on waste water treatment stations was carried out as required; a qualified third party was entrusted to detect waste water and waste gas; the monthly and quarterly self-monitoring of the enterprise was completed as required. Compliant treatment of hazardous wastes was made to reduce the risk of environmental pollution. Environmental impact assessment was conducted for new workshops and acceptance of environmental protection project of the newly-built workshop was completed as required. The facilities and exhaust gas equipment at the waste water treatment station were renovated and buildings near the waste water treatment station were renovated. |
| Ningxia Pharmaceutical | Suspended the use of the waste water treatment system of the former Xinbeijiang while ensuring the compliant treatment and discharge of waste water within the standards and reduced sources of odor gas; conducted comprehensive washing and maintenance of the spraying towers of the current |
| 9 sets (30) exhaust gas treatment facilities; replaced DN300 drainage pipes with a length of 600 meters (the original pipes leaked due to corrosion); obtained the recognition as a green factory at the level of the autonomous region; obtained the rating as a “green card” enterprise in the appraisal on the environment and credit and enterprises in the autonomous region in 2022; obtained the honor of an outstanding enterprise in pollutants treatment in Pingluo county in 2022; entrusted a third party to conduct repair, maintenance and operation of online monitoring equipment on VOCs in the exhaust gas from the RTO; completed LDAR detection and repair as required; completed self-inspection of the enterprise as required; | |
| Jiaozuo Hecheng | Carried out automation construction; completed the repair and inspection of LDAR in the first half and retested in the workshop in July; Exhaust gas: dichloro film equipment was added in the recycling stage in 2023 and exhaust gas was emitted after treatment and meeting the standards; two techniques, namely “spraying + activated carbon + spraying + RTO incinerator equipment” and “-20℃ condensation + dichloro films + spraying + activated carbon + spraying + RTO incinerator equipment”, were adopted to conduct collection and treatment of exhaust gas from processes in production areas and achieve emission under standards. Certain exhaust gas treatment equipment was replaced to ensure the treatment effect; hazardous waste was entrusted to a qualified unit for disposal, and the compliance disposal rate reached 100%; a qualified third party was entrusted to detect the exhaust gas; a qualified third party was entrusted to provide operation and maintenance services for wastewater system equipment; the implementation of “one policy for one plant” for emergency emission reduction in heavily polluted weather by the Municipal Environmental Protection Bureau was completed and the RTO incinerator equipment was operated normally this year; participated in various trainings organized by the municipal and district ecological and environmental bureaus; replaced logos and labels of hazardous waste based on the latest Technical Specifications on the Setting of Identification Logos of Hazardous Waste (《危险废物识别标志设置技术规范》). In 2023, the Company newly formulated the Appraisal System on Environmental Protection (《环保考核制度》), the Appraisal System on EHS Environmental Protection of Jiaozuo Livzon (《焦作丽珠EHS环保考核制度》) and the Responsibility System on Inspection of Hidden Dangers of Jiaozuo Livzon (《焦作丽珠隐患排查责任制度》). |
| Shanghai Livzon | The company has completed the Filing and Registration of the Contingency Plan for Emergent Environmental Incidents; completed the VOCs emission reduction milestone of “one plan for one factory” in accordance with the plan; discharged pollutants in strict accordance with the Sewage Discharge Permit System obtained, formulated the annual emission self-monitoring programme at the beginning of the year and implemented emission self-monitoring according to the programme, and completed the annual implementation report of the emission permits without any violations of laws or regulations. Meanwhile, we strengthened the daily supervision of the operation of the waste gas treatment facilities and sewage treatment stations, and entrusted a third party to test the emissions of waste gas and sewage every month to ensure the effective operation of the equipment and facilities. The safety facilities, occupational disease protection facilities and pollution prevention facilities of the “Preparation Line 3 and Assembly Line 2 Purification Plant and Utility System” project were designed, constructed and put into production and use at the same time as the workshop renovation project. In order to reduce the emission concentration of exhaust gas and reduce the emission of VOCs, double activated carbon was added and installed to exhaust funnel 4 and it can reduce the emission concentration of exhaust gas and reduce the emission of VOCs after one more treatment. Water purifiers were replaced to improve the efficiency of making water with purifiers. |
| Livzon MAB | Entrusted a qualified third party CTI to test the waste water and waste gas according to the requirements of the pollutant discharge license, and entrusted a qualified entity, Dongjiang Environmental-protection Doumen Yongxingsheng Environmental-protection, Co., Ltd. of Dongjiang Environmental Protection (东江环保斗门永兴盛环保公司), to dispose of hazardous wastes in accordance with the regulations, so as to reduce the risk of environmental pollution. Carried out the environmental impact assessment of the new workshop according to the requirements of “Three Simultaneities” for construction of workshops newly built, rebuilt and expanded. The production and R&D sewage was uniformly discharged into the sewage station of Livzon Pharmaceutical Factory in Livzon Industrial Park for treatment and discharge up to the standard. |
| Livzon Diagnostics | Waste water: an entity with national qualification on inspection was engaged to conduct monitoring strictly in compliance with the relevant national laws and regulations and standards. The inspection party carried out routine environmental monitoring on chemical oxygen demand, ammonia nitrogen, suspended solids and other indicators on water quality. The inspection is carried out on a quarterly basis with every monitoring strictly in compliance with the relevant national requirements to ensure the accuracy, validity and authenticity of the monitoring data and meeting the discharge standards. Exhaust gas and noise: an entity was engaged to conducting testing on exhaust gas and noise at the factory boundary each year and the monitoring data was accurate, valid and authentic and met the emission standards. |
(V) Measures taken add effects on carbon emission reduction during the Reporting Period
√Applicable □N/A
| Name of company or subsidiary | Measures taken and effects on carbon emissions reduction during the Reporting Period |
| Jiaozuo Joincare | Invested over RMB0.98 million to update the CASS aeration system, reducing the load of fans and saving 257,000 kWh of electricity each year, equivalent to reducing the carbon dioxide emission by approximately 135tCO2. |
| Taitai Pharmaceutical | 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 Pharma | Adjusted production plans and conducted centralized production to reduce the energy consumption of unit product. |
| Xinxiang Haibin | With energy-saving pumps provided by Xinxiang Sanjiang Air Conditioning Co., Ltd. (新乡市三江冷气有限公司), the energy-saving benefits are shared by the two parties. It saved electricity with the electricity fees saved sharing by the two parties. The use time of each pump is subject to time totalizers and electricity meters. The equipment shall belong to Xinxiang Haibin and the sharing of benefits shall terminate after the accumulated operation time of each equipment reaches 52,560 hours. |
| Joincare Haibin | Formulated plans based on new standard energy-saving equipment in the purchase process, developed the habit and thinking of saving electricity and turning off lights when leaving; refused waste and advocated civilized dining; promoted low-carbon travelling in green and environmental manners; saved natural gas and carried out multiple maintenance in daily use of boiler, and frequently inspected pipelines, took good insulation measures, and used pure electric cars to save fuel when going out. Adopted solar water heater in the dormitory, reduced plastics, conducted green consumption; advocated for online working and paper saving, etc. |
| Fuzhou Fuxing | Used photovoltaic power generation to reduce power consumption; renovated high-energy consuming pumps for energy conservation to effectively reduce energy consumption; replaced with high-efficiency motor water pumps to save energy consumption; vigorously promoted energy conservation and consumption reduction, and called on employees to realize the concept of “turning off lights, air conditioners and computers before leaving office” during their daily work. |
| Livzon Xinbeijiang | Used photovoltaic power generation to reduce power consumption; used water kinetic energy instead of electric motors to drive the cooling tower fans to reduce the electric energy consumption while ensuring the cooling effect; used LED lights to reduce power consumption, and raising employees’ awareness in power conservation and safety; promoted to set the temperature of the air conditioner to not lower than 26?C; promoted green travels by encouraging the use of public transportation thereby reducing the use of private cars. |
| Livzon Hecheng | Maintained and updated chiller units to make more rational use of energy and saved electricity consumption for production through more reasonable production scheduling by the production department; used natural gas as fuel for canteens and boilers; replaced sewage treatment Roots blowers in the environmental protection center with magnetic levitation blowers with an energy saving rate of about 30%, saving about 107,000 kWh of electricity consumption per year; replaced the ultra-low-nitrogen boiler has increased thermal efficiency by 10%, saved 10 cubic meters of natural gas per ton of steam consumption, and reduced nitrogen oxide emissions by 80%; called on all employees of the factory to respond to electricity conservation, turn off lights and air conditioners before leaving office, and limited the minimum temperature of air conditioners; promoted green travel, encouraged the use of public transportation when going out to work, and set up shuttle buses to transport employees to and from work. |
| Gutian Fuxing | Installed 4 air compressors with a capacity of 130 m3/min to replace the original air compressor with high power consumption to reduce power consumption; replaced one chiller unit to reduce electricity consumption; replaced a 100 m3/min air suspension blower and three 55KW Roots air compressors to reduce power consumption and on-site noise; called on all employees to “save every drop of water, save every kilowatt of electricity”, so that the lights are turned off and the equipment is powered off before people leaving office. |
| Livzon Limin | 1. Installed an online remote automatic data monitoring system in the boiler room to analyze and judge the instantaneous flow rate monitoring of the flowmeter in the boiler room, checked whether the steam traps and exhaust valves in the factory were in sound condition, and thereby reduced the waste of steam. The average steam loss in the public pipelines of the factory was 15.6%. The steam loss was reduced to 11% via the relevant renovation of steam pipelines and it was expected that 1,242 tons of steam could be saved thereby; 2. The steam pipelines in the animal room of the research and development center were re-insulated and the steam traps were remodeled to prevent the occurrence of long-time steam exhaust due to the failure of water valves; 3. In the first and second traditional Chinese medicine extraction workshops, a total of 23 drainage devices were |
| added to all condensate drainage pipelines with steam heating equipment to realize automatic drainage and improve the utilization rate of steam. It was expected that approximately 100 tons of steam could be saved thereby per year; in the first and second traditional Chinese medicine extraction workshops, the cooling method of purified water circulation system was changed from cooling by drinking water to cooling by recycled chilled water in order to reduce the consumption of drinking water. It was expected that the consumption of water could be thereby reduced by approximately 3,000 tons per year; 4. In the first traditional Chinese medicine extraction workshop, the existing n-butanol recovery SOP was improved and refined and the powder collection amount of Panax Notoginsenosides-XST was enhanced with an aim to reduce the unit consumption of n-butanol. Based on a production of 20 batches per year, approximately RMB24,800 could be saved per year. | |
| Livzon Pharmaceutical Factory | Carried out low-nitrogen transformation for boilers to reduce nitrogen oxide emissions; reduced operation costs by combining the operation of refrigeration stations, and discontinued P06 large air compressor system when P06 workshop stopped production, and supplied individual equipment with gas through small air compressors, which could save about 15,000 kWh of electricity and reduce energy consumption; regularly switched on and off the air conditioners in QC, warehouses and other departments according to their needs, which could save about 700 kWh of electricity per day; further strengthened the energy-saving management of functional departments, and advocated employees to turn off the lights during the lunch break, and encouraged them to turn off the lights and shut down their computers when they leave their seats and the office to save electricity. |
| Ningxia Pharmaceutical | The project of recovering waste heat from air compressors as heat source to heat water for heating in winter was completed and would be put into operation in winter. It was expected that 5,000 tons of steam could be saved thereby; the high-efficiency and energy-saving transformation of fermentation circulating water pump in workshop 103 was completed, saving 1.04 million kWh of electricity annually; the recycling test of solid waste (slag, sludge) was completed and solid waste would no longer be landfilled when relevant facilities were put into use. |
| Jiaozuo Hecheng | Collected and reused steam condense to reduce steam consumption, so as to reduce carbon emissions; changed the packaging equipment to automatic packaging to improve production efficiency; vigorously promoted energy saving and consumption reduction internally, called on all employees to “save every drop of water, save every kilowatt of electricity”, and uniformly managed the paint in the workshop to eliminate waste; installed additional mirrors behind the steam pipeline drainage valves to observe whether there is steam loss; led the steam condense to the production auxiliary system of the hot water tank and the crystallization tank to reduce the use of steam; changed the lighting in the common areas of the workshop, corridors, etc. to sound– or light-controlled switches and gradually replaced the workshop lighting with LED lights; gradually replaced high energy consuming equipment and facilities in workshops with low energy consuming or automated interlocking devices. |
| Shanghai Livzon | Further strengthened the daily energy-saving management according to the established energy-saving plan, effectively improved the energy-saving awareness of employees through inspection, publicity and other means, and cultivated good habit of saving water and electricity among employees; optimized the peptide splicing process, increased the peptide splicing yield by more than 10%, thus reducing the power consumption per unit of product; transformed the solid preparation workshop into the powder injection workshop which produces less waste and conserves electricity; while comfortable air conditioning unit (cooling) utilized the chilled water unit in the power room, the multi-expansion air conditioning unit was placed outdoors to use air cooling, saving cooling |
| capacity and reducing energy consumption. In order to reduce the exhauste mission concentration and VOCs emissions, double-stage activated carbon was installed to the No. 4 exhaust funnel. After one more step of treatment, both the exhaust emission concentration and the VOCs emissions could be reduced. In order to improve the efficiency of pure water production, the pure water equipment was replaced. | |
| Livzon MAB | Formulated energy-saving and emission reduction measures in accordance with the ESG targets of the Company and made reasonable use of recycled wastewater; introduced purchased steam to reduce steam consumption effectively. Effectively improved the energy-saving awareness of employees through inspection, publicity and other means, and cultivated good habit of saving water and electricity among employees; used LED lights to reduce electricity consumption, and encouraged employees to turn off lights and computers to save electricity before leaving office. Set up shuttle buses to transport employees to and from work. |
| Livzon Diagnostics | Entrusted a third party to carry out routine monthly maintenance of sewage treatment facilities to ensure that the wastewater treatment system was functioning properly. The water quality was up to standard, and the discharge did not exceed the limit. Formulated an energy management system to save energy and reduce emissions and strengthened daily energy-saving management to improve the Company’s performance in energy saving. |
II Consolidation and expansion of achievements in poverty alleviation and rural revitalization
√Applicable □N/A
1. Industrial revitalization
The Company guiding principles of the CPC Central Committee and the General Secretary. In accordancewith the relevant requirements, we have established and implemented the plan of “Astragalus Root (黃芪)Industry Revitalization”. Through adopting the model of “Company + Base” and “Company + ProfessionalCooperative”, we are driving local cultivation and processing of Astragalus and developing the astragalusroot industry with reference to the local conditions to make it a pillar industry for poverty relief in the long-term. The Group will establish a sustainable and pivotal industry that creates wealth, forging a new path forthe development of the distinctive Astragalus industry and promoting the construction of the “ChineseMedicine Ecological Base”.“Astragalus Root (黃芪) Industry Revitalization” has been in place since 2017. Datong Livzon QiyuanMedicine Co., Ltd. (大同丽珠芪源 有限公司) (“Datong Livzon”), a subsidiary of the Livzon, hasestablished its own planting bases in Hunyuan County of Datong City in Shanxi Province and Zizhou Countyof Yulin City in Shaanxi Province, respectively, and built astragalus root planting bases together with 12cooperatives and 3 individuals in Tianzhen County of Datong City and Ying County of Shuozhou City inShanxi Province and Yulin City of Shaanxi Province. The total area of the self-built bases and jointlyconstructed bases is about 33,000 mu and a total of 265 people have been assisted. This program haseffectively boosted the economy of corresponding areas in Shanxi and Shaanxi.During the Reporting Period, based on the national “rural revitalization strategy”, Datong Livzon launchedthe “Joint Construction by Villages and Enterprises” project in cooperation with the village committee of
Mazhuang Village, Guan’er Town, Hunyuan County, Datong City, Shanxi Province to renovate andreconstruct the primary processing plant in the origin of astragalus root planting base which has met therequirements on the primary processing and storage of astragalus root. In addition, Datong Livzon trainedapproximately 15 managers and planters of the co-built base in Zizhou County, Yulin City, Shaanxi Provinceon the new version of GAP (Good Agricultural Practices), conducted on-site technical guidance and practicaltraining on the traceability of traditional Chinese medicinal materials. These efforts aimed to assist in thepreliminary land plot planning for achieving traceability of Chinese medicinal materials.
2. Access to public welfare for chronic diseases prevention and treatment
In supporting consolidation and expansion of achievements in poverty alleviation and rural revitalization andIn order to respond positively to the call of national policy, Joincare have launched “Access to Public Welfarefor Chronic Diseases Prevention and Treatment (普惠慢病防治公益项目)” program by combining our ownindustrial advantages. The program targets at common chronic diseases such as hypertension, hyperlipidemia,cardiovascular and cerebrovascular diseases, and treatment drugs have been donated 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 Bononitrate Tablets ( 单硝酸异山梨酯片), which couldbe worth millions of RMB. These drugs can really help families in remote areas, make it convenient forpatients in the regions to take drugs nearby, help the families with patients to alleviate medical pressures, andprovide timely assistance. Based on actual conditions, the project regularly makes continuous drug donationsto remote areas and helps the families with patients in such regions. The project also helps to promote localdevelopment of rural revitalization.Since late 2018 onwards, with the support of local government agencies and relevant authorities at all levels,we carried out the “Inclusive Chronic Disease Prevention and Control Public Welfare Project” successivelyin areas including Chaotian District of Guangyuan City, Songpan County, Jiange County and Pingwu Countyof the Autonomous Prefecture of Aba Zangs and Qiangs in Sichuan Province, Hunyuan County, GuanglingCounty and Lingqiu County of Datong City in Shanxi Province, Dongxiang County, Tianzhu County, LinzeCounty and Shandan County in Gansu Province, Xianghai national nature reserve in Jilin Province, ChayuCounty in Tibet Autonomous Region, Macun District of Jiaozuo City in Henan Province, Huangshan Districtof Huangshan City in Anhui Province, Suining County of Hunan Province, and Fenyi County of JiangxiProvince, bringing benefits to many patients. In recognition of these efforts, the Company was honored witha number of awards, including the “ESG Practice Excellence Model Award (ESG践行卓越典范奖)” and“2022 China Pharmaceutical CSR Media Watch Pioneer Award (2022中国医药社会责任媒体观察责任先锋)” for its excellent projects supporting urban revitalization.As at 30 June 2023, the project covered 8 provinces and 2 autonomous regions, including 19 remote areasrequiring assistance and 2 natural reserves at state level. This initiative has aided over 17,700 low-incomepatients. In 2023, there are plans to further donate drugs to additional areas in need.
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Chapter 6 Major EventsI Fulfillment of undertakings(I) Undertakings fulfilled during the Reporting Period or not yet fulfilled as of the ReportingPeriod by the parties to the commitment such as de facto controllers, shareholders, related parties,acquirers of the Company and the Company
√Applicable □N/A
| Commitment background | Commitment type | Subject | Commitment content | Time and time limit of commitment | Whether there is a time limit for fulfillment | Whether commitment is strictly fulfilled in time | Specific reasons for failure in timely fulfillment shall be given | Next plan should be stated in case of failure in timely fulfillment |
| Commitment related to initial public offering | Settlement of horizontal competition | Baiyeyuan | Please see Note 1 for details | 30 April 2001, long-term | No | Yes | - | - |
| Settlement of horizon competition | Baiyeyuan, de facto controllers and persons acting-in concert, and the Company | Please see Note 2 for details | 10 January 2014, long-term | No | Yes | - | - | |
| Commitment related to seasoned offerings | Others | The Company and de facto controllers | Please see Note 3 for details | From 8 March 2016 to the date of completion of remedial measures in connection with the non-public offering of Livzon Group | Yes | Yes | - | - |
| Others | Baiyeyuan and the de facto controller | Please see Note 4 for details | From 11 May 2017 to the date of completion of remedial measures in connection with rights issue of Joincare | Yes | Yes | - | - | |
| Others | The Company | Please see Note 5 for details | From the date of proceeds for issuance of the Rights issue in place to the date of completion | No | Yes | - | - |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| of use of proceeds | ||||||||
| Other commitments made to the minority shareholders of the company | Others | The Company | Please see Note 6 for details | 17 December 2008, long-term | No | Yes | - | - |
Note 1: Shenzhen Baiyeyuan Investment Co., Ltd., the controlling shareholder of the Company, undertook that it would not bedirectly or indirectly engaged in or cause subsidiaries and branches under its control to be engaged in any business or activityconstituting horizontal competition with the Company after the founding of the Company, including but not limited to theresearch, production and sales of any products that were the same as or similar to products under research, production and salesof the Company, and was willing to undertake compensation responsibility for economic losses to the Company arising fromviolation of the said commitment.Note 2: Whereas the domestically listed foreign shares of Livzon Group, a controlled subsidiary of the Company, sought listingon the Main Board of the Stock Exchange of Hong Kong Limited, in order to fully ensure smooth completion of the said eventand in compliance with relevant requirements of the Stock Exchange of Hong Kong Limited, the controlling shareholders, defacto controller of the Company and the Company entered into relevant undertakings with Livzon Group as follows: 1. Thecontrolling shareholders, de facto controller and persons acting-in-concert of the Company, the Company and its controlledsubsidiaries except for Livzon Group did not or would not be, directly or indirectly, engaged in any business that constitutedcompetitive relation or potential competitive relation with drug research, development, production and sale businesses(“Restricted Businesses”) of Livzon Group from time to time. For the avoidance of doubt, the scope of Restricted Businessesdid not cover products that were researched, developed, manufactured and sold on the date of relevant letter of undertaking bythe controlling shareholders and de facto controller of the Company, the Company and its controlled subsidiaries except forLivzon Group; 2. If any new business opportunity was found to constitute competitive relation with Restricted Businesses, thecontrolling shareholders, de facto controllers and persons acting-in-concert of the Company, the Company and its controllingsubsidiaries except for Livzon Group would inform Livzon Group in written form immediately and firstly provide LivzonGroup with the business opportunity in accordance with reasonable and fair terms and conditions. If Livzon Group gave up thebusiness opportunity, the controlling shareholders and de facto controllers of the Company, the Company and its controlledsubsidiaries except for Livzon Group may accept the business opportunity in accordance with the terms and conditions thatwere not superior to those offered to Livzon Group; 3. If assets and businesses that directly or indirectly constituted competitiverelation and potential competitive relation with Restricted Businesses were intended to be transferred, sold, leased, licensed touse or otherwise transferred or allowed to use (these Sales and Transfers), the controlling shareholders and de facto controllersof the Company, the Company and its controlled subsidiaries except for Livzon Group would provide the right of first refusalfor Livzon Group under the same condition. If Livzon Group gave up the right of first refusal, the controlling shareholders, defacto controllers and persons acting-in-concert of the Company, the Company and its controlled subsidiaries except for LivzonGroup would carry out these Sales and Transfers to a third party in accordance with main terms that were not superior to thoseoffered to Livzon Group; 4. The controlling shareholders, de facto controllers and persons acting-in-concert of the Company,the Company and its controlled subsidiaries except for Livzon Group would not be engaged in or involved in any business thatmight damage the interests of Livzon Group and other shareholders through the relation with shareholders of Livzon Group orthe identity of shareholders of Livzon Group; 5. The controlling shareholders, de facto controllers and persons acting-in-concertof the Company, the Company and its controlled subsidiaries except for Livzon Group would not or cause its contact persons(except for Livzon Group) to directly or indirectly: (1) induce or attempt to induce any director, senior management orconsultant of any member of Livzon Group to terminate his/her employment with or to be an employee or consultant of LivzonGroup at any time (whichever is applicable), no matter if relevant acts of the person were against the Employment Contract or
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Consultancy Agreement (if applicable); (2) Within three years after any person terminated to be the director, seniormanagement or consultant of any member of Livzon Group, employ the person who had or might have any confidentialityinformation or business secret in relation to Restricted Businesses (except for the director, senior management or consultant ofthe Company and/or its controlling subsidiaries except for Livzon Group on the date of issuance of relevant letter ofundertaking); (3) Recruit or lobby any person carrying out business in any member of Livzon Group, accept orders, or carryout business separately, through any other person or as any person, firm, or manager, advisor, consultant, employee, agent orshareholder of any company (competitor of any member of Livzon Group), or lobby or persuade the person making transactionwith Livzon Group or negotiating with Livzon Group on Restricted Businesses to terminate its transaction with Livzon Groupor reduce its normal business volume with Livzon Group, or ask for more favorable transaction terms to any member of LivzonGroup. 6. The controlling shareholders, de facto controllers and persons acting-in-concert of the Company, the Company andits controlled subsidiaries except for Livzon Group further undertook that: (1) They would allow and cause relevant contactpersons (except for Livzon Group) to allow independent directors of Livzon Group to review if the Company and its controlledsubsidiaries except for Livzon Group obeyed the Letter of Undertaking at least once a year; (2) They would provide all the datarequired for annual review and implementation of the Letter of Undertaking for independent directors of Livzon Group; (3)They would allow Livzon Group to disclose the decision on whether the controlling shareholders and de facto controllers ofthe Company, the Company and its controlled subsidiaries except for Livzon Group obeyed and implemented the Letter ofUndertaking reviewed by independent directors of Livzon Group through the annual report or announcement; (4) Thecontrolling shareholders, de facto controllers and persons acting-in-concert of the Company, the Company (and its controlledsubsidiaries except for Livzon Group) would provide Livzon Group with the Letter of Confirmation in relation to compliancewith clauses of the Letter of Undertaking every year so as to be included in the annual report of Livzon Group. 7. The controllingshareholders, de facto controllers and persons acting-in-concert of the Company, and the Company promise that they wouldbear corresponding legal responsibility and consequence arising from violation of any clause by the Company (or theCompany's controlled subsidiaries except for Livzon Group or its contact persons), starting from the date of issuance of relevantletter of undertaking. 8. The said undertakings would terminate in case of the following circumstances (whichever is earlier):
(1) The controlling shareholders, de facto controllers and persons acting-in-concert of the Company, the Company and any ofits controlled subsidiaries were not the controlling shareholders of Livzon Group anymore; (2) Livzon Group terminated thelisting of its shares on the Hong Kong Stock Exchange and other overseas stock exchanges (except that shares of Livzon Groupstopped to be traded temporarily for any reason).Note 3: Do not interfere in the operation and management activities of Livzon Group or encroach on the interests of LivzonGroup.Note 4: Pursuant to the Guiding Opinions on Matters Relating to the Dilution of Current Returns as a Result of Initial PublicOffering, Refinancing and Major Asset Restructuring (Announcement of CSRC [2015] No. 31), the company shall undertaketo adopt specific remedial measures relating to dilution of current returns as a result of the company's initial public offering,refinancing of the listed company, or major asset restructuring and shall fulfill such undertaking. Pursuant to relevant provisionsof CSRC, Zhu Baoguo, the de facto controller of Shenzhen Baiyeyuan Investment Co., Ltd., a controlling shareholder:1. Donot intervene in the operation and management activities or encroach on the interests of the company; 2. If CSRC issued othernew regulatory provisions on the remedial measures in relation to returns and the relevant undertakings and the aforesaidundertakings did not conform to such provisions from the date of issuance of the undertaking to the completion of IPO shareallotment, the Company/the de facto controller would undertake to issue a supplemental undertaking in accordance with thelatest provisions of CSRC; 3. The Company/the de facto controller undertook to practically take the remedial measures inrelation to returns formulated by the company and fulfill the undertaking concerning the remedial measures. In case of violationof the undertaking, causing losses to the company or investors, the Company/the de facto controller was willing to assumecompensation responsibilities to the company or investors in accordance with law. In case of violation of the said undertakings
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
or rejection to fulfill the said undertakings, as one of the liability subjects relating to the remedial measures concerning returns,it was agreed that relevant punishment shall be imposed on or relevant management measures shall be taken against theCompany/the de facto controller by CSRC, the SSE and other securities regulators in accordance with relevant provisions andrules set or issued by them.Note 5: After the proceeds for issuance of allotment were in place, the Company would use them according to the disclosurein the announcement, and carry out the policies, including deposit in special account, approval by specially-assigned person,and special use of special funds in accordance with management measures for proceeds of the Company. The Board of theCompany would regularly check the progress of projects invested with proceeds, issue a special report on deposit and use ofproceeds, engage an accounting firm during the annual audit to issue a verification report on deposit and use of proceeds, wouldbe supervised by regulators and sponsors at any time, and would not make major investment, asset purchase or similar financialinvestment though proceeds in disguise.Note 6: (1) While transferring tradable shares subject to selling restrictions held by the company in Livzon Group, the companyshall strictly obey relevant provisions of Guidelines of Listed Companies on Transfer of Stock Shares Subject to SellingRestrictions ([2008] No. 15); (2) If the Company had shares subject to selling restrictions held by it in Livzon Group that wereplanned to be sold through the bid trading system of Shenzhen Stock Exchange and reduced more than 5% shares within sixmonths from the first share reduction, the Company would pass the Announcement on Sales disclosed by Livzon Group withintwo trading days before the first share reduction.
II Non-operating use of funds by the controlling shareholder and their related parties duringthe reporting period
□Applicable √N/A
III 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 audit opinions inthe 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.
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
VIII Information on punishment and rectification of the listed company and its directors,supervisors, senior management, controlling shareholders, and de facto controllers due toviolations of laws and regulations
□Applicable √N/A
IX Integrity of the Company and its controlling shareholders and de facto controllers duringthe Reporting Period
□Applicable √N/A
X Substantial related transactions(I) Related transactions in the ordinary course of business
1. Provisional Announcements without progress or change in subsequent implementation
√Applicable □N/A
| Overview | Query index |
| Pursuant to the “Resolution on Related Transactions in the Ordinary Course of Business of the Controlling Subsidiaries of Jiaozuo Joincare and Jinguan Electric Power” considered and approved at the 23rd Meeting of the 8th Session of the Board on 7 April 2023, Jiaozuo Joincare intended to purchase no more than RMB280 million (inclusive) of steam and power from Jinguan Electric Power in 2023 so as to satisfy the demands of Jiaozuo Joincare for steam and power in the process of production and operation. The independent directors of the Company gave prior approval opinions on the Resolution and gave opinions on the approval at the Board meeting. Both parties referred to the market price to fix a price of the said related transactions. During the Reporting Period, the actual amount of the said related transactions was RMB127.9266 million. | See the “Announcement on Resolutions Considered and Approved at the 23th Meeting of the 8th Session of the Board of Joincare Pharmaceutical Group Industry Co., Ltd.” (Lin 2023-030) and the “Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the Connected Transactions in the Ordinary Course of Business of the Majority-owned Subsidiaries of Jiaozuo Joincare and Jinguan Electric Power” (Lin 2023-036) disclosed by the Company on 11 April 2023 for details. |
2. Matters that have been disclosed in the provisional announcements with progress or changein subsequent implementation
□Applicable √N/A
3. Matters that have not been disclosed in the provisional announcements
□Applicable √N/A
(II) Related transactions relating to assets or equity acquisition and sale
1. 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 changein subsequent implementation
□Applicable √N/A
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
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 theReporting Period shall be disclosed
□Applicable √N/A
(III) Substantial related transactions of joint outbound investment
1. 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 changein 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. 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 changein subsequent implementation
□Applicable √N/A
3. Matters that have not been disclosed in the provisional announcements
√Applicable □N/A
Unit：Yuan Currency：RMB
| Related par ty | Relationship with related party | Offer funds to related parties | Receive funds from related parties | ||||
| Balance at the beginning of the period | Amount incurred in the current period | Balance at the end of the period | Balance at the beginning of the period | Amount incurred in the current period | Balance at the end of the period | ||
| Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. (焦作金冠嘉华电力有限公司) | Associated company | 75,724,913.57 | -8,480,203.79 | 67,244,709.78 | |||
| Guangdong Blue Treasure Pharmaceutical Co., Ltd. (广东蓝宝制药有限公司) | Others | 9,282,804.29 | 7,641,565.47 | 16,924,369.76 | 117,760.00 | 1,825,280.00 | 1,943,040.00 |
| Jiangsu One Winner Medical Technology Co., Ltd. (江苏一赢家医疗科技有限公司) | Others | 0.00 | 670,000.00 | 670,000.00 | |||
| Subsidiaries of Sichuan Healthy Deer Hospital Management Co., Ltd. (四川健康阿鹿医院管理有限公司之子公司) | Others | 497,828.30 | -4,410.00 | 493,418.30 | 20,947.89 | 83,329.36 | 104,277.25 |
| Shenzhen Youbao Technology Co., Ltd. (深圳市有宝科技有限公司) | Others | 188,100.00 | 141,578.00 | 329,678.00 | |||
| Zhongshan Renhe Health Products Co., Ltd. (中山市仁和保健品有限公司) | Others | 469,895.78 | 0.00 | 469,895.78 | |||
| Zhuhai Sanmed Biotech | Others | 211,200.00 | 0.00 | 211,200.00 | |||
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Inc. (珠海圣美生物诊断技术有限公司) | |||||||
| Zhuhai Sanmed Gene Diagnostics Ltd. (珠海市圣美基因检测科技有限公司) | Others | 101,526.98 | 134.20 | 101,661.18 | |||
| Shenzhen Health Deer Technology Co., Ltd. (深圳市健康阿鹿信息科技有限公司) | Others | 4,680.00 | -4,680.00 | 0.00 | |||
| Total | 86,480,948.92 | -36,016.12 | 86,444,932.80 | 138,707.89 | 1,908,609.36 | 2,047,317.25 | |
| Reason for occurrence of credits and debts with related parties | During the Reporting Period, the Company had regular operating fund transactions with related parties | ||||||
| Effect of credits and debts with related parties on the operating results and financial position of the Company | The said credits and debts with related parties mentioned above are operating fund transactions; there was no non-operating use of funds of the Company by shareholders and related parties | ||||||
(V) Financial businesses among the Company, related financial companies, financial companiescontrolled by the Company, and related parties
□Applicable √N/A
(VI) Other substantial related transactions
□Applicable √N/A
(VII) Others
□Applicable √N/A
XI Material contracts and their fulfilments
1. Custodianship, 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 | Relationship between the Guarantor and the listed company | Secured party | Amount of guarantee | Date of guarantee (date of signature of agreement) | Guarantee Start date | Guarantee Maturity date | Guarantee type | Fulfilled or not | Overdue or not | Overdue amount | Whether there's a counter-guarantee | Guaranteed for a related party or not | Relationship |
| Joincare | Headquarter of the Company | Jinguan Electric Power | 4,000.00 | 2022/7/11 | 2022/7/11 | 2023/7/11 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company |
| Joincare | Headquarter of the Company | Jinguan Electric Power | 3,000.00 | 2022/7/11 | 2022/7/11 | 2023/7/11 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company |
| Joincare | Headquarter of the Company | Jinguan Electric Power | 2,000.00 | 2022/7/15 | 2022/7/15 | 2023/7/15 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company |
| Joincare | Headquarter of the Company | Jinguan Electric Power | 3,000.00 | 2022/8/8 | 2022/8/8 | 2023/8/8 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company |
| Joincare | Headquarter of the Company | Jinguan Electric Power | 3,200.00 | 2022/9/16 | 2022/9/16 | 2023/9/16 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company |
| Joincare | Headquarter of the Company | Jinguan Electric Power | 3,800.00 | 2022/10/9 | 2022/10/9 | 2023/10/9 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Joincare | Headquarter of the Company | Jinguan Electric Power | 3,200.00 | 2022/10/12 | 2022/10/12 | 2023/10/12 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company | |
| Joincare | Headquarter of the Company | Jinguan Electric Power | 2,045.01 | 2023/6/12 | 2023/6/12 | 2023/10/13 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company | |
| Joincare | Headquarter of the Company | Jinguan Electric Power | 3,000.00 | 2022/11/24 | 2022/11/24 | 2023/11/24 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company | |
| Joincare | Headquarter of the Company | Jinguan Electric Power | 2,183.85 | 2023/6/12 | 2023/6/12 | 2023/12/12 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company | |
| Joincare | Headquarter of the Company | Jinguan Electric Power | 2,000.00 | 2023/6/16 | 2023/6/16 | 2023/12/12 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company | |
| Joincare | Headquarter of the Company | Jinguan Electric Power | 4,640.00 | 2022/12/19 | 2022/12/19 | 2023/12/16 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company | |
| Jiaozuo Joincare | Wholly-owned subsidiary | Jinguan Electric Power | 2,000.00 | 2022/12/14 | 2022/12/14 | 2023/12/14 | Joint liability guarantee | No | No | 0 | Yes | Yes | Associated company | |
| Total guaranteed amount occurred during the Reporting Period (excluding guarantees to subsidiaries) | 6,228.86 | |||||||||||||
| Total guaranteed amount as of the end of the Reporting Period (A) (excluding guarantees to subsidiaries) | 38,068.86 | |||||||||||||
| Guarantee provided by the Company and its subsidiaries to subsidiaries | ||||||||||||||
| Total amount of guarantees to subsidiaries during the Reporting Period | 133,364.31 | |||||||||||||
| Total amount of guarantees to subsidiaries as of the end of the Reporting Period (B) | 306,780.16 | |||||||||||||
| Total guaranteed amount of the Company (including guarantees to subsidiaries) | ||||||||||||||
| Total guaranteed amount (A+B) | 344,849.02 | |||||||||||||
| Percentage of total guaranteed amount in the Company's net assets (%) | 15.84 | |||||||||||||
| In which: | ||||||||||||||
| Amount of guarantees provided to shareholders, de facto controllers and their related parties (C) | 0.00 | |||||||||||||
| Amount of debt guarantee directly or indirectly provided to a guaranteed party with a liability-to-asset ratio exceeding 70% (D) | 192,093.20 | |||||||||||||
| Portion of total guaranteed amount exceeding 50% of net assets (E) | 0.00 | |||||||||||||
| Total guaranteed amount of the above three items (C+D+E) | 192,093.20 | |||||||||||||
| Statement on the contingent joint liability that might be assumed in connection with outstanding guarantee | N/A | |||||||||||||
| Statement on guarantees | The above connected guarantees are detailed in Note X 5(4) to the Financial Statements of this report. | |||||||||||||
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 IndustryCo., Ltd. issued by CSRC (Zheng Jian Xu Ke [2018] No. 1284), the Company allotted 365,105,066shares to original shareholders. The planned proceeds from the share allotment amounted to RMB2,000million; the total actual proceeds amounted to RMB1,715.9938 million; after deducting distributionexpenses of RMB46.2536 million, the net proceeds amounted to RMB1,669.7402 million. As at 16October 2018, the said proceeds were in place and validated by the Capital Verification Report of
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Joincare Pharmaceutical Group Industry Co., Ltd. issued by Ruihua Certified Public Accountants (RuiHua Yan Zi [2018] No. 40060006).Pursuant to the Resolution on the Temporary Replenishment of Working Capital with Idle Proceedsconsidered and approved at the 21st Meeting of the 8th Session of the Board and the 18th Meeting ofthe 8th Session of the Supervisory Committee of the Company on 29 December 2022, it was agreed thatthe Company temporarily replenished the working capital with no more than RMB500 million of idleproceeds from 1 January 2023 to 31 December 2023 so as to improve the use efficiency of proceeds andreduce financial expenses of the Company. For details, please refer to the “Announcement on theTemporary Replenishment of Working Capital with Certain Idle Proceeds of Joincare PharmaceuticalGroup Industry Co., Ltd.” (Lin 2022-146).For details about deposit and actual use of proceeds in the first half of 2023, please refer to the SpecialReport of Joincare Pharmaceutical Group Industry Co., Ltd. on Deposit and Actual Utilization ofProceeds for first half of 2023 disclosed by the Company on 24 August 2023.
2. Matters about share cancellation and share repurchase
(1) Share Cancellation
On 10 February 2020, the Company held the twenty-first meeting of the seventh session of the Board ofDirectors, at which it considered and approved proposals including the Proposal for the Repurchase ofShares through Centralized Price Bidding; and on 14 February 2020, the Company disclosed the Reporton the Repurchase of Shares through Centralized Price Bidding. The Company planned to repurchasethe shares of the Company with its own funds through centralized price bidding with the total fund ofnot less than RMB150 million (inclusive) and not more than RMB300 million (inclusive). The sharerepurchase price was not more than RMB15 per share (inclusive), and the repurchase period was set asnot more than 12 months from the date on which repurchase plan was considered and approved by theBoard of Directors. The repurchased shares shall be used for employee stock ownership plans and shareincentive plans, with 40% of the repurchased shares allocated to employee stock ownership plans and60% allocated to share incentive plans.The implementation of the share repurchase plan had been completed by the Company on 12 July 2020,and 19,890,613 shares of the Company, accounting for 1.02% of the total share capital (1,947,537,633shares) of the Company at that time, were repurchased through centralized price bidding. Pursuant tothe arrangement for use of repurchased shares mentioned above, on 4 August 2021, the Companytransferred 2,430,800 shares previously repurchased and held in special securities account forrepurchases to the account of the Company for first phase ownership scheme by non-trading transfer.As of now, the number of shares previously repurchased and held in special securities account forrepurchases is 17,459,813.
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Pursuant to the relevant requirements of the Company Law (《公司法》), the Self-regulatory Guidelinesfor the Companies Listed on the Shanghai Stock Exchange No. 7–Repurchase of Shares (《上海证券交易所上市公司自律监管指引第7号—回购股份》) and share repurchase plan of the Company, theshares were repurchased for employee stock ownership plans and share incentives, and if therepurchased shares are not fully utilized by the Company within 36 months after the completion of theshare repurchase, the unutilized shares repurchased shall be cancelled.The twenty-fifth meeting of the eighth session of the Board of Directors and the first extraordinarygeneral meeting of 2023 were convened by the Company on 28 April 2023 and 19 May 2023,respectively, at which the Resolution on the Cancellation of Treasury Shares Previously Repurchasedwas considered and approved. As the three-year term for the share repurchase conducted by theCompany in 2020 will expire soon and the Company has no plan to use remaining shares held in specialsecurities account for repurchases for share incentive plans or employee stock ownership plans in thenear future, it was agreed that the Company should cancel the remaining 17,459,813 shares previouslyrepurchased and held in special securities account for repurchases.On 4 July 2023, the aforesaid remaining shares and the special securities account for repurchase werecancelled by the Shanghai Branch of China Securities Depository and Clearing Company Limited. Uponthe completion of the share cancellation, the total share capital of the Company changed from1,929,189,374 shares to 1,911,729,561 shares.
(2) Share Repurchase
Pursuant to the Resolution on Share Repurchase Scheme by Way of Centralized Bidding Transactionsand other resolutions considered and approved at the 17th Meeting of the 8th Session of the Board andthe 2022 Fourth Extraordinary General Meeting of the Company on 14 October 2022 and 18 November2021, it was approved that the Company repurchased company shares by way of centralized biddingtransactions with its own funds, and the repurchased shares will be used to reduce the registered capital;the total amount of repurchase funds should be no less than RMB300 million (inclusive) and no morethan RMB600 million (inclusive); the repurchase price should be no more than RMB16/share (inclusive);the repurchase term should be from 18 November 2022 to 17 November 2023. For details, please referto the “Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the Share RepurchaseScheme by Way of Centralized Bidding Transactions” (Lin 2022- 121) and the “Repurchase Report ofJoincare Pharmaceutical Group Industry Co., Ltd. on Share Repurchase by Way of Centralized BiddingTransactions” (Lin 2022-137).On 14 December 2022, the Company initially repurchased 348,400 shares by way of centralized biddingtransactions, representing 0.02% of the total share capital of the Company. For details, please refer tothe “Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Initial Share Repurchaseby Way of Centralized Bidding Transactions” (Lin 2022-144).
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
As of 30 June 2023, the Company has repurchased a total number of 40,662,579 shares by way ofcentralized bidding transactions, representing 2.11% of the total share capital of the Company. The totalamount paid was RMB494.4911 million (including handling fee). For details, please refer to theAnnouncement of Joincare Pharmaceutical Group Industry Co., Ltd. on the Progress of ShareRepurchase by Way of Centralized Bidding Transactions (Lin 2023-065). As of 14 August 2023, theCompany has repurchased a total number of 45,957,211 shares by way of centralized biddingtransactions, representing 2.40% of the total share capital of the Company. The total amount paid wasRMB557.9157 million (including handling fee). For details, please refer to the Announcement ofJoincare Pharmaceutical Group Industry Co., Ltd. on the Progress of Share Repurchase by Way ofCentralized Bidding Transactions (Lin 2023-080).
3. GDRs of the Company issued and listed on the SIX Swiss Exchange
On 26 September 2022, the Company’s GDRs were listed on the SIX Swiss Exchange in an offering of6,382,500 GDRs representing 63,825,000 underlying A shares, representing 3.31% of the Company’stotal share capital at that time, at an issue price of USD$14.42 per GDR, with the final gross proceedsof approximately USD$92.04 million.The lock-up restriction period for the redemption of the GDRs issued by the Company is from 26September 2022 (Swiss time) to 23 January 2023 (Swiss time). As 23 January 2023 falls in the ChineseNew Year holiday, the transfer and settlement of A shares in relation to the cross-border conversion ofGDRs cannot proceed during the period from 23 January to 27 January 2023. In accordance with therelevant regulations on stock connect, the GDRs with the expiry of the lock-up restriction period for theredemption can be converted into A shares of the Company from 30 January 2023 (Beijing time). As ofthe closing of the Shanghai Stock Exchange on 30 January 2023, the number of A shares of the Companyrepresented by the outstanding GDRs was less than 50% of the number of underlying A sharesrepresented by the GDRs actually issued by the Company as approved by the CSRC.The proceeds from the Company’s issuance of GDRs, after deducting the issuance fees, are intended forthe business development and strategic investments of the Company, aimed at improving the Company'scapabilities of global research and development, industrialization and commercialization, thus furtherdeepening the international business presence and replenishing the working capitals of the Company.For details about deposit and actual use of GDR proceeds in the first half of 2023, please refer to theSpecial Report of Joincare Pharmaceutical Group Industry Co., Ltd. on Deposit and Actual Utilizationof Proceeds for first half of 2023 disclosed by the Company on 24 August 2023.
4. Overall relocation and expansion project of Sichuan Guangda
On 6 March 2019, after review and approval by the Board of the Livzon Group, the controllingsubsidiary of the Company, considered and approved that Livzon Group entered into the InvestmentAgreement for the “Overall Relocation and Expansion Project of Sichuan Guangda PharmaceuticalManufacturing”(《四川光大制药整体搬迁调迁扩建项目投资协议书》) (the “Investment Agreement”)
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
and the “Supplemental Agreement I with Sichuan Chengdu Pengzhou Municipal People'sGovernment”(四川省成都市彭州市人民政府). Pursuant to the Investment Agreement, the LivzonGroup will inject capital of RMB646 million for investment in construction of the overall relocation andexpansion project (the “Project”) of Sichuan Guangda, a wholly-owned subsidiary of 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 thanRMB125.8 million for the construction of new plantsto the Company.As at 30 June 2023, the total investment of the specific contracts entered into for the Project amountedto RMB548.5066 million, and the sum of subsidies received from government authorities at variouslevels amounted to RMB174.4317million, the construction works for all production plants andsupporting production facilities were completed, and the construction works for the office buildings,dormitories and canteens were completed. The new plant of Sichuan Guangda was officially put intooperation on 12 July 2023.
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Chapter 7 Changes in Equity and Shareholders
I Changes in share capital(I) Changes in shares
1. Changes in shares
During the Reporting Period, there was no change in the total number of shares and share capitalstructure of the Company.
2. Description of changes in shares
□ Applicable √N/A
3. Impact of changes in shares on earnings per share, net assets per share and other financialindicators 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
(II) Changes in shares with selling restrictions
□ Applicable √N/A
II Shareholders(I) Total number of shareholders:
| Total number of ordinary shareholders at the end of the Reporting Period | 80,960 |
| Total number of shareholders of preferred shares with resumed voting rights at the end of the Reporting Period | Not applicable |
(II) Shareholdings of the Top 10 shareholders and the Top 10 shareholders of tradable shares (orshareholders without selling restrictions) at the End of the Reporting Period
Unit: shares
| Shareholdings of the Top 10 shareholders | |||||||
| Name of shareholder (Full name) | Change during the reporting period | Number of shares held at the end of the Period | Percentage (%) | Number of shares held with selling restrictions | Pledge, mark or lock-up | Nature of Shareholder | |
| Share status | Number | ||||||
| Shenzhen Baiyeyuan Investment Co., Ltd. | 17,380,900 | 895,653,653 | 46.43 | 0 | Pledge | 75,679,725 | Domestic non-state owned entity |
| Hong Kong Securities Clearing Company Limited | -23,328,015 | 89,928,152 | 4.66 | 0 | Unknown | Unknown | |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Might Seasons Limited | -16,001,259 | 41,486,175 | 2.15 | 0 | Unknown | Foreign entity | |||
| Huaxia Life Insurance Co., Ltd.－Equity fund | 2,578,400 | 11,854,118 | 0.61 | 0 | Unknown | Unknown | |||
| Perseverance Asset Management L.L.P–Gaoyi Xiaofeng No. 2 Zhixin Fund | 10,840,000 | 11,800,000 | 0.61 | 0 | Unknown | Unknown | |||
| China Foreign Economy and Trade Trust Co., Ltd.–Foreign TRUST–Gaoyi Xiaofeng Hongyuan Collection Fund Trust Plan | 10,799,948 | 11,759,948 | 0.61 | 0 | Unknown | Unknown | |||
| Bank of Shanghai Co., Ltd.－Yinhua CSI Innovative Drug Industry Trading Open-end Index Securities Investment Fund | 5,294,500 | 8,972,896 | 0.47 | 0 | Unknown | Unknown | |||
| Abu Dhabi Investment Authority | 2,207,629 | 8,127,971 | 0.42 | 0 | Unknown | Unknown | |||
| 108 portfolio of national social security fund | 6,446,000 | 7,803,721 | 0.40 | 0 | Unknown | Unknown | |||
| He Zhong | 0 | 7,800,024 | 0.40 | 0 | Unknown | Domestic natural person | |||
| Shareholdings of the Top 10 shareholders without selling restrictions | |||||||||
| Name of shareholder | Number of tradable shares held without selling restrictions | Class and number of shares | |||||||
| Class | Number | ||||||||
| Shenzhen Baiyeyuan Investment Co., Ltd. * | 895,653,653 | Ordinary shares denominated in Renminbi | 895,653,653 | ||||||
| Hong Kong Securities Clearing Company Limited | 89,928,152 | Ordinary shares denominated in Renminbi | 89,928,152 | ||||||
| Might Seasons Limited | 41,486,175 | Ordinary shares denominated in Renminbi | 41,486,175 | ||||||
| Huaxia Life Insurance Co., Ltd.－Equity fund | 11,854,118 | Ordinary shares denominated in Renminbi | 11,854,118 | ||||||
| Perseverance Asset Management L.L.P–Gaoyi Xiaofeng No. 2 Zhixin Fund | 11,800,000 | Ordinary shares denominated in Renminbi | 11,800,000 | ||||||
| China Foreign Economy and Trade Trust Co., Ltd.–Foreign TRUST–Gaoyi Xiaofeng Hongyuan Collection Fund Trust Plan | 11,759,948 | Ordinary shares denominated in Renminbi | 11,759,948 | ||||||
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Bank of Shanghai Co., Ltd.－Yinhua CSI Innovative Drug Industry Trading Open-end Index Securities Investment Fund | 8,972,896 | Ordinary shares denominated in Renminbi | 8,972,896 |
| Abu Dhabi Investment Authority | 8,127,971 | Ordinary shares denominated in Renminbi | 8,127,971 |
| 108 portfolio of national social security fund | 7,803,721 | Ordinary shares denominated in Renminbi | 7,803,721 |
| He Zhong | 7,800,024 | Ordinary shares denominated in Renminbi | 7,800,024 |
| Notes on the special repurchase account among the top 10 shareholders | As at the end of the Reporting Period, the special repurchase account of the Company (special securities repurchase account of Joincare Pharmaceutical Group Industry Co., Ltd.) owned 58,122,392 shares in total, accounting for 3.01%. | ||
| Description of the above shareholders involved in entrustment/entrusted voting right and waiver of voting right | Not applicable | ||
| Description of connection or acting-in-concert relationship 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 unknown | ||
| Description of holders of preferred shares with resumed voting rights and number of preferred shares | Not applicable | ||
Note: As of the end of the Reporting Period, 17,380,900 shares lent by Shenzhen Baiyeyuan Investment Co., Ltd. (深圳市百业源投资有限公司), a controlling shareholder of the Company, by participating in the refinancing business were matured andcollected in full, and the ownership transfer of such shares did not take place.
Number 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 placementof 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
Description of other information
□ Applicable √N/A
(II) Equity incentive granted to directors, supervisors, and senior management during the ReportingPeriod
□ Applicable √N/A
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
(III) Others
□ Applicable √N/A
IV Changes in controlling shareholders or de facto controllers
□ Applicable √N/A
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Chapter 8 Information on Preferred Shares
□ Applicable √N/A
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Chapter 9 Information on Bonds
I Enterprise bonds, corporate bonds, and non-financial enterprise debt financing instruments
□ Applicable √N/A
II Information on convertible corporate bonds
□ Applicable √N/A
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Chapter 10 Financial statements
I. Auditor's report
□Applicable √N/A
II. Financial statements
Consolidated Balance Sheet
30 June 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
| Item | Note | 30 June 2023 | 31 December 2022 |
| Current assets: | |||
| Cash and bank balances | V.1 | 14,459,790,383.84 | 14,808,488,110.96 |
| Financial assets held for trading | V.2 | 90,560,120.03 | 109,015,664.98 |
| Notes receivable | V.3 | 2,170,075,201.62 | 1,959,985,016.85 |
| Accounts receivable | V.4 | 3,193,959,089.23 | 3,103,758,850.15 |
| Receivables financing | |||
| Prepayments | V.5 | 365,293,699.87 | 364,265,142.57 |
| Other receivables | V.6 | 105,444,746.96 | 52,535,740.14 |
| Including: Interests receivables | |||
| Dividends receivables | 40,304,700.46 | ||
| Inventories | V.7 | 2,850,415,298.45 | 2,561,869,999.57 |
| Contract assets | |||
| Assets held-for-sale | |||
| Non-current assets due within one year | V.8 | 55,066,666.67 | 54,048,611.11 |
| Other current assets | V.9 | 179,667,019.96 | 163,539,900.32 |
| Total current assets | 23,470,272,226.63 | 23,177,507,036.65 | |
| Non-current assets: | |||
| Debt investment | |||
| Other debt investment | |||
| Long-term receivables | |||
| Long-term equity investment | V.10 | 1,430,177,915.97 | 1,419,882,594.59 |
| Other equity instrument investments | V.11 | 1,192,927,634.58 | 1,193,958,879.05 |
| Other non-current financial assets | |||
| Investment properties | V.12 | 6,191,475.43 | 6,191,475.43 |
| Fixed assets | V.13 | 5,203,199,498.59 | 5,265,200,110.91 |
| Construction in progress | V.14 | 942,008,555.30 | 811,300,068.96 |
| Productive biological assets | |||
| Oil & gas assets | |||
| Right-of-use assets | V.15 | 40,253,482.25 | 41,843,133.97 |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Intangible assets | V.16 | 747,107,448.45 | 802,115,125.75 |
| Development cost | V.17 | 428,365,307.98 | 428,284,884.17 |
| Goodwill | V.18 | 636,339,503.82 | 614,468,698.73 |
| Long-term prepaid expenses | V.19 | 283,004,625.91 | 277,867,716.95 |
| Deferred tax assets | V.20 | 523,128,551.94 | 533,861,743.26 |
| Other non-current assets | V.21 | 1,338,462,703.49 | 1,156,772,182.99 |
| Total non-current assets | 12,771,166,703.71 | 12,551,746,614.76 | |
| Total assets | 36,241,438,930.34 | 35,729,253,651.41 | |
| Current liabilities: | |||
| Short-term loans | V.22 | 2,126,000,000.00 | 2,126,050,615.06 |
| Financial liabilities held for trading | V.23 | 21,644,248.86 | 755,634.43 |
| Notes payable | V.24 | 1,729,003,530.95 | 1,635,906,989.22 |
| Accounts payable | V.25 | 824,340,189.33 | 943,905,580.91 |
| Receipts in advance | |||
| Contract liabilities | V.26 | 92,547,832.12 | 292,977,730.74 |
| Employee benefits payable | V.27 | 429,497,292.92 | 573,010,571.46 |
| Taxes payable | V.28 | 291,260,187.96 | 337,702,273.73 |
| Other payables | V.29 | 4,070,004,397.43 | 3,680,334,360.88 |
| Including: Interests payables | |||
| Dividends payables | 439,505,017.15 | 12,252,074.84 | |
| Liabilities held-for-sale | |||
| Non-current liabilities due within one year | V.30 | 62,798,499.68 | 63,077,260.98 |
| Other current liabilities | V.31 | 89,741,502.82 | 101,276,714.35 |
| Total current liabilities | 9,736,837,682.07 | 9,754,997,731.76 | |
| Non-current liabilities: | |||
| Long-term loans | V.32 | 3,963,263,438.94 | 3,230,844,042.88 |
| Bonds payable | |||
| Lease liabilities | V.33 | 17,678,294.69 | 23,482,486.07 |
| Long-term payables | |||
| Long-term payroll payable | |||
| Estimated liabilities | |||
| Deferred income | V.34 | 426,374,081.37 | 384,537,267.55 |
| Deferred tax liabilities | V.20 | 240,208,214.99 | 231,164,425.48 |
| Other non-current liabilities | V.35 | 90,000,000.00 | 84,000,000.00 |
| Total non-current liabilities | 4,737,524,029.99 | 3,954,028,221.98 | |
| Total liabilities | 14,474,361,712.06 | 13,709,025,953.74 | |
| shareholders' equity | |||
| Share capital | V.36 | 1,929,189,374.00 | 1,929,189,374.00 |
| Other equity instruments | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | V.37 | 2,314,216,904.87 | 2,343,693,215.99 |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Less: Treasury shares | V.38 | 717,135,581.08 | 347,176,561.29 |
| Other comprehensive income | V.39 | 35,886,298.52 | 4,704,473.53 |
| Special reserve | |||
| Surplus reserve | V.40 | 734,766,581.50 | 734,766,581.50 |
| Undistributed profits | V.41 | 8,937,259,650.16 | 8,456,643,326.82 |
| Total shareholders' equity attributable to the parent | 13,234,183,227.97 | 13,121,820,410.55 | |
| Minority shareholder's equity | 8,532,893,990.31 | 8,898,407,287.12 | |
| Total shareholders' equity | 21,767,077,218.28 | 22,020,227,697.67 | |
| Total liabilities and shareholders' equity (or shareholder's equity) | 36,241,438,930.34 | 35,729,253,651.41 |
Person-in-charge of the Company:
Zhu Baoguo
Person-in-charge of theCompany’s accounting work:
Qiu Qingfeng
Person-in-charge of the accountingdepartment: Qiu Qingfeng
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Balance Sheet of the Parent Company
30 June 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
| Item | Note | 30 June 2023 | 31 December 2022 |
| Current assets: | |||
| Cash and bank balances | 1,987,536,896.86 | 3,148,933,185.29 | |
| Financial assets held for trading | |||
| Notes receivable | 250,442,507.70 | 249,617,024.89 | |
| Accounts receivable | 244,301,554.81 | 291,630,857.74 | |
| Receivable financing | |||
| Prepayments | 51,899,253.54 | 542,966,676.99 | |
| Other receivables | 1,157,913,625.25 | 785,307,024.78 | |
| Including: Interests receivables | |||
| Dividends receivables | 926,892,488.80 | 544,999,500.00 | |
| Inventories | 26,487,443.91 | 63,656,837.97 | |
| Contract assets | |||
| Assets held-for-sale | |||
| Non-current assets due within one year | 55,066,666.67 | 54,048,611.11 | |
| Other current assets | |||
| Total current assets | 3,773,647,948.74 | 5,136,160,218.77 | |
| Non-current assets: | |||
| Debt investment | |||
| Other debt investment | |||
| Long-term receivables | |||
| Long-term equity investment | 3,560,411,562.84 | 3,524,184,512.63 | |
| Other equity instrument investment | 160,833,887.86 | 141,562,064.27 | |
| Other non-current financial assets | |||
| Investment properties | 6,191,475.43 | 6,191,475.43 | |
| Fixed assets | 45,166,334.04 | 46,410,672.12 | |
| Construction in progress | 18,820,158.10 | 15,330,867.65 | |
| Productive biological assets | |||
| Oil & gas assets | |||
| Right-of-use assets | 5,505,524.52 | 7,570,096.21 | |
| Intangible assets | 18,553,395.99 | 20,154,211.97 | |
| Development cost | 132,361,980.23 | 92,797,615.87 | |
| Goodwill | |||
| Long-term prepaid expenses | 382,796.81 | 552,795.74 | |
| Deferred income tax assets | 87,900,288.11 | 88,792,276.83 | |
| Other non-current assets | 1,029,681,135.02 | 815,024,705.98 | |
| Total non-current assets | 5,065,808,538.95 | 4,758,571,294.70 | |
| Total assets | 8,839,456,487.69 | 9,894,731,513.47 | |
| Current liabilities: | |||
| Short-term loans | 200,000,000.00 | 100,091,666.67 | |
| Financial liabilities held for trading | |||
| Notes payable | 617,708,743.41 | 924,199,480.81 | |
| Accounts payable | 134,395,769.85 | 257,832,649.19 | |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Receipts in advance | |||
| Contract liabilities | 11,304,465.08 | 53,648,681.36 | |
| Employee benefits payable | 129,575,813.68 | 139,895,738.09 | |
| Taxes payable | 17,071,042.80 | 10,549,309.54 | |
| Other payables | 862,895,522.46 | 1,303,649,356.48 | |
| Including: Interests payables | |||
| Dividends payables | 175,574,399.22 | ||
| Liabilities held-for-sale | |||
| Non-current liabilities due within one year | 43,190,338.37 | 47,152,440.47 | |
| Other current liabilities | 1,026,096.80 | 3,007,795.91 | |
| Total current liabilities | 2,017,167,792.45 | 2,840,027,118.52 | |
| Non-current liabilities: | |||
| Long-term loans | 1,141,000,000.00 | 1,154,000,000.00 | |
| Bonds payable | |||
| Lease liabilities | 1,438,947.60 | 3,729,020.22 | |
| Long-term payables | |||
| Long-term payroll payable | |||
| Estimated liabilities | |||
| Deferred income | 20,091,800.00 | 20,534,000.00 | |
| Deferred tax liabilities | 1,349,792.53 | 997,675.94 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 1,163,880,540.13 | 1,179,260,696.16 | |
| Total liabilities | 3,181,048,332.58 | 4,019,287,814.68 | |
| shareholder's equity: | |||
| Share capital | 1,929,189,374.00 | 1,929,189,374.00 | |
| Other equity instruments | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | 1,693,043,177.98 | 1,678,414,507.96 | |
| Less: Treasury shares | 717,135,581.08 | 347,176,561.29 | |
| Other comprehensive income | 107,626.77 | 726,576.72 | |
| Special reserve | |||
| Surplus reserve | 646,164,633.12 | 646,164,633.12 | |
| Undistributed profits | 2,107,038,924.32 | 1,968,125,168.28 | |
| Total shareholders' equity attributable to the parent | 5,658,408,155.11 | 5,875,443,698.79 | |
| Total liabilities and shareholders' equity | 8,839,456,487.69 | 9,894,731,513.47 | |
Person-in-charge of the Company:
Zhu Baoguo
Person-in-charge of theCompany’s accounting work:
Qiu Qingfeng
Person-in-charge of the accountingdepartment: Qiu Qingfeng
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Consolidated Income StatementJanuary to June, 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
| Item | Note | First half of 2023 | First half of 2022 |
| I. Total Revenues | V.42 | 8,719,741,599.23 | 8,564,945,285.55 |
| Including: Operating revenues | V.42 | 8,719,741,599.23 | 8,564,945,285.55 |
| II. Total operating costs | 6,852,636,758.88 | 6,767,945,476.66 | |
| Including: Cost of operations | V.42 | 3,273,420,227.03 | 3,054,392,703.20 |
| Taxes and surcharges | V.43 | 102,706,433.95 | 94,322,638.31 |
| Selling expenses | V.44 | 2,399,063,230.20 | 2,512,369,792.45 |
| Administrative expenses | V.45 | 434,867,895.32 | 529,828,311.93 |
| Research and development expenses | V.46 | 765,166,559.76 | 707,433,078.44 |
| Financial expenses | V.47 | -122,587,587.38 | -130,401,047.67 |
| Including: Interest expenses | 70,061,146.58 | 60,979,386.68 | |
| Interest income | 135,947,800.19 | 117,501,999.50 | |
| Add: Other income | V.48 | 125,925,260.26 | 97,242,254.03 |
| Investment income("-" for loss） | V.49 | 56,854,039.45 | 51,014,159.00 |
| Including: Gains from investments in associates and joint ventures | 44,824,481.29 | 41,208,487.80 | |
| Gain from derecognition of financial assets at amortized cost（"-" for loss） | |||
| Gain from net exposure of hedging("-" for loss） | |||
| Gains from changes in fair values("-" for loss） | V.50 | -39,314,888.38 | -95,479,537.15 |
| Credit impairment loss("-" for loss） | V.51 | -22,209,391.69 | -2,805,440.83 |
| Assets impairment loss("-" for loss） | V.52 | -30,171,594.37 | -27,834,495.93 |
| Gains from disposal of assets("-" for loss） | V.53 | -342,359.46 | -510,518.91 |
| III. Operating profit("-" for loss） | 1,957,845,906.16 | 1,818,626,229.10 | |
| Add: Non-operating income | V.54 | 1,757,450.18 | 4,470,914.88 |
| Less: Non-operating expenses | V.55 | 7,370,028.41 | 6,741,606.85 |
| IV. Total profit("-" for loss） | 1,952,233,327.93 | 1,816,355,537.13 | |
| Less: Income tax expenses | V.56 | 324,663,062.10 | 271,175,329.55 |
| V. Net profit("-" for net loss） | 1,627,570,265.83 | 1,545,180,207.58 | |
| (I) Classified by continuity of operations： | |||
| Including: Net profit from continuing operations（"-" for net loss） | 1,627,570,265.83 | 1,545,180,207.58 | |
| Net profit from discontinued operations（"-" for net loss） | |||
| (II) Classified ownership： | |||
| Including: Net profit attributable to shareholders of the parent（"-" for net loss） | 815,434,734.90 | 801,268,519.50 | |
| Net profit attributable to minority interests（"-" for net loss） | 812,135,530.93 | 743,911,688.08 | |
| VI. Other comprehensive income – net of tax | 30,080,133.76 | -25,063,137.51 | |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| (I) Other comprehensive income attributable to shareholders of the parent, net of tax | 31,181,824.98 | -42,998,857.20 | |
| 1. Other comprehensive income not reclassified into profit or loss subsequently | -11,322,857.19 | -79,078,918.80 | |
| (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 | -11,322,857.19 | -80,188,888.79 | |
| (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 | 42,504,682.17 | 36,080,061.60 | |
| (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 | |||
| (6) Translation of foreign currency financial statements | 42,504,682.17 | 36,080,061.60 | |
| (7) Others | |||
| (II) Other comprehensive income attributable to minority interests, net of tax | -1,101,691.23 | 17,935,719.69 | |
| VII. Total comprehensive income | 1,657,650,399.59 | 1,520,117,070.07 | |
| (I) Total comprehensive income attributable to shareholders of the parent | 846,616,559.88 | 758,269,662.30 | |
| (II)Total comprehensive income attributable to minority interests | 811,033,839.70 | 761,847,407.77 | |
| Ⅷ. Earnings per share | |||
| (I) Basic earnings per share | 0.4264 | 0.4235 | |
| (II) Diluted earnings per share | 0.4251 | 0.4232 |
Person-in-charge of the Company:
Zhu Baoguo
Person-in-charge of theCompany’s accounting work:
Qiu Qingfeng
Person-in-charge of the accountingdepartment: Qiu Qingfeng
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Income Statement of the Parent Company
January to June, 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
| Item | Note | First half of 2023 | First half of 2022 |
| I. Total Revenues | 1,089,533,681.48 | 1,177,100,137.17 | |
| Less: Cost of operations | 562,374,480.65 | 788,887,001.95 | |
| Taxes and surcharges | 9,684,525.66 | 7,310,543.59 | |
| Selling expenses | 401,053,309.98 | 347,794,247.66 | |
| Administrative expenses | 43,383,375.37 | 106,346,117.92 | |
| Research and development expenses | 29,929,993.32 | 30,185,363.06 | |
| Financial expenses | -58,939,252.75 | -7,269,224.74 | |
| Including: Interest expenses | 17,039,482.75 | 7,190,074.41 | |
| Interest income | 52,611,530.57 | 15,043,357.51 | |
| Add: Other income | 2,329,988.11 | 874,278.66 | |
| Investment income("-" for loss） | 381,330,039.01 | 315,106,835.25 | |
| Including: Gains from investments in associates and joint ventures | -562,949.79 | 576,377.39 | |
| Gain from derecognition of financial assets at amortized cost（"-" for loss） | |||
| Gain from net exposure of hedging("-" for loss） | |||
| Gains from changes in fair values("-" for loss） | |||
| Credit impairment loss("-" for loss） | 768,574.70 | 1,514,532.04 | |
| Assets impairment loss("-" for loss） | |||
| Gain from disposal of assets("-" for loss） | |||
| II. Operating profit("-" for loss） | 486,475,851.07 | 221,341,733.68 | |
| Add: Non-operating income | 25,293.97 | 94,336.14 | |
| Less: Non-operating expenses | 36,018.67 | 23,452.93 | |
| III. Total profit("-" for loss） | 486,465,126.37 | 221,412,616.89 | |
| Less: Income tax expenses | 10,759,313.57 | -22,775,639.86 | |
| IV. Net profit("-" for net loss） | 475,705,812.80 | 244,188,256.75 | |
| (I) Net profit from continuing operations（"-" for net loss） | 475,705,812.80 | 244,188,256.75 | |
| (II) Net profit from discontinued operations（"-" for net loss） | |||
| V. Other comprehensive income, net of tax | -618,949.95 | -80,895,061.60 | |
| (I). Other comprehensive income not reclassified into profit or loss subsequently | -618,949.95 | -80,895,061.60 | |
| 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 | -618,949.95 | -80,895,061.60 | |
| 4. Changes in fair value of the Company's own credit risks |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| (II) Other comprehensive income that will be reclassified into profit or 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 | |||
| 6. Translation of foreign currency financial statements | |||
| 7. Others | |||
| VI. Total comprehensive income | 475,086,862.85 | 163,293,195.15 | |
| VII. Earnings per share | |||
| (I) Basic earnings per share | |||
| (II) Diluted earnings per share |
Person-in-charge of theCompany: Zhu Baoguo
Person-in-charge of theCompany’s accountingwork: Qiu Qingfeng
Person-in-charge of theaccounting department:
Qiu Qingfeng
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Consolidated Cash Flow Statement
January to June, 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
| Item | Note | First half of 2023 | First half of 2022 |
| I. Cash flows from operating activities： | |||
| Cash received from sales of goods or rendering of services | 8,906,333,555.96 | 9,266,508,015.60 | |
| Tax refund received | 90,738,446.12 | 167,531,739.91 | |
| Other cash received relating to operating activities | V.57 | 389,179,917.76 | 320,066,884.87 |
| Sub-total of cash inflows | 9,386,251,919.84 | 9,754,106,640.38 | |
| Cash paid for goods and services | 3,008,508,020.45 | 2,686,391,136.11 | |
| Cash paid to and on behalf of employees | 1,280,962,434.80 | 1,283,240,953.21 | |
| Payments of all types of taxes | 1,016,910,155.51 | 862,562,844.21 | |
| Other cash paid relating to operating activities | V.57 | 2,822,663,623.54 | 3,018,958,482.06 |
| Sub-total of cash outflows | 8,129,044,234.30 | 7,851,153,415.59 | |
| Net cash flows from operating activities | 1,257,207,685.54 | 1,902,953,224.79 | |
| II. Cash flows from investing activities： | |||
| Cash received from disposal of investments | 374,334,588.68 | 216,970,980.42 | |
| Cash received from returns on investments | 26,682,920.81 | 121,544,073.53 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 335,824.60 | 931,662.20 | |
| Cash received from disposal of subsidiaries and other business units | |||
| Other cash received relating to investing activities | V.57 | 297,725,238.13 | 12,984,186.55 |
| Sub-total of cash inflows | 699,078,572.22 | 352,430,902.70 | |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 541,421,314.72 | 739,956,798.62 | |
| Cash paid to acquire investments | 429,194,136.52 | 30,338,557.45 | |
| Cash paid to acquire subsidiaries and other business units | 22,461,951.59 | ||
| Other cash paid relating to investing activities | V.57 | 215,261,350.77 | 15,394,931.82 |
| Sub-total of cash outflows | 1,208,338,753.60 | 785,690,287.89 | |
| Net cash flows from investing activities | -509,260,181.38 | -433,259,385.19 | |
| III. Cash flows from financing activities ： | |||
| Cash received from capital contribution | 6,700,000.00 | 61,420,564.63 | |
| Including: Cash received from investment by minority interests of subsidiaries | 6,700,000.00 | 22,444,277.37 | |
| Cash received from borrowings | 2,272,549,701.83 | 3,620,437,809.48 | |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Cash received relating to other financing activities | V.57 | 20,000,000.00 | 3,124,846.38 |
| Sub-total of cash inflows | 2,299,249,701.83 | 3,684,983,220.49 | |
| Cash repayments of amounts borrowed | 1,435,273,289.94 | 2,583,795,608.09 | |
| Cash payments for interest expenses and distribution of dividends or profits | 1,119,156,231.94 | 1,219,425,266.74 | |
| Including: Dividend paid to minority interests of subsidiaries | 881,913,452.00 | 900,571,289.90 | |
| Other cash payments relating to financing activities | V.57 | 649,256,623.95 | 538,573,404.10 |
| Sub-total of cash outflows | 3,203,686,145.83 | 4,341,794,278.93 | |
| Net cash flows from financing activities | -904,436,444.00 | -656,811,058.44 | |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 82,691,655.27 | 105,379,819.98 | |
| V. Net increase in cash and cash equivalents | -73,797,284.57 | 918,262,601.14 | |
| Add: Opening balance of cash and cash equivalent | 14,178,465,686.40 | 11,697,518,141.18 | |
| VI. Closing balance of cash and cash equivalents | 14,104,668,401.83 | 12,615,780,742.32 |
Person-in-charge of the Company:
Zhu Baoguo
Person-in-charge of theCompany’s accounting work: QiuQingfeng
Person-in-charge of the accountingdepartment: Qiu Qingfeng
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Cash Flow Statement of Parent CompanyJanuary to June, 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
| Item | Note | First half of 2023 | First half of 2022 |
| I. Cash flows from operating activities： | |||
| Cash received from sales of goods or rendering of services | 1,186,543,577.01 | 1,627,134,774.34 | |
| Tax refund received | |||
| Other cash received relating to operating activities | 675,490,295.47 | 1,361,915,765.88 | |
| Sub-total of cash inflows | 1,862,033,872.48 | 2,989,050,540.22 | |
| Cash paid for goods and services | 520,976,342.45 | 1,220,271,835.02 | |
| Cash paid to and on behalf of employees | 110,926,580.85 | 171,079,267.11 | |
| Payments of all types of taxes | 78,549,138.25 | 59,188,798.29 | |
| Other cash paid relating to operating activities | 1,608,207,704.80 | 747,239,926.63 | |
| Sub-total of cash outflows | 2,318,659,766.35 | 2,197,779,827.05 | |
| Net cash flows from operating activities | -456,625,893.87 | 791,270,713.17 | |
| II. Cash flows from investing activities： | |||
| Cash received from disposal of investments | 216,970,980.42 | ||
| Cash received from returns on investments | 403,351,191.73 | ||
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 10,500.00 | 13,000.00 | |
| Cash received from disposal of subsidiaries and other business units | |||
| Other cash received relating to investing activities | 291,590,000.00 | 158,470.77 | |
| Sub-total of cash inflows | 291,600,500.00 | 620,493,642.92 | |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 3,629,530.81 | 3,688,331.00 | |
| Cash paid to acquire investments | 56,790,000.00 | ||
| Cash paid to acquire subsidiaries and other business units | |||
| Other cash paid relating to investing activities | 200,000,000.00 | ||
| Sub-total of cash outflows | 260,419,530.81 | 3,688,331.00 | |
| Net cash flows from investing activities | 31,180,969.19 | 616,805,311.92 | |
| III. Cash flows from financing activities ： | |||
| Cash received from capital contribution | 38,976,287.26 | ||
| Cash received from borrowings | 300,000,000.00 | 750,000,000.00 | |
| Cash received relating to other financing activities | 2,214,629.88 | ||
| Sub-total of cash inflows | 300,000,000.00 | 791,190,917.14 | |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Cash repayments of amounts borrowed | 217,000,000.00 | 650,000,000.00 | |
| Cash payments for interest expenses and distribution of dividends or profits | 178,476,531.68 | 281,112,849.39 | |
| Other cash payments relating to financing activities | 370,702,308.51 | 520,332,751.22 | |
| Sub-total of cash outflows | 766,178,840.19 | 1,451,445,600.61 | |
| Net cash flows from financing activities | -466,178,840.19 | -660,254,683.47 | |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 20,771,674.01 | 1,150.86 | |
| V.Net increase in cash and cash equivalents | -870,852,090.86 | 747,822,492.48 | |
| Add: Opening balance of cash and cash equivalent | 2,858,062,020.22 | 1,370,906,734.13 | |
| VI. Closing balance of cash and cash equivalents | 1,987,209,929.36 | 2,118,729,226.61 |
Person-in-charge of the Company:
Zhu Baoguo
Person-in-charge of theCompany’s accounting work: QiuQingfeng
Person-in-charge of the accountingdepartment: Qiu Qingfeng
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Consolidated Statement of Changes in Owner's Equity
January to June, 2023Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
| Item | First half of 2023 | |||||||||||||
| Owner's equity attributable to the parent company | Minority interests | Total shareholders' equity | ||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profits | Subtotal | |||||
| Preferred share | Perpetual bonds | Others | ||||||||||||
| I.Balance at end of previous year | 1,929,189,374.00 | 2,343,693,215.99 | 347,176,561.29 | 4,704,473.53 | 734,766,581.50 | 8,456,643,326.82 | 13,121,820,410.55 | 8,898,407,287.12 | 22,020,227,697.67 | |||||
| Add: Changes in accounting policies | ||||||||||||||
| Correction of prior period errors | ||||||||||||||
| Business combination under common control | ||||||||||||||
| Others | ||||||||||||||
| II. Balance at beginning of period | 1,929,189,374.00 | 2,343,693,215.99 | 347,176,561.29 | 4,704,473.53 | 734,766,581.50 | 8,456,643,326.82 | 13,121,820,410.55 | 8,898,407,287.12 | 22,020,227,697.67 | |||||
| III. Movement over the period（"-" for loss） | -29,476,311.12 | 369,959,019.79 | 31,181,824.98 | 480,616,323.34 | 112,362,817.41 | -365,513,296.81 | -253,150,479.39 | |||||||
| (I)Total comprehensive income | 31,181,824.98 | 815,434,734.90 | 846,616,559.88 | 811,033,839.70 | 1,657,650,399.59 | |||||||||
| (II)Capital contribution or reduction from shareholders | 14,628,670.02 | 369,959,019.79 | -355,330,349.77 | -73,940,616.66 | -429,270,966.43 | |||||||||
| 1.Capital contribution from ordinary shareholders | 369,959,019.79 | -369,959,019.79 | 6,700,000.00 | -363,259,019.79 | ||||||||||
| 2. Capitals invested by other equity instrument holders | ||||||||||||||
| 3. Increase in shareholders' equity resulted from share-based payments | 14,628,670.02 | 14,628,670.02 | 14,628,670.02 | |||||||||||
| 4. Others | -80,640,616.66 | -80,640,616.66 | ||||||||||||
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| (III) Appropriation of profits | -336,792,056.76 | -336,792,056.76 | -1,123,591,995.09 | -1,460,384,051.85 | ||||||||||
| 1.Transfer to surplus reserve | ||||||||||||||
| 2.Transfer to general risk reserve | ||||||||||||||
| 3.Distributions to shareholders | -336,792,056.76 | -336,792,056.76 | -1,123,591,995.09 | -1,460,384,051.85 | ||||||||||
| 4.Others | ||||||||||||||
| (IV) Transfer within shareholders' equity | 1,973,645.20 | 1,973,645.20 | 2,434,430.12 | 4,408,075.32 | ||||||||||
| 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 | 1,973,645.20 | 1,973,645.20 | 2,434,430.12 | 4,408,075.32 | ||||||||||
| 6.Others | ||||||||||||||
| (V)Specific reserve | ||||||||||||||
| 1.Appropriation for the period | ||||||||||||||
| 2.Used in the period（"-" for loss） | ||||||||||||||
| (VI) Others | -44,104,981.14 | -44,104,981.14 | 18,551,045.12 | -25,553,936.02 | ||||||||||
| IV. Balance at end of period | 1,929,189,374.00 | 2,314,216,904.87 | 717,135,581.08 | 35,886,298.52 | 734,766,581.50 | 8,936,012,274.69 | 13,234,183,227.97 | 8,528,725,362.28 | 21,767,077,218.28 |
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| Item | First half of 2022 | |||||||||||||
| Owner's equity attributable to the parent company | Minority shareholder's equity | Total shareholders' equity | ||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profits | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | ||||||||||||
| I. Balance at end of previous year | 1,907,727,908.00 | 2,265,357,311.92 | 222,644,454.50 | 5,387,545.97 | 640,821,179.08 | 7,223,644,166.22 | 11,820,293,656.69 | 8,359,317,322.63 | 20,179,610,979.32 | |||||
| Add: Changes in accounting policies | ||||||||||||||
| Correction of prior period errors | ||||||||||||||
| Business combination under common control | ||||||||||||||
| Others | ||||||||||||||
| II. Balance at beginning of period | 1,907,727,908.00 | 2,265,357,311.92 | 222,644,454.50 | 5,387,545.97 | 640,821,179.08 | 7,223,644,166.22 | 11,820,293,656.69 | 8,359,317,322.63 | 20,179,610,979.32 | |||||
| III. Movement over the year（"-" for loss） | 4,812,759.00 | 51,003,487.03 | 520,332,751.22 | -42,998,857.20 | 8,617,763.68 | 601,270,760.95 | 102,373,162.24 | -181,707,712.31 | -79,334,550.07 | |||||
| (I)Total comprehensive income | -42,998,857.20 | 801,268,519.50 | 758,269,662.30 | 761,847,407.77 | 1,520,117,070.07 | |||||||||
| (II)Capital contribution or reduction from shareholders | 4,812,759.00 | 34,163,528.26 | 520,332,751.22 | -481,356,463.96 | 16,410,217.23 | -464,946,246.73 | ||||||||
| 1.Capital contribution from ordinary shareholders | 4,812,759.00 | 34,163,528.26 | 520,332,751.22 | -481,356,463.96 | 16,410,217.23 | -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 | ||||||||||
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| 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' equity | 8,617,763.68 | 77,559,873.10 | 86,177,636.78 | 86,177,636.78 | ||||||||||
| 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 | 8,617,763.68 | 77,559,873.10 | 86,177,636.78 | 86,177,636.78 | ||||||||||
| 6.Others | ||||||||||||||
| (V) Specific reserve | ||||||||||||||
| 1.Appropriation for the period | ||||||||||||||
| 2.Used in the period（"-" for loss） | ||||||||||||||
| (VI) Others | 16,839,958.77 | 16,839,958.77 | 7,285,952.59 | 24,125,911.36 | ||||||||||
| IV. Balance at end of period | 1,912,540,667.00 | 2,316,360,798.95 | 742,977,205.72 | -37,611,311.23 | 649,438,942.76 | 7,824,914,927.17 | 11,922,666,818.93 | 8,177,609,610.32 | 20,100,276,429.25 |
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: QiuQingfeng
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Statement of Changes in Owner's Equity of the Parent Company
January to June, 2023Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
| Item | First half of 2022 | ||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Total shareholders' equity | |||
| Preferred share | Perpetual bonds | Others | |||||||||
| I. Balance at end of previous year | 1,929,189,374.00 | 1,678,414,507.96 | 347,176,561.29 | 726,576.72 | 646,164,633.12 | 1,968,125,168.28 | 5,875,443,698.79 | ||||
| Add: Changes in accounting policies | |||||||||||
| Correction of errors | |||||||||||
| Others | |||||||||||
| II. Balance at beginning of period | 1,929,189,374.00 | 1,678,414,507.96 | 347,176,561.29 | 726,576.72 | 646,164,633.12 | 1,968,125,168.28 | 5,875,443,698.79 | ||||
| III. Movement over the period（"-" for loss） | 14,628,670.02 | 369,959,019.79 | -618,949.95 | 138,913,756.04 | -217,035,543.68 | ||||||
| (I) Total comprehensive income | -618,949.95 | 475,705,812.80 | 475,086,862.85 | ||||||||
| (II) Capital contribution or reduction from shareholders | 14,628,670.02 | 369,959,019.79 | - | -355,330,349.77 | |||||||
| 1.Capital contribution from shareholders | 369,959,019.79 | -369,959,019.79 | |||||||||
| 2.Capitals invested by other equity instrument holders | |||||||||||
| 3.Increase in shareholders' equity resulted from share-based payments | 14,628,670.02 | 14,628,670.02 | |||||||||
| 4. Others | |||||||||||
| (III) Appropriation of profits | -336,792,056.76 | -336,792,056.76 | |||||||||
| 1.Transfer to surplus reserve | |||||||||||
| 2.Distributions to shareholders | -336,792,056.76 | -336,792,056.76 | |||||||||
| 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) Others | |||||||||||
| IV. Balance at end of period | 1,929,189,374.00 | 1,693,043,177.98 | 717,135,581.08 | 107,626.77 | - | 646,164,633.12 | 2,107,038,924.32 | 5,658,408,155.11 | |||
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
| tem | First half of 2022 | ||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Total shareholders' equity | |||
| Preferred share | Perpetual bonds | Others | |||||||||
| I. Balance at end of previous year | 1,907,727,908.00 | 1,605,482,128.64 | 222,644,454.50 | 77,015,953.08 | 552,219,230.70 | 1,400,174,178.18 | 5,319,974,944.10 | ||||
| Add: Changes in accounting policies | |||||||||||
| Correction of errors | |||||||||||
| Others | |||||||||||
| II. Balance at beginning of year | 1,907,727,908.00 | 1,605,482,128.64 | 222,644,454.50 | 77,015,953.08 | 552,219,230.70 | 1,400,174,178.18 | 5,319,974,944.10 | ||||
| III. Movement over the period（"-" for loss） | 4,812,759.00 | 36,426,888.30 | 520,332,751.22 | -80,895,061.60 | 8,617,763.68 | 44,190,498.20 | -507,179,903.64 | ||||
| (I) Total comprehensive income | -80,895,061.60 | 244,188,256.75 | 163,293,195.15 | ||||||||
| (II) Capital contribution or reduction from shareholders | 4,812,759.00 | 34,163,528.26 | 520,332,751.22 | -481,356,463.96 | |||||||
| 1.Capital contribution from shareholders | 4,812,759.00 | 34,163,528.26 | 520,332,751.22 | -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). Profit distribution | -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 | 8,617,763.68 | 77,559,873.10 | 86,177,636.78 | ||||||||
| 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 | 8,617,763.68 | 77,559,873.10 | 86,177,636.78 | ||||||||
| 6.Others | |||||||||||
| (V) Specific reserve | |||||||||||
| 1.Appropriation for the period | |||||||||||
| 2.Used in the period（"-" for loss） | |||||||||||
| (VI) Others | 2,263,360.04 | 2,263,360.04 | |||||||||
| IV. Balance at end of period | 1,912,540,667.00 | 1,641,909,016.94 | 742,977,205.72 | -3,879,108.52 | 560,836,994.38 | 1,444,364,676.38 | 4,812,795,040.46 | ||||
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: QiuQingfeng
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/A
The Company is formerly known as Shenzhen Aimier Food Co., Ltd. (深圳爱迷尔食品有限公司), wasa Sino-foreign joint venture officially established on 18 December 1992 with the approval fromShenzhen Administration for Industry and Commerce.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 toissue domestically listed shares (A shares) to the public. On 8 June 2001, shares of the Company werelisted and traded on Shanghai Stock Exchange.As of 30 June 2023, the total share capital of the Company was RMB 1,929,189,374 and the total numberof shares of the Company was 1,929,189,374. The controlling shareholder of the Company is ShenzhenBaiyeyuan Investment Co., Ltd. (深圳市百业源投资有限公司), and the ultimate controlling party isZhu 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 pharmaceuticalproducts and healthcare products, which covered drug preparation products, active pharmaceuticalingredients (“APIs”) and intermediates, diagnostic reagents and equipment as well as healthcareproducts.
2. Scope of consolidated financial statements
√Applicable □N/A
The information of subsidiaries included in the scope of consolidation for the first six months of 2023refer to Note VII “Equity in other entities” and the information of the changes in scope of consolidationduring 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/A
The financial statements have been prepared in accordance with the Accounting Standards for BusinessEnterprises issued by the Ministry of Finance of People’s Republic of China (“MOF”) and its applicationguidance, interpretations and the other related provisions (collectively, the “Accounting Standards for
Business Enterprises”). In addition, the Company also discloses relevant financial information inaccordance with the Information Disclosure and Presentation Rules for Companies Offering Securitiesto the Public No. 15 – General Provisions on Financial Reporting (2014 Revision) issued by the ChinaSecurities 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 financial statements are generally measured at historical cost. Non-current assets held for sale arestated at the lower of fair value less estimated selling costs and their original carrying amount if theyqualify as held for sale. In case of asset impairment, the Company shall make provisions for impairmentin accordance with applicable provisions.III Significant Accounting Policies and Accounting EstimatesSpecific accounting policies and accounting estimate tips:
√Applicable □N/A
The Company determines the depreciation of fixed assets, amortisation of intangible assets,capitalisation condition of R&D expenses and revenue recognition policies on the basis of its productionand operation characteristics. Details of accounting policies are set out in Note III.16, Note III.20, NoteIII.21 and Note III.28.
1. Statement of compliance with the Accounting Standards for Business EnterprisesThe financial statements comply with the Accounting Standards for Business Enterprises, which gave atrue and complete view of the consolidated and the Company's financial positions as at June 30, 2023,and the consolidated and the Company’s operating results and the consolidated and the Company’s cashflows and other relevant information for the 6 months period ending June 30, 2023.
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/A
The Company’s operating cycle is 12 months.
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (“RMB”). Overseassubsidiaries of the Company usually recognise HK dollar, Macau Pataca and US dollar as theirfunctional currencies according to the primary economic environment of which these subsidiariesoperate. The Company prepares its financial statements in RMB.
5. Accounting treatment for business combinations involving enterprises under common controland 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 liabilitiesassumed are measured based on their carrying amounts in the consolidated financial statements of theultimate controlling party as at the combination date, except the adjustment made due to differentaccounting policies. The difference between the carrying amount of the consideration paid for thecombination and the net assets acquired is adjusted against share premium in the capital reserve, withany excess adjusted against retained earnings.Business combination involving enterprises under common control and achieved in a number oftransactionsIn the separate financial statements, the initial investment cost will be recognised at the carrying amountof the Company's share in the combined party's net assets in the consolidated financial statements of theultimate controlling party on the date of combination. The difference between the initial investment costand the sum of the carrying amount of the investment held and the carrying amount of considerationpaid for the combination at the combination date is adjusted against 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 basedon their carrying amounts in the consolidated financial statements of the ultimate controlling party as atthe combination date, except the adjustment made due to different accounting policies. The differencebetween sum of the carrying amount of the investment held and the carrying amount of the considerationpaid for the combination and the carrying amount of the net assets acquired is adjusted against sharepremium in the capital reserve, with any excess adjusted against retained earnings. For long-term equityinvestment held before the control over the combined party is obtained, profit or loss, othercomprehensive income and other changes to equity interest attributable to the owners recognised fromthe later of the acquisition of the original equity interest and the date when the combing party and thecombined party are placed under common control until the date of combination shall be offset againstretained profit at the beginning of the period of the comparative financial statements or profit or loss ofthe period respectively.
(2). Business combinations involving enterprises not under common controlFor the business combinations involving enterprises not under common control, the combination costshall be the fair value of the assets transferred, liabilities incurred or assumed, and equity securitiesissued by the acquirer for acquisition of control in the acquiree on the acquisition date. The assets,liabilities and contingent liabilities acquired or assumed on the date of acquisition are recognised at fairvalue.Where the combination cost exceeds the fair value of the acquiree's identifiable net assets in the businesscombination, the difference is recognised as goodwill and is subsequently measured at cost lessaccumulated impairment provisions. Where the combination cost is less than the fair value of theacquiree's identifiable net assets in the business combination, the difference shall be included in profitor loss for the period after review.Business combination involving enterprises not under common control and achieved in a number oftransactionsIn the separate financial statements, the initial cost of the investment is the sum of the carrying amountof the acquiree's equity investment held before the acquisition date and the additional investment coston the acquisition date. In respect of the equity investment held prior to the acquisition date, othercomprehensive income will not be recognised using equity method on the acquisition date, and such
investment will be accounted for on the same accounting treatment as direct disposal of relevant assetor liability by the investee at the time of disposal. Shareholder's equity recognised due to the changes ofother 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 equityinvestment held prior to the acquisition date is measured at fair value, the cumulative changes in fairvalue recognised in other comprehensive income shall be transferred to profit or loss for current periodwhen accounted for using cost method.In the consolidated financial statements, the combination cost is the sum of consideration paid on theacquisition date and fair value of the acquiree's equity held prior to the acquisition date. The equity ofthe acquirees held before the acquisition date is re-measured at the fair value of the equity on theacquisition date and the differences between the fair value and the carrying amount are recognised inthe income for the current period; in respect of any other comprehensive income attributable to theequity interest in the acquiree held prior to the acquisition date and any changes of other shareholder'sequity 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 ornet liabilities of defined 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 advisoryfor business combinations are recognised in profit or loss when incurred. Transaction costs of equity ordebt securities issued as the considerations of business combination are included in the initial recognitionamounts.
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 theCompany has exposures or rights to variable returns from its involvement with the investee and theability to affect those returns through power over such investee. Subsidiaries are the entities controlledby the Company (including enterprises, a dividable 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 itssubsidiaries, and are prepared by the Company in accordance with other relevant information. Inpreparing the consolidation financial statements, the Company and its subsidiaries are required to applyconsistent 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 commoncontrol in the reporting period shall be included in the scope of the consolidation of the Company fromthe date when it is under control of the ultimate controlling party, and then its operating results and cashflows will be included in the consolidated income statement and the consolidated cash flow statement,respectively.For a subsidiary or a business acquired through a business combination involving entities not undercommon control in the reporting period, its income, expenses and profits are included in the consolidatedincome statement, and its cash flows are included in the consolidated cash flow statement from theacquisition date to the end of the reporting date.
The shareholders' equity of the subsidiaries that are not attributable to the Company shall be presentedunder shareholders' equity in the consolidated balance sheet as minority interests. The portion of netprofit or loss of subsidiaries for the period attributable to minority interest is presented in theconsolidated income statement under the “profit or loss of minority interest”. When the amount of lossattributable to the minority shareholders of a subsidiary exceeds the minority shareholders' portion ofthe opening balance of owners' equity of the subsidiary, the excess amount shall be allocated againstminority interest.
(3) Purchase of the minority stake in the subsidiary
The difference between the long-term equity investments costs acquired by the purchase of minorityinterests and the share of the net assets that the subsidiaries have to continue to calculate from the dateof purchase or the date of consolidation in proportion to the new shareholding ratio, and the differencebetween the disposal of the equity investment without losing control over its subsidiary and the disposalof the long-term equity investment corresponding to the share of the net assets of the subsidiaries fromthe date of purchase or the date of consolidation, shall be adjusted to the capital reserve (or sharepremium), if the capital reserve is not sufficient, any excess will be adjusted to retained earnings.
(4) Treatment of loss of control of subsidiaries
Where the Company loses its control over the original subsidiary due to the disposal of some equityinvestment or other reasons, the remaining equity is re-measured at its fair value on the date when theCompany loses its control. The difference between the sum of the consideration acquired due to thedisposal of the equity and the fair value of the remaining equity, and the Company's share in the sum ofcarrying value of net assets of the original subsidiary and goodwill calculated on an ongoing basis fromthe acquisition date based on the original shareholding proportion is recognised in the investment incomefor the current period when the control is lost.Other comprehensive income in relation to the original subsidiary's equity investment are transferred toprofit or loss for the current period when control ceases, except for those arising from re-measuring netassets or net liabilities of defined benefit plan by the investee.
(5) Treatment of disposal through several transactions until the loss of control of subsidiariesWhere the Company disposes of the equity interests in the subsidiary through several transactions untilit loses control, and the transaction terms, conditions and economic effects satisfy one or several of thefollowing circumstances, such several transactions shall be deemed as a basket of transactions inaccounting 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 intoaccount of other transactions in the series.In the separate financial statements, where the Company disposes of the equity investment in thesubsidiary through several transactions until the loss of control, and such transactions are not regardedas “a basket of transactions”, the carrying amount of the long-term equity investment involving eachdisposal will be carried forward, with the difference between the disposal price and the carrying amountof the long-term equity investment involving the disposal being accounted into the investment incomes
for the current period; where the transactions constitute “a basket of transactions”, the differencebetween 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 incomeand will be carried forward 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 thesubsidiary through several transactions until the loss of control, the measurement of the remaining equityinterest and the accounting treatment of the losses and gains of the disposal will be made with referenceto the “Treatment of loss of control of subsidiaries” as described above. For the difference between theconsideration of each disposal before the loss of the control and the carrying amount of the Company'sshare in the net assets involving the disposal of such subsidiary calculated on an on-going basis fromthe 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 othercomprehensive income and will be carried forward to the profit or loss for the current period when thecontrol is lost.
② In case the transactions are not “a basket of transactions”, such difference is accounted into thecapital reserve (or share premium) as equity, and shall not be carried forward to the profit or loss for thecurrent period when the control is lost.
7. Classification of joint arrangement and accounting treatment for joint operation
√Applicable □N/A
A joint arrangement is an arrangement jointly controlled by two or more parties. The Company's jointarrangement is classified 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 relevantassets and liabilities.The Company recognises the following items in relation to its interest in a joint operation, and makescorresponding accounting 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 thearrangements.The Company's investment in joint ventures is accounted for using the equity method according to therules of the long-term equity investment.
8. Standards for determination of cash and cash equivalents
Cash and cash equivalents of the Company include cash on hand, bank deposit readily available forpayment and those investments held by the Company that are short-term (normally due in three monthssince the acquisition date), highly liquid, readily convertible into known amounts of cash and subject toan 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 thespot exchange rates on the date of the transactions upon initial recognition.Monetary items denominated in foreign currencies are translated to functional currency at the spotexchange rate on the balance sheet date. Exchange differences arising from the differences between thespot exchange rate prevailing at the balance sheet date and those spot rates used on initial recognitionor at the previous balance sheet date are recognised in profit or loss for the current period; non-monetaryitems denominated in foreign currencies that are measured at historical cost are translated using the spotexchange rate on the transaction date. Non-monetary items denominated in foreign currencies that aremeasured at fair value are translated using the spot exchange rate on the date the fair value is 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 overseassubsidiaries, the assets and liabilities in the balance sheet are translated at the spot exchange rate at thebalance sheet date; all items except for “Retained earnings” of the shareholders' equity are translated atthe spot exchange rate on the transaction date.The revenue and expenses in profit or loss are translated at the spot exchange rate on the transactiondate.All items in the statement of cash flows are translated at the spot exchange rate on the transaction date.The effect of exchange difference on cash is adjusted and separately presented as “Effect of changes inforeign exchange rates on cash and cash equivalents” in the cash flow statement.The exchange differences arising from translation of the financial statements are presented as the “othercomprehensive income” in the shareholders' equity of the balance sheet.When the Company disposes of the overseas operation and loses control, the differences arising fromthe translation of the financial statements in foreign currency that have been presented under theshareholders' equity in the balance sheet and involving such overseas operation are carried forward tothe profit or loss for the current period in whole or in the proportion of the disposal of the overseasoperation.
10. Financial instruments
√Applicable □N/A
Financial instruments are contracts creating financial assets of a party and financial liabilities or equityinstruments of other parties.
(1) Recognition and De-recognition of financial instruments
A financial asset or financial liability is recognised when the Company becomes one of the parties undera financial instrument 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 followingconditions of derecognition.If the current obligation of a financial liability (or a part thereof) has been discharged, the financialliability (or that part of the financial liability) will be derecognised. When the Company (as the debtor)and the lender have signed an agreement which uses a new financial liability to replace the existingfinancial liability, and the contract terms of the new financial liability are substantially different withthe original financial liability, the original financial liability shall be de-recognised, and the newfinancial 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; financialassets at fair value through other comprehensive income; and financial assets at fair value through profitor loss based on the business model for managing financial assets and their contractual cash flowcharacteristics upon initial recognition.Financial assets at amortised costThe Company shall classify financial assets that meet the following conditions and are not designatedas financial assets at fair value through profit or loss for the current period as financial assets measuredat 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 isonly the payment for principal and interest accrued on the outstanding principal.After initial recognition, these financial assets are measured at amortised cost using the effective interestmethod. Gains or losses arising from financial assets which are measured at amortised cost and not partof any hedging relationship are included 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 designatedas financial assets measured at fair value through profit or loss for the current period as financial assetsmeasured at fair value through other comprehensive incomeA. The Company's business model for managing the financial assets is both to collect contractual cashflows and to sell the financial assets;B. The terms of the financial asset contract stipulate that the cash flow generated on a specific date isonly the payment for principal and interest accrued on the outstanding principal
After initial recognition, these financial assets are subsequently measured at fair value. Interest,impairment losses or gains and exchange losses and gains calculated using the effective interest methodare recognised in profit or loss for the current period, while other gains or losses are recognised in othercomprehensive income. The cumulative profit or loss previously included in other comprehensiveincome will be transferred to the profit or loss for the current period upon derecognition of the financialassets.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 throughother comprehensive income, the Company classifies all other financial assets as financial assetsmeasured at fair value through profit or loss for the current period. When initial recognition, in order toeliminate or significantly reduce accounting mismatches, the Company irrevocably designates somefinancial assets that should have been measured at amortised cost or at fair value through othercomprehensive income as financial assets at fair value through profit or loss for the current period.After initial recognition, these financial assets are subsequently measured at fair value, and the profitsor losses (including interest and dividend income) generated from which are recognised in profit or lossfor the current period, unless the financial assets are part of the hedging relationship.However, with respect to non-trading equity instrument investments, the Company may irrevocablydesignate them as financial assets measured at fair value through other comprehensive income at initialrecognition. The designation is made on the basis of individual investment, and the relevant investmentconforms to the definition of equity instruments from the issuer's point of view.After initial confirmation, financial assets are subsequently measured at fair value. Dividend incomethat meets the requirements is recognised in profit and loss, and other gains or losses and changes in fairvalue are recognised in other comprehensive gains. When derecognised, the accumulated gains or lossespreviously recognised in other comprehensive gains are transferred from other comprehensive gains toretained earnings.The business model of managing financial assets refers to how the Company manages financial assetsto generate cash flow. The business model decides whether the source of cash flow of financial assetsmanaged by the Company is to collect contract cash flow, sell financial assets or both of them. Basedon objective facts and the specific business objectives of financial assets management decided by keymanagers, the Company determines the business model of financial assets management.The Company evaluates the characteristics of the contract cash flow of financial assets to determinewhether the contract cash flow generated by the relevant financial assets on a specific date is only topay principal and interest based on the amount of unpaid principal. Among them, principal refers to thefair value of financial assets at the time of initial confirmation; interest includes the consideration oftime value of money, credit risk related to the amount of unpaid principal in a specific period, and otherbasic borrowing risks, costs and profits. In addition, the Company evaluates the terms and conditions ofthe contracts that may lead to changes in the time distribution or amount of cash flow in financial assetcontracts to determine whether they meet the requirements of the above contract cash flow'scharacteristics.Only when the Company changes its business model of managing financial assets, all the financial assetsaffected shall be reclassified on the first day of the first reporting period after the business model changes,otherwise, financial assets shall not be reclassified after initial confirmation.
Financial assets are measured at fair value on initial recognition. The relevant transaction cost offinancial assets at fair value through profit or loss is directly recognised in profit or loss for the currentperiod, and that of other types of financial assets is included in the initially recognised amount. Tradereceivables or notes receivable arising from sales of goods or rendering services, without significantfinancing component, are initially recognised based on the transaction price expected to be entitled bythe Company.
(3) Classification and measurement of financial liabilities
On initial recognition, the Company's financial liabilities are classified into financial liabilities at fairvalue through profit or loss and financial liabilities at amortised cost. For financial liabilities notclassified as financial liabilities at fair value through profit or loss, the relevant transaction costs areincluded 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 andfinancial liabilities designated at fair value through profit or loss upon initial recognition. Such financialliabilities are subsequently measured at fair value, all gains and losses arising from changes in fair valueand dividend and interest expense relative to the financial liabilities are recognised in profit or loss forthe current period.Financial liabilities at amortised costOther financial liabilities are subsequently measured at amortised cost using the effective interestmethod; gains and losses arising from derecognition or amortisation is recognised in profit or loss forthe 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 financialliabilities with other parties.
③ A contract that will or may be settled in the entity's own equity instruments and is a non-derivativefor which the entity is or may be obliged to deliver a variable number of the entity's own equityinstruments.
④ A derivative that will or may be settled other than by the exchange of a fixed amount of cash oranother 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 afterdeducting all of its liabilities.If the Company cannot unconditionally avoid fulfilling a contractual obligation by delivering cash orother 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, theCompany should consider whether the Company's equity instrument as the settlement instrument is asubstitute of cash or other financial assets or the residual interest in the assets of the Company after
deducting all of its liabilities. If the former, the tool is the Company's financial liability; if the latter, thetool 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 areinitially measured at fair value on the date of the derivative contract signed and are subsequentlymeasured at fair value. A derivative with positive fair value shall be recognised as an asset, otherwisethat with negative fair value shall be recognised as a liability. Any profit or loss arising from changes offair value and not compliance with the accounting provision of hedge shall be recognised as profit orloss for current period.For the hybrid instrument which includes embedded derivatives, where the host contract is a financialasset, requirements in relation to the classification of financial assets shall apply to the hybrid instrumentas a whole. Where the host contract is not a financial asset, and the hybrid instrument is not measuredat fair value and its changes are included in the profit and loss for the current period for accountingpurposes, there is no close relation between the embedded derivatives and the host contract in terms ofeconomic features and risks, and the instrument that has the same condition with the embeddedderivatives and exists independently meets the definition of derivatives, the embedded derivatives shallbe separated from the hybrid instrument and treated as a separate derivative financial instrument. If it isunable to separately measure the embedded derivatives upon acquisition or on the subsequent balancesheet date, the hybrid instrument shall be entirely designated as the financial assets or financial liabilitiesmeasured at fair value and whose movements are included 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 inNote III.11.
(6) Impairment of financial assets
The following items are subject to impairment accounting and recognition of loss allowances based onexpected credit losses:
A. Financial assets measured at amortised cost;B. Receivables and debt investments that are measured at fair value through other comprehensiveincome;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 whichthe transfer of financial assets does not satisfy the derecognition condition or those formed as a result ofcontinued involvement of the 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 the difference between all receivable contractual cash flows according to the contract andall cash flows expected to be received by the Company discounted to present value at the originaleffective interest rate, i.e. the present value of all cash shortfalls.
The Company takes into account reasonable and valid information on past events, current conditionsand forecasts of future economic conditions, with the risk of default as the weight, to calculate theprobabilistic weighted amount of the present value of the difference between the cash flow receivablefrom contract and the expected cash flow to be received and recognise the expected credit loss.The Company respectively measures the expected credit losses of financial instruments by differentstages. If the credit risk of the financial instrument does not increase significantly since the initialrecognition, it would be classified in Stage 1, the Company would measure loss allowance according tothe future 12-month expected credit losses. If the credit risk of a financial instrument has significantlyincreased since the initial recognition but not yet credit-impaired, it would be classified in Stage 2, theCompany 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 beclassified in Stage 3, and the Company would measure loss allowance according to the lifetime expectedcredit losses of that instrument.For financial instruments with lower credit risk on the balance sheet date, the Company assumes that itscredit risk has not increased significantly since the initial recognition, and measures loss allowanceaccording to the 12-month expected credit losses.Lifetime ECLs are the ECLs that result from all possible default event over the expected life of afinancial instrument. Future 12-month ECLs are the portion of ECL that results from default events ona financial instrument that are possible within the 12 months after the balance sheet date (or the expectedlife of the instrument, if it is less than 12 months).The maximum period considered when estimating ECLs is the maximum contractual period over whichthe Company are exposed 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, theCompany would measure the interest income by the book balance (that is, without deduction for creditallowance) and the effective interest rate. For financial instruments classified in Stage 3, the Companywould measure the interest income by the amortised cost (that is, book balance less impairmentallowance) and the effective interest rate.For notes receivable, trade receivables and contract assets, regardless whether it has significant financingcomponents or not, the Company has always measured its loss allowance at an amount equal to lifetimeexpected credit losses.If the expected credit losses of one individual financial asset cannot be estimated at a reasonable cost,the Company classifies notes receivable and trade receivables into portfolios based on credit riskcharacteristics, and measures expected credit losses on portfolios basis to determine portfolios by thefollowing 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 therisk exposures of default and lifetime expected credit losses rate with reference to the historical creditloss experience, current situation and forecasts of future economic conditions.For accounts receivables classified as portfolio, the Company measures expected credit losses throughpreparing a table of concordance between the aging of trade receivables and lifetime expected creditlosses rate with reference to the historical credit loss experience, current situation and forecasts of futureeconomic conditions.Other receivablesThe Company classifies other receivables into certain portfolios based on credit risk characteristics, andmeasures expected credit 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 leaseexpenses? Other receivables portfolio 3: Other receivables? Other receivables portfolio 4: Receivables of consolidated companiesFor other receivables classified as portfolios, the Company measures expected credit losses based on therisk exposures of default 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 portfoliosbased on credit risk characteristics, and measures expected credit losses on portfolios basis to determineportfolios 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 creditlosses based on the risk exposures of default and lifetime expected credit losses rate with reference tothe 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 transferreceivables that are classified as portfolio, the Company measures expected credit losses based on therisk exposures of default and future 12-month or lifetime expected credit losses rate.Debt investments and other debt investments
For debt investments and other debt investments, the Company measures expected credit losses basedon the nature of investments, counterparties and various types of risk exposures and the risk exposuresof default and future 12-month or lifetime 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 theinitial recognition date, the Company determines the relative changes in risk of default over the expectedlife of financial instruments and assesses whether the credit risk of financial instruments have increasedsignificantly since the initial recognition.When determine whether credit risks have significantly increased since the initial recognition, theCompany considers information that is reasonable and supportable, including forward-lookinginformation that is available without undue cost or effort. The information considered by the Companyincludes:
? 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 creditrating (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 havesignificant adverse effect on the debtors' abilities to repay to the Company.Depending on the nature of the financial instruments, the Company assesses whether credit risks havesignificantly increased on either an individual financial instrument basis or a collective financialinstrument basis. When the assessment is performed on a collective financial instrument basis, theCompany can classify the financial instruments based on the shared credit risk characteristics, such aspast due information and credit risk ratings.The Company determines that the credit risk on a financial instrument has increased significantly if it ismore than 30 days past due.Credit-impaired financial assetsThe Company assesses whether financial assets at amortised cost and debt investments measured at fairvalue through other comprehensive income are credit-impaired at balance sheet date. A financial assetis 'credit-impaired' when one or more events that have an adverse impact on the estimated future cashflows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes thefollowing 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 havinggranted 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 difficultiesPresentation of allowance for ECL
The Company re-measures the ECLs on each balance sheet date to reflect changes in the financialinstruments' credit risk since initial recognition, and the increase or reversal of the loss provision resultedtherefrom is recognised as an impairment gain or loss in profit or loss. For financial assets measured atamortised cost, the loss provision is offset against their carrying amounts in the balance sheet. For debtinvestments at FVOCI, the Company recognises the loss provision in other comprehensive income anddoes not deduct the carrying amount of the financial assets.Write-offThe gross carrying amount of a financial asset is written off (either partially or in full) to the extent thatthere is no realistic prospect of recovery. A write-off constitutes a derecognition event. This is generallythe case the Company determines that the debtor does not have assets or sources of income that couldgenerate sufficient cash flows to repay the amounts subject to the write-off. However, financial assetsthat are written off could still be subject to enforcement activities in order to comply with the Company'sprocedures for recovery of amounts due.Subsequent recoveries of an asset that was previously written off are recognised as a reversal ofimpairment in profit or loss 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 (thetransferee) other than the issuer of financial assets.The Company derecognises a financial asset only if it transfers substantially all the risks and rewards ofownership of the financial asset to the transferee; the Company should not derecognise a financial assetif it retains substantially all the risks and rewards of ownership of the financial asset.The Company neither transfers nor retains substantially all the risks and rewards of ownership, showsas the following circumstances: if the Company has forgone control over the financial assets,derecognise the financial assets and verify the assets and liabilities; if the Company retains its controlof the financial asset, the financial asset is recognised to the extent of its continuing involvement in thetransferred 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, andthe legal right can be executed at present, and the Company has a plan to settle the financial assets andfinancial liabilities at the same time or at net amount, the financial assets and financial liabilities can bepresented on the balance sheet after offsetting. Except for the above circumstances, financial assets andfinancial liabilities cannot be offset and shall be presented separately on the 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 liabilityin an orderly transaction between market participants at the measurement date.The Company measures the relevant assets or liability at fair value supposing the orderly transaction ofasset selling or liability transferring incurring in a principal market of relevant assets or liabilities. In theabsence of a principal market for the asset or liability, the Company assumes that the transaction takesplace at the most advantageous market of relevant asset or liability. A principal market (or the mostadvantageous market) is the transaction market that the Company can enter into at measurement date.
The Company implements the hypothesis used by the market participants to realise the maximumeconomic benefit in assets or liabilities pricing.If there exists an active market for the financial assets or financial liabilities, the Company uses thequotation on the active market as its fair value. For those in the absence of active market, the Companyuses valuation technique to recognise its fair value. However, under limited circumstances, the Companymay use all information about the results and operation of the investee obtained after the date of initialrecognition to determine whether cost represents fair value. Cost may represent the best estimate of fairvalue of the relevant financial asset within the scope of distribution, and such cost represents theappropriate 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 marketparticipants to put the assets into optimal use thus generating the economic benefit, or the capacity tosell assets to other market participants who can put the assets into optimal use and generate economicbenefit.The Company implements the valuation technique suitable for the current condition and supported byenough available data and other information, gives priority in use of relevant observable inputs, only theobservable inputs cannot be obtained or impracticable before using unobservable inputs.For the assets and liabilities measured or disclosed at fair value on financial statements, fair valuehierarchies are categorized into three levels as the lowest level input that is significant to the entire fairvalue measurement: Level 1: inputs are quoted prices (unadjusted) in active markets for identical assetsand liabilities. Level 2: inputs are inputs other than quoted prices included within Level 1 that areobservable for the asset or liability, either directly or indirectly. Level 3: inputs are unobservable inputsfor the asset or liability.At each balance sheet date, the Company re-evaluates the assets and liabilities recognised to be measuredat fair value on the financial statements to make sure whether conversion occurs between fair valuehierarchies.
12. Inventories
√Applicable □N/A
(1) Classification of inventories
The Company's inventories include raw materials, packaging materials, finished goods, work-in-progress, low-value consumables, subcontracting materials, inventory goods and expendablebiological assets.
(2) Method of costing
The method of costing of the Company's inventories: Cost of finished goods are measured at plannedcost, and material cost differences are carried forward at the end of the period to adjust planned cost toactual cost; other inventories are measured at actual cost on acquisition and raw materials received areaccounted for by the weighted-average method; low-value consumables and packaging materials areamortised in full upon the use.
(3) Method in the determination and the basis of provision for diminution in net realisable value ofinventories
On the balance sheet date, the inventories are calculated at the lower of cost and the net realisablevalue. When the net realisable value is lower than the cost, the provision for diminution in value ofinventories is made on an item-by-item basis at the excess of the cost of the inventory over its netrealisable value. For large volume inventories with low unit price, the provision for diminution in thevalue of inventories is made by categories. Inventories that are related to a product line manufacturedand sold in the same region, have the same or similar end use or purpose, and are difficult to measureseparately 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.
13. Assets held for sale
√Applicable □N/A
(1) Category and measurement of non-current assets or the disposal group held for saleNon-current assets and disposal groups are classified as held for sale if the Company recovers its bookvalue mainly by selling (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 fairvalue; the biological assets measured with the basis of fair value less selling costs; the assets formed byemployee benefits; financial assets and the right arising from deferred income tax assets and insurancecontracts.A disposal group is a group of assets to be disposed through sale or other means as a whole in a singletransaction, and liabilities directly associated with those assets that will be transferred in the transaction.In certain circumstance, disposal groups 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 the practice of disposing of this type of assets or disposal groups in a similar transaction, anon-current asset or disposal group is available for immediate sale at its present condition; the sale islikely to occur, that is, a decision has been made on a sale plan and a determined purchase commitmentis made, and the sale is expected to be completed within one year. Where the loss of control over thesubsidiaries is due to the sales of investment in subsidiaries, no matter whether the Company retains partof the equity investment after selling or not, the investment in subsidiaries shall be classified as held forsale in the separate financial statements when it satisfies the conditions for category of held for sale; allassets and liabilities of subsidiaries shall be classified as held for sale in the consolidated financialstatements.The difference between carrying amount of non-current assets or disposal groups classified as held forsale and the net amount of fair value less selling costs shall be recognised as impairment loss on assetsupon initial measurement or when such noncurrent assets or disposal groups are remeasured at thebalance sheet date. For the amount of impairment loss on assets recognised in disposal groups, thecarrying 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 the individualnon-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 groupless its selling costs increases, the amount reduced previously shall be recovered, and reversed in theasset impairment loss recognised on the noncurrent asset which is applicable to the measurementrequirements of Held-For-Sale Standards after the non-current asset is classified into held-for-salecategory. The reversed amount is credited to current profit or loss. The carrying value of goodwill whichhas been offset cannot be reversed.No depreciation or amortisation is provided for the non-current assets in the held-for-sale and the assetsin the disposal group held for sale. The interest on the liabilities and other costs in the disposal groupheld for sale is recognised continuously. As far as all or part of investment in the associates and jointventures is concerned, for the part classified into the held-for-sale category, the accounting with equitymethod shall be stopped, while the remaining part (which is not classified into the held for- sale category)shall still be accounted for using the equity method. When the Company loses the significant influenceon 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 longermeets the classification criteria for held-for-sale category, the Company shall stop classifying it into theheld-for-sale category and measure 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-salecategory after being adjusted with the depreciation, amortisation or impairment that could have been berecognised if it was not classified into 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 beendisposed of by the Company or classified by the Company into the held-for-sale type and can beidentified 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 principalbusiness 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 forsale under “assets classified as held for sale”, and the liabilities in the disposal group held for sale under“liabilities classified as held for sale” in the balance sheet.The Company presents the profit and loss for continuing operation and profit and loss for discontinuedoperation in the income statement, respectively. The impairment loss and reversal amount and disposalprofit and loss of the non-current assets held for sale or disposal group not meeting the definition ofdiscontinued operation will be presented as the profit and loss of continuing operation. The operatingprofit and loss (such as impairment loss and reversal amount) and disposal profit and loss of thediscontinued 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 relevantcomponent in the definition of the discontinued operation will be presented as discontinued operationfrom the date of retirement.For the discontinued operation reported in the current period, the information formerly presented asprofit and loss of continuing operation will be presented as the profit and loss of discontinued operationfor the comparable accounting period in the financial statement of the current period. If the discontinuedoperation no longer meets the classification criteria for held for- sale category, the information formerlypresented as profit and loss of discontinued operation will be presented as the profit and loss ofcontinuing operation for the comparable accounting period in the financial statement of the currentperiod.
14. Long-term equity investment
√Applicable □N/A
The long-term equity investment includes the equity investment in the subsidiary, joint ventures andassociates. The investee over which the Company has significant influence is the associates of theCompany.
(1) Determination of initial investment cost
The long-term equity investment resulting from corporate merger: For the long-term equity investmentresulting from merger of companies under the same control, the carrying amount of the ownership equityof the merged party obtained on the merger date presented in the consolidated financial statement of thefinal controlling party will be used as the investment cost. For the long-term equity investment resultingfrom merger of companies under different controls, the merger cost will be used as the investment costof the long-term equity investment.The long-term equity investment obtained by other means: For the long-term equity investment obtainedby paying cash, the actually paid purchase price will be used as the initial investment cost. For the longterm equity investment obtained by issuing equity securities, the fair value of the issued equity securitieswill 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 thecriteria of held-for-sale category. The investment in associates and joint venture will be accounted withequity method.For the long-term equity investment accounted for using cost method, except for the price actually paidupon the investment or the cash dividend or profit in the consideration that has been declared but notreleased, the cash dividend or profit declared and distributed by the investee is recognised as theinvestment income and recorded into the profit and loss for the current period.For the long-term equity investment accounted for using equity method, the investment cost of the long-term equity investment shall not be adjusted if the initial investment cost of the long-term equityinvestment is higher than the Company's share in the fair value of the identifiable net value of theinvestee at the time of investment; if the initial investment cost of the long-term equity investment islower than the Company's share in the fair value of the identifiable net value of the investee at the time
of investment, the carrying amount of the long-term equity investment will be adjusted, with thedifference 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 arerecognised according to the share in the investee's realised net profit or loss and other comprehensiveincome respectively, and the carrying amount of the long-term equity investment is adjusted. Thecarrying amount of the long-term equity investment will be deducted according to the profit distributiondeclared by the investee or cash dividend attributable to the Company. The carrying amount of longterm equity investment will be adjusted for changes to equity interest attributable to the owners of theinvestee other than net profit or loss, other comprehensive income and profit distribution, and recordedinto capital reserve (other capital reserve). The Company's share of the net profit or loss of the investeeswill be recognised after adjustment of the net profit of the investees according to the accounting policyand accounting period of the Company on the basis of fair value of all identifiable assets of the investeeon acquisition.If the Company is able to exert significant influence or implement joint control (which does notconstitute control) on the investee through additional investment or other reason, the sum of the fairvalue of the original equity plus the additional investment cost will be used as the initial investment cost,which will be accounted for with equity method, on the conversion date. The difference between the fairvalue of the original equity on the conversion date and its carrying amount, and the accumulated changeof fair value recorded into other comprehensive income will be transferred into the profit and loss forthe 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 ofparts of the equity investment, the surplus equity after disposal shall be recognised in accordance with“Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of FinancialInstruments”, and the difference between fair value and carrying amount should be recognised as profitor loss for current period. Other comprehensive income of original equity investment recognised underequity method shall be recognised in accordance with the same foundation used by the investees whendispose 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 currentperiod.If an entity loses control over investees due to the elimination of parts of the equity investment, thesurplus owners' equity that is able to implement joint control or have significant influence over investeesshall be measured at equity method and are deemed to be recognised under equity method since theacquisition date. The surplus owners' equity that are unable to implement joint control or have nosignificant influence over investees shall be processed in accordance with “Accounting Standards forBusiness 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 asprofit or loss for current period.If the shareholding ratio of the Company is reduced due to the increase of capital of other investors, andthus the control is lost, but the joint control or significant influence can be exerted on the invested entity,the Company should recognise net asset according to the new shareholding ratio. The difference betweenthe original book value of the long-term equity investment corresponding to the decrease in theshareholding ratio should be included in the current profit and loss; then, according to the newshareholding 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 orassociates that belongs to itself according to the proportion of the shares and recognises the investmentincome or loss after offset. However, the loss arising from the unrealised intra-transaction between theCompany and investees, which belongs to the impairment loss of assets transferred, cannot be offset.
(3) Basis of determining common control and significant influence on the investeeJoint control is the contractually agreed sharing of control over an arrangement under which thedecisions relating to any activity require the unanimous consent of the parties sharing control. Indetermining whether there is a joint control, the first judge is to determine whether the relevantarrangement is controlled collectively by all the parties involved or the group of the parties involved.Secondly, and then determine whether the decisions related to the basic operating activities shouldrequire the unanimous consent of the parties involved. If the parties involved or the group of the partiesinvolved must act consistently to determine the relevant arrangement, it is considered that the partiesinvolved or the group of the parties involved control the arrangement. If two or more parties involve inthe collectively control of certain arrangement, it shall not be considered as joint control. Protection ofrights shall not be considered in determining whether there is joint control.Significant influence refers to the power to participate in the decision making process for financial andoperational policies of the investees without control or common control over the formulation of suchpolicies. When determining whether it has significant influence over the investee, the influence of thevoting shares of the investee held by the investor directly and indirectly and the potential voting rightsheld by the investor and other parties which are exercisable in the current period and converted to theequity of the investee, including the warrants, stock options and convertible bonds that are issued by theinvestee and can be converted in the current period, shall be taken into account.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 significantinfluence over the investee, unless there is clear evidence that it cannot participate in the production andoperation decisions of the investee and does not have a significant influence under such circumstances.When the Company owns less than 20% (excluding) of the voting shares of the investee, it is generallynot considered to have significant influence on the investee unless there is clear evidence that it canparticipate in the production and operation decisions of the investee and have significant influence undersuch circumstances.
(4) Held-for-sale equity investment
Refer to Note III. 13 for the relevant accounting treatment of the equity investment to joint ventures orassociates all or partially classified as assets held for sale.The surplus equity investments that are not classified as assets held for sale shall be accounted for usingequity method.The equity investment to joint ventures or associates already classified as held for sale no longer meetsthe conditions of assets held for sale shall be adjusted retroactively using equity method from the dateof being classified as assets held for sale.
(5) Impairment test and impairment provision
Refer to note III. 22 for investment to subsidiaries, associates and joint ventures and the impairmentprovision of assets.
15. Investment properties
Investment properties are properties held to earn rental or capital appreciation or both. The investmentproperties of the Company include land use rights that have already been leased out, land use rights thatare held for the purpose of sale after capital appreciation, buildings that have already been leased out,etc.Investment properties of the Company are measured initially at cost upon acquisition, and subject todepreciation or amortisation in the relevant periods according to the relevant provisions on fixed assetsor intangible assets.The Company adopts the cost model for subsequent measurement of the investment properties. Themethod for asset impairment provision is set out in note III. 22.The balance after the disposal income from the disposal, transfer, scrapping or destruction of theinvestment properties deducts the book value and the relevant taxes shall be recorded into the profit andloss for the current period.
16. Fixed assets
(1) Conditions for recognition of fixed assets
√Applicable □N/A
The Company's fixed assets represent the tangible assets held by the Company using in the productionof goods, rendering of services, rent and for operation and administrative purposes with useful lifeover one year.The fixed asset can be recognised only when the economic benefit related to the fixed asset is probableto flow into the company 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/A
| Category | Useful years (year) | Annual depreciation | Residual rate |
| Properties and Buildings | 20 | 4.5%-4.75% | 5%-10% |
| Machine and equipment | 10 | 9%-9.5% | 5%-10% |
| Transportation equipment | 5 | 18%-19% | 5%-10% |
| Electric equipment and others | 5-10 | 18%-19% | 5%-10% |
Where, for the fixed assets for which depreciation provision is made, to determine the depreciationrate, the accumulated amount of the fixed asset depreciation provision that has been made shall bededucted.
(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 asfinance leased fixed assets:
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 bemuch lower than the fair value of the leased asset when the option is exercised. Therefore, it can bereasonably determined that the Company 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 lifeof the leased asset.
④ The present value of the Company's minimum lease payment on the lease start date is almostequivalent to the fair value of the leased assets on the lease start date.
⑤The leased assets are of special nature, and only our company can use them if they don't undergomajor transformation.For fixed assets leased by finance leases, the lower of the fair value of the leased assets on the lease startdate and the present value of the minimum lease payment shall be the entry value. The minimum leasepayment is taken as the entry value of the long-term payable, and the difference is taken as theunrecognized financing expense. In the process of lease negotiation 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 financing costs shall beamortized 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 calculatethe depreciation of leased assets. If it can be reasonably determined that the ownership of the leasedasset will be obtained at the end of the lease term, depreciation shall be accrued on the useful life of theleased asset; if it cannot be reasonably determined that the ownership of the leased asset will be obtainedat the end of the lease term, depreciation is accrued in the shorter of the lease period and the useful lifeof the leased asset.
(5) The Company reviews the useful life and estimated net residual value of fixed asset and thedepreciation 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 originalestimates; the estimated 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 and equipment if there is undoubted evidence to confirm that they meet the recognition criteria offixed assets, otherwise, the overhaul costs are recognised in profit or loss for the current period. Property,plant and equipment are depreciated during the intervals of the regular overhaul.
17. Construction in progress
√Applicable □N/A
Construction in progress is measured at actual cost. Actual cost comprises necessary project expenditureincurred during construction, borrowing cost that are eligible for capitalisation and other necessary costincurred to bring the fixed assets ready 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 inprogress”.
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 aqualifying asset, they shall be capitalised and included in the cost of related assets; other borrowingcosts are recognised as expenses and included in profit or loss when incurred. Capitalisation of suchborrowing costs can commence only when all of the following conditions are satisfied:
① Expenditures for the asset incurred, capital expenditure includes the expenditure in the form of cashpayment, transfer of non-cash assets or the interest bearing liabilities for the purpose of acquiring orconstructing assets eligible for capitalisation;
② Borrowing costs incurred;
③ Activities relating to the acquisition, construction or production of the asset that are necessary toprepare 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 orproduced become ready for their intended use or sale. The borrowing cost incurred after that isrecognised as an expense in the period in which they are incurred and included in profit or loss for thecurrent period.Capitalisation of borrowing costs is suspended during periods in which the acquisition, construction orproduction of a qualifying asset is interrupted abnormally and when the interruption is for a continuousperiod of more than 3 months; the borrowing costs in the normally interrupted period continue tocapitalise.
(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 interestincome earned from depositing the unused specific borrowings in bank or the investment income arisingfrom temporary investment, shall be capitalised. The capitalisation rate of the general borrowing isdetermined by applying the weighted average effective interest rate of general borrowings, to theweighted average of the excess amount of cumulative expenditures on the asset over the amount ofspecific borrowings.During the capitalisation period, exchange differences on foreign currency special borrowings shall becapitalised; exchange differences on foreign currency special borrowings shall be recognised as currentprofits 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 berecognised unless it meets 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 intothe 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 Chinesemedical herbal plant species.The consumable biological assets refer to the biological assets held for sale, or biological assets to beharvested as agricultural products in the future, consisting of growing traditional Chinese medical herbalplant species. The consumable biological asset is initially measured at cost. The cost of any consumablebiological assets by way of self-planting, self-cultivating, self-breading is the necessary cost directlyattributable to this asset prior to the harvest, consisting of borrowing costs that meet the conditions ofcapitalisation. The subsequent expenses for the maintenance, protection and cultivation of a consumablebiological 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 bookvalue by the weighted 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 impairment loss is made and recognised in the profit or loss for the current period as theexcess of the carrying amount over the net realisable value. If the factors affecting the impairment ofconsumable biological assets no longer exist, the amount of write-down shall be resumed and shall bereversed from the original provision for the impairment loss before being recognised in the profit or lossfor the current period.
20. Intangible assets
(1) Pricing methods, useful lives and impairment tests
√Applicable □N/A
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlledby the Company. An intangible asset is recognised only when all of the following conditions are satisfied:
It is probable that the economic benefits associated with the intangible assets will flow to the enterprise;The cost of the intangible asset can be reliably measured. Intangible assets are initially measured atactual 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 todetermine the useful life of intangible assets upon acquisition. Intangible assets with finite useful lifeare amortised in the profit or loss over the estimated useful life, using the method that reflects theexpected realisation of economic benefits associated with the asset, and if the expected realisation cannotbe reliably determined, it is amortised using the straight-line method. Intangible assets with indefiniteuseful life is not amortised.Amortisation of intangible assets with finite useful life is as follows:
| Category | Expected useful life | Amortisation method | Note |
| Land use rights | 30-50years | Straight-line | |
| Patent and technical know-how | 1-10 years | Straight-line | |
| Trademark rights | 2-10 years | Straight-line | |
| Others | 5 years | Straight-line |
The useful life for an intangible asset with a finite useful life and the method of amortisation arereviewed at least once at the end of each financial year. If the useful life and amortisation method forthe intangible assets are different from the previous estimate, the change of amortisation is recognisedprospectively as the change of accounting estimate.When the Company estimates an intangible asset can no longer bring future economic benefits to theCompany at the end of a period, the carrying amount in which should be reversed to profit or loss forthe current period.Please refer to note III. 22 for the provision of impairment of intangible assets.
21. Research and development expenditures
√Applicable □N/A
Expenditures on an internal research and development project are classified into expenditures on theresearch phase and expenditures on the development phase.Expenditures on the research phase shall be recognised in profit or loss for the current period whenincurred.Expenditures on the development phase will be capitalised only when all of the following conditions aresatisfied: it is technically feasible to complete the intangible asset so that it will be available for use orsale; the Company intends to complete the intangible asset and use or sell it; it can be demonstrated howthe intangible asset will generate economic benefits, including proving that the intangible assets or theproducts produced by it will have markets, or the intangible assets for internal use will be useful; thereare adequate technical, financial and other resources to complete the development and the Company isable to use or sell the intangible assets; and expenditures on the development phase attributable to theintangible 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 conditionsand forming the project through the technical and economic feasibility studies.Capitalised expenditures on the development phase are shown as development expenditures on thebalance sheet and reclassified 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 periodfrom the beginning of research and development to the pilot phase is treated as the research phase, andall expenditures shall be recognised in profit or loss for the current period when incurred; the periodfrom the pilot phase to the obtaining of production approvals is treated as the development phase, andall expenditures shall be recognised as development expenditures and reclassified as intangible assetsafter the obtaining of production approvals.
② For research and development projects that require clinical approval, the period from the beginningof research and development to the obtaining of clinical approval is treated as the research phase, andall expenditures incurred shall be recognised in profit or loss for the current period when incurred; theperiod from the obtaining of clinical approval to the obtaining of production approval is treated as thedevelopment phase, and the expenditures shall be recognised as development expenditures andreclassified as intangible assets after the obtaining of production approval.
③ External technology transfer fees and the cost of purchasing clinical approvals can be recogniseddirectly 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 eachyear and if the research and development project no longer qualifies for the development stage, thecorresponding development expenditure 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 expenditureson the development phase, all the research and development expenditures are recognised in profit orloss for the current period.Please refer to note III.22 for the impairment testing methodology and impairment provision forintangible assets.
22. Impairment of assets
The impairment of subsidiaries, associates and joint ventures in the long-term equity investments,investment properties subsequently measured at cost, fixed assets, construction in progress, right-of-useassets, intangible assets, etc. (Excluding inventories, investment properties measured at fair value,deferred income tax assets and financial assets) are determined as follows:
At the balance sheet date, the Company determines whether there may be evidence of impairment, ifthere is any, the Company will estimate the recoverable amount for impairment, and then test forimpairment. For goodwill arising from a business combination, intangible assets with indefinite usefullife and the intangible assets that have not yet ready for use are tested for impairment annually regardlessof whether such evidence exists.The recoverable amount of an asset is determined by the higher amount of fair value deducting disposalcosts and net present value of future cash flows expected from the assets. The Company estimates therecoverable amount based on individual asset; for individual asset which is difficult to estimate therecoverable amount, the recoverable amount of the asset group is determined based on the asset groupinvolving the asset. The identification of the asset group is based on whether the cash flow generatedfrom the asset group is independent of the major cash inflows from other assets or asset groups.
When the asset or asset group’s recoverable amount is lower than its carrying amount, the Companyreduces its carrying amount to its recoverable amount, the reduced amount is included in profit or loss,while the provision for impairment of assets is recognised.In terms of impairment test of the goodwill, the carrying amount of the goodwill, arising from businesscombination, shall be allocated to the related asset group in accordance with a reasonable basis atacquisition date. Those that are difficult to be allocated to related assets shall be allocated to related assetgroup. Related assets or assets group refer to those that can benefit from the synergies of businesscombination and are not larger than the Company’s recognised reporting segment.When there is an indication that the asset and asset group are prone to impair, the Company should testfor impairment for asset and asset group excluding goodwill and calculate the recoverable amount andrecognise the impairment loss accordingly. The Company should test for impairment for asset or theasset group including goodwill and compare the asset or asset group’s recoverable amount with itscarrying amount, provision for impairment of assets shall be recognised when the recoverable amountof 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/A
The Company’s long-term deferred expenses measured at cost actually incurred and evenly amortisedon straight-line basis over the expected beneficial period. For the long-term deferred expense items thatcannot benefit in subsequent accounting period, their amortised value is recognised through profit orloss.
24. Employee compensation
(1) The scope of employee compensation
Employee compensation are all forms of remuneration and compensation given by the Company inexchange for service rendered by employees or the termination of employment. Employee compensationinclude short-term employee compensation, post-employment benefits, termination benefits and otherlong-term employee benefits. Employee compensation include benefits provided to employees’ spouses,children, other dependants, survivors of the deceased employees or to other beneficiaries.According to liquidity, employment compensations are presented separately as “accrued payroll” itemand “long-term employment compensation payable” item in the balance sheet.
(2) Short-term employee compensation
√Applicable □N/A
During the accounting period in which the employees render the related services, wages, bonuses, socialsecurity contributions (including medical insurance, injury insurance, maternity insurance, etc.) andhouse funding are recognised as liability and included in the profit or loss for the current period orrelated asset costs. If the liability cannot be wholly settled within twelve months after the end of theannual reporting period in which the employees render the related service and have significant financialimpact, the liability shall be measured as the discounted amounts.
(3) Post-employment benefits
√Applicable □N/A
Post-employment benefit plans mainly includes defined contribution plans and defined benefit plans.Defined contribution plans include the basic pension insurance, unemployment insurance, etc., and thecontributions to defined contribution plans are recognised and included in profit or loss for the currentperiod or related asset costs.
(4) Termination benefits
√Applicable □N/A
The liability of employee compensation arising from termination benefits is recognised and included inprofit or loss for the current period in the earlier date of the followings: The Company cannot unilaterallywithdraw the offer of termination benefits because of an employment termination plan or a curtailmentproposal; the Company recognises costs or expenses related to the restructuring that involves thepayment of termination benefits.For the implementation of the internal retirement plan for employees, the economic compensation beforethe official retirement date is a termination benefit. The wage of and social insurance contributions forthe internally retired employee which would have incurred from the date on which the employee ceaserendering services to the Company to the scheduled retirement date will be included in the profit or lossfor the current period. Economic compensation after the official retirement date (such as normal pension)should be treated as post-employment benefits.
(5) Other long-term employee benefits
√Applicable □N/A
When other long-term employee benefits provided to the employees by the Company are satisfied theconditions of a defined contribution plan, those benefits shall be accounted for in accordance with therelevant provisions of the above defined contribution plans. When the benefits are satisfied theconditions of a defined benefit plan, those benefits shall be accounted for in accordance with the relevantprovisions of the above defined benefit plans, except that the “change in remeasurement of the netliability or net assets of the defined benefit plans” in the cost of the related employee compensation shallbe included in profit or loss for the current period or related asset costs.
25. Provision for liabilities
√Applicable □N/A
An obligations related to a contingency is recognised as a provision when all of the following conditionsare 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 obligationsand consider the relevant risk, uncertainty and time value of money. If the impact of time value of money
is significant, the best estimate is determined as its present value of future cash outflow. The Companyreviews the carrying amount of provisions at the balance sheet date and adjusts the carrying amount toreflect the best estimate.If the expenses for clearing of provisions is fully or partially compensated by a third party, and thecompensated amount can be definitely received, it is recognised separately as asset. The compensatedamount recognised shall not be greater than the carrying amount of the liability recognised.
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 assumedon the basis of equity instruments in order to obtain services from employees or other parties. Share-based payment is classified into equity-settled share-based payment and cash-settled share-basedpayment.
① Equity-settled share-based payment
Equity-settled share-based payment is measured at the fair value of the equity instruments granted toemployees. If vesting is conditional upon completion of services in the pending period or fulfilment ofperformance conditions, at each balance sheet date during the pending period, based on the bestestimates of the number of vested equity instruments, the services received for the period are recognisedas the costs or expenses on a straight-line basis. Instruments which are vested immediately upon thegrant are included in relevant costs or expenses at the fair value of equity instruments on the date ofgrant and capital reserves are increased accordingly.At each balance sheet date during the pending period, the Company makes the best estimate and revisesthe number of equity instruments expected to be exercisable based on subsequent information such aschanges in the number of exercisable employees obtained from the latest available information. Theeffect of the above estimates is recognised as the relevant cost or expense in the current period, andcapital surplus is adjusted accordingly.For the equity instruments granted under an equity-settled share-based payment for services from otherparties, if the fair value of services received from other parties can be measured reliably, the fair valueof the equity instruments is measured at the fair value of services from other parties on the grant date; ifthe fair value of services received from other parties cannot be measured reliably but the fair value ofthe equity instruments can be measured reliably, the fair value of the equity instruments on the date onwhich services are received shall be recognised as related costs or expenses, with a correspondingincrease 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 otherequity instrument-based) assumed by the Company. Instruments which are vested immediately upon thegrant are included in relevant costs or expenses at the fair value of liabilities assumed by the Companyon the date of grant and liabilities are increased accordingly. If vesting is conditional upon completionof services in the pending period or fulfilment of performance conditions, at each balance sheet dateduring 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 of theliabilities assumed by the Company.At each balance sheet date and settlement date before the relevant liabilities are settled, the fair value ofliabilities is re-measured and the resulting changes are included in the profit and loss for the currentperiod.
(2) Accounting treatment for amendment and termination of share-based paymentsWhen the Company modifies the share-based payment plan, and if such modification increases the fairvalue of the equity instruments granted, the increase in services received will be recognised accordinglyfollowing the increase in fair value of the equity instruments; if such modification increases the numberof equity instruments granted, the increase in fair value of the equity instruments is recognised as acorresponding increase in service achieved. The increase in fair value of the equity instruments refersto the difference in fair value on the date of modification before and after the modification in respect ofthe 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-basedpayment plan, accounting treatment will be continued to be conducted in respect of the services receivedand the modification will be deemed to have never occurred, unless the Company had cancelled part orall of the equity instruments granted.During the pending period, if the equity instruments granted are cancelled (except for failure to meet thenon-market conditions of the vesting conditions), the Company will undertake an accelerated vesting inrespect of the cancelled equity instruments that had been granted, include the remaining amount thatshall be recognised during the pending period in the current profit and loss immediately and recognisecapital reserve accordingly. Where employees or other parties are permitted to choose to fulfil non-vesting conditions but have not fulfilled during the pending period, the Company will treat the grantedequity instruments as cancelled.
(3) Accounting treatment for share-based payments involving the Company and the shareholders or thede facto controller of the CompanyFor share-based payment transactions involving the Company and the shareholders or the de factocontroller of the Company, the settlement enterprise and the enterprise receiving services (one under theCompany while another external to the Company) shall follow the requirements below to conductaccounting treatment in the Company’s consolidated financial statements:
① For settlement enterprises settling through their own equity instruments, such share-based paymenttransaction will be treated as equity-settled share-based payment; except for this, such share-basedpayment transaction will be treated as cash-settled share-based payment.Where a settlement enterprise is an investor of an enterprise receiving services, the fair value of theequity instruments on the date of grant or the fair value of the liabilities that shall be assumed arerecognised as long-term equity investment in the enterprise receiving services, at the same time, capitalreserve (other capital reserve) or liabilities are recognised.
② Where an enterprise receiving services has no settlement obligations or grants its own equityinstruments to employees, such share-based payment transaction will be treated as equity-settled share-based payment; where an enterprise receiving services has settlement obligations and grants equityinstruments (other than its own) to employees, such share-based payment transaction will be treated ascash-settled share-based payment.
For a share-based payment transaction occurring among enterprises under the Company where theenterprise receiving services and the settlement enterprise are not the same enterprise, such share-basedpayment transaction shall be recognised and measured in each of the respective financial statements ofthe enterprise receiving services and the settlement 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, financialliabilities or equity instruments at the initial recognition based on the contract terms of the issuedfinancial instrument and the economic substance it reflects, instead of only in legal form, and combinethe definition of financial assets, financial liabilities and equity instruments.
(2) Accounting treatment of preferred shares, perpetual bonds and other financial instrumentsThe financial instruments issued by the Company are initially recognised and measured in accordancewith the financial instrument standards; thereafter, interest or dividends are accrued or distributed oneach balance sheet date and processed in accordance with relevant specific accounting standards forenterprises. That is, on the basis of the classification of the financial instrument issued, the accountingtreatment of interest expenses or dividend distributions of the instrument is determined. For financialinstruments classified as equity instruments, interest expenses or dividend distributions are treated asprofit distribution of the Company, and repurchases and cancellations are treated as changes in equity;for financial instruments classified as financial liabilities, interest expenses or dividend distributions arein principle treated according to borrowing costs, and gains or losses arising from repurchase orredemption are credited to profit or loss for the current period.The transaction costs such as charges and commissions incurred by the Company when issuing financialinstruments, if classified as debt instruments and measured at amortised cost, are included in the initialmeasurement amount of the issued instrument; if classified as equity instruments, are deducted fromequity.
28. Revenue
√Applicable □N/A
The Company shall recognise revenue when the Company satisfies the performance obligation of thecontract, that is, the customer obtains control of relevant goods or services.When the contract contains two or more performance obligations, on the effective date of the contract,the Company allocates the transaction price to each performance obligation based on the percentage ofrespective unit price of a good or service guaranteed by each performance obligation, and the revenueis measured according to the transaction price allocated to each performance obligation.If one of the following conditions is fulfilled, the Company satisfies a performance obligation over time;otherwise, it satisfies a performance obligation at a point in time:
① When the customer simultaneously receives and consumes the benefits provided by the Companywhen 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 theCompany under the contract.
③ The product produced by the Company under the contract is irreplaceable and the Company has theright 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 bymeasuring the process towards complete satisfaction of the performance obligation. When the progressof performance cannot be reasonably determined, if the costs incurred by the Company are expected tobe recoverable, the revenue will be recognised to the extent of the costs incurred until the progress ofperformance can be reasonably determined.For a performance obligation satisfied at a point in time, the Company shall recognise revenue when thecustomer obtains control of relevant goods or services. When determining whether the customer hasobtained control of the goods and services, 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 thecustomers 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 clientpossesses the legal title of the goods.
③ The Company has transferred the physical possession of goods to the customer, which is when thecustomer obtains physical possession of the goods.
④ The Company has transferred all of the substantial risks and rewards of ownership of the goods tothe customer, which is when the client obtains all of the substantial risks and rewards of ownership ofthe 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 thatit has transferred to a customer when that right is conditioned on factors other than passage of time, forwhich the loss allowances for expected credit loss is recognised (see Note III.10(6) ). The Companyshall present any unconditional (i.e. if only the passage of time is required) rights to considerationseparately as a receivable. A contract liability is the Company’s obligation to transfer goods or servicesto a customer for which the Company has received consideration (or the amount is due) from thecustomer.The contract assets and liabilities under the same contract shall be shown on a net basis. If the net amountstated in debit balance, it will be presented under the items of “Contract assets” or “Other non-currentassets” according to its mobility; If the net amount stated in credit balance, it will be presented underthe items of “Contract liabilities” or “Other non-current liabilities” according to its mobility.The Company enters into sales contracts with customers. Revenue from sales is recognised accordingto the invoiced amount upon the delivery of goods to the designated carrier or purchaser according tothe orders received from customers; revenue from export sales is recognised mainly by adopting FOB
mode according to custom declaration upon making declaration for goods and completing the exportprocedures.
29. Contract costs
√Applicable □N/A
Contract costs are either the incremental costs of obtaining a contract with a customer or the costs tofulfil a contract with a customer.Incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contractwith a customer that it would not have incurred if the contract had not been obtained e.g. an incrementalsales commission. The Company recognises as an asset the incremental costs of obtaining a contractwith a customer if it expects to recover those costs. Other costs of obtaining a contract are expensedwhen incurred.If the costs to fulfil a contract with a customer are not within the scope of inventories or other accountingstandards, the Company recognises an asset from the costs incurred to fulfil a contract only if those costsmeet all of the following criteria:
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 areexplicitly chargeable to the customer and other costs that are incurred only because the Company enteredinto the contract;
② The costs generate or enhance resources of the Company that will be used in satisfying (or incontinuing 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 coststo fulfil a contract (the “assets related to contract costs”) are amortised on a systematic basis that isconsistent with the transfer to the customer of the goods or services to which the assets relate andrecognised 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 ofan asset related to contract costs exceeds:
① Remaining amount of consideration that the Company expects to receive in exchange for the goodsor 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 yearor a normal operating cycle upon the initial recognition, are presented as “Inventories” item, and if theamortisation period is more than one year or a normal operating cycle upon the initial recognition, arepresented as “Other non-current assets” item.The contract obtaining costs recognised as assets, if the amortisation period is less than one year or anormal operating cycle upon the initial recognition, are presented as “Other current assets” item, and ifthe amortisation period is more than one year or a normal operating cycle upon the initial recognition,are presented as “Other non-current assets” item.
30. Government grants
√Applicable □N/A
A government grant shall be recognised only when the enterprise can comply with the conditionsattaching to the grant and 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 amountreceived. If a government grant is in the form of a transfer of a non-monetary asset, the item is measuredat fair value, when fair value is not reliably determinable, the item is measured at a nominal amount ofRMB1.Government grant related to assets represents the government grant received for acquisition andconstruction of long term assets, or forming long term assets in other ways. Except for these, all aregovernment grant related to income.Regarding to the government grant not clearly defined in the official documents and can form long termassets, the part of government grant which can be referred to the value of the assets is classified asgovernment grant related to assets and the remaining part is government grant related to income. For thegovernment grant that is difficult to distinguish, the entire government grant is classified as governmentgrant related to income.The government grant related to assets is recognised as deferred income and would be transferred toprofit or loss in reasonable and systematic manner within the period of use of the relevant assets. Thegovernment grant related to income which is used to compensate the relevant costs or losses incurredshould be recognised in the profit or loss for the current period; the government grant related to incomewhich is used to compensate the relevant costs or losses for the subsequent period is recognised asdeferred income and shall be recognised in profit or loss during the relevant cost or loss confirmationperiod. 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 grantbusiness.The government grants related to daily activities are recognised as other gains in accordance with thesubstance of economic business. Government grants that are not related to daily activities are recognisedas non-operating income and expenses.If the recognised government grants need to be refunded, adjust the carrying amount of assets when thecarrying amount of assets is offset at the time of initial recognition; the balance of deferred income isoffset against the carrying amount of the balance of deferred income and the excess is recognised in theprofit or loss for the current period. Other circumstances, it is directly recognised in the profit or loss forthe 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 theprevious period, should be measured by the tax of the estimated payable (returnable) amount which iscalculated according to the regulations of the tax law. The amount of the tax payable which is based bythe calculation of the current tax expenses, are according to the result measured from the corresponding
adjustment of the pre-tax accounting profit of the current period in accord to the relevant regulations ofthe 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 thetemporary differences arising from differences between the carrying amount and tax basis of items thatare not recognised as assets and liabilities but in accordance with the tax law, can be recognised asdeferred tax assets and deferred tax liabilities by adopting the balance sheet liability method.No deferred tax liability is recognised for a temporary difference arising from the initial recognition ofgoodwill the initial recognition of assets or liabilities due to a transaction other than a businesscombination, which affects neither accounting profit nor taxable profit (or deductible loss). Besides, nodeferred tax assets well be recognised for the taxable temporary differences related to the investmentsin subsidiaries, associates and joint ventures, if the Company can control the time of the reverse oftemporary 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 liabilitiesarising from other taxable temporary differences.The deductible temporary differences the initial recognition of assets or liabilities arising fromtransactions that are neither a business combination, nor do they affect accounting profits and taxableincome (or deductible losses), will not be recognised as related deferred income tax assets. In addition,as for the taxable temporary differences associated with investments in subsidiaries, associates and jointventures, if the Company is able to control the timing of the reversal of the temporary differences, andthe temporary differences may not be reversed in the foreseeable future, the related deferred income taxassets will also not be recognised. Except for the above exceptions, the Company recognises a deferredtax asset arising from other deductible temporary differences, to the extent that it is probable that taxableincome will be available against which the deductible temporary differences.The Company recognises a deferred tax asset for the carry-forward of deductible losses and tax creditsto subsequent periods, to the extent that it is probable that future taxable profits will be available againstwhich deductible losses and tax credits can be utilised.At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax ratesthat are expected to apply to the period when the asset is realised or the liability is settled in accordancewith the provisions of the tax law.At the balance sheet date, the Company reviews the carrying amount of a deferred tax asset. If it isprobable that sufficient taxable profits will not be available in future periods to allow the benefit of thedeferred tax asset to be utilised, the carrying amount of the deferred tax asset is reduced. Any suchreduction in amount is reversed when it becomes probable that 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 andlosses expect for the current tax and the deferred tax related to the transaction and events that beconfirmed as other comprehensive income or be directly included in the shareholders’ equity whichshould be included in other comprehensive income or shareholders’ equity as well as the book value foradjusting the goodwill of the deferred income tax occurs from the business combination.
(4) Offset of tax
The current tax assets and liabilities of the Company should be listed by the written-off net amountwhich intend to execute the net amount settlement as well as the assets acquiring and liabilitiesliquidation at the same time while owns the legal rights of settling the net amount.The deferred tax assets and liabilities of the Company should be listed as written-off net amount whenhaving the legal rights of settling the current tax assets and liabilities by net amount and the deferred taxand liabilities is relevant to the tax which is collected from the same taxpaying bodies by the same taxcollection and administration department or is relevant to the different taxpaying bodies but during eachperiod which there is significant reverse of the deferred income assets and liabilities in the future andamong which the involved taxpaying bodies intend to settle the current income tax and liabilities by netamount or are at the same time acquire the asset as well as liquidate the liabilities.
32. Leases
(1) Accounting treatment method of finance leases
√Applicable □N/A
In a financial lease, the Company uses the net investment in leases as the carrying amount of financelease receivables at the inception of a lease. The net investment in leases is the sum of the unguaranteedresidual value and the present value 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 andrecognises the interest income over each period of the lease term at a fixed periodic interest rate. Variablelease payments not included in the measurement of the lease liability, which are obtained by theCompany as a lessor, are recognised in profit or loss as incurred.The termination of recognition and impairment of financial lease receivables is accounted for inaccordance with the provisions of “Accounting Standards for Business Enterprises No. 22 – Recognitionand Measurement of Financial Instrument” and “Accounting Standards for Business Enterprises No. 23– Transfer of Financial Assets”.
(2) Accounting treatment method of operating lease
√Applicable □N/A
For the rental of operating leases, the Company recognises it in the profit or loss for the current periodon a straight- line basis over each period of the lease term. The initial direct cost incurred in connectionwith an operating lease shall be capitalised and amortised on the same basis for recognition of rentalincome during the lease term, and shall be included in instalments in the profit or loss for the currentperiod. The variable lease payment, which is obtained in connection with an operating lease and notincluded in the lease receivables, shall be included in the profit and loss for the current period when theyactually occur.
(3) Determination method and accounting treatment method of lease under the new lease standards
√Applicable □N/A
(1) Identification of leases
At the inception of a contract, the Company, as a lessee or lessor, assesses if the customer in a contracthas the right to obtain substantially all the economic benefits from use of the identified assets and theright to direct the use of the identified assets in the period of use. The Company would identify that a
contract is a lease, or contains a lease if a party of the contract transfers the right to control the use ofone or more identified assets for a period of time in exchange for consideration.
(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 leaseliabilities, except for the short-term leases and the leases of low-value assets which are treated with asimplified 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 theinception of a lease, discounted using the interest rate implicit in the lease or the incremental borrowingrate. Lease payment include: fixed payments and in-substance fixed payments, less any lease incentives(if there is a lease incentive) ; variable lease payment that are based on an index or a rate; the exerciseprice of a purchase option if the lessee is reasonably certain to exercise that option; payments of penaltiesfor terminating the lease option, if the lease term reflects that the lessee will exercise that option; andamounts expected to be payable under the guaranteed residual value provided by the lessee. TheCompany shall subsequently calculate the interest expenses of lease liabilities over the lease term at thefixed periodic interest rate, and include it into the profit or loss for the current period. Variable leasepayments not included in the measurement of lease liabilities are charged to profit or loss in the periodin 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 ofa lease, and the lease 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 relatedasset or the profit or loss for the current period, on a straight-line method over each period of the leaseterm.Leases of low-value assetsFor the Leases of low-value assets, the Company chooses to adopt the above simplified treatmentmethod in accordance with the specific conditions of each lease.The Company recognised the lease payments for the leases of low-value assets in the relevant asset costor the profit or loss 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 relatedto the ownership of assets is recognised as a finance lease, and leases other than finance leases arerecognised as operating leases.
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 forthe Company as a lessee.Right-of-use assets are initially measured at cost as at the commencement date of the lease, whichconsists of: the amount of the initial measurement of the lease liability; any lease payments made at orbefore the commencement date of the lease less any lease incentives received if any; initial directexpenses incurred by the Company as a lessee; costs to be incurred by the Company as a lessee indismantling and removing a leased asset, restoring the site on which it is located or restoring the leasedassets to the condition required by the terms and conditions of the lease. The Company as a lesseerecognises and measures the costs of demolition and restoration according to “Accounting Standards forBusiness Enterprises No.13 – Contingencies”, and subsequently adjusts for any remeasurement of leaseliability.
(2) Depreciation method of right-of-use assets
The Company calculates depreciation on a straight-line basis. Right-of-use assets in which the Companyas a lessee is reasonably certain to obtain ownership of the underlying leased assets at the end of thelease term are depreciated over the remaining useful life. Otherwise, right-of-use assets are depreciatedover the shorter of the lease term and its remaining useful life.
(3) For methods of impairment testing and provision for impairment for right-of-use assets, please referto note III. 22.
34. Repurchase of shares
Prior to cancellation or transfer of shares repurchased, the Company recognises all expenditures arisingfrom share repurchase as cost of treasury shares in the treasury share account. Considerations andtransaction fee incurred from the repurchase of shares shall lead to the elimination of owners’ equityand does not recognise profit or loss when shares of the Company are repurchased, transferred orcancelled.The difference between the actual amount received and the carrying amount of the treasury stock arerecognised as capital reserve when the treasury stocks are transferred, if the capital reserve is notsufficient to be offset, the excess amount shall be recognised to offset surplus reserve and undistributedprofit. When the treasury stocks are cancelled, the capital shall be eliminated according to the numberof shares and par value of cancellation shares, the difference between the actual amount received andthe carrying amount of the treasury stock are recognised as capital reserve, if the capital reserve is notsufficient to be offset, the excess amount shall be recognised to offset surplus reserve and undistributedprofit.
35. Restricted Shares
If the Company grants the restricted shares to incentive participants under the Share Options IncentiveScheme, the incentive participants subscribe for the shares first. If the unlocking conditions stipulatedin the Share Options Incentive Scheme cannot be fulfilled subsequently, the Company repurchases theshares at the predetermined price. If the registration and other capital increase procedures for therestricted shares issued to employees are completed in accordance with relevant regulations, theCompany recognises share capital and capital reserve (or capital premium) based on the subscriptionmoney received from the employees on the grant date; and recognises treasury shares and other payablesfor repurchase obligation.
36. Other significant accounting judgements and estimates
√Applicable □N/A
Significant accounting estimates and critical assumptions adopted by the Company are continuallyevaluated based on historical experience and other factors, including expectations of future events thatare believed to be reasonable. The significant accounting estimates and critical assumptions that have asignificant risk of causing a material adjustment to the carrying amounts of assets and liabilities withinthe next accounting year are set out below:
(1) Classification of financial assets
Significant judgements involved in determining the classification of financial assets include analysis ofbusiness mode and characteristics of the contractual cash flows.Factors considered by the Company in determining the business model of financial assets managementfor a group of financial assets include past experience on how financial asset’s performance is evaluatedand reported to key management personnel, how risks affecting the performance of financial asset areassessed and managed and how managers of related businesses are compensated.When assessing whether the contractual cash flows of financial assets are consistent with basic lendingarrangement, the Company adopts the following significant judgements: whether the time distributionor amounts of the principal within the duration may change due to early repayment and other reasons;whether the interest includes only the time value of money, credit risk, other basic lending risks and theconsideration for cost and profit. For example, the amounts of early repayment only reflect principalunpaid, the interest based on principal unpaid and reasonable compensation paid for early terminationof a contract.
(2) Measurement of ECL for accounts receivables
The Company calculates ECL of accounts receivables according to their exposure at default and ECLrate, and determines ECL rate based on probability of default and loss given default. When determiningECL rate, the Company adopts data like historical credit loss experience in combination with currentsituation and forward-looking information to adjust historical data. When considering forward-lookinginformation, the Company uses indicators including the risk of economic downturn, external marketenvironment, technology environment and changes on customer situation. The Company periodicallymonitors and reviews assumptions relevant to the measurement of ECL.
(3) Impairment of non-current assets other than financial assets (other than goodwill)The Company determines at the balance sheet date whether there are signs of possible impairment ofnon-current assets other than financial assets. For intangible assets that have not yet reached usablecondition, in addition to the annual impairment test, when there are signs of impairment, the impairmenttest is also carried out. Other non-current assets, other than financial assets, are tested for impairmentwhen there are indications that their carrying amount is not recoverable. An impairment occurs whenthe carrying amount of an asset or group of assets is higher than the recoverable amount, which is thepresent value of the fair value net of disposal costs and projected future cash flows. The net amount offair value less disposal costs, is determined by referencing to the agreed sale price or observable marketvalue of a similar asset in an arm's length transaction, less incremental costs directly attributable to thedisposal of that asset. When projecting the present value of future cash flows, management must estimatethe projected future cash flows of the asset or group of assets and select an appropriate discount rate todetermine the present value of future cash flows.
(4) Impairment of goodwill
The Company evaluates whether goodwill is impaired at least once a year. This requires an estimate ofthe value in use of the asset groups to which the goodwill is allocated. In estimating the value in use, theCompany needs to estimate the future cash flows generated from the asset groups and also to choose anappropriate discount rate in order to calculate the present value of the future cash flows.
(5) Development costs
Determining the amounts to be capitalised requires the management to make assumptions regarding theexpected future cash flows generated from the relevant assets, discount rates to be applied and theexpected period of benefits.
(6) Deferred tax assets
The deferred income tax assets will be recognised for all unused tax losses to the extent that it is probablethat there will be sufficient taxable profits against which the loss is utilised. This requires themanagement to exert numerous judgments to estimate the timing and amount of the future taxable profitsso as to determine the amount of deferred income tax assets to be recognised with reference to the taxplanning strategy.
(7) Revenue recognition
As stated in note III. 28, the Company makes the following significant accounting judgements andestimates in terms of revenue recognition: identifying customer contracts; estimating the recoverabilityof the considerations that are entitled to be obtained by transferring goods to customers; identifying theperformance obligation in the contract; estimating the variable consideration in the contract andcumulative revenue recognised where it is highly probable that a significant reversal therein will notoccur when the relevant uncertainty is resolved; assessing whether there is a significant financingcomponent in the contract; estimating the individual selling price of the individual performanceobligation in the contract, etc. The Company makes judgments primarily based on historical experiencesand works. Changes in these significant judgments and estimates may have significant impacts on theoperating income, operating costs, and profit or loss of the current or subsequent periods.
(8) Determination of the fair value of unlisted equity investment
The fair value of unlisted equity investments represents the expected future cash flows discounted at theprevailing discount rate of items with similar terms and risk characteristics. It requires the Company toestimate the expected future cash flows and discount rates, and therefore there is uncertainty. Underlimited circumstances, if the information used to determine the fair value is insufficient, or the possibleestimated amount of fair value is widely distributed, and cost represents the best estimate of the fairvalue within such scope, the cost may represent an appropriate estimate of the fair value within suchdistribution scope.
37. Changes in significant accounting policies and accounting estimates and correction toaccounting errors
(1)Changes in significant accounting policies
□Applicable √N/A
(2)Changes in significant accounting estimates
□Applicable √N/A
IV. Taxation
1. Major taxes and their tax rates
√Applicable □N/A
| Tax category | Basis of taxation | Statutory tax rate |
| Value added tax | Taxable revenue | 3%, 6%, 13% |
| Urban maintenance and construction tax | Turnover tax to be paid | 1%, 5%, 7% |
| Education surcharges | Turnover tax to be paid | 3% |
| Local education surcharge | Turnover tax to be paid | Note 1 |
| Enterprise income tax | Taxable profit | Note 2 |
Note 1: The Company and its subsidiaries that are incorporated in Shenzhen and Zhuhai shall pay localeducation surcharges that are charged as 2% of the turnover tax payable. Other subsidiaries shall pay localeducation surcharges according to the tax rate as specified at their places of incorporation on the basis ofturnover 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
| Taxpayer | Rate of enterprise income tax (%) |
| Hong Kong Health Pharmaceutical Industry Company Limited (香港健康药业有限公司), Livzon Pharmaceutical Biotechnology Co., Ltd. (丽珠医药生物科技有限公司), Lian (Hong Kong) Co., Ltd. (丽安香港有限公司), Livzon Biologics Hong Kong Limited (丽珠生物科技香港有限公司) | 16.5 |
| Companhia de Macau Carason Limitada (澳门嘉安信有限公司), Li Zhu (Macau) Limitada (丽珠(澳门) 有限公司)；Macau Livzon Traditional Chinese Medicine Modernization Technology Co., Ltd.（澳门丽珠中药现代化科技有限公司） | 0 or 12 (Tax rate is 12% where the taxable income is MOP600,000 or more; for those with taxable income less than MOP600,000, they are exempted from income taxes.) |
| The Company and Shenzhen Taitai Pharmaceutical Industry Co., Ltd. (深圳太太药业有限公司), Shenzhen Haibin Pharmaceutical Co., Ltd. (深圳市海滨制药有限公司), Xinxiang Haibin Pharmaceutical Co., Ltd. (新乡海滨药业有限公司), Jiaozuo Joincare Bio Technological Co., Ltd. (焦作健康元生物制品有限公司), Shanghai Frontier Health Pharmaceutical Technology Co., Ltd. (上海方予健康医药科技有限公司), Guangzhou Joincare Respiratory Medicine Engineering Technology Co., Ltd. (广州健康元呼吸药物工程技术有限公司), Joincare Haibin Pharmaceutical Co., Ltd. (健康元海滨药业有限公司);Livzon Group (丽珠集团) and subsidiaries of Livzon Group, Livzon Group Limin Pharmaceutical Manufacturing Factory (丽珠集团利民制药厂) . Livzon Group Livzon Pharmaceutical Factory (丽珠集团丽珠制药厂) . Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd. (珠海保税区丽珠合成制药有限公司), Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd. (上海丽珠制药有限公司), Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc. (丽珠集团新北江制药股份有限公司). Sichuan Guangda Pharmaceutical Manufacturing Co., Ltd. (四川光大制药有限公司), Zhuhai Livzon Diagnostics Inc. (珠海丽珠试剂股份有限公司), Livzon Group Fuzhou Fuxing | 15 |
| Pharmaceutical Co., Ltd. (丽珠集团福州福兴医药有限公司), Shanghai Livzon Biotechnology Co., Ltd. (上海丽珠生物科技有限公司), Livzon Group (Ningxia) Pharmaceutical Manufacturing Co., Ltd. (丽珠集团(宁夏) 制药有限公司), Livzon MABPharm Inc. (珠海市丽珠单抗生物技术有限公司), Zhuhai Lihe Medical Diagnostic Products Co., Ltd. (珠海丽禾医疗诊断产品有限公司), Zhuhai Livzon Chinese Medicine Modern Technology Co., Ltd. (珠海市丽珠中药现代化科技有限公司) | |
| Livzon MAB Pharm (US) Inc. (丽珠单抗生物技术(美国) 有限公司) | 21 |
| LIVZON BIOLOGICS (MALAYSIA) SDN. BHD., | 17 or 24 (registered capital of less than MYR 2.5 million, the tax rate is 17% on the first profit less than MYR 600,000; the registered capital exceeds MYR 2.5 million or the profit exceeds MYR 600,000, the tax rate is 24%) |
| Health Investment Holdings Ltd, Joincare Pharmaceutical GroupIndustry Co.,Ltd., Livzon International Ventures, Livzon International Ventures I, LivzonInternational Ventures II | 0 (Note1) |
| Other subsidiaries | 25 |
Note 1: Companies registered in the British Virgin Islands and the Cayman Islands are not subject toenterprise 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 PharmaceuticalOperation Enterprises issued by the State Administration of Taxation (Announcement of StateAdministration of Taxation 2012 No. 20) and the Notice of the Ministry of Finance, the GeneralAdministration of Customs, the State Administration of Taxation and the State Drug Administration on theValue-Added Tax Policies for Anti-Cancer Drugs (Caishui [2018] No. 47), the biological products sold bythe Company are subject to value added tax at 3% by the simple approach.
(2) Preferential enterprise income tax
The Company enjoys the preferential income tax policy for high-tech enterprises for the 3 years from 2022;The Company's subsidiaries, Shenzhen Taitai Pharmaceutical Co., Ltd. (深圳太太药业有限公司), ShenzhenHaibin Pharmaceutical Co., Ltd (深圳市海滨制药有限公司), Xinxiang Haibin Pharmaceutical Co., Ltd. (新乡海滨药业有限公司) and Shanghai Frontier Health Medicine Technology Co., Ltd. (上海方予健康医药科技有限公司) have re-applied for high-tech enterprise certification in this period. Joincare HaibinPharmaceutical Co., Ltd. (健康元海滨药业有限公司) entitled to enjoy preferential income tax policiesapplicable to high and new technology enterprises for 3 years with effective from 2021. Jiaozuo Joincare Bio
Technological Co., Ltd. (焦作健康元生物制品有限公司), Guangzhou Joincare Respiratory DrugEngineering Technology Co., Ltd. (广州健康元呼吸药物工程技术有限公司) have re-applied for high-techenterprise certification in this period. Livzon Group and its subsidiaries—Livzon Group LiminPharmaceutical Manufacturing Factory (丽珠集团利民制药厂), Livzon Group Livzon PharmaceuticalFactory (丽珠集团丽珠制药厂), Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd. (珠海保税区丽珠合成制药有限公司), Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd. (上海丽珠制药有限公司), Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd. (丽珠集团福州福兴医药有限公司) and Sichuan Guangda Pharmaceutical Manufacturing Co., Ltd. (四川光大制药有限公司) have re-applied for high-tech enterprise certification in this period. Shanghai Livzon Biotechnology Co., Ltd. (上海丽珠生物科技有限公司) are entitled to preferential income tax policies applicable to high and newtechnology enterprises for 3 years with effective from 2021. Livzon Group Xinbeijiang PharmaceuticalManufacturing Inc. (丽珠集团新北江制药股份有限公司), Zhuhai Livzon Diagnostics Inc. (珠海丽珠试剂股份有限公司) and Livzon MABPharm Inc. (珠海市丽珠单抗生物技术有限公司) entitled to enjoypreferential income tax policies applicable to high and new technology enterprises for 3 years with effectivefrom 2022. Livzon Group (Ningxia) Pharmaceutical Manufacturing Co., Ltd. (丽珠集团(宁夏) 制药有限公司) was approved to enjoy the enterprise taxation preference of the Encouraged Industries in WesternChina. The above companies 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 andArticle 86 of the Regulations for the Implementation of the Enterprise Income Tax Law of the People'sRepublic of China, the business of planting Chinese herbal medicines engaged by the subsidiaries of theLivzon, Datong Livzon Qiyuan Medicine Co., Ltd. (大同丽珠芪源药材有限公司) and Longxi LivzonShenyuan Medicine Co., Ltd. (陇西丽珠参源药材有限公司) are exempted from enterprise income tax.According to the "Notice of the Ministry of Finance and the State Administration of Taxation on thePreferential Policies for Enterprise Income Tax in the Hengqin Guangdong-Macao Deep Cooperation Zone"(Cai Shui [2022] No. 19), enterprise income tax is levied at a reduced rate of 15% for qualified industrialenterprises located in the Hengqin Guangdong-Macao Deep Cooperation Zone. The Livzon Group’ssubsidiaries, Zhuhai Lihe Medical Diagnostic Products Co., Ltd. (珠海丽禾医疗诊断产品有限公司) andZhuhai Livzon Chinese Medicine Modern Technology Co., Ltd. (珠海市丽珠中药现代化科技有限公司)meet the relevant conditions and are subjected to 15% enterprise income tax rate for the current period.According to the preferential tax policies for small low-profit enterprises, the portion of annual taxableincome of a small low profit enterprise which does not exceed RMB1 million is subject to enterprise incometax at a tax rate of 5%.
3. Others
□Applicable √N/A
V. Notes to the items of consolidated financial statements
1.Cash and bank balances
√Applicable □N/A
Unit: Yuan Currency: RMB
| Items | Balance at End of the Period | Balance at Beginning of the Period |
| Cash on hand | 410,711.67 | 231,883.95 |
| Bank deposits | 14,439,410,683.45 | 14,792,867,005.08 |
| Other monetary funds | 19,968,988.72 | 15,389,221.93 |
| Total | 14,459,790,383.84 | 14,808,488,110.96 |
| Including: total overseas deposits | 1,553,615,124.00 | 1,491,900,539.35 |
Other descriptions:
① Other monetary funds are mainly deposits for investments, deposits under guarantee of letter ofguarantee, 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. inother monetary funds were deducted from cash and cash equivalents in the cash flow statement. Apartfrom these restricted funds, there is no other charge, pledge or lock up on the balance of cash at bankand on hand that may limit its use, is kept outside China and may have probable risks in its collection.Below are the details of the use of restricted monetary funds:
| Item | 30 June 2023 | 31 December 2022 |
| Deposits for letter of credit | 2,436,523.26 | 444,032.37 |
| Deposits for bank acceptance bills | 1,275,408.99 | 947,255.39 |
| Deposits for other business | 1,120.00 | 1,120.00 |
| Total | 3,713,052.25 | 1,392,407.76 |
2. Financial assets held for trading
√Applicable □N/A
（1）Classification
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Financial asset measured at fair value through profit or loss | 90,560,120.03 | 109,015,664.98 |
| Including: | ||
| Debt instrument investments | 943,863.73 | 934,289.94 |
| Equity instrument investments | 89,616,256.30 | 102,648,863.47 |
| Derivative financial assets | 0.00 | 5,432,511.57 |
| Total | 90,560,120.03 | 109,015,664.98 |
Other descriptions:
√Applicable □N/A
① The Company's investments in equity instruments and debt instruments for financial assets held fortrading at the End of the Period were listed for trading on Shenzhen Stock Exchange, Hong Kong StockExchange and NASDAQ in the United States. The fair value was determined based on the closing price
on the last trading day in the Reporting Period.
② Derivative financial assets represent foreign currency forward contracts, futures contracts andgains from unexpired contracts measured at fair value which were recognised as financial assets as atthe balance sheet date.
（1）No restrictive financial asset measured at fair value through profit or loss was realised in theclosing balance.
（2）No hedging instruments in the closing balance and no hedging transactions have occurredduring the period.
3. Notes receivable
(1) Classified presentation of notes receivable
√Applicable □N/A
Unit: Yuan Currency: RMB
| Category | Balance at the End of the Period | Balance at the Beginning of the Period |
| Bank acceptance bills | 2,170,075,201.62 | 1,959,985,016.85 |
| Bad debts | 0.00 | 0.00 |
| Total | 2,170,075,201.62 | 1,959,985,016.85 |
(2) Notes receivable pledged at period end
√Applicable □N/A
Unit: Yuan Currency: RMB
| Category | Amount pledged at year end |
| Bank acceptance bills | 530,641,682.69 |
| Total | 530,641,682.69 |
As at 30 June 2023, bank acceptance bills with carrying amount of RMB 530,641,682.69(31December 2022: RMB469,659,266.19) 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 of the Period | Amount not derecognised at the End of the Period |
| Bank acceptance bills not yet mature but already endorsed | 526,352,414.45 | 0.00 |
| Bank acceptance bills not yet mature but already discounted | 153,755,208.00 | 0.00 |
| Total | 680,107,622.45 | 0.00 |
In the current period, the Company discounted bank acceptance bills of RMB 206,754.53 thousand(previous year: RMB714,219.83 thousand). Since the major risks and rewards such as interest rate risk
related to these bank acceptance bills have been transferred to the bank, the Company derecognizes thediscounted unexpired bank acceptance bills. Factoring expenses incurred was RMB 1,494.62 thousand(previous year: RMB 6,657.46 thousand).
(4) Bills transferred into account receivables for non-performance by the issuer as at balance sheetdate 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 Period | Balance at the Beginning of the Period | ||||||||
| Book balance | Provision for bad debts | Carrying value | Book balance | Provision for bad debts | Carrying value | |||||
| Amount | Ratio (%) | Amount | Expected credit loss rate (%) | Amount | Ratio (%) | Amount | Expected credit loss rate (%) | |||
| Provision for bad debts on individual item | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Including: | ||||||||||
| Bank acceptance bills | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Provision for bad debts on portfolio basis | 2,170,075,201.62 | 100.00 | 0.00 | 0.00 | 2,170,075,201.62 | 1,959,985,016.85 | 100.00 | 0.00 | 0.00 | 1,959,985,016.85 |
| Including: | ||||||||||
| Bank acceptance bills | 2,170,075,201.62 | 100.00 | 0.00 | 0.00 | 2,170,075,201.62 | 1,959,985,016.85 | 100.00 | 0.00 | 0.00 | 1,959,985,016.85 |
| Total | 2,170,075,201.62 | 100.00 | 0.00 | 0.00 | 2,170,075,201.62 | 1,959,985,016.85 | 100.00 | 0.00 | 0.00 | 1,959,985,016.85 |
Provision for bad debts on individual item:
□ Applicable √ N/A
Provision for bad debt on a collective basis:
√ Applicable □ N/A
Name combination provision project：Bank acceptance bills
Unit: Yuan Currency: RMB
| Name | Balance at the End of the Period | ||
| Notes receivable | Provision for bad debts | Expected credit loss rate (%) | |
| Within 1 year | 2,170,075,201.62 | 0 | 0 |
| Total | 2,170,075,201.62 | 0 | 0 |
Recognition criteria and instructions for withdrawing bad debts by combination
□ Applicable √ N/A
If the provision for bad debts is made in accordance with the general model of expected credit losses,please refer to other receivables disclosure:
□Applicable √N/A
(6) Provision for bad debts
□Applicable √N/A
(7) Actual write-off of notes receivable in the period
□Applicable √N/A
4. Accounts receivable
(1) Disclosed by aging
√Applicable □N/A
Unit: Yuan Currency: RMB
| Aging | Balance at the End of the Period |
| Subtotal within 1 year: | 3,224,390,323.16 |
| 1-2 years | 28,693,652.96 |
| 2-3 years | 4,656,372.91 |
| 3-4 years | 2,160,501.98 |
| 4-5 years | 11,192,993.98 |
| Over 5 years | 15,746,072.78 |
| Total | 3,286,839,917.77 |
According to the credit policy of the Company, the Company usually grants a credit period rangingfrom 30 to 90 days to customers.
(2) Disclosure by method of provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
| Category | Balance at the End of the Period | Balance at the Beginning of the Period | ||||||||
| Book balance | Provision for bad debts | Carrying value | Book balance | Provision for bad debts | Carrying value | |||||
| Amount | Ratio (%) | Amount | Expected credit loss rate (%) | Amount | Ratio (%) | Amount | Expected credit loss rate (%) | |||
| Provision for bad debts on individual item | 9,854,599.67 | 0.30 | 5,657,914.46 | 57.41 | 4,196,685.21 | 10,454,599.67 | 0.33 | 6,257,914.47 | 59.86 | 4,196,685.20 |
| Including: | ||||||||||
| Receivables from domestic customers | 9,709,854.02 | 0.30 | 5,513,168.81 | 56.78 | 4,196,685.21 | 10,454,599.67 | 0.33 | 6,257,914.47 | 59.86 | 4,196,685.20 |
| Receivables from overseas customers | 144,745.65 | 0.00 | 144,745.65 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Provision for bad debts on portfolio basis | 3,276,985,318.10 | 99.70 | 87,222,914.08 | 2.66 | 3,189,762,404.02 | 3,165,780,437.19 | 99.67 | 66,218,272.24 | 2.09 | 3,099,562,164.95 |
| Including: | ||||||||||
| Receivables from domestic customers | 2,725,925,374.52 | 82.93 | 79,148,008.90 | 2.90 | 2,646,777,365.62 | 2,659,276,844.47 | 83.66 | 60,180,304.43 | 2.26 | 2,599,096,540.04 |
| Receivables from overseas customers | 551,059,943.58 | 16.77 | 8,074,905.18 | 1.47 | 542,985,038.40 | 506,503,592.72 | 16.01 | 6,037,967.81 | 1.19 | 500,465,624.91 |
| Total | 3,286,839,917.77 | 100.00 | 92,880,828.54 | 2.83 | 3,193,959,089.23 | 3,176,235,036.86 | 100.00 | 72,476,186.71 | 2.28 | 3,103,758,850.15 |
Provision for bad debt on individual item:
√Applicable □N/A
Unit: Yuan Currency: RMB
| Name | Closing balance | |||
| Book balance | Provision for bad debts | Expected credit loss rate (%) | Reason of provision | |
| Purchase of goods | 9,854,599.67 | 5,657,914.46 | 57.41 | Not expected to be recoverable |
| Total | 9,854,599.67 | 5,657,914.46 | 57.41 | / |
Descriptions of Provision for bad debt on individual item:
□Applicable √N/A
Provision for bad debts on portfolio basis:
√Applicable □N/A
Provision for bad debts on portfolio basis: Receivables from domestic customers
Unit: Yuan Currency: RMB
| Ageing | Closing balance | ||
| Account receivables | Provision for bad debt | Expected credit loss rate (%) | |
| Within 1 year: | 2,673,370,500.41 | 52,207,197.80 | 1.95 |
| 1 to 2 years (inclusive of 2 years) | 28,686,427.16 | 5,142,859.52 | 17.93 |
| 2 to 3 years (inclusive of 3 years) | 4,656,372.91 | 2,678,783.10 | 57.53 |
| 3 to 4 years (inclusive of 4 years) | 2,160,501.98 | 2,097,208.02 | 97.07 |
| 4 to 5 years (inclusive of 5 years) | 2,594,611.32 | 2,564,999.72 | 98.86 |
| Over 5 years | 14,456,960.74 | 14,456,960.74 | 100.00 |
| Total | 2,725,925,374.52 | 79,148,008.90 | 2.90 |
Standards of provision for bad debts on portfolio basis and descriptions thereof:
□Applicable √N/A
Provision for bad debts on portfolio basis: Receivables from overseas customers
Unit: Yuan Currency: RMB
| Ageing | Closing balance | ||
| Account receivables | Provision for bad debt | Expected credit loss rate (%) | |
| Within 1 year: | 551,052,717.78 | 8,073,460.02 | 1.47 |
| 1 to 2 years (inclusive of 2 years) | 7,225.80 | 1,445.16 | 20.00 |
| Total | 551,059,943.58 | 8,074,905.18 | 1.47 |
Standards of provision for bad debts on portfolio basis and descriptions thereof:
□Applicable √N/A
If the provision for bad debts is made in accordance with the general model of expected credit losses,please refer to other receivables disclosure:
□Applicable √N/A
(3) Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
| Category | Beginning balance | Changes for the current period | Closing balance | |||
| Provision | Recovery or reversal | Removal/write-off | Others | |||
| Provision for bad debts | 72,476,186.71 | 20,935,155.87 | 0.00 | 537,700.06 | 7,186.02 | 92,880,828.54 |
| Total | 72,476,186.71 | 20,935,155.87 | 0.00 | 537,700.06 | 7,186.02 | 92,880,828.54 |
At 30 June 2023 and 31 December 2022, the Company had no overdue but not impaired accountsreceivable.
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
| Item | Amount written-off |
| Accounts receivable actually written off | 537,700.06 |
Significant accounts receivable that are written off:
□Applicable √N/A
Descriptions of write-off of accounts receivable:
□Applicable √N/A
(5) Accounts receivable due from the top five debtors
√Applicable □N/A
As of 30 June 2023, the total amount of the top five debtors in closing balance is RMB321,299,912.04,accounting for 9.78% of the total amount of closing balance of accounts receivable, and the correspondingclosing balance of provision for bad debts is total RMB7,349,948.86.
(6) Accounts receivable derecognized due to the transfer of financial assets in each reporting period.
□Applicable √N/A
(7) Assets or liabilities formed by the continuing involvement of transferred accounts receivables in eachreporting period.
□Applicable √N/A
Other descriptions:
□Applicable √N/A
5. Prepayments
(1) Disclosure of prepayments by aging analysis
√Applicable □N/A
Unit: Yuan Currency: RMB
| Aging | Balance at the End of the Period | Balance at the Beginning of the Period | ||
| Amount | Ratio (%) | Amount | Ratio (%) | |
| Within 1 year | 305,775,902.09 | 83.71 | 343,457,382.98 | 94.29 |
| 1 to 2 years | 53,870,750.44 | 14.75 | 16,867,695.41 | 4.63 |
| 2 to 3 years | 2,277,462.13 | 0.62 | 948,519.54 | 0.26 |
| Over 3 years | 3,369,585.21 | 0.92 | 2,991,544.64 | 0.82 |
| Total | 365,293,699.87 | 100.00 | 364,265,142.57 | 100.00 |
(2) Prepayments due from the top five debtors
√Applicable □N/A
As of 30 June 2023, the total amount of the top five prepayments in closing balance isRMB123,487,227.51, accounting for33.80% 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 the Beginning of the Period |
| Dividends receivable | 40,304,700.46 | 0.00 |
| Other receivables | 65,140,046.50 | 52,535,740.14 |
| Total | 105,444,746.96 | 52,535,740.14 |
Other descriptions:
□Applicable √N/A
Dividends receivable
(1) Dividends receivable
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Kunlun Energy Company Limited | 264,700.46 | 0.00 |
| Tianjin Tongrentang Group Co., Ltd. | 40,040,000.00 | 0.00 |
| Total | 40,304,700.46 | 0.00 |
(2) Significant dividends receivable aged over 1 year.
□Applicable √N/A
(3) Provision made for bad debts
√Applicable □N/A
At the End of the Period, provision for bad debts on those in first stage:
| Category | Book balance | Expected credit loss rate for the next 12 months(%) | Provision for bad debts | Carrying amount | Reason |
| Provision for bad debts on individual item | 40,304,700.46 | 0.00 | 0.00 | 40,304,700.46 | |
| Dividends receivable | 40,304,700.46 | 0.00 | 0.00 | 40,304,700.46 | Expected to be recovered |
| Total | 40,304,700.46 | 0.00 | 0.00 | 40,304,700.46 |
Other receivables
□Applicable √N/A
Other receivables
(1) Disclosed by aging
√Applicable □N/A
Unit: Yuan Currency: RMB
| Aging | Balance at the End of the Period |
| Subtotal within 1 year | 62,129,686.89 |
| 1 to 2 years | 3,885,765.11 |
| 2 to 3 years | 3,346,403.49 |
| 3 to 4 years | 2,182,615.17 |
| 4 to 5 years | 744,277.02 |
| Over 5 years | 32,254,415.62 |
| Total | 104,543,163.30 |
(2) Disclosure by nature
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Security deposits, deposits and rental fees | 10,995,397.90 | 12,668,692.36 |
| Reserved fund and advances | 36,198,615.71 | 25,494,468.62 |
| Related party balances | 1,552,455.94 | 1,097,855.07 |
| External entities balances | 10,936,496.20 | 13,226,352.58 |
| Tax refund on exports | 11,068,188.29 | 16,539,609.68 |
| Treasury bonds and security deposits | 17,968,386.04 | 17,968,386.04 |
| Others | 15,823,623.22 | 3,812,338.32 |
| Total | 104,543,163.30 | 90,807,702.67 |
(3) Information of provision for bad debts
Unit: Yuan Currency: RMB
| Provision for bad debt | First stage | Second stage | Third stage | Total |
| Expected credit loss | Expected credit loss for lifetime (no credit impairment occurred) | Expected credit loss for lifetime (credit |
| within 12 months | impairment has occurred) | |||
| Beginning balance | 0.00 | 9,793,858.02 | 28,478,104.51 | 38,271,962.53 |
| Movement of beginning balance during the period | ||||
| --transfer to second stage | 0.00 | 0.00 | 0.00 | 0.00 |
| --transfer to third stage | 0.00 | -223,851.98 | 223,851.98 | 0.00 |
| --Reverse to second stage | 0.00 | 0.00 | 0.00 | 0.00 |
| --Reverse to first stage | 0.00 | 0.00 | 0.00 | 0.00 |
| Provision for the year | 0.00 | 1,300,635.82 | 0.00 | 1,300,635.82 |
| Reversal in the year | 0.00 | 0.00 | 26,400.00 | 26,400.00 |
| Transfer in the year | 0.00 | 0.00 | 0.00 | 0.00 |
| Write-off in the year | 0.00 | 0.00 | 223,851.98 | 223,851.98 |
| Other movement | 0.00 | 15,580.93 | 65,189.50 | 80,770.43 |
| Closing balance | 0.00 | 10,886,222.79 | 28,516,894.01 | 39,403,116.80 |
At the End of the Period, No provision for bad debts on those in first stage.At the End of the Period, provision for bad debts on those in second stage:
| Category | Book balance | Expected credit loss rate for the lifetime(%) | Provision for bad debts | Carrying amount | Reason |
| Provision for bad debts on individual item | 0.00 | 0.00 | 0.00 | 0.00 | |
| Provision for bad debts on portfolio basis | 76,026,269.29 | 14.32 | 10,886,222.79 | 65,140,046.50 | |
| Export tax refund receivable | 11,068,188.29 | 3.32 | 367,132.06 | 10,701,056.23 | |
| Security deposits, deposits and rental receivable | 10,995,397.90 | 26.03 | 2,862,178.09 | 8,133,219.81 | |
| Other receivables | 53,962,683.10 | 14.19 | 7,656,912.64 | 46,305,770.46 | |
| Total | 76,026,269.29 | 14.32 | 10,886,222.79 | 65,140,046.50 |
At the End of the Period, provision for bad debts on those in third stage:
| Category | Book balance | Expected credit loss rate for the lifetime(%) | Provision for bad debts | Carrying amount | Reason |
| Provision for bad debts on individual item | 28,516,894.01 | 100.00 | 28,516,894.01 | 0.00 | |
| Other receivables | 28,516,894.01 | 100.00 | 28,516,894.01 | 0.00 | Not expected to be recoverable |
| Provision for bad debts on portfolio basis | 0.00 | 0.00 | 0.00 | 0.00 | |
| Total | 28,516,894.01 | 100.00 | 28,516,894.01 | 0.00 |
As of 31 December 2022, information of provision for bad debts:
As of 31 December 2022, No Provision for bad debts on those in first stage.As of 31 December 2022, Provision for bad debts on those in second stage:
| Category | Book balance | Expected credit loss rate for the lifetime(%) | Provision for bad debts | Carrying amount | Reason |
| Provision for bad debts on individual item | 0.00 | 0.00 | 0.00 | 0.00 | |
| Provision for bad debts on portfolio basis | 62,329,598.16 | 15.71 | 9,793,858.02 | 52,535,740.14 | |
| Export tax refund receivable | 16,539,609.68 | 1.76 | 290,344.77 | 16,249,264.91 | |
| Security deposits, deposits and rental receivable | 12,668,692.36 | 28.52 | 3,613,600.49 | 9,055,091.87 | |
| Other receivables | 33,121,296.12 | 17.78 | 5,889,912.76 | 27,231,383.36 |
| Category | Book balance | Expected credit loss rate for the lifetime(%) | Provision for bad debts | Carrying amount | Reason |
| Total | 62,329,598.16 | 15.71 | 9,793,858.02 | 52,535,740.14 |
As of 31 December 2022, Provision for bad debts on those in third stage:
| Category | Book balance | Expected credit loss rate for the lifetime(%) | Provision for bad debts | Carrying amount | Reason |
| Provision for bad debts on individual item | 28,478,104.51 | 100.00 | 28,478,104.51 | 0.00 | |
| Other receivables | 28,478,104.51 | 100.00 | 28,478,104.51 | 0.00 | Not expected to be recoverable |
| Provision for bad debts on portfolio basis | 0.00 | 0.00 | 0.00 | 0.00 | |
| Total | 28,478,104.51 | 100.00 | 28,478,104.51 | 0.00 |
Descriptions of the significant changes in the gross carrying amount of other receivables for which thechanges in loss allowance occur for the current period:
□Applicable √N/A
Provision for bad debts in the current period and the basis for assessing whether the credit risk offinancial instruments have increased significantly:
□Applicable √N/A
(4) Actual written-off of other receivables in this period
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount written off |
| Other receivables actually written off | 223,851.98 |
Significant other receivables that are written off:
□Applicable √N/A
Descriptions of write-off of other receivables:
□Applicable √N/A
(5) Other receivables due from the top five debtors
√Applicable □N/A
Unit: Yuan Currency: RMB
| Name of entity | Nature | Other receivables Closing balance | Ageing | Proportion to total other receivables (%) | Provision for bad debts Closing balance |
| Hua Xia Securities Co., Ltd. | Treasury bonds and security deposits | 17,968,386.04 | Over 5 years | 17.19 | 17,968,386.04 |
| Tax refund on exports | Export tax refund | 11,068,188.29 | Within 2 years | 10.59 | 367,132.06 |
| Guangzhou Yinhe Sunshine Biological Products Co., Ltd. | Loan | 5,000,000.00 | Over 5 years | 4.78 | 5,000,000.00 |
| Suzhou Sino Imp.& Exp. Co., Ltd. | Security deposits | 2,150,000.00 | Over 3 years | 2.06 | 74,250.00 |
| Jiaozuo Yangsen Trading Co., Ltd. | Security deposits | 1,174,630.34 | Over 5 years | 1.12 | 1,174,630.34 |
| Total | / | 37,361,204.67 | 35.74 | 24,584,398.44 |
(6) Receivables involving government subsidies
□Applicable √N/A
(7) Other receivables derecognised due to the transfer of financial assets
□Applicable √N/A
(8) Assets or liabilities formed by the continuing involvement of transferred other receivables：
□Applicable √N/A
Other descriptions
□Applicable √N/A
7. Inventories
(1) Inventories by category
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period | ||||
| Book balance | Provision for diminution in value | Carrying amount | Book balance | Provision for diminution in value | Carrying amount | |
| Raw materials | 632,393,396.16 | 28,682,906.99 | 603,710,489.17 | 642,893,858.16 | 37,543,320.41 | 605,350,537.75 |
| Packaging materials | 134,682,255.54 | 11,249,787.36 | 123,432,468.18 | 137,488,629.87 | 11,191,692.58 | 126,296,937.29 |
| Goods in process and Proprietary semi-finished goods | 798,166,154.01 | 86,722,717.73 | 711,443,436.28 | 649,362,917.78 | 65,482,989.52 | 583,879,928.26 |
| Low-value consumables | 103,244,084.59 | 260,524.03 | 102,983,560.56 | 80,473,347.95 | 495,743.41 | 79,977,604.54 |
| Finished goods and stock goods | 1,305,985,264.09 | 23,279,507.09 | 1,282,705,757.00 | 1,138,363,946.23 | 22,354,857.60 | 1,116,009,088.63 |
| Sub-contracting materials | 1,952,145.59 | 0.00 | 1,952,145.59 | 2,318,531.50 | 0.00 | 2,318,531.50 |
| Consumptive biological assets | 14,671,473.02 | 0.00 | 14,671,473.02 | 13,692,837.04 | 0.00 | 13,692,837.04 |
| Goods in transit | 9,515,968.65 | 0.00 | 9,515,968.65 | 34,344,534.56 | 0.00 | 34,344,534.56 |
| Total | 3,000,610,741.65 | 150,195,443.20 | 2,850,415,298.45 | 2,698,938,603.09 | 137,068,603.52 | 2,561,869,999.57 |
(2) Provision for diminution in value of inventories and provision for diminution in value of contractperformance costs
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the Beginning of the Period | Increase during the Period | Decrease during the Period | Balance at the End of the Period | ||
| Provision | Others | Reversal or written-off | Others | |||
| Raw materials | 37,543,320.41 | 2,995,579.91 | 0.00 | 11,855,993.33 | 0.00 | 28,682,906.99 |
| Packaging materials | 11,191,692.58 | 2,027,096.21 | 0.00 | 1,969,001.43 | 0.00 | 11,249,787.36 |
| Goods in process and Proprietary semi-finished goods | 65,482,989.52 | 23,859,293.66 | 0.00 | 2,619,565.45 | 0.00 | 86,722,717.73 |
| Low-value consumables | 495,743.41 | 1,158,623.99 | 0.00 | 1,393,843.37 | 0.00 | 260,524.03 |
| Finished goods and stock goods | 22,354,857.60 | 10,015,530.95 | 0.00 | 9,090,881.46 | 0.00 | 23,279,507.09 |
| Total | 137,068,603.52 | 40,056,124.72 | 0.00 | 26,929,285.04 | 0.00 | 150,195,443.20 |
Provision for decline in value of inventories (Continued)
| Item | Basis in determination of net recoverable amount/residual value and cost to be incurred | Reason for reversal or written-off of provision for decline in value of inventories/ Provision for impairment of contract performance cost |
| Raw materials | The estimated selling price less the estimated costs of completion, selling expenses and related taxes | Processing, sale of finished goods and discard |
| Packaging materials | The estimated selling price less the estimated costs of completion, selling expenses and related taxes | Processing, sale of finished goods and discard |
| Goods in process and Proprietary semi-finished goods | The estimated selling price less the estimated costs of completion, selling expenses and related taxes | Processing of finished goods and discard |
| Low-value consumables | The estimated selling price less the related taxes | Used or discard |
| Finished goods and stock goods | The estimated selling price less the estimated selling 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/A
Other descriptions:
□Applicable √N/A
8. Non-current assets due within one year
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Long-term receivables due within one year | 0.00 | 0.00 |
| Time deposits due within 1 year | 55,066,666.67 | 54,048,611.11 |
| Total | 55,066,666.67 | 54,048,611.11 |
Significant 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 the End of the Period | Balance at the Beginning of the Period |
| Input VAT pending deduction /Input tax pending for verification | 51,349,452.39 | 35,679,462.66 |
| Prepaid income tax | 14,773,784.81 | 17,665,709.39 |
| Cash Management | 98,970,691.50 | 92,815,738.44 |
| Cost of returns receivable | 12,043,428.52 | 12,043,428.52 |
| Others | 2,529,662.74 | 5,335,561.31 |
| Total | 179,667,019.96 | 163,539,900.32 |
10. Long-term equity investment
√Applicable □N/A
Unit: Yuan Currency: RMB
| Investee | Balance at the Beginning of the Period | Movement during the Period | Balance at the End of the Period | Closing balance of provision for impairment | |||||||
| Additions in investment | Decrease in investment | Investment gain or loss under equity method | Adjustment in other comprehensive income | Changes of other equity | Announced distribution of cash dividend or profit | Provision for impairment | Others | ||||
| I. Subsidiaries | |||||||||||
| Zhongshan Renhe Health Products Co., Ltd. | 6,337,823.35 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 6,337,823.35 | 6,337,823.35 |
| Guangzhou Hiyeah Industry Co., Ltd. | 1,949,893.45 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,949,893.45 | 1,949,893.45 |
| Subtotal | 8,287,716.80 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 8,287,716.80 | 8,287,716.80 |
| II. Associates | |||||||||||
| Livzon Medical Electronic Equipment (Plant) Co., Ltd. | 1,200,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,200,000.00 | 1,200,000.00 |
| Guangdong Blue Treasure Pharmaceutical Co. Ltd. | 93,084,766.28 | 0.00 | 0.00 | 7,123,513.81 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100,208,280.09 | 0.00 |
| Shenzhen City Youbao Technology Co., Ltd. | 1,496,595.40 | 0.00 | 0.00 | 160,208.11 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,656,803.51 | 0.00 |
| AbCyte Therapeutics Inc. | 13,767,260.06 | 0.00 | 0.00 | -1,011,802.73 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 12,755,457.33 | 0.00 |
| L&L Biopharma, Co. Ltd. | 13,903,676.49 | 0.00 | 0.00 | -657,044.41 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 13,246,632.08 | 0.00 |
| Zhuhai Sanmed Biotech Inc. | 61,291,769.61 | 0.00 | 0.00 | -9,964,795.62 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 51,326,973.99 | 0.00 |
| Aetio Biotheraphy, Inc. | 16,034,314.68 | 0.00 | 0.00 | -452,987.59 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 15,581,327.09 | 0.00 |
| Jiangsu Atom Bioscience and Pharmaceutical Co., Ltd. | 92,803,409.42 | 0.00 | 0.00 | -3,635,306.07 | 0.00 | 10,840.09 | 0.00 | 0.00 | 0.00 | 89,178,943.44 | 0.00 |
| Tianjin Tongrentang Group Co., Ltd. | 726,580,281.08 | 0.00 | 0.00 | 48,579,279.42 | 0.00 | 0.00 | 40,040,000.00 | 0.00 | 0.00 | 735,119,560.50 | 0.00 |
| Infinite Intelligence Pharmaceutical Co. Ltd. | 18,857,727.08 | 0.00 | 0.00 | -698,434.04 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 18,159,293.04 | 0.00 |
| Shenzhen Kangti Biomedical Technology Co., Ltd. | 6,000,000.00 | 4,000,000.00 | 0.00 | -37,820.11 | 0.00 | 0.00 | 0.00 | 0.00 | 9,962,179.89 | 0.00 | |
| Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. | 285,538,495.52 | 0.00 | 0.00 | 3,807,951.04 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 289,346,446.56 | 0.00 |
| Ningbo Ningrong Biomedical Co., Ltd. | 27,179,209.51 | 0.00 | 0.00 | -158,884.43 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 27,020,325.08 | 0.00 |
| Feellife Health Inc. | 15,303,495.74 | 0.00 | 0.00 | 1,179,937.17 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 16,483,432.91 | 0.00 |
| Jiangsu Baining Yingchuang | 28,732,381.11 | 0.00 | 0.00 | 837,520.76 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 29,569,901.87 | 0.00 |
| Medical Technology Co., Ltd. | |||||||||||
| Shanghai Sheo Pharmacerutical Technology Co., Ltd. | 19,309,212.61 | 0.00 | 0.00 | -246,854.02 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 19,062,358.59 | 0.00 |
| Haisong Precision Parts (Taicang) Co., Ltd.(Note 1) | 0.00 | 1,500,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,500,000.00 | 0.00 |
| Subtotal | 1,421,082,594.59 | 5,500,000.00 | 0.00 | 44,824,481.29 | 0.00 | 10,840.09 | 40,040,000.00 | 0.00 | 0.00 | 1,431,377,915.97 | 1,200,000.00 |
| Total | 1,429,370,311.39 | 5,500,000.00 | 0.00 | 44,824,481.29 | 0.00 | 10,840.09 | 40,040,000.00 | 0.00 | 0.00 | 1,439,665,632.77 | 9,487,716.80 |
Other descriptions:
Note 1: On 15 March 2021, Shanghai Frontier Health Pharmaceutical Technology Co., Ltd. (上海方予健康医药科技有限公司) (“Shanghai Frontier”), a subsidiary of the Company, signed an investment agreement with Haisong Precision Parts (Taicang)Co., Ltd. (海嵩精密零部件(太仓)有限公司) (“Haisong Precision”). Shanghai Frontier proposes to contribute RMB3,230,000and hold 35% equity of Haisong Precision (with the Phase-I contribution of RMB1,500,000). Pursuant to the shareholderagreement and the articles of association, Shanghai Frontier will appoint one director of Haisong Precision. As ShanghaiFrontier can have significant effect on Haisong Precision, the investment in Haisong Precision is accounted as long-term equityinvestment.
11. Other equity instrument investments
(1) Descriptions of other equity investment
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Shanghai Yunfeng Xinchuang Equity Investment Center | 67,932,735.87 | 67,935,704.36 |
| Shanghai JingYi Investment Center | 72,891,151.99 | 73,616,359.91 |
| Qianhai Equity Investment Fund | 251,543,869.00 | 243,378,742.17 |
| Apricot Forest, Inc | 120,788,500.00 | 120,788,500.00 |
| Chengdu JinRui Foundation Biotechnology Co., Ltd. | 20,000,000.00 | 0.00 |
| Zhuhai China Resources Bank Co., Ltd. | 158,400,000.00 | 158,400,000.00 |
| GLOBAL HEALTH SCIENCE | 246,961,521.36 | 271,980,388.15 |
| Nextech V Oncology S.C.S., SICAV-SIF | 18,034,888.35 | 23,996,121.32 |
| Yizun Biopharmaceutics (Shanghai) Co., Ltd. | 30,513,209.27 | 30,513,209.27 |
| ELICIO THERAPEUTICS, INC. | 9,087,715.05 | 34,823,014.36 |
| CARISMA THERAPEUTICS, INC. | 45,520,870.86 | 34,821,295.50 |
| Beijing Luzhu Biotechnology Co., Ltd. | 83,485,178.24 | 53,654,738.60 |
| Shanghai Keentai Biotechnology Co., Ltd. | 12,000,000.00 | 12,000,000.00 |
| Others | 55,767,994.59 | 68,050,805.41 |
| Total | 1,192,927,634.58 | 1,193,958,879.05 |
(2) Descriptions of investments in non-trading equity instruments
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Dividend income recognized for the Period | Cumulative gains | Cumulative losses | Amount transferred from other comprehensive income to retained earning | Reason for the designation | Reason for transfer as fair value through other comprehensive income |
| Shanghai Yunfeng Xinchuang Equity Investment Center | 0.00 | 0.00 | 0.00 | 0.00 | non-trading | |
| Shanghai JingYi Investment Center | 0.00 | 0.00 | 0.00 | 0.00 | non-trading |
| Qianhai Equity Investment Fund | 0.00 | 0.00 | 0.00 | 0.00 | non-trading | |
| Apricot Forest, Inc | 0.00 | 0.00 | 0.00 | 0.00 | non-trading | |
| Chengdu JinRui Foundation Biotechnology Co., Ltd. | 0.00 | 0.00 | 0.00 | 0.00 | non-trading | |
| Zhuhai China Resources Bank Co., Ltd. | 0.00 | 0.00 | 0.00 | 0.00 | non-trading | |
| GLOBAL HEALTH SCIENCE | 17,709,895.19 | 0.00 | 0.00 | 0.00 | non-trading | |
| Nextech V Oncology S.C.S., SICAV-SIF | 0.00 | 0.00 | 0.00 | 0.00 | non-trading | |
| Yizun Biopharmaceutics (Shanghai) Co., Ltd. | 0.00 | 0.00 | 0.00 | 0.00 | non-trading | |
| ELICIO THERAPEUTICS, INC. | 0.00 | 0.00 | 0.00 | 0.00 | non-trading | |
| CARISMA THERAPEUTICS, INC. | 0.00 | 0.00 | 0.00 | 0.00 | non-trading | |
| Beijing Luzhu Biotechnology Co., Ltd. | 0.00 | 0.00 | 0.00 | 0.00 | non-trading | |
| Shanghai Keentai Biotechnology Co., Ltd. | 0.00 | 0.00 | 0.00 | 0.00 | non-trading | |
| Others | 0.00 | 0.00 | 0.00 | 0.00 | non-trading | |
| Total | 17,709,895.19 | 0.00 | 0.00 | 0.00 |
Other descriptions:
□Applicable √N/A
12. Investment properties
Measurement of investment properties
(1) Investment properties measured at cost
Unit: Yuan Currency: RMB
| Item | Housing and buildings | Total |
| I. Book value: | ||
| 1. Beginning balance | 61,914,754.28 | 61,914,754.28 |
| 2.Increase | 0.00 | 0.00 |
| 3.Decrease | 0.00 | 0.00 |
| 4.Closing balance | 61,914,754.28 | 61,914,754.28 |
| II. Accumulated depreciation and amortisation | ||
| 1.Beginning balance | 55,723,278.85 | 55,723,278.85 |
| 2.Increase | 0.00 | 0.00 |
| (1) Amortisation for the year | ||
| 3.Decrease | 0.00 | 0.00 |
| (1) Disposal | ||
| 4. Closing balance | 55,723,278.85 | 55,723,278.85 |
| III. Provision for impairment | ||
| 1.Beginning balance | 0.00 | 0.00 |
| 2.Increase | 0.00 | 0.00 |
| (1) Provision | 0.00 | 0.00 |
| 3. Decrease | 0.00 | 0.00 |
| (1) Disposal | 0.00 | 0.00 |
| 4.Closing balance | 0.00 | 0.00 |
| IV. Carrying amount | ||
| 1.Carrying value at period end | 6,191,475.43 | 6,191,475.43 |
| 2.Carrying value at beginning of the period | 6,191,475.43 | 6,191,475.43 |
(2) Investment properties whose title certificate has not completed:
□Applicable √N/A
Other descriptions:
□Applicable √N/A
13. Fixed assets
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Year |
| Fixed assets | 5,203,199,498.59 | 5,265,200,110.91 |
| Fixed assets for disposal | 0.00 | 0.00 |
| Total | 5,203,199,498.59 | 5,265,200,110.91 |
Fixed assets
(1) Details of fixed assets
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Housing and buildings | Machinery and equipment | Motor vehicles | Electronic equipment and others | Total |
| I. Book value: | |||||
| 1.Beginning balance | 4,305,054,019.02 | 5,637,544,484.73 | 106,291,576.88 | 856,552,473.06 | 10,905,442,553.69 |
| 2.Increase | 14,409,214.37 | 212,826,051.65 | 6,316,978.34 | 41,725,652.00 | 275,277,896.36 |
| (1) Purchase | 1,178,647.55 | 45,700,594.29 | 5,063,095.64 | 17,254,796.59 | 69,197,134.07 |
| (2) Transfer from construction in progress | 13,230,566.82 | 167,125,457.36 | 0.00 | 19,244,917.18 | 199,600,941.36 |
| (3) Changes in business merger | 0.00 | 0.00 | 805,832.74 | 5,193,524.57 | 5,999,357.31 |
| (4) Others | 0.00 | 0.00 | 448,049.96 | 32,413.66 | 480,463.62 |
| 3.Decrease | 225,272.42 | 6,055,902.27 | 2,358,365.71 | 3,878,689.30 | 12,518,229.70 |
| (1) Disposal or scrap | 225,272.42 | 6,055,902.27 | 2,358,365.71 | 3,878,689.30 | 12,518,229.70 |
| (2) Others | 0.00 | 0.00 | 0.00 | ||
| 4.Closing balance | 4,319,237,960.97 | 5,844,314,634.11 | 110,250,189.51 | 894,399,435.76 | 11,168,202,220.35 |
| II. Accumulated depreciation | |||||
| 1.Beginning balance | 1,806,888,229.17 | 3,109,967,392.10 | 82,170,130.55 | 538,254,242.39 | 5,537,279,994.21 |
| 2.Increase | 95,783,017.77 | 189,528,756.68 | 5,049,519.17 | 43,078,940.54 | 333,440,234.16 |
| (1) Provision | 95,783,017.77 | 189,528,756.68 | 3,998,932.75 | 39,103,823.83 | 328,414,531.03 |
| (2) Changes in business merger | 0.00 | 0.00 | 602,536.46 | 3,942,703.05 | 4,545,239.51 |
| (3)Other increase | 0.00 | 0.00 | 448,049.96 | 32,413.66 | 480,463.62 |
| 3.Decrease | 202,745.18 | 3,947,374.74 | 2,036,893.14 | 2,474,867.09 | 8,661,880.15 |
| (1) Disposal or scrap | 202,745.18 | 3,947,374.74 | 2,036,893.14 | 2,474,867.09 | 8,661,880.15 |
| (2) Others | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 4.Closing balance | 1,902,468,501.76 | 3,295,548,774.04 | 85,182,756.58 | 578,858,315.84 | 5,862,058,348.22 |
| III. Provision for impairment | |||||
| 1.Beginning balance | 26,474,491.83 | 57,549,501.09 | 0.00 | 18,938,455.65 | 102,962,448.57 |
| 2.Increase | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| (1) Provision | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 3.Decrease | 0.00 | 17,897.06 | 0.00 | 177.97 | 18,075.03 |
| (1) Disposal or scrap | 0.00 | 17,897.06 | 0.00 | 177.97 | 18,075.03 |
| 4.Closing balance | 26,474,491.83 | 57,531,604.03 | 0.00 | 18,938,277.68 | 102,944,373.54 |
| IV. Carrying amount | |||||
| 1.Carrying value at period end | 2,390,294,967.38 | 2,491,234,256.04 | 25,067,432.93 | 296,602,842.24 | 5,203,199,498.59 |
| 2.Carrying value at beginning of the period | 2,471,691,298.02 | 2,470,027,591.54 | 24,121,446.33 | 299,359,775.02 | 5,265,200,110.91 |
(2) Fixed assets with temporary idle
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Book value | Accumulated depreciation | Provision for impairment | Carrying amount | Note |
| Housing and buildings | 23,926,279.99 | 15,096,166.69 | 5,155,770.80 | 3,674,342.50 | |
| Machinery and equipment | 157,053,168.18 | 107,108,974.67 | 35,957,973.60 | 13,986,219.91 | |
| Electronic equipment and others | 2,529,359.60 | 2,064,729.22 | 167,401.17 | 297,229.21 | |
| Total | 183,508,807.77 | 124,269,870.58 | 41,281,145.57 | 17,957,791.62 |
(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
| Item | Carrying Amount |
| Housing and buildings | 1,388,823.73 |
(5) Fixed assets without property certificate
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Carrying Amount | Reason for pending for certificate of ownership |
| Housing and buildings | 167,321,294.13 | Application in progress |
Other descriptions
□Applicable √N/A
Disposal of fixed assets
□Applicable √N/A
14. Construction in progress
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Construction in progress | 941,543,760.31 | 810,835,273.97 |
| Construction materials | 464,794.99 | 464,794.99 |
| Total | 942,008,555.30 | 811,300,068.96 |
Construction in progress
(1) Descriptions of construction in progress
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period | ||||
| Book balance | Provision for impairment | Net book value | Book balance | Provision for impairment | Net book value | |
| Haibin Pharma Pingshang New Factory | 169,982,198.67 | 11,068,266.54 | 158,913,932.13 | 133,771,969.05 | 11,068,266.54 | 122,703,702.51 |
| Guangda New Factory Project | 404,619,421.41 | 0.00 | 404,619,421.41 | 360,963,893.27 | 0.00 | 360,963,893.27 |
| Fuxing Company Phase I & II Projects and others | 30,491,744.08 | 0.00 | 30,491,744.08 | 38,842,449.73 | 0.00 | 38,842,449.73 |
| Project of Shijiao New Factory | 23,806,304.97 | 0.00 | 23,806,304.97 | 12,409,895.73 | 0.00 | 12,409,895.73 |
| Transformation Project of Pharmaceutical Factory Workshop | 74,126,138.66 | 0.00 | 74,126,138.66 | 70,972,186.23 | 0.00 | 70,972,186.23 |
| Construction Project for Microsphere Workshop (including Gose) of Livzon Group Livzon Pharmaceutical Factory | 38,727,287.07 | 0.00 | 38,727,287.07 | 39,976,590.91 | 0.00 | 39,976,590.91 |
| P06 Construction Project of Livzon Group Livzon Pharmaceutical Factory | 0.00 | 0.00 | 0.00 | 180,053.79 | 0.00 | 180,053.79 |
| Project of lyophilized powder injection workshop | 0.00 | 0.00 | 0.00 | 1,157,559.47 | 0.00 | 1,157,559.47 |
| P04/P05 Construction Project of Livzon Group Livzon Pharmaceutical Factory | 1,586,060.52 | 0.00 | 1,586,060.52 | 0.00 | 0.00 | 0.00 |
| Technology transformation project for Microsphere Phase II of Shanghai Livzon | 15,364,843.69 | 0.00 | 15,364,843.69 | 1,560,960.52 | 0.00 | 1,560,960.52 |
| Jiaozuo new factory relocation project | 36,513,524.20 | 0.00 | 36,513,524.20 | 34,677,843.69 | 0.00 | 34,677,843.69 |
| Others | 157,563,844.04 | 169,340.46 | 157,394,503.58 | 127,559,478.58 | 169,340.46 | 127,390,138.12 |
| Total | 952,781,367.31 | 11,237,607.00 | 941,543,760.31 | 822,072,880.97 | 11,237,607.00 | 810,835,273.97 |
(2) Changes in significant construction in progress
√Applicable □N/A
Unit: Yuan Currency: RMB
| Project item | Budget | Balance at the Beginning of the Period | Increase | Transfer to fixed assets | Other decrease | Balance at the End of the Period | Proportion of cumulative input to budget % |
| Haibin Pharma Pingshang New Factory | 1,436,107,400.00 | 133,771,969.05 | 93,985,923.16 | 55,735,456.28 | 2,040,237.26 | 169,982,198.67 | 75.24 |
| Guangda New Factory Project | 536,882,000.00 | 360,963,893.27 | 43,655,528.14 | 0.00 | 0.00 | 404,619,421.41 | 80.96 |
| Fuxing Company Phase I & II Projects and others | 378,090,800.00 | 38,842,449.73 | 23,745,621.59 | 32,061,560.52 | 34,766.72 | 30,491,744.08 | 95.38 |
| Project of Shijiao New Factory | 377,005,000.00 | 12,409,895.73 | 11,396,409.24 | 0.00 | 0.00 | 23,806,304.97 | 92.94 |
| Transformation Project of Pharmaceutical Factory Workshop | 306,558,388.48 | 70,972,186.23 | 47,400,607.13 | 44,246,654.70 | 0.00 | 74,126,138.66 | 76.63 |
| Construction Project for Microsphere Workshop (including Gose) of Livzon Group Livzon Pharmaceutical Factory | 262,445,000.00 | 39,976,590.91 | 893,805.33 | 2,143,109.17 | 0.00 | 38,727,287.07 | 89.71 |
| P06 Construction Project of Livzon Group Livzon Pharmaceutical Factory | 117,710,000.00 | 180,053.79 | 331,155.40 | 511,209.19 | 0.00 | 0.00 | 95.3 |
| Project of lyophilized powder injection workshop | 143,500,000.00 | 1,157,559.47 | 426,344.85 | 1,583,904.32 | 0.00 | 0.00 | 95.4 |
| P04/P05 Construction Project of Livzon Group Livzon Pharmaceutical Factory | 126,880,000.00 | 1,560,960.52 | 25,100.00 | 0.00 | 0.00 | 1,586,060.52 | 1.25 |
| Technology transformation project for Microsphere Phase II of Shanghai Livzon | 40,500,000.00 | 34,677,843.69 | 31,000.00 | 19,344,000.00 | 0.00 | 15,364,843.69 | 85.7 |
| Jiaozuo new factory relocation project | 159,981,900.00 | 0.00 | 36,513,524.20 | 0.00 | 0.00 | 36,513,524.20 | 22.82 |
| Others | - | 127,559,478.58 | 81,175,675.65 | 43,975,047.18 | 7,196,263.01 | 157,563,844.04 | - |
| Total | 3,885,660,488.48 | 822,072,880.97 | 339,580,694.69 | 199,600,941.36 | 9,271,266.99 | 952,781,367.31 | / |
（Continued）
| Project item | Progress | Cumulative amount of interest capitalised | Including: interest capitalised in the year | Interest capitalisation rate for the year (%) | Source of fund |
| Haibin Pharma Pingshang New Factory | Completion of some projects | 0.00 | 0.00 | 0.00 | Self-funding and funds raised |
| Guangda New Factory Project | Under construction | 0.00 | 0.00 | 0.00 | Self-funding |
| Fuxing Company Phase I & II Projects and others | Completion of some projects | 0.00 | 0.00 | 0.00 | Self-funding |
| Project of Shijiao New Factory | Completion of some projects | 0.00 | 0.00 | 0.00 | Self-funding and funds raised |
| Transformation Project of Pharmaceutical Factory Workshop | Completion of some projects | 0.00 | 0.00 | 0.00 | Self-funding |
| Construction Project for Microsphere Workshop (including Gose) of Livzon Group Livzon Pharmaceutical Factory | Completion of some projects | 0.00 | 0.00 | 0.00 | Self-funding and funds raised |
| P06 Construction Project of Livzon Group Livzon Pharmaceutical Factory | Completed | 0.00 | 0.00 | 0.00 | Self-funding |
| Project of lyophilized powder injection workshop | Completed | 0.00 | 0.00 | 0.00 | Self-funding and funds raised |
| P04/P05 Construction Project of Livzon Group Livzon Pharmaceutical Factory | Under construction | 0.00 | 0.00 | 0.00 | Self-funding |
| Technology transformation project for Microsphere Phase II of Shanghai Livzon | Completion of some projects | 0.00 | 0.00 | 0.00 | Self-funding |
| Jiaozuo new factory relocation project | Under construction | 0.00 | 0.00 | 0.00 | Self-funding |
| Others | - | 0.00 | 0.00 | 0.00 | Self-funding |
| Total | 0.00 | 0.00 | 0.00 | - |
Other decrease is mainly transferred to long-term deferred expenses.
(3). Provision for impairment of construction in progress in the current period
□Applicable √N/A
Other descriptions:
□Applicable √N/A
15. Right-of-use assets
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Housing and buildings | Total |
| I. Book value: | ||
| 1.Beginning balance | 78,335,855.53 | 78,335,855.53 |
| 2.Increase | 14,230,427.76 | 14,230,427.76 |
| (1) Leasing | 14,230,427.76 | 14,230,427.76 |
| 3.Decrease | 3,505,411.89 | 3,505,411.89 |
| 4. Closing balance | 89,060,871.40 | 89,060,871.40 |
| II. Accumulated depreciation | ||
| 1.Beginning balance | 36,492,721.56 | 36,492,721.56 |
| 2.Increase | 15,820,079.48 | 15,820,079.48 |
| (1) Provision | 15,820,079.48 | 15,820,079.48 |
| 3.Decrease | 3,505,411.89 | 3,505,411.89 |
| 4.Closing balance | 48,807,389.15 | 48,807,389.15 |
| III. Provision for impairment | ||
| 1.Beginning balance | 0.00 | 0.00 |
| 2.Increase | 0.00 | 0.00 |
| 3.Decrease | 0.00 | 0.00 |
| 4.Closing balance | 0.00 | 0.00 |
| IV. Carrying amount | ||
| 1.Carrying value at period end | 40,253,482.25 | 40,253,482.25 |
| 2.Carrying value at beginning of the period | 41,843,133.97 | 41,843,133.97 |
Other descriptions:
As of 30 June 2023, the Company recognised lease expenses related to short-term leases and the leases oflow value assets of RMB314.73 million.
16. Intangible assets
(1) Details of intangible assets
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Land use rights | Patent and technical know-how | Software | Trademark rights | Others | Total |
| I. Book value | ||||||
| 1.Beginning balance | 442,251,561.19 | 1,015,955,570.54 | 93,252,884.14 | 62,769,716.98 | 10,985,294.53 | 1,625,215,027.38 |
| 2.Increase | 0.00 | 179,140,231.36 | 228,532.13 | 0.00 | 0.00 | 179,368,763.49 |
| (1) Purchase | 0.00 | 100,000.00 | 228,532.13 | 0.00 | 0.00 | 328,532.13 |
| (2) Internal R&D | 0.00 | 179,040,231.36 | 0.00 | 0.00 | 0.00 | 179,040,231.36 |
| 3.Decrease | 0.00 | 5,524,303.12 | 1,933,014.92 | 0.00 | 0.00 | 7,457,318.04 |
| 4.Closing balance | 442,251,561.19 | 1,189,571,498.78 | 91,548,401.35 | 62,769,716.98 | 10,985,294.53 | 1,797,126,472.83 |
| II. Accumulated amortisation | ||||||
| 1.Beginning balance | 132,119,481.74 | 542,409,896.29 | 63,402,361.15 | 62,765,668.27 | 6,682,720.82 | 807,380,128.27 |
| 2.Increase | 4,709,915.83 | 225,024,874.61 | 4,092,149.76 | 235.86 | 549,264.73 | 234,376,440.79 |
| Provision | 4,709,915.83 | 225,024,874.61 | 4,092,149.76 | 235.86 | 549,264.73 | 234,376,440.79 |
| 3.Decrease | 0.00 | 5,524,303.12 | 1,933,014.92 | 0.00 | 0.00 | 7,457,318.04 |
| 4.Closing balance | 136,829,397.57 | 761,910,467.78 | 65,561,495.99 | 62,765,904.13 | 7,231,985.55 | 1,034,299,251.02 |
| III. Provision for impairment | ||||||
| 1.Beginning balance | 981,826.94 | 14,737,946.42 | 0.00 | 0.00 | 0.00 | 15,719,773.36 |
| 2.Increase | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Provision | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 3.Decrease | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 4.Closing balance | 981,826.94 | 14,737,946.42 | 0.00 | 0.00 | 0.00 | 15,719,773.36 |
| IV. Carrying amount | ||||||
| 1.Carrying value at period end | 304,440,336.68 | 412,923,084.58 | 25,986,905.36 | 3,812.85 | 3,753,308.98 | 747,107,448.45 |
| 2.Carrying value at beginning of the period | 309,150,252.51 | 458,807,727.83 | 29,850,522.99 | 4,048.71 | 4,302,573.71 | 802,115,125.75 |
The proportion of intangible assets created due to the internal R&D in the balance of intangible assets at theEnd of the Period is 48.26%
(2) Intangible assets pending for certificates of ownership
□Applicable √N/A
Other descriptions
√Applicable □N/A
The land use rights represent the state-owned land use rights obtained by the Company in accordance withPRC laws in China, and the term of grant will be 50 years commencing from the date of obtaining the landuse rights
17. Development Costs
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the Beginning of the Period | Increase for the Period | Decrease for the Period | Balance at the End of the Period | ||
| Internal development costs | Other increase | Recognized as intangible assets | Recognised in profit or loss in the year | |||
| Chemical pharmaceuticals | 136,857,815.87 | 178,549,474.93 | 0.00 | 24,807,895.94 | 0.00 | 290,599,394.86 |
| Biologics | 238,227,636.57 | 0.00 | 0.00 | 145,802,628.07 | 0.00 | 92,425,008.50 |
| APIs and others | 53,199,431.73 | 571,180.24 | 0.00 | 8,429,707.35 | 0.00 | 45,340,904.62 |
| Total | 428,284,884.17 | 179,120,655.17 | 0.00 | 179,040,231.36 | 0.00 | 428,365,307.98 |
Other descriptions:
| Item | Time for commencement of capitalisation | Specific basis of capitalisation | Progress of research and development at year end |
| Chemical pharmaceuticals | Clinical trial | Obtain approval for clinical trial | Clinical stage |
| Biologics | Clinical trial | Obtain approval for clinical trial | Clinical stage |
| APIs and others | Pilot stage | Pilot related information | Post-pilot stage |
18. Goodwill
(1) Book value of goodwill
√Applicable □N/A
Unit: Yuan Currency: RMB
| Name of investee or matter from which goodwill arose | Balance at the Beginning of the Period | Increase for the Period | Decrease for the Period | Balance at the End of the Period | ||
| Formation by business combination | Others | Disposal | Others | |||
| Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd. | 2,045,990.12 | 0.00 | 0.00 | 0.00 | 0.00 | 2,045,990.12 |
| Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd. | 3,492,752.58 | 0.00 | 0.00 | 0.00 | 0.00 | 3,492,752.58 |
| Sichuan Guangda Pharmaceutical Manufacturing Co., Ltd. | 13,863,330.24 | 0.00 | 0.00 | 0.00 | 0.00 | 13,863,330.24 |
| Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc. | 7,271,307.03 | 0.00 | 0.00 | 0.00 | 0.00 | 7,271,307.03 |
| Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd. | 46,926,155.25 | 0.00 | 0.00 | 0.00 | 0.00 | 46,926,155.25 |
| Livzon Group Livzon Pharmaceutical Factory | 47,912,269.66 | 0.00 | 0.00 | 0.00 | 0.00 | 47,912,269.66 |
| Livzon Group | 395,306,126.41 | 0.00 | 0.00 | 0.00 | 0.00 | 395,306,126.41 |
| Shenzhen Haibin Pharmaceutical Co., Ltd. | 91,878,068.72 | 0.00 | 0.00 | 0.00 | 0.00 | 91,878,068.72 |
| Joincare Daily-Use & Health Care Co., Ltd. | 1,610,047.91 | 0.00 | 0.00 | 0.00 | 0.00 | 1,610,047.91 |
| Shenzhen Taitai Pharmaceutical Co., Ltd. | 635,417.23 | 0.00 | 0.00 | 0.00 | 0.00 | 635,417.23 |
| Health Pharmaceuticals (China) Limited | 23,516,552.65 | 0.00 | 0.00 | 0.00 | 0.00 | 23,516,552.65 |
| Shenzhen Hiyeah Industry Co., Ltd | 6,000,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 6,000,000.00 |
| Jiaozuo Joincare Bio Technological Co., Ltd. | 92,035.87 | 0.00 | 0.00 | 0.00 | 0.00 | 92,035.87 |
| Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd. | 0.00 | 21,870,805.09 | 0.00 | 0.00 | 0.00 | 21,870,805.09 |
| Total | 640,550,053.67 | 21,870,805.09 | 0.00 | 0.00 | 0.00 | 662,420,858.76 |
(2) Provision for impairment of goodwill
√Applicable □N/A
Unit: Yuan Currency: RMB
| Investee or matters formed the goodwill | Balance at the Beginning of the Period | Increase for the Period | Decrease for the Period | Balance at the End of the Period | ||
| Provision | Others | Disposal | Others | |||
| Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc. | 7,271,307.03 | 0.00 | 0.00 | 0.00 | 0.00 | 7,271,307.03 |
| Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd. | 11,200,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 11,200,000.00 |
| Shenzhen Hiyeah Industry Co., Ltd | 6,000,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 6,000,000.00 |
| Joincare Daily-Use & Health Care Co., Ltd. | 1,610,047.91 | 0.00 | 0.00 | 0.00 | 0.00 | 1,610,047.91 |
| Total | 26,081,354.94 | 0.00 | 0.00 | 0.00 | 0.00 | 26,081,354.94 |
(3) Relevant information regarding the asset portfolio and set of asset portfolios to which the goodwillbelongs
√Applicable □N/A
Goodwill of the Company arose from its business combination involving enterprises not under commoncontrol.
(4) Descriptions of the process of goodwill impairment testing, key parameters (such as the growth rateof the forecast period, the growth rate of the stable period, the profit rate, the discount rate and theforecast period, etc. when the present value of future cash flows are expected, if applicable) and therecognition method of the impairment losses on goodwill
√Applicable □N/A
On the balance sheet date, the Company conducts an impairment test on goodwill. When estimating therecoverable amount of input costs, it uses an assets group related to goodwill to estimate the presentvalue of future cash flows.The estimated future cash flow of asset groups is calculated according to the five-year financial budgetplan made by the management, the cash flows in the years beyond the five-year budget plan remainstable.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 goodwillof Livzon Group, key assumptions are a gross margin of 63.27%-63.46% and a business revenue growthrate of 0-9.08% as well as a cash flow discount rate of 12.21%. The management took into accounthistorical conditions and predictions for future market development in making the above assumptions.For the calculation of estimated present value of future cash flow of the asset groups related to goodwillof Shenzhen Haibin Pharmaceutical Co., Ltd. (深圳市海滨制药有限公司), key assumptions are a grossmargin of 38.91%-40.11% and a business revenue growth rate of -9.19~2.79% as well as a cash flowdiscount rate of 11.78%. The management took into account historical conditions and predictions forfuture market development in making the above assumptions.
For the calculation of estimated present value of future cash flow of the asset groups related to goodwillof Livzon Group Livzon Pharmaceutical Factory(丽珠集团丽珠制药厂), key assumptions are a grossmargin of 82.19%-83.33% and a business revenue growth rate of 0~7.83% as well as a cash flowdiscount rate of 14.72%. The management took into account historical conditions and predictions forfuture market development in making the above assumptions.For the calculation of estimated present value of future cash flow of the asset groups related to goodwillof Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd. (丽珠集团福州福兴医药有限公司), keyassumptions are a gross margin of 63.43%-64.44% and a business revenue growth rate of 0~11.80% aswell as a cash flow discount rate of 15.04%. The management took into account historical conditionsand 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 theperiod.
(5) The impact of goodwill impairment test
□Applicable √N/A
Other descriptions:
□Applicable √N/A
19. Long-term deferred expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the Beginning of the Period | Increase | Amortisation | Other decrease | Balance at the End of the Period |
| Renovation costs of offices | 32,404,898.26 | 1,882,339.34 | 3,287,024.57 | 0.00 | 31,000,213.03 |
| Renovation costs of plants | 177,270,511.39 | 15,024,467.04 | 17,436,584.11 | 0.00 | 174,858,394.32 |
| Others | 68,192,307.30 | 40,341,777.00 | 31,388,065.74 | 0.00 | 77,146,018.56 |
| Total | 277,867,716.95 | 57,248,583.38 | 52,111,674.42 | 0.00 | 283,004,625.91 |
20. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offsetting
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period | ||
| Deductible timing differences | Deferred tax assets | Deductible timing differences | Deferred tax assets | |
| Provision for impairment of assets | 337,089,020.61 | 51,580,954.99 | 336,502,793.26 | 51,790,732.85 |
| Accrued expenses | 902,905,879.26 | 135,624,380.46 | 965,912,234.46 | 145,014,131.32 |
| Deductible tax loss | 418,979,415.49 | 64,476,849.75 | 399,128,528.63 | 61,021,514.54 |
| Deferred income | 370,621,002.86 | 55,608,150.43 | 329,970,021.95 | 49,511,503.29 |
| Unrealised gains from intra-company transactions | 501,321,768.50 | 75,328,292.69 | 694,726,037.62 | 104,182,311.29 |
| Changes in fair value of other equity instrument investments | 179,876,717.01 | 44,924,244.73 | 146,540,719.40 | 36,635,179.85 |
| Deductible difference arising from share incentive expenses | 150,186,553.14 | 22,602,225.48 | 107,474,309.53 | 16,149,104.44 |
| Changes in fair value of financial assets held for trading | 28,168,669.24 | 4,660,606.50 | 7,298,819.37 | 1,234,418.76 |
| Other deductible temporary difference | 455,485,646.12 | 68,322,846.91 | 455,485,646.11 | 68,322,846.92 |
| Total | 3,344,634,672.23 | 523,128,551.94 | 3,443,039,110.33 | 533,861,743.26 |
(2) Deferred tax liabilities before offsetting
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period | ||
| Taxable timing difference | Deferred tax liabilities | Taxable timing difference | Deferred tax liabilities | |
| Changes in fair value of financial assets held for trading | 14,753,682.98 | 2,213,052.45 | 20,269,315.67 | 3,216,065.39 |
| Accelerated depreciation of fixed assets | 1,127,824,349.83 | 170,134,703.63 | 1,094,571,545.41 | 167,757,444.03 |
| Changes in fair value of other equity instrument investments | 274,168,629.71 | 47,069,458.91 | 242,925,303.81 | 39,399,916.06 |
| Unrealised gains from intra-company transactions | 105,940,000.00 | 20,791,000.00 | 105,940,000.00 | 20,791,000.00 |
| Total | 1,522,686,662.52 | 240,208,214.99 | 1,463,706,164.89 | 231,164,425.48 |
(3) Deferred income tax assets or liabilities listed as net amount after offset
□Applicable √N/A
(4) Details of unrecognized deferred tax assets
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Deductible temporary difference | 301,489,517.89 | 239,109,485.46 |
| Deductible tax losses | 3,241,798,031.09 | 2,804,958,759.64 |
| Total | 3,543,287,548.98 | 3,044,068,245.10 |
(5) Expiry of deductible tax losses in subsequent period
√Applicable □N/A
Unit: Yuan Currency: RMB
| Year | Balance at the End of the Period | Balance at the Beginning of the Period | Note |
| 2023 | 181,799,154.76 | 182,300,762.40 | / |
| 2024 | 385,138,859.92 | 385,139,111.62 | / |
| 2025 | 262,456,724.50 | 253,044,280.36 | / |
| 2026 | 398,033,727.51 | 390,203,263.39 | / |
| 2027 | 1,452,004,008.76 | 1,485,158,186.92 | / |
| 2028 | 442,037,468.37 | 0.00 | / |
| Indefinite | 120,328,087.27 | 109,113,154.95 | / |
| Total | 3,241,798,031.09 | 2,804,958,759.64 |
Other descriptions:
□Applicable √N/A
21. Other non-current assets
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period | ||||
| Book Balance | Provision for impairment | Carrying amount | Book Balance | Provision for impairment | Carrying amount | |
| Term deposit and interests | 1,037,535,481.51 | 0.00 | 1,037,535,481.51 | 812,562,286.58 | 0.00 | 812,562,286.58 |
| VAT carry forward | 3,338,552.19 | 0.00 | 3,338,552.19 | 3,338,552.19 | 0.00 | 3,338,552.19 |
| Prepayment for acquisition of project and equipment | 295,988,669.79 | 0.00 | 295,988,669.79 | 340,456,344.22 | 0.00 | 340,456,344.22 |
| Prepayment for acquisition of technical know-how | 1,600,000.00 | 0.00 | 1,600,000.00 | 415,000.00 | 0.00 | 415,000.00 |
| Total | 1,338,462,703.49 | 0.00 | 1,338,462,703.49 | 1,156,772,182.99 | 0.00 | 1,156,772,182.99 |
22. Short-term loans
(1) Short-term loans by category
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Unsecured loans | 2,116,000,000.00 | 2,089,585,755.20 |
| Guaranteed loans | 10,000,000.00 | 36,464,859.86 |
| Total | 2,126,000,000.00 | 2,126,050,615.06 |
(2) Overdue short-term loans
□Applicable √N/A
Other descriptions:
□Applicable √N/A
23. Financial liabilities held for trading
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the Beginning of the Period | Increase | Decrease | Balance at the End of the Period |
| Financial liabilities held for trading | 755,634.43 | 20,888,614.43 | 0.00 | 21,644,248.86 |
| Including: | ||||
| Derivative financial liabilities | 755,634.43 | 20,888,614.43 | 0.00 | 21,644,248.86 |
| Total | 755,634.43 | 20,888,614.43 | 0.00 | 21,644,248.86 |
Other descriptions:
Derivative financial liabilities represent foreign currency forward contracts. The loss from unexpiredonerous contracts measured at fair value on balance sheet date was recognised as financial liabilitiesheld for trading.
24. Notes payable
√Applicable □N/A
Unit: Yuan Currency: RMB
| Type | Balance at the End of the Period | Balance at the Beginning of the Period |
| Bank acceptance bills | 1,729,003,530.95 | 1,635,906,989.22 |
| Total | 1,729,003,530.95 | 1,635,906,989.22 |
The total of bills payable due but not yet paid during the period is RMB 0.00.
25. Accounts payable
(1) Presentations of accounts payable
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Within 1year | 766,124,196.07 | 815,158,453.21 |
| Over 1 year | 58,215,993.26 | 128,747,127.70 |
| Total | 824,340,189.33 | 943,905,580.91 |
(2) Significant accounts payable aged aging over one year
□Applicable √N/A
Other descriptions:
□Applicable √N/A
26. Contract liabilities
(1) Descriptions of contract liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Within 1 year | 64,934,759.90 | 260,935,024.18 |
| Over 1 year | 27,613,072.22 | 32,042,706.56 |
| Total | 92,547,832.12 | 292,977,730.74 |
(2) Significant changes in the carrying amount during the Reporting Period and reasons therefor
□Applicable √N/A
Other descriptions:
√Applicable □N/A
As at the End of the Period, there was no significant contract liabilities with ageing for more than 1 yearat the end of the period. The amount of contract liabilities at beginning of the period recognised asrevenue during the period is RMB189,613,046.02.
27. Employee benefits payables
(1) Descriptions of employee benefits payables
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the Beginning of the Period | Increase | Decrease | Balance at the End of the Period |
| I. Short-term employee benefits | 571,143,205.10 | 1,064,732,405.44 | 1,207,934,749.24 | 427,940,861.30 |
| II. Post-employment benefits -Defined contribution plans | 584,624.36 | 78,848,885.81 | 79,159,820.55 | 273,689.62 |
| III. Termination benefits | 1,282,742.00 | 3,606,117.44 | 3,606,117.44 | 1,282,742.00 |
| Total | 573,010,571.46 | 1,147,187,408.69 | 1,290,700,687.23 | 429,497,292.92 |
(2) Descriptions of Short-term employee benefits
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the Beginning of the Period | Increase for the Period | Decrease for the Period | Balance at the End of the Period |
| Ⅰ Salaries, bonus and allowances and subsidies | 375,067,929.19 | 958,354,048.92 | 1,100,233,701.81 | 233,188,276.30 |
| Ⅱ Staff welfare | 5,794,481.17 | 35,772,678.18 | 36,387,299.70 | 5,179,859.65 |
| Ⅲ Social insurances | 1,244,430.44 | 35,893,920.68 | 36,039,229.46 | 1,099,121.66 |
| Including: Medical insurance | 1,153,030.82 | 32,970,467.46 | 33,097,333.80 | 1,026,164.48 |
| Work injury insurance | 51,322.84 | 1,975,068.85 | 1,986,360.07 | 40,031.62 |
| Maternity insurance | 40,076.78 | 948,384.37 | 955,535.59 | 32,925.56 |
| Ⅳ Housing fund | 2,223,574.48 | 31,548,429.02 | 32,145,023.54 | 1,626,979.96 |
| Ⅴ Union funds and staff education | 418,905.96 | 3,163,328.64 | 3,129,494.73 | 452,739.87 |
| Ⅵ Stock Ownership Plan Special Fund | 186,393,883.86 | 0.00 | 0.00 | 186,393,883.86 |
| Total | 571,143,205.10 | 1,064,732,405.44 | 1,207,934,749.24 | 427,940,861.30 |
(3) Defined contribution plans
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the Beginning of the Period | Increase | Decrease | Balance at the End of the Period |
| Post-employment benefits | ||||
| Including: 1. Basic pension insurance | 545,595.12 | 76,509,184.46 | 76,806,285.48 | 248,494.10 |
| 2. Unemployment insurance | 39,029.24 | 2,339,701.35 | 2,353,535.07 | 25,195.52 |
| Total | 584,624.36 | 78,848,885.81 | 79,159,820.55 | 273,689.62 |
Other descriptions:
√Applicable □N/A
The Company participates in pension insurance and unemployment insurance plans established by thegovernment in accordance with relevant requirements. According to the plans, the Company makescontributions to these plans in accordance with relevant requirements of the local government. Save forthe above contributions, the Company no longer undertakes further payment obligation. Thecorresponding cost is charged to the profit or loss for the current period or the cost of relevant assetswhen it occurs.
28. Taxes payable
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Value added tax | 102,092,047.04 | 166,151,353.61 |
| Urban maintenance and construction tax | 9,994,708.09 | 14,374,197.97 |
| Enterprise income tax | 150,824,573.52 | 124,039,899.44 |
| Property tax | 10,241,088.83 | 7,992,927.81 |
| Land use tax | 2,995,400.14 | 2,847,286.45 |
| Individual income tax | 2,993,114.20 | 7,524,584.67 |
| Stamp duty | 3,140,814.03 | 2,904,260.39 |
| Education surcharges | 6,775,591.04 | 9,613,697.69 |
| Others | 2,202,851.07 | 2,254,065.70 |
| Total | 291,260,187.96 | 337,702,273.73 |
29. Other payables
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Dividends payable | 439,505,017.15 | 12,252,074.84 |
| Other payables | 3,630,499,380.28 | 3,668,082,286.04 |
| Total | 4,070,004,397.43 | 3,680,334,360.88 |
Dividends payable
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Common shares dividend | 412,156,930.98 | 20,174.46 |
| Dividends payable--Qingyuan Xinbeijiang (Group) Company | 1,200,710.00 | 1,200,710.00 |
| Dividends payable--Other legal persons and individual shares of subsidiaries | 14,355,461.84 | 6,682,964.50 |
| Dividends payable--Staff shares of subsidiaries | 11,791,914.33 | 4,348,225.88 |
| Total | 439,505,017.15 | 12,252,074.84 |
Other payables
(1) Other payables by nature
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Office expenses | 72,936,759.45 | 69,513,003.38 |
| Security deposit | 72,154,822.13 | 89,750,329.22 |
| Promotion fees | 1,948,108,687.80 | 1,722,993,407.82 |
| Technology transfer fees | 10,000,000.00 | 10,000,000.00 |
| Accrued expenses | 1,442,602,987.10 | 1,714,076,189.32 |
| others | 84,696,123.80 | 61,749,356.30 |
| Total | 3,630,499,380.28 | 3,668,082,286.04 |
The obligations of repurchasing restricted shares of the directors, the senior management and theirspouses amounted RMB0.00 at the End of the Period.
(2) Significant other payables aged over 1 year
□Applicable √N/A
Other descriptions:
√Applicable □N/A
Of which, the breakdown of accrued expenses was as follows:
| Item | 30 June 2023 | 31 December 2022 | Reason for outstanding at the End of the Period |
| Utility bill | 46,855,809.21 | 28,378,759.70 | Unpaid |
| Research expenses | 30,285,873.37 | 61,153,064.06 | Unpaid |
| Business development and promotion expenses | 1,273,381,492.64 | 1,517,084,251.92 | Unpaid |
| Audit and information disclosure expenses | 5,872,694.75 | 4,775,560.70 | Unpaid |
| Others | 86,207,117.13 | 102,684,552.94 | Unpaid |
| Total | 1,442,602,987.10 | 1,714,076,189.32 |
30. Non-current liabilities due within one year
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Lease liabilities due within one year | 23,951,826.07 | 19,415,779.34 |
| Long-term loans and interest due within one year | 38,846,673.61 | 43,661,481.64 |
| Total | 62,798,499.68 | 63,077,260.98 |
31. Other current liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Output VAT pending for transfer | 6,301,133.87 | 17,734,822.42 |
| Payable refunds | 83,440,368.95 | 83,440,368.95 |
| Others | 0.00 | 101,522.98 |
| Total | 89,741,502.82 | 101,276,714.35 |
Change of short-term bonds payable
□Applicable √N/A
Other descriptions:
□Applicable √N/A
32. Long-term loans
(1) Classification of long-term loans
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Unsecured loans | 2,025,232,389.91 | 1,475,974,398.32 |
| Guaranteed loans | 1,976,877,722.64 | 1,798,531,126.20 |
| Less: Long-term loans due within one year | 38,846,673.61 | 43,661,481.64 |
| Total | 3,963,263,438.94 | 3,230,844,042.88 |
Other descriptions, including interest rate range:
√Applicable □N/A
The interest rate range of credit loan is 2.25%-3.45%, and the interest rate range of guaranteed loan is
2.35%-3.60%.
33. Lease liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Lease payments payable | 41,630,120.76 | 42,898,265.42 |
| Lease liabilities due within one year | -23,951,826.07 | -19,415,779.35 |
| Total | 17,678,294.69 | 23,482,486.07 |
Other descriptions:
Interest expenses accrued on lease liabilities during the 6-month period ended 30 June 2023 wasRMB1,469,700, which was recorded in financial expenses-interest expense.
34. Deferred income
Deferred income
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the Beginning of the Period | Increase | Decrease | Balance at the End of the Period | Reason of formation |
| Government grants | 384,537,267.55 | 71,872,232.48 | 30,035,418.66 | 426,374,081.37 | / |
| Total | 384,537,267.55 | 71,872,232.48 | 30,035,418.66 | 426,374,081.37 | / |
Projects involving government grants:
√Applicable □N/A
Unit: Yuan Currency: RMB
| Projects with grants | Beginning balance | Additions in the period | Charged to Non-operating income for the period | Transfer to other income | Other movement | Closing balance | Related to assets/ Related to income |
| 2020 Shanghai Professional Technology Platform Capacity Enhancement Project (2020年度上海市专业技术平台能力提升项目立项) | 1,000,000.00 | 0 | 0 | 1,000,000.00 | 0 | 0 | Related to assets |
| Research on Common Co-construction Technology of Pharmaceutical Inhalation Preparations (开发区财政局拨款创业领军人才项目: 药品吸入制剂共性共建技术的研究) | 4,800,000.00 | 0 | 0 | 0 | 0 | 4,800,000.00 | Related to assets |
| Key technology research and development of budesonide nebulized inhalation solution | 2,158,333.29 | 0 | 0 | 175,000.02 | 0 | 1,983,333.27 | Related to assets |
| (布地奈德雾化吸入溶液关键技术研发) | |||||||
| High-growth small and micro innovation enterprises (高成长小微科创企业) | 400,000.00 | 0 | 0 | 0 | 0 | 400,000.00 | Related to assets |
| Project Subsidy of Marine mollusk kinetic protein (海洋软体动物动能蛋白项目补助) | 4,278,000.00 | 0 | 0 | 442,200.00 | 0 | 3,835,800.00 | Related to assets |
| Laboratory project of respiratory system inhalation preparation engineering laboratory project (呼吸系统吸入制剂工程实验室项目) | 1,885,450.00 | 0 | 0 | 808,050.00 | 0 | 1,077,400.00 | Related to assets |
| Research and development of respiratory system drug and clinical research technology service platform project talent funding (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) | 1,550,000.00 | 0 | 0 | 50,000.00 | 0 | 1,500,000.00 | Related to assets |
R&D of active substances withbone 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)
| 837,943.68 | 0 | 0 | 59,853.12 | 0 | 778,090.56 | Related to assets | |
| Science and technology help the economy key special projects (科技助力经济重点专项) | 500,000.00 | 0 | 0 | 500,000.00 | 0 | 0 | Related to assets |
| Leulu total sterone project (漏芦总甾酮项目) | 2,500,000.00 | 0 | 0 | 0 | 0 | 2,500,000.00 | Related to assets |
| Construction of an integrated production line for fully automatic blister-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) | 685,666.62 | 0 | 0 | 121,000.02 | 0 | 564,666.60 | Related to assets |
| City Service Development Special (市服务发展专项) | 800,000.00 | 0 | 0 | 0 | 0 | 800,000.00 | Related to assets |
| Government funding for small molecule peptide project (政拨款用于小分子肽项目) | 239,999.76 | 0 | 0 | 40,000.02 | 0 | 199,999.74 | Related to assets |
| Innovation coupon (Jingjin filter press equipment) (创新券(景津压滤设备) ) | 153,332.75 | 0 | 0 | 0 | 0 | 153,332.75 | Related to assets |
| Construction of a recycling production base for carbapenem products (碳青霉烯类系列产品循环化生产基地建设) | 3,625,000.00 | 0 | 0 | 0 | 0 | 3,625,000.00 | Related to assets |
| Glucocorticoid inhalation suspension project (糖皮质混悬液项目) | 7,200,000.00 | 0 | 0 | 0 | 0 | 7,200,000.00 | Related to assets |
| Return of land holding tax (土地使用税返还) | 3,460,631.62 | 0 | 0 | 703,111.26 | 0 | 2,757,520.36 | Related to assets |
| Xinxiang High-tech Project Fund Support (新乡高新技术项目资金扶持) | 1,804,713.72 | 0 | 0 | 28,198.68 | 0 | 1,776,515.04 | Related to assets |
| New inhalation drug formulation creation project (新型吸入给药制剂创制项目) | 20,908,374.88 | 0 | 0 | 920,106.30 | 0 | 19,988,268.58 | Related to assets |
| Large-scale development subsidy for new inhalation preparations (新型吸入制剂规模化发展补助) | 1,680,000.00 | 0 | 0 | 0 | 0 | 1,680,000.00 | Related to assets |
| Subsidies for the development of pharmaceutical APIs industry (医药原料药行业发展支持资金补助) | 39,522,162.26 | 0 | 0 | 0 | 0 | 39,522,162.26 | Related to assets |
| Zhimu total sapogenin project (知母总皂甙元项目) | 8,900,000.00 | 0 | 0 | 0 | 0 | 8,900,000.00 | Related to assets |
| Patent funding (专利资助) | 200,000.00 | 0 | 0 | 0 | 0 | 200,000.00 | Related to assets |
| Shenzhen Sponge City Construction Fund Award* Shenzhen Water Affairs Bureau (深圳市海绵城市建设资金奖励* 深圳市水务局) | 760,947.20 | 0 | 0 | 22,380.78 | 0 | 738,566.42 | Related to assets |
| Atmospheric environmental quality improvement subsidy (大气环境质量提升补贴资金) | 157,915.02 | 0 | 0 | 10,766.94 | 0 | 147,148.08 | Related to assets |
| Technology giant (科技小巨人) | 1,200,000.00 | 0 | 0 | 1,200,000.00 | 0 | 0 | Related to assets |
| First application for corporate postdoctoral project research funding (首次申请企业博士后项目研究资助) | 120,000.00 | 0 | 0 | 0 | 0 | 120,000.00 | Related to assets |
| R&D and industrialization of innovative Ilaprazole series (艾普拉唑系列创新药物研发及产业化) | 11,168,166.21 | 0 | 0 | 2,455,000.02 | 0 | 8,713,166.19 | Related to assets |
| Strategic emerging industries in 2014 (sustained release microspheres) (2014年战略性新兴产业 (缓释微球) | 16,700,000.00 | 0 | 0 | 0 | 0 | 16,700,000.00 | Related to assets |
| Fund for industrialization of prolonged-action microsphere preparation (长效微球制剂的产业化款项) | 12,550,000.00 | 0 | 0 | 0 | 0 | 12,550,000.00 | Related to assets |
| Construction project for industrialization of prolonged-action microsphere preparation (phase I) (长效微球制剂产业化建设项目 (一期工程) | 18,314,195.60 | 0 | 0 | 1,202,654.94 | 0 | 17,111,540.66 | Related to assets |
| Project subsidy from the Ministry of Industry and Information Technology (工业和信息化部项目补助款) | 2,400,000.00 | 0 | 0 | 0 | 0 | 2,400,000.00 | Related to assets |
| Project subsidy from the Ministry of Industry and Information Technology (工业和信息化部项目补助款) | 1,135,750.00 | 0 | 0 | 115,500.00 | 0 | 1,020,250.00 | Related to assets |
| Construction of Drug Conformity Evaluation Research Center Platform (药物一致性评价研究中心平台建设) | 880,000.18 | 0 | 0 | 79,999.98 | 0 | 800,000.20 | Related to assets |
| R&D and Commercialisation of Mouse Nerve Growth Factor for Injection (注射用鼠神经生长因子研发及产业化) | 29,485,857.65 | 0 | 0 | 5,280,044.64 | 183,600.00 | 24,022,213.01 | Related to assets |
| Demonstration project on the application of solar photovoltaic architecture (太阳能光电建筑应用示范项目) | 1,353,499.35 | 0 | 0 | 551,000.04 | 0 | 802,499.31 | Related to assets |
| Subsidy for the Tender of Technology Upgrade Project for PVC Soft Bag Supported by Provincial Finance Departments (省财政支持技改招标项目补助金PVC软袋) | 2,299,785.26 | 0 | 0 | 190,182.90 | 0 | 2,109,602.36 | Related to assets |
| Technical transformation project of Shenqi Fuzheng Injection with flexible bag (软袋参芪扶正注射液技改项目) | 11,852,941.22 | 0 | 0 | 1,911,764.70 | 0 | 9,941,176.52 | Related to assets |
| Provision for technology transformation funds and subsequent grants (技术改造资金拨款及事后补奖) | 4,329,992.36 | 0 | 0 | 564,781.68 | 0 | 3,765,210.68 | Related to assets |
| Provision for technology transformation funds and subsequent grants (技术改造资金拨款及事后补奖) | 5,576,302.33 | 0 | 0 | 891,684.24 | 0 | 4,684,618.09 | Related to assets |
| Energy Saving and Emission Reduction Program Distribution Transformer Energy Efficiency | 332,000.00 | 0 | 0 | 24,000.00 | 0 | 308,000.00 | Related to assets |
| Improvement (节能减排项目 配电变压器能效提升) | |||||||
| R&D and industrialization team of chemical drug liquid preparation (化药液体制剂研发与产业化团队) | 1,710,833.60 | 240,000.00 | 0 | 28,999.92 | 0 | 1,921,833.68 | Related to assets |
| Innovation capacity building of technology center (antibody laboratory) (技术中心创新能力建设 (抗体药物实验室) | 4,288,140.60 | 0 | 0 | 222,877.68 | 0 | 4,065,262.92 | Related to assets |
| Innovation capacity building of technology center (antibody laboratory) (技术中心创新能力建设 (抗体药物实验室) | 159,691.94 | 0 | 0 | 37,665.18 | 0 | 122,026.76 | Related to income |
| Achievement transfer of blood screening (BCI) nucleic acid detection testing (血液筛查 (BCI) 核酸检测试剂成果转化) | 3,329,659.71 | 0 | 0 | 0 | 0 | 3,329,659.71 | Related to assets |
| Technological upgrading and transformation projects of workshop for acarbose APIs for α-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) | 357,142.96 | 0 | 0 | 53,571.42 | 0 | 303,571.54 | Related to assets |
| Scientific technology award and subsidy for technological innovative project (科学技术奖及科技创新项目资助) | 2,200,000.00 | 0 | 0 | 0 | 0 | 2,200,000.00 | Related to income |
| Zhuhai industrial enterprise “cloud and platform” service coupons supporting funds (珠海市工业企业 “云上平台”服务券支持资金) | 63,891.00 | 0 | 0 | 12,770.42 | 0 | 51,120.58 | Related to income |
| Commissioner workstation (特派员工作站) | 25,000.00 | 0 | 0 | 25,000.00 | 0 | 0 | Related to assets |
| Industrial revitalisation supporting funds (产业振兴扶持资金) | 1,287,500.01 | 0 | 0 | 579,000.00 | 0 | 708,500.01 | Related to assets |
| Government grant for industrial transformation (工业转型政府扶持资金) | 108,333.83 | 0 | 0 | 83,333.44 | 0 | 25,000.39 | Related to assets |
| New industrialization development grant (新型工业化发展奖金) | 5,035,866.34 | 0 | 0 | 191,666.54 | 0 | 4,844,199.80 | Related to assets |
| Policy fund for leading industrial enterprises loan Interests (工业龙头企业贷款贴息政策资金) | 166,666.53 | 0 | 0 | 100,000.02 | 0 | 66,666.51 | Related to assets |
| Supporting funds for five advantageous industrial clusters and one high-tech industry (五优一新扶持资金) | 200,000.24 | 0 | 0 | 49,999.98 | 0 | 150,000.26 | Related to assets |
| Capital project for innovation and entrepreneurship team funding program (创新创业团队资助计划资金项目) | 11,750,000.00 | 0 | 0 | 0 | 0 | 11,750,000.00 | Related to assets |
| 2020 Zhuhai City Innovation and Entrepreneurship Team (Nanocrystalline) (2020年度珠海市创新创业团队(纳米晶) | 5,000,000.00 | 0 | 0 | 0 | 0 | 5,000,000.00 | Related to assets |
| Application of artificial intelligence in triptorelin long-acting microsphere preparation (人工智能在曲普瑞林长效微球制剂中的应用) | 0 | 0 | 0 | -80,000.00 | 0 | 80,000.00 | Related to income |
| Key projects of industrial core and key technologies of Zhuhai (Dantrolene) (珠海市产业核心和关键技术攻关方向项目 (丹曲林钠) | 3,000,000.00 | 0 | 0 | 3,000,000.00 | 0 | 0 | Related to assets |
| Data-driven industrial chain collaboration platform | 2,920,000.00 | 0 | 0 | 365,000.00 | 0 | 2,555,000.00 | Related to assets |
| demonstration project (数据驱动的产业链协同平台示范项目) | |||||||
| Fund for key projects of industrial core and key technologies of 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) ) | 2,000,000.00 | 0 | 0 | 0 | 0 | 2,000,000.00 | Related to assets |
| Innovative drug of Ilaprazole sodium for injection (创新药注射用艾普拉唑钠针剂) | 2,280,000.00 | 0 | 0 | 120,000.00 | 0 | 2,160,000.00 | Related to assets |
| Technological transformation projects of new Cefuroxime (新型头孢粉针剂技术改造项目) | 1,533,100.00 | 0 | 0 | 0 | 0 | 1,533,100.00 | Related to assets |
| Advanced Pharmaceutical Manufacturing Internet Benchmarking Project (先进药品制造互联网标杆项目) | 585,000.00 | 0 | 0 | 45,000.00 | 0 | 540,000.00 | Related to assets |
| Cleaner Production Audit Project (清洁生产审核项目) | 170,000.12 | 0 | 0 | 4,999.98 | 0 | 165,000.14 | Related to assets |
| Green factory (绿色工厂) | 1,001,666.75 | 0 | 0 | 64,999.98 | 0 | 936,666.77 | Related to assets |
| HCG Project Construction (HCG项目建设) | 2,992,185.88 | 0 | 0 | 197,824.98 | 0 | 2,794,360.90 | Related to assets |
| Sewage treatment system upgrade project (污水处理系统升级改造项目) | 56,209.88 | 0 | 0 | 4,015.02 | 0 | 52,194.86 | Related to assets |
| R&D and industrialization of Recombinant Human Chorionic Gonadotropin for Injection (注射用重组人绒促性素研发及产业化) | 987,500.00 | 0 | 0 | 75,000.00 | 0 | 912,500.00 | Related to assets |
| Development and Industrialization of Cyclosporin Self-emulsifying Soft Capsules with High Technology Barriers (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) | 786,000.00 | 0 | 0 | 28,000.00 | 80,000.00 | 678,000.00 | Related to assets |
| Project on the building of scale production capability on Recombinant SARS-CoV-2 Fusion Protein Vaccine (V-01)(重组新型冠状病毒融合蛋白疫苗（V-01）规模化生产能力建设项目) | 0 | 22,921,500.00 | 0 | 238,765.63 | 0 | 22,682,734.37 | Related to assets |
| Special Fund for Foreign Economic and Trade Development (外经贸发展专项资金) | 0 | 32,232.48 | 0 | 0 | 0 | 32,232.48 | Related to assets |
| Guangdong Provincial Key Laboratory of Characteristic Drug R&D Enterprises (广东省特色药物研发企业重点实验室) | 941,666.69 | 300,000.00 | 0 | 54,999.98 | 0 | 1,186,666.71 | Related to assets |
| Subsidies for online monitoring equipment and installations of coal fired boilers (燃煤锅炉在线监控设备装置补助资金) | 60,000.00 | 0 | 0 | 11,250.00 | 0 | 48,750.00 | Related to assets |
| Funds for joint R&D and industrialization of integrated platform 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) | 53,916.31 | 0 | 0 | 0 | 0 | 53,916.31 | Related to assets |
| Project supporting fund for the first batch of special funds for scientific 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) | 600,000.00 | 0 | 0 | 0 | 0 | 600,000.00 | Related to assets |
| Provincial industrial innovation (provincial enterprise | 79,229.73 | 0 | 0 | 0 | 0 | 79,229.73 | Related to assets |
| technology center) project in 2019 (2019年度省产业创新 (省级企业技术中心) 项目) | |||||||
| Pre-appropriation of special grants for industrialization of diagnostic reagents for COVID-19 (新型冠状病毒检测试剂产业化项目补助金预拨) | 4,089,721.57 | 0 | 0 | 0 | 0 | 4,089,721.57 | Related to assets |
| Xiangzhou District equipment purchase subsidy supporting funds (Special funds for epidemic prevention and control) (香洲区采购设备补贴扶持资金 (疫情防控专项资金) | 9,150.21 | 0 | 0 | 0 | 0 | 9,150.21 | Related to assets |
| Zhuhai innovation and enterprising team and high-level talent 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) | 12,000,000.00 | 0 | 0 | 0 | 0 | 12,000,000.00 | Related to assets |
| Overall relocation and deployment expansion project (整体搬迁调迁扩建项目) | 50,000,000.00 | 30,000,000.00 | 0 | 0 | 0 | 80,000,000.00 | Related to assets |
| Environmental protection bureau RTO project special funds (环保局RTO项目资金) | 159,999.92 | 0 | 0 | 10,000.02 | 0 | 149,999.90 | Related to assets |
| Structure-efficiency optimization of marine microorganisms and evaluation of antitumor activity (海洋微生物构效优化与抗肿瘤活性评价) | 99,209.17 | 0 | 0 | 99,209.17 | 0 | 0 | Related to income |
| R&D and demonstration of key technologies for the development and utilization of swim bladder (golden oyster) marine traditional Chinese medicine resources (鱼鳔(黄金鮸) 海洋中药资源开发与利用关键技术研发与示范) | 750,000.00 | 250,000.00 | 0 | 0 | 0 | 1,000,000.00 | Related to income |
| 2022 Special funds for the reconstruction of the industrial base and the high-quality development of the manufacturing industry from the central finance (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示范) | 27,965,416.69 | 9,828,500.00 | 0 | 4,609,789.46 | 0 | 33,184,127.23 | Related to assets |
| National Science and Technology Major Special Project Subsidy Fund LZM009 (国家科技重大专项项目后补助资金 LZM009) | 2,382,806.91 | 0 | 0 | 190,799.56 | 0 | 2,192,007.35 | Related to assets |
| Funds for scientific and technological cooperation in Guangdong-Hong Kong-Macau (粤港澳科技合作资金) | 0 | 300,000.00 | 0 | 0 | 0 | 300,000.00 | Related to assets |
| Phase-II support fund for innovation and entrepreneurship teams in Zhuhai in 2019 (2019年珠海市创新创业团队第二期资助资金) | 0 | 8,000,000.00 | 0 | 0 | 0 | 8,000,000.00 | Related to assets |
| Xiangzhou District actively responds to the impact of the epidemic and maintains stability, innovation drives technology industry project (香洲区积极应对和疫情影响保稳创新驱动科技工业分项) | 1,644,800.00 | 0 | 0 | 0 | 0 | 1,644,800.00 | Related to assets |
| Total | 384,537,267.55 | 71,872,232.48 | 0 | 29,771,818.66 | 263,600.00 | 426,374,081.37 |
Other descriptions:
□Applicable √N/A
35. Other non-current liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| The overall relocation and expansion project of Sichuan Guangda Pharmaceutical Manufacturing | 90,000,000.00 | 84,000,000.00 |
| Total | 90,000,000.00 | 84,000,000.00 |
36. Share capital
√Applicable □N/A
Unit: Yuan Currency: RMB
| Balance at the Beginning of the Period | Changes for the Period (+ -) | Balance at the End of the Period | |||||
| Issuance of new shares | Stock dividend | Conversion from capital reserve | Others | Subtotal | |||
| I. Tradable shares subject to selling restrictions | |||||||
| 1. Domestic legal person shares | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. Domestic natural person shares | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. Overseas legal person shares | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Tradable shares subject to selling restrictions in aggregate | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| II. Tradable shares | |||||||
| 1. Ordinary shares denominated in RMB | 1,929,189,374 | 0 | 0 | 0 | 0 | 0 | 1,929,189,374 |
| 2.Domestically listed foreign shares | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Tradable shares in aggregate | 1,929,189,374 | 0 | 0 | 0 | 0 | 0 | 1,929,189,374 |
| Total number of shares | 1,929,189,374 | 0 | 0 | 0 | 0 | 0 | 1,929,189,374 |
37. Capital reserve
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the Beginning of the Period | Increase | Decrease | Balance at the End of the Period |
| Capital premium (Share premium) | 2,221,682,284.77 | 0.00 | 64,111,240.69 | 2,157,571,044.08 |
| Other capital reserve | 122,010,931.22 | 34,634,929.57 | 0.00 | 156,645,860.79 |
| Total | 2,343,693,215.99 | 34,634,929.57 | 64,111,240.69 | 2,314,216,904.87 |
Other descriptions, including changes for the current period and reasons therefor:
The decrease in capital premium was due to: 1. After the stock options are exercised, the difference betweenthe tax deductible expenses according to tax regulations and the accrued expenses increases the income taxpayable by RMB234,356.35, which decreased the share premium accordingly. 2. The Company’s subsidiary,Livzon Group, repurchased shares, and the capital premium is reduced by RMB63,876,884.34correspondingly.The increase in other capital reserve was due to: 1. The Company and its subsidiary, Livzon Group, accruedshare incentive expenses RMB28,752,796.67. 2. The Company’s subsidiary, Livzon Group, made non-proportional capital contribution to an investee under equity accounting method that led to change inshareholding ratio and other equity, the capital reserve is increased by RMB1,706,551.56. 3. The repurchaseby the Company’s subsidiary, Livzon Group, caused the changes in the shareholding held by the Companyand led to the change in other equity, the capital reserve is decreased by RMB4,175,581.34.
38. Treasury shares
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the Beginning of the Period | Increase | Decrease | Balance at the End of the Period |
| Repurchase of shares due to Share Ownership Scheme and Share Options Incentive Scheme | 222,644,454.50 | 0.00 | 0.00 | 222,644,454.50 |
| Repurchase of shares to be cancelled | 124,532,106.79 | 369,959,019.79 | 0.00 | 494,491,126.58 |
| Total | 347,176,561.29 | 369,959,019.79 | 0.00 | 717,135,581.08 |
Other descriptions, including changes for the current period and reasons therefor:
The increase in Treasury shares during the current period represents the total amount of funds used by theCompany to repurchase 29,705,344 shares of the Company cumulatively through centralized biddingtransactions.
39. 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 Period | ||||
| Amount before tax | Less: transferred to profit or loss in current year or retained earnings | Less: Income tax expenses | Amount attributable to parent company after tax | Amount attributable to minority interests after tax | |||
| I. Other comprehensive income not reclassified into profit or loss subsequently | 16,979,631.87 | -17,160,840.71 | 4,408,075.32 | 6,154,772.69 | -11,322,857.19 | -16,400,831.54 | 5,656,774.68 |
| Other comprehensive income not reclassified to profit or loss under equity method | 8,775,200.25 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 8,775,200.25 |
| Changes in fair value of other equity instrument investments | 8,204,431.61 | -17,160,840.71 | 4,408,075.32 | 6,154,772.69 | -11,322,857.19 | -16,400,831.54 | -3,118,425.57 |
| II. Other comprehensive income that will be reclassified into profit or loss subsequently | -12,275,158.33 | 57,803,822.48 | 0.00 | 0.00 | 42,504,682.17 | 15,299,140.31 | 30,229,523.84 |
| Including:Other comprehensive income that will be transferred to profit or loss under equity method | 274,411.50 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 274,411.50 |
| Translation difference of foreign currency financial statements | -12,549,569.84 | 57,803,822.48 | 0.00 | 0.00 | 42,504,682.17 | 15,299,140.31 | 29,955,112.33 |
| Total of other comprehensive income | 4,704,473.53 | 40,642,981.77 | 4,408,075.32 | 6,154,772.69 | 31,181,824.98 | -1,101,691.23 | 35,886,298.52 |
40. Surplus reserve
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the Beginning of the Period | Increase | Decrease | Balance at the End of thePeriod |
| Statutory surplus reserve | 693,451,984.13 | 0.00 | 0.00 | 693,451,984.13 |
| Discretionary surplus reserve | 40,210,642.44 | 0.00 | 0.00 | 40,210,642.44 |
| Reserve funds | 1,103,954.93 | 0.00 | 0.00 | 1,103,954.93 |
| Total | 734,766,581.50 | 0.00 | 0.00 | 734,766,581.50 |
41. Undistributed profits
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Retained earnings in previous period before adjustments | 8,456,643,326.82 | 7,223,644,166.22 |
| Adjustments to opening balance of retained earnings (increase +, decrease -) | 0.00 | 0.00 |
| Opening balance of retained earnings after adjustments | 8,456,643,326.82 | 7,223,644,166.22 |
| Add: Net profit attributable to parent company for the current year | 815,434,734.90 | 1,502,595,840.48 |
| Gains from disposal of other equity instruments investment | 1,973,645.20 | 101,906,354.19 |
| Less: Appropriation of statutory surplus reserve | 0.00 | 93,945,402.42 |
| Appropriation of discretionary surplus reserve | 0.00 | 0.00 |
| Appropriation for dividends to ordinary shares | 336,792,056.76 | 277,557,631.65 |
| Dividend converted to share capital of ordinary shares | 0.00 | 0.00 |
| Closing balance of undistributed profits | 8,937,259,650.16 | 8,456,643,326.82 |
42. Operating income and operating cost
(1) The information of operating income and operating cost
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Income | Cost | Income | Cost | |
| Primary operations | 8,652,793,987.61 | 3,225,507,979.30 | 8,492,047,759.72 | 3,002,949,330.38 |
| Other operations | 66,947,611.62 | 47,912,247.73 | 72,897,525.83 | 51,443,372.82 |
| Total | 8,719,741,599.23 | 3,273,420,227.03 | 8,564,945,285.55 | 3,054,392,703.20 |
Other descriptions:
(2) Breakdown information of principal activities income
①Segregation by products
| Item | For the Period | For the Previous Period | ||
| Income | Cost | Income | Cost | |
| Chemical pharmaceuticals | 4,477,996,443.20 | 922,208,230.73 | 4,692,194,805.98 | 916,659,504.15 |
| Chemical APIs and Intermediates | 2,682,754,623.59 | 1,757,162,775.91 | 2,771,577,889.05 | 1,743,742,075.65 |
| Traditional Chinese medicine | 985,591,533.02 | 315,931,826.92 | 514,402,423.73 | 146,937,126.69 |
| Biologics | 113,409,489.23 | 59,602,491.18 | 107,058,620.30 | 8,426,569.04 |
| Health care products | 87,265,994.18 | 32,129,014.01 | 54,741,880.51 | 20,894,995.01 |
| Diagnostic reagents and equipment | 297,994,623.29 | 133,676,710.13 | 346,042,443.87 | 164,056,563.15 |
| Others | 6,493,224.41 | 4,376,527.62 | 0.00 | 0.00 |
| Subtotal of pharmaceutical industry | 8,651,505,930.92 | 3,225,087,576.49 | 8,486,018,063.45 | 3,000,716,833.69 |
| Service industry | 1,288,056.69 | 420,402.81 | 6,029,696.27 | 2,232,496.69 |
| Total | 8,652,793,987.61 | 3,225,507,979.30 | 8,492,047,759.72 | 3,002,949,330.38 |
②Segregation by operating location
| Item | For the Period | For the Previous Period | ||
| Income | Cost | Income | Cost | |
| Domestic | 7,274,024,825.06 | 2,345,678,968.90 | 6,974,358,565.54 | 2,065,054,349.09 |
| Overseas | 1,378,769,162.55 | 879,829,010.40 | 1,517,689,194.18 | 937,894,981.29 |
| Total | 8,652,793,987.61 | 3,225,507,979.30 | 8,492,047,759.72 | 3,002,949,330.38 |
③Segregation by timing of revenue recognition
| Item | For the Period | For the Previous Period | ||
| Income | Cost | Income | Cost | |
| Commodities (recognised at a point of time) | 8,652,793,987.61 | 3,225,507,979.30 | 8,492,047,759.72 | 3,002,949,330.38 |
| Total | 8,652,793,987.61 | 3,225,507,979.30 | 8,492,047,759.72 | 3,002,949,330.38 |
④Information of top five customers of business revenue
| Period | Total operating income of the top five customers | Proportion to primary operating income in the period (%) |
| January to June 2023 | 804,489,272.38 | 9.30 |
| January to June 2022 | 784,737,990.71 | 9.24 |
⑤ Segregation by other operations
| Item | For the Period | For the Previous Period | ||
| Income | Cost | Income | Cost | |
| Sales of raw materials | 16,840,657.33 | 11,419,476.82 | 32,752,345.84 | 20,358,443.93 |
| Processing fees | 931,674.96 | 787,254.35 | 1,336,854.96 | 546,940.37 |
| Rental fees | 6,337,567.62 | 951,349.22 | 5,928,780.42 | 930,025.57 |
| Power fees | 5,264,050.06 | 4,942,696.45 | 6,434,386.87 | 6,293,501.06 |
| Others | 37,573,661.65 | 29,811,470.89 | 26,445,157.74 | 23,314,461.89 |
| Total | 66,947,611.62 | 47,912,247.73 | 72,897,525.83 | 51,443,372.82 |
43. Taxes and surcharges
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Urban construction tax | 43,298,169.40 | 40,929,152.73 |
| Education surcharge | 32,598,533.87 | 30,058,369.58 |
| Property tax | 13,997,948.34 | 11,993,989.59 |
| Land use tax | 5,285,696.16 | 5,195,628.85 |
| Stamp duty and others | 7,526,086.18 | 6,145,497.56 |
| Total | 102,706,433.95 | 94,322,638.31 |
Other descriptions:
The bases of calculations for major taxes and surcharges are set out in Note IV. Taxation.
44. Selling expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Marketing and promotional expenses | 2,076,537,470.48 | 2,183,934,600.06 |
| Staff salaries | 251,267,240.73 | 260,162,330.69 |
| Entertainment and travel expenses | 28,223,785.21 | 20,988,461.23 |
| Conference fees | 10,768,435.82 | 8,609,021.92 |
| Others | 32,266,297.96 | 38,675,378.55 |
| Total | 2,399,063,230.20 | 2,512,369,792.45 |
45. Administrative expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Staff salaries | 183,700,164.99 | 276,280,216.68 |
| Depreciation and amortization | 59,970,975.61 | 52,062,021.03 |
| Loss on suspension of operations | 0.00 | 83,168,875.94 |
| Shares incentive expenses | 49,817,409.23 | 10,488,471.09 |
| Advisory, consultancy and information disclosure fees | 13,669,675.15 | 12,483,135.10 |
| Quality project expenses | 22,174,736.40 | 11,250,121.78 |
| Office, entertainment and travelling expenses | 26,242,650.31 | 22,601,820.05 |
| Repair of utilities, transportation and miscellaneous expenses | 18,490,663.47 | 16,250,836.91 |
| Recruitment and staff training expenses | 3,245,797.53 | 2,548,844.21 |
| Others | 57,555,822.63 | 42,693,969.14 |
| Total | 434,867,895.32 | 529,828,311.93 |
46. R&D expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Material fees | 108,389,222.80 | 146,857,218.55 |
| Staff salaries | 217,004,623.19 | 207,091,826.90 |
| Shares incentive expenses | 1,139,264.69 | 9,799,989.00 |
| Testing fee | 121,552,481.88 | 205,299,479.02 |
| Depreciation and amortization | 267,976,579.13 | 67,800,559.34 |
| Others | 49,104,388.07 | 70,584,005.63 |
| Total | 765,166,559.76 | 707,433,078.44 |
47. Finance expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Interest expenses | 70,061,146.58 | 60,979,386.68 |
| Interest income | -135,947,800.19 | -117,501,999.50 |
| Exchange (gains)/losses | -60,395,256.87 | -77,672,355.34 |
| Bank charges and others | 3,694,323.10 | 3,793,920.49 |
| Total | -122,587,587.38 | -130,401,047.67 |
48. Other income
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period | Related to assets/ Related to income |
| Government grants | 29,702,173.89 | 33,869,358.52 | Related to assets |
| Government grants | 93,642,570.39 | 60,315,844.07 | Related to income |
| Handling fees for tax withholding | 2,579,796.37 | 3,025,074.11 | |
| Tax refund on super-deduction | 719.61 | 31,977.33 | |
| Total | 125,925,260.26 | 97,242,254.03 |
Other descriptions:
For specific information on government grants, please refer to Note V. 61. Government grants for details.
49. Investment income
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Investment income from financial assets held for trading during the holding period | 356,166.62 | 306,527.56 |
| Investment income from disposal of financial assets held for trading | -6,036,503.65 | -3,456,991.56 |
| Dividend income from other equity instrument investments | 17,709,895.19 | 8,713,730.74 |
| Long-term equity investments income under equity method | 44,824,481.29 | 41,208,487.80 |
| Investment income from disposal of long-term equity investments | 0.00 | 4,242,404.46 |
| Total | 56,854,039.45 | 51,014,159.00 |
50. Gains from changes in fair value
√Applicable □N/A
Unit: Yuan Currency: RMB
| Sources of gains from changes in fair value | For the Period | For the Previous Period |
| Financial assets held for trading | -18,426,273.95 | -89,596,630.72 |
| Including: Debt instruments investment | 9,573.79 | 13,515.95 |
| Equity instruments investment | -13,003,336.17 | -80,056,904.18 |
| Derivative financial assets | -5,432,511.57 | -9,553,242.49 |
| Financial liabilities held for trading | -20,888,614.43 | -5,882,906.43 |
| Including: Derivative financial liabilities | -20,888,614.43 | -5,882,906.43 |
| Total | -39,314,888.38 | -95,479,537.15 |
51. Credit impairment loss
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Bad debts of accounts receivable | -20,935,155.87 | -933,002.92 |
| Bad debts of other receivables | -1,274,235.82 | -1,872,437.91 |
| Total | -22,209,391.69 | -2,805,440.83 |
52. Asset impairment losses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| I. Losses on bad debts | 0.00 | 0.00 |
| II. Losses on decline in value of inventories and on impairment of contract performance costs | -30,171,594.37 | -27,834,495.93 |
| III. Losses on impairment of long-term equity investments | 0.00 | 0.00 |
| IV. Losses on impairment of property | 0.00 | 0.00 |
| V. Losses on impairment of fixed assets | 0.00 | 0.00 |
| VI. Losses on impairment of project materials | 0.00 | 0.00 |
| VII. Losses on impairment of construction in progress | 0.00 | 0.00 |
| VIII. Losses on impairment of bearer biological assets | 0.00 | 0.00 |
| IX. Losses on impairment on oil and gas assets | 0.00 | 0.00 |
| X. Losses on impairment of intangible assets | 0.00 | 0.00 |
| XI. Losses on impairment of goodwill | 0.00 | 0.00 |
| XII. Others | 0.00 | 0.00 |
| Total | -30,171,594.37 | -27,834,495.93 |
53. Gains on disposal of assets
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Gain from disposal of fixed assets (“-” for Loss) | -342,359.46 | -510,518.91 |
| Gain from disposal of intangible assets (“-” for Loss) | 0.00 | 0.00 |
| Total | -342,359.46 | -510,518.91 |
54. Non-operating income
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period | Amount included in non-recurring gains and losses |
| Gain from retirement of non-current assets | 463,655.86 | 774,200.18 | 463,655.86 |
| Including: Gain from disposal of fixed assets | 463,655.86 | 774,200.18 | 463,655.86 |
| Income from scraps | 475,611.19 | 1,368,658.80 | 475,611.19 |
| Waiver of payables | 185,479.70 | 651,801.74 | 185,479.70 |
| Compensation income | 305,178.31 | 122,240.53 | 305,178.31 |
| Others | 327,525.12 | 1,554,013.63 | 327,525.12 |
| Total | 1,757,450.18 | 4,470,914.88 | 1,757,450.18 |
Government grants included in current profit or loss
□Applicable √N/A
55. Non-operating expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period | Amount included in non-recurring gains and losses |
| Loss on retirement of non-current assets | 1,210,440.54 | 2,249,701.49 | 1,210,440.54 |
| Including: Loss from disposal of fixed assets | 1,210,440.54 | 2,249,701.49 | 1,210,440.54 |
| Donation expenses | 3,107,267.57 | 3,675,341.69 | 3,107,267.57 |
| Others | 3,052,320.30 | 816,563.67 | 3,052,320.30 |
| Total | 7,370,028.41 | 6,741,606.85 | 7,370,028.41 |
56. Income tax expenses
(1) Table of income tax expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Current income tax | 304,266,559.25 | 357,374,828.74 |
| Deferred income tax | 20,396,502.85 | -86,199,499.19 |
| Total | 324,663,062.10 | 271,175,329.55 |
(2) Reconciliation between income tax expenses and accounting profits
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period |
| Profit before tax | 1,952,233,327.93 |
| Income tax expenses calculated at statutory (or applicable) tax rates | 488,058,331.98 |
| Impact from tax preferential rate in certain subsidiaries | -539,309.30 |
| Effect of tax reduction and exemption | -257,591,017.66 |
| Effect of non-deductible costs, expenses and losses | 3,144,882.49 |
| Effect of deductible tax losses for which no deferred tax assets were recognised in prior periods | -75,126.10 |
| Effect of deductible tax losses or deductible temporary differences for which no deferred tax asset was recognised in the current period | 100,280,827.03 |
| Others | -8,615,526.34 |
| Income tax expenses | 324,663,062.10 |
Other descriptions:
□Applicable √N/A
57. Notes to cash flows statement
(1) Other cash received relating to operating activities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Government grants | 166,304,476.76 | 135,472,208.17 |
| Interest income | 132,299,641.10 | 99,798,243.58 |
| Security deposits | 1,333,286.78 | 18,200,506.40 |
| Current accounts and others | 89,242,513.12 | 66,595,926.72 |
| Total | 389,179,917.76 | 320,066,884.87 |
(2) Other cash paid relating to operating activities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Business promotion expenses | 2,238,980,138.14 | 2,410,016,519.70 |
| Research and development expenses | 278,035,606.39 | 314,240,104.94 |
| Bank charges | 3,454,431.81 | 3,538,284.90 |
| Letter of credit and bank acceptance bill deposit, etc. | 628,328.60 | 1,164,843.92 |
| current accounts and others | 271,627,636.18 | 10,960,309.52 |
| Other expenses paid | 29,937,482.42 | 279,038,419.08 |
| Total | 2,822,663,623.54 | 3,018,958,482.06 |
(3) Other cash received relating to investing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Tiantong Securities bankruptcy distribution | 0.00 | 158,470.77 |
| Security deposits | 135,238.13 | 6,825,715.78 |
| Compensation for demolition | 6,000,000.00 | 6,000,000.00 |
| Time deposits | 291,590,000.00 | 0.00 |
| Total | 297,725,238.13 | 12,984,186.55 |
(4) Other cash paid relating to investing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Security deposits | 633,989.87 | 5,303,620.21 |
| Foreign exchange forward contract losses | 14,627,360.90 | 10,091,161.61 |
| Time deposits | 200,000,000.00 | 0.00 |
| Others | 0.00 | 150.00 |
| Total | 215,261,350.77 | 15,394,931.82 |
(5) Other cash received relating to financing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Bill discounting | 20,000,000.00 | 0.00 |
| Collection and advance payment of individual income tax | 0.00 | 3,124,846.38 |
| Total | 20,000,000.00 | 3,124,846.38 |
(6) Other cash paid relating to financing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Repurchase of shares | 512,626,059.45 | 520,433,907.64 |
| Discount bill redemption | 120,415,088.50 | 0.00 |
| Rent | 15,457,825.06 | 16,902,285.66 |
| Collection and advance payment of individual income tax | 14,362.22 | 1,237,210.80 |
| Others | 743,288.72 | 0.00 |
| Total | 649,256,623.95 | 538,573,404.10 |
58. Supplemental to cash flow statement
(1) Supplemental to cash flow statement
√Applicable □N/A
Unit: Yuan Currency: RMB
| Supplemental information | For the Period | For the Previous Period |
| 1. Reconciliation of net profit to cash flow from operating activities: | ||
| Net profit | 1,627,570,265.83 | 1,545,180,207.58 |
| Add: Assets impairment loss | 30,171,594.37 | 27,834,495.93 |
| Credit impairment loss | 22,209,391.69 | 2,805,440.83 |
| Depreciation of fixed assets, depletion of oil and gas assets, depreciation of productive biological assets | 328,414,531.00 | 297,357,229.58 |
| Amortization of right-of-use assets | 15,820,079.48 | 16,158,894.05 |
| Amortization of intangible assets | 234,376,440.79 | 29,104,955.65 |
| Long-term prepaid expenses amortization | 52,111,674.42 | 24,818,590.37 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (Gain as in “-”) | 342,359.46 | 510,518.91 |
| Loss on retirement of fixed assets (Gain as in “-”) | 746,784.68 | 1,475,501.31 |
| Losses on changes in fair value (Gain as in “-”) | 39,314,888.38 | 95,479,537.15 |
| Financial expenses (Gain as in “-”) | 29,379,861.81 | 4,262,214.38 |
| Investment losses (Gain as in “-”) | -56,854,039.45 | -51,014,159.00 |
| Decrease in deferred tax assets (Increase as in “-”) | 19,022,256.19 | -84,323,187.15 |
| Increase in deferred tax liabilities (Decrease as in “-”) | 1,374,246.66 | -1,876,312.04 |
| Decrease in inventories (Increase as in “-”) | -318,716,893.25 | -201,059,238.14 |
| Decrease in operating receivables (Increase as in “-”) | 814,112,912.19 | 559,085,768.30 |
| Increase in operating payables (Decrease as in “-”) | -1,633,858,286.87 | -393,594,247.88 |
| Others | 51,669,618.16 | 30,747,014.96 |
| Net cash flows from operating activities | 1,257,207,685.54 | 1,902,953,224.79 |
| 2. Significant investment or finance activities not involving cash: | ||
| Conversion of debt into capital | 0.00 | 0.00 |
| Convertible bonds mature within one year | 0.00 | 0.00 |
| Newly added use right assets in the current period | 14,230,427.76 | 0.00 |
| 3. Net increase/(decrease) in cash and cash equivalents: | ||
| Cash and bank balance as at end of period | 14,104,668,401.83 | 12,615,780,742.32 |
| Less: cash and bank balance at beginning of period | 14,178,465,686.40 | 11,697,518,141.18 |
| Add: cash equivalents at end of period | 0.00 | 0.00 |
| Less: cash equivalents at beginning of period | 0.00 | 0.00 |
| Net increase in cash and cash equivalents | -73,797,284.57 | 918,262,601.14 |
(2) Net cash paid for acquisition of subsidiaries during the period
√Applicable □N/A
Unit: Yuan Currency: RMB
| Amount | |
| Cash or cash equivalents paid during the Period for business combinations in the Period | |
| Including: Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd. | 22,500,000.00 |
| Less: Cash and cash equivalents held by subsidiaries on the acquisition date | |
| Including: Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd. | 38,048.41 |
| Add: Cash or cash equivalents paid during the Period for business combinations in previous periods | |
| Including: Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd. | |
| Net cash paid on the acquisition of subsidiaries | 22,461,951.59 |
(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 the End of the Period | Balance at the Beginning of the Period |
| I. Cash | 14,104,668,401.83 | 14,178,465,686.40 |
| Including: Cash on hand | 410,711.67 | 231,883.95 |
| Cash at bank readily available for payment | 14,088,001,753.69 | 14,164,236,988.28 |
| Other monetary fund readily available for payment | 16,255,936.47 | 13,996,814.17 |
| II. Cash equivalents | 0.00 | 0.00 |
| Including: bonds investment mature within 3 months | 0.00 | 0.00 |
| III. Cash and cash equivalents as at closing balance | 14,104,668,401.83 | 14,178,465,686.40 |
Other descriptions:
√Applicable □N/A
Cash and cash equivalents do not include any cash and cash equivalents that are restricted in use.
59. Ownership or using rights of assets subject to restriction
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Carrying value at period end | Reason of restriction |
| Other monetary funds | 3,713,052.25 | Security deposits of letters of credit, bank acceptance bills |
| and forward settlement | ||
| Notes receivable | 530,641,682.69 | Bills pool business, pledge notes receivable |
| Total | 534,354,734.94 | / |
60. Items in foreign currencies
(1). Items in foreign currencies
√Applicable □N/A
Unit: Yuan
| Item | Balance in foreign currency at year end | Conversion rate | Equivalent RMB balance at year end |
| Cash and bank balances | |||
| Including: HKD | 1,155,062,479.39 | 0.92198 | 1,064,944,504.75 |
| EUR | 94,230.96 | 7.8771 | 742,266.70 |
| USD | 238,326,165.22 | 7.2258 | 1,722,097,204.65 |
| MOP | 6,391,169.00 | 0.8997 | 5,750,134.75 |
| JPY | 301,142,397.00 | 0.050094 | 15,085,427.24 |
| GBP | 1,690.10 | 9.1432 | 15,452.92 |
| Accounts receivable | |||
| Including: USD | 75,882,763.03 | 7.2258 | 548,313,669.11 |
| MOP | 166,738.45 | 0.8997 | 150,014.58 |
| Dividend receivable | |||
| Including: HKD | 287,100.00 | 0.92198 | 264,700.46 |
| Other receivables | |||
| Including: HKD | 2,268,906.00 | 0.92198 | 2,091,885.96 |
| MOP | 179,548.00 | 0.8997 | 161,539.34 |
| Other current assets | |||
| Including: USD | 13,696,849.00 | 7.2258 | 98,970,691.50 |
| Short-term loans | |||
| Including: USD | 13,696,849.00 | 7.2258 | 98,970,691.50 |
| Accounts payable | |||
| Including: USD | 126,001.27 | 7.2258 | 910,459.98 |
| EUR | 5,665.41 | 7.8771 | 44,627.00 |
| JPY | 195,820,821.22 | 0.050094 | 9,809,448.22 |
| Dividends payable | |||
| Including: HKD | 255,415,684.50 | 0.92198 | 235,488,152.80 |
| Other payables | |||
| Including: HKD | 2,700,522.79 | 0.92198 | 2,489,828.00 |
| USD | 3,760,505.65 | 7.2258 | 27,172,661.73 |
(2). Descriptions of overseas operating entities, including disclosure of the main overseas businesslocations, functional currency and the basis for selection of important overseas operating entities, andthe reasons for changes in functional currency (if any)
□Applicable √N/A
61. Government grants
(1) Basic information of government grants
√Applicable □N/A
Unit: Yuan Currency: RMB
| Category | Amount | Line item | Amount included in profit or loss for the current period |
| Related to assets | 29,702,173.89 | Other income | 29,702,173.89 |
| Related to income | 93,642,570.39 | Other income | 93,642,570.39 |
(2) Return of government grants
□Applicable √N/A
Other descriptions
(1). Government grants recorded as deferred income and measured at gross amount method subsequently
| Projects with grants | Category | Beginning balance | Additions in the period | Charged to Non-operating | Transfer to other income | Other movement | Closing balance | Item presented in income statement | Related to assets/ Related to income |
| 2020 Shanghai Professional Technology Platform Capacity Enhancement Project (2020年度上海市专业技术平台能力提升项目立项) | Financial allocation | 1,000,000.00 | 0 | 0 | 1,000,000.00 | 0 | 0 | Other income | Related to assets |
| Research on Common Co-construction Technology of Pharmaceutical Inhalation Preparations (开发区财政局拨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 allocation | 4,800,000.00 | 0 | 0 | 0 | 0 | 4,800,000.00 | Other income | Related to assets |
| Key technology research and development of budesonide nebulized inhalation solution (布地奈德雾化吸入溶液关键技术研发) | Financial allocation | 2,158,333.29 | 0 | 0 | 175,000.02 | 0 | 1,983,333.27 | Other income | Related to assets |
| High-growth small and micro innovation enterprises (高成长小微科创企业) | Financial allocation | 400,000.00 | 0 | 0 | 0 | 0 | 400,000.00 | Other income | Related to assets |
| Project Subsidy of Marine mollusk kinetic protein (海洋软体动物动能蛋白项目补助) | Financial allocation | 4,278,000.00 | 0 | 0 | 442,200.00 | 0 | 3,835,800.00 | Other income | Related to assets |
| Laboratory project of respiratory system inhalation preparation engineering laboratory project (呼吸系统吸入制剂工程实验室项目) | Financial allocation | 1,885,450.00 | 0 | 0 | 808,050.00 | 0 | 1,077,400.00 | Other income | Related to assets |
| Research and development of respiratory system drug and clinical research technology service platform project talent funding (呼吸系统药物研发和临床研究技术 | Financial allocation | 1,550,000.00 | 0 | 0 | 50,000.00 | 0 | 1,500,000.00 | Other income | Related to assets |
服务平台项目人才经费)R&D of activesubstances with boneand joint repair andhealth care functions(具有骨关节修复与保健功能的活性物质研发)
| Financial allocation | 837,943.68 | 0 | 0 | 59,853.12 | 0 | 778,090.56 | Other income | Related to assets | |
| Science and technology help the economy key special projects (科技助力经济重点专项) | Financial allocation | 500,000.00 | 0 | 0 | 500,000.00 | 0 | 0 | Other income | Related to assets |
| Leulu total sterone project (漏芦总甾酮项目) | Financial allocation | 2,500,000.00 | 0 | 0 | 0 | 0 | 2,500,000.00 | Other income | Related to assets |
| Construction of an integrated production line for fully automatic blister-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 allocation | 685,666.62 | 0 | 0 | 121,000.02 | 0 | 564,666.60 | Other income | Related to assets |
| City Service Development Special (市服务发展专项) | Financial allocation | 800,000.00 | 0 | 0 | 0 | 0 | 800,000.00 | Other income | Related to assets |
| Government funding for small molecule peptide project (政拨款用于小分子肽项目) | Financial allocation | 239,999.76 | 0 | 0 | 40,000.02 | 0 | 199,999.74 | Other income | Related to assets |
| Innovation coupon (Jingjin filter press equipment) (创新券(景津压滤设备) ) | Financial allocation | 153,332.75 | 0 | 0 | 0 | 0 | 153,332.75 | Other income | Related to assets |
| Construction of a recycling production base for carbapenem products (碳青霉烯类系列产品循环化生产基地建设) | Financial allocation | 3,625,000.00 | 0 | 0 | 0 | 0 | 3,625,000.00 | Other income | Related to assets |
| Glucocorticoid inhalation suspension project (糖皮质混悬液项目) | Financial allocation | 7,200,000.00 | 0 | 0 | 0 | 0 | 7,200,000.00 | Other income | Related to assets |
| Return of land holding tax (土地使用税返还) | Financial allocation | 3,460,631.62 | 0 | 0 | 703,111.26 | 0 | 2,757,520.36 | Other income | Related to assets |
| Xinxiang High-tech Project Fund Support (新乡高新技术项目资金扶持) | Financial allocation | 1,804,713.72 | 0 | 0 | 28,198.68 | 0 | 1,776,515.04 | Other income | Related to assets |
| New inhalation drug formulation creation project (新型吸入给药制剂创制项目) | Financial allocation | 20,908,374.88 | 0 | 0 | 920,106.30 | 0 | 19,988,268.58 | Other income | Related to assets |
| Large-scale development subsidy for new inhalation preparations (新型吸入制剂规模化发展补助) | Financial allocation | 1,680,000.00 | 0 | 0 | 0 | 0 | 1,680,000.00 | Other income | Related to assets |
| Subsidies for the development of pharmaceutical APIs industry (医药原料药行业发展支持资金补助) | Financial allocation | 39,522,162.26 | 0 | 0 | 0 | 0 | 39,522,162.26 | Other income | Related to assets |
| Zhimu total sapogenin project (知母总皂甙元项目) | Financial allocation | 8,900,000.00 | 0 | 0 | 0 | 0 | 8,900,000.00 | Other income | Related to assets |
| Patent funding (专利资助) | Financial allocation | 200,000.00 | 0 | 0 | 0 | 0 | 200,000.00 | Other income | Related to assets |
| Shenzhen Sponge City Construction Fund Award* Shenzhen Water Affairs Bureau (深圳市海绵城市建设 | Financial allocation | 760,947.20 | 0 | 0 | 22,380.78 | 0 | 738,566.42 | Other income | Related to assets |
| 资金奖励*深圳市水务局) | |||||||||
| Atmospheric environmental quality improvement subsidy (大气环境质量提升补贴资金) | Financial allocation | 157,915.02 | 0 | 0 | 10,766.94 | 0 | 147,148.08 | Other income | Related to assets |
| Technology giant (科技小巨人) | Financial allocation | 1,200,000.00 | 0 | 0 | 1,200,000.00 | 0 | 0 | Other income | Related to assets |
| First application for corporate postdoctoral project research funding (首次申请企业博士后项目研究资助) | Financial allocation | 120,000.00 | 0 | 0 | 0 | 0 | 120,000.00 | Other income | Related to assets |
| R&D and industrialization of innovative Ilaprazole series (艾普拉唑系列创新药物研发及产业化) | Financial allocation | 11,168,166.21 | 0 | 0 | 2,455,000.02 | 0 | 8,713,166.19 | Other income | Related to assets |
| Strategic emerging industries in 2014 (sustained release microspheres) (2014年战略性新兴产业 (缓释微球) | Financial allocation | 16,700,000.00 | 0 | 0 | 0 | 0 | 16,700,000.00 | Other income | Related to assets |
| Fund for industrialization of prolonged-action microsphere preparation (长效微球制剂的产业化款项) | Financial allocation | 12,550,000.00 | 0 | 0 | 0 | 0 | 12,550,000.00 | Other income | Related to assets |
| Construction project for industrialization of prolonged-action microsphere preparation (phase I) (长效微球制剂产业化建设项目 (一期工程 ) | Financial allocation | 18,314,195.60 | 0 | 0 | 1,202,654.94 | 0 | 17,111,540.66 | Other income | Related to assets |
| Project subsidy from the Ministry of Industry and Information Technology (工业和信息化部项目补助款) | Financial allocation | 2,400,000.00 | 0 | 0 | 0 | 0 | 2,400,000.00 | Other income | Related to assets |
| Project subsidy from the Ministry of Industry and Information Technology (工业和信息化部项目补助款) | Financial allocation | 1,135,750.00 | 0 | 0 | 115,500.00 | 0 | 1,020,250.00 | Other income | Related to assets |
| Construction of Drug Conformity Evaluation Research Center Platform (药物一致性评价研究中心平台建设) | Financial allocation | 880,000.18 | 0 | 0 | 79,999.98 | 0 | 800,000.20 | Other income | Related to assets |
| R&D and Commercialisation of Mouse Nerve Growth Factor for Injection (注射用鼠神经生长因子研发及产业化) | Financial allocation | 29,485,857.65 | 0 | 0 | 5,280,044.64 | 183,600.00 | 24,022,213.01 | Other income | Related to assets |
| Demonstration project on the application of solar photovoltaic architecture (太阳能光电建筑应用示范项目) | Financial allocation | 1,353,499.35 | 0 | 0 | 551,000.04 | 0 | 802,499.31 | Other income | Related to assets |
| Subsidy for the Tender of Technology Upgrade Project for PVC Soft Bag Supported by Provincial Finance Departments (省财政支持技改招标项目补助金PVC软袋) | Financial allocation | 2,299,785.26 | 0 | 0 | 190,182.90 | 0 | 2,109,602.36 | Other income | Related to assets |
| Technical transformation project | Financial allocation | 11,852,941.22 | 0 | 0 | 1,911,764.70 | 0 | 9,941,176.52 | Other income | Related to assets |
| of Shenqi Fuzheng Injection with flexible bag (软袋参芪扶正注射液技改项目) | |||||||||
| Provision for technology transformation funds and subsequent grants (技术改造资金拨款及事后补奖) | Financial allocation | 4,329,992.36 | 0 | 0 | 564,781.68 | 0 | 3,765,210.68 | Other income | Related to assets |
| Provision for technology transformation funds and subsequent grants (技术改造资金拨款及事后补奖) | Financial allocation | 5,576,302.33 | 0 | 0 | 891,684.24 | 0 | 4,684,618.09 | Other income | Related to assets |
| Electricity distribution transformer performance enhancement for energy-saving and emission reduction projects (Energy-saving and emission reduction projects (节能减排项目 配电变压器能效提升) | Financial allocation | 332,000.00 | 0 | 0 | 24,000.00 | 0 | 308,000.00 | Other income | Related to assets |
| R&D and industrialization team of chemical drug liquid preparation (化药液体制剂研发与产业化团队) | Financial allocation | 1,710,833.60 | 240,000.00 | 0 | 28,999.92 | 0 | 1,921,833.68 | Other income | Related to assets |
| Innovation capacity building of technology center (antibody laboratory) (技术中心创新能力建设 (抗体药物实验室) | Financial allocation | 4,288,140.60 | 0 | 0 | 222,877.68 | 0 | 4,065,262.92 | Other income | Related to assets |
| Innovation capacity building of technology center (antibody laboratory) (技术中心创新能力建设 (抗体药物实验室) | Financial allocation | 159,691.94 | 0 | 0 | 37,665.18 | 0 | 122,026.76 | Other income | Related to income |
| Achievement 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 allocation | 3,329,659.71 | 0 | 0 | 0 | 0 | 3,329,659.71 | Other income | Related to assets |
| Technological upgrading and transformation projects of workshop for acarbose APIs for α-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 allocation | 357,142.96 | 0 | 0 | 53,571.42 | 0 | 303,571.54 | Other income | Related to assets |
| Scientific technology award and subsidy for technological innovative project (科学技术奖及科技创新项目资助) | Financial allocation | 2,200,000.00 | 0 | 0 | 0 | 0 | 2,200,000.00 | Other income | Related to income |
| Zhuhai industrial enterprise “cloud and platform” service coupons supporting funds (珠海市工业企业 “云上平台”服务券支持资金) | Financial allocation | 63,891.00 | 0 | 0 | 12,770.42 | 0 | 51,120.58 | Other income | Related to income |
| Commissioner workstation (特派员工作站) | Financial allocation | 25,000.00 | 0 | 0 | 25,000.00 | 0 | 0 | Other income | Related to assets |
| Industrial revitalisation supporting funds (产业振兴扶持资金) | Financial allocation | 1,287,500.01 | 0 | 0 | 579,000.00 | 0 | 708,500.01 | Other income | Related to assets |
| Government grant for industrial transformation (工业转型政府扶持资金) | Financial allocation | 108,333.83 | 0 | 0 | 83,333.44 | 0 | 25,000.39 | Other income | Related to assets |
| New industrialization development grant (新型工业化发展奖金) | Financial allocation | 5,035,866.34 | 0 | 0 | 191,666.54 | 0 | 4,844,199.80 | Other income | Related to assets |
| Policy fund for leading industrial enterprises loan Interests (工业龙头企业贷款贴息政策资金) | Financial allocation | 166,666.53 | 0 | 0 | 100,000.02 | 0 | 66,666.51 | Other income | Related to assets |
| Supporting funds for five advantageous industrial clusters and one high-tech industry (五优一新扶持资金) | Financial allocation | 200,000.24 | 0 | 0 | 49,999.98 | 0 | 150,000.26 | Other income | Related to assets |
| Capital project for innovation and entrepreneurship team funding program (创新创业团队资助计划资金项目) | Financial allocation | 11,750,000.00 | 0 | 0 | 0 | 0 | 11,750,000.00 | Other income | Related to assets |
| 2020 Zhuhai City Innovation and Entrepreneurship Team (Nanocrystalline) (2020年度珠海市创新创业团队 (纳米晶) | Financial allocation | 5,000,000.00 | 0 | 0 | 0 | 0 | 5,000,000.00 | Other income | Related to assets |
| Application of artificial intelligence in triptorelin long-acting microsphere preparation (人工智能在曲普瑞林长效微球制剂中的应用) | Financial allocation | 0 | 0 | 0 | -80,000.00 | 0 | 80,000.00 | Other income | Related to income |
| Key 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 allocation | 3,000,000.00 | 0 | 0 | 3,000,000.00 | 0 | 0 | Other income | Related to assets |
| Data-driven industrial chain collaboration platform demonstration project (数据驱动的产业链协同平台示范项目) | Financial allocation | 2,920,000.00 | 0 | 0 | 365,000.00 | 0 | 2,555,000.00 | Other income | Related to assets |
| Fund for key projects of industrial core and key technologies of 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) ) | Financial allocation | 2,000,000.00 | 0 | 0 | 0 | 0 | 2,000,000.00 | Other income | Related to assets |
| Innovative drug of Ilaprazole sodium for injection (创新药注射用艾普拉唑钠针剂) | Financial allocation | 2,280,000.00 | 0 | 0 | 120,000.00 | 0 | 2,160,000.00 | Other income | Related to assets |
| Technological transformation projects of new Cefuroxime (新型头孢粉针剂技术改造项目) | Financial allocation | 1,533,100.00 | 0 | 0 | 0 | 0 | 1,533,100.00 | Other income | Related to assets |
| Advanced Pharmaceutical Manufacturing Internet Benchmarking Project (先进药品制造互联网标杆项目) | Financial allocation | 585,000.00 | 0 | 0 | 45,000.00 | 0 | 540,000.00 | Other income | Related to assets |
| Cleaner Production Audit Project (清洁生产审核项目) | Financial allocation | 170,000.12 | 0 | 0 | 4,999.98 | 0 | 165,000.14 | Other income | Related to assets |
| Green factory (绿色工厂) | Financial allocation | 1,001,666.75 | 0 | 0 | 64,999.98 | 0 | 936,666.77 | Other income | Related to assets |
| HCG project construction (HCG项目建设) | Financial allocation | 2,992,185.88 | 0 | 0 | 197,824.98 | 0 | 2,794,360.90 | Other income | Related to assets |
| Sewage treatment system upgrade project (污水处理系统升级改造项目) | Financial allocation | 56,209.88 | 0 | 0 | 4,015.02 | 0 | 52,194.86 | Other income | Related to assets |
| R&D and industrialization of Recombinant Human Chorionic Gonadotropin for Injection (注射用重组人绒促性素研发及产业化) | Financial allocation | 987,500.00 | 0 | 0 | 75,000.00 | 0 | 912,500.00 | Other income | Related to assets |
| Development and Industrialization of Cyclosporin Self-emulsifying Soft Capsules with High Technology Barriers (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 allocation | 786,000.00 | 0 | 0 | 28,000.00 | 80,000.00 | 678,000.00 | Other income | Related to assets |
| Project on the building of scale production capability on Recombinant SARS-CoV-2 Fusion Protein Vaccine (V-01) (重组新型冠状病毒融合蛋白疫苗（V-01）规模化生产能力建设项目) | Financial allocation | 0 | 22,921,500.00 | 0 | 238,765.63 | 0 | 22,682,734.37 | Other income | Related to assets |
| Special Fund for Foreign Economic and Trade Development (外经贸发展专项资金) | Financial allocation | 0 | 32,232.48 | 0 | 0 | 0 | 32,232.48 | Other income | Related to assets |
| Guangdong Provincial Key Laboratory of Characteristic Drug R&D Enterprises (广东省特色药物研发企业重点实验室) | Financial allocation | 941,666.69 | 300,000.00 | 0 | 54,999.98 | 0 | 1,186,666.71 | Other income | Related to assets |
| Subsidies for online monitoring equipment and installations of coalfired boilers (燃煤锅炉在线监控设备装置补助资金) | Financial allocation | 60,000.00 | 0 | 0 | 11,250.00 | 0 | 48,750.00 | Other income | Related to assets |
| Funds for joint R&D and industrialization of integrated platform 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) | Financial allocation | 53,916.31 | 0 | 0 | 0 | 0 | 53,916.31 | Other income | Related to assets |
| Project supporting fund for the first batch of special funds for scientific 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 allocation | 600,000.00 | 0 | 0 | 0 | 0 | 600,000.00 | Other income | Related to assets |
| Provincial industrial innovation (provincial enterprise technology center) project in 2019 (2019年度省产业创新 (省级企业技术中心) 项目) | Financial allocation | 79,229.73 | 0 | 0 | 0 | 0 | 79,229.73 | Other income | Related to assets |
| Pre-appropriation of special grants for industrialization of diagnostic 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 allocation | 4,089,721.57 | 0 | 0 | 0 | 0 | 4,089,721.57 | Other income | Related to assets |
| Xiangzhou District equipment purchase subsidy supporting funds (Special funds for epidemic prevention and control) (香洲区采购设备补贴扶持资金 (疫情防控专项资金) | Financial allocation | 9,150.21 | 0 | 0 | 0 | 0 | 9,150.21 | Other income | Related to assets |
| Zhuhai innovation and enterprising team and high-level talent 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) | Financial allocation | 12,000,000.00 | 0 | 0 | 0 | 0 | 12,000,000.00 | Other income | Related to assets |
| Overall relocation and deployment expansion project (整体搬迁调迁扩建项目) | Financial allocation | 50,000,000.00 | 30,000,000.00 | 0 | 0 | 0 | 80,000,000.00 | Other income | Related to assets |
| Environmental protection bureau RTO project special funds (环保局RTO项目资金) | Financial allocation | 159,999.92 | 0 | 0 | 10,000.02 | 0 | 149,999.90 | Other income | Related to assets |
| Structure-efficiency optimization of marine microorganisms and evaluation of antitumor activity (海洋微生物构效优化与抗肿瘤活性评价) | Financial allocation | 99,209.17 | 0 | 0 | 99,209.17 | 0 | 0 | Other income | Related to income |
| R&D and demonstration of key technologies for the development and utilization of swim bladder (golden oyster) marine traditional Chinese medicine resources (鱼鳔(黄金鮸) 海洋中药资源开发与利用关键技术研发与示范) | Financial allocation | 750,000.00 | 250,000.00 | 0 | 0 | 0 | 1,000,000.00 | Other income | Related to income |
| 2022 Special funds for the reconstruction of the industrial base and the high-quality development of the manufacturing industry from the central finance (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)示范) | Financial allocation | 27,965,416.69 | 9,828,500.00 | 0 | 4,609,789.46 | 0 | 33,184,127.23 | Other income | Related to assets |
| National Science and Technology Major Special Project Subsidy Fund LZM009 (国家科技重大专项项目后补助资金 LZM009) | Financial allocation | 2,382,806.91 | 0 | 0 | 190,799.56 | 0 | 2,192,007.35 | Other income | Related to assets |
| Funds for scientific and technological cooperation in Guangdong-Hong Kong-Macau (粤港澳科技合作资金) | Financial allocation | 0 | 300,000.00 | 0 | 0 | 0 | 300,000.00 | Other income | Related to assets |
| Phase-II support fund for innovation and entrepreneurship teams in Zhuhai in 2019 (2019 | Financial allocation | 0 | 8,000,000.00 | 0 | 0 | 0 | 8,000,000.00 | Other income | Related to assets |
| 年珠海市创新创业团队第二期资助资金) | |||||||||
| Xiangzhou District actively responds to the impact of the epidemic and maintains stability, innovation drives technology industry project (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 allocation | 1,644,800.00 | 0 | 0 | 0 | 0 | 1,644,800.00 | Other income | Related to assets |
| Total | 384,537,267.55 | 71,872,232.48 | 0 | 29,771,818.66 | 263,600.00 | 426,374,081.37 |
(2). Government grants recognized in income for the period by gross method
| Projects with grants | Category | Amount recognised in profit or loss in prior period | Amount recognised in profit or loss in the period | Presented in income statement | Related to assets/ Related to income |
| Job stabilization subsidy (稳岗补贴) | Financial allocation | 577,232.17 | 350,819.74 | Other income | Related to income |
| Maternity benefits (生育津贴) | Financial allocation | 278,357.04 | 559,167.10 | Other income | Related to income |
| Talent quality improvement project (人才素质提升工程项目款) | Financial allocation | 100,000.00 | 0 | Other income | Related to income |
| 2022 High-tech Enterprise Cultivation Funding (2022年高新技术企业培育资助) | Financial allocation | 1,000,000.00 | 0 | Other income | Related to income |
| Water Saving Carrier Incentive Fund (节水载体奖励资金) | Financial allocation | 153,203.50 | 0 | Other income | Related to income |
| 2022 Industrial "Carbon Peak" Subsidy (2022年工业"碳达峰“补贴) | Financial allocation | 100,000.00 | 0 | Other income | Related to income |
| Amortization of special funds for engineering laboratories (工程实验室专项资金项目摊销) | Financial allocation | 808,050.00 | 808,050.00 | Other income | Related to assets |
| Industrial Development Fund (Green Factory) Project Funding (产业发展资金(绿色工厂) 项目资助经费) | Financial allocation | 200,000.00 | 0 | Other income | Related to income |
| Expansion and improve efficiency (扩产增效) | Financial allocation | 620,000.00 | 2,840,000.00 | Other income | Related to income |
| Production line project funding (生产线项目资助) | Financial allocation | 2,045,300.00 | 0 | Other income | Related to income |
| Project funding for enterprises that meet the standards for value-added growth (增加值增速达标企业项目资助) | Financial allocation | 1,145,100.00 | 0 | Other income | Related to income |
| Insurance premium subsidy for export (出口用保险保费资助款) | Financial allocation | 1,020,497.00 | 160,000.00 | Other income | Related to income |
| Major special project injection lipid research funding (重大专项项目注射脂质研究经费) | Financial allocation | 500,000.00 | 0 | Other income | Related to assets |
| China Patent Award Supporting Award (中国专利奖配套奖) | Financial allocation | 200,000.00 | 0 | Other income | Related to income |
| Carbon Peak work pilot demonstration project funding (“碳达峰”工作试点示范项目资助款) | Financial allocation | 500,000.00 | 0 | Other income | Related to income |
| Industrial development funds in Yantian District (盐田区产业发展基金) | Financial allocation | 0 | 1,574,275.12 | Other income | Related to income |
| 2020 Enterprise R&D Financial Subsidy Special Subsidy Fund District Matching Fund (2020年企业研发财政补助专项补助资金区配套资金) | Financial allocation | 1,400,000.00 | 280,000.00 | Other income | Related to income |
| Funds to support business development (扶持企业发展资金) | Financial allocation | 1,503,000.00 | 1,200,000.00 | Other income | Related to income |
| Return of land holding tax (土地使用税返还) | Financial allocation | 703,111.26 | 703,111.26 | Other income | Related to assets |
| Second tranche of high-level subsidies (40%) in 2019 (2019年认定高企补贴第二笔(40%) ) | Financial allocation | 400,000.00 | 0 | Other income | Related to income |
| Funding for pilot demonstration projects of industrial carbon peaking work (工业碳达峰工作试点示范项目资助款) | Financial allocation | 100,000.00 | 0 | Other income | Related to income |
| Government Subsidy of Special Fund for Scientific and Technological Innovation (科技创新专项资金政府补助) | Financial allocation | 0 | 863,994.00 | Other income | Related to income |
Subsidies 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 allocation | 0 | 1,150,000.00 | Other income | Related to income | |
| “Specialized and new” subsidy ( “专精特新”补贴) | Financial allocation | 0 | 300,000.00 | Other income | Related to income |
| Support plan on technological innovation projects (技术创新项目扶持计划) | Financial allocation | 0 | 2,000,000.00 | Other income | Related to income |
| Government incentive funds for full-load production of industrial above designated scale (规模上工业满负荷生产财政奖励资金) | Financial allocation | 0 | 200,000.00 | Other income | Related to income |
| Demonstration project on the preparation of marine mollusk kinetic protein and its application (海洋软体动物功能蛋白肽制备及其应用示范项目) | Financial allocation | 0 | 442,200.00 | Other income | Related to assets |
| Special support plan on promoting the high-quality development of life technology industries in Nanshan District (南山区促进生命科技相关产业高质量发展专项支持计划) | Financial allocation | 0 | 1,000,000.00 | Other income | Related to income |
| Science and technology help the economy key special projects (科技助力经济重点专项) | Financial allocation | 0 | 500,000.00 | Other income | Related to assets |
| 2020 Shanghai Professional Technology Platform Capacity Enhancement Project (2020年度上海市专业技术平台能力提升项目立项) | Financial allocation | 0 | 1,000,000.00 | Other income | Related to assets |
| 2022 Shanghai Technology giant (2022年上海科技小巨人) | Financial allocation | 0 | 1,200,000.00 | Other income | Related to assets |
| Incentive funds for high-quality development of industries in Jiaozuo in 2023 (2023年焦作市工业高质量发展奖励奖金) | Financial allocation | 0 | 250,000.00 | Other income | Related to income |
| Special support for market access of drugs and medical devices (药品和医疗器械市场准入专项扶持) | Financial allocation | 0 | 736,044.78 | Other income | Related to income |
| Support program on upgrading of industrialization technology (产业化技术升级资助项目) | Financial allocation | 0 | 665,900.00 | Other income | Related to income |
| Green and low-carbon development of enterprises (企业绿色低碳发展) | Financial allocation | 0 | 300,000.00 | Other income | Related to income |
| “Specialized and new” Enterprise reward projects ( “专精特新” 企业奖励项目) | Financial allocation | 0 | 300,000.00 | Other income | Related to income |
| New inhalation drug formulation creation project (新型吸入给药制剂创制项目) | Financial allocation | 0 | 920,106.30 | Other income | Related to assets |
| Export credit insurance subsidy (出口信保补贴) | Financial allocation | 1,110,960.80 | 751,524.46 | Other income | Related to income |
| R&D subsidy (研究开发费补助) | Financial allocation | 950,440.00 | 70,300.00 | Other income | Related to income |
| Research and development funds for new drug for Class I Treatment of Necrosis Factor in 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 allocation | 5,924,000.00 | 0 | Other income | Related to income |
| Government Subsidy for Long-acting Microspheres Major New Drug Creation (长效微球重大新药创制政府补助) | Financial allocation | 1,202,654.94 | 1,202,654.94 | Other income | Related to assets |
| R&D and industrialization of innovative Ilaprazole Series (艾普拉唑系列创新药物研发及产业化) | Financial allocation | 16,265,800.32 | 2,455,000.02 | Other income | Related to assets |
| Fiscal Subsidy and Operating Subsidy (财政补贴及经营运营补贴) | Financial allocation | 21,859,039.00 | 42,998,690.80 | Other income | Related to income |
| R&D and Commercialisation of Mouse Nerve Growth Factor for Injection (注射用鼠神经生长因子研发及产业化) | Financial allocation | 5,280,044.64 | 5,280,044.64 | Other income | Related to assets |
| Import discount and supporting funds (进口贴息及配套资金) | Financial allocation | 211,356.00 | 0 | Other income | Related to income |
| Promoting Imports of Foreign Trade Development Special Fund (外贸经济发展专项资金) | Financial allocation | 1,230,271.00 | 190,505.51 | Other income | Related to income |
| Technical transformation project of Shenqi Fuzheng Injection with flexible bag (软袋(参芪扶正注射液) 技改项目) | Financial allocation | 1,911,764.70 | 1,911,764.70 | Other income | Related to assets |
| Demonstration project on the application of solar photovoltaic architecture (太阳能光电建筑应用示范项目) | Financial allocation | 551,000.04 | 551,000.04 | Other income | Related to assets |
Subsidies 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 allocation | 100,000.00 | 418,004.00 | Other income | Related to income | |
| Funds for market exploration by SMEs (中小企业开拓市场项目资金) | Financial allocation | 0 | 2,139,156.30 | Other income | Related to income |
| Provision for technology transformation funds and subsequent grants (技术改造资金拨款及事后补奖) | Financial allocation | 3,687,400.00 | 0 | Other income | Related to income |
| Provision for technology transformation funds and subsequent grants (技术改造资金拨款及事后补奖) | Financial allocation | 1,257,556.68 | 1,257,556.68 | Other income | Related to assets |
| Scientific technology award and subsidy for technological innovative project (科学技术奖及科技创新项目资助) | Financial allocation | 1,140,000.00 | -100,000.00 | Other income | Related to income |
| Patent (Intellectual Property) Support Fund (专利（知识产权）资助资金) | Financial allocation | 0 | 457,096.00 | Other income | Related to income |
| Industrial revitalisation supporting funds (产业振兴扶持资金) | Financial allocation | 579,000.00 | 579,000.00 | Other income | Related to assets |
| Employment Assurance and Re-employment and Attraction to Graduates of Tertiary Academic Institutions Subsidy (企业稳岗及再就业和吸纳高校毕业生补贴款) | Financial allocation | 1,690,234.86 | 398,303.65 | Other income | Related to income |
| Enterprise Technology Center Innovation Capacity Development (Antibody Laboratory) 企业技术中心创新能力建设（抗体药物试验室） | Financial allocation | 222,877.68 | 222,877.68 | Other income | Related to assets |
| Special fund from the Ministry of Industry and Information Technology (工业和信息化专项资金) | Financial allocation | 0 | 223,500.00 | Other income | Related to income |
| Supporting subsidy for “Talents Plan” and subsidy for talents introduction and cultivation ( “人才计划”配套补贴及引才育才补贴) | Financial allocation | 583,774.23 | 638,700.00 | Other income | Related to income |
| Rewards for the integration of informatization and industrialization (两化融合奖励) | Financial allocation | 500,000.00 | 0 | Other income | Related to income |
| Special funds for key leading enterprises in the 13th Five-Year Plan (2019) (十三五重点领军企业专项资金 (2019年)) | Financial allocation | 5,503,400.00 | 8,501,100.00 | Other income | Related to income |
| Special capital replenishment for industrial enterprise Restructuring (工业企业结构调整专项资金) | Financial allocation | 1,000,000.00 | 0 | Other income | Related to income |
| Special Funds for Promoting High-quality Economic Development (促进经济高质量发展专项资金) | Financial allocation | 0 | 4,609,789.46 | Other income | Related to assets |
| Special Funds for Promoting High-quality Economic Development (促进经济高质量发展专项资金) | Financial allocation | 0 | 11,837,821.00 | Other income | Related to income |
| “Specialized and new” subsidy ( “专精特新”补贴) | Financial allocation | 950,000.00 | 300,000.00 | Other income | Related to income |
| National special funds for foreign trade in 2020 appropriated by the Department of Science and Technology of Guangdong Province (广东省科学技术厅拨来2020年度国家外专款) | Financial allocation | 741,000.00 | 0 | Other income | Related to income |
| Hengqin Guangdong-Macao Deep Cooperation Zone Factory Rental Subsidy (横琴粤澳深度合作区厂房租金补贴) | Financial allocation | 345,012.00 | 0 | Other income | Related to income |
| National Science and Technology Major Special Project Subsidy Fund LZM009 (国家科技重大专项项目后补助资金 LZM009) | Financial allocation | 2,171,293.53 | 190,799.56 | Other income | Related to assets |
| Data-driven industrial chain collaboration platform demonstration project (数据驱动的产业链协同平台示范项目) | Financial allocation | 365,000.00 | 365,000.00 | Other income | Related to assets |
| Key projects of industrial core and key technologies of Zhuhai (Dantrolene) (珠海市产业核心和关键技术攻关方向项目 (丹曲林钠) ) | Financial allocation | 0 | 3,000,000.00 | Other income | Related to assets |
| Project funds for promoting the development of the biomedical industry (促进生物医药产业发展用途项目资金) | Financial allocation | 0 | 9,415,420.00 | Other income | Related to income |
| Application of artificial intelligence in triptorelin long-acting microsphere preparation (人工智能在曲普瑞林长效微球制剂中的应用) | Financial allocation | 0 | -479,813.48 | Other income | Related to income |
| Others | Financial allocation | 2,051,204.73 | 2,503,218.61 | Other income | Related to assets |
| Others | Financial allocation | 1,446,266.47 | 1,152,061.41 | Other income | Related to income |
| Total | 94,185,202.59 | 123,344,744.28 |
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 losecontrol
□Applicable √N/A
Other 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 anew subsidiary and liquidation of a subsidiary, etc.) and their relevant information:
√Applicable □N/A
Change to scope of consolidation in the subsidiary Livzon Group
(1) Business combination involving enterprises not under common control
① Business combination involving enterprises not under common control during the Period
| Name of acquiree | Time of obtaining equity | Cost of obtaining equity | Proportion of equity obtained | Method of obtaining equity | Purchase date | Basis for determining purchase date | Revenue of acquiree from the purchase date to the end of the Period | Net profit of acquiree from the purchase date to the end of the Period |
| Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd. | 2023.3.6 | 25,000,000.00 | 100 | Purchase | 2023.3.6 | Completion of asset delivery | 483,018.86 | -988,386.12 |
② Combination cost and goodwill
| Item | Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd. |
| Combination cost: | |
| Cash | 25,000,000.00 |
| Total combination cost | 25,000,000.00 |
| Less: Share of the fair value of identifiable net assets obtained | 3,129,194.91 |
| Goodwill | 21,870,805.09 |
③ The purchaser can identify the assets and liabilities on the purchase date
| Item | Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd. | |
| Fair value at the purchase date | Book value at the purchase date | |
| Assets | ||
| Current assets | 3,133,248.41 | 3,133,248.41 |
| Non-current assets | 1,454,117.80 | 1,454,117.80 |
| Liabilities: | ||
| Current liabilities | 1,458,171.30 | 1,458,171.30 |
| Net assets | 3,129,194.91 | 3,129,194.91 |
| Less: Minority interests | ||
| Net assets acquired by consolidation | 3,129,194.91 | 3,129,194.91 |
(2) Other changes
On 1 February 2023, the Company and Livzon Group established Lijian (Guangdong) Animal HealthcareCo., Ltd. (丽健（广东）动物保健有限公司) with a registered capital of RMB200 million, of which, LivzonGroup contributed RMB102 million, accounting for 51% of its registered capital; and the Companycontributed RMB98 million, accounting for 49% of its registered capital.On 8 February 2023, the Company and Livzon Group established Wuhan Kangli Health InvestmentManagement Co., Ltd. (武汉康丽健康投资管理有限公司) with a registered capital of RMB1,000 million,of which, Livzon Group contributed RMB600 million, accounting for 60% of its registered capital; and theCompany contributed RMB400 million, accounting for 40% of its registered capital.On 13 April 2023, Zhuhai Livzon Traditional Chinese Medicine Modernization Technology Co., Ltd., asubsidiary of Livzon Group, and Livzon Group Limin Pharmaceutical Manufacturing Factory establishedMacau Livzon Traditional Chinese Medicine Modernization Technology Co., Ltd. (澳门丽珠中药现代化科技有限公司) with a registered capital of MOP100,000, each of them accounting for 70% and 30% of itsregistered capital, respectively.On 15 March 2023, Gongshan Livzon Pharmaceutical Technology Limited (贡山丽珠药源科技有限公司),a subsidiary of Livzon Group, was deregistered.
6. Others
□Applicable √N/A
Ⅶ Equity in Other Entities
1. Interests in subsidiaries
(1). Group structure
√Applicable □N/A
| Name of subsidiary | Main operating location | Place of registration | Business nature | Shareholding (%) | Acquisition method | |
| Direct | Indirect | |||||
| Topsino Industries Limited (Topsino Industries) | Hong Kong | Hong Kong | Business | 100 | 0 | Set-up by investment |
| Shenzhen Taitai Genomics Inc. Co., Ltd. (Taitai Genomics) | Shenzhen | Shenzhen | Industry | 75 | 25 | Set-up by investment |
| Shenzhen Taitai Pharmaceutical Industry Co., Ltd. (Taitai Pharmaceutical) | Shenzhen | Shenzhen | Industry | 100 | 0 | Set-up by investment |
| Health Investment Holdings Ltd. (Health Investment) | The British Virgin Islands | The British Virgin Islands | Investment | 0 | 100 | Set-up by investment |
| Joincare Pharmaceutical Group Industry Co.,Ltd.(BVI) * | The British Virgin Islands | The British Virgin Islands | Investment | 0 | 100 | Set-up by investment |
| Joincare Pharmaceutical Group Industry Co.,Ltd. (CAYMAN ISLANDS) | Cayman Islands | Cayman Islands | Investment | 0 | 100 | Set-up by investment |
| Xinxiang Haibin Pharmaceutical Co., Ltd. (Xinxiang Haibin) | Henan Xinxiang | Henan Xinxiang | Industry | 0 | 100 | Set-up by investment |
| Shenzhen Fenglei Electric Power Investment Co., Ltd. (Fenglei Electric Power) | Shenzhen | Shenzhen | Investment | 100 | 0 | Set-up by investment |
| Jiaozuo Joincare Bio Technological Co., Ltd.(Jiaozuo Joincare) | Henan Jiaozuo | Henan Jiaozuo | Industry | 75 | 25 | Set-up by investment |
| Shanghai Frontier Health Pharmaceutical Technology Co., Ltd.(Shanghai Frontier) | Shanghai | Shanghai | Industry | 65 | 0 | Set-up by investment |
| Shenzhen Taitai Biological Technology Co., Ltd. (Taitai Biological) | Shenzhen | Shenzhen | Industry | 100 | 0 | Set-up by investment |
| Guangzhou Joincare Respiratory Medicine Engineering Technology Co., Ltd.(Joincare Respiratory) | Guangzhou | Guangzhou | Industry | 0 | 26 | Set-up by investment |
| Guangdong Taitai Forenstic Test Institute (Forenstic Test) | Shenzhen | Shenzhen | Business | 0 | 100 | Set-up by investment |
| Joincare Haibin Pharmaceutical Co., Ltd (Joincare Haibin) | Shenzhen | Shenzhen | Industry | 25 | 75 | Set-up by investment |
| Shenzhen Haibin Pharmaceutical Co., Ltd. (Haibin Pharma) | Shenzhen | Shenzhen | Industry | 97.87 | 2.13 | Business combination not under common control |
| Joincare Daily-Use & Health Care Co., Ltd. (Joincare Daily-Use) | Shenzhen | Shenzhen | Business | 80 | 20 | Business combination not under common control |
| Health Pharmaceutical (China) Limited (Health China) | Zhuhai | Zhuhai | Industry | 0 | 100 | Business combination not under common control |
| Livzon Pharmaceutical Group Inc. (Livzon Group) *Note 1 | Zhuhai | Zhuhai | Industry | 23.66 | 21.11 | Business combination not under common control |
| Hong Kong Health Pharmaceutical Industry Company Limited | Hong Kong | Hong Kong | Investment | 0 | 100 | Business combination not under common control |
| Health Pharmaceutical Industry Company Limited | Hong Kong | Hong Kong | Investment | 0 | 100 | Business combination not under common control |
| Shenzhen Hiyeah Industry Co., Ltd (Hiyeah Industry ) | Shenzhen | Shenzhen | Business | 97.58 | 2.42 | Business combination not under common control |
| Guangzhou Hiyeah Industry Co., Ltd. | Guangzhou | Guangzhou | Industry | 0 | 100 | Business combination not under common control |
| Zhongshan Renhe Health Products Co., Ltd. | Zhongshan | Zhongshan | Industry | 0 | 100 | Business combination not under common control |
| Shenzhen Jiekang Health Care Co., Ltd. | Shenzhen | Shenzhen | Industry | 0 | 100 | Business combination not under common control |
| Joincare (Guangdong) Special medicine Food Co., Ltd. ( Joincare Special medicine Food) | Shaoguan | Shaoguan | Industry | 100 | 0 | Set-up by investment |
| Name of subsidiary | Main operating location | Place of registration | Business nature | Shareholding (%) | Acquisition method | |
| Direct | Indirect | |||||
| Henan Joincare Biomedical Research Institute Co., Ltd. | Jiaozuo | Jiaozuo | Industry | 0 | 70.13 | Set-up by investment |
| Jiaozuo Jianfeng Biotechnology Co., Ltd. | Jiaozuo | Jiaozuo | Industry | 0 | 66.5 | Set-up by investment |
*Note 1: Invested subsidiaries of the Company controlled by Livzon Group
（1）Shanghai Frontier Health Pharmaceutical Technology Co., Ltd. (上海方予健康医药科技有限公司) and theCompany's subsidiary Livzon Group established 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 shares and Shanghai FrontierHealth Pharmaceutical Technology Co., Ltd holds 45%.
(2) On 1 February 2023, the Company and Livzon Group established Lijian (Guangdong) Animal Healthcare Co.,Ltd. (丽健（广东）动物保健有限公司) with Livzon Group and the Company holding 51% and 49% of equityinterests, respectively.
(3) On 8 February 2023, the Company and Joincare Pharmaceutical Group Industry Co., Ltd. established Lijian(Guangdong) Animal Healthcare Co., Ltd. (武汉康丽健康投资管理有限公司) with Livzon Group and theCompany holding 60% and 40% of equity interests, respectively.
（4）Zhuhai Livzon Biotechnology Co., Ltd. (珠海市丽珠生物医药科技有限公司) is a subsidiary within thescope of Livzon Group's consolidation. It was originally 100% indirectly held by Livzon Group. Due to therestructuring of the shareholding structure of the subsidiary, Livzon Group holds 51% of its shares, the Companyholds 33.07% of the shares, YFPharmab Limited holds 8.43% of the shares, and Hainan Lishengjuyuan InvestmentPartnership (Limited Partnership) (海南丽生聚源投资合伙企业(有限合伙)) holds 7.50%
Other descriptions:
Subsidiaries not included in the scope of consolidation in the current period:
| Name of subsidiary | Registered Capital | Actual investment | Interest held |
| Guangzhou Hiyeah Industry Co., Ltd. | 3,000,000.00 | 3,000,000.00 | 100% |
| Zhongshan Renhe Health Products Co., Ltd. | 500,000.00 | 500,000.00 | 100% |
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 liquidationprocess in 2008, and has been out of business for many years, and completed the tax cancellation procedures, sothey were not included in the scope of the consolidated.
(2). Significant non-wholly owned subsidiaries
√Applicable □N/A
Unit: Yuan Currency: RMB
| Name of subsidiary | Shareholding of minority interest | Profit or loss attributable to minority interest | Dividend paid to minority interest | Balance of minority interests at period end |
| Livzon Group | 55.2266 | 626,584,628.11 | 817,351,995.09 | 7,407,755,714.92 |
Descriptions of the difference between the shareholding ratio of minority shareholders and their proportionof voting rights in a subsidiary:
□Applicable √N/A
Other 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 balance | Beginning balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Livzon Group | 179.27 | 77.99 | 257.26 | 82.39 | 32.37 | 114.76 | 169.87 | 78.78 | 248.65 | 73.97 | 25.32 | 99.29 |
| Name of subsidiary | Current period | Prior Period | ||||||
| Revenue | Net profit | Total Comprehensive income | Cash flow from operating activities | Revenue | Net profit | Total Comprehensive income | Cash flow from operating activities | |
| Livzon Group | 66.90 | 11.74 | 11.77 | 12.27 | 63.03 | 11.18 | 11.51 | 14.26 |
(4). Significant restrictions on the use of enterprise group assets and settlement of enterprisegroup debts:
□Applicable √N/A
(5). Financial supports or other supports offered for the structured entities included in thescope of consolidated financial statements:
□Applicable √N/A
Other 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: RMB
| Name of joint arrangements or associates | Main operating location | Place of registration | Business nature | Shareholding(%) | Accounting treatment of joint investment | |
| Direct | Indirect | |||||
| Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. | Jiaozuo City, Henan Province | Jiaozuo City, Henan Province | Electricity production, | 0.00 | 49 | Equity method |
| Tianjin Tongrentang Group Co., Ltd. | Tianjin | Tianjin | Manufacture of medicine | 0.00 | 40 | Equity 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 for the prior period |
| Jinguan Electric Power | Jinguan Electric Power | |
| Current assets | 983,674,798.10 | 1,034,890,763.04 |
| Including: Cash and cash equivalents | 145,046,368.84 | 193,286,823.41 |
| Non-current assets | 293,533,049.66 | 274,836,800.49 |
| Total assets | 1,277,207,847.76 | 1,309,727,563.53 |
| Current liabilities | 694,019,787.24 | 734,194,376.70 |
| Non-current liabilities | 12,284,097.25 | 12,419,097.25 |
| Total liabilities | 706,303,884.49 | 746,613,473.95 |
| Net assets | 570,903,963.27 | 563,114,089.58 |
| Including: Minority interests | 0.00 | 0.00 |
| Owners’ equity attributable to parent company | 570,903,963.27 | 563,114,089.58 |
| Share of net assets calculated based on shareholding ratio | 279,742,942.00 | 275,925,903.89 |
| Adjustment items | 9,603,504.56 | 9,612,591.63 |
| Goodwill | ||
| Unrealized profit on internal transactions | ||
| Others | 9,603,504.56 | 9,612,591.63 |
| Carrying value of equity investment in associates | 289,346,446.56 | 285,538,495.52 |
| Fair value of publicly quoted equity investments of associates | ||
| Operating income | 425,894,049.32 | 545,919,608.69 |
| Financial expenses | 874,470.98 | 5,790,628.01 |
| Income tax expenses | 2,568,597.39 | 0.00 |
| Net profit | 7,789,873.69 | 1,656,551.92 |
| Net profit from discontinued operations | ||
| Other comprehensive income | ||
| Total comprehensive income | 7,789,873.69 | 1,656,551.92 |
| Net cash flows from operating activities | -31,462,568.89 | 120,800,417.88 |
| Dividends received from joint ventures in the current period |
②Tianjin Tongrentang Group Co., Ltd.
| Item | Tianjin Tongrentang Group Co., Ltd. |
| 2023.6.30 | |
| Owners’ equity attributable to parent company | 591,654,692.05 |
| Share of net assets by shareholding | 236,661,876.82 |
| Adjustments | |
| Including: Goodwill | 498,457,683.68 |
| Carrying value of equity investment in associates | 735,119,560.50 |
| Fair value of publicly quoted equity investments |
Continued:
| Item | Tianjin Tongrentang Group Co., Ltd. |
| Amount for the period | |
| Operating income | 577,306,842.17 |
| Dividends received by the company from associates in the current period | 0.00 |
Other descriptions:
√Applicable □N/A
The Company calculated share of assets by shareholding ratio based on the amount attributable to the parentcompany in the associates’ consolidated financial statements. The amounts of associates on the consolidatedfinancial statements take into account the fair value of net identifiable assets and liabilities of the associatewhen acquiring the investment and the effect of unifying accounting policies. The above data of TianjinTongrentang 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 investment | 405,711,908.91 | 389,448,001.30 |
| The following amount are calculated on the basis of shareholding ratio | ||
| Net profit | -7,562,749.17 | -5,650,897.40 |
| Other comprehensive income | 0.00 | 0.00 |
| Total comprehensive income | -7,562,749.17 | -5,650,897.40 |
(5) Description of significant restrictions on the ability of joint ventures or associates to transfer fundsto 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 statementsRelevant descriptions of structured entities not included in the scope of consolidated financial statements:
□Applicable √N/A
6. Others
□Applicable √N/A
Ⅷ. Risks Management of Financial Instruments
√Applicable □N/A
The 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 fortrading, other equity instrument investments, long-term receivables, bills payable and accounts payable,other payables, short-term borrowings, financial liabilities held for trading, non-current liabilities duewithin one year, short-term borrowings, bonds payable and long-term payables. The details of thesefinancial instruments are disclosed in the respective notes. The financial risk of these financialinstruments and financial management policies used by the Company to minimize the risk are disclosedas below. The management of the Company manages and monitors the exposure of these risks to ensurethe above risks are controlled 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 (mainlyincluding foreign exchange risks and interest rate risks), credit risks and liquidity risks. The Companyformulates an overall risk management plan with respect to the unforeseeability of the financial marketin order to minimise the potential adverse impacts on the financial performance of the Company.
(1) Foreign exchange risks
The Company conducts its operation primarily in China. Substantially all of the transactions weredenominated and settled in Renminbi. However, the Company still has certain imports and exportsbusinesses regarding APIs and diagnostic reagents that are settled in U.S. dollar, Euro and Japanese Yen.The Company’s businesses outside China (mainly in Hong Kong, India, Europe) are settled in Hong
Kong dollars, U.S. dollar and Euro dollar. In addition, the Company will have foreign currency loansaccording to the operating needs. In respect of the above, the Company still exposes to certain foreignexchange risks. Taking into account the foreign exchange risks acceptable by the Company, theCompany adopted Derivative instruments to control foreign exchange risk. However, as to the foreignexchange risk in loans, the Company shall closely monitor the trend of the exchange rate of Renminbi,and timely adjust the extent of borrowings, so as to minimise its risks.Financial assets and liabilities in foreign currencies held by the Company expressed in Renminbi arestated below:
① As at 2023.06.30
Unit: 1,000 Yuan
| Item | HKD | USD | EUR | JPY | GBP | MOP |
| Financial assets in foreign currency — | ||||||
| Cash and bank balances | 1,064,944.50 | 1,722,097.20 | 742.27 | 15,085.43 | 15.45 | 5,750.13 |
| Financial assets held for trading | 75,320.98 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Accounts receivable | 0.00 | 548,313.67 | 0.00 | 0.00 | 0.00 | 150.01 |
| Dividends receivable | 264.70 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Other receivables | 2,091.89 | 0.00 | 0.00 | 0.00 | 0.00 | 161.54 |
| Other current assets | 0.00 | 98,970.69 | 0.00 | 0.00 | 0.00 | 0.00 |
| Other equity instruments investment | 441,193.91 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal: | 1,583,815.98 | 2,369,381.56 | 742.27 | 15,085.43 | 15.45 | 6,061.69 |
| Financial liabilities in foreign currency — | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Accounts payable | 0.00 | 910.46 | 44.63 | 9,809.45 | 0.00 | 0.00 |
| Dividends payable | 235,488.15 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Other payables | 2,489.83 | 27,172.66 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal: | 237,977.98 | 28,083.12 | 44.63 | 9,809.45 | 0.00 | 0.00 |
②As at 2022.12.31
Unit: 1,000 Yuan
| Item | HKD | USD | EUR | JPY | GBP | MOP | CHF |
| Financial assets in foreign currency — | |||||||
| Cash and bank balances | 689,008.76 | 1,795,183.72 | 702.84 | 18,052.98 | 16.29 | 4,272.78 | 0.00 |
| Financial assets held for trading | 87,193.75 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Accounts receivable | 0.00 | 498,180.41 | 0.00 | 0.00 | 0.00 | 1,097.96 | 0.00 |
| Other receivables | 2,849.00 | 0.15 | 0.00 | 0.00 | 0.00 | 504.53 | 0.00 |
| Other current assets | 0.00 | 92,815.74 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Other equity instruments investment | 524,464.51 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal: | 1,303,516.02 | 2,386,180.02 | 702.84 | 18,052.98 | 16.29 | 5,875.27 | 0.00 |
| Financial liabilities in foreign currency— | |||||||
| Short-term loan | 0.00 | 13,464.86 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Accounts payable | 0.00 | 3,569.18 | 42.05 | 14,627.29 | 0.00 | 0.00 | 141.89 |
| Other payables | 2,583.45 | 27,967.54 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal: | 2,583.45 | 45,001.58 | 42.05 | 14,627.29 | 0.00 | 0.00 | 141.89 |
As at 30 June 2023, in respect of the Company’s financial assets and liabilities denominated in foreigncurrencies such as Hong Kong dollar, U.S. dollar, Euro dollar, Japanese Yen and Macau Pataca, should thevalue of RMB appreciate or depreciate by 5% against foreign currencies such as Hong Kong dollar, U.S.dollar, Euro, Japanese Yen and Macau Pataca, and other factors remain unchanged, the Company would besubject to an increase or decrease in profit of approximately RMB184,959.36 thousand (31 December 2022:
approximately RMB182,597.36 thousand).
(2). Interest rate risk
The Company’s exposures to interest rate risk are mainly arising from interest-bearing liabilities such as bankborrowings and bonds payables. The interest rates are affected by the macro monetary policies of China;hence the Company will face the 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 ofthe Company. The rise in the interest rate will increase the cost of additional interest-bearing liabilities andthe interest expenses of the Company’s outstanding interest-bearing liabilities of which the interests arecalculated at floating rates, and impose material adverse impact on the financial results of the Company. Themanagement will make timely adjustment based on the updated market conditions. The directors of theCompany consider that the future changes in the interest rate will have no material adverse impact on theoperating results of the Company.
(3). Credit risk
Credit risk is primarily attributable to cash and cash equivalents, restricted funds, accounts receivables andother receivables. In respect of cash at banks, they were placed at several banks with good reputations, forwhich the credit risk was limited. In respect of receivables, the Company shall assess the credit limit grantedto customers for credit purpose. Moreover, as the customer base of the Company is large, the credit risk onaccounts receivables is not concentrated. In terms of bills receivable settlement, external payments are settledwith bills receivable with priority and most of the remaining bills are high-quality bills with maturity withinthree months; thus none expected major credit risk exits. In addition, the provision made on the impairmentof accounts receivables and other receivables are adequate to manage the credit risk.Among the accounts receivable of the Company, the accounts receivable of the top five customers accountedfor 9.78% (31 December 2022: 11.98%); among the other receivables of the Company, the other receivablesof the top five customers accounted for 35.74% (31 December 2022: 46.23%).
(4). Liquidity risk
The Company adopts prudent liquidity risk management for the sufficient supply of monetary funds andliquidity. It secures readily available credit loans from banks mainly by maintaining adequate monetary fundsand banking facilities. Apart from indirect financing from banks, a number of financing channels wereavailable, such as direct financing by inter-bank market including short-term financing bills and medium-term financing bills, corporate bonds etc. These instruments can effectively reduce the effects of scale of
financing and the macro monetary policies of China on indirect bank financing, which shall secure adequatefunds in a flexible manner.As at the date of the balance sheet, the contractual cash flows of financial assets and financial liabilities arepresented below by term of maturity:
①As at 2023.06.30
| Item | Within a year | 1-2 years | 2-5 years | Over 5 years | Total |
| Financial assets: | |||||
| Cash and bank balances | 14,459,790,383.84 | 0.00 | 0.00 | 0.00 | 14,459,790,383.84 |
| Financial assets held for trading | 90,560,120.03 | 0.00 | 0.00 | 0.00 | 90,560,120.03 |
| Notes receivable | 2,170,075,201.62 | 0.00 | 0.00 | 0.00 | 2,170,075,201.62 |
| Accounts receivable | 3,193,959,089.23 | 0.00 | 0.00 | 0.00 | 3,193,959,089.23 |
| Other receivables | 105,444,746.96 | 0.00 | 0.00 | 0.00 | 105,444,746.96 |
| Non-current assets | 111,489,549.76 | 0.00 | 0.00 | 0.00 | 111,489,549.76 |
| Subtotal: | 20,131,319,091.44 | 0.00 | 0.00 | 0.00 | 20,131,319,091.44 |
| Financial liabilities: | |||||
| Short-term loans | 2,126,000,000.00 | 0.00 | 0.00 | 0.00 | 2,126,000,000.00 |
| Financial liabilities held for trading | 21,644,248.86 | 0.00 | 0.00 | 0.00 | 21,644,248.86 |
| Notes payable | 1,729,003,530.95 | 0.00 | 0.00 | 0.00 | 1,729,003,530.95 |
| Accounts payable | 824,340,189.33 | 0.00 | 0.00 | 0.00 | 824,340,189.33 |
| Other payables | 4,070,004,397.43 | 0.00 | 0.00 | 0.00 | 4,070,004,397.43 |
| Other current liabilities | 83,440,368.95 | 0.00 | 0.00 | 0.00 | 83,440,368.95 |
| Non-current liabilities due within one year | 62,798,499.68 | 0.00 | 0.00 | 0.00 | 62,798,499.68 |
| Lease liabilities | 0.00 | 12,104,847.17 | 5,573,447.52 | 0.00 | 17,678,294.69 |
| Long term loans | 0.00 | 1,608,118,419.41 | 2,355,145,019.53 | 0.00 | 3,963,263,438.94 |
| Subtotal: | 8,917,231,235.20 | 1,620,223,266.58 | 2,360,718,467.05 | 0.00 | 12,898,172,968.83 |
②As at 2022.12.31
| Item | Within a year | 1-2 years | 2-5 years | Over 5 years | Total |
| Financial assets: | |||||
| Cash and bank balances | 14,808,488,110.96 | 0.00 | 0.00 | 0.00 | 14,808,488,110.96 |
| Financial assets held for trading | 109,015,664.98 | 0.00 | 0.00 | 0.00 | 109,015,664.98 |
| Notes receivable | 1,959,985,016.85 | 0.00 | 0.00 | 0.00 | 1,959,985,016.85 |
| Accounts receivable | 3,103,758,850.15 | 0.00 | 0.00 | 0.00 | 3,103,758,850.15 |
| Other receivables | 52,535,740.14 | 0.00 | 0.00 | 0.00 | 52,535,740.14 |
| Non-current assets | 104,859,166.96 | 0.00 | 0.00 | 0.00 | 104,859,166.96 |
| Subtotal: | 20,138,642,550.04 | 0.00 | 0.00 | 0.00 | 20,138,642,550.04 |
| Financial liabilities: | |||||
| Short-term loans | 2,126,050,615.06 | 0.00 | 0.00 | 0.00 | 2,126,050,615.06 |
| Financial liabilities held for trading | 755,634.43 | 0.00 | 0.00 | 0.00 | 755,634.43 |
| Notes payable | 1,635,906,989.22 | 0.00 | 0.00 | 0.00 | 1,635,906,989.22 |
| Accounts payable | 943,905,580.91 | 0.00 | 0.00 | 0.00 | 943,905,580.91 |
| Item | Within a year | 1-2 years | 2-5 years | Over 5 years | Total |
| Other payables | 3,680,334,360.88 | 0.00 | 0.00 | 0.00 | 3,680,334,360.88 |
| Other current liabilities | 83,541,891.93 | 0.00 | 0.00 | 0.00 | 83,541,891.93 |
| Non-current liabilities due within one year | 63,077,260.98 | 0.00 | 0.00 | 0.00 | 63,077,260.98 |
| Lease liabilities | 0.00 | 14,509,839.81 | 8,972,646.26 | 0.00 | 23,482,486.07 |
| Long term loans | 0.00 | 907,182,927.81 | 2,323,661,115.07 | 0.00 | 3,230,844,042.88 |
| Subtotal: | 8,533,572,333.41 | 921,692,767.62 | 2,332,633,761.33 | 0.00 | 11,787,898,862.36 |
2. Capital management
The capital management policies are made to keep the continuous operation of the Company, to enhancethe return to shareholders, to benefit other stakeholders and to maintain the best capital structure tominimize the cost of capital.For the maintenance or adjustment of the capital structure, the Company might adjust financing method,the amount of dividends paid to shareholders, return capital to shareholders, issue new shares and otherequity instruments or make an asset disposal to reduce the liabilities.The Company monitors the capital structure with gearing ratio (calculated by dividing total liabilitiesby total assets). On 30 June 2023, the Company’s gearing ratio is 39.94% (31 December 2022: 38.37%).
3. Transfer of financial assets
(1). Financial assets which are transferred but have not been derecognised in their entiretyNone.
(2). Financial assets which have been transferred and ceased to be recognised but still have involvementwith the transferorDuring the Period, the Bank discounted bank acceptance bills to the bank of RMB206,754,529.57(previous period: RMB407,822,740.99). Since the principal risks and rewards, such as interest rate risksassociated with these bank acceptance bills, have been transferred to the banks, the Companyderecognizes discounted unmatured bank acceptance bills. According to the discount agreement, if thebank acceptance bills are not accepted when due, the bank has the right to require the Company to paythe outstanding balance. As a result, the Company continued to engage in discounted bank acceptancebills, which amounted to RMB153,755,208.00 (31 December 2022: RMB422,899,944.56) as at 30 June2023.As of 30 June 2023, the Company’s carrying amounts of bank acceptance bills undue and endorsed tosuppliers for settling account payables is RMB526,352,414.45 (31 December 2022:
RMB542,620,475.62); the Company has no commercial acceptance bills undue and endorsed tosuppliers for settling account payables in the period (31 December 2022: Nil). In accordance with theNegotiable Instruments Law, 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 theCompany, the Company has transferred substantially all risks and rewards. Accordingly, their fullcarrying amounts and the corresponding account payables have been derecognised. The maximum lossand 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 notsignificant.During the 6-month period ended 30 June 2023, no gain or loss was generated by the Company on thedate of transfer of the bills. The Company had no current or accumulated gain or loss arising from thecontinuing involvement in financial assets which had been derecognised. The endorsement was incurredevenly throughout the period.
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 value | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| I. Recurring fair value measurement | ||||
| （Ⅰ）Financial assets held for trading | 103,583,153.41 | 5,432,511.57 | 0.00 | 109,015,664.98 |
| 1. Financial assets at fair value through profit or loss | ||||
| （1）Debt instruments investment | 934,289.94 | 0.00 | 0.00 | 934,289.94 |
| （2）Equity instruments investment | 102,648,863.47 | 0.00 | 0.00 | 102,648,863.47 |
| （3）Derivative financial assets | 0.00 | 5,432,511.57 | 0.00 | 5,432,511.57 |
| 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 instruments | 141,235,838.68 | 0.00 | 1,051,691,795.90 | 1,192,927,634.58 |
| (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 basis | 244,818,992.09 | 5,432,511.57 | 1,051,691,795.90 | 1,301,943,299.56 |
| (VI) Financial liabilities held for trading | ||||
| 1. Financial liabilities at fair value through profit or loss | ||||
| Including: Issued tradable bonds | ||||
| Derivative financial liabilities | 0.00 | 21,644,248.86 | 0.00 | 21,644,248.86 |
| Others | ||||
| 2. Financial liabilities designated as at fair value through profit or loss | ||||
| Total liabilities measured at fair value on a recurring basis | 0.00 | 21,644,248.86 | 0.00 | 21,644,248.86 |
| II. Non-recurring fair value measurement | ||||
| (Ⅰ) Assets held-for-sale | 0.00 | 0.00 | 0.00 | 0.00 |
| Total assets measured at fair value on a non-recurring basis | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities measured at fair value on a non-recurring basis | 0.00 | 0.00 | 0.00 | 0.00 |
During January to June 2023, ELICIO THERAPEUTICS, INC. and Carisma Therapeutics, Inc., inwhich Livzon Group, a subsidiary of the Company, holds investments, were listed on the NASDAQStock Exchange, and Beijing Luzhu Biotechnology Co., Ltd. (北京绿竹生物技术股份有限公司), inwhich the Company holds investments, was listed on the Hong Kong Stock Exchange. As a result, thefair value measurement of this investment in other equity instruments transferred from level 3 to level1; except for this investment in other equity instruments, there were no transfers of the fair valuemeasurements between level 1 and level 2 and no transfers into or out of level 3.
2.Basis for determining the market price of continuous and non-continuous level 1 fair valuemeasurement items
√Applicable □N/A
The basis for determining the market price of level 1 fair value measurement items is when listed andtraded on the Shanghai Stock Exchange, Shenzhen Stock Exchange, Hong Kong Stock Exchange andthe United States, its fair value is determined by the closing price on the last trading day of the reportingperiod.
3.Valuation techniques and qualitative and quantitative information of key parameters adoptedfor continuous and non-continuous level 2 fair value measurement items
√Applicable □N/A
For the items in level 2 fair value measurement which uses valuation techniques and qualitative andquantitative information of important parameters to determine the fair value. For derivative financialinstruments such as foreign exchange forward contracts, the fair value is determined based on the quotedforward exchange rate corresponding to the expiring contract.
| Item | Fair value at the End of the Period | Valuation techniques |
| Derivative financial assets | 5,432,511.57 | Calculated and determined based on the quoted forward exchange rate corresponding to the expiring contract |
| Derivative financial liabilities | 21,644,248.86 | Calculated 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 forcontinuous and non-continuous level 3 fair value measurement items
√Applicable □N/A
For the items in level 3 fair value measurement uses valuation techniques and qualitative and quantitativeinformation of important parameters to determine the fair value. For some other equity instruments held,the fair value is based on the cost or the present value of the estimated future net cash flow as the bestestimate.
5.Reconciliation between opening and closing carrying amounts and sensitivity analysis ofunobservable parameters for continuous level 3 fair value measurement items
√Applicable □N/A
| Item | Fair value at the end of the period | Valuation techniques |
| Other equity instruments investment-Shanghai Yunfeng Xinchuang Equity Investment Centre (上海云锋新创股权投资中心) | 67,932,735.87 | Net assets |
| Other equity instruments investment-Shanghai JingYi Investment Centre (上海经颐投资中心) | 72,891,151.99 | Net assets |
| Other equity instruments investment-Qianhai Equity Investment Fund (前海股权投资基金) | 251,543,869.00 | Net assets |
| Other equity instruments investment- PANTHEON D ,L.P. | 164,827.73 | Net assets |
| Other equity instruments investment-Apricot Forest, Inc (杏树林) | 120,788,500.00 | Income method |
| Other equity instruments investment-Zhuhai China Resources Bank Co., Ltd. (珠海华润银行股份有限公司) | 158,400,000.00 | Market method |
| Other equity instruments investment-Yizun Biopharmaceutics (Shanghai) Co., Ltd. (羿尊生物医药(上海) 有限公司) | 30,513,209.27 | Market method |
| Other equity instruments investment-Zhuhai Medpha Biotechnology Co., Ltd. (珠海麦得发生物科技股份有限公司) | 32,099,443.70 | Recent financing price |
| Other equity instruments investment- Xiangrong (Shanghai) Biotechnology Co., Ltd. (享融（上海）生物科技有限公司) | 19,613,667.00 | Recent financing price |
| Other equity instruments investment-GLOBAL HEALTH SCIENCE | 246,961,521.36 | Net assets |
| Other equity instruments investment-SCC VENTURE VI 2018-B,L.P. | 237,981.63 | Net assets |
| Other equity instruments investment-Nextech V Oncology S.C.S., SICAV-SIF | 18,034,888.35 | Net assets |
| Other equity instruments investment- Others | 32,510,000.00 | Cost |
6. In case of transfers among levels for the current period, explain the transfer reasons and policiesfor 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: RMB
| Name of parent company | Place of registration | Nature of business | Registered capital | Shareholding ratio by parent company (%) | Voting right by parent company (%) |
| Shenzhen Baiyeyuan Investment Co., Ltd. | Shenzhen | Investment and establishment of industry, domestic commerce, and material supply and marketing | 80,000,000.00 | 46.43 | 46.43 |
Notes to the parent company of the Company:
The parent company of the Company is Shenzhen Baiyeyuan Investment Co., Ltd., which was establishedon 21 January 1999, and its main business scope is investment and establishment of industry, domesticcommerce, and material supply and marketing.
The ultimate controller of the Company: Zhu Baoguo
Other descriptions:
(1) Registered capital of parent company and its changes
| Name of parent company | 2022.12.31 | Increase for the Period | Decrease for the Period | 2023.06.30 |
| Shenzhen Baiyeyuan Investment Co., Ltd. | 80,000,000.00 | 0.00 | 0.00 | 80,000,000.00 |
(2) Shares of the company held by the parent company and its changes
| Name of parent company | 2022.12.31 | Ratio | Increase for the Period | Decrease for the Period | 2023.06.30 | Ratio |
| Shenzhen Baiyeyuan Investment Co., Ltd. | 878,272,753.00 | 45.53% | 17,380,900 | 0.00 | 895,653,653.00 | 46.43% |
On 21 March 2023, 17,380,900 shares lent by Shenzhen Baiyeyuan Investment Co., Ltd. (深圳市百业源投资有限公司) for participating in the refinancing securities lending business were returned.
2. Subsidiaries of the Company
Details of subsidiaries refer to Note
√Applicable □N/A
Please refer to notes Ⅶ.1. for the details of subsidiaries.
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/A
Details of significant joint ventures or associates refer to Note Ⅴ. 11 and Note VII. 2.
Other joint ventures or associates entered into transactions with the Company during the period, orduring the prior period with remaining closing balance were as follows:
√Applicable □N/A
| Name of joint ventures and associates | Relationship with the Company |
| Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. | Associate |
| Guangdong Blue Treasure Pharmaceutical Co., Ltd. | Associate |
| Shenzhen City Youbao Technology Co., Ltd. | Associate |
| AbCyte Therapeutics Inc. | Associate |
| L&L Biopharma, Co. Ltd. | Associate |
| Zhuhai Sanmed Biotech Inc. | Associate |
| Aetio Biotherapy Inc | Associate |
| Jiangsu Atom Bioscience and Pharmaceutical Co., Ltd. | Associate |
| Tianjin Tongrentang Group Co., Ltd. | Associate |
| Infinite Intelligence Pharmaceutical Co. Ltd. | Associate |
| Shenzhen Kangti Biomedical Technology Co., Ltd. | Associate |
| Shanghai Sheo Pharmaceutical Technology Co., Ltd. | Associate |
| Zhuhai Sanmed Gene Diagnostics Ltd. | Entity controlled by an associate |
| Zhuhai Hengqin Weisheng Precision Medicine Technology Co., Ltd. | Entity controlled by an associate |
Other descriptions
□Applicable √ N/A
4. Other related parties of the Company
√Applicable □N/A
| Name of other related parties | Relationship with the Company |
| Shenzhen Taitelixing Investment Development Co., Ltd. | Others |
| Zhuozhou Jingnan Yongle Golf Club Co., Ltd. | Others |
| Shenzhen Healthy Deer Information Technology Co., Ltd. | Others |
| Sichuan Healthy Deer Hospital Management Co., Ltd. and its subsidiaries | Others |
| Zhuhai Medpha Biotechnology Co., Ltd. | Others |
| Zhuhai Xianghetai Investment Management Partnership (Limited Partnership) | Others |
| Zhuhai Zhong Hui Yuan Investment Partnership (Limited Partnership) | Others |
| Zhuhai Liying Investment Management Partnership (Limited Partnership) | Others |
| Jiangsu Yiyingjia Medical Technology Co., Ltd. | Others |
| Directors, Supervisors and other senior management personnel | Others |
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 parties | Nature of transaction | Current period | Approved transaction amount (if applicable) | Whether the transaction amount is exceeded (if applicable) | Prior period |
| Guangdong Blue Treasure Pharmaceutical Co., Ltd. | Raw materials | 1,615,292.04 | 1,458,973.45 | ||
| Jiangsu Yiyingjia Medical Technology Co., Ltd. | Finished goods, Modern service | 611,361.00 | 368,692.00 | ||
| Zhuhai Sanmed Biotech Inc. | Testing | 0.00 | 53,443.40 | ||
| Shenzhen Youbao Technology Co., Ltd. | Modern service | 643,255.00 | 871,765.00 | ||
| Beijing Infinite Intelligence Pharmaceutical Technology Co., Ltd. | R&D | 693,069.31 | 339,805.83 | ||
| Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. | Electricity, steam | 127,926,603.34 | 280,000,000 | No | 129,081,366.42 |
Sales of goods/rendering of services
√Applicable □N/A
Unit: Yuan Currency: RMB
| Name of related parties | Nature of transaction | Current period | Prior period |
| Guangdong Blue Treasure Pharmaceutical Co. Ltd. | Finished goods, water and electricity, power | 22,816,768.72 | 15,282,052.21 |
| Zhuhai Sanmed Biotech Inc. | Finished goods, water and electricity, power and others | 232,007.99 | 194,261.12 |
| Zhuhai Sanmed Gene Diagnostics Ltd. | Finished goods, water and electricity, power and others | 274,234.26 | 325,180.92 |
| Subsidiaries of Sichuan Healthy Deer Hospital Management Co., Ltd. | Finished goods | 1,280,329.37 | 1,987,679.87 |
| Tianjin Tongrentang Group Co., Ltd. | Modern service | 283,018.87 | 0.00 |
Descriptions of related party transactions with respect to the sales and purchase of goods, renderingand receipt of services
□Applicable √ N/A
(2). Related entrusted management/contracting and entrusting management/outsourcingTable of the entrusted management/contracting of the Company:
□Applicable √ N/A
Descriptions of related trusteeship/outsourcing
□Applicable √ N/A
Table of the entrusting management/outsourcing of the Company:
□Applicable √ N/A
Descriptions 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 lessee | Type of leased assets | Lease income recognized in the current period | Lease income recognized in the previous period |
| Zhuhai Sanmed Biotech Inc. | Buildings | 1,113,149.50 | 1,113,149.50 |
| Zhuhai Sanmed Gene Diagnostics Ltd. | Buildings | 120,000.00 | 120,000.00 |
| Shenzhen Baiyeyuan Investment Co., Ltd. | Buildings | 9,445.88 | 9,445.88 |
| Shenzhen Taitelixing Investment Development Co., Ltd. | Buildings | 9,360.00 | 9,360.00 |
| Shenzhen Healthy Deer Information Technology Co., Ltd. | Buildings | 8,587.16 | 8,587.16 |
| Shenzhen City Youbao Technology Co., Ltd. | Buildings | 8,587.16 | 8,587.16 |
The Company as a lessee:
□Applicable √ N/A
Descriptions 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 party | Guarantee amount | Effetive date | Expiration date | Fullfilled or not |
| Jinguan Electric Power | 4,000.00 | 2022/7/11 | 2023/7/11 | No |
| Jinguan Electric Power | 3,000.00 | 2022/7/11 | 2023/7/11 | No |
| Jinguan Electric Power | 2,000.00 | 2022/7/15 | 2023/7/15 | No |
| Jinguan Electric Power | 3,000.00 | 2022/8/8 | 2023/8/8 | No |
| Jinguan Electric Power | 3,200.00 | 2022/9/16 | 2023/9/16 | No |
| Jinguan Electric Power | 3,800.00 | 2022/10/9 | 2023/10/9 | No |
| Jinguan Electric Power | 3,200.00 | 2022/10/12 | 2023/10/12 | No |
| Jinguan Electric Power | 2,045.01 | 2023/6/12 | 2023/10/13 | No |
| Jinguan Electric Power | 3,000.00 | 2022/11/24 | 2023/11/24 | No |
| Jinguan Electric Power | 2,183.85 | 2023/6/12 | 2023/12/12 | No |
| Jinguan Electric Power | 2,000.00 | 2023/6/16 | 2023/12/12 | No |
| Jinguan Electric Power | 4,640.00 | 2022/12/19 | 2023/12/16 | No |
| Jinguan Electric Power | 2,000.00 | 2022/12/14 | 2023/12/14 | No |
The Company as the guaranteed party
□Applicable √ N/A
Descriptions of guarantees with related parties
√Applicable □N/A
① In order to ensure the stable development of production and operation of Jinguan Electric Power, theCompany and its controlling subsidiary Jiaozuo Joincare jointly provided a revolving guarantee facility withbalance of no more than RMB350 million (inclusive) for Jinguan Electric Power (specific guarantors shallbe specified in the guarantee contracts) according to “the Resolution on Providing Loan Guarantee forJinguan Electric Power by the Company and Its Controlling Subsidiary Jiaozuo Joincare” considered andapproved at the First Extraordinary General Meeting of the Company on 6 July 2016, with the guaranteeperiod starting from the date when the resolution was considered and approved to 31 December 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 Meetingof the Company on 22 May 2018, the Company and its controlling subsidiary Jiaozuo Joincare jointlyprovided a revolving guarantee facility with balance of no more than RMB350 million (inclusive) for JinguanElectric Power (specific guarantors shall be specified in the guarantee contracts), with the guarantee periodstarting from the date when the resolution was considered and approved to 31 December 2022. In order toensure the stable development of production and operation of Jinguan Electric Power, the revolving guaranteefacility with balance of no more than RMB350 million (inclusive) for Jinguan Electric Power (specificguarantors 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 thanRMB450 million (inclusive) on 10 May 2019 due to the actual business needs of Jinguan Electric Power,with the guarantee period starting from the date when the resolution was considered and approved to 31December 2022. On 18 May 2022, the "Proposal on the Company and its subsidiary Jiaozuo Joincare inProviding Loan Guarantee for Jinguan Electric Power" was reviewed and approved by the Company's 2021annual general meeting, the Company and its subsidiary Jiaozuo Joincare jointly provided a guarantee forJinguan Electric Power on its revolving loans facility with a balance of not more than RMB 450 million(including RMB 450 million) (the specific guarantor will be specified in each guarantee contract), and theterm is from the date of approval of this guarantee proposal at the Company’s annual general meeting to 31December 2025.As at 30 June 2023, the Company provided Jinguan Electric Power with guarantees for loans ofRMB380.6886 million; of which RMB254.2886 million in Shenzhen Branch of China Everbright Bank,RMB60 million in Shenzhen Branch of Zheshang Bank, RMB46.40 million in Shenzhen Branch of NanyangCommercial Bank and RMB20 million in Jiaozuo Branch of China CITIC Bank.In order to ensure the safety of secured loans, Jinguan Electric Power provided counter guarantees for thesaid guarantees provided by the Company and its subsidiary, Jiaozuo Joincare, based on its owned assets,and undertook that it would unconditionally provide mutual guarantees for the Company or its controllingsubsidiary designated with total facility of no more than RMB450 million (inclusive) whenever the Companydeemed necessary.
② Another shareholder of Livzon MABPharm Inc. (珠海市丽珠单抗生物技术有限公司) – the Companyhas issued a "Counter Guarantee Commitment", promising that it will share the joint and several guaranteeliability to the extent of 33.07% of the scope 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 willexpire on the date when the Company's guarantee responsibility expiry.
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 sharethe joint and several guarantee liability to the extent of 8.44% of the scope of guarantee responsibilityincurred by the Company 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'sguarantee 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 the current period | Amount for the prior period |
| Remuneration of key management personnel | 782.04 | 799.59 |
For the 6-month period ended 30 June 2023
Unit: 10,000 Yuan Currency: RMB
| Item | Director/ Supervisor Allowance | Wages and allowances | Social security | Housing fund | Bonus | Severance pay | Others | Total | |
| Directors: | |||||||||
| Zhu Baoguo (朱保国) | 162.50 | 0.00 | 3.17 | 1.40 | 0.00 | 0.00 | 0.00 | 167.07 | |
| Liu Guangxia (刘广霞) | 162.50 | 9.65 | 4.82 | 1.40 | 0.00 | 0.00 | 0.00 | 178.37 | |
| Yu Xiong (俞雄) | 0.00 | 130.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 130.00 | |
| Qiu Qingfeng (邱庆丰) | 0.00 | 67.50 | 3.86 | 1.40 | 0.00 | 0.00 | 0.00 | 72.76 | |
| Lin Nanqi (林楠棋) | 0.00 | 67.50 | 3.86 | 1.40 | 0.00 | 0.00 | 0.00 | 72.76 | |
| Cui Liguo (崔利国) | 6.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 6.00 | |
| Huo Jing (霍静) | 6.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 6.00 | |
| Qin Yezhi (覃业志) | 6.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 6.00 | |
| Peng Juan (彭娟) | 6.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 6.00 | |
| Supervisors: | |||||||||
| Yu Xiaoyun (余孝云) | 2.40 | 19.08 | 3.54 | 1.12 | 0.00 | 0.00 | 0.00 | 26.14 | |
| Peng Jinhua (彭金花) | 2.40 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 2.40 | |
| Xing zhiwei (幸志伟) | 2.40 | 28.88 | 3.44 | 1.05 | 0.00 | 0.00 | 0.00 | 35.77 | |
| Other senior management: | |||||||||
| Item | Director/ Supervisor Allowance | Wages and allowances | Social security | Housing fund | Bonus | Severance pay | Others | Total |
| Zhao Fenguang (赵凤光) | 0.00 | 67.50 | 3.86 | 1.40 | 0.00 | 0.00 | 0.00 | 72.76 |
| Total | 356.20 | 390.11 | 26.56 | 9.17 | 0.00 | 0.00 | 0.00 | 782.04 |
Note: 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. Theremuneration presented in above does not include the portion paid by Livzon.
For the 6-month period ended 30 June 2021
Unit: 10,000 Yuan Currency: RMB
| Item | Director/ Supervisor Allowance | Wages and allowances | Social security | Housing fund | Bonus | Severance pay | Others | Total | |
| Directors: | |||||||||
| Zhu Baoguo (朱保国) | 162.50 | 0.00 | 3.42 | 1.25 | 0.00 | 0.00 | 0.00 | 167.17 | |
| Liu Guangxia (刘广霞) | 162.50 | 9.03 | 4.51 | 1.25 | 0.00 | 0.00 | 0.00 | 177.29 | |
| Yu Xiong (俞雄) | 0.00 | 130.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 133.00 | |
| Qiu Qingfeng (邱庆丰) | 0.00 | 67.50 | 3.60 | 1.25 | 0.00 | 0.00 | 0.00 | 72.36 | |
| Lin Nanqi (林楠棋) | 0.00 | 67.50 | 3.60 | 1.25 | 0.00 | 0.00 | 0.00 | 72.36 | |
| Cui Liguo (崔利国) | 5.54 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 5.54 | |
| Huo Jing (霍静) | 5.54 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 5.54 | |
| Qin Yezhi (覃业志) | 5.54 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 5.54 | |
| Peng Juan (彭娟) | 5.54 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 5.54 | |
| Supervisors: | 5.54 | ||||||||
| Yu Xiaoyun (余孝云) | 2.40 | 19.23 | 3.46 | 1.12 | 0.00 | 0.00 | 0.00 | 26.21 | |
| Peng Jinhua (彭金花) | 2.40 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 2.40 | |
| Xing zhiwei (幸志伟) | 0.57 | 32.00 | 3.36 | 1.05 | 0.00 | 0.00 | 0.00 | 36.98 | |
| Xie Youguo(谢友国) (resigned) | 1.83 | 18.46 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 20.29 | |
| Other senior management: | 5.54 | ||||||||
| Zhao Fenguang (赵凤光) | 0.00 | 67.50 | 3.60 | 1.25 | 0.00 | 0.00 | 0.00 | 72.36 | |
| Total | 354.37 | 411.23 | 25.55 | 8.44 | 0.00 | 0.00 | 0.00 | 799.59 | |
Note: Mr. Zhu Baoguo serves as the chairman of Livzon, a controlled subsidiary of the Company; and Mr. YuXiong and Mr. Qiu Qingfeng serve as non-executive directors of Livzon. Xie Youguo has resigned. Theremuneration 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
| Item | Name of related parties | Balance at the End of the Period | Balance at the Beginning of the Period | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Bills receivables | Guangdong Blue Treasure Pharmaceutical Co., Ltd. | 12,738,589.00 | 0.00 | 3,893,820.00 | 0.00 |
| Accounts receivables | Guangdong Blue Treasure Pharmaceutical Co., Ltd. | 3,121,800.00 | 31,218.00 | 4,781,500.00 | 47,336.85 |
| Accounts receivables | Zhuhai Sanmed Gene Diagnostics Ltd. | 83,081.78 | 830.82 | 85,731.98 | 840.17 |
| Accounts receivables | Subsidiaries of Sichuan Healthy Deer Hospital Management Co., Ltd. | 493,418.30 | 138,748.58 | 497,828.30 | 103,325.48 |
| Prepayments | Zhuhai Sanmed Biotech Inc. | 211,200.00 | 0.00 | 211,200.00 | 0.00 |
| Prepayments | Shenzhen Youbao Technology Co., Ltd. | 329,678.00 | 0.00 | 188,100.00 | 0.00 |
| Prepayments | Jiangsu Yiyingjia Medical Technology Co., Ltd. | 670,000.00 | 0.00 | 0.00 | 0.00 |
| Prepayments | Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. | 67,244,709.78 | 0.00 | 75,724,913.57 | 0.00 |
| Other receivables | Zhongshan Renhe Health Products Co., Ltd. | 469,895.78 | 469,895.78 | 469,895.78 | 469,895.78 |
| Other receivables | Shenzhen Health Deer Technology Co., Ltd. | 0.00 | 0.00 | 4,680.00 | 74.38 |
| Other receivables | Guangdong Blue Treasure Pharmaceutical Co., Ltd. | 1,063,980.76 | 10,639.81 | 607,484.29 | 6,925.32 |
| Other receivables | Zhuhai Sanmed Gene Diagnostics Ltd. | 18,579.40 | 123.49 | 15,795.00 | 170.59 |
(2). Payables to related party
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Related parties | Balance at the End of the Period | Balance at the Beginning of the Period |
| Contract liabilities | Subsidiaries of Sichuan Healthy Deer Hospital Management Co., Ltd. | 104,277.25 | 12,011.72 |
| Bills payables | Guangdong Blue Treasure Pharmaceutical Co., Ltd. | 1,943,040.00 | 0.00 |
| Accounts payables | Guangdong Blue Treasure Pharmaceutical Co., Ltd. | 0.00 | 117,760.00 |
| Other payables | Subsidiaries of Sichuan Healthy Deer Hospital Management Co., Ltd. | 0.00 | 8,936.17 |
Ⅺ. Share-Based Payment
1. General information about share-based payment
√Applicable □N/A
Unit: Share Currency: RMB
| Total equity instruments granted during the Current Period by the Company | |
| Total equity instruments exercised during the Current Period by the Company | |
| Total equity instruments of the Company expired during the Current Period | |
| Range of exercise price of share option of the Company outstanding and remaining term of contract as at the End of the Period | Note 1 |
| Range of exercise price of other equity instruments of the Company and remaining term of contract as at the End of the Period | _ |
Note 1: Share Option
① On 29 August 2022, the Company held the third extraordinary general meeting of shareholders in 2022,and reviewed and approved the "Proposal on the Company's 2022 Stock Option Incentive Plan (Draft) andits Summary", "Proposal on the Company's 2022 Stock Option Incentive Plan Implementation AppraisalManagement Measures" and "Proposal on Requesting the Company's Shareholders' Meeting to Authorizethe Board of Directors to Handle Matters Related to Shares Incentive". The Company held the 16th meetingof the eighth board of directors on 5 September 2022, and reviewed and passed the "Proposal on First TimeGranting Stock Options to Incentive Participants". With 5 September 2022 as the grant date, 49.45 millionstock options were granted to 423 incentive participants at a price of RMB11.24 per share. The date ofcompletion and effective date of registration of stock options granted is 16 September 2022.The exercise period of the options granted this time and the exercise time schedule for each period are shownin the following table:
| Vesting period | Vesting date | Vesting ratio |
| First vesting period | From the first trading day 12 months after the first grant date to the last trading day within 24 months from the first grant date | 40% |
| Second vesting period | From the first trading day 24 months after the first grant date to the last trading day within 36 months from the first grant date | 30% |
| Third vesting period | From the first trading day 36 months after the first grant date to the last trading day within 48 months from the first grant date | 30% |
Company-level performance appraisal requirements: The stock options granted by this incentive plan aresubject to annual performance appraisal and vesting. To achieve the performance appraisal target as thevesting condition for incentive participants, the annual performance appraisal targets for the first-time grantare shown in the table below:
| Vesting period | Performance appraisal targets |
| First vesting period | Based on the net profit in 2021, the compound growth rate of net profit in 2022 shall not be less than 15%; |
| Second vesting period | Based on the net profit in 2021, the compound growth rate of net profit in 2023 shall not be less than 15%; |
| Third vesting period | Based on the net profit in 2021, the compound growth rate of net profit in 2024 shall not be less than 15%. |
The calculation of the above "net profit" and "net profit growth rate" indicators is based on the net profitattributable to shareholders of listed company after deducting non-recurring gains and losses, and excludingthe impact of share-based payments in this incentive plan. If the Company fails to meet the above-mentionedperformance appraisal targets, all incentive participants whose stock options are exercisable in the yearcorresponding to the appraisal shall not be exercised and shall be canceled by the Company.
(2) The Company’s subsidiary, Livzon Group
| Total amount of equity instruments granted during the year (shares) | |
| Total amount of equity instruments exercised during the year (shares) | |
| Total amount of equity instruments forfeited during the year (shares) | |
| Range of exercise price and residual life of outstanding share options at the end of the year | Note 2 |
| Range of exercise price and residual life of outstanding other equity instruments at the end of the year | Note 3 |
Note 2: Share Option
① On 14 October 2022, Livzon Group’s 2022 Second Extraordinary Shareholders’ Meeting, 2022 SecondA-Share Class Shareholders’ Meeting and 2022 H-Share Class Shareholders’ Meeting reviewed andapproved the “Proposal on the Company's 2022 Stock Option Incentive Plan (Revised Draft) and ItsSummary", "Proposal on the company's 2022 Stock Option Incentive Plan Implementation AppraisalManagement Measures", "Proposal on submitting to the company's general meeting of shareholders toauthorize the board of directors to handle matters related to the 2022 stock options incentive plan". On 7November 2022, the 39th meeting of the 10th Board of Directors of Livzon Group reviewed and approvedthe "Proposal on Matters Related to the First Time Grant of the 2022 Stock Option Incentive Plan". With 7November 2022 as the grant date, 17,973,500 stock options were granted to 1,026 incentive participants at aprice of RMB31.31 per A share. The date of completion and effective date of registration of stock optionsgranted is 23 November 2022.The exercise period of the options granted this time and the exercise time schedule for each period are shownin the following table:
| Vesting period | Vesting date | Vesting ratio |
| First vesting period of stock options granted for the first time | From the first trading day 12 months after the completion of the first time grant registration to the last trading day within 24 months from the completion of the first time grant registration | 40% |
| Second vesting period of stock options granted for the first time | From the first trading day 24 months after the completion of the first time grant registration to the last trading day within 36 months from the completion of the first time grant registration | 30% |
| Third vesting period of stock options granted for the first time | From the first trading day 36 months after the completion of the first time grant registration to the last trading day within 48 months from the completion of the first time grant registration | 30% |
Livzon Group performance appraisal requirements: The stock options granted by this incentive plan are subject toannual performance appraisal and vesting during the 3 fiscal years of the vesting period. To achieve the performanceappraisal target as the vesting condition for incentive participants, the annual performance appraisal targets for thefirst-time grant are shown in the table below:
| Vesting period | Performance appraisal targets |
| First vesting period of stock options granted for the first time | Based on the net profit in 2021, the compound growth rate of net profit in 2022 shall not be less than 15%; |
| Second vesting period of stock options granted for the first time | Based on the net profit in 2021, the compound growth rate of net profit in 2023 shall not be less than 15%; |
| Third vesting period of stock options granted for the first time | Based on the net profit in 2021, the compound growth rate of net profit in 2024 shall not be less than 15%. |
The calculation of the above "net profit" and "net profit compound growth rate" indicators is based on the netprofit attributable to shareholders of listed company after deducting non-recurring gains and losses, andexcluding the impact of share-based payments in this incentive plan. If the Company fails to meet the above-mentioned performance appraisal targets, all incentive participants whose stock options are exercisable in theyear corresponding to the appraisal shall not be exercised and shall be canceled by the Company.Note 3: Other equity incentivePursuant to “ the Resolution on the Disposal of Certain Equity of a Holding Subsidiary and ConnectedTransaction” considered and approved at the 34th Meeting of the 9th Session of the Board of Livzon Groupon 8 November 2019, it was agreed that 9.5% equity interests (totally 8,382,100 shares) in Zhuhai LivzonDiagnostics Inc. (珠海丽珠试剂股份有限公司) held by Livzon Group shall be transferred to Zhuhai LiyingInvestment 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 on the Valuation of the
Shareholders'. According to “Assets evaluation report of all shareholders' equity value project of ZhuhaiLivzon Diagnostics Inc. (珠海丽珠试剂股份有限公司) involved in the proposed transfer of equity byLivzon Pharmaceutical Group Co., Ltd.”. (Huaya Zhengxin Appraisal Report [2019] No. A02-0011), thevaluation of all shareholders’ equity of Zhuhai Livzon Diagnostics Inc. as at 30 June 2019 was RMB647.3075million, and the above equity transfer price was lower than its fair value, therefore it constitutes a share-basedpayment. The total share-based payment of the transaction is RMB40.4017 million, which should beamortized within 5 years according to the partnership agreement and share incentive expenses wererecognised due to the share-based payment as a result of the change in the shareholding of the shareholdersof Zhuhai Liying Investment Management Partnership (Limited Partnership).Pursuant to “the Resolution on the Implementation of Employee Equity Incentive Scheme by a HoldingSubsidiary” considered and approved at the 34th Meeting of the 9th Session of the Board of Livzon Groupon 8 November 2019, the total number of shares of new issuance by Zhuhai Livzon Diagnostics Inc. forimplementation of employee equity incentive scheme shall not be more than 4,643,839 shares, and thescheme participants shall contribute a total of RMB11,702,474.28 to directly subscribe for the above sharesor indirectly subscribe for the such shares through the holding of the limited partnership shares of theemployee shareholding platform. In December 2019, pursuant to the Capital Increase Agreement of ZhuhaiLivzon 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 forby Zhuhai Haoxun 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 (LimitedPartnership) (珠海熠臣企业管理咨询合伙企业（有限合伙）) and Zhuhai Qijing Enterprise ManagementConsulting Partnership (Limited Partnership) (海启靖企业管理咨询合伙企业（有限合伙）) at theconsideration of RMB11,702,474. The subscription price is lower than the fair value, therefore it constitutesa share-based payment. The total share-based payment of the transaction is RMB20,709,000, which shouldbe 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 theshareholders or employee stock ownership platform of Zhuhai Livzon Diagnostics Inc.On 31 August 2021, the general meeting of Livzon Bio considered and approved the Equity Incentive Schemeof Zhuhai Livzon Biotechnology Co., Ltd. (珠海市丽珠生物医药科技有限公司), granting 66,666,667restricted shares of Livzon Biologics to incentive participants, among which 42 million shares were grantedin the first batch and 24,666,667 shares were reserved. Incentive participants indirectly subscribed for theabove shares through the holding of the limited partnership shares of the employee shareholding platform.The subscription price is lower than the fair value, therefore it constitutes a share-based payment. The totalshare-based payment of the transaction is RMB33.6 million, which should be amortized during the lock-upperiod according to the Equity Incentive Scheme of LivzonBio and the Grant Agreement and RMB4.76million was amortized in the 6-month period ended 30 June 2023.
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 Period | None |
| Accumulated amount of equity settled share-based payments included in capital reserve | 222,785,534.02 |
| Total expense recognised for equity settled share-based payments for the Period | 50,956,673.92 |
3. Cash settled share-based payments
□Applicable √N/A
Ⅻ. Commitments and Contingencies
1. Significant commitments
√Applicable □N/A
Significant 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 financial statements | Closing balance | Beginning balance |
| Commitments in relation to acquisition of long-term assets | 380,762,082.33 | 455,161,816.72 |
| Commitments in relation to external investment | 8,000,000.00 | 12,000,000.00 |
| Commitments in relation to research and development expenditures | 206,451,500.00 | 0.00 |
(2) Other commitments
None.
(3) Performance of previous commitments
The Company has duly performed the capital expenditure commitments and the operating leasecommitments and the other commitments as at 30 June 2023.
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 bedisclosed:
□Applicable √N/A
3. Others
□Applicable √N/A
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
ⅩⅣ. Other significant events
1、Other significant events
√Applicable □N/A
LeasesThe Company had adopted a simplified approach for short-term leases and leases of low value assets anddid not recognized right-of-use assets and lease liabilities. The expense of short-term leases, leases oflow value assets and variable lease payments not included in the measurement of lease liabilities areincluded in the expenses in the current period as follows:
| Item | Amount for the Period |
| Short-term leases | 3,147,259.24 |
As at 30 June 2023, save as the disclosed above, there were no other significant matters required to bedisclosed by the Company.ⅩⅤ. Notes to the Key Components of Financial Statements item of the Parent Company
1. Notes receivables
| Category | Balance at the End of the Period | Balance at the Beginning of the Period | ||||
| Book balance | Provision for bad debts | Carrying value | Book balance | Provision for bad debts | Carrying value | |
| Bank acceptance bills | 250,442,507.70 | 0.00 | 250,442,507.70 | 249,617,024.89 | 0.00 | 249,617,024.89 |
| Commercial acceptance bill | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total | 250,442,507.70 | 0.00 | 250,442,507.70 | 249,617,024.89 | 0.00 | 249,617,024.89 |
（1）Notes receivable pledged at the end of the period
| Category | Amount pledged at the End of the Period |
| Bank acceptance bills | 165,392,453.42 |
（2）Notes receivable endorsed or discounted to other parties but not yet expired at balance sheet date
| Category | Amount derecognised at the End of the Period | Amount not derecognised at the End of the Period |
| Bank acceptance bills not yet mature but already endorsed | 49,342,163.84 | |
| Bank acceptance bills not yet mature but already discounted | 0.00 | |
| Total | 49,342,163.84 |
（3）There were no bills transferred into accounts receivables for non-performance by the issuer at theEnd of the Period.
（4）Classification by the method of bad debt provision
| Category | Balance at the End of the Period | Balance at the Beginning of the Period | ||||||||
| Book balance | Provision for bad debts | Book balance Amount | Provision for bad debts | Book balance | Provision for bad debts | |||||
| Amount | Percentage (%) | Amount | Percentage (%) | Amount | Percentage (%) | Amount | Percentage (%) | Carrying value | ||
| Provision for bad debt on an individual basis | ||||||||||
| Provision for bad debt on a collective basis | 250,442,507.70 | 100.00 | 0.00 | 0.00 | 250,442,507.70 | 249,617,024.89 | 100.00 | 0.00 | 0.00 | 249,617,024.89 |
| Including: | ||||||||||
| Bank acceptance bills | 250,442,507.70 | 100.00 | 0.00 | 0.00 | 250,442,507.70 | 249,617,024.89 | 100.00 | 0.00 | 0.00 | 249,617,024.89 |
| Total | 250,442,507.70 | 100.00 | 0.00 | 0.00 | 250,442,507.70 | 249,617,024.89 | 100.00 | 0.00 | 0.00 | 249,617,024.89 |
（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 the End of the Period |
| Within 1 year | 243,755,283.87 |
| 1-2 years | 2,382,422.30 |
| 2-3 years | 1,149,664.82 |
| 3-4 years | 71,587.93 |
| 4-5 years | 171,734.61 |
| Over 5 years | 8,115,871.79 |
| Total | 255,646,565.32 |
(2). Classification by the method of bad debt provision
√Applicable □N/A
Unit: Yuan Currency: RMB
| Category | Balance at the End of the Period | Balance at the Beginning of the Period | ||||||||
| Book balance | Provision for bad debts | Carrying value | Book balance | Provision for bad debts | Carrying value | |||||
| Amount | Percentage (%) | Amount | Expected credit loss rate (%) | Amount | Percentage (%) | Amount | Expected credit loss rate (%) | |||
| Provision for bad debts on individual basis | 771,300.68 | 0.30 | 771,300.68 | 100.00 | 0.00 | 771,300.68 | 0.25 | 771,300.68 | 100.00 | 0.00 |
| Including: | ||||||||||
| Receivables from domestic customers | 771,300.68 | 0.30 | 771,300.68 | 100.00 | 0.00 | 771,300.68 | 0.25 | 771,300.68 | 100.00 | 0.00 |
| Receivables from overseas customers | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Provision for bad debts on portfolio basis | 254,875,264.64 | 99.70 | 10,573,709.83 | 4.15 | 244,301,554.81 | 302,839,357.89 | 99.75 | 11,208,500.15 | 3.70 | 291,630,857.74 |
| Including: | ||||||||||
| Receivables from domestic customers | 254,875,264.64 | 99.70 | 10,573,709.83 | 4.15 | 244,301,554.81 | 302,839,357.89 | 99.75 | 11,208,500.15 | 3.70 | 291,630,857.74 |
| Receivables from overseas customers | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total | 255,646,565.32 | 100.00 | 11,345,010.51 | 4.44 | 244,301,554.81 | 303,610,658.57 | 100 | 11,979,800.83 | 3.95 | 291,630,857.74 |
Provision for bad debts on individual item:
√Applicable □N/A
Unit: Yuan Currency: RMB
| Name | Balance at the End of the Period | |||
| Book balance | Provision for bad debts | Expected credit loss rate (%) | Reason for provision made | |
| Purchase of goods | 771,300.68 | 771,300.68 | 100.00 | Not expected to be recoverable |
| Total | 771,300.68 | 771,300.68 | 100.00 | / |
Statements of provision for bad debt on individual basis:
□Applicable √N/A
Provision for bad debts on portfolio basis:
√Applicable □N/A
Item on portfolio basis: Due from domestic customers
Unit: Yuan Currency: RMB
| Aging | Balance at the End of the Period | ||
| Accounts receivables | Provision for bad debts | Provision Ratio(%) | |
| Within 1 year | 243,788,178.90 | 2,612,778.20 | 1.07 |
| 1-2 years (inclusive of 2 years) | 2,382,422.30 | 119,121.12 | 5.00 |
| 2-3 years (inclusive of 3 years) | 1,149,664.82 | 344,899.45 | 30.00 |
| 3-4 years (inclusive of 4 years) | 71,587.93 | 35,793.97 | 50.00 |
| 4-5 years (inclusive of 5 years) | 111,468.01 | 89,174.41 | 80.00 |
| Over 5 years | 7,371,942.68 | 7,371,942.68 | 100.00 |
| Total | 254,875,264.64 | 10,573,709.83 | 4.15 |
Standards of provision for bad debts made by portfolio and descriptions thereof:
□Applicable √N/A
If the provision for bad debts is made in accordance with the general model of expected credit losses,please refer to other receivables disclosure:
□Applicable √N/A
(3). Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the Beginning of the Period | Changes for the current period | Balance at the End of the Period | |||
| Provision | Recovery or reversal | Removal/write-off | Other changes | |||
| Accounts receivables | 11,979,800.83 | -634,790.32 | 0.00 | 0.00 | 0.00 | 11,345,010.51 |
| Total | 11,979,800.83 | -634,790.32 | 0.00 | 0.00 | 0.00 | 11,345,010.51 |
As at 30 June 2023 and 31 December 2022, the Company had no accounts receivables that are past due butnot 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/A
As of 30 June 2023, the total amount of the top five debtors in closing balance is RMB39,253,456.12,accounting for 15.35% of the total amount of closing balance of accounts receivable, and the correspondingclosing balance of provision for bad debts is total RMB392,534.56.
(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 butinvolvement continues in the Company.
□Applicable √N/A
Other descriptions:
□Applicable √N/A
3. Other receivables
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Dividends receivable | 926,892,488.80 | 544,999,500.00 |
| Other receivables | 231,021,136.45 | 240,307,524.78 |
| Total | 1,157,913,625.25 | 785,307,024.78 |
Other descriptions:
□Applicable √N/A
(1). Dividends receivable
Dividends receivable
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Topsino | 524,999,500.00 | 524,999,500.00 |
| Livzon Group | 381,892,988.80 | 0.00 |
| Fenglei Electric Power | 20,000,000.00 | 20,000,000.00 |
| Total | 926,892,488.80 | 544,999,500.00 |
Other receivables
(2). Disclosure by aging
√Applicable □N/A
Unit: Yuan Currency: RMB
| Aging | Balance at the End of the Period |
| Subtotal within 1 year | 230,926,374.00 |
| 1-2 years | 48,152.00 |
| 2-3 years | 210,597.40 |
| 3-4 years | 148,186.44 |
| 4-5 years | 138,912.04 |
| Over 5 years | 19,124,794.21 |
| Total | 250,597,016.09 |
(3). Disclosure by nature of the amount
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period |
| Other receivables of each company within the scope of combination | 225,864,474.22 | 238,041,400.41 |
| Treasury bonds and security deposits | 17,968,386.04 | 17,968,386.04 |
| External entities balances | 799,416.83 | 1,384,240.83 |
| Security deposits | 822,373.90 | 973,098.11 |
| Others | 5,142,365.10 | 1,650,063.41 |
| Total | 250,597,016.09 | 260,017,188.80 |
(4). Provision made for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
| Provision for bad debts | First stage | Second stage | Third stage | Total |
| Expected credit losses over the next 12 months | Expected credit losses over the lifetime (without impairment of credit) | Expected credit losses over the lifetime (with impairment of credit) | ||
| Balance at the Beginning of the Period | 0.00 | 1,741,277.98 | 17,968,386.04 | 19,709,664.02 |
| Movement of beginning balance during the period | ||||
| -- Transferred to Second stage | 0.00 | 0.00 | 0.00 | 0.00 |
| -- Transferred to third stage | 0.00 | 0.00 | 0.00 | 0.00 |
| -- Reversed to second stage | 0.00 | 0.00 | 0.00 | 0.00 |
| -- Reversed to first stage | 0.00 | 0.00 | 0.00 | 0.00 |
| Provisions made for the Period | 0.00 | -133,784.38 | 0.00 | -133,784.38 |
| Reversals for the Period | 0.00 | 0.00 | 0.00 | 0.00 |
| Write-off for the Period | 0.00 | 0.00 | 0.00 | 0.00 |
| Settlement for the Period | 0.00 | 0.00 | 0.00 | 0.00 |
| Other changes | 0.00 | 0.00 | 0.00 | 0.00 |
| Balance at the End of the Period | 0.00 | 1,607,493.60 | 17,968,386.04 | 19,575,879.64 |
As at the End of the Period, provision for bad debts in first stage:
| Category | Book balance | Expected credit losses rate over the next 12 months (%) | Provision for bad debts | Carrying value | Reason |
| Provision for bad debt on individual item | 0.00 | 0.00 | 0.00 | 0.00 | |
| Provision for bad debt on portfolio basis | 225,864,474.22 | 0.00 | 0.00 | 225,864,474.22 | |
| Other receivables of each company within the scope of combination | 225,864,474.22 | 0.00 | 0.00 | 225,864,474.22 | Expected to be recovered |
| Total | 225,864,474.22 | 0.00 | 0.00 | 225,864,474.22 |
As at the End of the Period, provision for bad debts in second stage:
| Category | Book balance | Expected credit losses rate over the lifetime (%) | Provision for bad debts | Carrying value | Reason |
| Provision for bad debt on individual item | |||||
| Provision for bad debt on portfolio basis | 6,764,155.83 | 23.76 | 1,607,493.60 | 5,156,662.23 | |
| Receivables of security deposits | 822,373.90 | 33.18 | 272,840.51 | 549,533.39 | |
| Other receivables | 5,941,781.93 | 22.46 | 1,334,653.09 | 4,607,128.84 | |
| Total | 6,764,155.83 | 23.76 | 1,607,493.60 | 5,156,662.23 |
As at the End of the Period, provision for bad debts in third stage:
| Category | Book balance | Expected credit losses rate over the lifetime (%) | Provision for bad debts | Carrying value | Reason |
| Provision for bad debt on individual item | 17,968,386.04 | 100.00 | 17,968,386.04 | 0.00 |
| National debt and Margin | 17,968,386.04 | 100.00 | 17,968,386.04 | 0.00 | Not expected to be recoverable |
| Provision for bad debt on portfolio basis | 0.00 | 0.00 | 0.00 | 0.00 | |
| Total | 17,968,386.04 | 100.00 | 17,968,386.04 | 0.00 |
As at 31 December 2022, provision made for bad debts:
As at 31 December 2022, provision for bad debts in first stage:
| Category | Book balance | Expected credit losses rate over the next 12 months (%) | Provision for bad debts | Carrying value | Reason |
| Provision for bad debt on individual item | 0.00 | 0.00 | 0.00 | 0.00 | |
| Provision for bad debt on portfolio basis | 238,041,400.41 | 0.00 | 0.00 | 238,041,400.41 | |
| Other receivables of each company within the scope of combination | 238,041,400.41 | 0.00 | 0.00 | 238,041,400.41 | Expected to be recovered |
| Total | 238,041,400.41 | 0.00 | 0.00 | 238,041,400.41 |
As at 31 December 2022, provision for bad debts in second stage:
| Category | Book balance | Expected credit losses rate over the lifetime (%) | Provision for bad debts | Carrying value | Reason |
| Provision for bad debt on an individual basis | 0.00 | 0.00 | 0.00 | 0.00 | |
| Provision for bad debt on a collective basis | 4,007,402.35 | 43.45 | 1,741,277.98 | 2,266,124.37 | |
| Receivable deposits and deposits and rental fees | 973,098.11 | 36.42 | 354,429.35 | 618,668.76 | |
| Other receivables | 3,034,304.24 | 45.71 | 1,386,848.63 | 1,647,455.61 | |
| Total | 4,007,402.35 | 43.45 | 1,741,277.98 | 2,266,124.37 |
As at 31 December 2022, provision for bad debts in the third stage:
| Category | Book balance | Expected credit losses rate over the lifetime (%) | Provision for bad debts | Carrying value | Reason |
| Provision for bad debt on an individual basis | 17,968,386.04 | 100.00 | 17,968,386.04 | 0.00 | |
| Treasury bonds and Margin | 17,968,386.04 | 100.00 | 17,968,386.04 | 0.00 | Not expected to be recoverable |
| Provision for bad debt on a collective basis | 0.00 | 0.00 | 0.00 | 0.00 | -- |
| Total | 17,968,386.04 | 100.00 | 17,968,386.04 | 0.00 |
Descriptions of the significant changes in the gross carrying amount of other receivables for which thechanges in loss allowance occur for the current period:
□Applicable √N/A
Provision for bad debts in the current period and the basis for assessing whether the credit risk of
financial instruments have 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 entity | Nature of receivables | Balance at the End of the Period | Ageing | Proportion to total other receivables at the End of the Period (%) | Balance of provision for bad debts at the End of the Period |
| Shenzhen Fenglei Electric Power Investment Co., Ltd. | Other receivables of each company within the scope of combination | 129,956,104.29 | 2-3 years | 51.86 | 0.00 |
| Shenzhen Haibin Pharmaceutical Co., Ltd. | Other receivables of each company within the scope of combination | 21,470,539.48 | Within one year | 8.57 | 0.00 |
| Huaxia Securities Co., Ltd | Treasury bonds and security deposits | 17,968,386.04 | Over 5 years | 7.17 | 17,968,386.04 |
| Joincare Haibin Pharmaceutical Co., Ltd. | Other receivables of each company within the scope of combination | 17,491,868.69 | Within one year | 6.98 | 0.00 |
| Joincare (Guangdong) Special Medicine Food Co., Ltd. | Other receivables of each company within the scope of combination | 16,757,913.91 | Within two years | 6.69 | 0.00 |
| Total | / | 203,644,812.41 | / | 81.26 | 17,968,386.04 |
(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 continuinginvolvement therein
□Applicable √N/A
Other descriptions:
□Applicable √N/A
4.Long-term equity investments
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Balance at the End of the Period | Balance at the Beginning of the Period | ||||
| Book balance | Provision for impairment | Carrying value | Book balance | Provision for impairment | Carrying value | |
| Investments in subsidiaries | 3,453,138,312.11 | 7,010,047.91 | 3,446,128,264.20 | 3,453,138,312.11 | 7,010,047.91 | 3,446,128,264.20 |
| Investments in associates and joint ventures | 114,283,298.64 | 0.00 | 114,283,298.64 | 78,056,248.43 | 0.00 | 78,056,248.43 |
| Total | 3,567,421,610.75 | 7,010,047.91 | 3,560,411,562.84 | 3,531,194,560.54 | 7,010,047.91 | 3,524,184,512.63 |
(1). Investments in subsidiaries
√Applicable □N/A
Unit: Yuan Currency: RMB
| Investee | Balance at the Beginning of the Year | Increase during the Period | Decrease during the Period | Balance at the End of the Period | Provision for impairment for the Period | Balance of provision for impairment at the End of the Period |
| Livzon | 608,741,654.08 | 0.00 | 0.00 | 608,741,654.08 | 0.00 | 0.00 |
| Haibin Pharma | 783,054,186.38 | 0.00 | 0.00 | 783,054,186.38 | 0.00 | 0.00 |
| Joincare Daily-Use | 24,116,498.56 | 0.00 | 0.00 | 24,116,498.56 | 0.00 | 1,610,047.91 |
| Topsino | 813,552,689.31 | 0.00 | 0.00 | 813,552,689.31 | 0.00 | 0.00 |
| Taitai Genomics | 37,500,000.00 | 0.00 | 0.00 | 37,500,000.00 | 0.00 | 0.00 |
| Taitai Pharmaceutical | 105,939,709.72 | 0.00 | 0.00 | 105,939,709.72 | 0.00 | 0.00 |
| Shenzhen Hiyeah | 170,100,000.00 | 0.00 | 0.00 | 170,100,000.00 | 0.00 | 5,400,000.00 |
| Fenglei Electric Power | 100,763,433.06 | 0.00 | 0.00 | 100,763,433.06 | 0.00 | 0.00 |
| Jiaozuo Joincare | 375,000,000.00 | 0.00 | 0.00 | 375,000,000.00 | 0.00 | 0.00 |
| Shanghai Frontier | 32,500,000.00 | 0.00 | 0.00 | 32,500,000.00 | 0.00 | 0.00 |
| Taitai Biological | 4,832,950.00 | 0.00 | 0.00 | 4,832,950.00 | 0.00 | 0.00 |
| Joincare Haibin | 100,000,000.00 | 0.00 | 0.00 | 100,000,000.00 | 0.00 | 0.00 |
| Joincare Special medicine Food | 3,000,000.00 | 0.00 | 0.00 | 3,000,000.00 | 0.00 | 0.00 |
| Livzon Biotechnology | 294,037,191.00 | 0.00 | 0.00 | 294,037,191.00 | 0.00 | 0.00 |
| Total | 3,453,138,312.11 | 0.00 | 0.00 | 3,453,138,312.11 | 0.00 | 7,010,047.91 |
(2) Investment in associates and joint ventures
√Applicable □N/A
Unit: Yuan Currency: RMB
| Investee | Balance at the Beginning of the Year | Change during the Period | Balance at the End of the Period | Balance of provision for impairment at the End of the Period | |||||||
| Increased investmen | Decreased investment | Investment profit and loss under the equity method | Adjustment in other comprehensive income | Other equity changes | Cash dividend or profit distribution declared | Provision for Impairment | Others | ||||
| Ⅱ Associates | |||||||||||
| Ningbo Ningrong Biological Medicine Co., Ltd. | 27,179,209.51 | 0.00 | 0.00 | -158,884.43 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 27,020,325.08 | 0.00 |
| Feellife Health Inc. | 12,402,324.22 | 0.00 | 0.00 | 786,621.90 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 13,188,946.12 | 0.00 |
| Jiangsu Baining Yingchuang Medical Technology Co., Ltd | 28,732,381.11 | 0.00 | 0.00 | 837,520.76 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 29,569,901.87 | 0.00 |
| Shanghai Sheo Pharmaceutical Technology Co., Ltd. | 9,742,333.59 | 0.00 | 0.00 | -88,165.30 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 9,654,168.29 | 0.00 |
| Lijian (Guangdong) Animal Healthcare Co., Ltd. | 0.00 | 36,750,000.00 | 0.00 | -1,940,032.85 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 34,809,967.15 | 0.00 |
| Wuhan Kangli Health Investment Management Co., Ltd. | 0.00 | 40,000.00 | 0.00 | -9.87 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 39,990.13 | 0.00 |
| Total | 78,056,248.43 | 36,790,000.00 | 0.00 | -562,949.79 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 114,283,298.64 | 0.00 |
5. Operating income and operating cost
(1). Operating income and operating cost
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period | ||
| Income | Cost | Income | Cost | |
| Principal activities | 1,077,437,728.28 | 554,833,929.81 | 1,169,331,881.23 | 785,770,845.75 |
| Other activities | 12,095,953.20 | 7,540,550.84 | 7,768,255.94 | 3,116,156.20 |
| Total | 1,089,533,681.48 | 562,374,480.65 | 1,177,100,137.17 | 788,887,001.95 |
Other descriptions:
(2). Descriptions of operating income
①Operating income and operating cost presented by product types
| Item | For the Period | For the Previous Period | ||
| Income | Cost | Income | Cost | |
| Chemical pharmaceuticals | 965,727,948.21 | 492,012,624.44 | 1,091,103,688.17 | 735,913,959.70 |
| Traditional Chinese medicine | 31,093,955.39 | 18,301,781.00 | 23,819,263.50 | 13,860,751.57 |
| Health care products | 80,615,824.68 | 44,519,524.37 | 54,408,929.55 | 35,996,134.48 |
| Total | 1,077,437,728.28 | 554,833,929.81 | 1,169,331,881.23 | 785,770,845.75 |
②Operating income and operating cost presented by major operating regions
| Item | For the Period | For the Previous Period | ||
| Income | Cost | Income | Cost | |
| Domestic | 1,077,437,728.28 | 554,833,929.81 | 1,169,331,881.23 | 785,770,845.75 |
| Total | 1,077,437,728.28 | 554,833,929.81 | 1,169,331,881.23 | 785,770,845.75 |
③ Operating income and operating cost presented by time of income recognition
| Item | For the Period | For the Previous Period | ||
| Income | Cost | Income | Cost | |
| Commodities (transferred at a point in time) | 1,077,437,728.28 | 554,833,929.81 | 1,169,331,881.23 | 785,770,845.75 |
| Total | 1,077,437,728.28 | 554,833,929.81 | 1,169,331,881.23 | 785,770,845.75 |
(3) Descriptions of other activities
| Item | For the Period | For the Previous Period | ||
| Income | Cost | Income | Cost | |
| Rental fees | 4,513,807.00 | 583,020.25 | 5,325,285.20 | 781,055.72 |
| Others | 7,582,146.20 | 6,957,530.59 | 2,442,970.74 | 2,335,100.48 |
| Total | 12,095,953.20 | 7,540,550.84 | 7,768,255.94 | 3,116,156.20 |
6. Investment income
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | For the Period | For the Previous Period |
| Long-term equity investments income under cost method | 381,892,988.80 | 310,288,053.40 |
| Long-term equity investments income under equity method | -562,949.79 | 576,377.39 |
| Investment income from disposal of long-term equity investments | 0.00 | 4,242,404.46 |
| Total | 381,330,039.01 | 315,106,835.25 |
7. Others
□Applicable √N/A
ⅩⅥ Supporting Information
1. Statement of non-recurring profit or loss
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount |
| Gain or loss on disposal of non-current assets | -342,359.46 |
| Return, exemption and discharge of taxes resulting from approving ultra vires, or without formal approval or incidentally incurred | 0.00 |
| Government grants as included in the current profit or loss, however, except for those which are closely related to the normal business of an enterprise, comply with the policies of the State and are continuously entitled with specific amount or quantity according to certain standards | 123,344,744.28 |
| Funds occupation fees charged from non-financial enterprises | 0.00 |
| Gains resulting from the investment cost of the enterprise for the purpose of acquisition of the subsidiaries, joint operation and joint ventures is lower than the fair value of net identifiable assets of the investee as entitled at the time of receipt of the investment | 0.00 |
| Profit or loss from exchange of non-monetary assets | 0.00 |
| Profit or loss from investment or management of assets by the others | 0.00 |
| Provision for impairment of assets accrued due to force majeure factors, such as natural disasters | 0.00 |
| Profit or loss from debts restructuring | 0.00 |
| Enterprise restructuring fees, such as the expenses for employees’ settlement and the integration fees | 0.00 |
| Profit or loss exceeding the fair value and generated from the transaction of which the transaction price is obviously unfair | 0.00 |
| Net profit or loss over the current period of the subsidiaries as a result of business combination under 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 business | 0.00 |
| Except for the efficient hedging related to the Company’s normal business, profit or loss from changes in fair value as generated from financial assets and financial | -45,351,392.03 |
| liabilities held for trading and gains from investment as a result of the disposal of financial assets and financial liabilities held for trading and debt investments | |
| Reversals of provision for impairment of accounts receivable with individual impairment test | 0.00 |
| Profit or loss from entrusted loans | 0.00 |
| Gains or losses from changes in the fair values of investment properties that are subsequently measured using the fair value model | 0.00 |
| Impact of a one-time adjustment on current profit and loss according to the requirements of tax and accounting laws and regulations | 0.00 |
| Custody fees of entrusted operation | 0.00 |
| Other non-operating income and expenses besides the above items | -5,612,578.23 |
| Other items that conform to the definition of non-recurring profit or loss | 0.00 |
| Less: Effect of income tax | 12,031,185.95 |
| Effect of minority equity(After tax) | 26,316,635.89 |
| Total | 33,690,592.72 |
Provide explanations for classifying non-recurring profit and loss items defined in the ExplanatoryAnnouncement No. 1 for Public Company Information Disclosures –Non-recurring Profits and Losses, andfor classifying non-recurring profit and loss items listed in the Explanatory Announcement No. 1 for PublicCompany Information Disclosures –Non-recurring Profits and Losses as recurring profit and loss item.
□Applicable √N/A
2. Rate of return on net assets and earnings per share
√Applicable □N/A
| Profit for the Reporting Period | Weighted average return on equity (%) | Earnings per share | |
| Basic EPS | Diluted EPS | ||
| Net loss attributable to the Company’s ordinary shareholders | 6.29 | 0.4264 | 0.4251 |
| Net profit attributable to the parent company’s shareholders, excluding non-recurring profit or loss | 6.03 | 0.4088 | 0.4075 |
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: 23 August 2023
Revised information
□Applicable √N/A