Important
Notice
I The Board of Directors (the“Board”), the Board of Supervisors and directors, supervisors and senior management of the
Company hereby warrant the truthfulness, accuracy and completeness of the contents of this annual report (the“Report”), and
that there are no false representations, misleading statements or material omissions contained in the Report, and severally and
jointly accept responsibility.
II All directors of the company have attended the Board meeting.
III Grant Thornton (Special General Partnership) Issued a standard unqualied audit report for the Company.
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
accounting work and the person-in-charge of the accounting department (the head of the accounting department) declare that
they hereby warrant the truthfulness, accuracy and completeness of the nancial statements contained in the Report.
V Profit distribution plan or plan for conversion of capital reserve to share capital approved by the Board resolution during the
Reporting Period
Based on the audit conducted by Grant Thornton (Special General Partnership), the Parent Company generated net profit of
RMB 1,248,797,138.93, 10% of which was contributed to the statutory surplus reserve, namely RMB 124,879,713.89, the
remainder of which, together with undistributed profits from last year RMB 564,932,141.19, subtracting cash dividends from
last year RMB 288,675,388.05, is the current year Profits available for distribution to shareholders RMB 1,400,174,178.18.
The Company plans to distribute cash dividends for the fiscal year 2021, based on the total number of shares for dividend
distribution, which is dened by the total shares of Company, minus the shares in the Share Repurchase Account, on the equity
registration date designated by the annual prot distribution plan. The Company plans to distribute cash dividend of RMB 1.50
(tax inclusive) for every 10 shares of to all shareholders of the Company, and the remaining undistributed profits to be carried
forward to the following year.
VI 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 related parties
No
VIII Whether there is a violation of the prescribed decision-making procedures to provide external guarantees
No
IX Whether more than half of directors cannot warrant the truthfulness, accuracy and completeness of the Report disclosed by the
Company
No
X Signicant risk warnings
There is no exceptionally significant risk that will have a material impact on the production and operation of the Company
during the Reporting Period. In this report, the Company has elaborated on the risks and countermeasures that the Company may
face in the course of production and operation, including industry policy risks, market risks, environmental risks, risk in price
and supply of raw materials, R&D risks, risk of the normalization of Covid-19 pandemic. For more information, please refer to
“Possible risks”part in Chapter III Management Discussion and Analysis.
XI Others
□ Applicable √ N/A
XII The Report is prepared in both Chinese and English. In case of any ambiguity in the understanding of the Chinese and English
texts, the Chinese version shall prevail.
1
Table of
Contents
Chairman's Statement .........................................................................................................................................................3
Financial Highlights ............................................................................................................................................................6
Chapter 1 Denitions ..........................................................................................................................................................8
Chapter 2 Company Prole and Major Financial Indicators ............................................................................................10
Chapter 3 Management Discussion and Analysis .............................................................................................................15
Chapter 4 Corporate Governance ......................................................................................................................................60
Chapter 5 Environmental and Social Responsibility ........................................................................................................85
Chapter 6 Major Events .................................................................................................................................................. 110
Chapter 7 Changes in Equity and Shareholders ..............................................................................................................124
Chapter 8 Information on Preferred Shares ....................................................................................................................130
Chapter 9 Information on Bonds .....................................................................................................................................131
Chapter 10 Financial Statements ....................................................................................................................................132
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)
List of lings The original document of the auditors’report sealed by the accounting firm and signed and sealed by the
certied public accountants.
The original copies of all documents and announcements of the Company which have been disclosed to the
public on the website designated by CSRC during the Reporting Period
2
Chairman's
Statement
Dear shareholders,
The year 2021, marking the opening year of the 14th Five-Year Plan, was a critical year for China to deepen the reforms of the
pharmaceutical and health systems. Starting there, the reform of the“three-med”linkage covering medicine, medical care, and
medical insurance headed towards a deeper level. For the healthcare industry, the past year was full of unprecedented opportunities
and challenges. The year 2021 was a year when COVID-19 pandemic continued to spread around the world. The pandemic changed
the habits and order of human society, regardless of national boundaries. We are experiencing a pandemic, a turnaround and a change
unseen in a hundred years.
Faced with the industry-wide“big test”, Joincare adheres to, as it always does, the mission of“For the health, For the future”and
the vision of“Attentively developing high-quality medicines and innovative medicines”. Centered on medicine development, we
were firmly implementing the dual-drive strategy of developing platforms of both innovative medicines and high-barrier complex
preparations. Oriented by the three-in-one goal of innovative transformation, integrated operation, and sustainable growth, we
gave full play to the advantages of production-research integration and “APIs-preparations integration” across the
entire industry. We sought “opportunities” from “crisis” and pursued growth while ensuring stability. We united as one,
worked hard, and finally successfully achieved our annual business goals and targets, achieving double-digit growth in both
revenues and profits given that we have been continuously increasing investments in R&D.
In 2021, Joincare realized total revenues of RMB 15,904 million, representing a year-on-year increase of approximately 17.62%;
realized a net profit attributable to shareholders of listed companies of RMB 1,328 million, representing a year-on-year increase of
approximately 18.57%; and realized a net prot attributable to shareholders of listed companies after deduction of the extraordinary
gains and losses of RMB 1,225 million, representing a year-on-year increase of approximately 26.72%.
Robust financial performance builds a solid foundation for us to generate higher returns for our shareholders.
We attach great importance to our shareholder returns. In addition to completing the first share repurchase mandate with a total
amount of RMB700 million in the secondary market in September 2021, we launched a new share buyback plan in the secondary
market with a mandate of total amount of RMB 300 million to RMB600 million at the end of the reporing period; those share
buyback mandtes illustrate the sincere confidence of the Borad and the management level in the intrinsic vaule of Joincare. Based
on our operating results and overall financial position in 2021, the Board of Directors propose that we continue to adopt a stable
prot distribution scheme. Specically, a cash dividend of RMB 1.50 (tax inclusive) will be distributed to all shareholders for every
10 shares, based on the total number of shares for dividend distribution, which is dened by the total shares of Company, minus the
shares in the Share Repurchase Account, on the equity registration date designated by the annual profit distribution plan.The profit
distribution scheme for 2021 is yet to be reviewed and approved at the Company's 2021 Annual General Meeting.
In 2021, our main business structure and product matrix have been continuously optimizing, making the Group's
advantages of endogenous growth much more significant.
We achieved an obvious sales growth in the segment of chemical drug preparations, and an especially rapid year-on-year sales
growth in key advantageous fields, such as respiratory, gastroenterology and gonadotropic hormones. In the segment of APIs,
our high-end characteristic APIs steadily gained more market shares and profits. We have been continuing doing great jobs in
pipeline commercialization and recording increased sales volumes in our inhalation preparations segment, reconfirming the
growth momentum and our status as a leader of the inhalation medicine market niche in China.The Sale Volumes of The Ilaprazole
series, one of our innovative medicines, and of Leuprorelin Acetate Microspheres for Injection, one of our high-barrier complex
preparations continue to grow rapidly, providing a strong engine for the rapid development for Joincare.
In terms of product innovation, In the innovation development in line with the trend of the times, we gradually worked out
a set of mature system, and continuously polished and optimized along each dimension, not letting go of any opportunity
for leapfrog development under the tone of progressive innovation.
We continued to signicantly increase our R&D investment for several years, from RMB 609 million in 2016 to RMB1,850 million
3
in 2021, more than tripling in ve years.“Taking the needs of patients as our responsibility and being ambitious to be the pioneer”,
we have developed innovative R&D technology platforms for high-barrier complex preparations, including inhalation administration,
antibody, and sustained-release microspheres. In 2021, the R&D of many innovative medicine products in the Group's pipeline made
signicant progress.
We are expanding our business territory at a steady pace. In 2021, Recombinant SARS-CoV-2 Fusion Protein Vaccine (V-01), jointly
developed by the Institute of Biophysics of the Chinese Academy of Sciences and Joincare, achieved milestones in terms of both
R&D and commercialization. Currently, we are actively promoting the launch of V-01 to the market, hoping to contribute to the
world-wide fight against the COVID-19 epidemic at the earliest possible time. As Joincare's first product to conduct the phase III
global multi-center clinical trials, the smooth progress of V-01's phase III clinical trials have also accumulated richer resources and
experience in organizational management, partnerships, team capabilities and registration applications for the internationalization of
our innovative medicines.
In 2021, Joincare Biopharmaceutical Research Institute was established. We successively built 6 R&D platforms of industrial strain
improvement, synthetic biology, biocatalysis, fermentation scale-up, product extraction, and biochemical APIs. In addition, we
signed a strategic cooperation agreement with Tencent Quantum Lab to joint our eorts in establishing a system enabled by quantum
computing and AI for research on microbial synthetic biology and R&D of relevant drugs. We will apply AI technology to better
serve the Group's R&D and innovation, and boost the development and upgrading of China's medical and healthcare industry.
In 2021, in terms of business model innovation, we strive to embrace a digital marketing mode.
Our“Healthy Lung”Challenge for the World COPD Day launched on TikTok was a precedent for digital marketing in the industry. In
China, the rate of awareness and rate of standardized diagnosis and treatment of Chronic obstructive pulmonary disease (COPD) and
similar chronic respiratory diseases are low, but the patient population is quite large. Joincare has bravely stepped out of the“comfort
zone”, create a“friend zone”and build an“ecosphere”. With the clear principle of“patient-centered”, We strive to empower
all links including education, screening, diagnosis, treatment, and medication monitoring, form a closed-loop consisting of doctors,
hospitals, patients and drug companies, and explore the external huge market of chronic disease management with private trac, so as to
realize real-time interaction between consumers and brands, and inject new vitality to commercialization of the Company.
Only when we share the same frequency can we resonate. While focusing on our own development, the Group always
persists in contributing to the social welfare business and actively undertakes social responsibilities We pay great attention
to our sustainable development, and actively focus on the internal regulatory environment and external policy guidance.
Considering China's 14th Five-Year Plan and the local government's development plan, the Group has formulated a CSR
strategy and goals adapting to its current business situation. We adhere to social welfare undertakings and strive to make
achievement in both enterprise profits and social benefits.
The inhalation medicine products are the best and most effective therapy methods for respiratory diseases, such as asthma and
COPD, and the R&D investments in this market niche are highly recommended by the Chinese government. However, due to
the high barriers to the R&D and production of inhalation medicine products, the market shares have been dominated by foreign
manufacturers for a long time. In March 2021, the National Drug Reimbursement List (2020) was ocially implemented. Joincare's
blockbuster product, Levosalbutamol Hydrochloride Nebuliser Solution, as the only made-in-China inhalation preparation
included in the List for negotiation led by National Health Security Administration, started to benet more patients with respiratory
diseases. In June 2021, Joincare's three inhalation preparation products, including“Budesonide Suspension for Inhalation” 雾 舒 ),
“Compound Ipratropium Bromide Solution for Inhalation” 舒坦琳 ), and“Ipratropium Bromide Solution for Inhalation” 丽雾安 ),
were listed in the fifth round of the national centralized drug procurement program. This enabled more Chinese people to get high-
quality inhalation preparations at a more aordable price.
In 2021, our footprint for public welfare for chronic diseases prevention and treatment further expanded. Since the end of 2018 until
today, the“Access to Public Welfare for Chronic Diseases Prevention and Treatment Program”, established jointly by the us and
the Livzon Group, has been implemented in various regions, including Sichuan Province, Shanxi Province, Gansu Province, Jilin
Province, Tibet, Henan Province, Anhui Province, Hunan Province and Jiangxi Province, and delivered pharmaceuticals needed
urgently by middle and elder age patients with chronic diseases.
In 2021, Henan was hit by a flood and drew nation-wide concerns. To help the flood-stricken areas, Joincare and Livzon Group
4
Annual Report
2021
quickly joined hands to donate a total of RMB 10 million in cash and RMB 10 million in medicines to boost related medical
assistance and post-disaster reconstruction.
The year 2022 will be the 30th anniversary of Joincare. Looking back, we have seized opportunities given by the times again and
again, especially in the context of the“Healthy China”development strategy officially proposed in the report of the 19th National
Congress of the Communist Party of China. We have been chorusing with the times and produced triumphs in terms of innovation,
transformation and development. There are full of uncertainties in the current global macro and economic environments.
For Joincare, an enterprise with revenues of tens of billions and a history of three decades, achieving continuous innovation and
growth call for arduous efforts. Looking into 2022, we will continue to take the courage of“starting from the scratch”and work
hard together to accelerate the progress of R&D, innovation, and commercialization of new products. We will also thoroughly plan
the next-generation product matrix to further strengthen the Company's competitiveness. We are full of confidence in fulfilling our
business goals for 2022 and realizing our future strategic vision.
On behalf of the Board of the Company, I would like to take this opportunity to express my sincere thanks to all Shareholders, all
sta of the Group and business partners for their long-lasting care, companion and support.
Chairman: Zhu Baoguo
29 March 2022
5
Financial
Highlights
6
7
Chapter 1
Definitions
I Definitions
In this Report, unless the context otherwise requires, the following expressions shall have the following meanings:
Denitions of common terms
CSRC Refers to China Securities Regulatory Commission
Baiyeyuan or the Controlling
Refers to Shenzhen Baiyeyuan Investment Co., Ltd. * ( 深圳市百业源投资有限公司 )
Shareholder
Joincare Pharmaceutical Group Industry Co., Ltd. *
Company or the Company Refers to
( 健康元药业集团股份有限公司 )
GMP Refers to Good Manufacturing Practice
GSP Refers to Good Supply Practice
BE Refers to Bioequivalence
BLA Refers to Biologics License Application
IND Refers to Investigational New Drug Application
WHO Refers to World Health Organazation
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 )
Joincare Haibin Refers to Joincare Haibin Pharmaceutical Co., Ltd.* ( 健康元海滨药业有限公司 )
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 )
Taitai Genomics Refers to Shenzhen Taitai Genomics Inc.Co.,Ltd. * ( 深圳太太基因工程有限公司 )
Joincare Biopharmaceutical Henan Province Joincare Biopharmaceutical Research Institute Co., Ltd. *
Refers to
Research Institute ( 河南省健康元生物医药研究院有限公司 )
Jiaozuo Joincare Bio Technological Co., Ltd.*
Jiaozuo Joincare Refers to
( 焦作健康元生物制品有限公司 )
Joincare Daily-Use Refers to Joincare Daily-Use & Health Care Co., Ltd. * ( 健康元日用保健品有限公司 )
Topsino Refers to Topsino Industries Limited * ( 天诚实业有限公司 )
Shenzhen Fenglei Electric Power Investment Co., Ltd. *
Fenglei Electric Power Refers to
( 深圳市风雷电力投资有限公司 )
Zhuhai Jiankangyuan Biology Medicine Co.,Ltd. *
Zhuhai Jiankangyuan Refers to
( 珠海健康元生物医药有限公司 )
Health Pharmaceutical Refers to Health Pharmaceutical (China) Co., Ltd. * ( 健康药业（中国）有限公司 )
Hiyeah Industry Refers to Shenzhen Hiyeah Industry Co., Ltd. * ( 深圳市喜悦实业有限公司 )
Shanghai Frontier Health Pharmaceutical Technology Co., Ltd. *
Shanghai Frontier Refers to
( 上海方予健康医药科技有限公司 )
Joincare Special Medicine Joincare (Guangdong) Special Medicine Food Co., Ltd. *
Refers to
Food ( 健康元（广东）特医食品有限公司 )
Joincare BVI Refers to Joincare Pharmaceutical Group Industry Co., Ltd
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 Group Fuzhou Fuxing Pharmaceutical Co., Ltd.*
Fuzhou Fuxing Refers to
( 丽珠集团福州福兴医药有限公司 )
Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc.*
Xinbeijiang Pharmaceutical Refers to
( 丽珠集团新北江制药股份有限公司 )
8
Annual Report
2021
Denitions of common terms
Livzon Group (Ningxia) Pharmaceutical Manufacturing Co., Ltd.*
Ningxia Pharmaceutical Refers to
( 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 )
Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd. *
Livzon Hecheng Refers to
( 珠海保税区丽珠合成制药有限公司 )
Livzon Group Limin Pharmaceutical Manufacturing Factory *
Livzon Limin Refers to
( 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 )
Jiaozuo Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd.*
Jiaozuo Hecheng Refers to
( 焦作丽珠合成制药有限公司 )
Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd. *
Shanghai Livzon Refers to
( 上海丽珠制药有限公司 )
Sichuan Guangda Pharmaceutical Manufacturing Co., Ltd. *
Sichuan Guangda Refers to
( 四川光大制药有限公司 )
Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. *
Jinguan Electric Power Refers to
( 焦作金冠嘉华电力有限公司 )
Tianjin Tasly Healthcare Industry Investment Partnership (Limited Partnership)*
Tianjin Tasly Refers to
( 天津天士力健康产业投资合伙企业（有限合伙）)
Tianjin Tongrentang Refers to Tianjin Tongrentang Group Co., Ltd. * ( 天津同仁堂集团股份有限公司 )
Sanmed Biotech Refers to Zhuhai Sanmed Biotech Inc. * ( 珠海圣美生物诊断技术有限公司 )
Livzon Biologics or Livzon
Refers to Livzon Biologics Limited
Cayman
Livzon International Refers to Livzon International Limited
YF Refers to YF Pharmab Limited
Kadi Biotechnology Refers to Zhuhai Kadi Medical Biotechnology Inc. * ( 珠海市卡迪生物医药有限公司 )
Hainan Lisheng Juyuan Investment Partnership (Limited Partnership) *
Lisheng Juyuan Refers to
( 海南丽生聚源投资合伙企业（有限合伙）)
Livzon HK Refers to Livzon Biologics Hong Kong Limited * ( 丽珠生物科技香港有限公司 )
Zhuhai Livzon Biotechnology Co., Ltd.*
LivzonBio Refers to
( 珠海市丽珠生物医药科技有限公司 )
COVID-19 Refers to A new coronavirus (SARS-CoV-2)
COVID-19 pandemic or
Refers to The outbreak of the disease caused by a new coronavirus called SARS-CoV-2
pandemic
Ruihua Certied Public
Refers to Ruihua Certied Public Accountants (Special General Partnership)
Accountants
Grant Thornton Refers to Grant Thornton (Special General Partnership)
Reporting Period Refers to From 1 January 2021 to 31 December 2021
End of the Reporting Period Refers to 31 December 2021
Currency or unit Refers to RMB unless otherwise specied
9
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 Joincare Pharmaceutical Group Industry Co., Ltd.
Abbreviation of the English name Joincare
Legal representative of the Company Zhu Baoguo
II Contact persons and contact information
Board Secretary Representatives of Securities Aairs
Name Zhao Fengguang ( 赵凤光 ) Li Hongtao( 李洪涛 ) Luo Xiao( 罗逍 )
Joincare Pharmaceutical Group Building, No. 17, Joincare Pharmaceutical Group Building, No. 17,
Address Langshan Road, North District, Hi-tech Zone, Langshan Road, North District, Hi-tech Zone,
Nanshan District, Shenzhen Nanshan District, Shenzhen
Telephone 0755-86252656, 0755-86252388 0755-86252656, 0755-86252388
Fax 0755-86252165 0755-86252165
E-mail zhaofengguang@joincare.com lihongtao@joincare.com luoxiao@joincare.com
III Introduction of the Company's basic information
Joincare Pharmaceutical Group Building, No. 17, Langshan Road, North District, Hi-tech
Registered address
Zone, Nanshan District, Shenzhen
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,
Historical changes in Shennan East Road, Shenzhen on 20 June 1997
registered address 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
Joincare Pharmaceutical Group Building, No. 17, Langshan Road, North District, Hi-tech
Oce address
Zone, Nanshan District, Shenzhen
Postal code of Oce address 518057
Website www.joincare.com
E-mail joincare@joincare.com
10
Annual Report
2021
IV Information disclosure and place of reports prepared for inquiry
China Securities Journal, Securities Times, Securities Daily,
Designated media and website for disclosing annual report
and Shanghai Securities News
Stock exchange website for disclosing annual report www.sse.com.cn
The place for inspection of annual report Oce address of the Company
V Company Stock Profile
Company Stock Prole
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
VI Other relevant information
Name Grant Thornton (Special General Partnership)
5th Floor, Scitech Palace, 22 Jianguomen Wai Avenue,
Accounting rm appointed by the Oce address
Chaoyang District, Beijing
Company (domestic)
Name of the signing
Wang Ying ( 王莹 ) and Wang Qilai ( 王其来 )
accountants
Name Minsheng Securities Co., Ltd.
17th Floor, Block D, Minsheng Financial Centre, 28
Oce address
Sponsor appointed for performing Jianguomen Nei Avenue, Dongcheng District, Beijing
the duty of continuous supervisory Name of sponsor
responsibilities during the Reporting representatives signing Yu Chunyu( 于春宇 ) and Ma Chujin ( 马初进 )
Period the report
Period of continuous
From 24 October 2018 to 31 December 2019
supervision
Note: According to Article 29 of Measures for the Administration of the Sponsorship Business for the Offering and Listing
of Securities, for offering of new stocks or convertible corporate bonds by a company listed on the main board, the period
of continuous supervision and guidance shall be the remaining time of the current year of the listing of securities and the
following one full accounting year. As the Company issued shares to the public by allotment on 24 October 2018, the period
of continuous supervision should start from the completion of this issuance and end on 31 December 2019. Furthermore,
according to Article 13 of the Guidelines of Shanghai Stock Exchange for Self-Regulation Rules for Listed Companies No.
11 - Continuous Supervision, the sponsor shall continue to perform the obligations of continuous supervision if the funds
raised have not been fully utilized upon the expiration of the continuous supervision period. During the Reporting Period,
funds raised in this issuance have not yet been fully utilized, so the sponsor, Minsheng Securities, shall continue to perform its
continuous supervision obligations in respect of the deposit and utilization of the funds raised.
11
VII Major accounting data and financial indicators in the last three years
1) Major accounting data
Unit:Yuan Currency: RMB
Major accounting data 2021 2020 YoY Change (%) 2019
Revenues 15,903,688,266.59 13,521,605,768.20 17.62 11,980,153,109.49
Net prot attributable to shareholders of
1,328,499,432.05 1,120,439,799.25 18.57 894,346,741.25
the listed company
Net prot attributable to shareholders
of the listed company after deduction of 1,224,997,371.57 966,680,220.14 26.72 828,859,988.18
extraordinary gains and losses
Net cash ow from operating activities 2,563,089,045.24 3,024,999,592.24 -15.27 2,312,447,687.11
Increase or decrease
at the end over the
End of 2021 End of 2020 End of 2019
same period of last
year (%)
Net assets attributable to shareholders of
11,820,293,656.69 11,096,125,890.51 6.53 10,355,964,661.31
the listed company
Total assets 31,103,900,389.29 28,156,977,599.07 10.47 25,437,613,001.39
2) Major financial indicators
Major nancial indicators 2021 2020 YoY Change (%) 2019
Basic earnings per share (RMB/share) 0.6864 0.5753 19.31 0.4615
Diluted earnings per share (RMB/share) 0.6858 0.5728 19.73 0.4607
Basic earnings per share after deduction of
0.6329 0.4964 27.50 0.4277
extraordinary gains and losses (RMB/share)
Weighted average return on net assets (%) 11.50 10.41 Increased by 1.09 percentage points 8.98
Weighted average return on net assets after
10.60 8.98 Increased by 1.62 percentage points 8.32
deduction of extraordinary gains and losses (%)
Statement on major accounting data and nancial indicators within three years before the end of the Reporting Period
□ Applicable √ N/A
VIII Differences in accounting data under domestic and foreign accounting standards
1) Differences in net profit and net assets attributable to shareholders of the listed company disclosed in the financial
statements according to international accounting standards (IFRS) and Chinese accounting standards (Chinese
GAAP)
□ Applicable √ N/A
2) Differences in net profit and net assets attributable to shareholders of the listed company disclosed in the financial
statements according to foreign accounting standards and Chinese accounting standards
□ Applicable √ N/A
3) Explanations on differences under domestic and foreign accounting standards:
□ Applicable √ N/A
12
Annual Report
2021
IX Major financial indicators in 2021 by quarter
Unit: Yuan Currency: RMB
1st quarter 2nd quarter 3rd quarter 4th quarter
(Jan. - Mar.) (Apr.- Jun.) (Jul. - Sept.) (Oct. - Dec.)
Revenues 4,144,871,763.27 3,690,500,511.39 4,098,276,714.19 3,970,039,277.74
Net prot attributable to shareholders of
366,890,019.20 320,457,475.33 321,327,690.20 319,824,247.32
the listed company
Net prot attributable to Shareholders of
the listed company after deducting the 335,022,033.02 262,870,294.41 321,676,905.90 305,428,138.24
extraordinary gains or losses
Net cash ow from operating activities 494,649,514.25 251,137,999.11 875,382,191.22 941,919,340.66
Statement on dierences between quarterly data and the data disclosed in previous periodic reports
□ Applicable √ N/A
X Items and amounts of extraordinary gains and losses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item of extraordinary gains and losses 2021 2020 2019
Gain or loss on disposal of non-current assets 14,492,047.24 102,634,566.25 1,492,371.91
Government grants recognized in prot or loss for the current period
(excluding government grants that are closely related to the business
of the Company and are provided in xed amount or quantity 245,335,140.69 246,707,925.30 178,577,544.79
continuously according to the applicable polices and standards of the
country)
Prot or loss on debt restructuring 0.00 -298,617.11 0.00
Gains and losses on fair value changes incurred from nancial assets
held for trading, derivative nancial assets, nancial liabilities held for
trading and derivative nancial liabilities, and investment income on
disposal of nancial assets held for trading, derivative nancial assets,
8,110,644.25 48,458,672.96 -12,515,352.16
nancial liabilities held for trading, derivative nancial liabilities and
other debt investments, except for
eective hedging activities related to the ordinary operating business
of the Company
Reversal of impairment loss on accounts receivable and contract assets
1,013,650.67 0 468,558.26
tested for impairment individually
Other non-operating income and expenses apart from the above items -30,737,442.83 -22,794,516.25 -9,119,451.05
Less: Eect of income tax 39,580,260.30 51,541,134.41 22,788,289.61
Eect of minority equity (after tax) 95,131,719.24 169,407,317.63 70,628,629.07
Total 103,502,060.48 153,759,579.11 65,486,753.07
explanations for classifying items of extraordinary gains and losses dened in the Explanatory Announcement No. 1 for Public
Company Information Disclosures –Non-recurring Profits and Losses - Extraordinary gains and losses as items of recurring
prot or loss
□ Applicable √ N/A
13
XI Items measured at fair value
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Change during the Eect on current
Item Beginning balance Ending balance
period Prots & losses
Financial assets held for trading 28,328,748.72 184,638,344.31 156,309,595.59 10,674,950.50
Other equity instrument investments 1,576,391,663.13 1,408,882,377.42 -167,509,285.71 37,114,395.95
Financial liabilities held for trading 212.07 143,302.24 143,090.17 -143,090.17
Total 1,604,720,623.92 1,593,664,023.97 -11,056,599.95 47,646,256.28
XII Others
□ Applicable √ N/A
14
Chapter 3
Management Discussion and Analysis
I Discussion and analysis of business operation
In 2021, the rst year of the 14th Five-Year Plan period, the ght against COVID-19 on the global scale remained challenging,
and the external environment was becoming increasingly complicated and uncertain. In this context, China pursued economic
development while ensuring stability and deepened reform of the medical and health care systems. The pharmaceutical
industry was accelerating its pace in upgrading and innovation, and yielded new results in pursuing high quality development.
Facing the complex and volatile market environment, and guided by the vision of“Attentively developing high-quality
medicines and innovative medicines”and the core values of“Putting People First, Valuing Workmanship and Quality,
Pursuing Innovation and Truth, Promoting Cooperation and Sharing”, the Company achieved sustained and stable growth
by focusing on its principal business, fully leveraging its comprehensive strength, increasing input in R&D to improve its
innovative capability, and adjusting the product structure in a quicker pace to adapt to the in-depth reform and innovation of
the marketing system.
(1) Focusing on innovative medicines and high-barrier complex preparations to promote innovation and upgrading for
sustainable development
Driven by technical innovation, the Company has been concentrating on developing innovative medicines and high-barrier
complex preparations to meet the needs of patients. While continuing to promote original inhalation drugs, sustained-release
microspheres, antibodies technology and other platforms with technical strength, the Company has been committed to
developing technical platforms for new complex injections represented by micro/nano injection, and has entered a new stage
of product structure optimization. During the Reporting Period, the Company made a major headway in developing multiple
innovative medicines, and sped up the innovation process. It completed phase III clinical study and production application for
Tobramycin Solution for Inhalation ( 妥 布 霉 素 吸 入 溶 液 ) and Triptorelin Acetate Microspheres for Injection ( 注 射 用 醋 酸
曲 普 瑞 林 微 球 ) (1-month sustained release). Overseas phase III clinical study of Recombinant SARS-CoV-2 Fusion Protein
Vaccine ( 重组新型冠状病毒融合蛋白疫苗 ) (“V-01”) was advancing smoothly. Formoterol Fumarate Inhalation Aerosol
( 富马酸福莫特罗吸入气雾剂 ), Mometasone Furoate and Formoterol Fumarate Dihydrate Inhalation Aerosol ( 莫米松福莫
特罗吸入气雾剂 ), Aripiprazole Microspheres for Injection ( 注射用阿立哌唑微球 ), and Recombinant Anti-human IL-17A/
F Humanized Monoclonal Antibody Injection ( 重组抗人 IL-17A/F 人源化单克隆抗体注射液 ) were currently under clinical
study, and an approval for clinical study of Aclidinium Bromide Powder for Inhalation ( 阿 地 溴 铵 吸 入 粉 雾 剂 ), Triptorelin
Pamoate Microspheres for Injection ( 注 射 用 双 羟 萘 酸 曲 普 瑞 林 微 球 ) (3-month sustained release) and Alarelin Acetate
Microspheres for Injection ( 注射用丙氨瑞林微球 ) (1-month sustained release) was obtained.
While continuously strengthening independent innovation, the Company actively sought opportunities for frontier technology
expansion and global product layout through cooperative development and licensing, among other means, to improve its
capability for commercialization and integration. In 2021, Joincare Biopharmaceutical Research Institute signed a strategic
cooperation agreement with Tencent Quantum Lab ( 腾 讯 量 子 实 验 室 ) to study Biosynthetic Gene Clusters (BGCs) from
the prospective of synthetic biology with AI technology; Livzon Group completed introduction of multiple technologies,
and completed IND application for a small-molecule antitumor drug (LZ001) developed in cooperation with Zhejiang TYK
Medicines. A pre-IND application was submitted for a transdermal product Asenapine introduced with authorization by a
German company LTS Lohmann Therapie-Systeme AG. At the same time, Livzon Group participated in the pre-A round
equity investment of Beijing Infinite Intelligence Pharma and B round financing of Beijing Luzhu Biotechnology Co., Ltd.,
which was conducive to further enriching the Company's industrial layout and empowering product pipeline. Moreover, the
Company succeeded in exporting its products under research, with its R&D strength gradually recognized by overseas markets.
In November 2021, Livzon MAB licensed the Recombinant Humanized Anti-PD-1 Monoclonal Antibody for Injection ( 注 射
用重组人源化抗 PD-1 单克隆抗体 ) with proprietary intellectual property rights to Bright Peak Therapeutics, Inc., on a non-
exclusive basis for development of novel PD-1-targeted immune cytokines (PD-1 ICs) ( 新型 PD-1 靶向免疫细胞因子 ).
15
(2) Building a diversified marketing model to strengthen brand promotion
In 2021, the marketing teams of prescription medicines actively implemented the sales plans and mainly completed the
following key tasks: strengthening product and brand promotion, integrating terminal resources, focusing on appraisal of
hospitals at above grade II, and enhancing the coverage of core brands and fulllment rate of evaluation indicators. During the
Reporting Period, the hospital coverage rate of key products continued to rise, and the overall sales revenue of prescription
medicines showed a remarkable increase compared with the previous period; strengthening professional marketing and fine
management, constantly improving the marketing teams of the respiratory and psychiatric departments to promote the rapid
growth of respiratory and psychiatric products; continuously promoting digital marketing, such as using new media like
TikTok and WeChat to conduct online marketing and popularize knowledge on disease management so as to improve the
Company's brand image; continuing to carry out evidence marketing, and maintain close communication with domestic and
international academic communities. Thanks to the eorts, Levosalbutamol Hydrochloride Nebuliser Solution ( 盐 酸 左 沙 丁
胺醇雾化吸入溶液 ), Ilaprazole series ( 艾普拉唑系列 ) and Perospirone Hydrochloride Tablets ( 盐酸哌罗匹隆片 ), among
others, were incorporated into a number of core guides or clinical consensus, and the clinical and pharmacoeconomic study for
key products went on smoothly, boosting continuous growth of products; actively following up the implementation of policies
on national medical reform, and including four products to the fifth batch of centralized drug procurement organized by the
State; achieving success in negotiation over keeping Ilaprazole Sodium for injection ( 注 射 用 艾 普 拉 唑 钠 ) in the national
reimbursement drug list, to reduce its price, improve its accessibility to patients, and expand the number of patients beneting
from it.
Actively exploring overseas markets remained the focus for API marketing this year. Affected by the spread of the pandemic
worldwide, the demand for high-end antibiotics was increasing. Seizing the opportunity, the Company further improved its
competitiveness and shares of high-end antibiotic products such as Meropenem ( 美 罗 培 南 ), Vancomycin ( 万 古 霉 素 ) and
Teicoplanin ( 替考拉宁 ) in overseas markets. Through conducting in-depth cooperation with strategic customers, the Company
actively explored overseas markets to maintain the current high market shares of intermediates; through strengthening
cooperation with major animal heath companies around the world, the Company increased the market shares of high-end pet
drugs in many regions, and the market development for new products was progressing smoothly.
(3) Attaching equal importance to quality and efficiency, and accelerating the pace of internationalization
Adhering to the concept that quality, safety and environmental protection are the lifeline, the Company conducted
systematic control of quality and safety risks, improved the management mechanism, and increased investment in safety and
environmental protection, to ensure production safety and stable quality of drugs. At the same time, the Company continued
to promote lean production and technical innovation of the production process. Through process optimization, the yield of key
products was improved and the costs went down against the backdrop of continued rise of commodity prices and increased
pressure from procurement costs of raw materials. While constantly consolidating the foundation for environmental protection
and safety, improving the quality of existing products, optimizing the production process, and promoting the normalization
of GMP, all production enterprises actively applied for international certification. The internationalization process was
further accelerated. With respect to preparations, the Company strengthened the access and promotion of respiratory, assisted
reproduction, antifungal, antiviral and Gastroenterology products in Pakistan, Indonesia, the Philippines and other countries
and regions. In 2021, Joincare Haibin's production line for Compound Ipratropium Bromide Solution for Inhalation ( 复 方 异
丙托溴铵吸入溶液 ) passed GMP certication in the Philippines; Livzon's Kanamycin for Injection ( 丽珠卡那霉素注射液 )
passed international certication and obtained a WHO pre-certication qualication certicate and special import approval in
Indonesia. With respect to APIs, In 2021, three products were registered internationally which mainly include: Daptomycin ( 达
托 霉 素 ) was approved for registration in Portugal, Japan, India, Singapore, Brazil and South Africa; Ceftriaxone sodium ( 头
孢曲松钠 ) was approved for registration in Pakistan, East Africa, Colombia and Vietnam.
16
Annual Report
2021
(4) Optimizing the management structure and improving the overall operating efficiency
During the Reporting Period, the Company further improved the Group's organizational structure and institutional setting,
optimized the management structure, completed the establishment of five management centers through resource integration,
and realized the improvement of management efficiency. In order to improve the overall operating efficiency and the risk
control ability of the Group, the Company formulated the Detailed Rules for Standardized Operation and Management of
Subsidiaries to further standardize and improve internal control operation and management; improved the management by
objective (MBO) system with OKRs and KPIs in parallel, with full cooperation and support from all functional departments
to provide strong services and guarantee for R&D, production and marketing; attached great importance to the building of a
talent echelon, implemented the A/B role working mechanism, enhanced the working capability of employees, and continued
to introduce high-end talents while strengthening identification, training and promotion of internal talents, to ensure stability
of the core talent team; and improved cultural infrastructure, and constantly optimized the working environment and living
facilities for employees, to enhance their sense of happiness and enterprise identity so as to achieve greater cohesiveness and
anity in the workplace.
(5) Strengthening social responsibility management to boost high-quality development
In 2021, taking into account the industrial characteristics and the overall strategic goals of the State, the Company formulated
the“Energy Conservation and Emission Reduction Targets 2021-2025”, urging all production enterprises to carry out
fine management of resources and energy consumption, and putting forward higher requirements for green production and
sustainable development of the Company. While promoting the development of principal business, the Company further
fullled its social responsibilities by actively participating in social welfare undertakings. Since the end of 2018, the Company
has been cooperating with Livzon Group on the“Inclusive Chronic Disease Prevention and Treatment Public Welfare Project”
to deliver urgently needed drugs to middle-aged and elderly patients with chronic diseases in Sichuan, Shanxi, Gansu, Jilin,
Xizang, Henan, Anhui, Hunan and Jiangxi provinces. Moreover, the Company donated RMB 10 million in cash and RMB
10 million worth of drugs through Chinese Red Cross Foundation to aid disease prevention and post-disaster recovery and
reconstruction in ood-hit areas in Henan.
II Overview on the industry in which the Company operates during the Reporting Period
On 30 January 2022, the“14th Five-Year Plan for the Development of Pharmaceutical Industry in China”(hereinafter referred
to as the“Plan”) was jointly released by the Ministry of Industry and Information Technology, National Development and
Reform Commission, Ministry of Science and Technology, Ministry of Commerce, National Health Commission, Ministry
of Emergency Management, National Healthcare Security Administration, National Medical Products Administration, and
National Administration of Traditional Chinese Medicine. The Plan noted that the pharmaceutical industry is a strategic
industry vital to the national economy, people's livelihood, economic development and national security, and an important
foundation for the building of Healthy China. The Plan also clarified the development goals and safeguard measures for the
pharmaceutical industry in the next five years. Pursuant to the Plan, the average annual growth rate of operating revenue
and total profit should be above 8%. The Plan underscores the importance of product innovation, manufacturing upgrade
and international development, and encourages enterprises to tap into the global market, vigorously promote the R&D of
innovative products, and improve industrial technologies, placing higher requirements for the innovation-driven transformation
and high-quality development of China's pharmaceutical industry.
Data of National Bureau of Statistics shows that in 2021, enterprises in the pharmaceutical manufacturing industry above
designated scale in China have realized Revenues of RMB2,928.85 billion, representing a year-on-year increase of 20.1%;
operating costs of RMB1,560.68 billion, representing a year-on-year increase of 12.7%; total profits of RMB627.14 billion,
representing a year-on-year increase of 77.9% or an increase of 65.1 percentage points in growth rate as compared with
the same period of last year, 43.6 percentage points higher than the overall level of domestic industrial enterprises above
designated scale in the same period.
17
III Overview on the main businesses of the Company during the Reporting Period
(I) Principal businesses and products of the Company
The Company was primarily engaged in the R&D, production and sale of pharmaceutical products and health care products.
Pursuant to the Guidelines for the Industry Classication of Listed Companies (2012 Revision) issued by CSRC, the Company
operated in the pharmaceutical manufacturing industry (C27).
At present, the business scope of the Company covers chemical drug preparation products, traditional Chinese drug preparation
products, chemical active pharmaceutical ingredients (APIs) and intermediates, diagnostic reagents and equipment, and
health care products, etc. The comprehensive product series and mix provide larger market and growth opportunities for the
Company. Main products of the Company are as follows:
Product
Treatment Field Main Products
Type
Levosalbutamol Hydrochloride Nebuliser Solution Budesonide Suspension for Inhalation
( 丽舒同 ) ( 雾舒 )
Respiration
Chemical
drug
preparation
products
Compound Ipratropium Bromide Solution for
Ipratropium Bromide Solution for Inhalation
Inhalation
( 丽雾安 )
( 舒坦琳 )
Gastroenterology
Ilaprazole Enteric-Coated Tablets (Ilaprazole Sodium for Injection)
（壹丽安） （壹丽安）
18
Annual Report
2021
Product
Treatment Field Main Products
Type
Gastroenterology
Bismuth Potassium Citrate Tablets/Tinidazole
Bismuth Potassium Citrate Tablets
Tablets/Clarithromycin Tablets
( 丽珠得乐 )
( 丽珠维三联 )
Anti-infection
Chemical
Meropenem for Injection Voriconazole for Injection
drug
( 倍能 ) ( 丽福康 )
preparation
products
Gonadotropic
hormones
Leuprorelin Acetate Microspheres for Injection Urofollitropin for Injection
( 贝依 ) ( 丽申宝 )
Psychiatry
Fluvoxamine Maleate Tablets Perospirone Hydrochloride Tablets
( 瑞必乐 ) ( 康尔汀 )
Traditional
Chinese
Anti-tumor,
drug
Cold
preparation
products
Anti-tumor medicine Cold medicine
Shenqi Fuzheng Injection Anti-viral Granules
19
Treatment
Product Type Main Products
Field
Chemical
7-ACA, D-7ACA, Meropenem Trihydrate, Imipenem and Cilastatin Sodium, Phenylalanine, Daptomycin, Vancomycin
APIs and /
Hydrochloride, Mevastatin, Acarbose, Lincomycin, etc.
intermediates
Diagnostic
reagents and /
equipment
Diagnostic Kit for IgM / IgG Antibody to Coronavirus
Autoimmunity multiple detection platform
(SARS-CoV-2) (Lateral Flow)
Healthcare
/
products
Jingxin Menocare Essence Eagle's American Ginseng Tea
(II) Business model of the Company
With the stable operation and rapid development over the years, the Company has become a comprehensive pharmaceutical
group company that is driven by scientific research and innovation and integrates the R&D, production, sale and service of
pharmaceutical and health care products. It has complete systems of R&D, procurement, production and sale. Main business
models of the Company are as follows:
1. R&D model
Taking independent R&D as the mainstay and combining external introduction and cooperative development, the Company
has been paying attention to the cutting-edge technology and unfulfilled clinical demand, with efforts focused on innovative
medicines and high-barrier complex drug preparations, and has established an efficient R&D innovation management model.
In terms of independent innovation, the Company has diversied, multi-level R&D organizations with mature R&D teams for
chemical drug preparation products, traditional Chinese drug preparation products, biological drugs, APIs, diagnostic reagents
and health care products. Based on technology platform construction, the Company has built a clear product R&D pipeline
centering on key areas such as respiration, tumor immunity and psychiatry. In terms of cooperative innovation, the Company
has launched technical cooperation with domestic and foreign scientific research institutions by way of commissioned
development or cooperative development, and introduced new technologies and products through technology transfer or
licensing to implement industrial transformation, so as to shorten the time for product development and research and reduce the
risk of development to a certain extent.
20
Annual Report
2021
2. Procurement model
In terms of procurement, the Company pays strict attention to effectiveness, quality and cost of procurement and has
established long-term and stable partnership with many suppliers. Active pharmaceutical ingredients, supplementary materials,
and packaging materials were purchased and stocked up by manufacturers according to production schedules. The Company
has developed strict quality standards and procurement management systems and required subordinate manufacturers to make
procurements in accordance with the GMP. Meanwhile, the Company established long-term strategic partnerships with bulk
material suppliers, and strengthened the management of supply quality and cost control based on strict quality standards. The
Company has established an internal evaluation system and les of market prices so as to promptly master market information
for procurement through comparisons of quality and price.
3. Production model
In terms of production, the Company adopts the principle of market demand-oriented approach paying attention to real
market demand. Specifically, the Sales Department of the Company investigated market demands, made sales plans, and
comprehensively considered factors such as the product inventory quantity and capacity of production lines of the Company so as
to determine the monthly production quantities and specications. Moreover, the purchase orders of raw materials are determined
according to the production schedule and the inventory levels of raw materials. The final production plans are issued upon
approval of the management of the Company and implemented by the Production Technology Department of the Company.
The Company carried out production in strict accordance with the GMP. The Company and its affiliates have established a
sound quality management system and implemented the qualified person system. In terms of quality control, the Company
established a strict and sound production quality assurance system, and was geared to international standards and subject to
international certication while in compliance with national standards. The Company conducted annual GMP self-inspection,
ISO9001 internal and external audits, and was subject to various external audits. It actively pursued the internationally
advanced GMP management, and implemented whole-process quality control over supplier selection, audit, incoming material
inspection, production process, product release from factory, and market tracking with good system operation.
4. Sales model
(1) Drug preparation products
End customers of drug preparation products of the Company are mainly hospitals, clinics, and retail pharmacies. In line
with the pharmaceutical industry practice and the sales model of most peers in the industry, the Company has conducted
sales of drug preparation products through drug distribution enterprises. The Company carried out selection and centralized
management of qualified drug distribution enterprises (with Drug Supply Certificate, GSP Certification, etc.) according to
their distribution capability, market familiarity, financial strength, credit record, and operation scale. General sales process:
After end customers place purchase orders to distribution enterprises, drug distribution enterprises will send those orders to the
Company according to their inventories, distribution agreements and conditions; then, the Group will deliver products to drug
distribution enterprises and do the revenues recognitions.
(2) APIs and intermediates
Main target customers of APIs are large pharmaceutical manufacturers. The selling prices are determined based on a set of
comprehensive factors such as costs of production, inventory levels, industry rivalry and market conditions. Specic pricing method:
The detailed process of price determination are as follows: The sales and marketing department conduct weekly or bi-weekly
meetings to analyze the current market conditions and the trends and drivers of prices; the selling 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 eective once are 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 product sales contracts with large
manufacturers to directly sell products to customers. Meanwhile, the Company also sells products through distributors. 2)
Foreign market: The Company directly sells products in the foreign market and also sells products through distributors in
areas with high market and political risks. At present, products of the Company are mainly exported to nearly 40 countries and
regions in Asia, Europe, North America, and Africa.
21
(3) Diagnostic reagents and equipment
Diagnostic reagents and equipment sold by the Company both in-house manufactured and imported. Main end customers are
hospitals, centers for disease control and prevention, and health departments. The Company mainly sells those products in
combination with direct sales and sales through drug distribution enterprises.
The Company has an experienced sales team responsible for the sales of diagnostic reagents and equipment and provision of
marketing support for some drug distribution enterprises. The Company carried out selection and centralized management of
qualified drug distribution enterprises (with Drug Supply Certificate, GSP Certification, etc.) according to their distribution
capability, market familiarity, nancial 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 channel and terminal coverage capability. At
present, the Company has set up 27 provincial branches and 107 subordinate offices across China and maintained long-term
partnership with distributors with better area coverage capability for stable strategic alliance and common development. The
Company has cooperated with about 103 first-level/primary distributors in total, including 78 businesses in drug production
line and more than 25 businesses in food production line with more than 150,000 subordinate secondary businesses and
terminal businesses in drug and food production lines. Products are well managed and promoted through the tiered marketing
channel. In addition to the traditional distribution management model, the Company realizes common development through
coordinated marketing in E-commerce channel.
(III) Industry status of the Company
Through years of development, the Company has become a comprehensive pharmaceutical enterprise covering multiple areas
including chemical drug preparation products, chemical APIs and intermediates, traditional Chinese drug preparation products,
diagnostic reagents and equipment, health care products, etc. Chemical drug preparation products are the largest revenue
generator of the Company, among which gastroenterological products, anti-infective products and gonadotropic hormones
products are traditional competitive products of the Company, with key products securing a long-term position in national
drug preparation market, and respiratory and psychiatrical products have been the focus of the Company, with key products
maintaining a strong sales growth momentum.
During the Reporting Period, the Company, with solid strength in R&D and production and steady marketing presence, ranked
Top 9 in“2020 Annual Ranking of Top 100 Chinese Chemical Drug Enterprises”under“2020 Annual Ranking of Top 100
Enterprises in Pharmaceutical Industry in China”of menet.com.cn.
(IV) Performance drivers in the Reporting Period
In 2021, the COVID-19 pandemic was basically and effectively controlled in China, and medical order was gradually
restored to normal. The Company actively implemented sales deployment, strengthened market promotion, reinforced
sales specialization and delicacy management, and ensured steady growth of overall performance of the Company during
the Reporting Period. During the Reporting Period, sales of main varieties in key specialist areas, especially in fileds of
respiratory, Gastroenterology, gonadotropic hormonesof the Company kept steady growth, and contribution of sales revenue of
key preparation products to overall revenues was continuously improved.
Meanwhile, sales of API segment realized steady growth after resources integration, adjustment of product mix, reinforcement
of international certication and other measures taken by the Company.
22
Annual Report
2021
IV Analysis of core competitive strengths during the Reporting Period
√ Applicable □ N/A
1. Diversied product structure, constantly upgraded product matrix and obvious brand advantage
Since its foundation, the Company has been dedicated to the production and operation of pharmaceutical and health products,
and has built a successful brand image and won wide recognition in the market with premium product quality and market
service. Products of the Company cover biologics, prescription drug preparations, APIs, health products, OTC drugs,
diagnostic reagents and equipment, enabling the Company to establish an advantageous market position in a number of
therapeutic elds such as respiration, anti-infection, assisted reproduction, gastroenterology, psychiatry, and tumor immunity.
Many brands of series products under the Company have made the Company widely recognized and gain brand advantages.
In particular, in recent years, the Group has successfully removed the barriers in R&D, approval and production of inhalation
preparations, and launched competitive products such as“Shutanlin ( 舒 坦 琳 )”,“Lishutong ( 丽 舒 同 )”and“Wushu ( 雾
舒 )”in succession, breaking through the monopoly in the international market and marking a milestone in the history of
development of inhalation preparations in China.
2. R&D innovation strength
Under the strategy of developing both innovative preparations and high-barrier complex preparations, and bearing in mind the
unsatised clinical demands, the Company has been committed to the development of technical platforms for inhalation drugs,
antibodies, sustained-release microspheres and milk corpuscles through increasing R&D investment, actively introducing
domestic and foreign senior experts and innovative talents, and forming overseas strategic alliances, to continuously enhance
its R&D competitiveness. At present, with diversied and multi-level R&D institutions, the Company boasts strong capability
and internationally advanced R&D concepts in the fields of chemical and traditional Chinese drug preparation products,
biological drugs, diagnostic reagents, health products and over-the-counter (OTC) drugs, and has formed a clear layout of
product lines in the elds of respiration, assisted reproduction, digestion, psychiatry and nerve and tumor immunity, etc.
The Company adopted a strategy of“competitive dierentiation”in the layout and management of R&D pipeline, focusing on
both innovation and success rate. On the one hand, the Company took practical measures to accelerate the R&D and launch of
modified innovative medicines, to constantly improve the sustainable profitability of product matrix; and on the other hand,
firmly and steadily deployed cutting-edge technologies from a long-term perspective, such as AI drug molecular design and
synthetic biology, to empower the innovation, success rate and eciency of the Group's R&D pipeline.
3. Improved terminal competitive strength through continuous marketing reform and innovation
Through continuous marketing reform and innovation, the sales teams of the Company became more independent, competitive
and capable, and maintained a good cooperative relationship with dealers at all levels through active and frequent interaction
with them. Joincare has adopted the new marketing model of streamline administration and institute decentralization to
enhance independent sales and decision-making abilities of contractual sellers, optimized resource allocation of personnel,
variety, terminal and policy while arousing the enthusiasm and motivation of marketing personnel, expanded product
promotion and coverage, and achieved eective growth of operating income.
Corporate value added by innovation of marketing model. In the future, the health industry in China will tend to combine
the emerging Internet marketing with the traditional industry via the Internet, especially mobile Internet to improve sales
conversion rate and enhance customer and consumer stickiness. Under the new digital marketing mode, Joincare strives
to empower all links including education, screening, diagnosis, treatment and medication monitoring, form a closed-loop
consisting of doctors, hospitals, patients and drug companies, and explore the external huge market of chronic disease
management with private trac, so as to realize real-time interaction between consumers and brands, and inject new vitality to
commercialization of the Company.
23
4. Enhanced Talent Teams
The Company has a stable, visionary and experienced, results-oriented management team and an outstanding talent team.
Outstanding leaders are the key to the Company's rapid development. The founder and the core management team of Joincare
have long-term work experience and rich professional knowledge in the pharmaceutical industry, and have rich experience,
outstanding leadership, vision and ambition in the eld under their management. Joincare 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 training to build a diversified reserve of talents with global vision, advanced knowledge, strong
implementation capability and sense of self-reliance. Driven by the corporate culture of pursuing excellence, the talent
team works diligently and conscientiously to achieve the strategic goals and vision of the enterprise through teamwork and
collaboration.
V Overview of business operations during the Reporting Period
During the Reporting Period, Joincare realized total revenues of RMB 15,904 million, up approximately 17.62% compared
with the same period last year; realized a net profit attributable to shareholders of listed companies of RMB 1,328 million,
representing a year-on-year increase of approximately 18.57%; and realized a net profit attributable to shareholders of listed
companies after deduction of the extraordinary gains and losses of RMB 1,225 million, representing a year-on-year increase of
approximately 26.72%. Operation results of our main business segments are as follows:
(1) Livzon Group (excluding Livzon MAB)
As at the end of the Reporting Period, the Company directly and indirectly held 44.66% of equity interest in Livzon Group
(000513.SZ, 01513.HK). During the Reporting Period, Livzon Group (excluding Livzon MAB) realized revenues of RMB
12,021 million, representing a year-on-year increase of approximately 14.27%; and realized a net prot of approximately RMB
888 million attributable to shareholders of the Company. For operation and financial results of Livzon Group, please refer to
the 2021 Annual Report of Livzon Pharmaceutical Group Inc.
(2) Livzon MAB
As at the end of the Reporting Period, the equity interest directly and indirectly held by the Company in Livzon MAB was
55.86%, and the amount affecting the Company's net profit attributable to the parent company for the current period was
approximately RMB -211 million.
During the Reporting Period, Livzon MAB focused on promoting the clinical study and commercialization of the Recombinant
SARS-CoV-2 Fusion Protein Vaccine ( 重 组 新 型 冠 状 病 毒 融 合 蛋 白 疫 苗 ) (“V-01”) project. The results of Phase I/II
clinical trials of V-01 showed that the vaccine had excellent safety and immunogenicity. Phase III clinical trials were carried
out overseas in a comprehensive manner. Phase III clinical trials of the basic immunization regimen were conducted in the
Philippines, Indonesia and Russia, and phase III clinical trials of inactivated sequential immunization as a booster shot were
conducted in Pakistan and Malaysia. The vaccine commercialization workshop had been completed and put into use. Phase
III clinical trial of V-01, the Company's first product undergoing global multi-center clinical trials was advancing smoothly,
providing resources and experience for subsequent internationalization of Company's innovative medicines and multi-center
clinical trials of more drugs in terms of organizational management, partnership, team capabilities and registration application.
On the other hand, Livzon MAB continues to focus on new molecules, new targets and differentiated molecular designs in
the fields of oncology, autoimmune diseases and assisted reproduction. During the Reporting Period, the following projects
of biologics have achieved phase progress in R&D: Recombinant Human Choriogonadotropin alfa for Injection ( 注 射 用 重 组
人 绒 促 性 素 ) was approved for market launch as the rst domestic generic drug and has started sales; the BLA application of
Tocilizumab Solution for Injection ( 托珠单抗注射液 ) (i.e. Recombinant Humanized Anti-human IL-6R Monoclonal Antibody
Solution for Injection ( 重 组 人 源 化 抗 人 IL-6R 单 克 隆 抗 体 注 射 液 ) was accepted by CDE (Center for Drug Evaluation
under the National Medical Products Administration); Recombinant anti-human IL-17A/F Humanized Monoclonal Antibody
24
Annual Report
2021
Injection ( 重组抗人 IL-17A/F 人源化单克隆抗体注射液 ) completed enrollment of the Ib clinical trial; Recombinant Human
Follitropin Alfa Solution for Injection ( 重组人促卵泡激素注射液 ) was approved for clinical trials, and has initiated the phase
I clinical studies. During the Reporting Period, Livzon MAB and Bright Peak Therapeutics, Inc., an American company, signed
a licensing cooperation agreement on the Recombinant Humanized Anti-PD-1 Monoclonal Antibody for Injection ( 注 射 用 重
组人源化抗 PD-1 单克隆抗体 ) project, which will provide more opportunities for further commercialization in future.
(3) Joincare (excluding Livzon Group and Livzon MAB)
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized revenues of RMB 4,129 million,
up about 23.41% compared with the same period last year; and realized a net profit attributable to shareholders of listed
companies of RMB 650 million, a year-on-year increase of approximately 45.09%. Joincare realized a net profit attributable
to Shareholders of the listed company after deducting the extraordinary gains and losses of RMB 618 million, representing a
year-on-year increase of approximately 44.27%. Key results of the main therapeutic elds and core products are as follows:
① Prescription medicines
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized sales revenues of RMB
1,789million from prescription drug segment, representing a year-on-year increase of approximately 55%. Among which,
the sales reveunes and year-on-year change of key therapeutic areas are as follows: the revenues genereated from the field
of anti-infection totaled 1,192 million, repreenting a year-on-year increase of 12%; the revenues genereated from the filed of
respiratory totaled 577 million, representing a year-on-year increase of 6.58 times.
In 2021, the Company continued to accelerate construction of the national sales team in respiratory line, established a three-
level fine marketing development system of regional manager, provincial manager, and development manager, actively took
various measures to speed up the development of key products in hospitals: 1. Enhanced the coverage and fulfillment rate
of evaluation indicators; the development speed of respiratory variety was obviously accelerated; more than 4,000 hospitals
above grade II were developed; 2. Realized rapid coverage and sales growth of the variety by taking the opportunity that
Levosalbutamol Hydrochloride Nebuliser Solution ( 盐 酸 左 沙 丁 胺 醇 雾 化 吸 入 溶 液 ) was included in the list of drugs for
negotiation led by National Healthcare Security Administration; 3. Continued to advance the construction of digital marketing
platforms, launched a phenomenal public welfare campaign titled“who has the strongest lung”on TikTok and promoted
knowledge on respiratory disease on multiple platforms, marking a new starting point for digital marketing of prescription
medicines; 4. The three inhalation preparation varieties of Budesonide Suspension for Inhalation ( 吸 入 用 布 地 奈 德 混 悬 液 ),
Ipratropium Bromide Solution for Inhalation ( 吸 入 用 异 丙 托 溴 铵 溶 液 ), and Compound Ipratropium Bromide Solution for
Inhalation ( 吸 入 用 复 方 异 丙 托 溴 铵 溶 液 ) were selected into the fth batch of centralized drug procurement organized by
the State, contributing to rapidly opening up the domestic sales market and improving market share for inhalation preparation
products of the Company.
② APIs and intermediates
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized revenues of RMB 2,034million
from APIs and intermediates, representing a year-on-year increase of approximately 11%.
During the Reporting Period, in the API segment, Joincare continued to strengthen safety and environmental protection and
drive lean production. Production capacity and yield of key products were improved steadily through further enhancement
of technical innovation of the production process. In terms of marketing, both the sales volume and prices of the Company's
key products 7-ACA and Meropenem Trihydrate ( 美 罗 培 南 混 粉 ) increased and remained at high levels in 2021, due to the
continuous rise of commodity prices, the rising costs of raw materials and energy, the impact of pandemic and production
restriction for environmental protection. On the other hand, the Company achieved stable sales growth through precise
strategic layout, strengthening in-depth cooperation with strategic customers, and actively expanding domestic and foreign
markets. In particular, the sales of Meropenem Trihydrate ( 美 罗 培 南 混 粉 ) continued to go up under the catalysis of overseas
pandemic situation, driving the export share to a new high.
25
One of the key tasks of the Company this year is to strengthen R&D innovation of APIs. The Company established Joincare
Biopharmaceutical Research Institute at the end of 2020 to focus on green pharmaceutical intermediates, enzymes used in the
pharmaceutical industry, and biochemical APIs. At present, construction of the Research Institute goes well. The Research
Institute has successfully introduced 8 doctors and 14 masters, successively established 6 R&D platforms of breeding
of industrial strains, synthetic biology, biocatalysis, fermentation amplification, product extraction, and drug synthesis
according to demands of the technical and industrial chain, and focused on development and research in improvement of the
production capacity for industrial strains, and fermentation and extraction of natural products for drugs. In early 2021, Joincare
Biopharmaceutical Research Institute signed a strategic cooperation agreement with Tencent Quantum Lab ( 腾讯量子实验室 )
to drive the application of quantum computing + AI in research fields of microbial synthetic biology and relevant drugs, and
conduct research on sequence prediction and metabolic pathway optimization of genome gene clusters and functional elements
with AI technology.
③ Health care products and OTC drugs
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized revenues of RMB 289 million
from health products and OTC sector, representing a year-on-year decrease of approximately 12%.
In 2021, due to the impact of external environment such as the lingering pandemic, natural disasters in key target provinces
and medical insurance policies of the State, the customer flow of offline pharmacies and shops, which were the mainstream
channels for the Company's healthcare products, declined sharply, affecting the offline sales performance. Joincare quickly
adjusted the marketing strategy for health products in Q3 2021, by focusing on online digital marketing and increasing
exposure on TikTok and Xiaohongshu platforms to improve the brand reputation and product visibility. At the same time, being
customer-centered, Joincare enhanced the proportion of online sales channels to promote the sale of key products through
content marketing to innovate trac referral for e-commerce platforms and increasing investment in festivals.
(I) Analysis of principal business
1. Analysis of changes in statement of income and statement of cash ows items
Unit: Yuan Currency: RMB
Amount in same period
Item Amount in current period Change (%)
of last year
Revenues 15,903,688,266.59 13,521,605,768.20 17.62
Operating costs 5,716,293,887.58 4,874,186,898.05 17.28
Selling expenses 5,026,812,145.41 3,940,337,105.29 27.57
Administrative expenses 939,253,444.33 950,827,562.47 -1.22
Financial expenses -92,894,751.72 -98,885,820.58 N/A
R&D expenses 1,397,131,273.33 1,071,711,981.95 30.36
Net cash ow from operating activities 2,563,089,045.24 3,024,999,592.24 -15.27
Net cash ow from investing activities -1,964,157,731.17 -500,320,691.78 N/A
Net cash ow from nancing activities -974,904,353.44 -1,238,212,948.15 N/A
Reasons for changes in R&D expenses: Mainly due to an increase in the number of R&D projects, as well as an expansion of
R&D scale and investment.
Reasons for changes in net cash ow from investing activities: Mainly due to the payment of consideration for the acquisition
of equity interest in Tianjin Tongrentang Group Co., Ltd. ( 天津同仁堂集团股份有限公司 ) and the increase in investment for
construction of new plants and workshops of some subsidiaries.
Details of material changes in business type, components or source of prots during the current period
□ Applicable √ N/A
26
Annual Report
2021
2. Analysis of revenues and costs
√ Applicable □ N/A
During the Reporting Period, the Company realized revenues of 15,904 million, representing a YoY increase of 17.62%; the
operating costs totaled 5,716 million, an increase of 17.28% over the same period of the previous year.
1) Composition of principal businesses by industry, product, region and sales model
Unit: Yuan Currency: RMB
Principal business by industry
YoY change YoY change YoY change in
Gross prot
Industry Operating revenues Operating costs in operating in operating gross prot
margin (%)
revenues (%) costs (%) margin (%)
Increased by 0.26
Industrial and commercial 15,741,612,221.92 5,602,928,231.82 64.41 17.13 16.29
percentage points
Increased by 8.33
Service industry 5,012,626.61 1,774,064.30 64.61 -20.36 -35.34
percentage points
Principal business by product
YoY change YoY change YoY change
Gross prot
Product Operating revenues Operating costs in operating in operating in gross prot
margin (%)
revenues (%) costs (%) margin (%)
Chemical drug preparation Increased by 0.90
9,102,675,799.95 1,769,561,792.01 80.56 35.88 29.85
products percentage points
Chemical APIs and Decreased by 1.17
4,690,255,375.73 3,184,889,165.53 32.10 19.20 21.28
intermediates percentage points
Traditional Chinese drug Increased by 0.59
1,109,344,037.45 295,328,306.33 73.38 -11.04 -12.96
preparation products percentage points
Decreased by 14.14
Diagnostic reagents and
723,917,736.81 319,168,131.72 55.91 -47.65 -22.94 percentage points
equipment
Increased by 2.19
Health care products 115,164,422.30 33,652,500.02 70.78 -20.80 -26.33
percentage points
Principal business by region
YoY change YoY change YoY change in
Gross prot
Region Operating revenues Operating costs in operating in operating gross prot
margin (%)
revenues (%) costs (%) margin (%)
Increased by 0.38
Domestic 13,175,044,906.28 3,837,751,076.40 70.87 22.16 20.60
percentage points
Decreased by 7.11
Overseas 2,571,579,942.25 1,766,951,219.72 31.29 -3.34 7.82
percentage points
Principal business by sales model
YoY change YoY change YoY change in
Gross prot
Sales model Operating revenues Operating costs in operating in operating gross prot
margin (%)
revenues (%) costs (%) margin (%)
Increased by 0.77
Channel sales 10,702,994,671.61 2,302,249,214.15 78.49 17.01 12.96
percentage points
Decreased by 0.74
Direct sales 5,043,630,176.92 3,302,453,081.97 34.52 17.33 18.67
percentage points
27
Explanations on composition of principal businesses by industry, product, region and sales model
During the Reporting Period, the Company realized operating revenues of 15,747 million representing a YOY 2,301 million
increase in amount and a YOY 17.11% increase in percentage; the operating revenues of chemical drug preparation products
achieved a YoY increase of 35.88% and the operating revenues of APIs and intermediates achieved a YoY increase of 19.20%.
The growth of the Company's revenues from principal businesses mainly thanks to the Company's efforts in deepening
marketing reform by sinking down to low tier markets and focusing on sales in key specialist areas. Sales of main varieties
in key specialist areas kept steady growth, and contribution of sales revenue of key preparation products to overall revenues
was continuously improved. In specic, Ilaprazole series (gastroenterological products), Leuprorelin Acetate Microspheres for
Injection and Urofollitropin for Injection (gonadotropic hormones products) achieved high growth year-on-year. Budesonide
Suspension for Inhalation, Levosalbutamol Hydrochloride Nebuliser Solution and other series recorded a gradual increase
in sales with a remarkable overall growth rate. Meanwhile, the sales volume of the API segment also rose steadily through
consolidating resources, adjusting product mix and increasing international certications.
2) Analysis of production and sales
√ Applicable □ N/A
Inventory YoY change in YoY change YoY change in
Main products Unit Production Sales
level production (%) in sales (%) inventory (%)
Ilaprazole sodium for ten thousand
1,436.29 1,245.05 316.14 94.86 97.94 152.43
injection boxes
Leuprorelin Acetate
Ten thousand
Microspheres for 155.70 137.53 - 48.23 31.42 -
ampules
Injection
Ilaprazole Enteric- ten thousand
1,950.88 2,055.40 239.36 26.87 46.94 -30.39
Coated Tablets boxes
Meropenem for Ten thousand
1,826.21 1,977.24 150.75 14.66 11.57 -51.38
Injection ampules
7-ACA (including
ton 2,903.89 2,986.98 55.88 45.00 44.49 -64.48
D-7ACA)
Explanations on production and sales
During the Reporting Period, the COVID-19 pandemic was basically and effectively controlled in China, and medical order
was gradually restored to normal. The Company actively implemented sales deployment, strengthened market promotion,
reinforced sales specialization and delicacy management. Therefore, during the Reporting Period, sales revenue of main
varieties in key specialist areas of the Company kept steady growth, and the production and sales volume grew in proportion.
The changes in inventory was mainly due to the stock-up in the beginning of the year and the demand-supply position change
during the year end.
3) Performance of major procurement contracts and major sales contracts
□ Applicable √ N/A
28
Annual Report
2021
4) Cost analysis
Unit: Yuan
Cost Components by Industry
As a As Percentage in
Amount incurred in YoY
Amount incurred in percentage total costs in the
Industry Cost components the same period of Change
the current period of operating same period of
previous year (%)
costs(%) previous year (%)
Costs of materials 3,426,827,118.77 59.95 3,089,084,780.11 63.38 10.93
Labor costs 619,622,563.47 10.84 448,186,516.57 9.20 38.25
Industrial
Manufacturing costs 1,487,278,456.52 26.02 1,137,339,779.71 23.33 30.77
and
Depreciation 322,761,251.80 5.65 276,175,262.41 5.67 16.87
commercial
Others -141,969,567.28 -2.48 -79,351,536.71 -1.63 78.91
Total 5,714,519,823.28 99.97 4,871,434,802.09 99.94 17.31
Costs of materials 408,782.66 0.01 898,200.38 0.02 -54.49
Labor costs 1,022,280.28 0.02 1,315,269.00 0.03 -22.28
Service
Manufacturing costs 223,280.63 0.00 415,334.88 0.01 -46.24
industry
Depreciation 119,720.73 0.00 123,291.70 0.00 -2.90
Total 1,774,064.30 0.03 2,752,095.96 0.06 -35.54
Costs of materials 3,427,235,901.43 59.96 3,089,982,980.49 63.39 10.91
Labor costs 620,644,843.75 10.86 449,501,785.57 9.22 38.07
Manufacturing costs 1,487,501,737.14 26.02 1,137,755,114.59 23.34 30.74
Total
Depreciation 322,880,972.53 5.65 276,298,554.11 5.67 16.86
Others -141,969,567.28 -2.48 -79,351,536.71 -1.63 78.91
Total 5,716,293,887.58 100.00 4,874,186,898.05 100.00 17.28
Cost Components by Product
As a As Percentage in
Amount incurred in YoY
Amount incurred in percentage total costs in the
Product Cost components the same period of Change
the current period of operating same period of
previous year (%)
costs(%) previous year (%)
Costs of materials 26,560,959.72 0.46 33,355,073.53 0.68 -20.37
Labor costs 6,336,694.50 0.11 7,403,326.99 0.15 -14.41
Healthcare Manufacturing costs 2,677,541.36 0.05 6,875,531.21 0.14 -61.06
products Depreciation 2,564,510.61 0.04 1,195,160.19 0.02 114.57
Others -4,487,206.18 -0.08 -3,146,679.93 -0.06 42.60
Total 33,652,500.02 0.59 45,682,412.00 0.94 -26.33
Costs of materials 3,359,165,272.77 58.76 3,003,987,376.89 61.63 11.82
Labor costs 611,624,924.03 10.70 440,395,045.89 9.04 38.88
Medicine Manufacturing costs 1,435,952,937.90 25.12 1,105,950,570.61 22.69 29.84
Products Depreciation 320,084,243.85 5.60 268,333,896.16 5.51 19.29
Others -157,879,982.96 -2.76 -76,427,205.33 -1.57 106.58
Total 5,568,947,395.59 97.42 4,742,239,684.22 97.29 17.43
29
Other information on cost analysis
Cost and variety of main medicinal herbs used in main TCMs
Variety of main Procurement
Main TCMs Supply and demand Inuence of price uctuation
medicinal herbs model
The supply is relatively stable. Both
medicinal herbs are supplied by
plantation bases and external suppliers.
Plantation Base of Livzon Group
Limin Pharmaceutical Manufacturing
Factory (“Livzon Limin Base”) Supplied 1. Codonopsis Root's purchase price
Shenqi Codonopsis maintains safety stock of medicinal by Livzon fall compared with the same period
Fuzheng Root and herbs, which ensures the supply Limin Base last year; 2. Astragalus Root: stay
Injection Astragalus Root quantity and stabilizes the supply and external the same compared with the same
price. Meanwhile, Limin signed annual suppliers period last year.
demand-based supply agreements with
external suppliers who are obligated to
stock up according to Limin's quality
requirements, so as to ensure sucient
supply of herbs with stable quality.
Price of main raw medicinal herbs
used in Anti-Viral Granules stays
the same compared with the same
period last year. Specically, price
Indigowoad
of Fructus Forsythiae increases
Root, Fructus
signicantly due to reduced
Forsythiae,
production in main producing areas
Anemarrhena,
Anti-Viral caused by spring frost and extreme
Acori graminei
Granules, weather; price of Rehmanniae
Rhizoma,
Anti-Viral Radix increases signicantly due to
Gypsum, There is sucient supply of main raw
Granules Tendering reduced production in Henan and
Rhizoma medicinal herbs used in Anti-Viral
(Sugar-free), procurement Shanxi caused by extreme rainstorm
Phragmitis, Granules
Anti-Viral and ood; price of Patchouli
Patchouli,
Syrup, Anti- falls largely thanks to eective
Rehmanniae
Viral Tablets prevention and control of the
Radix, Radix
epidemic; price of Indigowoad Root,
Curcumae,
Anemarrhena, and Acori graminei
Dahurian
Rhizoma records a small increase
Angelica Root
as aected by market demand and
supply; purchase price of Rhizoma
Phragmitis, Gypsum and Radix
Curcumae stays relatively the same.
5) Changes in consolidation scope due to equity change of major subsidiaries during the Reporting Period
□ Applicable √ N/A
6) Material changes or adjustments in business, products or services during the Reporting Period
□ Applicable √ N/A
30
Annual Report
2021
7) Major customers of sales and major suppliers
A. Major customers of sales
Sales to top 5 customers were RMB 1,372.03 million, representing 8.63% of the total annual sales; none of which is the sales
to related parties.
Sales to any individual customer in excess of 50% of the total, any new customer in top 5 customers or heavy dependence on a
few customers during the Reporting Period
□ Applicable √ N/A
B. Information on major suppliers
Purchases from top 5 suppliers were RMB 839.93 million, representing 20.54% of the total annual purchase cost, of which the
purchases from related parties wereRMB 212.59 million, representing 5.20% of the total purchase cost.
Purchases from any individual supplier in excess of 50% of the total, any new supplier in top 5 suppliers or heavy dependence
on a few suppliers during the Reporting Period
□ Applicable √ N/A
3. Expenses
√ Applicable □ N/A
Unit:Yuan
Item 2021 2020 YoY Change Explanations
Selling expenses 5,026,812,145.41 3,940,337,105.29 27.57% No material changes
Administrative
939,253,444.33 950,827,562.47 -1.22% No material changes
expenses
Financial expenses -92,894,751.72 -98,885,820.58 N/A No material changes
Mainly due to an increase in the number of
R&D expenses 1,397,131,273.33 1,071,711,981.95 30.36% R&D projects, as well as an expansion of
R&D scale and investment.
4. Investment in R&D
1) Investment in R&D
√ Applicable □ N/A
Unit: Yuan
Current expensed R&D expenditure 1,397,131,273.33
Current capitalized R&D expenditure 452,684,306.26
Total R&D expenditure 1,849,815,579.59
Total amount R&D expenditure as a percentage of Revenues (%) 11.63
Ratio of capitalized R&D expenditure (%) 24.47
31
2) R&D Sta
√ Applicable □ N/A
Number of R&D personnel 1,615
Proportion of R&D personnel to the total employees (%) 12.20
Education background of R&D sta
Degree level Number
PhD 55
Master 409
Bachelor 749
Junior college graduate 293
Graduate from high school and lower 109
Age composition of R&D sta
Age composition of R&D sta Number
Under 30 years old (exclusive) 788
30-40 years old (including 30 years old, excluding 40 years old) 612
40-50 years old (including 40 years old, excluding 50 years old) 165
50-60 years old (including 50 years old, excluding 60 years old) 50
Over 60 years old 0
3) Explanations
√ Applicable □ N/A
During the Reporting Period, total investment of the Company amounted to RMB 1,849.82 million, representing a year-on-
year growth of 46.75%, accounting for 11.63% of total Revenues and 9.17% of total net assets. During the Reporting Period,
the Company's investment in R&D was mainly used for R&D of new products and upgrading and reconstruction of project
technology. As biologics, inhalation preparations and other projects entered the clinical stage, R&D expenditures increased
signicantly.
4) Reasons for and impact of the material change in the composition of R&D staff personnel on future development of the
Company
□ Applicable √ N/A
5. Cash ows
√ Applicable □ N/A
Item 2021 2020 YoY Change Explanations
Net cash ow from
2,563,089,045.24 3,024,999,592.24 -15.27% No material changes
operating activities
Mainly due to the payment of consideration
for the acquisition of equity interest in Tianjin
Net cash ow from Tongrentang Group Co., Ltd. ( 天津同仁
-1,964,157,731.17 -500,320,691.78 N/A
investing activities 堂集团股份有限公司 ) and the increase in
investment for construction of new plants and
workshops of some subsidiaries.
Net cash ow from
-974,904,353.44 -1,238,212,948.15 N/A No material changes
nancing activities
32
Annual Report
2021
(II) Statement on material changes in profits arising from non-principal businesses
√ Applicable □ N/A
Unit: Yuan
As a percentage
Item Amount Reason for occurrence Sustainability
of total prot
Mainly due to changes in prot and loss from
investments in associates and gains generated
Investment income 71,881,264.65 2.43% No
upon expiration of forward foreign exchange
settlement contracts.
Gains or losses arising
Mainly due to uctuations in the market value
from changes in fair -23,506,126.09 -0.80% No
of subject securities investment held.
value
Mainly due to impairment provisions for
Asset impairment cost -62,950,978.72 -2.13% No
inventories.
Non-operating
8,641,830.86 0.29% Mainly due to income on disposal of obsolete. No
Revenues
Non-operating Mainly due to donation payments and loss on
39,379,273.69 -1.33% No
expenditure scrapping of xed assets.
Mainly due to the government subsidies
Other income 247,346,934.96 8.38% Yes
received.
(III) Analysis of assets and liabilities
√ Applicable □ N/A
1. Status of assets and liabilities
Unit: Yuan
Proportion of The proportion of Change
Ending balance of closing balance of Ending balance of closing balance of in
Item Explanations
this period this period to the previous period previous period to amount
total assets (%) the total assets (%) (%)
Mainly due to the subsidiary Livzon Group
Financial assets cancelled the investment in SCC VENTURE
184,638,344.31 0.59 28,328,748.72 0.10 551.77
held for trading VII 2018-C, L.P., and received the distributed
shares.
Mainly due to the increase of sales revenues
Bills Receivables 1,977,286,022.02 6.36 1,343,013,818.54 4.77 47.23
during the reporting period.
Mainly due to an increase of payment of raw
Prepayments 369,232,546.29 1.19 209,926,040.57 0.75 75.89
material purchase.
Mainly due to the receipt of Yunfeng's
Other receivables 88,053,825.12 0.28 177,240,162.81 0.63 -50.32
payment during the reporting period.
Non-current assets Mainly due to the subsidiary Livzon Group
due within one 317,381.23 0.00 19,934,376.07 0.07 -98.41 collected the equity transfer price of an
year invested company.
Other current Mainly due to an increase of excess VAT
83,986,214.37 0.27 58,098,049.20 0.21 44.56
assets credits and prepaid corporate income tax.
Long-term equity Mainly due to Livzon Group acquired 40%
1,419,349,454.84 4.56 628,279,599.73 2.23 125.91
investments share of Tianjin Tongrentang Group Co. LTD.
Mainly due to an increase of leases longer
right-of-use assets 46,774,759.69 0.15 18,030,132.69 0.06 159.43
than one year.
33
Proportion of The proportion of Change
Ending balance of closing balance of Ending balance of closing balance of in
Item Explanations
this period this period to the previous period previous period to amount
total assets (%) the total assets (%) (%)
Mainly due to an increase in R&D
Development expenses Investment in the overseas phase
786,993,435.71 2.53 399,119,603.78 1.42 97.18
expenditure III clinical trials of a project researched and
developed by Livzon MAB
Other non-current Mainly due to the increase in
663,584,003.80 2.13 373,557,910.72 1.33 77.64
assets prepayment for project and equipment.
Mainly due to an increase of bank acceptance
Bills payable 1,582,386,767.93 5.09 1,087,759,353.31 3.86 45.47
bills paid.
Mainly due to an increase of the collection of
Contract liabilities 234,140,702.29 0.75 133,422,354.03 0.47 75.49
contract advances by the Company.
Non-current Mainly due to the reclassication of long-
liabilities due 91,576,066.33 0.29 8,539,077.05 0.03 972.44 term loans due within one year as non-current
within one year liabilities due within one year.
Other current Mainly due to an increase of output VAT
15,626,224.29 0.05 6,267,034.79 0.02 149.34
liabilities debits.
Mainly due to an increase of bank long-term
Long-term loans 826,780,252.78 2.66 360,324,027.48 1.28 129.45
loans.
Leasing liabilities 25,071,794.32 0.08 9,817,780.04 0.03 155.37 Mainly due to the increase in leases payable.
Other Mainly due to the disposal of investment in
comprehensive 5,387,545.97 0.02 116,300,559.28 0.41 -95.37 other equity instruments, transferring other
income comprehensive income to retained earnings.
2. Overseas assets
√ Applicable □ N/A
(1) Asset size
Of which: Overseas assets were 37.34 (Unit: 100million Currency: RMB), representing 12.03% of the 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
Uint: Yuan
Book value
Item Reasons for being subject to restriction
(Ending Balance)
Other monetary funds 11,742,597.03 Letter of credit, bank acceptance bill and forward settlement deposit, etc.
Bills receivable 870,153,979.75 Bills Pooling Business, bills receivables pledged
Total 881,896,576.78
4. Others
□ Applicable √ N/A
34
Annual Report
2021
(IV) Analysis of industry-related business information
√ Applicable □ N/A
According to the Guidelines for the Industry Classification of Listed Companies (2012 Revision) issued by CSRC, the
Company was operating in the pharmaceutical manufacturing industry. Adhering to the mission of“ For the health, For the
future”and the vision of“Attentively developing high-quality medicines and innovative medicines”, the Company has been
committed to the pharmaceutical business and been strengthening R&D, production, marketing and management of medical
products, to strive to become a domestic leading comprehensive pharmaceutical enterprise with capacity for independent
innovation and international competitiveness in terms of production, technology and management in the near future.
Analysis of business information on pharmaceutical manufacturing industry
1. Basic information on industry and main drugs (products)
(1). Basic information on industry
√ Applicable □ N/A
I) Inuence of industry policies
In 2021, multiple pharmaceutical industry policies were launched. The 14th Five-Year Plan for A Healthcare Security System
with Universal Coverage was released. The practice of centralized volume-based procurement and use of drugs was further
expanded. The catalog of medicines covered by medical insurance system was modied. DRG payment reform was initiated.
All those movements exerted far-reaching impact on the industry. Some of the main policies that have a signicant impact on
the Company are as follows:
1) 14th Five-Year Plan for A Healthcare Security System with Universal Coverage was released.
On September 23, 2021, Executive Meetings of the State Council reviewed, approved, and released the nation's first special
plan for the development of healthcare security system - 14th Five-Year Plan for A Healthcare Security System with Universal
Coverage. The plan, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics, aims to promote
the implementation of Healthy China strategy. The plan clearly proposes to establish a fair, law-based, safe, intelligent, and
collaborative healthcare security system, and anticipates a more mature and stable healthcare security system, standardization
of healthcare security policies, rened management, convenient services, and more collaborative reform by 2025. By 2035, the
basic healthcare security system will be more standardized and unied, the multi-level healthcare security system will be more
rened, and the superiority of the healthcare security system with Chinese characteristics will be fully revealed.
2) Volume-based procurement becomes normalized.
On January 28, 2021, the State Council published the Opinions on Promoting the Normalization and Institutionalization
of Centralized Volume-Based Procurement of Drugs to improve the market-driven drug price mechanism and promote the
normalization and institutionalization of centralized volume-based procurement of drugs.
On January 15, 2021, the state's Joint Drug Procurement Office issued an announcement on National Centralized Drug
Procurement (GY-YD2021-1); on February 8, 2021, the state's Joint Drug Procurement Office announced the Selected Drugs
in the Fourth-Round National Centralized Drug Procurement (GY-YD2021-1) and the List of Varieties of Selected Drugs to Be
Supplied (GY-YD2021-1).
On June 2, 2021, the state's Joint Drug Procurement Office issued an announcement on National Centralized Drug
Procurement (GY-YD2021-2); on June 28, 2021, the state's Joint Drug Procurement Office announced the Selected Drugs in
the Fifth-Round National Centralized Drug Procurement (GY-YD2021-2) and the List of Varieties of Selected Drugs to Be
Supplied (GY-YD2021-2).
On November 15, 2021, the state's Joint Drug Procurement Office issued an announcement on National Centralized Drug
Procurement (Insulin) (GY-YD2021-3); on November 30, 2021, the state's Joint Drug Procurement Office announced the
Selected Drugs in the Sixth-Round National Centralized Drug Procurement (Insulin) and the List of Varieties of Selected
Drugs to Be Supplied.
35
3) The catalog of medicines covered by medical insurance is modied.
On May 10, 2021, the National Healthcare Security Administration and the National Health Commission jointly issued
the Guiding Opinions on Establishing and Improving the“Dual Channel”Management Mechanism for Drugs in National
Medical Insurance Negotiations. On June 30, 2021, the National Healthcare Security Administration issued the 2021 Work
Plan for Modifying the Catalog of Drugs Covered by National Medical Insurance System, and simultaneously issued the 2021
Guidelines on Application for Modifying the Catalog of Drugs Covered by National Medical Insurance System. On September
10, 2021, the National Healthcare Security Administration and the National Health Commission officially issued the Notice
on Adapting to the N ormalization of National Medical Insurance Negotiations and Continuing to Ensure the Adoption of
Negotiated Drugs.
In November 2021, according to 2021 Work Plan for Modifying the Catalog of Drugs Covered by National Medical Insurance
System, the National Healthcare Security Administration and the Ministry of Human Resources and Social Security jointly
organized negotiation on inclusion of drugs into the Catalog of Drugs Covered by National Medical Insurance System. As
a result, the Catalog of Drugs Covered by National Basic Medical Insurance, Work-Related Injury Insurance and Maternity
Insurance (2021) was published on December 3, 2021 and would come into effect from January 1, 2022. Through the
negotiation, a total of 94 drugs were successfully negotiated and the payment standards were established.
4) Reform of DRG/DIP payment method implemented industy-wide.
To promote reform of medical insurance related payment method and further deepen the DRG/DIP payment reform, the
National Healthcare Security Administration issued the Rules for Diagnosis-Intervention Packet (DIP) Payment Agency
Services (Pilot) on July 15, 2021. On November 26, 2021, the National Healthcare Security Administration issued the Notice
of the National Healthcare Security Administration on the Issuance of the Three-Year Action Plan for the Reform of DRG/
DIP Payment Methods. According to the Notice, all areas reimbursed by the pooled fund will carry out reform of DRG/DIP
payment by the end of 2024.
On December 17, 2021, the National Healthcare Security Administration issued the Notice on the Issuance of the List of
Demonstration Sites of DRG/DIP Payment. Prepared after evaluation on voluntary applicants, the list includes 18 DRG
demonstration sites, 12 DIP demonstration sites and 2 DRG/DIP demonstration sites.
5) The reform of medical service price will be deepened.
On August 31, 2021, eight ministries including the National Healthcare Security Administration, the National Health
Commission and National Development and Reform Commission issued the Pilot Program for Deepening the Reform of
Medical Service Price. This program expects to gather replicable and extendable experience in the reform of medical service
price through 3-5 years' pilot practice. By 2025, the experience will be extended to the whole country. The medical service
price mechanism featured classied management, hospital participation, scientic determination and dynamic adjustment will
be mature and nalized with the price leverage role coming into full play.
6) API industry is undergoing high-quality development
On November 9, 2021, the National Development and Reform Commission and the Ministry of Industry and Information
Technology jointly issued the Implementation Plan to Promote the High-quality Development of the API Industry. The plan
emphasizes that chemical APIs are the basic raw materials and active ingredients of drugs, and are an important part of the
pharmaceutical industry. By 2025, the nation will develop a batch of high value-added and high-growth varieties, make a
breakthrough in a batch of green and low-carbon technology and equipment, cultivate a batch of internationally competitive
leading enterprises, and establish a batch of industrial clusters and production bases with global inuence.
36
Annual Report
2021
7) Faster progress is made in inheritance and innovation of TCMs
On December 28, 2021, the Office of the National Healthcare Security Administration and the Office of the National
Administration of Traditional Chinese Medicine issued the Notice on Updating the Classification and Codes of Diseases and
Patterns of Traditional Chinese Medicine (Covered by Medical Insurance). As indicated by the notice, the classification and
codes of diseases and patterns of traditional Chinese medicine in the Classification and Code of Diagnosis and Operation of
Diseases Covered by Medical Insurance (GB/T15657-2021) shall be updated and take eect from January 1, 2022.
On 31 December 2021, the National Healthcare Security Administration and the Office of the National Administration of
Traditional Chinese Medicine jointly issued the Guiding Opinions on Supporting the Inheritance, Innovation and Development
of Traditional Chinese Medicine with Healthcare Security System. The Opinions propose to recognize qualied TCM medical
institutions as medical insurance designated sites, and allow TCMs and medical services to be paid by medical insurance fund.
Also, the Opinions stress the need to improve the payment policy suitable for TCMs and strengthen the price management.
Response measures: The Company will take effective measures to cope with major changes in policies of the pharmaceutical
industry through early layout, transformation and compliance, and constantly improve its core competitive strength. To build
strengths and core competitiveness, the Company will: emphasize more on R&D and innovation of new products to drive
development; adhere to high standards of consistency evaluation; do its best endeavor to apply for medical insurance coverage;
maintain the competitive sales of large varieties while keeping striving for market access and promoting sales to lower-tier
markets; create more competitive advantages of products; improve the production quality management; standardize the safe
and environmentally friendly production; operate in compliance with regulations, and establish a more reasonable market-
oriented system.
II) Basic information on the segment where the Company belongs
The Company is primarily engaged in the R&D, production and sale of hundreds of varieties of pharmaceutical products in
areas such as chemical drug preparation products, chemical active pharmaceutical ingredients (APIs), traditional Chinese drug
preparation products, and intermediates, diagnostic reagents and equipment, and healthcare products. Basic information on the
market niches in which the Company operates are follows:
Chemical drug preparation products: In recent years, influenced by policies regarding medical insurance payment control,
volume-based procurement and consistency evaluation, chemical drug preparation products have recorded a slower growth
in revenue and profit. The market of chemical drug preparation products is relatively competitive as there are many domestic
manufacturers. However, innovative drugs and high-barrier preparations will become an industry trend and an important source
of profits thanks to low competitive pressure and continuous support from national policies. The Company's chemical drug
preparation products cover many therapeutic fields with competitive strengths in product varieties, sales channels, end user
groups and brand awareness. In the future, the Company will speed up research and development, introduce new technologies,
accelerate the product structure adjustment and strategic layout to cope with the increasingly erce market competition.
Chemical APIs: At present, the Company has the following chemical APIs: cephalosporin series, statin series, and
carbapenem series among others. Restricted by heavy investment, long construction period, high technical threshold and
strict environmental protection requirements, the bulk API market in China is relatively concentrated. However, overcapacity
causes erce competition. To adapt to future competition, the Company gradually completed the transformation and upgrading
from bulk APIs to high-end characteristic APIs, from nonstandard market to standardized market and from domestic market
to international market. Meanwhile, in an effort to further implement the Implementation Plan to Promote the High-quality
Development of the API Industry issued by the National Development and Reform Commission and the Ministry of Industry
and Information Technology in November 2021, the Company strengthened forward-looking research layout to accelerate
high-quality development of APIs under new background. Since October 2020, the Company has focused on building a
research and development platform in synthetic biology with AI integrated to promote green, low-carbon transformation of the
industry, give more added value to pharmaceutical intermediates and APIs, and accelerate integration into the global industrial
chain and value chain.
37
Traditional Chinese medicine (TCM): In recent years, encouraged by many favorable national policies, the TCM industry
has gained abundant opportunities to grow. Since 2021, the state has successively issued several policies, including the
Several Policies and Measures on Accelerating the Characteristic Development of Traditional Chinese Medicine, the Notice
on Updating the Classification and Codes of Diseases and Patterns of Traditional Chinese Medicine (Covered by Medical
Insurance) and the Guiding Opinions on Supporting the Inheritance, Innovation and Development of Traditional Chinese
Medicine with Healthcare Security System. These policies emphasize the need to optimize the TCM evaluation and approval
management, improve the classification and registration management, implement suitable payment policies, strengthen
the price management, adopt integrative medicine approach, and promote the development of TCM industry. In the fight
against the epidemic, three drugs and three prescriptions of TCM play an important role in clinic treatment, highlighting
the importance of TCM. Shenqi Fuzheng Injection, Anti-Viral Granules and other products from Livzon Group, a holding
subsidiary of the Company, are representatives of the Company's TCM products. In the future, the Company will continue to
intensify R&D and technological innovation to drive sustainable protability.
Diagnostic reagents and equipment: As China's healthcare industry develops gradually, in vitro diagnostic reagents industry
is seeing a bigger market but remains in primary stage compared with developed countries such as European countries and
America. With more product varieties and more advanced technologies, in vitro diagnostic reagents are used in more scenarios,
from traditional hospital laboratories to third-party medical diagnostic institutions, physical examination centers, families
and other primary healthcare institutions. More application scenarios fully release the demand for different kinds of in vitro
diagnostic reagents, promoting rapid development of the industry. Since its establishment, Livzon Diagnostics, controlled by
Livzon Group (a holding subsidiary of the Company), has been committed to the R&D, production and sales of diagnostic
reagents and equipment. After years of efforts and development, it has built a multi-faceted technical platform that supports
ELISA test, colloidal gold rapid test, chemiluminescence assay, multiplex liquid-chip assay, and nucleic acid assay. It has
strong market inuence in such elds as respiratory infection, infectious diseases, and drug concentration monitoring. Some of
its products hold big market shares in China.
Health care products: Driven by increasing public awareness of wellness, aging, consumption upgrading and promotion of
direct sales, health care industry has developed rapidly in recent years. However, due to low technical threshold and high gross
prot, the domestic market is witnessing erce competition, product homogeneity and low concentration. Well-known brands
such as“Taitai” 太 太 ),“Jingxin” 静 心 ) and“Eagle's” 鹰 牌 ) have gained wide recognition. In the face of erce market
competition, while staying committed to traditional pharmaceutical chain channels, the Company also vigorously expands
online channels through strategic cooperation with new social e-commerce sales platforms to drive sales growth. In addition,
the Company actively prepares to access to fields of special medical purpose and functional food by leveraging its R&D and
market strengths to add product pipelines and enhance core competitiveness.
38
Annual Report
2021
(2). Basic information on main drugs (products)
√ Applicable □ N/A
Basic information on main drugs (products) by segment and therapeutic areas
√ Applicable □ N/A
New drug Included Covered
Protected
Eective and (product) in the by
traditional
expiration date launched Catalog of national
Main treatment Name of drug Registration Prescription Chinese
Segment Indications of patent right during the National medical
eld (product) classication drug or not medicine
for invention (if Reporting Essential insurance
or not (if
applicable) Period or Drugs or system or
applicable)
not not not
Chemical drug Ilaprazole Chemical From 23 October
Peptic ulcer
preparation Gastroenterology Sodium for drugs Yes No 2009 to 23 No No Yes
bleeding
products Injection Class 2 October 2029
Leuprorelin Endometriosis, From 23
Chemical drug Chemical
Gonadotropic Acetate hysteromyoma, December 2010
preparation drugs Yes No No No Yes
hormones Microspheres breast cancer, to 23 December
products Class 6
for Injection etc. 2030
Chemical drug Ilaprazole Chemical Duodenal ulcer From 24 March
preparation Gastroenterology Enteric-Coated drugs and reux Yes No 2006 to 24 No No Yes
products Tablets Class 1.1 esophagitis March 2026
Used to treat From 6 June
infection caused 2006 to 6 June
Chemical drug Chemical
Meropenem for by one bacterium 2026
preparation Anti-infection drugs Yes No No No Yes
Injection or more bacteria From 31 July
products Class 4
sensitive to 2012 to 31 July
meropenem. 2032
Note: The starting and expiration dates listed above refer to the corresponding term of patents of core products in each product
category.
Main drugs (products) newly added into and exited from the Catalog of National Essential Drugs and the catalog of medicines
covered by medical insurance system during the Reporting Period
√ Applicable □ N/A
Catalog of National Catalog of Medicines Covered by
Name of main products
Essential Drugs National Medical Insurance System
Ilaprazole Sodium for Injection Not included Included
Leuprorelin Acetate Microspheres for Injection Not included Included
Ilaprazole Enteric-Coated Tablets Not included Included
Meropenem for Injection Not included Included
39
Winning bids for main drugs in centralized drug procurement during the Reporting Period
√ Applicable □ N/A
Total actual procurement
Name Winning bid price range volume by medical Unit
institutions
Ilaprazole Sodium for Injection RMB 156 1,299.37 Ten thousand ampules
Leuprorelin Acetate Microspheres for Injection RMB 1,295.90~1,409.36 148.89 Ten thousand boxes
Ilaprazole Enteric-Coated Tablets (6 tablets) RMB 78.34~102.09 1,535.36 Ten thousand boxes
Ilaprazole Enteric-Coated Tablets (10 tablets) RMB 156.30~161.12 109.46 Ten thousand boxes
Meropenem for Injection 0.25g RMB 54.05~63.3 618.54 Ten thousand ampules
Meropenem for Injection 0.5g RMB 86.30~108.08 1,186.70 Ten thousand ampules
Meropenem for Injection 1g RMB 157.20~187.70 68.41 Ten thousand ampules
Explanations
√ Applicable □ N/A
(1) Data regarding Total actual procurement volume by medical institutions are from IQVIA;
(2) The information disclosed is the winning price of the tenderee province and newly implemented winning prices during the
Reporting Period.
Operating data by therapeutic areas or main drug (products)
√ Applicable □ N/A
Unit: 10,000 Yuan Currency: RMB
Gross prot margin
YoY change YoY change YoY change
Operating Operating Gross prot of products in the
Therapeutic area in operating in operating in gross prot
income costs margin (%) same eld in the
income (%) costs (%) margin (%)
same industry
Gastroenterology 371,790.91 45,364.70 87.80 50.40 42.78 0.65 85.39%
Gonadotropic
245,355.67 86,255.72 64.84 28.34 24.21 1.17 -
hormones
Anti-infection 156,128.38 25,332.56 83.77 7.84 20.47 -1.70 53.54%
Respiratory 57,709.55 10,663.88 81.52 657.53 592.10 1.75 84.95%
Explanations
√ Applicable □ N/A
① The gross prot margin of products in the eld of gastroenterology is derived from that of the relevant industry in“Major
products of metabolism and alimentary system”in Fosun Pharma's 2020 Annual Report.
② No comparable data on gross prot margin in the eld of gonadotropic hormones has been found.
③ The data on the gross prot margin of products in the eld of anti-infection comes from that of“anti-infection category”in
the 2020 Annual Report of Tianyao Co., Ltd.
④ The gross prot margin data of products in the eld of the respiratory comes from that of“respiratory system category”in
Luoxin Pharmaceutical's 2021 Annual Report.
40
Annual Report
2021
2. Drug (product) R&D of the Company
(1). Overview of R&D of the Company
√ Applicable □ N/A
(1) Chemical drug preparation products
1. High-barrier complex preparations: There were a total of 40 projects under research, of which, four had been applied for
production and 7 had started clinical/BE study. The progress of the major projects was as follows
Inhalation preparations: Tobramycin Solution for Inhalation ( 妥 布 霉 素 吸 入 溶 液 ), Formoterol Fumarate Solution for
Inhalation ( 富马酸福莫特罗吸入溶液 ) and Terbutaline Sulphate Solution for Nebulization ( 硫酸特布他林雾化吸入溶液 )
had been applied for production; Formoterol Fumarate Inhalation Aerosol ( 富 马 酸 福 莫 特 罗 吸 入 气 雾 剂 ) and Mometasone
Furoate and Formoterol Fumarate Dihydrate Inhalation Aerosol ( 莫米松福莫特罗吸入气雾剂 ) had started clinical study, and
Aclidinium Bromide Powder for Inhalation ( 阿地溴铵吸入粉雾剂 ) had received the notice of clinical trials;
Sustained-release microspheres: Triptorelin Acetate Microspheres for Injection ( 注 射 用 醋 酸 曲 普 瑞 林 微 球 ) (one-month
sustained release) had been applied for production registration after completing the phase III clinical trials, and received the
notication of acceptance of the production application. Aripiprazole Microspheres for Injection ( 注射用阿立哌唑微球 ) were
currently undergoing phase I clinical trials. The single dose study had been completed, and multiple dose clinical trials were
now under way. Octreotide Acetate Microspheres for Injection ( 注 射 用 醋 酸 奥 曲 肽 微 球 ) were undergoing BE pre-trials.
Leuprorelin Acetate Microspheres for Injection ( 注射用醋酸亮丙瑞林微球 ) (three-month sustained-release) were undergoing
BE pre-trials; Triptorelin Pamoate Microspheres for Injection ( 注 射 用 双 羟 萘 酸 曲 普 瑞 林 微 球 ) (three-month sustained-
release) and Alarelin Acetate Microspheres for Injection ( 注射用丙氨瑞林微球 ) (one-month sustained-release) had obtained
the notication of clinical trials, and active preparations had been made for the trials.
2. Conventional preparations: There were a total of 27 projects under research, of which, two had been approved, four had been
applied for production and ve had started clinical/BE study. Among them, Alogliptin Benzoate Tablets ( 苯甲酸阿格列汀片 )
had been approved for production; Cetrorelix Acetate for Injection ( 注 射 用 醋 酸 西 曲 瑞 克 ) had been applied for registration
in China and the United States, and was approved for marketing by China National Medical Products Administration in
December 2021; Blonanserin Tablets ( 布南色林片 ) and Lurasidone Hydrochloride Tablets ( 盐酸鲁拉西酮片 ) had completed
BE study and will be soon applied for production; and LZ001, an innovative anti-tumor drug was applied for clinical study
(IND) in December 2021.
3. Consistency evaluation: There were a total of 20 projects under research, of which, 4 had been approved and 10 were
under application review. Among them, Omeprazole Sodium for Injection ( 注 射 用 奥 美 拉 唑 钠 ) and Fluvoxamine Maleate
Tablets ( 马来酸氟伏沙明片 ) had been approved; Cefodizime Sodium for Injection ( 注射用头孢地嗪钠 ) was under review;
Valsartan Capsule ( 缬 沙 坦 胶 囊 ) had completed submission of supplementary application materials; Imipenem and Cilastatin
Sodium for Injection ( 注射用亚胺培南西司他丁钠 ) and Bismuth Potassium Citrate Capsule ( 枸橼酸铋钾胶囊 ) had been
applied for approval; Rabeprazole Sodium Enteric-Coated Tablets ( 雷 贝 拉 唑 钠 肠 溶 片 ) had completed process verication
and were in preparation for BE.
41
(2) Biologics
There were a total 8 research projects, of which, one had been launched to the market; one had been applied for production;
one was in phase III clinical study; two were in phase Ib/II clinical study and two were in phase I clinical study.
Recombinant Human Choriogonadotropin alfa for Injection ( 注 射 用 重 组 人 绒 促 性 素 ) had been approved for launching in
the market in China; Tocilizumab Solution for Injection ( 托珠单抗注射液 ) had been ocially applied for production and the
application had been accepted; Phase III clinical trial enrollment of Recombinant SARS-CoV-2 Fusion Protein Vaccine ( 重 组
新型冠状病毒融合蛋白疫苗 ) was coming to an end; Recombinant Humanized Anti-PD-1 Monoclonal Antibody for Injection
( 注 射 用 重 组 人 源 化 抗 PD-1 单 克 隆 抗 体 ) and Recombinant Anti-human IL-17A/F Humanized Monoclonal Antibody for
Injection ( 重 组 抗 人 IL-17A/F 人 源 化 单 克 隆 抗 体 注 射 液 ) were undergoing phase Ib/II clinical trials; and Recombinant
Tumor Enzyme Specic Interferon α-2b Fc Fusion Protein for Injection ( 注射用重组肿瘤酶特异性干扰素 α-2b Fc 融合
蛋 白 ) and Recombinant Human Follicle Stimulating Hormone for Injection ( 重 组 人 促 卵 泡 激 素 注 射 液 ) were undergoing
phase I clinical trials.
(3) APIs and intermediates
There were a total of 35 projects under research, of which Dalbavancin ( 达 巴 万 星 ) had completed verication and batch
production, and Fluralaner ( 氟雷拉纳 ) was planned for verication and batch production.
(4) Diagnostic reagents and equipment
There were a total of 49 projects under research, of which, seven were in the clinical trial stage. For reagent development
platform, four products including Novel Coronavirus (2019-nCOV) IgM Antibody Detection Kit (IgM 抗 体 检 测 试 剂 盒 )
(enzyme-linked immunosorbent assay) (category III), seven Autoimmune Hepatitis-related Autoantibodies Detection Kit
(magnetic barcode immunofluorescence luminescence) (category II), Mycoplasma Pneumoniae IgM Antibody Detection
Kit (Chemiluminescence) (category III) and Dry Immunofluorescence Analyzer had been registered in China; seven
projects including four diabetes specific autoantibodies, IgG4, Mycoplasma pneumoniae IgM (chemiluminescence) and
Influenza Virus A+B antigen colloid gold had entered clinical trials, among which IgG4 and Mycoplasma pneumoniae IgM
(chemiluminescence) had completed clinical trials and were being submitted for registration. As for the equipment R&D
platform, the multi-channel dry fluorescence immunoanalyzer had been registered in China, and the second-generation
irradiator model and the all-in-one instrument for molecular diagnostics had entered the stage of trial production.
42
Annual Report
2021
(2). Basic information on main R&D projects
√ Applicable □ N/A
Protected
traditional
R&D projects (including Registration Prescription Chinese R&D stage
Name of drug (product) Indications
projects subject to GCE) classication drug or not medicine (registration)
or not (if
applicable)
Preventive
The Recombinant SARS-
biological
V-01（COVID-19） CoV-2 Used for treatment of novel coronavirus infection Yes No Clinical trial
products
Fusion Protein Vaccine
Class 1.1
The Recombinant
Therapeutic
Humanized Anti-PD-1
LZM009（PD-1） biological Advanced solid tumor Yes No Clinical trial
Monoclonal Antibody for
products
Injection
Aripiprazole Microspheres Aripiprazole Microspheres
Chemical drugs
for Injection (1-month for Injection (1-month Mainly used to treat adult schizophrenia Yes No Clinical trial
Class 2.2
sustained-release) sustained-release)
Triptorelin Acetate Triptorelin Acetate Metastatic prostate cancer, endometriosis (stages
Chemical drugs Application for
Microspheres for Injection Microspheres for Injection I to IV), female infertility, pretreatment of uterine Yes No
Class 2.2 production
(1-month sustained release) (1-month sustained release) broids before surgery, precocious puberty.
It is indicated for the treatment of adult patients
Recombinant Humanized
with moderately to severely active rheumatoid
Anti-human IL-6R Chemical drugs Application for
LZM008（IL-6R） arthritis who have not responded adequately Yes No
Monoclonal Antibody Class3.3 production
to disease-modifying antirheumatic drugs
Solution for Injection
(DMARDs).
Chemical drugs Completed BE
Blonanserin Tablets Blonanserin Tablets Schizophrenia Yes No
Class 4 studies
Used for long-term treatment of chronic
Tobramycin Solution for Tobramycin Solution for Chemical drugs pulmonary infection caused by Pseudomonas Application for
Yes No
Inhalation Inhalation Class 2.4 aeruginosa in children with cystic brosis over 5 production
years old.
Formoterol Fumarate Formoterol Fumarate Chemical drugs Used to treat chronic obstructive pulmonary Application for
Yes No
Inhalation Solution Inhalation Solution Class 3 disease production
Formoterol Fumarate Formoterol Fumarate Chemical drugs Used to treat bronchial asthma and chronic
Yes No Clinical trial
Inhalation Aerosol Inhalation Aerosol Class 2.2 obstructive pulmonary disease.
Mometasone Furoate and Mometasone Furoate and
Formoterol Fumarate Formoterol Fumarate Chemical drugs Used to treat asthma and chronic obstructive
Yes No Clinical trial
Dihydrate Inhalation Dihydrate Inhalation Class 3 pulmonary disease.
Aerosol Aerosol
Salmeterol Xinafoate and Salmeterol Xinafoate and Used for routine treatment of reversible
Chemical drugs Application for
Fluticasone Propionate Fluticasone Propionate obstructive airway diseases, including asthma in Yes No
Class 4 clinical trial
Powder for Inhalation Powder for Inhalation adults and children.
Imipenem and Cilastatin Used to treat infection caused by one bacteria or
Imipenem and Cilastatin Chemical drugs Consistency
Sodiumfor Injection (under more bacteria sensitive to imipenem in adults and Yes No
Sodium for Injection Class 4 evaluation
consistency evaluation) children.
43
(3). Drugs (products) led for regulatory approval and granted approval during the Reporting Period
√ Applicable □ N/A
① Drugs (products) led for regulatory approval during the Reporting Period
Registration
Name of drug Approval items Indications
classication
Used for long-term treatment of chronic pulmonary infection
Chemical drugs Application for
Tobramycin Solution for Inhalation caused by Pseudomonas aeruginosa in children with cystic
Class 2.4 production
brosis over 5 years old.
Formoterol Fumarate Solution for Chemical drugs Application for
Used to treat chronic obstructive pulmonary disease
Inhalation Class 3 production
Used to relieve bronchial asthma, chronic bronchitis,
Terbutaline Sulphate Solution for Chemical drugs Application for
pulmonary emphysema and bronchospasm caused by other
Nebulization Class 4 production
pulmonary diseases.
Used for treatment of moderate to severe active rheumatoid
Chemical drugs Application for arthritis in adult patients with inadequate response to
Tocilizumab Solution for Injection
Class 3.3 production DMARDs. Recombinant Humanized Anti-IL-6R Monoclonal
Antibody for Injection combined with Methotrexate (MTX)
Triptorelin Acetate Microspheres for Chemical drugs Application for
Localized, advanced, and metastatic prostate cancer
Injection Class 2.2 production
Application
Chemical drugs
Ilaprazole Sodium for Injection for production Peptic ulcer bleeding
Class 2
(Indonesia)
Salmeterol Xinafoate and Fluticasone Chemical drugs Application for Used for routine treatment of reversible obstructive airway
Propionate Powder for Inhalation Class 4 clinical trial diseases, including asthma in adults and children.
Used for treatment of non-small cell lung cancer (NSCLC)
Chemical drugs Application for
LZ001 Tablets with ROS1 gene mutation and solid tumor with NTRK gene
Class 1 clinical trial
fusion
1. Transplantation: organ transplantation; bone marrow
Ciclosporin Soft Capsules Supplementary transplantation
Chemical drugs
(consistency evaluation) application 2. Non-transplantation: endogenous uveitis; psoriasis; atopic
dermatitis; rheumatoid arthritis; nephrotic syndrome
Valsartan Capsules (consistency Supplementary
Chemical drugs Used for treatment of mild to moderate essential hypertension.
evaluation) application
Used for treatment of the following infections caused by
sensitive organism: respiratory system infection; ear, nose, and
Cefuroxime Sodium for Injection Supplementary throat (ENT) infection; urogenital system infection; skin and
Chemical drugs
(consistency evaluation) application soft tissue infection; bone and joint infection; other infections;
and used for prevention of surgical and gynaecological
diseases
Used for treatment of chronic gastritis and mitigation of
Bismuth Potassium Citrate Capsules Supplementary
Chemical drugs gastralgia, heartburn and sour regurgitation caused by
(consistency evaluation) application
hyperacidity.
Used for treatment of infections caused by methicillin-resistant
staphylococcus aureus and other bacteria: septicemia, infective
Vancomycin Hydrochloride for Supplementary
Chemical drugs endocarditis, osteomyelitis, arthritis, supercial secondary
Injection (consistency evaluation) application
infection including burns and operative wound, pneumonia,
lung abscess, empyema, peritonitis, and meningitis.
44
Annual Report
2021
② Drugs (products) granted clinical approval during the Reporting Period
Registration
Name of drug Indications
classication
Formoterol Fumarate Chemical drugs
Used to treat bronchial asthma and chronic obstructive pulmonary disease.
Inhalation Aerosol Class 2.2
Mometasone Furoate
and Formoterol Chemical drugs
Used to treat asthma and chronic obstructive pulmonary disease.
Fumarate Dihydrate Class 3
Inhalation Aerosol
Aclidinium Bromide Chemical drugs
Used to treat chronic obstructive pulmonary disease
Powder for Inhalation Class 2.2
1) Used for treatment in women with anovulation (including polycystic ovary
syndrome [PCOS]) and showing no response to Clomiphene Citrate.
2) Used to stimulate the development of multiple follicles in women who
Recombinant Human underwent controlled ovarian hyperstimulation by Assisted Reproductive
Chemical drugs
Follicle Stimulating Technology (ART), such as In Vitro Fertilization (IVF), Gamete Intra-Fallopian
Class 3.3
Hormone for Injection Transfer (GIFT), and Zygote Intra-Fallopian Transfer (ZIFT).
3) Used in patients who lack luteinizing hormone (LH) and follicle-stimulating
hormone (FSH), or patients whose endogenous serum LH level is below 1.2IU/L.
Combined use of LH and FSH is recommended to stimulate follicular development
Preventive
SARS-CoV-2 Fusion biological
Used for treatment of novel coronavirus infection
Protein Vaccine products
Class 1.1
Triptorelin Pamoate
Chemical drugs
Microspheres for Localized, advanced, or metastatic prostate cancer
Class 2.2
Injection
Alarelin Acetate
Chemical drugs 1) Prostate cancer; 2) endometriosis, hysteromyoma, breast cancer, precocious
Microspheres for
Class 2.2; 2.4 puberty, assisted reproduction, etc.
Injection
Used to control the blood glucose of adult patients with type 2 diabetes after pool
Therapeutic
glycemic control with metformin and/or sulfonylureas based on diet control and
biological
Semaglutide Injection exercise, and to reduce the risk of main cardiovascular adverse events (including
products
cardiovascular death, non-fatal myocardial infarction or non-fatal stroke) to adult
Class 3.3
patients with type 2 diabetes and cardiovascular diseases.
Note: The Recombinant SARS-CoV-2 Fusion Protein Vaccine obtained approvals for phase III clinical primary trials countries
including Philippines, Indonesia and Russia and obtained approvals for phase III clinical booster trials in Pakistan and
Malaysia.
45
③ Drugs (products) granted registration approval during the Reporting Period
Registration
Name of drug Indications
classication
1) Used to trigger nal maturity and luteinization of follicles after stimulating follicular
Recombinant Human Therapeutic growth in women who underwent controlled ovarian hyperstimulation before receiving
Choriogonadotropin biological products assisted reproduction technology such as IVF.
alfa for Injection Class 15 2) Used to trigger ovulation and luteinization after stimulating follicular growth in women
with anovulation or rare ovulation.
Used to treat patients with type 2 diabetes in addition to diet control and exercise; used
Alogliptin Benzoate Chemical drugs
to improve glycemic control in patients with type 2 diabetes based on diet control and
Tablets Class 4
exercise in combination with Metformin Hydrochloride.
Used to prevent premature ovulation in patients receiving controlled ovarian stimulation
with assisted reproduction technology.
Cetrorelix Acetate for Chemical drugs
Used in combination with human menopausal gonadotropin (HMG) in clinical trials.
Injection Class 4
Limited combined use of this product with recombinant human follicle-stimulating
hormone (r-hFSH) shows that its ecacy is similar to the former.
Mainly used to: 1) treat peptic ulcer bleeding and anastomotic ulcer bleeding; 2) treat
acute gastric mucosal lesion under stress condition or caused by non-steroidal anti-
Omeprazole Sodium for
inammatory drugs; 3) prevent upper gastrointestinal bleeding caused by severe diseases
Injection (consistency Chemical drugs
(such as cerebral hemorrhage and severe trauma) under stress condition and after gastric
evaluation)
surgery; 4) treat the following diseases when oral therapies are not applicable: duodenal
ulcer, gastric ulcer, reux esophagitis, and Zollinger-Ellison.
Fluvoxamine Maleate
Tablets (consistency Chemical drugs Used for treatment of 1) depression; 2) obsessive compulsive disorder
evaluation)
(4). Cancellation of R&D projects or the failure to obtain approval for drugs (products) during the Reporting Period
□ Applicable √ N/A
(5). R&D accounting policy
√ Applicable □ N/A
Expenditures on an internal research and development project are classified into expenditures on the research phase and
expenditures on the development phase.
Expenditures on the research phase shall be recognized in prot or loss for the current period when incurred.
Expenditures on the development phase will be capitalized only when all of the following conditions are satisfied: it is
technically feasible to complete the intangible asset so that it will be available for use or sale; the Company intends to complete
the intangible asset and use or sell it; it can be demonstrated how the intangible asset will generate economic benefits,
including proving that the intangible assets or the products produced by it will have markets, or the intangible assets for
internal use will be useful; there are adequate technical, financial and other resources to complete the development and the
Company is able to use or sell the intangible assets; and expenditures on the development phase attributable to the intangible
assets can be reliably measured. The development expenditures that do not satisfy the above conditions shall be recognized in
prot or loss for the current period.
Our research and development projects enter the development stage after meeting the above conditions and forming the project
through the technical and economic feasibility studies.
Capitalized expenditures on the development phase are shown as development expenditures on the balance sheet and
reclassied as intangible assets on the date the project meets the intended purpose.
46
Annual Report
2021
Capitalization conditions for specic research and development projects are as follows:
① For research and development projects that are not required to obtain clinical approvals, the period from the beginning of
research and development to the pilot phase is treated as the research phase, and all expenditures shall be recognized in
prot or loss for the current period when incurred; the period from the pilot phase to the obtaining of production approvals
is treated as the development phase, and all expenditures shall be recognized as development expenditures and reclassied
as intangible assets after the obtaining of production approvals.
② For research and development projects that require clinical approval, the period from the beginning of research and
development to the obtaining of clinical approval is treated as the research phase, and all expenditures incurred shall be
recognized in profit or loss for the current period when incurred; the period from the obtaining of clinical approval to
the obtaining of production approval is treated as the development phase, and the expenditures shall be recognized as
development expenditures and reclassied as intangible assets after the obtaining of production approval.
③ External technology transfer fees and the cost of purchasing clinical approvals can be recognized directly as development
expenditures, and subsequent expenditures are accounted for in accordance with ① and ② above.
④ The Company reviews the latest research and development status of each project at the end of each year and if the research
and development project no longer qualifies for the development stage, the corresponding development expenditure are
recognized in prot or loss for the current period.
⑤ Where it is impossible to differentiate the expenditures on the research phase and the expenditures on the development
phase, all the research and development expenditures are recognized in prot or loss for the current period
(6). R&D investment
Horizontal comparison
√ Applicable □ N/A
Unit: 10,000 Yuan Currency: RMB
Proportion of R&D Proportion of R&D
R&D investment Ratio of capitalized
Comparable peer companies investment to operating investment to net
amount R&D investment (%)
income (%) assets (%)
Fosun Pharma 400,300.00 13.21 10.82 30.18
Kelun Pharma 151,629.35 9.21 11.23 -0.73
CR Double-Crane 41,111.92 4.83 4.42 29.21
Humanwell Healthcare (Group) 93,661.07 4.60 8.70 18.33
North China Pharmaceutical 46,886.42 4.08 7.66 74.56
Average R&D investment in the same industry 146,717.75
Proportion of R&D investment to operating income during the Reporting Period (%) 11.63
Proportion of R&D investment to net assets during the Reporting Period (%) 9.17
Ratio of capitalized R&D investment during the Reporting Period (%) 24.47
Note: 1. The data regarding comparable companies listed above are from each company's 2020 annual report;
2. The average R&D investment in the same industry is the arithmetic average of the R&D investment of five
comparable companies listed above.
Statement on material changes in R&D investment and rationality of R&D investment proportion and capitalization proportion
√ Applicable □ N/A
During the Reporting Period, the Company's total R&D investment was RMB 1,849.82 million, a YoY increase of 46.75%,
representing 11.63% of the total operating revenue and 9.17% of the total net assets, which was relatively high in the
industry. In order to adapt to the changes in the demand of the pharmaceutical market and the continuous reform of the new
drug research and development registration, the Company reconsidered its varieties under research and actively adjusted
R&D strategy. While maintaining competitive products, the Company strengthened resource integration and internal
control management. These moves improved R&D efficiency while kept R&D activities in an orderly manner as usual. The
Company's current R&D investment is reasonable as it is well in line with the strategic layout and future development.
47
Investment in major R&D projects
√ Applicable □ N/A
Unit: 10,000 Yuan Currency: RMB
Proportion of R&D
R&D Expensed Capitalized
investment to Change
R&D project investment R&D R&D
operating income (%)
amount investment investment
(%)
V-01（COVID-19） 49,111.94 17,694.65 31,417.29 3.09 1,062.05
LZM009（PD-1） 5,078.53 3,222.14 1,856.39 0.32 39.35
Aripiprazole Microspheres for Injection
4,856.54 4,856.54 0 0.31 139.60
(1-month sustained-release)
Triptorelin Acetate Microspheres for Injection
4,403.32 3,361.52 1,041.8 0.28 55.52
(1-month sustained release)
LZM008（IL-6R） 3,812.03 563.81 3,248.22 0.24 -53.21
Blonanserin Tablets 1,194.12 1,194.12 0 0.08 128.90
Tobramycin Solution for Inhalation 2,268.58 313.58 1,955.01 0.14 68.38
Formoterol Fumarate Solution for Inhalation 1,571.91 497.87 1,074.05 0.10 50.62
Fluticasone Propionate Nebulizable Suspension 964.54 902.51 62.03 0.06 27.68
Formoterol Fumarate Inhalation Aerosol 396.68 110.85 285.83 0.02 -32.69
Mometasone Furoate and Formoterol Fumarate
419.77 52.75 367.02 0.03 26.46
Dihydrate Inhalation Aerosol
Salmeterol Xinafoate and Fluticasone
1,311.78 799.16 512.62 0.08 533.11
Propionate Powder for Inhalation
Imipenem and Cilastatin Sodium for Injection
275.14 0.06 275.08 0.02 62.73
（consistency evaluation）
Notes:1. The Projects listed above are the main R&D projects conducted by the Company; of which project Blonanserin
Tablets is a Priority Review & Approval project.
2. The main reason for the quite significant YoY increase in our R&D expenditure is that our R&D projects went into
later clinical stages during the Reporting Period.
3. Sales of drugs (products)
(1). Analysis of main sales model
√ Applicable □ N/A
Please refer to Overview on the main businesses of the company during the Reporting Period part in this Chapter.
(2). Analysis of selling expenses
Components of selling expenses
√ Applicable □ N/A
Unit: 10,000 Yuan Currency: RMB
Proportion of current amount to
Project name Amount incurred in the current period
total selling expenses (%)
Business promotion expenses 447,776.46 89.08
Employee compensation 39,717.01 7.90
Entertainment and travel expenses 6,529.77 1.30
Business meeting expenses 2,355.47 0.47
Others 6,302.51 1.25
Total 502,681.21 100.00
48
Annual Report
2021
Horizontal comparison
√ Applicable □ N/A
Unit: 10,000 Yuan Currency: RMB
Proportion of selling expenses to
Comparable peer companies Selling expenses
operating income (%)
Fosun Pharma 846,394.32 27.93
Kelun Pharma 488,254.51 29.66
CR Double-Crane 302,941.81 35.62
Humanwell Healthcare (Group) 366,880.40 18.01
North China Pharmaceutical 276,414.83 24.05
Total selling expenses of the Company during the Reporting Period 502,681.21
Proportion of selling expenses to operating income during the Reporting Period (%) 31.61
Note:The data regarding comparable companies listed above are from each company's 2020 annual report;
Statement on material changes in selling expenses and rationality of selling expenses
√ Applicable □ N/A
During the Reporting Period, the Company's sales expenses were 5,026.81 million, representing 31.61% of the operating
revenue, recording an increase compared with the previous year. The increase was mainly due to more efforts to promote
products and brands, and an increase in sales expenses in prescription drugs which recorded significant sales growth during
this period. Looking fowward, the Company will continue to deepen the reform of the marketing system to optimize sales
channels and increase the cost eciency for high protability.
4. Others
□ Applicable √ N/A
(V) Analysis of investments
Overall analysis of external equity investment
√ Applicable □ N/A
During the Reporting Period, the Company carried out strategic investments in accordance with our development plans; the
main investment projects are as follows:
1. Major equity investment
√ Applicable □ N/A
(1) Livzon Group acquired 40% equity interest of Tianjin Tongrentang
The Resolution on Acquisition of 40% Equity Interest in Tianjin Tongrentang Group Co., Ltd. by the Controlling Subsidiary
Livzon Group was considered and approved at the 43rd Meeting of the 7th Session of the Board on 22 March 2021, pursuant
to which Livzon Group, the controlling subsidiary of the Company, was approved to enter into the Share Transfer Agreement
in Relation to Tianjin Tongrentang Group Co., Ltd. with Tianjin Tasly Healthcare Industry Investment Partnership (Limited
Partnership) * ( 天津天士力健康产业投资合伙企业（有限合伙）) (“Tianjin Tasly”). Accordingly, Livzon Group shall
use its own funds of RMB724 million to acquire 44,000,000 shares of Tianjin Tongrentang Group Co., Ltd.* ( 天 津 同 仁 堂 集
团股份有限公司 ) (“Tianjin Tongrentang”) held by Tianjin Tasly, representing 40% of the total number of shares of Tianjin
Tongrentang.
49
Tianjin Tongrentang is principally engaged in the R&D, production and sales of Chinese patent medicines. Tianjin Tongrentang
has a stable operating performance with unique products and promising growth potential. On 9 March 2021, the Tianjin
Securities Regulatory Bureau announced its acceptance of the application for counselling of the initial public offering of its
shares (and listing on the ChiNext Board of Shenzhen Stock Exchange). Upon completion of the Transaction, Livzon Group
will not only have certain synergy with Tianjin Tongrentang in respect of the development of Chinese medicine business but
will also be able to realize the corresponding investment income through cash dividends or initial public oering and listing of
Tianjin Tongrentang. The Transaction is not expected to have a material impact on the current and future nancial position and
operating results of the Company and Livzon Group. After completion of the Transaction, the financial statement of Tianjin
Tongrentang will not be consolidated in the nancial statements of the Company and Livzon Group and will only be treated as
an investment by the Company and Livzon Group.
On 27 April 2021, Livzon Group obtained the“Conrmation Letter on Securities Transfer and Registration ( 证 券 过 户 登 记
确 认 书 )”from China Securities Depository and Clearing Corporation Limited, and Livzon Group has completed the transfer
and registration procedures in relation to the Transaction. In addition, during the share transfer period of the Transaction,
Tianjin Tongrentang implemented the equity distribution for the year 2020 (distribution of cash dividends), and pursuant to
the Agreement, Tianjin Tasly shall pay Livzon Group the full amount of the cash dividends received during the share transfer
period. On 27 April 2021, Livzon Group has received the aforesaid cash dividends which amounted to a total of RMB40.04
million.
Tianjin Tongrentang obtained the Notice on the Acceptance of Application Documents of Tianjin Tongrentang Group Co., Ltd.
in Connection with the Listing of Shares from Initial Public Offering on the Chinext Board (Shen Zheng Shang Shen [2021]
No.265) on 28 June 2021, which states that the Shenzhen Stock Exchange has accepted the application documents of Tianjin
Tongrentang in connection with the listing of shares from initial public offering on the ChiNext Board. However, it remains
uncertain whether such application would be approved by the Shenzhen Stock Exchange.
The Shenzhen Stock Exchange has suspended the review of listing of Tianjin Tongrentang on 26 January 2022, as CSRC
has initiated an investigation against ShineWing Certified Public Accountants (Special General Partnership), the accountant
engaged by Tianjin Tongrentang for the initial public offering of its shares and listing on the ChiNext Board.The suspension
of the review of the IPO application of Tianjin Tongrentang will not have significant impact on the production and operation
activities of the Company. There is still uncertainty about the time for the resumption of review of Tianjin Tongrentang's IPO
application and whether it will eventually be approved by the Shenzhen Stock Exchange.
Please refer to the relevant announcements disclosed by the Company on 23 March 2021, 7 April 2021, 28 April 2021, 1 July
2021 and 8 February 2022.
(2) Overall relocation and expansion project of Sichuan Guangda
On 6 March 2019, Livzon Group, the controlling subsidiary of the Company, entered into the“Investment Agreement for the
Overall Relocation and Expansion Project of Sichuan Guangda Pharmaceutical Manufacturing”(《 四 川 光 大 制 药 整 体 搬
迁 调迁 扩 建 项 目 投 资 协 议 书 》) (the“Investment Agreement”) and the Supplemental Agreement I with Sichuan Chengdu
Pengzhou Municipal People's Government ( 四川省成都市彭州市人民政府 ). Pursuant to the Investment Agreement, Livzon
Group will inject capital of RMB646 million for investment in construction of the overall relocation and expansion project (the
“Project”) of Sichuan Guangda, a wholly-owned subsidiary of Livzon Group. Pursuant to the Supplemental Agreement I,
Pengzhou Municipal People's Government has agreed to pay a compensation for demolition of RMB90 million and grant total
incentive of not more than RMB125.8 million for the construction of new plant to Livzon Group.
As at 31 December 2021, the total investment of the specic contracts entered into for the Project amounted to RMB395.5607
million, and the sum of subsidies received from government authorities at various levels amounted to RMB 101.1799 million,
the construction works for the warehousing system and the QC main body were completed, the construction works for the
main body of the extraction workshop and the pre-treatment workshop were implemented, and the foundation construction
works for the granulation workshop, the comprehensive preparation workshop and the packaging workshop were implemented,
and the overall Project was smooth in progress.
50
Annual Report
2021
(3) Investment in Beijing Innite Intelligence Pharma Technology Co., Ltd.
On 15 January 2021, Zhuhai Livzon Pharmaceutical Equity Investment Management Co., Ltd. * ( 珠 海 市 丽 珠 医 药 股 权 投
资 管 理 有 限 公 司 ), a wholly-owned subsidiary of Livzon Group, a controlling subsidiary of the Company, entered into the
Capital Injection Agreement of Beijing Innite Intelligence Pharma Technology Co., Ltd. with original shareholders of Beijing
Innite Intelligence Pharma Technology Co., Ltd. * ( 北 京 英 飞 智 药 科 技 有 限 公 司 ) (“Innite Intelligence Pharma”),
pursuant to which Zhuhai Livzon Pharmaceutical Equity Investment Management Co., Ltd. contributed RMB 20 million to
subscribe for registered capital of RMB 158,730 of Infinite Intelligence Pharma. After the capital injection, Zhuhai Livzon
Pharmaceutical Equity Investment Management Co., Ltd. held 11.7647% equity interest in Infinite Intelligence Pharma.
Innite Intelligence Pharma is principally engaged in the articial intelligence empowered drug design.
(4) Investment in Haisong Precision Parts and Components (Taicang) Co., Ltd.
In March 2021, Shanghai Frontier, a controlling subsidiary of the Company, entered into the Investment Agreement in Relation
to Haisong Precision Parts and Components (Taicang) Co., Ltd. with Haisong Precision Parts and Components (Taicang) Co.,
Ltd. * ( 海 嵩 精 密 零 部 件（ 太 仓 ） 有 限 公 司 ) (“Haisong Precision”), pursuant to which Shanghai Frontier subscribed
for registered capital of RMB3.23 million of Haisong Precision, accounting for 35% equity interest of Haisong Precision.
Haisong Precision is principally engaged in the production, processing and sale of plastic products, molds, and class I and II
medical devices. The investment will strengthen the R&D strength of the Company in inhalation administration system, which
conforms to the strategic development goal of the Company.
(5) Establishment of Shanghai Liyu Biopharmaceutical Technology Co., Ltd.
In March 2021, Shanghai Frontier, a controlling subsidiary of the Company, entered into the Shareholder Agreement with
Livzon Group, pursuant to which both parties jointly invested and established Shanghai Liyu Biopharmaceutical Technology
Co., Ltd. * ( 上 海 丽 予 生 物 医 药 技 术 有 限 责 任 公 司 ) in cash at the registered capital RMB3 million, of which Shanghai
Frontier and Livzon Group contributed RMB1.35 million and RMB1.65 million in proportion of 45% and 55% of the
registered capital, respectively. Shanghai Liyu Biopharmaceutical Technology Co., Ltd. is principally engaged in technological
services, technological development and related business within the scope of pharmaceutical technology.
(6) Establishment of Zhuhai Liye Biotechnology Co., Ltd.
In February 2021, Zhuhai Livzon Diagnostics Inc. * ( 珠 海 丽 珠 试 剂 股 份 有 限 公 司 ), a subsidiary of Livzon Group, a
controlling subsidiary of the Company, established Zhuhai Liye Biotechnology Co., Ltd. * ( 珠海市丽业生物技术有限公司 )
at the registered capital of RMB50 million, of which Zhuhai Livzon Diagnostics Inc. accounted for 100% of the registered
capital. Zhuhai Liye Biotechnology Co., Ltd. is principally engaged in R&D, production, and sales of medical devices.
(7) Establishment of Zhuhai Livzon Pharmaceutical Import and Export Co., Ltd.
In July 2021, Zhuhai Livzon Pharmaceutical Import and Export Co., Ltd. was established as a wholly-owned subsidiary of
Livzon Group, a majority-owned subsidiary of the Company, with a registered capital of RMB 10 million, to mainly engage in
wholesale, import and export of drugs.
(8) Establishment of Changsha Lijin Baokang Medical Technology Co., Ltd.
In August 2021, Changsha Lijin Baokang Medical Technology Co., Ltd. was established by Livzon Diagnostics, a majority-
owned subsidiary of Livzon Group, a majority-owned subsidiary of the Company, with a registered capital of RMB 1 million,
to mainly engage in R&D, production and sale of class I, class II and class III medical apparatuses and instruments.
(9) Establishment of Zhuhai Livzon Traditional Chinese Medicine Modernization Technology Co., Ltd.
In August 2021, Zhuhai Livzon Traditional Chinese Medicine Modernization Technology Co., Ltd. was established as a
wholly-owned subsidiary of Livzon Group, a majority-owned subsidiary of the Company with a registered capital of RMB 30
million, to mainly engage in production, wholesale, import and export of drugs.
51
(10) Investment in Beijing Luzhu Biotechnology Co., Ltd.
In August 2021, Zhuhai Livzon Pharmaceutical Equity Investment Management Co., Ltd., a wholly-owned subsidiary
of Livzon Group, a majority-owned subsidiary of the Company, invested RMB 30 million to purchase Beijing Luzhu
Biotechnology Co., Ltd, accounting for 1.3951% of its registered capital of RMB 2,332,815. The company is mainly engaged
in development and transfer of technologies, and provision of services related to biological products, drugs, diagnostic reagents
and medical instruments.
(11) Investment in Shanghai Keentai Biomedical Technology Co., Ltd.
In September 2021, Zhuhai Livzon Pharmaceutical Equity Investment Management Co., Ltd., a wholly-owned subsidiary of
Livzon Group, a majority-owned subsidiary of the Company, invested RMB 20 million to participate in Pre-A round nancing
of Shanghai Keentai Biomedical Technology Co., Ltd., accounting for 4.88% of the total nancing. The company is principally
engaged in technological development, technology service, technology transfer, technology consulting and drug R&D in elds
of biotechnology and pharmaceutical technology.
2. Major non-equity investment
□ Applicable √ N/A
3. Financial assets measured at fair value
√ Applicable □ N/A
As of the end of the Reporting Period, for details of the Company's nancial assets measured at fair value, please refer to Note
9“ Fair Value”in Chapter X“ Financial Statements”.
4. Progress of Material Asset Restructurings of the Company during the Reporting Period
□ Applicable √ N/A
(VI) Sale of major assets and equity
□ Applicable √ N/A
(VII) Analysis of major controlled and invested companies
√ Applicable □ N/A
Unit: 10,000 Yuan
Nature of Registered Operating
Company Main product and service Asset size Net assets Revenues Net prot
business capital prot
R&D, production and sales of oral liquids,
hormone tablets, aerosol (hormone-
Taitai containing), inhalation preparations
Industry 10,000 56,299.86 29,267.82 22,281.36 10,316.83 9,227.15
Pharmaceutical (solution for inhalation) (hormone-
containing), hormone nasal spray, and
TCM extraction workshop.
Wholesale and retail of skincare products,
cosmetics, and other daily necessities;
Taitai
Industry domestic business, material supply and 500 178.84 124.34 80.74 -6.15 -21.60
Biotechnology
marketing industry, R&D of health care
products.
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Annual Report
2021
Nature of Registered Operating
Company Main product and service Asset size Net assets Revenues Net prot
business capital prot
Powder injection (including penicillin),
tablets, hard capsules, APIs, and sterile
APIs. Import and export businesses and
Haibin Pharma Industry domestic trade (excluding commodities 70,000 223,846.22 123,957.73 168,852.00 31,642.97 28,641.75
under exclusive rights, commodities
under special government control, and
monopolized commodities).
Manufacturing and sale of pharmaceutical
Xinxiang Haibin Industry products, intermediates and other chemical 10,000 42,854.45 24,198.91 63,588.06 7,346.68 6,575.02
products.
Production and sale of self-produced
Health healthcare food, traditional Chinese
Industry HKD 7,317 13,085.35 9,815.33 3,914.58 682.75 401.30
Pharmaceutical medicine decoction pieces, and drug
products.
R&D of new pharmaceutical products,
health care products, medical devices,
Shanghai diagnostic reagents, pharmaceutical
Industry 5,000 18,513.32 10,184.61 10,970.48 2,329.97 2,160.77
Frontier intermediates, and provision of relevant
technical consulting, technical service and
technical transfer
Investment in industry, domestic
commerce, material supply and marketing
Hiyeah Industry Commerce 17,800 659.46 607.84 280.38 -57.60 -57.60
industry, and economic information
consulting
Wholesale of health care products, ginseng
Joincare Daily- tea, ginseng lozenges, ginseng capsules,
Commerce 2,500 3,860.41 3,854.08 - 95.75 95.29
Use and stereotyped packaged food (including
health-care food)
Screening of human disease-specic
genes, R&D, production, sale and
technical consulting service of genetic
Taitai Genomics Industry engineering drugs and diagnostic reagents, 5,000 3,629.66 3,629.66 6.63 6.53 6.53
wholesale of medical devices, and in vitro
diagnostic reagents (except for diagnostic
reagents under special management)
Appraisal
Commerce Forensic evidence identication - 1,023.64 945.17 190.52 -54.65 -56.22
institution
Zhuhai Technical R&D and application of
Industry 6,587 - - - 949.88 948.95
Jiankangyuan biomedical products
Investment in power, industry, domestic
Fenglei Electric
Investment commerce, and material supply and 10,000 29,186.45 14,190.84 - -3,193.67 -3,193.67
Power
marketing industry
Hong Kong
Investment Investment and trade HKD 1 32,345.55 648.66 289.51 240.40 214.42
Health
R&D, production and sale of pharmaceutic
preparations, chemical APIs, biological
Jiaozuo Joincare Industry 50,000 207,954.53 153,764.56 140,642.76 21,634.98 19,267.40
APIs, pharmaceutical intermediates, and
biological products.
53
Nature of Registered Operating
Company Main product and service Asset size Net assets Revenues Net prot
business capital prot
Topsino Commerce Investment and trade HKD89,693 162,517.08 81,227.09 - 21,191.45 21,191.45
Health
Investment According to law where it was registered USD5 2,594.51 2,594.51 - - -
Investment
R&D, production, storage, transport
and sale of chemical APIs (including
intermediates) and pharmaceutic
preparations Import and export
Joincare Haibin Industry 50,000 66,857.71 45,349.43 30,977.60 17,343.57 14,570.05
businesses and domestic trade (excluding
commodities under exclusive rights,
commodities under special government
control, and monopolized commodities)
R&D, production and sale of formula
Joincare Special
Industry food, health-care food and food for special 2,000 1,354.85 232.54 - -84.43 -66.48
Medicine Food
medical use
Drug R&D, production, manufacturing
Livzon Group Industry 93,787 2,237,191.56 1,431,102.48 1,206,386.33 226,699.00 195,210.12
and sale
Note: 1. The companies listed above are companies where the Company directly or indirectly held 100% equity interest,
except for Livzon Group, Zhuhai Jiankangyuan, and Shanghai Frontier; financial data thereof are 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 individual accounting statements is not separately analyzed.
2. Zhuhai Jiankangyuan completed the industrial and commercial deregistration on 8 September 2021.
3. For business conditions of Livzon Group, please refer to the 2021 Annual Report of Livzon Group.
(VIII) Structured entities controlled by the Company
□ Applicable √ N/A
VI Discussion ad analysis of the Company's future development
(I) Industry landscape and trend
√ Applicable □ N/A
Please refer to the“Basic information on industry”part in this chapter.
(II) Company's strategies for business development
√ Applicable □ N/A
Taking scientific and technological innovation as a strategic priority, executing our dual-drive strategy of developing
platforms of both innovative medicines and high-barrier complex preparations, we have been evolving into an industry-
wide influential innovative pharmaceutical enterprise paying great attention to people's livelihood and actively undertaking
social responsibilities. Over the years, the Company has been committed to developing itself in the pharmaceutical field,
and has grown into a comprehensive pharmaceutical enterprise covering multiple areas including chemical drug preparation,
chemical APIs and intermediates, traditional Chinese drug preparation products, diagnostic reagents and equipment. In the
future, the Company will continue to increase R&D investment to improve its research and innovation capacity, accelerate the
optimization and adjustment of its product structure, fully leverage its existing market advantages, and actively deepen the
reform of the marketing system, to promote its sustainable and steady business growth.
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Annual Report
2021
(III) Business plans
√ Applicable □ N/A
The main business plans for each operation unit of the Company in 2022 are set as follows:
1. R&D Center
R&D and innovation are the hard power of the Company to maintain sustainable development. The Company will, on
the one hand, define the strategic direction for future R&D efforts, and screen and evaluate key high-barrier varieties, to
diversify the R&D variety pipeline; and will, on the other hand, promote product transformation, and effectively advance the
research and clinical development of existing core products, to accelerate the marketing process. (1) Strategic layout of R&D
and innovation: In recent years, focusing on inhalant preparations, the Group has conducted in-depth research on a few of
carefully selected new products with high clinical value and wide market space, and has achieved good results. In the future,
under the existing R&D pipeline, the Group will focus on the following R&D areas: 1) Inhalation preparations: continue to
enrich the pipeline and layout of inhalation preparations; 2) Complex injections: Complex injections are mainly micro and
nano injections, with broad clinical application prospect and high technical complexity, and will be added to the high-barrier
complex preparation R&D platform of the Group; 3) New drug delivery devices: drugs for respiratory treatment are usually
delivered through combined medical instruments with a complex structure, thus posing high requirements on the structural
design, performance and quality control. The Group will develop supporting drug delivery devices based on the progress of
R&D of drugs for respiratory diseases, improve the industrial chain of inhalation preparations, and enhance the added value
and core competitive strengths of products to be marketed. (2) Transformation of existing products under R&D: Currently,
the Group has 179 products under R&D, including 40 high-barrier complex preparations. In 2022, the Group will make major
eorts to apply for marketing authorization for Tobramycin Solution for Inhalation ( 妥 布 霉 素 吸 入 溶 液 ), and strive to get
it included in China's National Reimbursement Drug List. At the same time, the Group will make vigorous efforts to assist
and promote global multi-center phase III clinical trials of V-01, and strive to complete the trials and apply for marketing
authorization as soon as possible. This will endow the Company with the qualification and rich experience in conducting
global multi-center clinical trials for more products in the future.
2. Sales Center
In 2021, the Group secured outstanding achievements in selling prescription medicines. In the future, with the transformation
of more products developed, especially the production and marketing of new respiratory products, the Company will see a
more complete product line in the prescription drug sector. Against the backdrop of increased incidence of respiratory diseases
and steady increase of clinical demand, the marketing and promotion of prescription medicines should be backed by the
Group's strong R&D strength and efficient innovation. Taking the industrial and market opportunity that three blockbuster
products, including Budesonide Suspension for Inhalation ( 吸入用布地奈德混悬液 ) have been selected for centralized drug
procurement organized by the State and that Levosalbutamol Hydrochloride Nebuliser Solution ( 盐 酸 左 沙 丁 胺 醇 雾 化 吸
入 溶 液 ) has been included in the list of drugs for negotiation led by National Health Security Administration, the Company
will make continuous eorts to enable its inhalation preparations to enter more hospitals and serve more patients. To this end,
the Group will, in terms of marketing prescription medicines in the new year, focus on the following five aspects: strengthen
team building and improvement of comprehensive quality, continue to expand the terminal sales team, continuously attract
excellent talents to join the sales team, take brand building as the goal, and improve the practical capability and comprehensive
quality of marketing teams; strengthen supervision, appraisal, and management by objectives, strengthen integration of
terminal resources, focus on establishing national benchmark areas, benchmark hospitals and benchmark sales teams, include
key hospitals above grade II in the appraisal system, and comprehensively enhance the coverage and fulfillment rate of
evaluation indicators; seize the opportunity that three inhala tion preparation products have been successfully selected for
centralized drug procurement organized by the State, be prepared in business, production, terminal and other links, and quickly
increase market share and raise brand awareness in all aspects; promote digital marketing, continue to advance construction
of digital marketing platform and support for terminal market activities, effectively combine online and offline methods, and
enhance brand recognition on the doctor side and patient side; strengthen access to the National Reimbursement Drug List
and policy adjustment, follow up in real time national medical reform-related policies, strengthen drug post-marketing and
pharmacoeconomic research, and actively cope with subsequent medical insurance adjustment.
55
In the past year, by grasping the market opportunities in the API and intermediates segments, the Group ensured continued
sales growth. In the future, in order to further excel in API and intermediates marketing, the Group will: 1) strengthen building
of the sales team: make full use of OKR and strengthen management by objectives, to build a vigorous and highly efficient
sales team; 2) continue to promote strategic cooperation: pursue further development in segments, actively develop customer
resources and maintain cooperative partnerships, give full play to the strength of the Company's brand, and establish long-
term, stable and win-win cooperation with strategic partners; 3) subdivide the terminals of the entire industrial chain, with
a focus on that of key varieties, conduct in-depth research and analysis of domestic and foreign markets, explore potential
customer resources, and continuously increase the market share at home and abroad; 4) accelerate the R&D and production
transformation of high-margin varieties, enrich the product structure, foster a complete ecological industry chain, and enhance
the visibility of the brand of Joincare API series.
Healthcare products, as the pr oducts firstly developed by the Group, are an important part of the Group's entire product
package. In the future, the Group will deepen reform of the marketing mode for healthcare products and OTC products and
further promote digital marketing, to enhance the brand visibility and influence among users through three major media
platforms. TikTok platform will be mainly used to increase the exposure of products, enhance the brand visibility and access by
consumers; Xiaohongshu will be used to maintain the brand reputation and attract consumers; Toutiao will be used to activate
and enhance the stickiness of consumers utilizing the influence of authoritative figures. Through mental and effect input, the
Group will increase the transformation efficiency of communication, achieve the integration of brand effect and sales results
and empower oine and online marketing transformation. The Company will make in-depth channel distribution through O2O
reform, and focus on integrating diversied resources and boosting sales by resource empowerment.
3. Production Center
The Production Center will persist in ensuring workplace safety and product quality, proceed with establishment of a quality
m anagement system, and implement product quality-centered risk control, with a focus on checking raw and auxiliary
materials, production sites and production process, to detect workplace safety risks according to the six systems in GMP, at
the same time, continuously optimize the production process by introducing advanced technology, and improve the employee
training system to enhance the professional skills of employees so as to ensure uniform and stable product quality; persist in
reducing costs and improving efficiency through introducing advanced technology and equipment, production optimization,
system improvement and lean management, to effectively improve the production and operation level; adhere to green
development, continue to uphold and promote the concept of green, healthy and sustainable development, enhance the
environmental protection and quality standards and requirements, set environmental protection targets, strengthen monitoring
of energy consumption, pollutant emissions and other environmental information in the production and operation processes,
and effectively implement energy conservation, emission reduction and green production. It will persist in optimizing
production capacity, advance the construction of Haibin factory in Pingshan and the new production line as planned, follow up
the establishment of supporting facilities and capacity layout planning, and improve the technology transformation capacity of
new products to meet the increased market demand for new and existing products.
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Annual Report
2021
4. Functions and strategies
The Company's functions and strategies of 2022 are mainly focused on the following ve aspects: 1) organizational structure:
further perfect the organizational structure and institutional setting of subsidiaries of the Group, strengthen internal control
of the Group and its subsidiaries, comprehensively enhance the management eciency of the Group and its subsidiaries, and
promote lean management; 2) talent team building: conduct a comprehensive reform of the compensation system, clarify
the career development channel and ranks within the compensation system and corresponding incentives, implement the
management by objective (MBO) system with OKRs and KPIs in parallel, conduct quarterly rolling dynamic tracking and
adjustment, build a talent echelon and introduce high-end talents to ensure the stability of the core talent team; 3) internal
and external cooperation: pay close attention to innovation of cutting-edge technologies and industry development, actively
leverage the resource advantages brought out by internal and external business cooperation, and invest in and introduce
innovative products and technologies to improve the Company's strategic layout; 4) cultural development: actively create
a healthy and positive work culture and atmosphere, constantly optimize the working environment, boost the enthusiasm
and subjective initiative of employees, improve the sense of happiness and belonging of employees in work and life, so that
employees and the Company can develop together; 5) social responsibility: in the pandemic era, the Company will actively
fulll its social responsibilities by contributing to the ght against the pandemic, and will, at the same time, promote the high
quality and sustained development of the Company.
(IV) Potential risks
√ Applicable □ N/A
1. Risk 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 continuous deepening of medical reform, advancement of
supply-side structural reform in the industry, revision of Drug Administration Law, acceleration of consistency evaluation of
generic drugs, adjustment of the new edition of Medical Insurance Catalog, expansion of minimum procurement commitment,
and other industrial policies that have been successively launched. In 2022, the Company's key product Meropenem for
Injection ( 注 射 用 美 罗 培 南 ) was included in the seventh batch of centralized drug procurement organized by the State. This
will have a great impact on the sales price and market share of this product.
Response measures: The Company will pay close attention to industry dynamics and reform, cope with major changes in
policies of the pharmaceutical industry through early layout, transformation and compliance, and actively strengthen new
product R&D and innovation and constantly improve its core competitive strengths. Meanwhile, the Company is actively
engaged in the access to the national reimbursement drug list and negotiation. In the adjustment of the list in 2021, the
Company's product Ilaprazole sodium for injection ( 注 射 用 艾 普 拉 唑 钠 ) has been renewed through negotiations and
continues to be included in the New Medical Insurance Catalogue.This will improve the clinical value of the product and
benefit more patients. At present, this product has a low coverage rate of grade hospitals, so the price reduction will benefit
more patients. The Company will continue to increase the coverage of hospitals and sales, to realize the objective of“price for
quantity”, so as to reduce the impact of price adjustment on the Company's steady growth. Moreover, the centralized drug
procurement is becoming a regular practice. In 2021, three inhalation preparation products of the Company were successfully
included into the fth batch of centralized drug procurement organized by the State. This will help the Company rapidly open
up the domestic market of inhalation preparation products and increase the market share. In the face of the upcoming seventh
batch of centralized drug procurement and the possible impact on the business performance, the Company will continue to
strengthen innovation and improve its competitiveness, to ensure sound operation. With the Company's new high-barrier
complex preparations, represented by inhalation preparations, appearing on the market one after another, commercialization
will gradually enter a stable contribution period. The Company's product structure will be further optimized, and the reliance
on a single product will also gradually reduce.
57
2. Market risk
With advancement of supply-side structural reform in the pharmaceutical manufacturing industry and two invoice policy in
circulation domain, pharmaceutical market structure is deeply changed. With the gradual standardization and centralization
of the market, competition in the pharmaceutical industry becomes increasingly fierce. Affected by increasingly stricter drug
regulation, policy-based drug price reduction, price cutting during bidding, medical insurance premium control, and minimum
procurement commitment of the pharmaceutical industry in current stage, bid winning price of drugs will be further lowered,
competition among enterprises in the industry will be intensified, and price war will occur frequently, thus the Company will
be at the risk of drug price reduction.
Response measures: The Company will establish a more reasonable market system through strict compliance operation so
as to maintain its dominant position and core competitive strengths, and ensure that it can achieve sustainable and steady
development and improve its protability by reinforcing marketing. Meanwhile, the Company will oset the impact of product
price reduction by means of price supplement based on quantity, and optimize technical process and reduce production costs
through internal exploration and transformation. Moreover, the Company will speed up the R&D and marketing of new
products, spread risks of the Company while expanding the range of existing products in segment markets, improve sales and
form new prot growth point by increasing product varieties in the future.
3. Risk of environmental protection
The Company is a comprehensive pharmaceutical manufacturing enterprise. During production, it implements relevant
chemical synthesis process and uses a large number of acid and alkali and other chemical components, which are inammable,
explosive, toxic, irritant and corrosive, and have hidden hazards of fire, explosion and poisoning, posing certain risks to the
production and operation of the Company. As environmental protection policies and regulations have been constantly issued in
recent years, environmental protection standards have become more stringent, and the state has strengthened its control over
pollutants, risks of environmental protection of the Company are increasing.
Response measures: The Company has always obeyed the safety work concept of“Putting People First”and the guideline
of“safety first, Precaution Crucial and Comprehensive Treatment”. It will strengthen the construction of safe production
infrastructure and ensure a sound environment for safe production of the Company through regular internal audit of safety
and environment systems and employee safety education and training. The Company will carry out discharge after treatment
and reaching standards in accordance with environmental protection provisions, actively accept supervision and inspection
of environmental protection authorities, and try to reduce emission and increase expenditures 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 changes in material prices,
especially the materials of traditional Chinese medicine, causing greater volatility or rise in production costs of the Company.
Meanwhile, the quantity and category of raw material suppliers of the Company are various, thus quality of final products of
the Company will be directly aected by the 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 tendering and bidding based on the
principle of selecting qualified suppliers, strengthen audit of suppliers, and eliminate the adulteration of adverse suppliers.
The Quality Assurance Department and Supply Department of the Company will directly conduct process control of products
provided by suppliers of key raw materials and carry out quality inspection and control of nal products.
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Annual Report
2021
5. Risk of R&D for new drugs
New drug R&D is characterized by high input, high risk and long period. The State has frequently issued drug R&D related
policies in recent years to further enhance approval work requirements of new drugs for marketing, thus bringing certain
risks for new drug R&D of the Company. Meanwhile, promotion of drugs after marketing is affected by national regulations,
industry policies, market environment and competitive intensity, causing that income obtained after marketing of new drugs
cannot reach the expected income, making the Company at risk of product R&D.
Response measures: The Company will further improve the R&D and innovation systems, introduce and develop high-end
talents, proactively carry out cooperation and introduction of overseas innovative medicines, strengthen market research and
evaluation of varieties, reinforce the process regulation and risk management of the initiation of R&D projects, and concentrate
efforts and make key breakthroughs in the R&D of core products. At the same time, the Group's advantages in APIs will be
fully utilized to reinforce the integration of API and drug preparations to ensure the long-term sustainable development of the
Company.
6. Risk of the normalization of COVID-19 pandemic
In early 2020, the outbreak of the COVID-19 pandemic brought certain impact on the production and operations of the
Company. As the demand for prescription medicines irrelevant to the pandemic dropped due to the decline of outpatients
and inpatients in medical institutions, the sales of some products were lower than expected. In the first half of 2021, China
implemented pandemic prevention and control on a continuing basis and promoted vaccination against the virus in an orderly
manner. According to data on the ocial website of the National Health Commission, as of 31 December 2021, 31 provinces
(autonomous regions and municipalities) and Xinjiang Production and Construction Commission had reported a total of
2,823.42 million doses of vaccines vaccinated, with a full vaccination coverage rate over 85%. However, the emergence of
new COVID-19 variants has made epidemic prevention and control more complicated, especially since its discovery in South
Africa in November 2021, Omicron variant has spread widely worldwide. In late January 2022, the outbreak began in Hong
Kong, China with an average daily new infections exceeded 10,000 in early March. Many parts of Mainland China also report
a formidable outbreak.
Response measures: The Company during the Reporting Period was under normal operation, and the overall impact of the
COVID-19 pandemic on its business was relatively slight. The extent of its subsequent impact will depend on the prevention
and control of the pandemic on a global scale, the time of continuation, the prevention and control of the pandemic, and the
responsive measures of enterprises. The Company will continue to pay attention to the development of the pandemic and any
possible impact on the financial conditions and operating results of the Company, while adopting various measures at the
same time to mitigate the adverse effect of the pandemic on corporate operations, to ensure that the production and operation
activities are performed in a steady and orderly manner. Measures include improving operational management, controlling
various operational risks, and promoting innovation and collaboration. In the face of the new global market pattern brought
out by COVID-19, the Company will strengthen the export advantages of featured APIs, set up an Internet operation center,
strengthen online promotion of some preparations, and accelerate the overseas clinical progress of COVID-19 vaccine, so as to
contribute to the global supply of COVID-19 vaccines and actively fulll its social responsibilities.
(V) Others
□ Applicable √ N/A
VII Information not disclosed according to guidelines due to inapplicability of the standard,
involving state secrets or trade secrets or other reasons, and notes on relevant reasons
□ Applicable √ N/A
59
Chapter 4
Corporate Governance
I Corporate Governance
√ Applicable □ N/A
During the Reporting Period, the Company continued to improve its corporate governance structure, strengthen information
disclosure management, enhance investor relations management and internal control to standardize the operation of the
Company in strict accordance with the laws and regulations, including the Company Law, the Securities Law, the Guidelines
for Corporate Governance of Listed Companies, and the Rules Governing the Listing of Stocks on Shanghai Stock Exchange.
1. Shareholders and General Meetings
During the Reporting Period, 1 annual general meeting and 5 extraordinary general meetings were held by the Company. The
Company convened and held general meetings in strict compliance with the Articles of Association, Rules of Procedure for
General Meetings and other relevant regulations to ensure that resolutions can be made at general meetings based on fairness
and openness, thereby safeguarding the rights and interests of shareholders. In addition, the Company made full use of modern
information technology such as online voting to ensure that all shareholders, particularly minority shareholders, can attend
general meetings and exercise their rights to know and participate in decision making in the most convenient and fastest way.
2. Controlling shareholders and the listed company
The Company is able to carry on its business and operations independently. In terms of business, personnel, assets,
organizations and finance, the Company performed management and accounting independently from the controlling
shareholders of the Company. The controlling shareholders of the Company have exercised their rights and assumed their
obligations in strict compliance with the laws and regulations, and have never directly or indirectly interfered with the
decision-making or business activities of the Company without authorization of the general meeting. The Company has
formulated the Management Policy of Joincare Pharmaceutical Group Industry Co., Ltd. for Preventing the Controlling
Shareholders or De Facto Controller and Other Related Parties from Using Funds of the Company, and established a long-term
mechanism to prevent the controlling shareholders or de facto controller and their related parties from using funds of the listed
company or damaging the interests of the listed company. During the Reporting Period, there was no circumstance where the
Company's controlling shareholders, de facto controller, and their related parties occupied assets of the Company or damaged
the interests of the Company and minority shareholders.
3. Directors and the Board
During the Reporting Period, the Company held 23 board meetings in multiple ways, including on-the-spot meeting,
attendance through electronic means and the combination of on-the-spot meeting and electronic means, providing convenience
for the attending directors. During the Reporting Period, the Board of the Company performed its duties actively and
eectively in strict compliance with the relevant regulations, including the Company Law, the Articles of Association, and the
Rules of Procedure for Board Meetings.
The Board of the Company comprises a total of 9 directors, including 4 independent directors who are legal and financial
professionals and provide constructive advice for the effective, standard governance and decision-making on major policies
of the Company. Besides, five special committees are set up under the Board of the Company, namely the Audit Committee,
the Remuneration Committee, the Strategy Committee, the Nomination Committee, and the Corporate Social Responsibility
Committee. These committees assist the Board in performing its decision-making and supervision functions and give full play
to their expertise, so as to ensure the legality, scienticity, and correctness of decisions made by the Board.
During the Reporting Period, the Company convened, held and voted at the board meetings in accordance with the Rules of
Procedure for Board Meetings, and all directors of the Company have attended meetings including the board meeting and general
meeting in a conscientious, responsible and honest manner, actively participated in relevant business training, familiarized
themselves with relevant laws and regulations, and claried the rights, obligations and responsibilities of directors.
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Annual Report
2021
4. Supervisors and the Supervisory Committee
During the Reporting Period, the Company held 15 meetings of the Supervisory Committee for review of the periodic report,
option exercise, special report on fund raising, and other matters of the Company. The Supervisory Committee of the Company
is comprised of three supervisors, including one employee's representative. During the Reporting Period, the Supervisory
Committee of the Company performed its duties in accordance with the law, supervised the duty performance of directors and
senior management of the Company, carried out regular inspections on the nancial position of the Company, and focused on
signicant investments of the Company, fully protecting the interests of the Company and all shareholders.
5. Performance evaluation and incentive restraint mechanism for senior management
The appointment and dismissal of and reward and punishment for senior management of the Company are performed in strict
accordance with the relevant laws, regulations, and the Articles of Association. The Company has established the selection,
appointment and performance assessment criteria and the remuneration decision-making procedure for the senior management.
The Nomination Committee of the Company provided appropriate candidates for directors and senior management in
accordance with the law, and submitted the list of candidates to the Board of the Company for review. The Remuneration
Committee of the Company, pursuant to the regulations such as the Management Policy on the Remuneration and Performance
Assessment of Senior Management, determined the result of performance assessment of senior management based on the
completion of business objectives of the Company and work objectives of the senior management in 2021. Based on the result
of performance assessment, the performance bonus and remuneration of senior management in 2021 were determined and
submitted to the Board of the Company for review and resolution.
6. Investor relations
The Company has always attached great importance to communication and exchange with investors. The Board designated
departments and personnel to manage information disclosure and investor relations, enhance communication with minority
shareholders, answer questions from shareholders on the production, management and operation of the Company, and listen
earnestly to the suggestions and advice of shareholders on the strategy and development of the Company. Without violating
regulations, the Company satisfied to the maximum extent the information needs of investors for the sustainable and healthy
development of the Company.
7. Information disclosure and transparency
The Company disclosed information in a timely, accurate, authentic and complete manner in strict compliance with the
relevant regulations, including the Company Law, the Rules Governing the Listing of Stocks on Shanghai Stock Exchange, the
Articles of Association, and the Information Disclosure Management Bylaws. The Company designated the Board Secretary
to manage information disclosure, receive visitors, answer questions consulted, contact shareholders, and provide investors
with the information publicly disclosed by the Company. The Company has the ability to disclose information in an authentic,
accurate, complete and timely manner in accordance with the laws, regulations, and the Articles of Association, and is able to
ensure equal access to information for all shareholders.
61
8. Stakeholders
The Company has fully respected the legitimate rights and interests of stakeholders, including banks, other creditors,
employees, consumers, suppliers and communities, and has extended communication and cooperation with such stakeholders
based on mutual benefit, so as to jointly promote the sustained and healthy development of the Company and protect the
interests of public shareholders.
During the Reporting Period, the Company did not provide undisclosed information to its substantial shareholders or de facto
controller, and the substantial shareholders and de facto controller of the Company did not interfere with the production,
operation and management of the listed company. Overall, no corporate governance irregularities were found.
The corporate governance of the Company complies with the Company Law and relevant regulations issued by the CSRC.
Achieving good corporate governance is a long journey, which requires continuous improvement. The Company will
continue to timely update and improve its internal governance system in accordance with relevant regulations, discover and
solve problems in a timely manner, and strengthen internal management, so as to promote standard operation and corporate
governance and advance the steady and healthy development of the Company.
9. Establishment and implementation of insider registration management system for inside information
The Resolution relating to Amendment of the Insider Registration Management System for Inside Information of Joincare
Pharmaceutical Group Industry Co., Ltd. was revised and approved at the 8th meeting of the 8th session of the Board of the
Company, with a view to strengthening the confidentiality of inside information, maintaining the principles of openness,
fairness and justice for the Company's information disclosure, and protecting the legitimate rights and interests of investors.
During the Reporting Period, the Board Office of the Company was responsible for the management of inside information of
the Company. It is stipulated that the documents and data reported and transmitted externally and other information involving
inside information and information disclosure shall be reviewed and approved by the Board or the Board Secretary. When
preparing periodic reports and planning significant matters, the Company performed inside information registration timely,
and reminded the insiders by mail or phone not to deal with shares of the Company during the sensitive period. Through self-
inspection, it was found that there was no circumstance where the insiders dealt with shares and derivatives using inside
information of the Company during the Reporting Period.
Whether there are any material deviations of the Company's corporate governance from laws, administrative regulations and
CSRC regulations on the governance of listed companies; If any, give the reasons.
□ Applicable √ N/A
II Measures taken by the controlling shareholder and de facto controllers to ensure the
independence of the Company's assets, personnel, finance, organization, business, in
addition to solutions, work schedules and follow-up work plans adopted to enhance the
independence of the Company
□ Applicable √ N/A
Engagement in the same or similar business as the Company by controlling shareholders, de facto controllers and other units
under their control, and the influence of horizontal competition or major changes in horizontal competition on the Company,
countermeasures taken, progress and follow-up plan
□ Applicable √ N/A
62
Annual Report
2021
III Introduction to General Meetings
Query index of the
Meeting Date of designated website Disclosure
Meeting resolution
session meeting for publishing the date
resolution
The Resolution on Repurchase of Shares of the Company through
2021 First Centralized Bidding Transactions and the Resolution on the General
26
Extraordinary 25 February Meeting for Granting Mandate to Deal with Matters Regarding the
www.sse.com.cn February
General 2021 Repurchase were considered and approved. See the Announcement on
2021
Meeting Resolutions of Joincare Pharmaceutical Group Industry Co., Ltd. at the
2021 First Extraordinary General Meeting (Lin 2021-025) for details.
Thirteen (13) resolutions were considered and approved, including the
2020 Annual Work Report of the Supervisory Committee, 2020 Annual
2020 Annual Work Report of the Board of Directors, 2020 Annual Prot Distribution
22 May
General 21 May 2021 www.sse.com.cn Scheme, and 2020 Annual Report of Joincare Pharmaceutical Group
2021
Meeting Industry Co., Ltd. (Full Text and Abstract). See the Announcement on
Resolutions of Joincare Pharmaceutical Group Industry Co., Ltd. at the
2020 Annual General Meeting (Lin 2021-063) for details.
Five (5) resolutions were considered and approved, including the
Resolution on Increase of Ways for Investments of Projects Invested
2021 Second
with Proceeds and the Resolution on the First Phase Ownership Scheme
Extraordinary 30 June
29 June 2021 www.sse.com.cn under Medium to Long-term Business Partner Share Ownership Scheme
General 2021
of the Company (Draft) and its Summary. See the Announcement on
Meeting
Resolutions of Joincare Pharmaceutical Group Industry Co., Ltd. at the
2021 Second Extraordinary General Meeting (Lin 2021-081) for details.
Seven (7) resolutions were considered and approved, including the
Resolution on Increase of Board Seats and Amendment to Certain
2021 Third Clauses of the Articles of Association, the Resolution on Adjustment
Extraordinary 27 August 28 August to Emoluments of Independent Directors of the Company, and the
www.sse.com.cn
General 2021 2021 Resolution on Modication of Certain Clauses of the Work System for
Meeting Independent Directors. See the Announcement on Resolutions of Joincare
Pharmaceutical Group Industry Co., Ltd. at the 2021 Third Extraordinary
General Meeting (Lin 2021-111) for details.
Four (4) resolutions were considered and approved, including the
Resolution in Relation to Providing a Three-Year Financing Guarantee
2021 Fourth for the Controlling Subsidiary Livzon MAB by Livzon Group and the
13
Extraordinary 12 November Counter Guarantee for Livzon Group by the Company, and the Resolution
www.sse.com.cn November
General 2021 in Relation to Amendment of the Business Scope of the Company. See
2021
Meeting the Announcement on Resolutions of Joincare Pharmaceutical Group
Industry Co., Ltd. at the 2021 Fourth Extraordinary General Meeting (Lin
2021-133) for details.
The Resolution on Repurchase of Shares of the Company through
2021 Fifth Centralized Bidding Transactions and the Resolution on the General
24
Extraordinary 23 December Meeting for Granting Mandate to Deal with Matters Regarding the
www.sse.com.cn December
General 2021 Repurchase were considered and approved. See the Announcement on
2021
Meeting Resolutions of Joincare Pharmaceutical Group Industry Co., Ltd. at the
2021 Fifth Extraordinary General Meeting (Lin 2021-154) for details.
63
Holders of preferred shares with restored voting rights requesting to hold extraordinary general meeting
□ Applicable √ N/A
Explanations to general meetings
□ Applicable √ N/A
IV Information on directors, supervisors and senior management
(I) Changes in shareholding and remuneration of current directors, supervisors, and senior management and those left
the Company during the Reporting Period
√ Applicable □ N/A
Unit: shares
Total pre-tax Receive any
Number remuneration remuneration
Number of
Start date End date of shares received from the from any
shares held Change in Reason for
Name Position (Note) Gender Age of the of the held at the Company during related
at the end shareholding change
oce term oce term beginning the Reporting party of the
of the year
of the year Period Company or
(Ten thousand) not
28 August 27 August
Zhu Baoguo Chairman Male 60 339.56 No
2021 2024
28 August 27 August
Liu Guangxia Vice Chairman Female 53 359.27 No
2021 2024
Director, 28 August 27 August
Yu Xiong Male 61 430,000 660,000 230,000 Equity incentive 335.00 No
President 2021 2024
Director, Vice
28 August 27 August
Qiu Qingfeng President, Chief Male 51 357,409 537,409 180,000 Equity incentive 173.62 Yes
2021 2024
Financial Ocer
Director, Vice 28 August 27 August
Lin Nanqi Male 40 811,040 1,051,040 240,000 Equity incentive 173.62 No
President 2021 2024
Independent 28 August 27 August
Cui Liguo Male 52 10.00 No
Director 2021 2024
Independent 28 August 27 August
Huo Jing Female 46 10.00 No
Director 2021 2024
Independent 28 August 27 August
Qin Yezhi Male 48 10.00 No
Director 2021 2024
Independent 28 August 27 August
Peng Juan Female 58 3.60 No
Director 2021 2024
Chairman of
28 August 27 August
Yu Xiaoyun the Supervisory Male 54 68.29 No
2021 2024
Committee
28 August 27 August
Peng Jinhua Supervisor Female 60 38,043 38,043 0 38.09 No
2021 2024
28 August 27 August
Xie Youguo Supervisor Male 65 75,442 75,442 0 44.38 No
2021 2024
Equity incentive
Vice President,
Zhao 28 August 27 August and purchase
Secretary to the Male 47 407,400 588,000 180,600 168.62 No
Fengguang 2021 2024 from the
Board
secondary market
Total / / / / / 2,119,334 2,949,934 830,600 / 1,734.05 /
Note: Mr. Zhu Baoguo serves as the chairman of Livzon Group, a controlled subsidiary of the Company; and Mr. Yu Xiong
and Mr. Qiu Qingfeng serve as non-executive directors of Livzon Group. The remuneration listed above does not include the
part paid by Livzon Group. Please refer to Livzon Group's 2021 Annual Report for details.
64
Annual Report
2021
Name Main work experience
Male, born in 1962, with a bachelor's degree. He was the director of Henan Xinxiang Waterborne Resin
Research Institute, vice chairman and general manager of Henan Feilong Fine Chemical Products Co.,
Ltd., and had been the general manager and vice chairman of the Company since 1992. He is currently the
Zhu Baoguo
chairman of the Company and the chairman of Livzon Pharmaceutical Group Inc. Mr. Zhu Baoguo is a
shareholder of Shenzhen Baiyeyuan Investment Co., Ltd., a controlling shareholder of the Company, and is
the de facto controller of the Company.
Female, born in 1969, with a college degree. She was the manager of the Advertising Department of CCTV
International Corporation Shenzhen, deputy general manager and director of the Company, and the vice
Liu Guangxia chairman of Livzon Group. She is currently the vice chairman of the Company. Ms. Liu Guangxia is a
shareholder of Shenzhen Baiyeyuan Investment Co., Ltd., a controlling shareholder of the Company, and is
the spouse of Mr. Zhu Baoguo, the de facto controller of the Company.
Male, born in 1961, researcher. He graduated from the Department of Chemistry of Fudan University with
a bachelor of science degree in July 1984. In 1999, he received the special government allowance from the
State Council. In 2004, he studied at KU Leuven in Modern Enterprise Management. From July 2005 to
January 2006, he worked as a senior visiting scholar at California State University, Northridge. Since 2016,
he had been the vice president of the Company. He serves currently as director and president of the Company,
director of Livzon Group, chairman of Shanghai Frontier and Haibin Pharma, independent director of Tianjin
Tianyao Pharmaceuticals Co., Ltd. and Sichuan Biokin Pharmaceutical Co., Ltd., director of Shanghai Huatai
Investment Development Co., Ltd., honorary director of Chinese Pharmaceutical Association, honorary
Yu Xiong chairman of Pharmaceutical Engineering Specialized Committee, honorary director of Shanghai Society of
Chemistry and Chemical Industry, and adjunct professor of East China University of Science and Technology.
He was formerly the vice president of China State Institute of Pharmaceutical Industry, chemistry department
director and vice president of Shanghai Institute of Pharmaceutical Industry, chairman of Shanghai Techwell
Biopharmaceutical Co., Ltd., legal person of National Shanghai Center for New Drug Safety Evaluation and
Research, and general manager and chairman of Sinopharm Yangzhou VAC Biological Engineering Co.,
Ltd. He was also the person in charge of the comprehensive new drug research and development platform
under the national key project of“new drug creation”(Shanghai Institute of Pharmaceutical Industry) and the
technical chief of rolling projects under the 12th Five-Year Plan.
Male, born in 1971, with an executive master of business administration degree from China Europe
International Business School, member of Chinese Institute of Certied Public Accountants (non-practicing).
He worked at Tianjin No.1 Machine Tool Works. Since 1996, he had served successively as the finance
Qiu Qingfeng
personnel, finance supervisor, finance manager, deputy general manager of the Company, and the general
manager, board secretary, and president of the Company. He is currently the director, vice president and chief
nancial ocer of the Company and a non-executive director of Livzon Pharmaceutical Group Inc.
Male, born in 1982, with a bachelor of engineering degree. He was formerly the workshop supervisor
of Chongqing Daxin Pharmaceutical Co., Ltd., the workshop manager, production director and
Lin Nanqi deputy general manager of Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc., and the
general manager of Jiaozuo Joincare Bio Technological Co., Ltd., a wholly-owned subsidiary of the
Company. He is currently the director and vice president of the Company.
Male, born in 1970, with a master of laws degree. He is the founding partner and director of Management
Committee of Beijing Guantao Law Firm. He is currently an independent director of the Company, APT
Cui Liguo Satellite Holdings Limited (security code: 01045), CNNC International Ltd. (security code: 02302), Frontier
Services Group Ltd. (security code: 00500), China Coal Xinji Energy Co., Ltd. (security code: 601918),
Essence Securities Co., Ltd. and Beijing Life Insurance Co., Ltd.
65
Name Main work experience
Female, born in 1976, with a bachelor's degree. She is a member of All China Lawyers Association and
Tencent Guangdong Real Estate Think Tank. She was a specially invited lawyer by chinacourt.org, 9ask.
cn, 66law.cn, Southern Metropolis Daily, and Shenzhen Evening News. Since 2007, she has been the lawyer
and partner of Guangdong Sun Law Firm. She was a member of Real Estate Specialized Committee of
Huo Jing
Shenzhen Lawyers Association, and served successively as permanent legal adviser to many companies, fully
responsible for the review of corporate legal affairs, drafting and amendment of economic contracts, and
issuance of legal opinions, with extensive litigation experience for various types of cases. She is currently an
independent director of the Company.
Male, born in 1974, with a bachelor's degree, a practicing member of Chinese Institute of Certified Public
Accountants and China Certified Tax Agents Association, and a non-practicing member of China Certified
Public Valuers Association. He successively served as auditor of Shenzhen Zhengfeng Lifu Accounting Firm,
Qin Yezhi
partner of Shenzhen Jinzheng Accounting Firm, and partner of Asia Pacific (Group) CPAs (Special General
Partnership). From 2014 to date, he has served as partner of China Shu Lun Pan Certied Public Accountants
LLP. He is currently an independent director of the Company.
Female, born in 1964, doctor and doctoral supervisor. From 1997 to date, she has been an associate
professor at the Department of Accounting of Antai College of Economics and Management in Shanghai
Jiao Tong University, covering research areas of digital finance, green finance, marketing audit, and
corporate governance. She is currently an independent director of the Company.She successively served as
instructor at the Department of Accounting of School of Economics and Management in Shanghai Maritime
University, and director of Executive Education Center of Antai College of Economics and Management
in Shanghai Jiao Tong University. She is currently the president and training supervisor of Shanghai Cost
Peng Juan
Research Society of Shanghai Jiao Tong University, adviser of China Financial Cloud Institute, a member
of Behavioral Science Council, China marketing certification training specialist, a member of Finance
and Accounting Association of Shanghai Jiao Tong University, and a member of Green Finance Center of
Shanghai Environment and Energy Exchange. She served concurrently as independent director of Zhejiang
Dibay Electric Co., Ltd. (security code: 603320), Kexin Development Co., Ltd., Shanxi (security code:
600234), Dynamiker Biotechnology (Tianjin) Co., Ltd. and Jiangsu Pizhou Rural Commercial Bank, and
supervisor of Shanghai Jiaopeng Technology Co., Ltd.
Male, born in 1968, with a bachelor's degree, and an MBA degree from University of Greenwich. He is a
senior engineer and high-level professional talent of Shenzhen. He worked for Henan Institute of Traditional
Chinese Medicine. From December 1992 to date, he has served successively as technical manager of the
Yu Xiaoyun
Company, government affairs manager of Institute of Traditional Chinese Medicine, and vice president of
the Institute. He is currently the adviser of the Institute and chairman of the Supervisory Committee of the
Company, and also a standing member of China Healthcare Association.
Female, born in 1962, with a college degree. She served as technical data processor at State-owned 272nd
Plant of Ministry of Nuclear Industry and accountant of the staff hospital of the Plant, teacher of Hengyang
Radio & TV University, and finance manager of Shenzhen New Era Industrial City Industrial Co., Ltd. She
Peng Jinhua
joined the Company in March 1994, and served successively as nance supervisor, manager of planning and
nance department, manager of nance department, manager of tax department, administration manager, and
general manager assistant. She is currently a supervisor of the Company.
Male, born in 1957, with a bachelor's degree. Since 2003, he served successively as pharmaceutical factory
director of the Company's wholly-owned subsidiary Shenzhen Taitai Pharmaceutical Co., Ltd., executive
Xie Youguo deputy general manager and general manager of the Company's wholly-owned subsidiary Shenzhen Haibin
Pharmaceutical Co., Ltd. He is currently an inspector of Shenzhen Haibin Pharmaceutical Co., Ltd. and a
supervisor of the Company.
66
Annual Report
2021
Name Main work experience
Male, born in 1975, with a bachelor of economics degree and master of science degree, member of Jiusan
Society. He was formerly the secretary to president of Shenyang Pharmaceutical University, council secretary
and office director of Shenzhen Research Center of Traditional Chinese Medicine and Natural Products,
Zhao and assistant to director of Chinese Medicine Laboratory of Research Institute of Tsinghua University in
Fengguang Shenzhen. Since August 2011, he served successively as manager of project research and management
department of the institute of the Company, deputy head and project research director of the institute of the
Group, and director of the controlling subsidiary Shanghai Frontier. He is currently the vice president and
board secretary of the Company.
Explanations of other relevant information
√ Applicable □ N/A
On 10 August 2021, the Company convened the 52nd meeting of the seventh session of the Board of Directors, at which the
Resolution on Addition of Board Seats and Revision of Provisions of the Articles of Association, the Resolution on General
Election of the Board of Directors and Election of Non-Independent Directors of the 8th Session of the Board of the Company
and the Resolution on General Election of the Board of Directors and Election of Independent Directors of the 8th Session of
the Board of the Company were considered and approved; at the same time, the Company convened the 39th meeting of the
seventh session of the Supervisory Committee, at which, the Resolution on General Election of the Supervisory Committee
and Election of Supervisors of the 8th Session of the Supervisory Committee of the Company was considered and approved.
According to the resolution, the number of supervisors of the Company increased from 7 to 9, and the resolution was submitted
to the annual general meeting for deliberation. On 27 August 2021, the Company convened the 2021 third extraordinary
general meeting, at which the Resolution on Addition of Board Seats and Revision of Provisions of the Articles of Association,
the Resolution on General Election of the Board of Directors and Election of Non-Independent Directors of the 8th Session of
the Board of the Company, the Resolution on General Election of the Board of Directors and Election of Independent Directors
of the 8th Session of the Board of the Company and the Resolution on General Election of the Supervisory Committee and
Election of Supervisors of the 8th Session of the Board of the Company were considered and approved. Following the general
meeting of shareholders on the day, the rst meeting of the 8th session of the Board of Directors was held by the Company, at
which, the Resolution on Appointment of Senior Management of the 8th Session of the Board of Directors was considered and
approved. For details, please see the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Completion of the
General Election of the Board of Directors, the Supervisory Committee and Senior Management disclosed by the Company on
28 August 2021 (Lin 2021-114).
(II) Posts held by current directors, supervisors, and senior management and those resigned during the Reporting Period
1. Posts held at corporate shareholders of the Company
√ Applicable □ N/A
Corporate
Name Posts held Start date of the oce term End date of the oce term
shareholder
Zhu Baoguo Baiyeyuan Chairman, General Manager 11 March 2014 /
Liu Guangxia Baiyeyuan Director 21 January 1999 /
Mr. Zhu Baoguo, Chairman of the Company, directly holds 90% of shares in Baiyeyuan, and Ms. Liu Guangxia,
Note Vice Chairman of the Company, directly holds 10% of shares in Baiyeyuan. Both of them are directors of
Baiyeyuan, and Mr. Zhu Baoguo is the spouse of Ms. Liu Guangxia.
67
2. Posts held at other entities
√ Applicable □ N/A
Start date of the End date of the
Name Other entities Posts held
oce term oce term
Shenzhen Federation of Industry and Commerce Honorary Vice President November 2014 /
Federation of Shenzhen Commerce Director April 2015 /
TNC Greater China Council of Advisors Council Member December 2012 /
Zhu Baoguo
The Paradise International Foundation Director April 2015 /
China Entrepreneur Club Council Member April 2017 /
Central China Management Company Limited Independent Director May 2021
Chinese Pharmaceutical Association Honorary Director January 2022 /
Shanghai Society of Chemistry and Chemical Industry Honorary Director October 2016 /
Tianjin Tianyao Pharmaceuticals Co., Ltd. Independent Director December 2016 /
Yu Xiong Sichuan Biokin Pharmaceutical Co., Ltd. Independent Director September 2019 /
East China University of Science and Technology Adjunct Professor July 2019 /
Pharmaceutical Engineering Specialized Committee of
Honorary Chairman November 2019 /
Chinese Pharmaceutical Association
Qiu Qingfeng Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. Director December 2004
Director of Management
Beijing Guantao Law Firm Committee, Founding February 1994 /
Partner
Independent non-executive
APT Satellite Holdings Limited July 2007 /
director
Independent non-executive
CNNC International Ltd. November 2008 /
director
Cui Liguo
Independent non-executive
Frontier Services Group Ltd. June 2020 /
director
China Electronics Information Service Co., Ltd. External Director July 2016 /
Essence Securities Co., Ltd. Independent Director December 2016 /
Beijing Life Insurance Co., Ltd. Independent Director April 2018 /
CEC Xinze (Beijing) Investment Management Co., Ltd. External Director May 2018 /
China Coal Xinji Energy Co., Ltd. Independent Director May 2019 /
Huo Jing Guangdong Sun Law Firm Lawyer, Partner June 2007 /
China Shu Lun Pan Certied Public Accountants LLP
Partner July 2014 /
(Special General Partnership)
Qin Yezhi
Shenzhen Yongpeng CTA Firm (Special General
Partner September 2013 /
Partnership)
Antai College of Economics and Management of Associate Professor of
September 1997 /
Shanghai Jiao Tong University Department of Accounting
Kexin Development Co., Ltd., Shanxi Independent Director July 2016 /
Peng Juan Zhejiang Dibay Electric Co., Ltd. Independent Director August 2016 /
Jiangsu Pizhou Rural Commercial Bank Independent Director September 2016 /
Dynamiker Biotechnology (Tianjin) Co., Ltd. Independent Director July 2020 /
Shanghai Jiaopeng Technology Co., Ltd. Supervisor July 2019 /
Yu Xiaoyun China Healthcare Association Executive Council Member June 2015 /
Explanations Not applicable
68
Annual Report
2021
(III) Remuneration of directors, supervisors and senior management
√ Applicable □ N/A
The emolument of chairman and vice chairman of the Company shall follow the Resolutions of
the 2018 Second Extraordinary General Meeting of the Company, which is RMB3.25 million
per year, with the individual income tax withheld and remitted by the Company in accordance
with the relevant regulations of the Tax Law. The emolument of each independent director of
the Company, following the Resolutions of the 2021 Third Extraordinary General Meeting of
the Company, shall be adjusted to RMB9,000 (before tax) from RMB 8,000 (before tax) per
month, with the individual income tax withheld and remitted by the Company in accordance
with the relevant regulations of the Tax Law.
The emolument of each supervisor of the Company, following the Resolutions of the 2021
Third Extraordinary General Meeting of the Company, shall be adjusted to RMB4,000 (before
tax) per month from RMB 3,000 (before tax) per month, with the individual income tax
withheld and remitted by the Company in accordance with the relevant regulations of the Tax
Law. During the Reporting Period, the remuneration received by supervisors is the duty wage
based on the Wage System of the Company plus the emolument. During the Reporting Period,
the person who acted as the supervisor of the Company received remuneration according to the
salary system in addition to the supervisor allowance.
The remuneration of senior management of the Company shall follow the resolution of the
52nd meeting of the 6th session of the Board of the Company. The annual basic remuneration
of the president, vice president and other senior management members during the term of
office is RMB2.60 million, RMB1.35 million and RMB1.20 million, respectively. In addition
Decision-making procedure
to the basic remuneration, pursuant to the remuneration management system of the Company,
regarding remuneration of
individual assessment shall be performed and performance bonuses shall be paid according to
directors, supervisors and
the assessment result. In case of holding concurrent positions, the highest remuneration among
senior management
all positions shall prevail.
For the Company's directors who serve concurrently as a senior management member of the
Company, the remuneration received by them is equal to the wage paid according to their
position as a senior management member, and no directors’emoluments are paid by the
Company.
On 24 January 2022, the Remuneration Committee under the Board of the Company convened
the 4th meeting of the 8th session of the Board, at which the Resolution on the 2021 Annual
Performance Assessment Result and Remuneration Distribution of Senior Management of
the Company was considered and approved. It was agreed that the Company, pursuant to the
regulations such as the Management Policy on the Remuneration and Performance Assessment
of Senior Management, determined the 2021 annual performance assessment result and annual
remuneration of senior management based on the completion of business objectives of the
Company and work objectives of the senior management in 2021. On 24 January 2022, the
Board of the Company convened the 8th meeting of the 8th session of the Board, at which
the Resolution on Remuneration Distribution of Senior Management for the Year 2021 was
considered and approved.
Except for fulfilling the job responsibilities of being directors, supervisors and senior
management of the Company, other remuneration paid for positions held in subsidiaries
shall be implemented according to the relevant remuneration system of the corresponding
subsidiaries.
69
Pursuant to the regulations such as the Management Policy on the Remuneration and
Performance Assessment of Senior Management, the result of performance assessment of
Basis for determining
senior management is determined based on the completion of business objectives of the
remuneration of directors,
Company and work objectives of the senior management in 2021. Based on the result of
supervisors and senior
performance assessment, the performance bonus and remuneration of senior management in
management
2021 were determined and submitted to be reviewed by the Remuneration Committee under the
Board who shall then submit it to the Board for review and resolution.
Remuneration actually paid
As at the date of the Report, remuneration of directors, supervisors and senior management has
to directors, supervisors
been fully paid.
and senior management
Total remuneration paid to
all directors, supervisors
and senior management as RMB 17.3405million
of the end of the Reporting
Period
(IV) Changes in directors, supervisors and senior management
√ Applicable □ N/A
Name Position Change Reason for change
Yu Xiong Director Appointed Appointed by the Board
Peng Juan Independent Director Appointed Appointed by the Board
(V) Statement on punishments imposed by securities regulatory authorities in the past three years
□ Applicable √ N/A
(VI) Others
□ Applicable √ N/A
V Board meetings held during the Reporting Period
Meeting session Date of meeting Meeting resolution
The Resolution on Equity Transfer and Capital Increase of Zhuhai Livzon
38th meeting of Biotechnology Co., Ltd. was considered and approved. See the Announcement on
the 7th session 11 January 2021 Resolutions Considered and Approved at the 38th Meeting of the 7th Session of the
of the Board Board of Joincare Pharmaceutical Group Industry Co., Ltd. (Lin 2021-006) disclosed
on 12 January 2021 for details.
The Resolution on Capital Increase of Zhuhai Livzon Biotechnology Co., Ltd. and
39th meeting of the Resolution on Equity Transfer of Livzon MABPharm Inc. were considered and
the 7th session 18 January 2021 approved. See the Announcement on Resolutions Considered and Approved at the 39th
of the Board Meeting of the 7th Session of the Board of Joincare Pharmaceutical Group Industry
Co., Ltd. (Lin 2021-008) disclosed on 19 January 2021 for details.
The Resolution on Equity Transfer of Livzon Biologics Hong Kong Limited was
40th meeting of considered and approved. See the Announcement on Resolutions Considered
the 7th session 27 January 2021 and Approved at the 40th Meeting of the 7th Session of the Board of Joincare
of the Board Pharmaceutical Group Industry Co., Ltd. (Lin 2021-011) disclosed on 28 January 2021
for details.
70
Annual Report
2021
Meeting session Date of meeting Meeting resolution
Five (5) resolutions were considered and approved, including the Resolution on
Termination of Matters regarding 2020 Non-public Issuance of Shares of the Company,
41st meeting of
and the Resolution on Repurchase of Shares through Centralized Bidding Transactions.
the 7th session 9 February 2021
See the Announcement on Resolutions Considered and Approved at the 41st Meeting of
of the Board
the 7th Session of the Board of Joincare Pharmaceutical Group Industry Co., Ltd. (Lin
2021-014) disclosed on 10 February 2021 for details.
The Resolution on Repurchase of Shares by Livzon Biologics Limited and the
42nd meeting of Resolution on Adjustment of Organizational Structure of the Company were considered
25 February
the 7th session and approved. See the Announcement on Resolutions Considered and Approved at
2021
of the Board the 42nd Meeting of the 7th Session of the Board of Joincare Pharmaceutical Group
Industry Co., Ltd. (Lin 2021-022) disclosed on 26 February 2021 for details.
The Resolution on Acquisition of 40% Equity Interest in Tianjin Tongrentang Group
43rd meeting of Co., Ltd. by the Controlling Subsidiary Livzon Group was considered and approved.
the 7th session 22 March 2021 See the Announcement on Resolutions Considered and Approved at the 43rd Meeting
of the Board of the 7th Session of the Board of Joincare Pharmaceutical Group Industry Co., Ltd.
(Lin 2021-029) disclosed on 23 March 2021 for details.
Eighteen (18) resolutions were considered and approved, including the 2020
Annual Work Report of the President, 2020 Annual Work Report of the Board
44th meeting of of Directors, 2020 Annual Profit Distribution Plan, and 2020 Annual Report of
the 7th session 29 March 2021 Joincare Pharmaceutical Group Industry Co., Ltd. (Full Text and Abstract). See the
of the Board Announcement on Resolutions Considered and Approved at the 44th Meeting of the 7th
Session of the Board of Joincare Pharmaceutical Group Industry Co., Ltd. (Lin 2021-
033) disclosed on 31 March 2021 for details.
Four (4) resolutions were considered and approved, including the 2021 Q1 Report
of Joincare Pharmaceutical Group Industry Co., Ltd. (Full Text and Body) and the
45th meeting of
Resolution on Change in Registered Capital of the Company. See the Announcement
the 7th session 22 April 2021
on Resolutions Considered and Approved at the 45th Meeting of the 7th Session of the
of the Board
Board of Joincare Pharmaceutical Group Industry Co., Ltd. (Lin 2021-053) disclosed
on 23 April 2021 for details.
The Resolution on Convening the 2020 Annual General Meeting of the Company was
46th meeting of
considered and approved. See the Notice of Joincare Pharmaceutical Group Industry
the 7th session 28 April 2021
Co., Ltd. on Convening the 2020 Annual General Meeting (Lin 2021-057) announced
of the Board
on 29 April 2021 for details.
The Resolution on the Launch of Futures Hedging Activities by Controlling
47th meeting of Subsidiaries of Livzon Group was considered and approved. See the Announcement of
the 7th session 7 May 2021 Joincare Pharmaceutical Group Industry Co., Ltd. on the Launch of Futures Hedging
of the Board Activities by Controlling Subsidiaries of Livzon Group (Lin 2021-060) disclosed on 8
May 2021 for details.
Six (6) resolutions were considered and approved, including the Resolution on Adding
implementation methods of Usage of Proceeds from Fund-Raising and the Resolution
48th meeting of on the First Phase Ownership Scheme under Medium to Long-term Business
the 7th session 10 June 2021 Partner Share Ownership Scheme of the Company (Draft) and its Summary. See the
of the Board Announcement on Resolutions Considered and Approved at the 48th Meeting of the 7th
Session of the Board of Joincare Pharmaceutical Group Industry Co., Ltd. (Lin 2021-
068) disclosed on 11 June 2021 for details.
71
Meeting session Date of meeting Meeting resolution
The Resolution on Adjusting the Exercise Price of the 2018 Share Options Incentive
49th meeting of Scheme of the Company was considered and approved. See the Announcement of
the 7th session 25 June 2021 Joincare Pharmaceutical Group Industry Co., Ltd. on Adjusting the Exercise Price of
of the Board the 2018 Share Options Incentive Scheme of the Company (Lin 2021-080) disclosed on
26 June 2021 for details.
The Resolution on Changes in Asset Management and Custody Agencies of the
First Phase Ownership Scheme under Medium to Long-term Business Partner Share
50th meeting of Ownership Scheme was considered and approved. See the Announcement of Joincare
the 7th session 8 July 2021 Pharmaceutical Group Industry Co., Ltd. on Changes in Asset Management and
of the Board Custody Agencies of the First Phase Ownership Scheme under Medium to Long-term
Business Partner Share Ownership Scheme (Lin 2021-085) disclosed on 9 July 2021 for
details.
The Resolution on Conducting Foreign Exchange Derivatives Trading Business was
51st meeting of
considered and approved. See the Announcement of Joincare Pharmaceutical Group
the 7th session 29 July 2021
Industry Co., Ltd. on Conducting Foreign Exchange Derivatives Trading Business (Lin
of the Board
2021-089) disclosed on 30 July 2021 for details.
Seven (7) resolutions were considered and approved, including the Resolution
on Increase of Board Seats and Amendment to Certain Clauses of the Articles of
52nd meeting of Association, and the Resolution relating to Cancellation of Certain Share Options of the
the 7th session 10 August 2021 Company Granted but Not Yet Exercised under the 2018 Share Option Incentive Plan.
of the Board See the Announcement on Resolutions Considered and Approved at the 52nd Meeting
of the 7th Session of the Board of Joincare Pharmaceutical Group Industry Co., Ltd.
(Lin 2021-095) published on 11 August 2021 for details.
Three (3) resolutions were considered and approved, including the Announcement
of Joincare Pharmaceutical Group Industry Co., Ltd. on Fulfillment of Exercise
53rd meeting of Conditions for the Second Exercise Period of the Reserved Grant under the 2018 Share
the 7th session 25 August 2021 Options Incentive Scheme of the Company was considered and approved. See the
of the Board Announcement on Resolutions Considered and Approved at the 53rd Meeting of the 7th
Session of the Board of Joincare Pharmaceutical Group Industry Co., Ltd. (Lin 2021-
105) disclosed on 26 August 2021 for details.
Three (3) resolutions were considered and approved, including the Resolution
on Election of Chairman and Vice Chairman of the 8th Session of the Board of
1st meeting of the Company, and the Resolution on Appointment of Senior Management of the
the 8th session 27 August 2021 8th Session of the Board of the Company. See the Announcement on Resolutions
of the Board Considered and Approved at the 1st Meeting of the 8th Session of the Board of Joincare
Pharmaceutical Group Industry Co., Ltd. (Lin 2021-113) disclosed on 28 August 2021
for details.
The Resolution in Relation to Providing a Credit Line Guarantee for the Wholly-Owned
Subsidiary Shenzhen Haibin Pharmaceutical Co., Ltd. by the Company was considered
2nd meeting of
and approved. See the Announcement of Joincare Pharmaceutical Group Industry Co.,
the 8th session 13 October 2021
Ltd. on Providing a Credit Line Guarantee for the Wholly-Owned Subsidiary Shenzhen
of the Board
Haibin Pharmaceutical Co., Ltd. (Lin 2021-125) disclosed on 14 October 2021 for
details.
72
Annual Report
2021
Meeting session Date of meeting Meeting resolution
Six (6) resolutions were considered and approved, including the 2021 Q3 Report of
Joincare Pharmaceutical Group Industry Co., Ltd. and the Resolution in Relation to
3rd meeting of Providing a Three-Year Financing Guarantee for the Controlling Subsidiary Livzon
the 8th session 26 October 2021 MAB by Livzon Group and the Counter Guarantee for Livzon Group by the Company.
of the Board See the Announcement on Resolutions Considered and Approved at the 3rd Meeting of
the 8th Session of the Board of Joincare Pharmaceutical Group Industry Co., Ltd. (Lin
2021-127) disclosed on 27 October 2021 for details.
The Resolution relating to Cancellation of Certain Share Options under the 2018 Share
Option Incentive Plan and the Resolution relating to Adjustment to Projected Daily
4th meeting of Connected Transactions of the Controlling Subsidiaries Jiaozuo Joincare and Jinguan
15 November
the 8th session Electric Power were considered and approved. See the Announcement on Resolutions
2021
of the Board Considered and Approved at the 4th Meeting of the 8th Session of the Board of
Joincare Pharmaceutical Group Industry Co., Ltd. (Lin 2021-135) disclosed on 16
November 2021 for details.
The Resolution on Fulfillment of Exercise Conditions for the Third Exercise Period of
the First Grant under the 2018 Share Options Incentive Scheme was considered and
5th meeting of
29 November approved. See the Announcement of Joincare Pharmaceutical Group Industry Co.,
the 8th session
2021 Ltd. on Fulfillment of Exercise Conditions for the Third Exercise Period of the First
of the Board
Grant under the 2018 Share Options Incentive Scheme of the Company (Lin 2021-140)
disclosed on 30 November 2021 for details.
Three (3) resolutions were considered and approved, including the Resolution on
Repurchase of Shares through Centralized Bidding Transactions and the Resolution
6th meeting of
6 December on the General Meeting for Granting Mandate to Deal with Matters Regarding the
the 8th session
2021 Repurchase. See the Announcement on Resolutions Considered and Approved at the
of the Board
6th Meeting of the 8th Session of the Board of Joincare Pharmaceutical Group Industry
Co., Ltd. (Lin 2021-144) disclosed on 7 December 2021 for details.
The Resolution on the Temporary Replenishment of Working Capital with Idle
Proceeds and the Resolution on Appointment of Representative of Securities Aairs of
7th meeting of
30 December the Company were considered and approved. See the Announcement on Resolutions
the 8th session
2021 Considered and Approved at the 7th Meeting of the 8th Session of the Board of
of the Board
Joincare Pharmaceutical Group Industry Co., Ltd. (Lin 2021-158) disclosed on 31
December 2021 for details.
73
VI Performance of duties by directors
(1) Attendance by directors of the Board meetings and general meetings
Attendance of
Attendance of the Board meetings
general meetings
Whether the
Whether Meetings Meetings
director has
Name independent the director Meetings attended Meetings Absence
been absent
director should have attended through attended （times） Meetings attended
from two
attended this in person electronic by proxy
consecutive
year means
meetings
Zhu Baoguo No 23 23 22 0 0 No 5
Liu Guangxia No 23 23 22 0 0 No 1
Yu Xiong No 7 7 7 0 0 No 2
Qiu Qingfeng No 23 23 22 0 0 No 6
Lin Nanqi No 23 23 22 0 0 No 5
Cui Liguo Yes 23 23 22 0 0 No 6
Huo Jing Yes 23 23 22 0 0 No 6
Qin Yezhi Yes 23 23 22 0 0 No 6
Peng Juan Yes 7 7 7 0 0 No 2
Statement on absence from two consecutive meetings
□ Applicable √ N/A
Board meetings held during the year 23
In which: Face-to-face meetings 1
Meetings held through electronic means 22
Meetings held both in the form of face-to-face meeting and through electronic means 0
(2) Objections raised by directors to affairs of the Company
□ Applicable √ N/A
(3) Others
□ Applicable √ N/A
VII Board committees
√ Applicable □ N/A
(1) Members of the Board committees
Committee name Member
Audit Committee Qin Yezhi, Huo Jing, Peng Juan
Nomination Committee Cui Liguo, Qiu Qingfeng, Huo Jing
Remuneration Committee Huo Jing, Qin Yezhi, Peng Juan
Strategy Committee Zhu Baoguo, Yu Xiong, Qin Yezhi, Cui Liguo, Peng Juan
Corporate Social Responsibility (CSR) Committee Zhu Baoguo, Lin Nanqi, Cui Liguo
74
Annual Report
2021
(2) 6 meetings were held by the Audit Committee during the Reporting Period
Important opinion
Date of meeting Content
and suggestion
Review of the 2020 Annual Financial Statements of Joincare Pharmaceutical Group
25 January 2021 Approved
Industry Co., Ltd. (Unaudited)
Review of the Draft Audit Opinions for the 2020 Annual Financial Statements of
Approved
Joincare Pharmaceutical Group Industry Co., Ltd.
22 March 2021
Review of the Draft Audit Opinions for the 2020 Annual Internal Control of
Approved
Joincare Pharmaceutical Group Industry Co., Ltd.
Review of the Audit Report for the 2020 Annual Financial Statements of the
Approved
Company (Final)
Review of the Audit Report for the 2020 Annual Internal Control of the Company
Approved
(Final)
Review of the Summary Report on Audit Work for the Year 2020 from Grant
Approved
Thornton (Special General Partnership)
29 March 2021 Review of the Self-Assessment Report of Joincare Pharmaceutical Group Industry
Approved
Co., Ltd. on Risk Management and Internal Control for the Year 2020
Review of the Resolution on Appointment of Grant Thornton (Special General
Approved
Partnership) as the Auditor of the Company for the Year 2021
Review of the Resolution on Daily Connected Transactions of the Controlling
Approved
Subsidiaries Jiaozuo Joincare and Jinguan Electric Power
Review of the Resolution on Change of Accounting Policies Approved
Review of the Resolution on Election of Chairman of the Audit Committee under
27 August 2021 Approved
the 8th Session of the Board of the Company
Review of Resolution relating to Adjustment to Projected Daily Connected
15 November 2021 Transactions of the Controlling Subsidiaries Jiaozuo Joincare and Jinguan Electric Approved
Power
Review of the 2021 Financial Statements and Internal Control Audit Proposal of
3 December 2021 Approved
Joincare Pharmaceutical Group Industry Co., Ltd.
(3) 6 meetings were held by the Remuneration Committee during the Reporting Period
Important opinion
Date of meeting Content
and suggestion
Review of the Resolution on 2020 Annual Remuneration of Senior Management of
29 March 2021 Approved
the Company
Review of the Resolution relating to Cancellation of Certain Share Options of the
10 August 2021 Company Granted but Not Yet Exercised under the 2018 Share Option Incentive Approved
Plan
Review of the Resolution on Fulllment of Exercise Conditions for the Second
25 August 2021 Exercise Period of the Reserved Grant under the 2018 Share Options Incentive Approved
Scheme
Review of the Resolution on Election of Chairman of the Remuneration Committee
27 August 2021 Approved
under the 8th Session of the Board of the Company
Review of the Resolution relating to Cancellation of Certain Share Options under
15 November 2021 Approved
the 2018 Share Option Incentive Plan
Review of the Resolution on Fulllment of Exercise Conditions for the Third
29 November 2021 Approved
Exercise Period of the First Grant under the 2018 Share Options Incentive Scheme
75
(4) 2 meetings were held by the Nomination Committee during the Reporting Period
Important opinion
Date of meeting Content
and suggestion
Review of the Resolution on General Election of the Board of Directors and Election
7 August 2021 Approved
of Non-Independent Directors of the 8th Session of the Board of the Company
Review of the Resolution on Election of Chairman of the Nomination Committee
27 August 2021 Approved
under the 8th Session of the Board of the Company
(5) 2 meetings were held by the Strategy Committee during the Reporting Period
Important opinion
Date of meeting Content
and suggestion
25 February 2021 Review of the Resolution on Adjustment of Organizational Structure of the Company Approved
Review of the Resolution in Relation to Amendment of the Business Scope of the
26 October 2021 Approved
Company
(6) 3 meetings were held by the Corporate Responsibility Committee during the Reporting Period
Important opinion
Date of meeting Content
and suggestion
Review of the 2020 Corporate Social Responsibility Report of Joincare
Approved
Pharmaceutical Group Industry Co., Ltd.
29 March 2021
Review of the Energy Saving and Emission Reduction Targets of Joincare
Approved
Pharmaceutical Group Industry Co., Ltd. (2021-2025)
Review of the Resolution on Election of Chairman of the Corporate Responsibility
27 August 2021 Approved
Committee under the 8th Session of the Board of the Company
Review of the Resolution on Establishment of 2021 Corporate Responsibility Work
15 November 2021 Approved
Group of Joincare Pharmaceutical Group Industry Co., Ltd.
(7) Affairs subject to objection
□ Applicable √ N/A
VIII Statement on risks of the Company identified by the Board of Supervisors
□ Applicable √ N/A
The Supervisory Committee had no objection to the matters under their supervision within the reporting period.
76
Annual Report
2021
IX Employees of the parent company and major subsidiaries
(I) Employees
Number of active employees of the parent company 411
Number of active employees of major subsidiaries 12,823
Total number of active employees 13,234
Number of retired employees for whom the parent company and
665
major subsidiaries need to pay certain expenses
Profession
Category Number
Production sta 7,612
Sales sta 2,634
Technical sta 1,980
Financial sta 262
Administrative sta 746
Total 13,234
Education background
Education background Number
PhD 62
Master 611
Undergraduate 3,368
Junior college diploma 3,569
Others 5,624
Total 13,234
(II) Compensation policy
√ Applicable □ N/A
The Company implements scientic, reasonable and incentive-based compensation strategies. Based on scientic analysis and
assessment of the organizational structure and job responsibilities, the Company determines the relative value of each position,
and by combining the external market compensation data and the ability of the Company to pay, the Company provides a
reasonable employee compensation package. Employee compensation consists of two parts: xed income and variable income.
Variable income is linked to business results of the Company and individual performance of employees. In this way, employees
are encouraged to increase their enthusiasm and motivation at work. Competitive compensation policies are adopted for talents
in key positions and those urgently needed in the market, so as to prevent loss of key talents and provide a talent pool for the
development of the Company.
(III) Training programs
√ Applicable □ N/A
In 2021, the Company continued to attach great importance to internal talent training. With multi-level, diversified training
systems and a combination of online and offline learning, the Company organized and carried out new employee orientation
training, employee on-the-job training, career-based study for a master's or doctor's degree, and training team building.
Meanwhile, the Company encouraged employees to actively participate in external learning activities related to work,
facilitated the improvement of employee competence and team cohesion, and built talent teams.
(IV) Outsourced workers
□ Applicable √ N/A
77
X Profit distribution proposal or proposal for capitalization of capital reserve
(I) Formulation, implementation or adjustment of cash dividend distribution policy
√ Applicable □ N/A
1. Formation of Cash dividend policy
To establish a scientific, consistent and stable decision-making and supervision mechanism for dividends, and fully protect
and safeguard the rights and interests of the majority of shareholders, the Company formulated this cash dividend policy
in accordance with the“Regulatory Guidelines for Listed Companies No. 3 - Distribution of Cash Dividends of Listed
Companies”released by China Securities Regulatory Commission (CSRC announcement [2022] No. 3) and the“Regulatory
Guideline for Self-regulation of Listed Companies No. 1 - Standardized Operation”released by Shanghai Stock Exchange and
other relevant documents and requirements and in light of the reality of the Company, and claried the formulation, decision-
making and adjustment procedures for the policy in the Articles of Association: If the Company is in a sound operating
condition and its cash flow can meet the needs of normal operation and long-term development, the Company shall actively
implement the profit distribution policy to provide reasonable returns to investors while taking into account the sustainable
development of the Company, in order to maintain the continuity and stability of the policy. The profits may be distributed
in cash, stocks, or combination thereof or in any other way permitted by laws and regulations. Cash dividends are superior to
stock dividends in the distribution of prots, and shall be adopted whenever the conditions are met. Unless otherwise provided
for in the Articles of Association, the profits distributed in cash shall not be less than 10% of the distributable profits realized
in the current year. The specific amount and proportion of cash dividends for each year shall be determined by the Board of
Directors of the Company in accordance with relevant provisions and in light of the Company's current operating situation, and
shall be reported to the annual general meeting for deliberation and decision.
2. Implementation of cash dividend policy in 2021
On 21 May 2021, the Company convened the 2020 Annual General Meeting, at which the Company's Prot Distribution Plan
for 2020 was considered and approved: a cash dividend of RMB 1.50 (tax inclusive) will be distributed to all shareholders
for every 10 shares, based on the total share capital of the Company on the equity registration date as determined for
implementation of the Company's prot distribution plan for 2020, minus the total number of shares in the Company's special
securities account for repurchase, with the remaining undistributed prots to be carried forward to the following year. As of the
end of this Reporting Period, the above cash dividends have been fully distributed.
3. Prot distribution scheme for 2021
Based on the audit conducted by Grant Thornton (Special General Partnership), the Parent Company generated net profit of
RMB 1,248,797,138.93, 10% of which was contributed to the statutory surplus reserve, namely RMB 124,879,713.89, the
remainder of which, together with undistributed prots from last year RMB 564,932,141.19, subtracting cash dividends from
last year RMB 288,675,388.05, is the current year Profits available for distribution to shareholders RMB 1,400,174,178.18.
The Company plans to distribute cash dividends for the fiscal year 2021, based on the total number of shares for dividend
distribution, which is dened by the total shares of Company, minus the shares in the Share Repurchase Account, on the equity
registration date designated by the annual prot distribution plan. The Company plans to distribute cash dividend of RMB 1.50
(tax inclusive) for every 10 shares of to all shareholders of the Company, and the remaining undistributed prots to be carried
forward to the following year.
4. Modication and adjustment of the cash dividend policy during the Reporting Period
The Company's cash dividend policy was not modied or adjusted during the Reporting Period.
78
Annual Report
2021
(II) Special statement on cash dividend distribution policy
√ Applicable □ N/A
Whether it meets the requirements of the articles of association or the resolution of the general meeting √ Yes □ No
Are there dened and clear distribution qualications and proportions √ Yes □ No
Are there well-designed decision-making procedures and system √ Yes □ No
Have independent directors performed their duties and role properly √ Yes □ No
Whether the minority shareholders have the chance to fully express their opinions and demands
√ Yes □ No
Whether their legitimate rights and interests have been well protected
(III) If the Company made a profit in the Reporting Period and there's profit distributable by the parent company to
shareholders, but the Company does not propose to distribute profits in cash, the Company shall explain the reason
in detail, usage of the undistributed profit and usage plan
□ Applicable √ N/A
XI Share incentive plan, employee share ownership scheme and other employee incentives
of the Company and their effect
(1) Matters related to equity incentive scheme have been disclosed have been disclosed in the Provisional Announcements without
progress or change in subsequent implementation
√ Applicable □ N/A
Overview Query index
The number of options exercised was 3,848,413 by way of
See the Announcement on 2021 Q1 Independent Exercise
independent exercise from 1 January 2021 to 31 March 2021. As
Results of the 2018 Share Options Incentive Scheme
at 31 March 2021, the number of options cumulatively exercised
of Joincare Pharmaceutical Group Industry Co., Ltd.
and completing share transfer registration under the first grant
& Changes in Shares (Lin 2021-044) disclosed by the
and reserved grant of the 2018 Share Options Incentive Scheme
Company on 2 April 2021 for details.
of the Company was 18,595,839.
See the Announcement on Resolutions of Joincare
Pharmaceutical Group Industry Co., Ltd. at the Congress
of Workers and Staff (Lin 2021-069), Announcement on
Resolutions of Joincare Pharmaceutical Group Industry
The Resolution on the First Phase Ownership Scheme under
Co., Ltd. at the 48th Meeting of the 7th Session of the
Medium to Long-term Business Partner Share Ownership
Board (Lin 2021-068), Announcement on Resolutions
Scheme of the Company (Draft) and its Summary and the
of Joincare Pharmaceutical Group Industry Co., Ltd. at
Resolution on the General Meeting for Granting Mandate
the 36th meeting of the 7th Session of the Supervisory
to the Board to Deal with Matters Related to the First Phase
Committee (Lin 2021-067), and the First Phase Ownership
Ownership Scheme under Medium to Long-term Business
Scheme under Medium to Long-term Business Partner
Partner Share Ownership Scheme of the Company were
Share Ownership Scheme of Joincare Pharmaceutical
considered and approved at the Congress of Workers and Staff,
Group Industry Co., Ltd. (Draft) and its Summary
the 48th Meeting of the 7th Session of the Board, and the 36th
disclosed by the Company on 11 June 2021 for details.
meeting of the 7th Session of the Supervisory Committee on 10
See the Announcement on Resolutions of Joincare
June 2021.
Pharmaceutical Group Industry Co., Ltd. at the Second
The said resolutions were considered and approved at the 2021
Extraordinary General Meeting (Lin 2021-081) and the
Second Extraordinary General Meeting on 29 June 2021.
First Phase Ownership Scheme under Medium to Long-
term Business Partner Share Ownership Scheme of the
Company (Draft) and its Summary disclosed on 30 June
2021 for details.
79
Overview Query index
The Resolution on Adjusting the Exercise Price of the 2018
Share Options Incentive Scheme of the Company was
considered and approved at the 49th Meeting of the 7th Session See the Announcement on Adjusting the Exercise Price of
of the Board and at the 37th Meeting of the 7th Session of the 2018 Share Options Incentive Scheme of the Company
the Supervisory Committee on 25 June 2021. Due to profit by Joincare Pharmaceutical Group Industry Co., Ltd. (Lin
distribution, the exercise price under the rst grant was adjusted 2021-080) disclosed on 26 June 2021 for details.
to RMB7.74/share, while that under the reserved grant was
adjusted to RMB10.16/share.
The number of options exercised was 1,964,040 from 1 April
See the Announcement on 2021 Q2 Independent Exercise
2021 to 30 June 2021. As at 30 June 2021, the number of
Results of the 2018 Share Options Incentive Scheme
options cumulatively exercised and completing share transfer
of Joincare Pharmaceutical Group Industry Co., Ltd.
registration under the first grant and reserved grant of the
& Changes in Shares (Lin 2021-084) disclosed by the
2018 Share Options Incentive Scheme of the Company was
Company on 2 July 2021 for details.
20,559,879.
The Resolution relating to Cancellation of Certain Share Options
of the Company Granted but Not Yet Exercised under the 2018
Share Option Incentive Plan was considered and approved at
the 52nd Meeting of the 7th Session of the Board and the 38th
meeting of the 7th Session of the Supervisory Committee of
the Company on 10 August 2021. The share options under the See the Announcement of Joincare Pharmaceutical Group
first grant and reserved grant that have been granted but not Industry Co., Ltd. on Cancellation of Certain Share
yet exercised by some of the original incentive participants Options of the Company Granted but Not Yet Exercised
who had resigned and were therefore no longer qualified for under the 2018 Share Option Incentive Plan (Lin 2021-
the incentive were canceled. The number of share options 098) disclosed by the Company on 11 August 2021 for
incentive participants under the first grant was adjusted from details. Upon review and confirmation by the Shanghai
233 to 211, the number of share options under the first grant Branch of China Securities Depository and Clearing
that have not been exercised was adjusted from 9,505,859 to Corporation Limited, the said cancellation of share
8,827,859, and 678,000 share options under the first grant were options was completed on 17 August 2021.
canceled. The number of share options incentive participants
under the reserved grant was adjusted from 150 to 142, the
number of share options under the reserved grant that have not
been exercised was adjusted from 3,370,472 to 3,210,472, and
160,000 share options under the reserved grant were canceled.
The Resolution on Fulfillment of Exercise Conditions for the
Second Exercise Period of the Reserved Grant under the 2018
Share Options Incentive Scheme was considered and approved
at the 53rd Meeting of the 7th Session of the Board and the 40th
See the Announcement of Joincare Pharmaceutical Group
meeting of the 7th Session of the Supervisory Committee of
Industry Co., Ltd. on Fulfillment of Exercise Conditions
the Company on 25 August 2021, with independent opinions
for the Second Exercise Period of the Reserved Grant
issued by independent directors of the Company, and review
under the 2018 Share Options Incentive Scheme of the
opinions issued by the Supervisory Committee. The number
Company (Lin 2021-107) disclosed by the Company on
of exercisable options during the second exercise period of the
26 August 2021 for details.
reserved grant under the 2018 Share Options Incentive Scheme
of the Company was 2,935,000, and the exercise period was
from 23 September 2021 to 22 September 2022 by way of
independent exercise.
80
Annual Report
2021
Overview Query index
The number of options exercised was 1,899,922 from 1 July
See the Announcement of Joincare Pharmaceutical Group
2021 to 30 September 2021. As at 30 September 2021, the
Industry Co., Ltd. on 2021 Q3 Independent Exercise
number of options cumulatively exercised and completing share
Results of the 2018 Share Options Incentive Scheme
transfer registration under the first grant and reserved grant of
& Changes in Shares (Lin 2021-124) disclosed by the
the 2018 Share Options Incentive Scheme of the Company was
Company on 9 October 2021 for details.
22,459,801.
The Resolution relating to Cancellation of Certain Share Options
under the 2018 Share Option Incentive Plan was considered and
See the Announcement of Joincare Pharmaceutical Group
approved at the 4th Meeting of the 8th Session of the Board and
Industry Co., Ltd. on Cancellation of Certain Share
the 3rd meeting of the 8th Session of the Supervisory Committee
Options under the 2018 Share Option Incentive Plan (Lin
of the Company on 15 November 2021. The share options that
2021-136) disclosed by the Company on 16 November
have been granted but not yet unlocked by some of the original
2021 for details. Upon review and confirmation by the
incentive participants who had resigned and were therefore no
Shanghai Branch of China Securities Depository and
longer qualied for the incentive should be canceled. The number
Clearing Corporation Limited, the said cancellation of
of share options incentive participants under the first grant
60,000 share options was completed on 17 November
was adjusted from 211 to 208, and 60,000 share options were
2021.
canceled. After completion of the cancellation, the number of
share options under the rst grant was adjusted to 15,264,000.
The Resolution on Fulfillment of Exercise Conditions for the
Third Exercise Period of the First Grant under the 2018 Share
Options Incentive Scheme was considered and approved at the
5th Meeting of the 8th Session of the Board and the 4th meeting See the Announcement of Joincare Pharmaceutical Group
of the 8th Session of the Supervisory Committee of the Company Industry Co., Ltd. on Fulfillment of Exercise Conditions
on 29 November 2021, with independent opinions issued by for the Third Exercise Period of the First Grant under the
independent directors of the Company, and review opinions 2018 Share Options Incentive Scheme of the Company
issued by the Supervisory Committee. The number of exercisable (Lin 2021-140) disclosed by the Company on 30
options during the third exercise period of the first grant under November 2021 for details.
the 2018 Share Options Incentive Scheme of the Company was
7,263,000, and the exercise period was from 21 December 2021
to 20 December 2022 by way of independent exercise.
The number of options exercised was 2,370,065 from 1 October
See the Announcement of Joincare Pharmaceutical Group
2021 to 31 December 2021. As at 31 December 2021, the
Industry Co., Ltd. on 2021 Q4 Independent Exercise
number of options cumulatively exercised and completing share
Results of the 2018 Share Options Incentive Scheme
transfer registration under the first grant and reserved grant of
& Changes in Shares (Lin 2022-001) disclosed by the
the 2018 Share Options Incentive Scheme of the Company was
Company on 6 January 2022 for details.
24,829,866.
(2) Incentives not disclosed in the Provisional Announcements or with subsequent progress
Equity incentives
□ Applicable √ N/A
Others
□ Applicable √ N/A
Employee share ownership scheme
□ Applicable √ N/A
Other incentive Program
□ Applicable √ N/A
81
(3) Equity incentives granted to directors and senior management during the Reporting Period
√ Applicable □ N/A
Unit: 10,000 shares
Number of Number of Number of Number Market
Number of
newly granted exercisable exercised Exercise of share price at the
share options
share options options options price options end of the
Name Title held at the
during the during the during the (RMB held at Reporting
beginning of
Reporting Reporting Reporting Yuan) the end of Period
the year
Period Period Period the period (RMB Yuan)
Yu Xiong Director, 13 7.89
37 0 37 14 12.84
President 10 7.74
Director, Vice
Lin Nanqi 48 0 48 24 7.74 24 12.84
President
Director, Vice
Qiu President,
36 0 36 18 7.89 18 12.84
Qingfeng Chief Financial
Ocer
Vice President,
Zhao
Board 36 0 36 18 7.89 18 12.84
Fengguang
Secretary
Total / 157 0 157 83 / 74 /
(4) Performance assessment mechanism for senior management during the Reporting Period, and the development and
implementation of incentive scheme
√ Applicable □ N/A
According to the relevant provisions of the Company such as the“Remuneration and Performance Appraisal Management
System for Senior Management”, plans on remuneration of senior management are set based on the operating revenue and
profit of the Company in 2021 and the corresponding personal performance of each senior management. The plans shall be
reviewed and approved by the Remuneration C ommittee of the Board and then be submitted to the Board for review and
decision. During the Reporting Period, Senior management of the Company perform their duties in strict accordance with the
“Company Law”,“Articles of Association”and other relevant regulations, actively implement the relevant resolutions of
the Company's General meetings and the Board meetings, actively adjust business plans under the guidance of the board of
directors, continuously strengthen internal control management, and strive to Improve the Company's core competitiveness.
XII Development and implementation of internal controls during the Reporting Period
√ Applicable □ N/A
During the Reporting Period, the Company carried out standard operation and risk control in strict accordance with the laws
and regulations in China and the internal control system of the Company. The Company established a rigorous internal control
management system, continued to optimize and improve the internal control system by combining the industry characteristics
and the actual operation of the Company, enhanced its decision-making efficiency, and ensured the legal compliance of
business management and the security of corporate assets, facilitating the steady implementation of strategies of the Company.
Thanks to an effective internal control mechanism, the Company can prevent, timely identify and correct any deviation in
the operation and management, and can reasonably ensure the security and integrity of corporate assets, and the authenticity,
accuracy and completeness of accounting information, safeguarding the interests of the Company and all shareholders.
82
Annual Report
2021
Based on the identification of material deficiencies of internal control of the Company, there was no material deficiency or
significant deficiency of internal control over financial reporting and non-financial reporting in the Company for the year
2021. Through operation, analysis and evaluation of the internal control system, the Company effectively prevented business
management risks, and promoted the achievement of internal control objectives. Looking ahead, the Company will continue
to improve the internal control system, standardize its implementation, strengthen the supervision and inspection over internal
control, and promote the healthy and sustainable development of the Company.
See the Risk Management and Internal Control Self-Assessment Report 2021 of Joincare Pharmaceutical Industry Group Co.,
Ltd. disclosed by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on 31 March 2022 for details.
Statement on material loopholes in internal controls during the Reporting Period
□ Applicable √ N/A
XIII Management and control of subsidiaries during the Reporting Period
√ Applicable □ N/A
The Company formulated relevant subsidiary management rules, such as the Detailed Rules for Standardized Operation and
Management of Subsidiaries, to strengthen internal control of wholly-owned and majority-owned subsidiaries by specifying
their governance structure, management of three meetings, outbound investment, special transactions, legal person's
authorization and relevant issues, to improve the Company's overall operating eciency and risk control capability. During the
Reporting Period, the Company exercised management and control over its subsidiaries in accordance with the Company Law,
the Articles of Association and other relevant laws and regulations. First, it provided guidance for the subsidiaries as to how
to improve the corporate governance structure, and how to revise and improve the Articles of Association and other relevant
systems in accordance with relevant laws and regulations; second, through internal training such as training on connected
transactions, the Company urged subsidiaries to report to the Company on connected transactions, external guarantee and
other major matters in advance; third, the Company updated the internal control manual and related materials, to improve the
internal control system, and strengthen implementation and enhance the eectiveness of internal control.
XIV Related information on internal control audit report
√ Applicable □ N/A
In accordance with relevant standards, guidelines and regulatory documents, and subject to approval by the audit committee
of the Board of Directors, the Board of Directors and the general meeting, the Company engaged Grant Thornton China
(special general partnership) to conduct internal control audit in 2021. In accordance with the Basic Standards for Enterprise
Internal Control and the Application Guidelines for Enterprise Internal Control, Grant Thornton China conducted audit of the
effectiveness of internal control over financial reporting of the Company and its subsidiaries as of 31 December 2021, and
issued a standard internal control audit report with unqualied opinion. See the Internal Control Audit Report 2021 of Joincare
Pharmaceutical Industry Group Co., Ltd. disclosed by the Company on the website of Shanghai Stock Exchange (www.sse.
com.cn) on 31 March 2022 for details.
Disclosure of internal control auditor's report: Yes
Types of internal control auditor's opinion: Standard unqualied opinion
83
XV Rectification of self-examined deviations in the Special Action for Governance of Listed
Companies
1. Optimization of the meeting convening methods of the Board of Directors and Special Committees of the Board
Situation description: At present, the Board of Directors and the special committees mostly hold meetings through electric
means which is not conducive to full expression of opinions by directors.
Rectication measures: In order to ensure that directors can fully express their opinions, the Company will increase the number
of on-site meetings of the Board of Directors and its specialized committees. In particular, on-site meetings or on-site + electric
means will be held for matters related to major asset purchase or sale or major connected transactions in the future.
2. Improvement of the audit institution selection and engagement review process
Situation description: The special self-inspection found that the Company engaged the audit institution based on public
information on its professional competence and integrity, without consulting the record of integrity of the audit institution in
the securities and futures market through China Securities Regulatory Commission in advance.
Rectification measures: From 2021, in addition to public information, the Company would, before selecting and engaging an
audit institution, consult the records of integrity of the audit institution and relevant certied public accountants to be engaged
in the securities and futures market as maintained by Shenzhen Securities Regulatory Bureau, to fully learn about its practicing
experience, professional competence and integrity.
XVI Others
□ Applicable √ N/A
84
Chapter 5
Environmental and Social Responsibility
I Environmental information
(I) Environmental issues of companies and their major subsidiaries belonging to key pollutant discharging units as
announced by the environmental protection department
√ Applicable □ N/A
1. Pollution discharge information
√ Applicable □ N/A
i. Jiaozuo Joincare
Pollutant Total
Total
Name of Name of major Number of Distribution Discharge discharge amount of
Mode of amount of Excessive
company or pollutants and discharge of discharge concentration standards discharge
discharge discharge discharge
subsidiary specic pollutants outlets outlets (mg/L) implemented approved
(t/a)
(mg/L) (t/a)
Chemical oxygen Master outlet
115.69 220 700.123 942.1 Nil
Jiaozuo demand in sewage
Continuous 1
Joincare Ammonia treatment
16.2 35 97.685 105.3 Nil
nitrogen workshop
ii. Taitai Pharmaceutical
Pollutant Total
Total
Name of Name of major Number of Distribution Discharge discharge amount of
Mode of amount of Excessive
company or pollutants and discharge of discharge concentration standards discharge
discharge discharge discharge
subsidiary specic pollutants outlets outlets (mg/L) implemented approved
(t/a)
(mg/L) (t/a)
Chemical oxygen
28.38 345 0.24 19.34 Nil
demand The
Biochemical southwest
Intermittent 1 48.4 150 0.35 Nil Nil
oxygen demand side of the
Taitai Suspended solids factory 5.3 250 0.042 Nil Nil
Pharmaceutical pH value 8.06 6～9 / Nil Nil
Sulfur dioxide Chimney on 0.9 50 0.009 Nil Nil
Nitrogen oxide the roof of 11.36 150 0.12 Nil Nil
Intermittent 1
the boiler
Particulate matter 15.46 20 0.22 Nil Nil
room
85
iii. Haibin Pharma
Pollutant Total
Total
Name of Name of major Number of Distribution Discharge discharge amount of
Mode of amount of Excessive
company or pollutants and discharge of discharge concentration standards discharge
discharge discharge discharge
subsidiary specic pollutants outlets outlets (mg/L) implemented approved
(t/a)
(mg/L) (t/a)
Chemical oxygen
Master 53.85 500 3.07 41.65 Nil
demand
1 outlet for
Ammonia
sewage 3.14 45 0.18 3.7485 Nil
nitrogen
Particulate matter Discharge 2.4 20 0.05 Nil Nil
Sulfur dioxide outlet of 0 50 0 Nil Nil
1
boiler
Nitrogen oxide 21 150 0.43 Nil Nil
exhaust gas
Haibin Pharma Continuous
Discharge
outlet of
process
Volatile organic organic
2 3.3 100 0.3 9.156 Nil
compounds exhaust gas
and tank
farm exhaust
gas
iv. Xinxiang Haibin
Pollutant Total
Total
Name of Name of major Number of Distribution Discharge discharge amount of
Mode of amount of Excessive
company or pollutants and discharge of discharge concentration standards discharge
discharge discharge discharge
subsidiary specic pollutants outlets outlets (mg/L) implemented approved
(t/a)
(mg/L) (t/a)
Chemical oxygen Master outlet
62.30 220 11.286 14.81 Nil
Xinxiang demand in sewage
Continuous 1
Haibin Ammonia treatment
0.79 35 0.838 1.66 Nil
nitrogen workshop
v. Fuzhou Fuxing
Pollutant Total
Total
Name of Name of major Number of Distribution Discharge discharge amount of
Mode of amount of Excessive
company or pollutants and discharge of discharge concentration standards discharge
discharge discharge discharge
subsidiary specic pollutants outlets outlets (mg/L) implemented approved
(t/a)
(mg/L) (t/a)
Chemical oxygen The
19.43 100 19.41 124.5 Nil
demand northwest
Fuzhou Fuxing Intermittent 1
Ammonia side of the
0. 273 15 0.27 18.7 Nil
nitrogen factory
86
Annual Report
2021
Note: The discharge concentration represents the actual discharge concentration, and the standards implemented represent
the standards for discharge to the environment by Jiangyin sewage plant ( 江 阴 污 水 处 理 厂 ) (i.e. COD ≤ 100mg/L, ammonia
nitrogen ≤ 15mg/L), and the agreed standard for discharge of COD and ammonia nitrogen from the company to Jiangyin
sewage plant shall be ≤ 500mg/L and ≤ 60mg/L, respectively. The data was obtained from Fuqing Environmental Protection
Bureau.
vi. Xinbeijiang Pharmaceutical
Pollutant Total
Total
Name of Name of major Number of Distribution Discharge discharge amount of
Mode of amount of Excessive
company or pollutants and discharge of discharge concentration standards discharge
discharge discharge discharge
subsidiary specic pollutants outlets outlets (mg/L) implemented approved
(t/a)
(mg/L) (t/a)
Chemical oxygen
Sewage 86.4 240 70.62 Nil Nil
Xinbeijiang demand
Intermittent 1 treatment
Pharmaceutical Ammonia
workshop 6.8 70 5.61 Nil Nil
nitrogen
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 standard stipulated in the pollutant
discharge license of the company, i.e. COD ≤ 240mg/L, ammonia nitrogen ≤ 70mg/L. The data was obtained from Qingyuan
Environmental Protection Bureau.
vii. Livzon Hecheng
Pollutant
Total
Discharge discharge Total
Name of Name of major Number of Distribution amount of
Mode of concentration standards amount of Excessive
company or pollutants and discharge of discharge discharge
discharge (mg/L)/ implemented discharge discharge
subsidiary specic pollutants outlets outlets approved
（mg/m3） (mg/L)/ (t)
(t/a)
（mg/m3）
Chemical oxygen
Wastewater 88.505 192 18.258 Nil Nil
demand
Intermittent 1 treatment
Ammonia nitrogen
station 8.757 40 1.478 Nil Nil
(NH3-N)
Sulfur dioxide 3 Boiler room 5.67 50 0.1427 Nil Nil
Nitrogen oxide 3 Boiler room 57.0625 150 1.5497 Nil Nil
Livzon Particulate matter 3 Boiler room 1.36 20 0.0361 Nil Nil
Hecheng Hydrogen chloride 7 Workshop 1.41 100 0.4635 Nil Nil
Organized
Non-methane
continuous 7 Workshop 15.93 60 7.5421 Nil
hydrocarbons
emission 77.76
Non-methane
1 RTO 8.56 60 1.5622 Nil
hydrocarbons
Nitrogen oxide 1 RTO 50 200 8.3813 Nil Nil
Sulfur dioxide 1 RTO 3 200 0.8233 Nil Nil
87
Notes:
1. The discharge concentration of pollutants in waste water represents the average concentration by online monitoring from
the master discharge outlet by the company into South District Sewage Treatment Plant, while the standard adopted for
discharge represents the standard stipulated in the pollutant discharge license of the company, i.e. COD ≤ 192mg/L, ammonia
nitrogen ≤ 40mg/L.
2. The discharge concentration of pollutants in the discharge outlet of waste gas represents the average concentration detected
by a qualified third party engaged, of which the boiler exhaust adopted the Emission Standard for Boiler Atmospheric
Pollutants in Guangdong Province (DB 44/765-2019) (《 广 东 省 锅 炉 大 气 污 染 物 排 放 标 准 》(DB 44/765-2019)), the
workshop and wastewater treatment station emission complied with the Air Pollutant Discharge Standards for Pharmaceutical
Industry (《制药工业大气污染物排放标准》) (GB 37823-2019).
viii. Gutian Fuxing
Pollutant Total
Total
Name of Name of major Number of Distribution Discharge discharge amount of
Mode of amount of Excessive
company or pollutants and discharge of discharge concentration standards discharge
discharge discharge discharge
subsidiary specic pollutants outlets outlets (mg/L) implemented approved
(t)
(mg/L) (t/a)
Chemical oxygen Southeastern
50.66 120 13.463 108 Nil
Gutian Fuxing demand Continuous 1 part of the
Ammonia nitrogen factory zone 11.884 35 3.162 31.5 Nil
Note: The discharge concentration represents the concentration of ultimate discharge into the environment, while the standard
adopted for discharge represents the standard stipulated in the pollutant discharge license of the company, i.e. COD ≤ 120mg/L,
ammonia nitrogen ≤ 35mg/L.
ix. Livzon Limin
Pollutant Total
Total
Name of Name of major Number of Distribution Discharge discharge amount of
Mode of amount of Excessive
company or pollutants and discharge of discharge concentration standards discharge
discharge discharge discharge
subsidiary specic pollutants outlets outlets (mg/L) implemented approved
(t)
(mg/L) (t/a)
Chemical oxygen Wastewater
16.75 110 4.988 Nil Nil
Livzon Limin demand Intermittent 1 treatment
Ammonia nitrogen station 0.516 15 0.152 Nil Nil
Note: The wastewater of Livzon Group Limin Pharmaceutical Manufacturing Factory ( 丽 珠 集 团 利 民 制 药 厂 ) was
discharged into Shaoguan Second Sewage Treatment Plant ( 韶 关 市 第 二 污 水 处 理 厂 ) and the standard adopted for pollutant
discharge represented the standard stipulated in the pollutant discharge license of the company, i.e. COD ≤ 110mg/L, ammonia
nitrogen ≤ 15mg/L, while the data detected by third party inspection rm was adopted as the discharge concentration.
88
Annual Report
2021
x. Livzon Pharmaceutical Factory
Pollutant Total
Total
Name of Name of major Number of Distribution Discharge discharge amount of
Mode of amount of Excessive
company or pollutants and discharge of discharge concentration standards discharge
discharge discharge discharge
subsidiary specic pollutants outlets outlets （mg/L） implemented approved
(t)
（mg/L） (t/a)
Wastewater
Chemical oxygen
1 treatment 12.83 120 2.27 Nil Nil
Livzon demand
station
Pharmaceutical Intermittent
Wastewater
Factory Ammonia
1 treatment 0.369 20 0.06 Nil Nil
nitrogen
station
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 Schedule 2 Water Pollutant Discharge
Concentration Limits for Newly-Built Enterprises ( 表 2 新 建 企 业 水 污 染 物 排 放 浓 度 限 值 ) of 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), Schedule 2 Water Pollutant Discharge Concentration Limits for Newly-Built Enterprises ( 表 2 新
建企业水污染物排放浓度限值 ) of Discharge Standards for Biopharmaceutical Industrial Wastewater (《生物工程类制药工
业水污染物排放标准》) (GB 21907-2008), or the level 1 of phase II standard of Guangdong Provincial Capping on Polluted
Euents Discharge (《广东省水污染物排放限值》) (DB44/26–2001).
xi. Ningxia Pharmaceutical
Pollutant
Total
Discharge discharge Total
Name of Name of major Number of Distribution amount of
Mode of concentration standards amount of Excessive
company or pollutants and discharge of discharge discharge
discharge (mg/L)/ implemented discharge discharge
subsidiary specic pollutants outlets outlets approved
（mg/m3） (mg/L)/ (t)
(t/a)
（mg/m3）
Chemical oxygen Sewage
105 200 111.59 Nil Nil
demand treatment
1 workshop on
Ammonia
north side of 0.8 25 0.82 Nil Nil
nitrogen
factory zone
Sulfur dioxide Boiler 47 200 24.79 156.816 Nil
Nitrogen oxide workshop on 102 200 87.76 156.816 Nil
Ningxia 1
Continuous north side of
Pharmaceutical Particulate matter 14 30 8.2 23.522 Nil
factory zone
4 outlets for
fermentation,
Volatile organic 3 outlets for
9 8.5 100 22 79.535 Nil
compounds renery and
2 outlets for
sewage
89
Notes:
1. The discharge concentration of wastewater represents the concentration of ultimate discharge to the environmental
protection control center of Ningxia Xin'an Technology Co., Ltd. ( 宁 夏 新 安 科 技 有 限 公 司 ) (“Xin'an Company”), the
standard adopted for pollutant discharge was the standard stipulated in the pollutant discharge license of the company and the
amount of discharge was calculated by the amount received by Xin'an Company. In respect of the total amount of approved
discharge, since the company adopted indirect discharge, the local government of Ningxia cancelled the 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 pharmaceutical industrial park established by the government after the
renewal of the pollution discharge license.
2. The emission concentration of boiler exhaust gas represents the self-monitoring average concentration throughout the
year, the standard adopted for discharge was the standard stipulated in the pollutant discharge license of the company and
the amount of discharge was calculated by the amount indicated by online monitoring. The concentration of volatile organic
compounds (VOCs) represents the concentration of ultimate discharge to the environment (self-monitoring concentration), the
adopted 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》) (GB37823-2019) and the amount of discharge was calculated by the amount
of exhaust gas emissions and the discharge concentration recorded by the monitoring report.
xii. Jiaozuo Hecheng
Pollutant Total
Total
Name of Name of major Number of Distribution Discharge discharge amount of
Mode of amount of Excessive
company or pollutants and discharge of discharge concentration standards discharge
discharge discharge discharge
subsidiary specic pollutants outlets outlets (mg/L) implemented approved
(t)
(mg/L) (t/a)
Chemical oxygen Master outlet
109.049 220 9.396 60.8 Nil
Jiaozuo demand in industrial
Continuous 1
Hecheng Ammonia wastewater
3.911 35 0.337 8.8 Nil
nitrogen workshop
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 monitoring data.
xiii. Shanghai Livzon
Pollutant
Total
Discharge discharge Total
Name of Name of major Number of Distribution amount of
Mode of concentration standards amount of Excessive
company or pollutants and discharge of discharge discharge
discharge (mg/L)/ implemented discharge discharge
subsidiary specic pollutants outlets outlets approved
（mg/m3） (mg/L)/ (t)
(t/a)
（mg/m3）
COD Master outlet 50.25 500 2.97 Nil Nil
Intermittent 1
Ammonia nitrogen in the park 27.98 40 1.77 Nil Nil
No. 5 and 6
Particulate matter 2 outlet on the 5 20 0.015 0.054 Nil
Shanghai
Organized roof
Livzon
intermittent No.1, 2, 3, 4,
discharge 7, 8, 9 and 10
VOCs 8 1.98 60 0.277 2.145 Nil
outlets on the
roof
90
Annual Report
2021
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 were in accordance with the Air Pollutant
Discharge Standards for Pharmaceutical Industry (《制药工业大气污染物排放标准》) (GB37823-2019), and the discharge
of COD and Ammonia nitrogen were implemented in accordance with the comprehensive sewage discharge standard
DB31/199-2018. Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd. ( 上海丽珠制药有限公司 ) was among other key
pollutant discharge units, but not among the key pollutant discharge units of water environment and atmospheric environment.
2. Construction and operation of pollution preventive facilities
√ Applicable □ N/A
Name of company
Construction and operation of pollution preventive facilities
or subsidiary
Exhaust gas: The treatment process of“water spray + acid spray + alkali 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 nned 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 +
Jiaozuo Joincare
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.
Wastewater: The treatment process of“regulating pool + hydrolysis acidication 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, and flow. At present,
wastewater treatment process sections can be stably operated. Moreover, wastewater control factors can
be stably emitted in compliance with the required standard.
Taitai
No new facilities were set up. Facilities functioned properly.
Pharmaceutical
Haibin Pharma Pollution preventive facilities functioned properly and ensured up-to-standard discharge.
1．Wastewater: The wastewater treatment system with daily processing capacity of 600 tonnes through
A/O process designed by East China University of Science and Technology started operation in April
2016 and functioned properly in the rst half of 2021. A set of MVR concentration wastewater treatment
plant was added in April 2020, which has been functioning properly in the first half of 2021. From
March to June 2021, 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 at present. A new
sewage anaerobic treatment system had been building in 2021 and is currently under construction.
2．Exhaust gas: The 40000m/h regenerative oxidation exhaust gas treatment system designed by
Jiangsu Ruiding started operation on 2 November 2019 and is functioning properly in 2021. After
Xinxiang Haibin
reconstruction of dry tail gas self-circulating process, the activated carbon adsorption device for high
concentration waste gas designed by Beijing Rixin Daneng Technology Co., Ltd. has been functioning
properly in 2021 and solvent recovery amount was increased. After alkali spray and water spray, the
exhaust gas from biochemical aerobic process of wastewater treatment was emitted in compliance
with the required standard. A set of tetrahydrofuran membrane recovery system was added for high
concentration exhaust gas treatment of six workshops, which has been functioning properly in 2021. An
new exhaust gas membrane recovery system was added to the third workshop and the system operates
properly in 2021
3．Solid wastes were disposed of in compliance with the relevant requirements.
91
Name of company
Construction and operation of pollution preventive facilities
or subsidiary
The company strictly complies with the“Three-Simultaneous”system of environmental protection
by collecting and treating“Three Wastes (waste water, exhaust gas and solid waste)”according to
requirements, and employs an advanced sewage treatment process known as“Regulating pool +
Hydrolysis acidification tank + SBR + Air float”. After the sewage has gone through the above
treatment process, all indicators are stable and satisfy the discharge standard. After meeting the discharge
Fuzhou Fuxing standards, the sewage is discharged to Jiangyin sewage plant operated by Fujian Huadong Water
Treatment Co., Ltd. ( 福 建 华 东 水 务 有 限 公 司 ) via sewage pipe network at the industrial park area for
further treatment. Two sets of QC waste gas treatment devices have been newly constructed in 2021,
in which the waste gas was treated through water spray and activated carbon adsorption method and
emitted after meeting the emission standards. For details on circumstances in previous years, please refer
to the relevant content of the 2020 annual report of Livzon.
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”.
In 2021, an aggregate amount of over RMB6 million was invested to the treatment and improvement
projects of sewage, waste gas, noise and solid waste storage sites in the factory, including more than
Xinbeijiang
40 environmental protection improvement projects, such as the power cooling tower noise reduction
Pharmaceutical
project, the installation of the boiler inlet muer, the enclosure of MVR fans, the renovation of sewage
tank in workshop 1 of department III, the replacement of the aeration pipes of the biological lter of the
sewage station, and the renovation of the pretreatment waste gas of the sewage treatment station, so as
to reduce the impact of factory noise on the surrounding area through controlling from the source, while
eliminating the smell emission of workshops, sewage and solid waste storage sites to ensure the stable
operation of sewage treatment system.
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 preventive facilities
were enhanced to ensure that emission of pollutants was stable and in compliance with the required
standard. The treatment process of“pre-treatment of drainage from the production process + hydrolytic
acidification + upflow anaerobic sludge blanket (UASB) + advanced oxidation + CASS process + air
floatation/ozonation advanced treatment”was adopted. Treated sewage was discharged through the
municipal sewage pipeline network into Zhuhai Leaguer Environmental Protection Co., Ltd. ( 珠 海
力 合 环 保 有 限 公 司 ) (water purication plant in the South District). In 2021, RMB4.88 million has
Livzon Hecheng be invested in environmental protection projects; RMB2.34 million has be invested in the collection
and pretreatment of high-concentration exhaust gas from various workshops; RMB0.8 million has be
invested in increase washing to eliminate odors from RTO-treated waste gas; Valves; RMB0.63 million
has be invested in RTO maintenance, including valves, ceramics and internal anti-corrosion replacement
and upgrade, etc.; RMB0.65 million has be invested to purchase liquid nitrogen cryogenic device for
treatment of chloroform waste gas in Workshop 102; RMB0.26 million has be invested to collect and
treat laboratory and R&D waste gas; and RMB0.20 million has be invested for maintenance of GAC
activated carbon adsorption and desorption attached device. For details on circumstances in previous
years, please refer to the relevant content of the 2020 annual report of Livzon.
92
Annual Report
2021
Name of company
Construction and operation of pollution preventive facilities
or subsidiary
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 1,200 t/d, adoption of the advanced
“A/O + SBR + nitrogen removal by denitrification + Fenton decolorizing + air flotation”sewage
treatment process, 6,000 m3 of eective 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
Gutian Fuxing ensuring that all wastewater treatment indicators are stable and satisfy the discharge standard. Treated
sewage that reaches the grade II discharge standard is directly discharged into Minjiang River. The
hazardous wastes of the company are entrusted to qualied companies for compliant disposal according
to the requirements of environmental impact assessment and acceptance inspection opinions. In 2021,
RMB0.6 million was invested to upgrade the environmentally friendly sludge pressing system to reduce
the moisture content of the sludge and the amount of sludge produced. For details on circumstances in
previous years, please refer to the relevant content of the 2020 annual report of Livzon.
The“Three Simultaneous”system was strictly implemented by the company for the treatment of“Three
Wastes”by collecting and treating the“Three Wastes”eectively. The investment for sewage treatment
facilities was over RMB13 million with designed processing capacity of 1,500t/d and adopted the
treatment process of“Pre-treatment + Hydrolysis acidification tank + Facultative tank + Aerobic pool
+ Secondary sedimentation”, and the sewage after treatment was discharged through the municipal
Livzon Limin
pipeline network into Shaoguan Second Sewage Treatment Plant ( 韶关市第二污水处理厂 ). In respect
of exhaust gas treatment, biomass boilers were all replaced by 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. In respect of control of noise pollution, RMB100,000 was invested to
construct noise segregation wall to reduce noise pollution.
The“Three Simultaneous”system was strictly implemented by the company for the treatment of“Three
Wastes”by collecting and treating the“Three Wastes”eectively. For wastewater: an investment of over
RMB10 million was made for phase I and phase II sewage treatment station with designed processing
Livzon
capacity of 1,000t/d, which adopted the CASS process for phase I and the AO process for phase II, and
Pharmaceutical
the sewage after treatment was discharged through the municipal pipeline network into sewage treatment
Factory
plants. For waste gas: currently, the company uses purchased steam and uses the boilers as backups,
greatly reducing exhaust gas emissions. The waste gas of the sewage treatment stations is treated by a
combination of rst-level spray towers, UV photoion equipment and second-level spray towers.
Through strict enforcement of the“Three Simultaneous”system, the“Three Wastes”were collected and
treated eectively. The designed total processing capacity of sewage treatment was 7,500m3/d (including
one plant with capacity of 5,000m3/d and one plant with capacity of 2,500m3/d), and the actual total
treatment amount was 3,100m 3/d. After the wastewater had reached the standard stipulated in the
pollutant discharge license, it would be discharged through the sewage pipeline network in the industrial
Ningxia
park to Xin’an Company. In 2021, the installation and use of exhaust gas collection and treatment
Pharmaceutical
facilities for hazardous waste stations were completed, and doramectin fermentation exhaust gas of 101
fermentation workshop was introduced into the specific exhaust gas treatment facility for doramectin
fermentation exhaust gas of 102 fermentation workshop, and a primary sedimentation tank was added
to the sewage treatment station to lead out exhaust gas for treatment. For details on circumstances in
previous years, please refer to the relevant content of the 2020 annual report of Livzon.
93
Name of company
Construction and operation of pollution preventive facilities
or subsidiary
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 acidication tank + anaerobic UASB + aerobic pool + materialized treatment”was adopted,
the treated wastewater would be discharged through the municipal pipeline network into the sewage
treatment plant of Xiuwu Branch of Kangda Water Co., Ltd. ( 康 达 水 务 有 限 公 司 修 武 分 公 司 ). The
sewage treatment facilities were under normal operation with compliant discharge. For exhaust gas:
exhaust gases generated from technical process in the production zone would be collected and treated by
adopting two sets of processes of“water spray + active carbon and -20 ℃ condensation + water spray +
Jiaozuo Hecheng
active carbon”and then discharged after reaching the required standard. For solid waste: hazardous solid
wastes 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 ）》) for hazardous wastes. The company entered into a
hazardous waste disposal agreement with Henan Zhonghuanxin Environmental Technology Co., Ltd.
( 河南中环信环保科技有限公司 ) for disposal of hazardous wastes on regular basis. Other general solid
wastes would be disposed of in compliance with the relevant requirements.
The company designed and built a sewage treatment station with a processing capacity of 200m3/d in
2018. The company's sewage 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
Shanghai Livzon
Preventions”to store hazardous waste and appointed a qualified company for compliant disposal.
The company's main exhaust outlets were treated with activated carbon adsorption and filtration, and
the activated carbon was replaced every half a year to ensure that the exhaust gas emission met the
standards.
3. Environmental impact assessment of construction projects and other environmental protection administrative licensing
√ Applicable □ N/A
Name of company Environmental impact assessment of construction projects and other environmental protection
or subsidiary administrative licensing
The Reply to the Environmental Impact Assessment Report for the 400-ton Pharmaceutical Intermediates
Erythromycin Thiocyanate Project of Jiaozuo Joincare Biological Product Co.,Ltd (Jiao Huan Shen
Jiaozuo Joincare
[2021] No. 29) was received on October 27, 2021. For details on circumstances in previous years, please
refer to the relevant content of the 2020 annual report of the Company.
Taitai
There was no such project in 2021.
Pharmaceutical
The“Environmental Impact Assessment Report for the Reconstruction Project of Shenzhen Haibin
Pharmaceutical Inc. (《深圳市海滨制药有限公司改扩建项目环境影响报告表》)”was approved on
Haibin Pharma November 2019; 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.
94
Annual Report
2021
Name of company Environmental impact assessment of construction projects and other environmental protection
or subsidiary administrative licensing
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
Xinxiang Haibin Environmental Impact Report on 100 Tonnes/Year Meropenem Pharmaceutical Intermediate Expansion
Project on 24 March 2019, and 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).
The 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) was received.
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 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
Fuzhou Fuxing 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.
For details on circumstances in previous years, please refer to the relevant content of the 2020 annual
report of Livzon.
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
Xinbeijiang Simultaneous”system and implementation of the environmental protection measures required under
Pharmaceutical the environmental impact assessment, the environmental protection facilities have been functioning
properly. On 29 December 2017, approval was granted for the application of a new national pollutant
discharge license and the work for changing and renewing the pollutant discharge license was completed
in December 2020. The environment protection policies were strictly enforced.
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 of 14 new products
including paliperidone palmitate ( 棕 榈 酸 帕 利 呱 酮 ), aripiprazole ( 阿 立 哌 唑 ), bismuth potassium
citrate ( 枸 橼 酸 铋 钾 ), i.e. the“Environmental Impact Assessment Report on Technological Renovation
and Expansion Project of Livzon Synthetic Pharmaceutical Co., Ltd. in Zhuhai Free Trade Zone”(《 珠
海保税区丽珠合成制药有限公司技改扩建项目环境影响评价报告》), passed the expert review,
Livzon Hecheng
with approval being processed. 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. Change of pollutant discharge license
was completed in December 2019. The integrated treatment on VOCs passed the“one policy for one
enterprise”inspection and acceptance in November 2020. On 21 December 2021, a new round of
voluntary clean production was inspected and approved. On 30 December 2021, the inspection and
acceptance of VOCs in-depth management manual was completed. In 2021, it was awarded the green
card enterprise of environmental credit rating by Zhuhai Municipal Ecology and Environment Bureau.
95
Name of company Environmental impact assessment of construction projects and other environmental protection
or subsidiary administrative licensing
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. After passing the application for a new pollutant discharge license
Gutian Fuxing
from State authorities on 29 December 2017, the company strictly followed the licensing requirements
for emissions of pollutants and strictly complied with the administrative requirements. The procedure
for replacing the pollutant discharge license was completed in November 2020. In November 2021, the
review for initial emission right was passed, and the right will be valid for four years. In October 2021,
the clean production audit report was completed and passed auditing by experts, audit opinion of the
Ningde Environmental Science Institute was obtained, and the company is applying to the Gutian County
Ecology and Environment Bureau for review acceptance.
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-
Livzon Limin 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 Sewage Permit 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.
The Environmental Impact Assessment Report on Expansion Project for Production Line of
Recombinant Human Chorionic Gonadotropin for Injection of Livzon Group Livzon Pharmaceutical
Factory ( 丽 珠 集 团 丽 珠 制 药 厂 ) was approved in March 2018; the Environmental Impact Assessment
Livzon Report on Expansion Project for Sewage Treatment Stations of Livzon Group Livzon Pharmaceutical
Pharmaceutical Factory was approved in April 2019; the Environmental Impact Assessment Report on Expansion Project
Factory for Production Line of lyophilized Powder Injection of Livzon Group Livzon Pharmaceutical Factory
was approved in November 2020. The company obtained a updated sewage permit in October 2021.
The company will strictly enforce the“Three-simultaneous”system to implement the environmental
protection measures as required by environmental assessment.
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
Ningxia
Branch of Shizuishan Municipal Ecology and Environment Bureau in December 2021. The company
Pharmaceutical
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. For details on circumstances in previous years, please refer to the relevant content of the 2020
annual report of Livzon.
96
Annual Report
2021
Name of company Environmental impact assessment of construction projects and other environmental protection
or subsidiary administrative licensing
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
Jiaozuo Hecheng 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 measures were implemented. In 2021, Jiaozuo Livzon
Hecheng Pharmaceutical Manufacturing Co., Ltd. prepared the implementation plan of“one factory, one
policy”for emergency emission reduction in response to heavy pollution weather from 2021 to 2022.
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
Shanghai Livzon 程及实验室项目环境影响报告》) on 10 January 2020, and completed the construction and passed the
acceptance inspection in September 2020. The company strictly implements the“Three Simultaneous”
system and take environmental protection measures required for environmental assessment, with the
environmental protection facilities under normal operation. In July 2021, the change of national pollutant
discharge license was completed.
4. Environmental emergency contingency plan
√ Applicable □ N/A
Name of company
Environmental emergency contingency plan
or subsidiary
Revision of the environmental emergency contingency plan of Jiaozuo Joincare was completed in early
April 2019 and was led with the Ecological Environment Bureau of Jiaozuo City on 16 April 2019.
Jiaozuo Joincare
Revision of the environmental emergency contingency plan for hazardous waste pollution accident of
Jiaozuo Joincare was completed in December 2020.
Taitai
Review ling was completed in July 2020.
Pharmaceutical
The Environmental Emergency Contingency Plan was revised and recorded (record number: 440308-
Haibin Pharma 2020-0029M). Trainings and drills on emergency responses were provided for employees to improve the
capability of the Company for dealing with environmental emergencies.
Environmental Emergency Contingency Plan of Xinxiiang Haibin Pharmaceutical Co., Ltd. was
Xinxiang Haibin filed with the Ecological Environment Bureau on 14 February 2019 with the file reference number
4107712019001.
97
Name of company
Environmental emergency contingency plan
or subsidiary
Pursuant to relevant regulations 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“Focusing on Prevention, Aiming at Self-
help, Centralized Command, Division of Responsibility”, which was approved on 1 November 2019
with the le reference number 350181-2019-039-M.
After environmental emergency incidents occur, immediate, quick, effective and orderly emergency
Fuzhou Fuxing rescue actions will 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 such plan, the company provides trainings and drills for its employees to get them 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. In June 2021, the RTO power failure emergency drill was conducted.
Based on the principles of“Focusing on Prevention, On-alert all the time; Management by
Classication, Response by Tiers; Cooperation among Departments, Responsibility by Levels; Scientic
Prevention and Ecient Disposal”, Xinbeijiang Pharmaceutical 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)
Xinbeijiang
again on 30 September 2021, which has been verified and filed by the Qingyuan Municipal Ecology
Pharmaceutical
and Environment Bureau on 22 October 2021. The company conducted internal exercises regularly to
identify environmental factors and sources of hazards, as well as drills on the emergency contingency
plan. The environmental emergency contingency drill was conducted in June 2021 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 dierent tasks.
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 ling and formally announced with le
Livzon Hecheng
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
eectively and resume orderly production as soon as possible.
98
Annual Report
2021
Name of company
Environmental emergency contingency plan
or subsidiary
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》) was
prepared based on the principles of“Focus on Prevention, Aim at Self-rescue, Centralised Command and
Division of Responsibility ( 预防为主、自救为主、统一指挥、分工负责 )”. The contingency plan
was approved in May 2017 with the le reference number 352200-2017-005-L. The second amendment
of the contingency plan was made in June 2020, which passed expert review and completed filing, with
the ling number 350922-2020-002-M.
According to the plan, after environmental emergency incidents occur, immediate, quick, effective
Gutian Fuxing
and orderly emergency rescue actions will be taken to control and prevent accidents and the spread of
contamination, protect the surrounding environment eectively 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 and drills for its employees. On 9 September
2021, the company carried out an ammonia leakage emergency drill. 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.
The principles of occupational health and safe 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. Identication 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
Livzon Limin
事件应急预案》) 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（File
No. 440203-2021-009-L).According to 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 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 dierent tasks.
Pursuant to relevant regulations and requirements, 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》)
Livzon
was updated by the company in 2021, and has been approved for ling approval and announced, with the
Pharmaceutical
File No. 440404-2021-0212-L. In October 2021, the company conducted an emergency drill for alcohol
Factory
leakage in the dangerous goods warehouse, to enhance emergency response capabilities of sta, so as to
alleviate or eliminate the consequences eectively.
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 (filing reference number: 640221-2019-005-II). Identification of
environmental factors and sources of hazards and drills for emergency were conducted internally in the
Ningxia
company on regular basis to improve the operability of the contingency plan, enhance the performance
Pharmaceutical
level of the emergency rescue sta, and enhance the responsiveness and coordination of the rescue team
in terms of integrated coordination and collaboration capabilities. Reamendment of the Environmental
Emergency Contingency Plan was amended in May 2021, and has passed expert review and has been
reviewed and led by government environmental department in August 2021.
99
Name of company
Environmental emergency contingency plan
or subsidiary
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 (filing reference number:
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 ling in January 2018.
Identication of environmental factors and sources of hazards and drills for emergency were conducted
Jiaozuo Hecheng internally in the company on regular basis to improve the operability of the contingency plan, enhance
the performance level of the emergency rescue sta, and enhance the responsiveness and coordination of
the rescue team in terms of integrated coordination and collaboration capabilities. The company carried
out trainings on the Standard Operating Procedure for Acid Mist Purification Towers and the Standard
Operating Procedure for Hazardous Waste Storage Pollutants in April 2021 and June 2021, respectively,
according to the relevant requirements of 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》). In November 2021, the“Operation Regulations
for Exhaust Gas UV Photolysis Equipment”and the“Spray Towers Operation Regulations”were added,
and training was carried out on the operation regulations for exhaust gas UV photolysis equipment and
spray tower operation regulations to enhance the environmental protection knowledge of sta.
In January 2019, 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 》) was led by the
Shanghai Livzon
company, with the File No. 02-310115-2019-027-L. The company conducts drills and reviews of the plan
every year to improve its emergency response capabilities through regular training on the plan.
5. Environmental self-monitoring program
√ Applicable □ N/A
Name of company
Environmental self-monitoring program
or subsidiary
As required by the self-monitoring program for pollutant discharge licenses, Jiaozuo Joincare developed
the 2021 Self-monitoring Program at the beginning of 2021 and carried out self-monitoring according to
Jiaozuo Joincare
the program. As at 31 December 2021, Jiaozuo Joincare has completed the self-monitoring for the full
year.
Wastewater was monitored once a quarter; boiler exhaust gas and plant boundary noise were monitored
Taitai once a year; exhaust gases generated from technical process was monitored once half a year; online
Pharmaceutical monitoring facilities of wastewater and boiler exhaust gas were additionally installed and functioning
well.
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
Haibin Pharma 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.
Exhaust gas and wastewater were monitored quarterly by the third party in accordance with the new
Xinxiang Haibin
version of pollutant discharge license.
100
Annual Report
2021
Name of company
Environmental self-monitoring program
or subsidiary
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公（试行）》)”and the“Technical Guidelines for Self-Monitoring
by Pollution Discharge Enterprises in the Fermentation Pharmaceutical Industry (HJ882-2017) (《 排
污 单 位 自 行 监 测 技 术 指 南 发 酵 类 制 药 工 业 (HJ882-2017)》)”, the company has completed the
establishment of the self-monitoring program 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
Fuzhou Fuxing
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 2021, the work on leakage
detection and repair (LDAR) of volatile organic compounds (VOCs) was done on two occasions. The
soil and groundwater testing was completed in July 2021. Information publicity website: http://wryfb.
fjemc.org.cn.
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 led 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
Xinbeijiang
equipment for waste water (COD, ammonia nitrogen, pH, flow) and waste gases (non-methane
Pharmaceutical
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 waste water 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 specication, a third party is hired to conduct
LADR testing and repairs every six months for workshops that use VOCs. On 28 September 2021, the
TOC testing for the import and export of cooling towers was completed.
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 verication and calibration of monitoring analyzing devices
Livzon Hecheng were carried out in strict compliance with relevant provisions. Automated monitoring equipment was
installed according to the requirements of technical standards for environmental detection, while online
monitoring equipment for COD, ammonia nitrogen and PH level and online monitoring equipment for
non-methane hydrocarbons were installed and connected with the national development platform as
required.
101
Name of company
Environmental self-monitoring program
or subsidiary
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 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 environment
protection authority and Gutian County protection authority. The analysis methods of the monitoring
program comply with the national environmental monitoring technical standards and methods; the
Gutian Fuxing 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 2021, a qualified third party was
engaged on two occasions to complete the leakage detection and repair (LDAR) work of volatile organic
compounds and a report was obtained. Information publicity website: http://wryfb.fjemc.org.cn.
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 and boiler exhaust gas monitoring every month, each time the monitoring
would be conducted strictly in compliance with the relevant national requirements to ensure the
Livzon Limin accuracy, validity and authenticity of the monitoring data. The installation and commissioning of
online monitoring equipment for COD, ammonia nitrogen was completed and began to run officially in
December 2020, and COD and ammonia nitrogen were monitored every 2 hours. Online data should be
completed and filed to the Shaoguan Municipal Ecology and Environmental Bureau on a timely basis,
and the relevant data would be announced to the public after being reviewed by and filing with the
Shaoguan Municipal Ecology and Environmental Bureau.
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
Livzon specific conditions, the company appointed the inspection party to carry out monitoring on sewage and
Pharmaceutical waste gas every month, each time the monitoring would be conducted strictly in compliance with the
Factory 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.
The company formulated the self-monitoring program for 2021, which was reviewed by and filed
with the Ecological Environment Bureau of Shizuishan City. Monthly and quarterly monitoring was
carried out strictly in accordance with the requirements of the program, which focused primarily on
organized exhaust gas emission, exhaust gas emission from boiler, waste water discharge, underground
water, soil, plant boundary unorganized environmental air, noise and recycled water TOC, and volatile
organic matter leak detection and repair (LDAR) work was carried out. The monitoring results would
Ningxia be announced to the public through the System of National Pollution Sources Monitoring Information
Pharmaceutical 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 automated monitoring equipment was connected to the network of the
competent environmental protection authority and passed the inspection conducted by the competent
environmental protection authority. The automated monitoring equipment was sound, and the monitoring
information was accurate, valid and authentic. In the first half of 2021, the RTO exhaust VOCs online
monitoring equipment was installed and put into use, and passed government inspection in August 2021.
102
Annual Report
2021
Name of company
Environmental self-monitoring program
or subsidiary
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
Jiaozuo Hecheng
automated monitoring equipment has been installed in accordance with the requirement of environmental
assessment technical standards. In 2018, the online water quality monitoring equipment had passed
the inspection and acceptance conducted by the competent environmental protection authorities and
the connection between the online data and the municipal platform of Jiaozuo City was completed;
the Internet Private Line Access Clustering Protocol was entered into in November 2021. The leak
detection and repair (LDAR) of volatile organic compounds was completed according to plan in 2021.
The automated monitoring equipment was under normal operation and the data was accurate, valid and
authentic.
In accordance with the General Rules for the Self-Monitoring Technical Guidelines for Pollutant
Discharge Units (《排污单位自行监测技术指南总则》) (HJ 819-2017) and the relevant requirements
(including those on pollution discharge license), the company organized self-monitoring and information
Shanghai Livzon disclosure of the pollutants it has discharged, and formulated the Self-monitoring Program. In 2021, the
company monitors main exhaust gas outlets once a month, common discharge outlets once half a year,
noise once every quarter and sewage once a month. The monitoring items and frequency shall meet the
requirements of the pollutant discharge license.
6. Administrative punishments 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 conditions of companies except for key pollutant discharge units
√ Applicable □ N/A
The remaining subsidiaries of the Company strictly and thoroughly implemented and obeyed the Environmental Protection
Law of the People's Republic of China, Cleaner Production Law of the People's Republic of China and other environmental
protection and safe production laws and regulations, constantly increased investment in environmental protection, continuously
invested in energy conservation and consumption reduction projects, actively promoted cleaner production, improved
comprehensive utilization eciency of resources, and reduced and avoided pollutants so as to ensure sound mind and body of
employees and try to realize coordination of economic, environmental and social benets and sustainable development.
1. Administrative punishments imposed for environmental issues
□ Applicable √ N/A
2. Refer to other environmental information disclosed by key pollutant discharge units
□ Applicable √ N/A
3. Reasons for non-disclosure of other environmental information
□ Applicable √ N/A
103
(III) 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,
or subsidiary and fulllment of environmental responsibilities
The company completed verication of carbon emissions and the external audit on the energy system. In
Jiaozuo Joincare the evaluation of green development of the pharmaceutical industry in Henan Province, it ranked second
among the industrial peers. LDAR leak detection and repair was conducted twice.
Creation of environmental safety standardization, management of hazardous waste standardization, on-
site inspection, cooperation with the Ecological Environment Department or its entrusted third-party
Taitai
evaluation agency to carry out the safety evaluation and inspection of corporate environmental facilities,
Pharmaceutical
operating systems and online inspection systems, prompt rectification of hidden hazards proposed were
carried out as required by the Municipal Ecological Environment Department.
The company promoted LDAR detection, to timely repair leakage points and reduce unorganized
Haibin Pharma
emission of VOCs.
The company completed verication of carbon emissions, and in the evaluation of green development of
Xinxiang Haibin
the pharmaceutical industry in Henan Province, it ranked fourth among the industrial peers.
All waste water from production was collected and sent to the waste water treatment station for
Joincare Haibin treatment, and then sent back to the cooling tower for reuse, so as to realize“zero”discharge of waste
water.
Two LDARs in the rst half and second half of the year, detection of hidden hazards in soil, detection of
soil, audit of energy system, verification of greenhouse gas emission, and application for the certificate
Fuzhou Fuxing
of provincial green factory were completed. In the environmental credit evaluation completed, the
company was rated as an environmentally credible enterprise.
LDAR was completed; unorganized emission of VOCs was reduced; certification audit of energy
management system was completed; a series of waste gas and noise control and improvement measures,
such as reconstruction of certain sewage tanks, installation of noise segregation wall on the cooling
Xinbeijiang tower, and installation of the inlet muffler on the boiler, were taken to effectively reduce impacts of
Pharmaceutical waste gas emission and noise on the surrounding environment; sealing around the reverse hanging
membrane of the pretreatment tank at the waste water treatment station was reinforced to reduce
unorganized odor dispersion in surrounding areas; the RTO operation processing level was improved;
and the VOCs processing eciency was raised to 98%, eectively reducing VOCs emission.
LDAR was completed; unorganized emission of organic gas was reduced; hazardous waste was entrusted
to qualied units for treatment with compliance treatment rate of 100%; and tail gas treatment facilities
Livzon Hecheng
were added at gas collection station by the QC Testing and Technical Development Department. The
self-monitoring plan was completed and environmental responsibilities were fullled as required.
LDAR was completed; cover and sealing were added to sewage treatment regulating pool; waste gas
was collected and treated so as to avoid odor spillover; HV frame was replaced in the sewage treatment
workshop; water content of sludge was reduced; total volume of sludge was reduced; sludge generated
Gutian Fuxing was entrusted to qualified units for treatment; and the entrusted testing of waste water, waste gas, soil
and groundwater in 2021 was completed, with the results showing they were all up to the standards.
Hazardous waste was entrusted to qualified companies for compliant treatment to reduce the risk of
environmental pollution.
Solid preparations and steam equipment in high capacity workshop were renovated; steam usage was
reduced; locations of dierent drugs in the overhead cabin and TCM cabin were adjusted; storage energy
Livzon Limin
consumption of the two cabins was reduced; three idle water pumps of the factory were used; post-
treated waste water was used for watering owers, trees and grass in the factory in three lines.
104
Annual Report
2021
Name of company Relevant information contributing to ecological protection, pollution prevention and control,
or subsidiary and fulllment of environmental responsibilities
Installation and debugging of online monitoring equipment were completed; qualified third party was
Livzon entrusted to detect waste water and waste gas; compliant treatment of hazardous wastes was made; the
Pharmaceutical risk of environmental pollution was reduced. Environmental impact assessment was conducted for new
Factory workshops as required. The facilities at the waste water treatment station were renovated to ensure the
sewage treatment meets the national standards, and at the same time, improve the treatment eciency.
LDAR was completed; field check of“one policy for one enterprise”for corporate VOCs governance
was carried out in cooperation with leaders and experts of the Municipal Environmental Protection
Department; installation of online monitoring equipment for RTO exhaust and VOCs was completed;
installation of treatment facilities for exhaust gas from hazardous waste stations, primary sedimentation
Ningxia tank at the sewage treatment station and 101 doramectin fermentation workshop, and installation of
Pharmaceutical the dust collection and treatment facilities for the boiler coal conveying system were completed. The
environmental protection inspection for completion of doramectin expansion project was completed, and
the evaluation of project work upon optimized disposal of the company's solid waste was carried out.
The amendment of the Environmental Emergency Contingency Plan was completed. The monthly and
quarterly self-monitoring was completed as required.
Automatic construction was carried out; LDAR was completed; green development evaluation
of the pharmaceutical industry in Henan Province was completed; the result of being No. 8 in the
pharmaceutical industry of Henan Province was achieved; treated waste gas was replaced to ensure
the treatment effect; hazardous waste was entrusted to qualified units for treatment with compliance
Jiaozuo Hecheng
treatment rate of 100%; waste gas was entrusted to qualified third party for testing; the facilities of the
waste water system were entrusted to qualified third party for maintenance; the“one policy for one
enterprise”as advocated by the Municipal Environmental Protection Bureau for emergency emission
reduction in heavily polluted weather was implemented.
The company discharged pollutants in strict compliance with standards set out in the pollution discharge
license obtained, developed the annual self-monitoring program for pollution discharge at the beginning
of 2021 and implemented it, and successfully passed the semi-annual and annual review of corporate
pollution discharge by the third party entrusted by government departments. It also completed the annual
report on compliance with the pollution discharge license without violation of laws and regulations.
Meanwhile, the company further strengthened the daily monitoring of operation of waste gas treatment
Shanghai Livzon
facilities and waste water treatment stations and ensured the effective operation of equipment and
facilities. The company developed the Plan on Comprehensive VOCs Treatment and Emission Reduction
in General Enterprises in accordance with the Notice on Comprehensive Treatment of Volatile Organic
Compounds in Key Industries in the City issued by Shanghai Ecological Environment Department, and
used bromogeramine (benzalkonium bromide) solution to replace part of ethanol for disinfection, so as to
meet the VOCs emission targets.
(IV) Measures for carbon emission reduction and effect during the Reporting Period
√ Applicable □ N/A
Name of company
Measures for carbon emission reduction and eect during the Reporting Period
or subsidiary
In the fermentation workshop, the control parameters of fermentation tank consumption were optimized
to reduce steam flow and cut steam consumption; the stirring motor of fermentation tanks was changed
from fixed frequency to variable frequency to realize real-time control of the rotation speed so as to
Jiaozuo Joincare
reduce power consumption and carbon emission. In the refining workshop, plate heat exchangers were
installed in front of the desorption tanks to stabilize the temperature of water supply by physical means,
so as to save one compressor on the refrigerator from being used and reduce power consumption.
105
Name of company
Measures for carbon emission reduction and eect during the Reporting Period
or subsidiary
Lighting facilities in the park were replaced with“energy-saving lamps”in response to the call of the
Municipal Government, producing prominent energy-saving eect; the high-power motor in the factory
was replaced with the efficient energy-saving motor in accordance with energy-saving requirements of
Taitai
the government and frequency conversion devices were installed to maximize energy conservation. The
Pharmaceutical
ecient low-nitrogen boiler was replaced in response to the call of“Green Shenzhen”; employees were
organized to learn energy conservation knowledge so as to achieve energy conservation and emission
reduction in routine work by turning o lamps and machines timely.
In 2021, the old cooling tower was replaced with a new efficient one, saving about 5,976 yuan and
reducing carbon dioxide emission of about 9.5 tons annually. In 2021, the pump motor at the water pump
house was replaced with an energy-saving one, saving about 14,172 yuan and reducing carbon dioxide
Haibin Pharma
emission of about 22.4 tons annually; in the same year, the waste water treatment blower was replaced
with an air suspension blower, saving about 90,000 yuan and reducing carbon dioxide emission of about
136.6 tons annually.
The company invested 3 million yuan to replace the leaky reciprocating vacuum pumps with screw
Xinxiang Haibin
vacuum pumps and liquid ring pumps.
The company purchased energy-saving and power-saving equipment meeting the new standards,
developed energy-saving habits and thinking, reduced the use of natural gas in boilers, increased the
Joincare Haibin
frequency of facility maintenance and pipeline inspection, adopted eective heat preservation measures,
and encouraged use of pure electric cars for traveling to save fuel.
The company introduced PV power generation to reduce power consumption. Energy-saving renovation
of high energy consumption pumps were carried out, effectively reducing energy consumption.
Fuzhou Fuxing
The company vigorously publicized energy conservation and consumption reduction, and called on
employees to promptly turn o lamps, air conditioners and computers in routine work.
Certain cooling towers were renovated; fans of cooling towers were driven by hydrodynamic kinetic
energy rather than motors, achieving the same cooling effect while reducing power consumption;
80m3 air compressor was renovated and added a heat exchanger so that boiler soft water was preheated
through running heat of air compressor and boiler inlet temperature was raised, effectively reducing the
Xinbeijiang
consumption of natural gas ; inner wall of MVR equipment was cleaned by a professional third party,
Pharmaceutical
making the evaporation rate of sugar water for MVR equipment increase by approximately 40% so as
to effectively reduce the run time of MVR equipment and greatly reduce power consumption; the old
boilers with high energy consumption and high maintenance costs were replaced with new ones, reducing
the average steam consumption per ton by1.06m3 natural gas.
Water cooling units were maintained and renovated so as to use energy in a more reasonable manner;
power consumption for production was saved through a more reasonable production scheduling of the
Production Department; the natural gas was used as the fuel for the canteen and boiler of the company;
the Roots fans for sewage treatment at the Environmental Protection Center were replaced with magnetic
Livzon Hecheng levitation fans with a relative energy saving rate of 30%, saving about 100,000 KWH of power annually.
All employees in the factory were called on to save electricity by turning off lamps and air conditioners
after work, and limit the minimum temperature of air conditioners; green travel was promoted;
employees were encouraged to take public transportation for business trip; commuting buses were
provided for employees.
Four sets of air compressors and a set of water cooling unit were replaced to reduce power consumption;
Gutian Fuxing all employees were called on to“save every drop of water and every kilowatt hour”by turning o lamps
and shutting down equipment after work.
106
Annual Report
2021
Name of company
Measures for carbon emission reduction and eect during the Reporting Period
or subsidiary
In the solid agent workshop, the set values of temperature and humidity of the air conditioning system
were appropriately adjusted (within the reference range) to be as close as possible to the values of the
ambient temperature and humidity to reduce steam consumption; the large - capacity workshops were
renovated to save steam; the energy consumption was reduced by the QC Department through control of
Livzon Limin
the number of compressors of the air conditioning unit in service and parameter setting, and intermittent
use of the biological test room; the total energy consumption of warehouses was reduced by the Supply
Chain Department through reasonably relocating and merging warehouses of Chinese medicinal
materials on eight oors and construction of cool warehouses according to requirements of GSP.
Incandescent light bulbs were replaced with LED lamps to reduce power consumption. PV inverter
cabinets and roof PV modules were renovated, which improved PV power generation efficiency
Livzon
and could save about 600,000 kilowatts per year. Outsourced steam was introduced to reduce boiler
Pharmaceutical
combustion and save energy. Functional departments were required to further tighten energy conservation
Factory
management, and encourage employees to turn off lights and machines during the lunch break, or when
they leave their post, so as to reduce power consumption.
Two 1500m/h cooling water towers were newly installed to reduce the consumption of primary water.
The waste condensate water produced by MVR equipment was used to replace the primary water for
ceramic membrane cleaning. Part of phenylalanine spent activated carbon was reused to reduce the spent
Ningxia activated carbon generated. Phenylalanine concentration system was planned to be renovated, pursuant
Pharmaceutical to which, the original triple effect thickening system was replaced with MVR thickening system, thus
reducing energy consumption by 50%. The boiler system was overhauled and maintained regularly so as
to ensure ecient operation of boiler body and desulfurization and dust removal facilities. Consumption
of outsourced steam was increased to reduce coal consumption.
The production process was promptly adjusted in coordination with the workshop; activated carbon
in the activated carbon adsorption plant was replaced so as to try to emit organic waste gas in stable
concentration; steam condensate was changed for recycling so as to reduce carbon emission. Packaging
equipment of the company was changed to automatic packaging. Energy conservation and consumption
reduction were vigorously publicized in the company; all employees were called on to“save every
drop of water and every kilowatt hour”. Workshop paint was put unified management, to avoid waste;
Jiaozuo Hecheng
a view mirror was added behind the steam trap valve to observe steam loss; unqualified water in the
puried water system of workshops was used; steam condensate was diverted to the production auxiliary
system of the hot water tank and the crystallizing tank for use; the lights in the public areas and corridors
of workshops were changed to voice-controlled or light-controlled ones; LED lights were used in
workshops; and high energy-consumption equipment and facilities in workshops were gradually replaced
with low energy- consumption or automatic interlocking ones.
The company further strengthened daily energy conservation management according to existing energy
conservation plan, eectively enhanced energy conservation awareness of employees through inspection
Shanghai Livzon and publicity, and encouraged employees to develop the good habit of water and power conservation.
Meanwhile, the company improved more than 10% of peptide yield by optimizing peptide process so as
to reduce power consumption of unit product.
107
II Corporate Social responsibility
√ Applicable □ N/A
Joincare is striving to be an explorer in the healthcare industry and insisting on creating a healthy life driven by technology.
The Group pays great attention to its sustainable development, and actively focuses on the internal regulatory environment and
external policy guidance. Considering China's 14th Five-Year Plan and the local government's development plan, the Group
has formulated a CSR strategy and goals adapting to its current business situation.
Focusing on“health”, the Group's CSR strategy aims to provide the whole society with high-quality, safe, accessible and
affordable medical products and services through the development of its principal businesses, while improving the overall
strength of the health industry. Meanwhile, the strategy is committed to empowering employees and communities, emphasizing
environmental protection and promoting the overall health development in society.
The development of enterprises relies on society. Over the years, the Company has conscientiously fulfilled its social
responsibility, paid taxes according to law, supported social public welfare projects, and actively assumed its social
responsibility for building a harmonious society. At the same time, the Group was actively creating social value. It generated
tax revenues for the government of RMB 1,653 million, paid RMB 1,951 million in salary to employees, distributed dividends
and paid interest worth RMB1,271 million to banks and other creditors, donated funds and goods totaling RMB 29.10 million
to the society, and achieved a social contribution per share of ap proximately RMB 2.57 for the society in 2021 For our
performance of social responsibility, see the 2021 Corporate Social Responsibility Report of Joincare Pharmaceutical Industry
Group Co., Ltd. disclosed by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on 31 March 2022
for details.
III Consolidation and expansion of achievements in poverty alleviation and rural revitalization
√ Applicable □ N/A
1. Industrial revitalization
The Company fully implements the spirit of the important instructions put forward by the CPC Central Committee and the
General Secretary. In accordance with the relevant requirements, we establish the plan of“Astragalus Root ( 黄 芪 ) Industry”
and adopt the model of“Company + Base”and“Company + Professional Cooperative”, encouraging locals to cultivate
and process astragalus root and develop the astragalus root industry with reference to the local conditions to make it a pillar
industry for poverty relief in the long-term. The Company will explore the development of the featured astragalus root industry
to achieve poverty elimination and promote the construction of the“Chinese Medicine Ecological Base”.
During the Reporting Period, Datong Livzon Qiyuan Medicine Co., Ltd. ( 大 同 丽 珠 芪 源 药 材 有 限 公 司 ) (“Datong
Livzon”), a subsidiary of the Company's controlling subsidiary Livzon Group, has employed 95 local workers for the self-
built base and jointly constructed base.
108
Annual Report
2021
2. Access to public welfare for chronic diseases prevention and treatment
In supporting consolidation and expansion of achievements in poverty alleviation and rural revitalization and In order to
respond positively to the call of national policy, Joincare have launched“Access to Public Welfare for Chronic Diseases
Prevention and Treatment ( 普 惠 慢 病 防 治 公 益 项 目 )”program by combining our own industrial advantages. The program
targets at hypertension, hyperlipidemia, cardiovascular and cerebrovascular diseases, and drugs for treatment of chronic
diseases 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 could be worth millions of RMB. These drugs can really help families in remote areas, make it convenient for
patients in the regions to take drugs nearby, help the families with patients to alleviate medical pressures, and provide timely
assistance. Based on actual conditions, the project regularly makes continuous drug donations to remote areas and helps the
families with patients in such regions.
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”successively in areas including Chaotian District
of Guangyuan City, Songpan County, Jiange County and Pingwu County of the Autonomous Prefecture of Aba Zangs and
Qiangs in Sichuan Province, Hunyuan County, Guangling County and Lingqiu County of Datong City in Shanxi Province,
Dongxiang County and Tianzhu County in Gansu Province, Xianghai national nature reserve in Jilin Province, Chayu County
in Tibet Autonomous Region, Macun District of Jiaozuo City in Henan Province, Huangshan District of Huangshan City in
Anhui Province, Suining County of Hunan Province, and Fenyi County of Jiangxi Province, bringing benets to many patients.
Joincare won the awards of“2021 China Brand Influence - Model for Undertaking Social Responsibility”and“2021 Model
for Rural Revitalization”for its excellent projects supporting urban revitalization.
As at 31 December 2021, the project covered 8 provinces and one autonomous region, among which 14 were remote areas
in need of help and one was natural reserve at state level, and there were more than 5,000 registered people. In 2022, it is
expected to donate drugs to areas including Hubei, Gansu and Sichuan.
3. Charitable projects for students
One of the education policies of the CPC and the state is to subsidize students in poverty to complete their studies, which is
vital to talent training and social progress and is the common responsibility of the whole society. With the great support and
help of the National Medical Products Administration, the Company has donated RMB900,000 in total to poor college students
in Linquan County in three years since 2019 and shouldered its responsibility to the society. The student grant program is set
by the National Medical Products Administration for poor college students in Linquan County, Fuyang City, Anhui Province
majoring in pharmaceutical in colleges and universities. The grant standard is RMB5,000 per undergraduate and RMB3,000
per junior college student for more than a hundred students. The program aims to improve the learning and living conditions
of those students and help them to better complete their studies so as to train more talents for the national pharmaceutical
undertaking.
The proposed grant of RMB300,000 for 2021 has been awarded. Up to now, the grant of RMB900,000 planned to be donated
has been awarded and the total number of project participants is more than 180.
4. Assist Henan's Flood Relief
In 2021, a record-breaking extreme heavy and persistent rainfall occurred in Henan province, causing serious waterlogging and
other disasters in many parts of Henan, imposing great pressure on flood control. Providing Strong Support to Disaster Areas
Joincare Pharmaceutical Group and Livzon Pharmaceutical Group supported Henan by jointly donating RMB 10 million in
cash and RMB 10 million worth of medicines through China Red Cross Foundation, joining the Government and other sectors
of the society in an effort to ensure the safety of Henan locals, to procure emergency relief materials and to assist disaster
recovery.
109
Chapter 6
Major Events
I Fulfillment of undertakings
(I) Undertakings fulfilled during the Reporting Period or not yet fulfilled as of the Reporting Period by the parties to the
commitment such as de facto controllers, shareholders, related parties, acquirers of the Company and the Company
√ Applicable □ N/A
Specic Next plan
Whether Whether
reasons should be
Time and there is commitment
Commitment Commitment for failure stated in case
Subject Commitment content time limit of a time is strictly
background type in timely of failure
commitment limit for fullled in
fulllment in timely
fulllment time
shall be given fulllment
Shenzhen Baiyeyuan Investment Co., Ltd., a controlling shareholder of the Company,
undertook that it would not be directly or indirectly engaged in or cause subsidiaries
and branches under its control to be engaged in any business or activity constituting
Settlement 30 April
horizontal competition with the Company after the founding of the Company, including
of horizontal Baiyeyuan 2001, No Yes - -
but not limited to the research, production and sales of any products that were the same
competition long-term
as or similar to products under research, production and sales of the Company, and was
willing to undertake compensation responsibility for economic losses to the Company
arising from violation of the said commitment.
Whereas the domestically listed foreign shares of Livzon Group, a controlling
subsidiary of the Company, would be listed on the Main Board of the Stock Exchange
of Hong Kong Limited, in order to fully ensure smooth completion of the said event
and in compliance with relevant requirements of the Stock Exchange of Hong Kong
Limited, the controlling shareholders and de facto controller of the Company, and
the Company entered into relevant undertakings with Livzon Group as follows: 1.
The controlling shareholders, de facto controller and persons acting-in-concert of the
Company, the Company and its controlling subsidiaries except for Livzon Group did
not or would not be, directly or indirectly, engaged in any business that constituted
competitive 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 Businesses did not
Commitment
cover products that were researched, developed, manufactured and sold on the date of
related to
relevant letter of undertaking by the controlling shareholders and de facto controller of
initial public
Baiyeyuan, the Company, the Company and its controlling subsidiaries except for Livzon Group;
oering
de facto 2. If any new business opportunity was found to constitute competitive relation with
Settlement controllers Restricted Businesses, the controlling shareholders, de facto controllers and persons 10 January
of horizontal and persons acting-in-concert of the Company, the Company and its controlling subsidiaries except 2014, No Yes - -
competition acting-in- for Livzon Group would inform Livzon Group in written form immediately and rstly long-term
concert, and provide Livzon Group with the business opportunity in accordance with reasonable
the Company and fair terms and conditions. If Livzon Group gave up the business opportunity, the
controlling shareholders and de facto controllers of the Company, the Company and its
controlling subsidiaries except for Livzon Group may accept the business opportunity
in accordance with the terms and conditions that were not superior to those offered
to Livzon Group; 3. If assets and businesses that directly or indirectly constituted
competitive relation and potential competitive relation with Restricted Businesses
were intended to be transferred, sold, leased, licensed to use or otherwise transferred
or allowed to use (these Sales and Transfers), the controlling shareholders and de
facto controllers of the Company, the Company and its controlling subsidiaries except
for Livzon Group would provide the right of first refusal for Livzon Group under
the same condition. If Livzon Group gave up the right of rst refusal, the controlling
shareholders, de facto controllers and persons acting-in-concert of the Company, the
Company and its controlling subsidiaries except for Livzon Group would carry out
these Sales and Transfers to a third party in accordance with main terms that were not
superior to those oered to Livzon Group;
110
Annual Report
2021
Specic Next plan
Whether Whether
reasons should be
Time and there is commitment
Commitment Commitment for failure stated in case
Subject Commitment content time limit of a time is strictly
background type in timely of failure
commitment limit for fullled in
fulllment in timely
fulllment time
shall be given fulllment
4. The controlling shareholders, de facto controllers and persons acting-in-concert of
the Company, the Company and its controlling subsidiaries except for Livzon Group
would not be engaged in or involved in any business that might damage the interests of
Livzon Group and other shareholders through the relation with shareholders of Livzon
Group or the identity of shareholders of Livzon Group; 5. The controlling shareholders,
de facto controllers and persons acting-in-concert of the Company, the Company and
its controlling 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 or consultant of any member of Livzon Group
to terminate his/her employment with or to be an employee or consultant of Livzon
Group at any time (whichever is applicable), no matter if relevant acts of the person
were against the Employment Contract or Consultancy Agreement (if applicable); (2)
Within three years after any person terminated to be the director, senior management or
consultant of any member of Livzon Group, employ the person who had or might have
any confidentiality information or business secret in relation to Restricted Businesses
(except for the director, senior management or consultant of the Company and/or its
controlling subsidiaries except for Livzon Group on the date of issuance of relevant
letter of undertaking); (3) Recruit or lobby any person carrying out business in any
member of Livzon Group, accept orders, or carry out business separately, through any
other person or as any person, firm, or manager, advisor, consultant, employee, agent
or shareholder of any company (competitor of any member of Livzon Group), or lobby
or persuade the person making transaction with Livzon Group or negotiating with
Baiyeyuan,
Livzon Group on Restricted Businesses to terminate its transaction with Livzon Group
de facto
or reduce its normal business volume with Livzon Group, or ask for more favorable
controllers transaction terms to any member of Livzon Group. 6. The controlling shareholders,
Settlement 10 January
and persons de facto controllers and persons acting-in-concert of the Company, the Company and
of horizontal 2014, No Yes - -
acting-in- its controlling subsidiaries except for Livzon Group further undertook that: (1) They
competition
concert, would allow and cause relevant contact persons (except for Livzon Group) to allow long-term
independent directors of Livzon Group to review if the Company and its controlling
and the
subsidiaries except for Livzon Group obeyed the Letter of Undertaking at least once a
Company
year; (2) They would provide all the data required 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 of the Company, the Company and its controlling subsidiaries
except for Livzon Group obeyed and implemented the Letter of Undertaking reviewed
by independent directors of Livzon Group through the annual report or announcement;
(4) The controlling shareholders, de facto controllers and persons acting-in-concert of
the Company, the Company (and its controlling subsidiaries except for Livzon Group)
would provide Livzon Group with the Letter of Conrmation in relation to compliance
with clauses of the Letter of Undertaking every year so as to be included in the annual
report of Livzon Group. 7. The controlling shareholders, de facto controllers and persons
acting-in-concert of the Company, and the Company undertake that they would bear
corresponding legal responsibility and consequence arising from violation of any clause
in relevant letter of undertaking from the date of issuance thereof by the Company (or
the Company's controlling subsidiaries except for Livzon Group or its contact persons).
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 of its holding subsidiary
were not the controlling shareholders of Livzon Group any more; (2) Livzon Group
terminated the listing of its shares on the Hong Kong Stock Exchange and other overseas
stock exchanges (except that shares of Livzon Group stopped to be traded temporarily
for any reason).
111
Specic Next plan
Whether Whether
reasons should be
Time and there is commitment
Commitment Commitment for failure stated in case
Subject Commitment content time limit of a time is strictly
background type in timely of failure
commitment limit for fullled in
fulllment in timely
fulllment time
shall be given fulllment
From 8 March
2016 to the date
of completion
Commitment The
of remedial
related to Company Do not interfere in the operation and management activities of Livzon Group or
Others measures in Yes Yes - -
seasoned and de facto encroach on the interests of Livzon Group
connection with
oerings controllers
the non-public
oering of
Livzon Group
Pursuant to the Guiding Opinions on Matters Relating to the Dilution of Current
Returns As a Result of Initial Public Offering, Refinancing and Major Asset
Restructuring (Announcement of CSRC [2015] No. 31), the Company shall
undertake to 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 provisions of CSRC, Zhu Baoguo, the de facto controller
of Shenzhen Baiyeyuan Investment Co., Ltd., a controlling shareholder of the
Company, made the following undertakings in order to practically take remedial
measures in relation to returns: 1. Do not intervene in the operation and management
From 11 May
activities or encroach on the interests of the Company; 2. If CSRC issued other
2017 to the date
new regulatory provisions on the remedial measures in relation to returns and
Baiyeyuan of completion
the relevant undertakings and the aforesaid undertakings did not conform to such
and the of remedial
Others provisions from the date of issuance of the undertaking to the completion of IPO Yes Yes - -
de facto measures in
share allotment, the Company/the de facto controller would undertake to issue a
controller connection
supplemental undertaking in accordance with the latest provisions of CSRC; 3. The
withrights issue
Company/the de facto controller undertook to practically take the remedial measures
Commitment of Joincare
in relation to returns formulated by the Company and fulfill the undertaking
related to
concerning the remedial measures. In case of violation of the undertaking, causing
seasoned
losses to the Company or investors, the Company/the de facto controller was willing
oerings
to assume compensation responsibilities to the Company or investors in accordance
with law. In case of violation of the said undertakings 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 the Company/the de facto
controller by CSRC, the Shanghai Stock Exchange and other securities regulators in
accordance with relevant provisions and rules set or issued by them.
After the proceeds for issuance of allotment were in place, the Company would use
From the date
them according to contents disclosed in the announcement, and carry out deposit in
of proceeds
special account, approval by specially-assigned person, and special use of special
for issuance
funds in accordance with management measures for proceeds of the Company. The
of the Rights
The Board of the Company would regularly check the progress of projects invested
Others issue in place Yes Yes - -
Company with proceeds, issue a special report on deposit and use of proceeds, engage an
to the date of
accounting rm during the annual audit to issue an verication report on deposit and
completion of
use of proceeds, would be supervised by regulators and sponsors at any time, and
use of proceeds
would not make major investment, asset purchase or similar financial investment
for rights issue.
though proceeds in disguise.
1. While transferring tradable shares subject to selling restrictions held by the
Other
Company in Livzon Group, the Company shall strict obey relevant provisions of
commitments
Guidelines of Listed Companies on Transfer of Stock Shares Subject to Selling
made to the
Restrictions ([2008] No. 15); 2. If the Company had shares subject to selling
medium The 17 December
Others restrictions held by it in Livzon Group that were planned to be sold through the No Yes -
and small Company 2008, long-term
bid trading system of Shenzhen Stock Exchange and reduced more than 5% shares
shareholders
within six months from the first share reduction, the Company would pass the
of the
Announcement on Sales disclosed by Livzon Group within two trading days before
Company
the rst share reduction.
112
Annual Report
2021
(II) If the Company has made profit forecast on its assets or projects and the Year is still within the profit forecast period, the
Company shall give an explanation on why its assets or projects achieved its profit forecast
□ Realized □ Unrealized √ N/A
(III) Fulfillment of performance covenant and its influence on goodwill impairment test
□ Applicable √ N/A
II Information on Non-operating use of funds by controlling shareholders and other related
parties during the Reporting Period
□ Applicable √ N/A
III Information on Illegal guarantees
□ Applicable √ N/A
IV TheBoard'sstatementonthe“non-standardopinionauditor'sreport”issuedbythe
appointed accounting firm
□ Applicable √ N/A
V Analysis and explanation from the Company on the reasons and impact of the change of
accounting policies, accounting estimates or correction on significant accounting errors
(I) Analysis and explanation from the Company on the reasons and impact of the change of accounting policies or
accounting estimates
□ Applicable √ N/A
(II) Analysis and explanation from the Company on the reasons and impact of the correction on significant accounting
errors
□ Applicable √ N/A
(III) Communication with former accounting firm
□ Applicable √ N/A
(IV) Others
□ Applicable √ N/A
113
VI Appointment and termination of appointment of accounting firm
Unit: 10,000 Yuan Currency: RMB
Current accounting rm
Name of domestic accounting rm Grant Thornton (Special General Partnership)
Remuneration for domestic accounting rm 128
Continuous years of auditing services provided by domestic accounting rm 3
Name Fee
Accounting rm for internal control audit Grant Thornton (Special General Partnership) 32
Statement on appointment and termination of appointment of accounting rm
□ Applicable √ N/A
Statement on re-engagement of accounting rm during the audit period
□ Applicable √ N/A
VII Risk of delisting
(1) Reasons for delisting risk warning
□ Applicable √ N/A
(2) Countermeasures to be taken by the Company
□ Applicable √ N/A
(3) Risk of delisting and the reasons
□ Applicable √ N/A
VIII Matters related to bankruptcy and reorganization
□ Applicable √ N/A
IX Material litigation and arbitration
□ The Company was involved in material litigation or arbitration in current year
√ The Company was not involved in material litigation or arbitration in current year
X Violations committed by the listed company and its directors, supervisors, senior
management, controlling shareholders and de facto controllers, punishments imposed
and rectifications
□ Applicable √ N/A
XI Credit standing of the Company and its controlling shareholders and de facto controllers
during the Reporting Period
□ Applicable √ N/A
114
Annual Report
2021
XII Material related-party transactions
(I) Related-party transactions in connection with day-to-day operation
1. Matters already disclosed in interim announcements about which no new information is available
√ Applicable □ N/A
Overview Query index
Pursuant to the“Resolution on Connected Transactions in the Ordinary See the Announcement on Resolutions Considered and
Course of Business of the Majority-owned Subsidiaries of Jiaozuo Joincare Approved at the 44th Meeting of the 7th Session of
and Jinguan Electric Power”considered and approved at the 44th Meeting the Board of Joincare Pharmaceutical Group Industry
of the 7th Session of the Board on 29 March 2021, Jiaozuo Joincare intended Co., Ltd. (Lin 2021-033) and the Announcement of
to purchase no more than RMB 200 million (inclusive) of steam and power Joincare Pharmaceutical Group Industry Co., Ltd. on
from Jinguan Electric Power in 2021 so as to satisfy the demands of Jiaozuo the Connected Transactions in the Ordinary Course of
Joincare for steam and power in the process of production and operation. The Business of the Majority-owned Subsidiaries of Jiaozuo
independent directors of the Company gave prior approval opinions on the Joincare and Jinguan Electric Power (Lin 2021-038)
Resolution and gave opinions on the approval at the Board meeting. disclosed by the Company on 31 March 2021 for details.
The“Resolution on the Adjustment of Forecast of Connected Transactions in
the Ordinary Course of Business of the Majority-owned Subsidiary Jiaozuo
Joincare and Jinguan Electric Power”was considered and approved at the
4th Meeting of the 8th Session of the Board on 15 November 2021: given See the Announcement on Resolutions Considered
that the prices of coal and other raw materials in the market have been rising and Approved at the 4th Meeting of the 8th Session of
considerably since Q3 2021, and the actual power consumption of Jiaozuo the Board of Joincare Pharmaceutical Group Industry
Joincare was higher than forecast at the beginning of the year, to satisfy the Co., Ltd. (Lin 2021-135) and the Announcement of
demands of Jiaozuo Joincare for steam and power in the process of production Joincare Pharmaceutical Group Industry Co., Ltd. on the
and operation, the cap of the connected transaction, that is, purchase of steam Adjustment of Projection of Connected Transactions in
and power from Jinguan Electric Power, was changed from RMB 200 million the Ordinary Course of Business of the Majority-owned
(inclusive) to RMB 220 million (inclusive) in 2021. The independent directors Subsidiaries of Jiaozuo Joincare and Jinguan Electric
of the Company gave prior approval opinions on the Resolution and gave Power (Lin 2021-137) disclosed by the Company on 16
opinions on the approval at the Board meeting. November 2021 for details.
Both parties referred to the market price to fix a price of the said connected
transactions. During the Reporting Period, the actual amount of the said
connected transactions was RMB 212.586 million.
2. Matters already disclosed in interim announcements about which new information is available
□ Applicable √ N/A
3. Matters not disclosed in interim announcements
□ Applicable √ N/A
(II) Related-party transactions involving acquisition or sale of assets or equity
1. Matters already disclosed in interim announcements about which no new information is available
□ Applicable √ N/A
2. Matters already disclosed in interim announcements about which new information is available
□ Applicable √ N/A
3. Matters not disclosed in interim announcements
□ Applicable √ N/A
4. Fulllment of performance covenants (if any) during the Reporting Period
□ Applicable √ N/A
115
(III) Material related-party transactions involving joint external investment
1. Matters already disclosed in interim announcements about which no new information is available
□ Applicable √ N/A
2. Matters already disclosed in interim announcements about which new information is available
□ Applicable √ N/A
3. Matters not disclosed in interim announcements
□ Applicable √ N/A
(IV) Claims and debts with related parties
1. Matters already disclosed in interim announcements about which no new information is available
□ Applicable √ N/A
2. Matters already disclosed in interim announcements about which new information is available
□ Applicable √ N/A
3. Matters not disclosed in interim announcements
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Oer funds to related parties Receive funds from related parties
Amount Amount
Related party Relationship Opening Closing Opening Closing
incurred in the incurred in the
balance balance balance balance
current period current period
Guangdong Blue Treasure Pharmaceutical Co.,
Others 5,092,960.00 20,560,996.55 25,653,956.55 0.00 379,960.00 379,960.00
Ltd.* ( 广东蓝宝制药有限公司 )
L&L Biopharma, Co. Ltd.
Others 1,740,994.29 -1,740,994.29 0.00
( 上海健信生物医药科技有限公司 )
Shenzhen Jiekang Health Care Co., Ltd.*
Others 18,577,246.63 0.00 18,577,246.63
( 深圳市捷康保健有限公司 )
Shenzhen Health Deer Technology Co., Ltd.（深
Others 0.00 4,680.00 4,680.00
圳市健康阿鹿信息科技有限公司）
Shenzhen City Youbao Technology Co., Ltd. *
Others 0.00 154,500.00 154,500.00
( 深圳市有宝科技有限公司 )
Sichuan Healthy Deer Hospital Management Co.,
Ltd. and its subsidiaries Others 153,900.00 183,495.02 337,395.02 0.00 8,936.17 8,936.17
( 四川健康阿鹿医院管理有限公司及其子公司 )
Zhongshan Renhe Health Product Co., Ltd.
Others 469,895.78 0.00 469,895.78
( 中山市仁和保健品有限公司 )
Zhuhai Sanmed Biotech Inc.*
Others 15,211,200.00 -15,000,000.00 211,200.00
( 珠海圣美生物诊断技术有限公司 )
Zhuhai Sanmed Gene Diagnostics Ltd.*
Others 49,093.14 180,195.69 229,288.83
珠海市圣美基因检测科技有限公司
Zhuhai Zhong Hui Yuan Investment Partnership
(Limited Partnership) * Others 10,967,767.26 -10,967,767.26 0.00 1,466,606.04 -1,466,606.04 0.00
( 珠海中汇源投资合伙企业（有限合伙）)
Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. * Associated
0 8,240,517.56 8,240,517.56 31,681,080.57 -31,681,080.57 0
( 焦作金冠嘉华电力有限公司 ) company
Total 52,263,057.10 1,615,623.27 53,878,680.37 33,147,686.61 -32,758,790.44 388,896.17
During the Reporting Period, the Company had normal operating fund transactions with
Cause for claims and debts with related parties
connected parties.
The said credits and debts with connected persons are operating fund transactions; there was no
Impact of claims and debts with related parties on the Company
non-operating use of funds of the Company by shareholders and connected part
116
Annual Report
2021
(V) Financial business among the Company, related financial companies, financial companies controlled by the Company,
and related parties
□ Applicable √ N/A
(VI) Others
□ Applicable √ N/A
XIII Material contracts and their performance
(I) Trusteeship, contracting and lease
1. Trusteeship
□ Applicable √ N/A
2. Contracting
□ Applicable √ N/A
3. Lease
□ Applicable √ N/A
(II) Guarantees
√ Applicable □ N/A
Unit: 10,000 Yuan Currency: RMB
External guarantees provided by the Company (excluding those provided for its subsidiaries)
Relationship Date of
Whether
between the guarantee Guaranteed
Guaranteed Eective Expiration Guarantee Fullled Overdue Overdue there's a Relationship
Guarantor guarantor Guaranteed party (signing for a related
amount date date type or not or not amount counter-
and the listed date of party or not
guarantee
company agreement)
Headquarter of Jinguan Electric Joint liability
Joincare 4,800.00 2021/2/23 2021/2/23 2022/2/23 No No 0 Yes Yes Associate
the Company Power guarantee
Headquarter of Jinguan Electric Joint liability
Joincare 10,000.00 2021/3/3 2021/3/3 2022/2/25 No No 0 Yes Yes Associate
the Company Power guarantee
Headquarter of Jinguan Electric Joint liability
Joincare 4,000.00 2021/7/8 2021/7/8 2022/7/8 No No 0 Yes Yes Associate
the Company Power guarantee
Headquarter of Jinguan Electric Joint liability
Joincare 5,000.00 2021/7/14 2021/7/14 2022/7/14 No No 0 Yes Yes Associate
the Company Power guarantee
Headquarter of Jinguan Electric Joint liability
Joincare 3,000.00 2021/7/16 2021/7/16 2022/6/16 No No 0 Yes Yes Associate
the Company Power guarantee
Headquarter of Jinguan Electric Joint liability
Joincare 3,000.00 2021/8/12 2021/8/12 2022/8/12 No No 0 Yes Yes Associate
the Company Power guarantee
Headquarter of Jinguan Electric Joint liability
Joincare 3,200.00 2021/9/23 2021/9/23 2022/9/22 No No 0 Yes Yes Associate
the Company Power guarantee
Headquarter of Jinguan Electric Joint liability
Joincare 3,200.00 2021/10/11 2021/10/11 2022/10/11 No No 0 Yes Yes Associate
the Company Power guarantee
Headquarter of Jinguan Electric Joint liability
Joincare 3,800.00 2021/10/13 2021/10/13 2022/10/12 No No 0 Yes Yes Associate
the Company Power guarantee
Holding Joint liability
Livzon Sanmed Biotech 2,900.00 2021/1/1 2021/1/1 2021/5/6 Yes No 0 Yes Yes Associate
subsidiary guarantee
117
Total guaranteed amount occurred during the Reporting Period (excluding guarantees to subsidiaries) 42,900.00
Total guaranteed amount as of the end of the Reporting Period (A) (excluding guarantees to subsidiaries) 40,000.00
Guarantee provided by the Company and its subsidiaries to subsidiaries
Total amount of guarantees to subsidiaries during the Reporting Period 276,627.03
Total amount of guarantees to subsidiaries as of the end of the Reporting Period (B) 164,656.89
Total guaranteed amount of the Company (including guarantees to subsidiaries)
Total guaranteed amount (A+B) 204,656.89
Percentage of total guaranteed amount in the Company's net assets (%) 10.14
In which:
Amount of guarantees provided to shareholders, de facto controllers and their related parties (C) 0
Amount of debt guarantee directly or indirectly provided to a guaranteed party with an asset-liability ratio exceeding 70% (D) 121,966.71
Portion of total guaranteed amount exceeding 50% of net assets (E) 0
Total guaranteed amount of the above three items (C+D+E) 121,966.71
Statement on the contingent joint liability that might be assumed in connection with outstanding guarantee N/A
Statement on guarantees -
(III) Entrusted cash asset management
1. Entrusted wealth management
(1) Overall situation of entrusted wealth management
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(2) Single entrusted wealth management
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(3) Provision for impairment of entrusted wealth management products
□ Applicable √ N/A
2. Entrusted loans
(1) Overall situation of entrusted loans
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(2) Single entrusted loans
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(3) Provision for impairment of entrusted loans
□ Applicable √ N/A
3. Other information
□ Applicable √ N/A
(IV) Other material contracts
□ Applicable √ N/A
118
Annual Report
2021
XIV Other significant matters having significant influence on the value judgment and decisions
of investors
√ Applicable □ N/A
1. Use of proceeds
Pursuant to the Reply to the Approval of Share Allotment of Joincare Pharmaceutical Group Industry Co., Ltd. issued by
CSRC (Zheng Jian Xu Ke [2018] No. 1284), the Company allotted 365,105,066 shares to original shareholders. Total amount
of actual proceeds for the allotment was RMB1,715,993,810.20; the deducted distribution expenses were RMB46,253,565.29;
the net amount of proceeds was RMB1,669,740,244.91. As at 16 October 2018, the said proceeds were in place and validated
by the Capital Verification Report of Joincare Pharmaceutical Group Industry Co., Ltd. issued by Ruihua Certified Public
Accountants (Rui Hua Yan Zi [2018] No. 40060006).
As at 31 December 2021, the use of proceeds was as follows:
Unit: 10,000 Yuan
Total amount of Total amount of Use of proceeds as Balance of proceeds as
Project name
investment proceeds investment at 31 December 2021 at 31 December 2021
Zhuhai Health Industry Base
98,066.84 76,974.02 3,386.29 73,587.73
Construction Project
Haibin Pharma Pingshan
Pharmaceutical 125,471.35 90,000.00 66,745.58 23,254.42
Industrialization Base Project
Total 223,538.19 166,974.02 70,131.87 96,842.15
Pursuant to the Resolution on the Temporary Replenishment of Working Capital with Idle Proceeds considered and approved
at the 37th Meeting of the 7th Session of the Board of the Company on 30 December 2020, it was agreed that the Company
temporarily replenished the working capital with no more than RMB 900 million of idle proceeds from 1 January 2021 to 31
December 2021 so as to improve the use eciency of proceeds and reduce nancial expenses of the Company. On 9 February
2021, the Company repaid RMB 40 million to the special account for proceeds ahead of schedule; and returned the temporary
replenishment of working capital was RMB 860 million to the special account.
Pursuant to the Resolution on Cash Management with Idle Proceeds considered and approved, it was agreed that the Company
carried out cash management with no more than RMB 250 million of idle proceeds and purchased principal-guaranteed bank
cash management products with high security and good liquidity or deposit products with high revenues, without prejudice
to the implementation of projects invested with proceeds and the use of proceeds. Duration of the said cash management was
from 1 January 2021 to 31 December 2021; the funds may be used on revolving basis within the limit. As of 31 December,
2021, all cash management products purchased by the Company have been withdrawn due to maturity.
Pursuant to the Resolution on Extension of Certain Projects Invested with Proceeds considered and approved at the 44th
Meeting of the 7th Session of the Board of the Company on 29 March 2021, it was approved that the Company extended the
construction start time of Zhuhai Health Industry Base Construction Project to the second half of 2021; the specic start time
was up to the date of completion for construction of municipal supporting works on project construction site. The resolution
was considered and approved at the 2020 annual general meeting convened by the Company on 21 May 2021. For details,
see the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Extension of Certain Projects Invested with
Proceeds disclosed by the Company (Lin 2021-040) and the Announcement of Joincare Pharmaceutical Group Industry Co.,
Ltd. on the Resolution of 2020 Annual General Meeting (Lin 2021-063).
119
Pursuant to the Resolution on Increase of Ways to Input Proceeds for Equity Investment Projects respectively considered
and approved at the 48th Meeting of the 7th Session of the Board on 10 June 2021, it was approved that the Company input
investment by“provision of interest-free loans”to“Zhuhai Health Industry Base Construction Project”and“Haibin Pharma
Pingshan Pharmaceutical Industrialization Base Project”. After adjustment, ways to input proceeds to“Zhuhai Health Industry
Base Construction Project”and“Haibin Pharma Pingshan Pharmaceutical Industrialization Base Project”were to increase
capital and provide interest-free loans, in which the amount of loans was limited to the net amount of proceeds not invested in
equity investment projects as of the date of loan. The resolution was considered and approved at the 2021 second extraordinary
general meeting convened by the Company on 29 June 2021. For details, see the Announcement of Joincare Pharmaceutical
Group Industry Co., Ltd. on Increase of Ways to Input Proceeds for Equity Investment Projects disclosed by the Company
(Lin 2021-070) and the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the Resolution of 2021 Second
Extraordinary General Meeting of Joincare Pharmaceutical Group Industry Co., Ltd. (Lin 2021-081).
Pursuant to the Resolution on the Temporary Replenishment of Working Capital with Idle Proceeds considered and approved
at the 7th Meeting of the 8th Session of the Board of the Company on 30 December 2021, it was agreed that the Company
temporarily replenished the working capital with no more than RMB 700 million of idle proceeds from 1 January 2022 to
31 December 2022 on the premise of not affecting the progress of the equity investment projects, so as to improve the use
eciency of proceeds and reduce nancial expenses of the Company.
Pursuant to the“Resolution on Change of Certain Projects Invested with Proceeds”considered and approved at the 8th
meeting of the 8th Session of the Board of the Company on 24 January 2022, given the facts that the“Zhuhai Health Industry
Base Construction Project”has been postponed for several times for not meeting the conditions for commencement, and the
market environment and the Company's business situation have changed, which resulted in changes in the project feasibility,
that the Company has an urgent need of funds for R&D investment and other projects, and that other financing channels are
time-consuming and costly, it was agreed that Zhuhai Health Industry Base Construction Project was changed to the New
Product R&D Project, Haibin Pharma Pingshan Pharmaceutical Industrialization Base Expansion Project and the Information
Platform Construction Project. The resolution was approved at the 2022 1st extraordinary general meeting of the Company
on 11 February 2022. For details, see the“Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Change of
Certain Projects Invested with Proceeds”(Lin 2022-007).
For details about deposit and actual use of proceeds in 2021, please refer to the Special Report of Joincare Pharmaceutical
Group Industry Co., Ltd. on Deposit and Actual Use of Proceeds in 2021 disclosed by the Company on the website of
Shanghai Stock Exchange (www.sse.com.cn) on 31 March 2022.
2. Matters about share repurchase
1) First share repurchases in 2021
Pursuant to the Resolution on Share Repurchase Scheme by Way of Centralized bidding transactions and other resolutions
considered and approved at the 41st Meeting of the 7th Session of the Board and the 2021 First Extraordinary General Meeting
of the Company on 9 February 2021 and 25 February 2021, it was approved that the Company repurchased company shares by
way of Centralized bidding transactions with its own funds; the total amount of repurchase funds should be no less than RMB
350 million (inclusive) and no more than RMB 700 million (inclusive); the repurchase price should be no more than RMB
20/share (inclusive); the repurchase term should be no more than 12 months from the date when the repurchase scheme was
approved by the General Meeting of the Company. For the details, please see the Announcement of Joincare Pharmaceutical
Group Industry Co., Ltd. on the Share Repurchase Scheme by Way of Centralized bidding transactions (Lin 2021-016) and the
Repurchase Report of Joincare Pharmaceutical Group Industry Co., Ltd. on Share Repurchase by Way of Centralized bidding
transactions (Lin 2021-027).
On 9 March 2021, the Company initially repurchased 680,000 shares by way of Centralized bidding transactions, representing
0.03% of total share capital of the Company. See the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on
Initial Share Repurchase by Way of Centralized bidding transactions (Lin 2021-028) for details.
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As of 14 September 2021, the Company had actually repurchased 55,135,296 shares, representing 2.81% of the Company's
total share capital (1,959,977,436 shares). The highest repurchase price was RMB 16.92/share, the lowest, RMB 10.80/share,
and the average, RMB 12.69/share. The total amount of funds used was RMB 699,900,526.87 (including the handling fee).
De-registration was completed on 16 September 2021. For details, see the“Announcement of Joincare Pharmaceutical Group
Industry Co., Ltd. on Implementation Results of Share Repurchase and Share Changes”(Lin 2021-122).
2) Second share repurchases in 2021
Pursuant to the Resolution on Share Repurchase Scheme by Way of Centralized bidding transactions and other resolutions
considered and approved at the 6th Meeting of the 8th Session of the Board and the 2021 Fifth Extraordinary General Meeting
of the Company on 6 December 2021 and 23 December 2021, it was approved that the Company repurchased company
shares by way of Centralized bidding transactions with its own funds; the total amount of repurchase funds should be no less
than RMB 300 million (inclusive) and no more than RMB 600 million (inclusive); the repurchase price should be no more
than RMB 15/share (inclusive); the repurchase term should be no more than 12 months from the date when the repurchase
scheme was approved by the General Meeting of the Company. For the details, please see the Announcement of Joincare
Pharmaceutical Group Industry Co., Ltd. on the Share Repurchase Scheme by Way of Centralized bidding transactions (Lin
2021-145) and the Repurchase Report of Joincare Pharmaceutical Group Industry Co., Ltd. on Share Repurchase by Way of
Centralized bidding transactions (Lin 2022-002).
On 20 January 2022, the Company initially repurchased 785,992 shares by way of Centralized bidding transactions,
representing 0.04% of total share capital (1,907,727,908 shares) of the Company. The aggregate amount of funds used for the
repurchase was RMB 9.981 million (including the transaction costs). See the Announcement of Joincare Pharmaceutical Group
Industry Co., Ltd. on Initial Share Repurchase by Way of Centralized bidding transactions (Lin 2022-004) for details.
As of 11 March 2022, the Company initially repurchased 19,195,871 shares by way of Centralized bidding transactions,
representing 1.01% of total share capital (1,907,727,908 shares) of the Company. The aggregate amount of funds used for the
repurchase was RMB229.98 million (including the transaction costs). See the Announcement of Joincare Pharmaceutical Group
Industry Co., Ltd. on the Repurchase of Total Share Capital to 1% and the Repurchase Progress (Lin 2022-022) for details.
3. Non-public issuance of shares
Resolutions in Relation to the 2020 Non-public Issuance of Shares were considered and approved at the 29th Meeting of the
7th Session of the Board and the 24th Meeting of the 7th Session of the Supervisory Committee of the Company on 12 July
2020. No more than 169,350,000 shares (inclusive) were planned to be issued through non-public issuance; Hillhouse Capital
Management PTE. LTD. (Hillhouse Capital) planned to subscribe for all of those shares with no more than RMB2,172,760,500
through“Hillhouse Capital Management PTE. LTD.-China Value Fund”under its management. The Company entered into
the Share Subscription Agreement Valid with Conditions between Joincare Pharmaceutical Group Industry Co., Ltd. and
Hillhouse Capital Management PTE. LTD. and the Strategic Cooperation Agreement Valid with Conditions between Joincare
Pharmaceutical Group Industry Co., Ltd. and Hillhouse Capital Management PTE. LTD. with Hillhouse Capital. See the
Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Attraction of Strategic Investors and Execution
of Strategic Cooperation Agreement (Lin 2020-089) and the Plan for 2020 Non-public Issuance of Shares of Joincare
Pharmaceutical Group Industry Co., Ltd. disclosed by the Company on 13 July 2020. The said resolut ions on non-public
issuance of shares were approved at the 2020 Second Extraordinary General Meeting of the Company on 29 July 2020.
Pursuant to the Resolution on Termination of Matters regarding 2020 Non-public Issuance of Shares and the Resolution
on Termination Agreement on Share Subscription Agreement and Strategic Cooperation Agreement Valid with Conditions
between the Company and Subscribers considered and approved at the 41st Meeting of the 7th Session of the Board and the
32nd Meeting of the 7th Session of the Supervisory Committee of the Company on 9 February 2021, it was approved that the
Company terminated the non-public issuance of shares. See the Announcement of Joincare Pharmaceutical Group Industry
Co., Ltd. on Termination of Matters regarding 2020 Non-public Issuance of Shares and the Termination Agreement on Share
Subscription Agreement Valid with Conditions and Strategic Cooperation Agreement Valid with Conditions (Lin 2021-015)
disclosed by the Company on 10 February 2021.
121
4. Reorganization of LivzonBio
Pursuant to the Resolution on Reorganization of Shareholding Structures of LivzonBio and Other Subsidiaries was considered
and approved at the 36th Meeting of the 7th Session of the Board of the Company on 4 December 2020, the Company, Livzon
Group and other trading parties agreed to reorganize shareholding structures of the subordinates of Livzon Cayman, took
Zhuhai Livzon Biotechnology Co., Ltd. as the controlling platform company of the subordinates of Livzon Cayman at home
and abroad so as to optimize shareholding structures of the subordinates of Livzon Cayman for the purpose of financing
at home and abroad. Original multiple indirect shareholding structures were adjusted to direct shareholding by parties; the
Reorganization Framework Agreement was jointly signed. The said resolutions were considered and approved at the 2020
Fourth Extraordinary General Meeting on 21 December 2020. See the Announcement of Joincare Pharmaceutical Group
Industry Co., Ltd. on Reorganization of Shareholding Structures of the Controlling Subsidiary of Livzon Group (Lin 2020-159)
disclosed by the Company on 5 December 2020 for details.
Pursuant to the Equity Transfer Agreement between the Company, Livzon Group and Livzon HK on 11 January 2021, the
Company and Livzon Group agreed to respectively acquire 49% and 51% equity interest in LivzonBio from Livzon HK.
Pursuant to the Capital Injection Agreement among the Company, Livzon Group, Lisheng Juyuan, and LivzonBio on the
same day, the Company, Livzon Group and Lisheng Juyuan jointly injected capital to LivzonBio. The registered capital of
LivzonBio was increased from RMB250,000,000 to RMB666,666,667. The capital injection was completed with filing of
industrial and business change registration on 15 January 2021. After the change, LivzonBio was respectively owned by the
Company, Livzon Group and Lisheng Juyuan as to 44.10%, 45.90% and 10.00% equity interest, respectively.
Pursuant to the Capital Injection Agreement among the Company, Livzon Group, Lisheng Juyuan, YF, Livzon HK, Livzon
MAB, Kadi, and LivzonBio on 18 January 2021, Livzon Group and YF jointly injected capital to LivzonBio. The capital
injection was completed with filing of industrial and business change registration on 5 February 2021. After the change, the
registered capital of LivzonBio was increased from RMB666,666,667 to RMB889,023,284. LivzonBio was owned by the
Company, Livzon Group, YF, and Lisheng Juyuan as to 33.07%, 51.00%, 8.43% and 7.50% equity interest, respectively.
Pursuant to the Equity Transfer Agreement between LivzonBio and Livzon HK on 18 January 2021, Livzon HK agreed to
transfer and LivzonBio agreed to acquire 100% equity interest of Livzon MAB. The equity transfer was completed with ling
of industrial and business change registration on 3 February 2021. After the change, Livzon MAB was directly owned by
LivzonBio as to 100.00% equity interest.
On 27 January 2021, LivzonBio and Livzon Cayman entered into an equity transfer agreement, pursuant to which Livzon
Cayman agreed to transfer and LivzonBio agreed to acquire 100% equity interest of Livzon HK. The equity transfer was
completed on 16 April 2021. After the change, Livzon HK was directly owned by LivzonBio as to 100.00% equity interest.
On 25 February 2021, each of Livzon International, YF and Joincare BVI issued a repurchase letter to Livzon Cayman.
Pursuant to which, (1) each of Livzon International and YF agreed that Livzon Cayman could repurchase 24,574,830 ordinary
shares and 12,500,000 preferred A shares held by them respectively at a consideration of USD98,299,320 in RMB equivalent
(i.e. RMB637,421,940.54) and USD50,000,000 in RMB equivalent (i.e. RMB324,225,000), respectively; (2) each of Livzon
International and Joincare BVI agreed that Livzon Cayman could repurchase 50,999,999 ordinary shares and 49,000,000
ordinary shares held by them respectively at a consideration of RMB306,038,709 and RMB294,037,191 respectively. As at 26
February 2021, Livzon Cayman repurchased a total of 137,074,829 shares in issue and paid the corresponding consideration of
the share repurchases to Livzon International, YF and Joincare BVI, respectively. The above share repurchases were completed
and Livzon Cayman only preserved 1 issued ordinary share, which was held by Livzon International. Livzon Cayman is
directly owned by Livzon International as to 100.00% equity interest, and the relevant registration of Livzon Cayman will be
canceled.
For specific information on the reorganization of the shareholding structures, please refer to relevant announcements
respectively disclosed by the Company on 5 December 2020, 12 January 2021, 19 January 2021, 28 January 2021, 16 February
2021, and 13 May 2021 (Announcement No.: Lin 2020-159, Lin 2021-007, Lin 2021-009, Lin 2021-012, Lin 2021-023, and
Lin 2021-061).
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5. Livzon Group's plan to spin o Livzon Diagnostics for A-share listing
On 7 August 2020, the Board of Directors of Livzon Group, a majority-controlled subsidiary of the Company, considered and
approved the proposal to spin o its subsidiary Zhuhai Livzon Diagnostics Inc. (hereinafter referred to as Livzon Diagnostics)
for A-share listing (hereinafter referred to as spin-off listing). Livzon Diagnostics is mainly engaged in the R&D, production
and sale of diagnostic reagents and equipment. As at the end of the Reporting Period, Livzon Group held approximately
39.425% of shares of Livzon Diagnostics. After completion of this spin-off, the shareholding structure of Livzon Group will
remain unchanged, and Livzon Group will still maintain control over Livzon Diagnostics. For more details, please see“the
Suggestive Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Livzon Group's Planned Spin-off of Its
Subsidiary Livzon Diagnostics for A-share Listing”(Lin 2020-106).
On 16 October 2020, the Stock Exchange of Hong Kong Limited (hereinafter referred to as SKEX) agreed to Livzon Group's
spin-off listing, and agreed to exempt the group from the applicable regulations concerning the assured entitlement related to
the spin-o listing. For details, see the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the progress of
Livzon Group's Planned Spin-o of Its Subsidiary Livzon Diagnostics for A-share Listing (Lin 2020-131).
Livzon Diagnostics would go spin-off listing on the ChiNext Board of Shenzhen Stock Exchange pursuant to the Resolution
on the Spin-off of the Subsidiary Zhuhai Livzon Diagnostics Inc. to Go Listing on the ChiNext Board of Shenzhen Stock
Exchange considered and approved at the Board meeting of Livzon Group on 23 October 2020. For details, see the
Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the progress of Livzon Group's Planned Spin-o of Its
Subsidiary Livzon Diagnostics for A-share Listing (Lin 2020-134).
The spin-o listing of Livzon Diagnostics was approved at the 2020 4th extraordinary general meeting of Livzon Group on 20
November 2020, and was registered with Guangdong Securities Regulatory Bureau for pre-listing tutoring in November 2020.
As of the disclosure date of this report, Livzon Diagnostics has submitted the ve issues of reports on progress of the tutoring.
As of the disclosure date of this report, Livzon Diagnostics has not submitted any application to or registered with Shenzhen
Stock Exchange or any relevant Chinese regulatory authorities other than those progresses listed above.
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Chapter 7
Changes in Equity and Shareholders
I Changes in share capital
(I) Table of changes in shares
1. Table of changes in shares
Before the current change Increase/decrease (+, -) due to the current change After the current change
Conversion
Issuance
Percentage Issuance of of capital Percentage
Number of bonus Others Subtotal Number
(%) new shares reserve to (%)
shares
share capital
I. Shares subject to selling restrictions 0 0 0 0 0 0 0 0 0
1. Shares held by state government
2. Shares held by state-owned entities
3. Shares held by other domestic holders
Of which: Shares held by domestic
non-state-owned entities
Shares held by domestic natural persons
4. Shares held by foreign holders
Including: Shares held by foreign entities
Shares held by foreign natural persons
II. Shares not subject to selling restrictions 1,952,780,764 100 10,082,440 0 0 -55,135,296 -45,052,856 1,907,727,908 100
1. Ordinary shares denominated in Renminbi 1,952,780,764 100 10,082,440 0 0 -55,135,296 -45,052,856 1,907,727,908 100
2. Domestically listed foreign shares
3. Overseas listed foreign shares
4. Others
III. Total number of shares 1,952,780,764 100 10,082,440 0 0 -55,135,296 -45,052,856 1,907,727,908 100
2. Explanations on changes in shares
√ Applicable □ N/A
The number of exercisable options during the second exercise period of the rst grant under the 2018 Share Options Incentive
Scheme of the Company was 8,001,000, and the exercise period was from 21 December 2020 to 20 December 2021. The
number of exercisable options during the third exercise period was 7,263,000, and the exercise period was from 21 December
2021 to 20 December 2022 The number of exercisable options during the rst exercise period of the reserved grant under the
2018 Share Options Incentive Scheme of the Company was 3,545,000, and the exercise period was from 23 September 2020
to 22 September 2021. The number of exercisable options during the second exercise period was 2,935,000, and the exercise
period was from 23 September 2021 to 22 September 2022. Options are exercised in an active way. During the Reporting
Period, the number of options cumulatively exercised and completing share transfer registration for grants under the 2018
Share Options Incentive Scheme of the Company was 10,082,440.
From 25 February 2021 to 24 February 2022, the Company expects to buy back at a price of not more than RMB 20 yuan/
share, with a total repurchase amount of not less than RMB 350 million (inclusive) and not more than RMB 700 million
(inclusive). The shares bought back this time will be used to reduce the registered capital of the Company. As of 14 September
2021, the Company has bought back 55,135,296 shares through centralized bidding, and canceled 55,135,296 shares bought
back in Shanghai Branch of China Securities Depository and Clearing Corporation Limited on 16 September 2021.
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3. The inuence of changes in shares on nancial indicators such as earnings per share and net assets per share in the most recent
year and the most recent reporting period (if applicable)
□ Applicable √ N/A
4. Other information disclosed as the Company deems necessary or required by the securities regulatory authority
□ Applicable √ N/A
(II) Changes in shares subject to selling restrictions
□ Applicable √ N/A
II Issuance and listing of securities
(I) Securities issued during the Reporting Period
□ Applicable √ N/A
Explanations on securities issuance during the Reporting Period (list separately bonds with different interest rates during the
duration):
□ Applicable √ N/A
(II) Changes in total number of shares, shareholding structure, and structure of assets and liabilities of the Company
□ Applicable √ N/A
(III) Outstanding shares granted under the employee share ownership scheme
□ Applicable √ N/A
III Information on shareholders and the de facto controller
(I) Total number of shareholders
Total number of shareholders of ordinary shares as of the end of the Reporting Period 109,269
Total number of shareholders of ordinary shares as of the end of the month immediately prior
104,600
to the publish date of this annual report
125
(II) Shares held by top 10 shareholders and top 10 holders of tradable shares (shares without selling restrictions) as of
the end of the Reporting Period
Unit: shares
Shareholdings of the Top 10 shareholders
Change during Number of shares I. Number of shares Pledge, mark or lock-up
Name of shareholder Percentage Nature of
the Reporting held at the End of held without selling
(Full name) (%) Share status Number shareholder
Period the Period restrictions
Domestic
Shenzhen Baiyeyuan Investment Co.,
0 895,653,653 46.95 0 Pledge 95,679,725 non-state
Ltd. * ( 深圳市百业源投资有限公司 )
owned entity
Hong Kong Securities Clearing
-2,253,722 91,961,426 4.82 0 Unknown Unknown
Company Limited
Might Seasons Limited 0 71,859,334 3.77 0 Unknown Foreign entity
108 portfolio of national social
-4,570,119 12,272,021 0.64 0 Unknown Unknown
security fund
Huaxia Life Insurance Co., Ltd. -
9,112,618 9,112,618 0.48 0 Unknown Unknown
Equity fund
16011 portfolio of basic endowment
-11,977,669 9,050,234 0.47 0 Unknown Unknown
insurance fund
Bosera Funds Management Co., Ltd. -
-11,266,700 8,732,946 0.46 0 Unknown Unknown
419 portfolio of social security funds
Domestic
He Zhong 3,062,424 7,850,024 0.41 0 Unknown
natural person
Agricultural Bank of China Limited
- Fullgoal CSI 500 Index Enhanced 4,186,892 5,757,424 0.30 0 Unknown Unknown
Securities Investment Fund (LOF)
Agricultural Bank of China Limited
- CSI 500 Exchange Traded Index -95,308 5,397,294 0.28 0 Unknown Unknown
Securities Investment Fund
Shareholdings of the Top 10 shareholders without selling restrictions
Number of tradable shares held Class and number of shares
Name of shareholder
without selling restrictions Class Number
Shenzhen Baiyeyuan Investment Co., Ltd. *
895,653,653 Ordinary shares denominated in Renminbi 895,653,653
(深圳市百业源投资有限公司 )
Hong Kong Securities Clearing Company Limited 91,961,426 Ordinary shares denominated in Renminbi 91,961,426
Might Seasons Limited 71,859,334 Ordinary shares denominated in Renminbi 71,859,334
108 portfolio of national social security fund 12,272,021 Ordinary shares denominated in Renminbi 12,272,021
Huaxia Life Insurance Co., Ltd. - Equity fund 9,112,618 Ordinary shares denominated in Renminbi 9,112,618
16011 portfolio of basic endowment insurance fund 9,050,234 Ordinary shares denominated in Renminbi 9,050,234
Bosera Funds Management Co., Ltd. - 419 portfolio of
8,732,946 Ordinary shares denominated in Renminbi 8,732,946
social security funds
He Zhong 7,850,024 Ordinary shares denominated in Renminbi 7,850,024
Agricultural Bank of China Limited - Fullgoal CSI 500
5,757,424 Ordinary shares denominated in Renminbi 5,757,424
Index Enhanced Securities Investment Fund (LOF)
Agricultural Bank of China Limited - CSI 500
5,397,294 Ordinary shares denominated in Renminbi 5,397,294
Exchange Traded Index Securities Investment Fund
As at the end of the Reporting Period, the special repurchase account of the Company (special
Notes on the special repurchase account among the
securities repurchase account of Joincare Pharmaceutical Group Industry Co., Ltd.) owned
Top 10 shareholders
17,459,813 shares in total, accounting for 0.92%.
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Annual Report
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Description of the above shareholders involved in
entrustment/entrusted voting right and waiver of Not applicable
voting right
There was no connection or acting-in-concert relationship between Shenzhen Baiyeyuan
Description of connection or acting-in-concert
Investment Co., Ltd., a controlling shareholder of the Company, and other shareholders; whether
relationship of the above shareholders
there is connection or acting-in-concert relationship among other shareholders is unknown.
Number of shares held by the Top 10 shareholders with selling restrictions and the description of the selling restrictions
□ Applicable √ N/A
(III) Strategic investors or general legal persons who became top 10 shareholders as a result of allotment of new shares
□ Applicable √ N/A
IV Information on the Controlling shareholder and the de facto controller
(I) Information on the Controlling shareholder
1 Legal person
√ Applicable □ N/A
Name Shenzhen Baiyeyuan Investment Co., Ltd. * ( 深圳市百业源投资有限公司 )
Person in charge of the unit or legal
Zhu Baoguo
representative
Date of incorporation January 21, 1999
Investment in industry, domestic commerce, and material supply and
Principal business
marketing industry
Equity held in other domestic and overseas Except for the daily trading of securities assets in the secondary market,
listed companies during the Reporting Baiyeyuan did not hold or participate in the equity of other domestic and
Period overseas listed companies during the Reporting Period.
Others Not applicable
2 Natural person
□ Applicable √ N/A
3 Special statement if the Company does not have a controlling shareholder
□ Applicable √ N/A
4 Statement on changes in controlling shareholders during the Reporting Period
□ Applicable √ N/A
5 The block diagram describing controlling shareholders' ownership of and control over the Company
√ Applicable □ N/A
See the“Block diagram showing the property rights and control relationship between the Company and its de facto
shareholders”in this chapter.
127
(II) Information on the De facto controller
1 Legal person
□ Applicable √ N/A
2 Natural person
√ Applicable □ N/A
Name Zhu Baoguo
Nationality China
Hold the right of residence in other
No
countries or regions or not
Main occupation and position Chairman of the Company and Livzon Group
Domestic and overseas listed companies Except for the Company and Livzon Group, Mr. Zhu Baoguo has never
controlled in the past 10 years controlled any other domestic and overseas listed companies.
3 Special statement if the Company does not have a de facto controller
□ Applicable √ N/A
4 Statement on change of control of the Company during the Reporting Period
□ Applicable √ N/A
5 The block diagram describing de facto controllers' ownership of and control over the Company
√ Applicable □ N/A
Zhu Baoguo Liu Guangxia
90% 10%
Shenzhen Baiyeyuan Investment Co., Ltd.
46.95%
Joincare Pharmaceutical Group Industry Co., Ltd.
6 The De facto controller controls the Company through trust or other asset management methods
□ Applicable √ N/A
(III) Other information on the controlling shareholder and the de facto controllers
□ Applicable √ N/A
V The cumulative number of shares pledged by controlling shareholders or the largest
shareholder of the Company and their persons acting in concert accounts for more than
80% of the shares held by them in the Company
□ Applicable √ N/A
VI Other corporate shareholders holding more than 10% shares
□ Applicable √ N/A
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Annual Report
2021
VII Explanation on restrictions on share selling
□ Applicable √ N/A
VIII Information on implementation of share repurchases plans during the Reporting Period
√ Applicable □ N/A
Unit: 10,000 Yuan Currency: RMB
Plan on share repurchase by Plan on share repurchase by
Name of share repurchase plan
centralized bidding centralized bidding
Disclosure date of share repurchase plan 10 February 2021 7 December 2021
Number of shares to be repurchased and its
0.89~1.79 1.05~2.10
percentage in total share capital (%)
Proposed repurchase amount 35,000~70,000 30,000~60,000
12 months after the date when the 12 months after the date when the
Proposed repurchase period share repurchase plan is approved share repurchase plan is approved
at the general meeting at the general meeting
To reduce registered capital of the To reduce registered capital of the
Purpose of repurchase
Company Company
Repurchased number (shares) 55,135,296 0
Percentage of repurchased shares in the target
Not applicable Not applicable
shares under share incentive scheme (%) (if any)
The progress of the Company's reduction of
Not applicable Not applicable
repurchased shares by centralized bidding
On 16 September 2021, 55,135,296
Remarks repurchased shares completed
cancellation.
129
Chapter 8
Information on Preferred Shares
□ Applicable √ N/A
130
Chapter 9
Information on Bonds
I Corporate bonds, debentures and debt financing instruments issued by non-financial entities
□ Applicable √ N/A
II Convertible corporate bonds
□ Applicable √ N/A
131
Chapter 10
Financial Statements
I Auditor's report
√ Applicable □ N/A
Z.T.S.Zi (2022) No. 442A005270
To all shareholders of Joincare Pharmaceutical Group Industry Co., Ltd.:
I. Auditor's Opinion
We have audited the nancial statements of Joincare Pharmaceutical Group Industry Co., Ltd. (the“Group”), which comprise
the Consolidated and Company balance sheet as at 31 December 2021, and the Consolidated and Company income statement,
the Consolidated and Company cash flow statement, the Consolidated and Company statement of changes in shareholders'
equity for the year 2021, and notes to the nancial statements.
In our opinion, the accompanying financial statements have been prepared in compliance with the Accounting Standards for
Enterprises in all material aspects, and give a truthful and fair view of the Consolidated and Company nancial position of the
Group as at 31 December 2021, and of its Consolidated and Company nancial performance and cash ows for the year 2021.
II. Basis for the Formation of Auditor's Opinion
We conducted our audit in accordance with Auditing Standards for CPAs of China (the“Auditing Standards”). Our
responsibilities under those standards are further described in the“Auditor's responsibilities for the audit of the financial
statements”section of our report. We are independent of the Group in accordance with China Code of Ethics for Certified
Public Accountants (the“Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We
believe that the audit evidence we have obtained is sucient and appropriate to provide a basis for our opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
(I) Revenue recognition
Further disclosed in paragraph 28 under Note 3 to the nancial statements and paragraph 43 under Note 5.
1. Key audit matter
In 2021, the Group generated operating revenues of RMB15,746.62 million from the principal businesses. We identified
revenue recognition as a key audit matter due to the materiality of revenue to the nancial statements as a whole and the risk of
material misstatement as to whether revenue is real and accurately accounted for in the appropriate accounting period.
2. How our audit addressed the key audit matter
(1) We obtained an understanding of and assessed the Company management's design and operating effectiveness of key
internal controls over revenue recognition.
(2) We obtained the contracts signed between the Company and its customers and veried the key terms of the contracts, such
as shipment and acceptance, payment and settlement, exchange and return policies.
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Annual Report
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(3) We inquired about the business registration information of the Company's customers and asked relevant personnel of
the Company in order to confirm whether there was an affiliated relationship between the Company and its customers;
obtained an understanding of the reasons for customer changes and contract performance among others; counted and
analyzed end sales of products purchased by selected customers from the Company based on the business system of the
Company's directly connected customers.
(4) We obtained records of returns and exchanges in the Company's business system and checked them to confirm whether
there were signicant abnormalities that aected revenue recognition.
(5) We selected samples to check contracts, purchase orders, shipping documents, transportation documents, bookkeeping
vouchers, payback documents, and periodic reconciliation letters, and performed external confirmation procedures on
major customer sales and accounts receivable.
(6) The procedures of income analysis for the rationality of income changes are based on product category and factors such as
market trends, industry trends, business expansion; and the income analysis would be combined with market data collected
by third-party consulting companies.
(7) We sampled sales revenue transactions around the balance sheet date, reviewed sales contracts, purchase orders, shipping
documents, transportation documents, and bookkeeping vouchers, and evaluated whether revenues were recorded in the
appropriate accounting period.
(II) Allowance for bad debts on accounts receivable
Further disclosed in paragraph 10 under Note 3 to the nancial statements and paragraph 4 under Note 5.
1. Key audit matter
As of 31 December 2021, the Group's ending balance of accounts receivable as reported in the consolidated balance sheet
was RMB 2,926.10 million and the allowance for bad debts was RMB 72.44 million which were material to the financial
statements as a whole. The management is required to apply significant accounting estimates and judgments in assessing the
expected recoverable amount of accounts receivable, which could have a material impact on the financial statements if they
were not collected on schedule or uncollectible resulting in a bad debt loss. Therefore, we identied allowance for bad debts on
accounts receivable as a key audit matter.
2. How our audit addressed the key audit matter
(1) We obtained an understanding of and assessed the management's design and operating eectiveness of key internal controls
over the management of accounts receivable.
(2) We obtained an understanding of the basis and process of recognizing the expected credit loss ratio and the key parameters
and assumptions applied in the expected credit loss model, including the basis for grouping accounts receivable based on
customers' credit risk characteristics and the historical migration rate data indicated in the expected loss ratio; evaluated
whether the expected credit loss ratio was set by taking into account and was appropriately adjusted for current economic
conditions and forward-looking information, and assessed the reasonableness of the estimate of the allowance for bad
debts.
(3) We obtained a schedule of allowance for bad debts on accounts receivable and checked whether the allowance method was
implemented in accordance with the allowance policy for bad debts; and recalculated the amount of allowance for bad
debts to check the accuracy.
(4) We analyzed the ratio of the ending balance of allowance for bad debts to accounts receivable and compared the allowance
for bad debts in the previous period with the actual amount incurred, and analyzed whether the allowance for bad debts on
accounts receivable was adequate.
(5) We analyzed the aging of accounts receivable and the creditworthiness of customers, and evaluated the reasonableness of
the allowance for bad debts on accounts receivable through audit procedures such as audit confirmation and post-period
recovery check.
133
IV. Other Information
The Group's management (the“Management”) is responsible for the other information. The other information comprises
the information disclosed in 2021 Annual Report of the Group but does not include the financial statements and our auditor's
report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
V. Management's and Governance Level's Responsibility for the Financial Statements
The Management of the Group is responsible for the preparation of the financial statements that give a truthful and fair view
in accordance with the Accounting Standards for Enterprises, and for design, implementation and maintenance of internal
controls necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Management is responsible for assessing the Group's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Management of the Group either intends to liquidate the Group or to cease operations or has no realistic alternative but to do so.
The Governance level is responsible for overseeing the Group's nancial reporting process.
VI. CPA's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Auditing Standards will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are generally considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the nancial statements.
As part of an audit in accordance with the Auditing Standards, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the nancial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sucient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
(2) Obtain an understanding of internal control relevant to the audit in order to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Management.
(4) Conclude on the appropriateness of the Management's use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's
134
Annual Report
2021
report. However, future events or conditions may cause the Group to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the financial statements. We are responsible for the direction, supervision and
performance of the group audit, and remain solely responsible for our audit opinion.
We communicate with the Governance level regarding the planned scope and timing of the audit and signicant audit ndings,
including any signicant deciencies in internal control that we identify during our audit.
We also provide the Governance level with a statement that we have complied with relevant ethical requirements regarding
independence and communicate with it all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
In our communication with the Governance level, we identify key audit matters which are those matters of most significance
in our audit of the financial statements of the current period. We disclose these matters in our auditor's report unless public
disclosure of such matters is prohibited by laws or regulations, or in rare cases where we determine not to communicate a
matter in our auditor's report if we reasonably expect that the negative consequences of communicating it in our auditor's
report would outweigh the benets in the public interest.
Certied Public Accountants Wang Ying
Grant Thornton (Special General Partnership) (The partner in charge of the auditing service project)
Beijing, China Certied Public Accountants Wang Qilai
March 29, 2022
135
II Financial statements
Consolidated Balance Sheet
31 December 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
Item Note 31 December 2021 31 December 2020
Current assets:
Monetary funds V.1 11,729,230,390.98 12,289,098,613.19
Financial assets held for trading V.2 184,638,344.31 28,328,748.72
Bill receivable V.3 1,977,286,022.02 1,343,013,818.54
Accounts receivable V.4 2,853,655,551.54 2,447,406,222.52
Receivables nancing
Prepayments V.5 369,232,546.29 209,926,040.57
Other receivables V.6 88,053,825.12 177,240,162.81
In which: Interests receivable 365,873.64
Dividends receivable
Inventories V.7 2,078,944,387.68 1,831,509,012.27
Contract assets
Held-for-sale assets
Non-current assets due within one year V.8 317,381.23 19,934,376.07
Other current assets V.9 83,986,214.37 58,098,049.20
Total current assets 19,365,344,663.54 18,404,555,043.89
Non-current assets:
Debt investment
Other debt investment
Long-term receivables V.10 266,904.13 584,284.36
Long-term equity investment V.11 1,419,349,454.84 628,279,599.73
Other equity instrument investment V.12 1,408,882,377.42 1,576,391,663.13
Other non-current nancial assets
Investment properties V.13 6,191,475.43 6,191,475.43
Fixed assets V.14 4,839,005,169.81 4,380,285,156.93
Construction in progress V.15 742,998,743.75 648,478,042.42
Productive biological assets
Oil & gas assets
Right-of-use assets V.16 46,774,759.69 18,030,132.69
Intangible assets V.17 456,782,094.80 468,087,916.05
Development expenses V.18 786,993,435.71 399,119,603.78
Goodwills V.19 614,468,698.73 614,468,698.73
Long-term prepaid expenses V.20 200,715,740.93 170,049,601.98
Deferred income tax assets V.21 552,542,866.71 468,898,469.23
Other non-current assets V.22 663,584,003.80 373,557,910.72
Total non-current assets 11,738,555,725.75 9,752,422,555.18
Total assets 31,103,900,389.29 28,156,977,599.07
Current liabilities:
Short-term loans V.23 2,518,484,835.09 2,110,942,804.06
Financial liabilities held for trading V.24 143,302.24 212.07
Notes payable V.25 1,582,386,767.93 1,087,759,353.31
Accounts payable V.26 871,553,210.51 832,632,206.53
Receipts in advance
Contract liabilities V.27 234,140,702.29 133,422,354.03
Payroll payable V.28 475,430,823.20 476,521,798.51
136
Annual Report
2021
Item Note 31 December 2021 31 December 2020
Taxes payable V.29 270,618,183.41 298,342,182.44
Other payables V.30 3,292,407,989.79 2,847,688,065.59
In which: Interests payable
Dividends payable 6,951,984.46 8,418,590.50
Held-for-sale liabilities
Non-current liabilities due within one year V.31 91,576,066.33 8,539,077.05
Other current liabilities V.32 15,626,224.29 6,267,034.79
Total current liabilities 9,352,368,105.08 7,802,115,088.38
Non-current liabilities:
Long-term loans V.33 826,780,252.78 360,324,027.48
Bonds payable
Lease liabilities V.34 25,071,794.32 9,817,780.04
Long-term payables
Long-term payroll payable
Estimated liabilities
Deferred income V.35 433,543,352.40 467,562,770.49
Deferred income tax liabilities V.21 208,525,905.39 202,259,855.68
Other non-current liabilities V.36 78,000,000.00 78,000,000.00
Total non-current liabilities 1,571,921,304.89 1,117,964,433.69
Total liabilities 10,924,289,409.97 8,920,079,522.07
Owner's equity (or shareholder's equity):
Paid-in capital V.37 1,907,727,908.00 1,952,780,764.00
Other equity instruments
In which: Preferred shares
Perpetual debts
Capital reserve V.38 2,265,357,311.92 2,533,288,674.28
Less: Treasury shares V.39 222,644,454.50 253,637,154.50
Other comprehensive income V.40 5,387,545.97 116,300,559.28
Special reserve
Surplus reserve V.41 640,821,179.08 515,941,465.19
Undistributed prots V.42 7,223,644,166.22 6,231,451,582.26
Total owner's equity (or shareholder's equity) attributable to the
11,820,293,656.69 11,096,125,890.51
parent company
Minority shareholder's equity 8,359,317,322.63 8,140,772,186.49
Total owner's equity (or shareholder's equity) 20,179,610,979.32 19,236,898,077.00
Total liabilities and owner's equity (or shareholder's equity) 31,103,900,389.29 28,156,977,599.07
Person-in-charge of the Company: Person-in-charge of the Company's accounting work: Person-in-charge of the accounting department:
Zhu Baoguo Qiu Qingfeng Qiu Qingfeng
137
Balance Sheet of the Parent Company
31 December 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
Item Note 31 December 2021 31 December 2020
Current assets:
Monetary funds 1,370,906,734.13 1,469,821,002.61
Financial assets held for trading
Notes receivable 374,296,302.21 53,571,233.65
Accounts receivable 535,543,070.24 369,494,860.22
Receivable nancing
Prepayments 201,605,530.55 319,923,532.69
Other receivables 1,136,237,811.25 376,775,704.09
In which: Interest receivable
Dividends receivable 814,041,000.00 69,999,500.00
Inventories 778,363.53
Contract assets
Held-for-sale assets
Non-current assets due within one year 8,520,000.00
Other current assets 9,379,100.23
Total current assets 3,627,968,548.61 2,598,884,696.79
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investment 3,530,939,152.29 3,273,776,583.43
Other equity instrument investment 372,609,966.35 417,364,363.95
Other non-current nancial assets
Investment properties 6,191,475.43 6,191,475.43
Fixed assets 45,139,232.27 45,314,938.23
Construction in progress 7,890,737.14 5,681,470.43
Productive biological assets
Oil & gas assets
Right-of-use assets 12,470,703.77
Intangible assets 15,316,963.24 16,497,572.49
Development expenses 21,304,063.68 13,616,385.52
Goodwills
Long-term prepaid expenses 900,737.50 1,597,393.42
Deferred income tax assets 134,711,371.96 65,869,331.55
Other non-current assets 54,866,150.94 943,396.22
Total non-current assets 4,202,340,554.57 3,846,852,910.67
Total assets 7,830,309,103.18 6,445,737,607.46
Current liabilities:
Short-term loans 450,436,811.38 500,000,000.00
Trading nancial liabilities
Notes payable 358,526,972.01
Accounts payable 461,763,867.32 310,847,849.81
Receipts in advance
Contract liabilities 31,637,971.91 8,066,344.20
Payroll payable 95,624,280.17 50,357,030.92
Taxes payable 17,190,533.60 20,724,808.94
138
Annual Report
2021
Item Note 31 December 2021 31 December 2020
Other payables 810,207,330.35 502,707,045.70
In which: Interests payable
Dividends payable
Held-for-sale liabilities
Non-current liabilities due within one year 44,954,632.42
Other current liabilities 2,140,860.88
Total current liabilities 2,272,483,260.04 1,392,703,079.57
Non-current liabilities:
Long-term loans 160,000,000.00
Bonds payable
In which: Preferred shares
Perpetual debts
Lease liabilities 7,683,561.03
Long-term payables
Long-term payroll payable
Estimated liabilities
Deferred income 40,796,000.00 43,134,800.00
Deferred income tax liabilities 29,371,338.01 38,280,327.88
Other non-current liabilities
Total non-current liabilities 237,850,899.04 81,415,127.88
Total liabilities 2,510,334,159.08 1,474,118,207.45
Owner's equity (or shareholder's equity):
Paid-in capital 1,907,727,908.00 1,952,780,764.00
Other equity instruments
In which: Preferred shares
Perpetual debts
Capital reserve 1,605,482,128.64 2,169,622,381.22
Less: Treasury shares 222,644,454.50 253,637,154.50
Other comprehensive income 77,015,953.08 110,581,751.29
Special reserve
Surplus reserve 552,219,230.70 427,339,516.81
Undistributed prots 1,400,174,178.18 564,932,141.19
Total owner's equity (or shareholder's equity) 5,319,974,944.10 4,971,619,400.01
Total liabilities and owner's equity (or shareholder's equity) 7,830,309,103.18 6,445,737,607.46
Person-in-charge of the Company: Person-in-charge of the Company's accounting work: Person-in-charge of the accounting department:
Zhu Baoguo Qiu Qingfeng Qiu Qingfeng
139
Consolidated Income Statement
From January to December, 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
Item Note 2021 2020
I. Total revenues V.43 15,903,688,266.59 13,521,605,768.20
In which: Operating revenues 15,903,688,266.59 13,521,605,768.20
II. Total operating costs 13,169,412,648.95 10,900,819,831.29
In which: Operating costs V.43 5,716,293,887.58 4,874,186,898.05
Operating tax and surcharges V.44 182,816,650.02 162,642,104.11
Selling expenses V.45 5,026,812,145.41 3,940,337,105.29
Administrative expenses V.46 939,253,444.33 950,827,562.47
R&D expenses V.47 1,397,131,273.33 1,071,711,981.95
Financial expenses V.48 -92,894,751.72 -98,885,820.58
In which: Interest expenses 90,278,042.69 35,689,153.09
Interest income 191,964,051.82 203,479,591.12
Add: Other income V.49 247,346,934.96 248,324,865.70
Income from investments (loss is indicated by“-”) V.50 71,881,264.65 182,316,456.98
In which: Income from investments in associates and joint ventures 10,281,021.59 17,271,121.06
Gains from derecognition of nancial assets at amortized cost
Gains from net exposure hedges (loss is indicated by“-”)
Gains from changes in fair values (loss is indicated by“-”) V.51 -23,506,126.09 10,217,720.09
Losses of credit impairment (loss is indicated by“-”) V.52 -8,024,112.20 -6,838,947.54
Impairment loss of assets (loss is indicated by“-”) V.53 -62,950,978.72 -80,786,875.70
Gains from disposal of assets (loss is indicated by“-”) V.54 24,044,186.55 -1,064,564.68
III. Operating prot (loss is indicated by“-”) 2,983,066,786.79 2,972,954,591.76
Add: Non-operating income V.55 8,641,830.86 10,432,247.60
Less: Non-operating expenses V.56 39,379,273.69 33,226,763.85
IV. Total prot (loss is indicated by“-”) 2,952,329,343.96 2,950,160,075.51
Less: Income tax expenses V.57 339,480,305.29 371,693,580.17
V. Net prot (loss is indicated by“-”) 2,612,849,038.67 2,578,466,495.34
(I) Classied by business continuity
1. Net prot from ongoing operation (loss is indicated by“-”) 2,612,849,038.67 2,578,466,495.34
2. Net prot from discontinuing operation (loss is indicated by“-”)
(II) Classied by ownership
1.Net prot attributable to shareholders of the parent company (loss is indicated by“-”) 1,328,499,432.05 1,120,439,799.25
2.Prot and loss of minority shareholders (loss is indicated by“-”) 1,284,349,606.62 1,458,026,696.09
VI. Other comprehensive income, net of tax -177,686,201.25 76,769,040.33
(I) Other comprehensive income attributable to owners of the parent company, net of tax -110,913,013.31 -644,580.46
1. Other comprehensive income that cannot be reclassied into prot or loss -78,059,481.21 37,208,220.51
(1) Changes from remeasurement of dened benet plans
(2) Other comprehensive income that cannot be reclassied into prot or loss under the
6,658,847.65
equity method
(3) Changes in fair value of investments in other equity instruments -84,718,328.85 37,208,220.51
(4) Changes in fair value of the enterprise's own credit risks
2. Other comprehensive income that will be reclassied into prot or loss -32,853,532.10 -37,852,800.97
(1) Other comprehensive income that can be reclassied into prot or loss under the
-13,599.80 -18,039.87
equity method
(2) Changes in fair value of other debt investments
(3) Amount of nancial assets reclassied into other comprehensive income
(4) Provision for credit impairment of other debt investments
140
Annual Report
2021
Item Note 2021 2020
(5) Reserve for cash ow hedges
(6) Exchange dierences on translation of nancial statements denominated in foreign
-32,839,932.30 -37,834,761.10
currencies
(7) Others
(II) Other comprehensive income attributable to minority shareholders, net of tax -66,773,187.94 77,413,620.78
VII. Total comprehensive income 2,435,162,837.42 2,655,235,535.67
(I) Total comprehensive income attributable to owners of the parent company 1,217,586,418.74 1,119,795,218.79
(II) Total comprehensive income attributable to minority shareholders 1,217,576,418.68 1,535,440,316.87
VIII. Earnings per share:
(I) Basic earnings per share (RMB/share) 0.6864 0.5753
(II) Diluted earnings per share (RMB/share) 0.6858 0.5728
Person-in-charge of the Company: Person-in-charge of the Company's accounting work: Person-in-charge of the accounting department:
Zhu Baoguo Qiu Qingfeng Qiu Qingfeng
141
Income Statement of the Parent Company
From January to December, 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
Item Note 2021 2020
I. Operating revenues 2,021,173,825.62 1,433,075,511.23
Less: Operating costs 1,356,825,036.11 921,243,233.86
Operating tax and surcharges 12,392,762.31 10,221,427.14
Selling expenses 509,217,536.91 309,277,172.32
Administrative expenses 152,344,869.22 109,243,507.11
R&D expenses 99,273,556.14 41,453,499.24
Financial expenses -18,244,358.04 -11,350,097.41
In which: Interest expenses 4,032,165.84 10,015,894.55
Interest income 22,710,793.68 21,521,821.07
Add: Other income 1,551,111.38 2,375,942.94
Income from investments (loss is indicated by“-”) 1,293,747,303.58 544,379,774.53
In which: Income from investments in associates and joint ventures -2,005,822.14 -1,887,802.59
Gains from derecognition of nancial assets at amortized cost
Gains from net exposure hedges (loss is indicated by“-”)
Gains from changes in fair values (loss is indicated by“-”)
Losses of credit impairment (loss is indicated by“-”) -203,993.20 -948,839.02
Impairment loss of assets (loss is indicated by“-”) -41,007.68 -187,095.55
Gains from disposal of assets (loss is indicated by“-”)
II. Operating prot (loss is indicated by“-”) 1,204,417,837.05 598,606,551.87
Add: Non-operating income 75,665.33 1,910,488.90
Less: Non-operating expenses 13,762,938.68 8,560,790.62
III. Total prot (loss is indicated by“-”) 1,190,730,563.70 591,956,250.15
Less: Income tax expenses -58,066,575.23 10,740,637.06
IV. Net prot (loss is indicated by“-”) 1,248,797,138.93 581,215,613.09
(1) Net prot from ongoing operation (loss is indicated by“-”) 1,248,797,138.93 581,215,613.09
(II) Net prot from discontinuing operation (loss is indicated by“-”)
V. Other comprehensive income, net of tax -33,565,798.21 -34,389,779.91
(I) Other comprehensive income not to be reclassied into prot and loss -33,565,798.21 -34,389,779.91
1. Changes from remeasurement of dened benet plans
2. Other comprehensive income that cannot be reclassied into prot or loss
under the equity method
3. Changes in fair value of investments in other equity instruments -33,565,798.21 -34,389,779.91
4. Changes in fair value of the enterprise's own credit risks
(II). Other comprehensive income that will be reclassied into prot and loss
1. Other comprehensive income that can be reclassied into prot or loss under
the equity method
2. Changes in fair value of other debt investments
(3) Amount of nancial assets reclassied into other comprehensive income
(4) Provision for credit impairment of other debt investments
(5) Reserve for cash ow hedges
(6) Exchange dierences on translation of nancial statements denominated in
foreign currencies
(7) Others
VI. Total comprehensive income 1,215,231,340.72 546,825,833.18
VII. Earnings per share:
(1) Basic earnings per share (RMB/share)
(2) Diluted earnings per share (RMB/share)
Person-in-charge of the Company: Person-in-charge of the Company's accounting work: Person-in-charge of the accounting department:
Zhu Baoguo Qiu Qingfeng Qiu Qingfeng
142
Annual Report
2021
Consolidated Cash Flow Statement
From January to December, 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
Item Note 2021 2020
I. Cash ow from operating activities:
Cash received from sales of goods and rendering of services 16,302,075,867.93 13,571,483,724.62
Tax refunds 142,987,224.70 133,558,486.14
Other cash received related to operating activities V.58 545,037,436.64 655,216,196.75
Subtotal of cash inow from operating activities 16,990,100,529.27 14,360,258,407.51
Cash paid for goods and services 4,536,979,552.07 3,560,766,056.50
Cash paid to and on behalf of employees 1,950,726,146.40 1,470,505,238.58
Taxes paid 1,653,421,224.28 1,419,695,247.36
Other cash paid related to operating activities V.58 6,285,884,561.28 4,884,292,272.83
Subtotal of cash outow in operating activities 14,427,011,484.03 11,335,258,815.27
Net cash ow from operating activities 2,563,089,045.24 3,024,999,592.24
II. Cash ow from investing activities:
Cash received from withdrawal of investment 155,208,882.44 319,220,699.26
Cash received from investment income 114,833,282.84 64,666,776.09
Net cash received from disposal of xed assets, intangible assets and other long-
9,404,128.73 49,081,680.14
term assets
Net cash received from disposal of subsidiaries and other business units 3,311,220.53 5,339,063.95
Other cash received related to investing activities V.58 113,574,087.21 61,508,016.38
Subtotal of cash inow from investing activities 396,331,601.75 499,816,235.82
Cash paid for purchase and construction of xed assets, intangible assets and other
1,521,419,292.51 830,408,355.23
long-term assets
Cash paid for investment 786,000,000.00 157,137,468.09
Net cash paid for acquisition of subsidiaries and other business units
Other cash paid related to investing activities V.58 53,070,040.41 12,591,104.28
Subtotal of cash outow in investing activities 2,360,489,332.92 1,000,136,927.60
Net cash ow from investing activities -1,964,157,731.17 -500,320,691.78
III. Cash ow from nancing activities:
Cash received from absorption of investments 609,358,382.32 484,946,400.09
In which: Cash received by subsidiaries from investments of minority shareholders 526,782,825.73 360,264,512.67
Borrowings received 3,534,880,943.19 2,943,579,914.03
Other cash received related to nancing activities V.58 37,852,177.42 2,778,643.64
Subtotal of cash inow from nancing activities 4,182,091,502.93 3,431,304,957.76
Cash repayment 2,593,581,286.53 3,129,811,030.60
Cash paid for dividend and prot distribution or interest payment 1,271,374,383.55 1,035,943,628.98
In which: Dividends and prot paid by subsidiaries to minority shareholders 888,900,577.12 675,004,435.64
Other cash paid related to nancing activities V.58 1,292,040,186.29 503,763,246.33
Subtotal of cash outow in nancing activities 5,156,995,856.37 4,669,517,905.91
Net cash ow from nancing activities -974,904,353.44 -1,238,212,948.15
IV. Inuence of exchange rate uctuations on cash and cash equivalents -49,290,130.94 -103,989,866.63
V. Net increase in cash and cash equivalents -425,263,170.31 1,182,476,085.68
Add: Opening balance of cash and cash equivalents 12,122,781,311.49 10,940,305,225.81
VI. Closing balance of cash and cash equivalents 11,697,518,141.18 12,122,781,311.49
Person-in-charge of the Company: Person-in-charge of the Company's accounting work: Person-in-charge of the accounting department:
Zhu Baoguo Qiu Qingfeng Qiu Qingfeng
143
Cash Flow Statement of Parent Company
From January to December, 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
Item Note 2021 2020
I. Cash ow from operating activities:
Cash received from sales of goods and rendering of services 2,029,373,201.42 1,363,754,879.37
Tax refunds
Other cash received related to operating activities 606,516,829.33 1,128,399,015.69
Subtotal of cash inow from operating activities 2,635,890,030.75 2,492,153,895.06
Cash paid for goods and services 983,814,721.63 822,966,958.82
Cash paid to and on behalf of employees 181,261,857.67 127,975,207.89
Taxes paid 107,046,894.42 67,292,114.59
Other cash paid related to operating activities 1,062,779,580.04 909,133,528.65
Subtotal of cash outow in operating activities 2,334,903,053.76 1,927,367,809.95
Net cash ow from operating activities 300,986,976.99 564,786,085.11
II. Cash ow from investing activities:
Cash received from withdrawal of investment 68,268,656.05 88,796,121.25
Cash received from investment income 632,000,814.98 592,707,238.45
Net cash received from disposal of xed assets, intangible assets and
81,400.00 4,852,059.86
other long-term assets
Net cash received from disposal of subsidiaries and other business units 2,351,839.03
Other cash received related to investing activities 101,013,650.67
Subtotal of cash inow from investing activities 801,364,521.70 688,707,258.59
Cash paid for purchase and construction of xed assets, intangible assets
8,127,874.33 1,811,509.57
and other long-term assets
Cash paid for investment 319,037,191.00 78,000,000.00
Net cash paid for acquisition of subsidiaries and other business units
Other cash paid related to investing activities 50,000,000.00
Subtotal of cash outow in investing activities 377,165,065.33 79,811,509.57
Net cash ow from investing activities 424,199,456.37 608,895,749.02
III. Cash ow from nancing activities:
Cash received from absorption of investments 82,575,556.59 124,681,887.42
Borrowings received 650,000,000.00 500,000,000.00
Other cash received related to nancing activities 36,583,025.57
Subtotal of cash inow from nancing activities 769,158,582.16 624,681,887.42
Cash repayment 500,000,000.00 1,300,000,000.00
Cash paid for dividend and prot distribution or interest payment 292,289,892.43 336,592,711.32
Other cash paid related to nancing activities 701,265,930.75 253,701,833.17
Subtotal of cash outow in nancing activities 1,493,555,823.18 1,890,294,544.49
Net cash ow from nancing activities -724,397,241.02 -1,265,612,657.07
IV. Inuence of exchange rate uctuations on cash and cash equivalents 296,539.18 -1,416.03
V. Net increase in cash and cash equivalents 1,085,731.52 -91,932,238.97
Add: Opening balance of cash and cash equivalents 1,369,821,002.61 1,461,753,241.58
VI. Closing balance of cash and cash equivalents 1,370,906,734.13 1,369,821,002.61
Person-in-charge of the Company: Person-in-charge of the Company's accounting work: Person-in-charge of the accounting department:
Zhu Baoguo Qiu Qingfeng Qiu Qingfeng
144
Annual Report
2021
Consolidated Statement of Changes in Owner's Equity
From January to December, 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
2021
Owner's equity attributable to the parent company
Minority
Item Other equity instruments Other General Total owner's
Less: Treasury Special Undistributed shareholder's
Paid-up capital Preferred Perpetual Capital reserve comprehensive Surplus reserve risk Subtotal equity
Others shares reserve prots equity
share debts income provision
I. Balance at the end of last year 1,952,780,764.00 2,533,288,674.28 253,637,154.50 116,300,559.28 515,941,465.19 6,231,451,582.26 11,096,125,890.51 8,140,772,186.49 19,236,898,077.00
Add: Change of accounting policies
Correction to errors of the previous period
Business combination involving enterprises under
common control
Others
II. Opening balance of the current year 1,952,780,764.00 2,533,288,674.28 253,637,154.50 116,300,559.28 515,941,465.19 6,231,451,582.26 11,096,125,890.51 8,140,772,186.49 19,236,898,077.00
III. Increase and decrease of the current year
-45,052,856.00 -267,931,362.36 -30,992,700.00 -110,913,013.31 124,879,713.89 992,192,583.96 724,167,766.18 218,545,136.13 942,712,902.32
(enter“-”for decrease)
(I) Total comprehensive income -110,913,013.31 1,328,499,432.05 1,217,586,418.74 1,217,576,418.68 2,435,162,837.42
(II). Capital invested or decreased by owners -45,052,856.00 -570,478,635.27 -30,992,700.00 -584,538,791.27 -21,931,055.41 -606,469,846.68
1. Ordinary shares invested by the owners 10,082,440.00 72,493,116.59 699,900,526.87 -617,324,970.28 437,967,405.33 -179,357,564.95
2. Capitals invested by other equity instrument
holders
3. Amount of share-based payment included in
1,793,479.01 1,793,479.01 1,793,479.01
owner's equity
4. Others -55,135,296.00 -644,765,230.87 -730,893,226.87 30,992,700.00 -459,898,460.74 -428,905,760.74
(III). Prot distribution 124,879,713.89 -413,555,101.94 -288,675,388.05 -887,433,971.08 -1,176,109,359.13
1. Accrual of surplus reserve 124,879,713.89 -124,879,713.89
2. Accrual of general risk provision
3. Amount distributed to owners (or shareholders) -288,675,388.05 -288,675,388.05 -887,433,971.08 -1,176,109,359.13
4. Others
(IV).Internal carrying forward of owner's equity 77,248,253.85 77,248,253.85 94,678,535.62 171,926,789.47
1. Capital reserve transferred to increase capital
(or share capital)
2. Surplus reserve transferred to increase capital
(or share capital)
3. Surplus reserve compensating losses
4. Retained earnings carried over from changes in
the dened benet plan
5. Retained earnings carried over from other
77,248,253.85 77,248,253.85 94,678,535.62 171,926,789.47
comprehensive income
6. Others
(V).Special reserve
1. Accrual of the current year
2. Amount utilized in the current period
(VI). Others 302,547,272.91 302,547,272.91 -184,344,791.68 118,202,481.23
IV. Closing balance of the current 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
145
Consolidated Statement of Changes in Owner's Equity (Cont.)
From January to December, 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
2020
Owner's equity attributable to the parent company
Minority
Item Other equity instruments Other General Total owner's
Less: Treasury Special Undistributed shareholder's
Paid-up capital Preferred Perpetual Capital reserve comprehensive Surplus reserve risk Subtotal equity
Others shares reserve prots equity
share debts income provision
I. Balance at the end of last year 1,938,033,338.00 2,403,657,077.97 116,945,139.74 454,015,137.30 5,443,313,968.30 10,355,964,661.31 7,028,061,589.45 17,384,026,250.76
Add: Change of accounting policies
Correction to errors of the previous period
Business combination involving enterprises
under common control
Others
II. Opening balance of the current year 1,938,033,338.00 2,403,657,077.97 - 116,945,139.74 - 454,015,137.30 - 5,443,313,968.30 10,355,964,661.31 7,028,061,589.45 17,384,026,250.76
III. Increase and decrease of the current year
14,747,426.00 129,631,596.31 253,637,154.50 -644,580.46 - 61,926,327.89 - 788,137,613.96 740,161,229.20 1,112,710,597.04 1,852,871,826.25
(enter“-”for decrease)
(I). Total comprehensive income -644,580.46 1,120,439,799.25 1,119,795,218.79 1,535,440,316.87 2,655,235,535.67
(II). Capital invested or decreased by owners 14,747,426.00 125,566,742.45 253,637,154.50 - - - - - -113,322,986.05 98,645,829.86 -14,677,156.19
1. Ordinary shares invested by the owners 14,747,426.00 109,934,461.42 253,637,154.50 -128,955,267.08 77,986,526.50 -50,968,740.58
2. Capitals invested by other equity instrument
- -
holders
3. Amount of share-based payment included in
15,632,281.03 15,632,281.03 20,659,303.36 36,291,584.39
owner's equity
4. Others - -
(III). Prot distribution - 58,121,561.31 - -366,545,084.51 -308,423,523.20 -593,243,501.42 -901,667,024.62
1. Accrual of surplus reserve 58,121,561.31 -58,121,561.31 - -
2. Accrual of general risk provision - -
3. Amount distributed to owners (or
-308,423,523.20 -308,423,523.20 -593,243,501.42 -901,667,024.62
shareholders)
4. Others - -
(IV) . Internal carrying forward of owner's
3,804,766.58 - 34,242,899.22 38,047,665.80 - 38,047,665.80
equity
1. Capital reserve transferred to increase capital
- -
(or share capital)
2. Surplus reserve transferred to increase capital
(or share capital)
3. Surplus reserve compensating losses
4. Retained earnings carried over from changes
in the dened benet plan
5. Retained earnings carried over from other
3,804,766.58 34,242,899.22 38,047,665.80 38,047,665.80
comprehensive income
6. Others
(V) . Special reserve
1. Accrual of the current year
2. Amount utilized in the current period
(VI) . Others 4,064,853.86 4,064,853.86 71,867,951.73 75,932,805.59
IV. Closing balance of the current period 1,952,780,764.00 2,533,288,674.28 253,637,154.50 116,300,559.28 - 515,941,465.19 - 6,231,451,582.26 11,096,125,890.51 8,140,772,186.49 19,236,898,077.00
Person-in-charge of the Company: Person-in-charge of the Company's accounting work: Person-in-charge of the accounting department:
Zhu Baoguo Qiu Qingfeng Qiu Qingfeng
146
Annual Report
2021
Statement of Changes in Owner's Equity of the Parent Company
From January to December, 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
2021
Other equity instruments Other
Item Less: Treasury Special Undistributed Total owner's
Paid-up capital Preferred Perpetual Capital reserve comprehensive Surplus reserve
Others shares reserve prots equity
share debts income
I. Balance at the end of last year 1,952,780,764.00 2,169,622,381.22 253,637,154.50 110,581,751.29 427,339,516.81 564,932,141.19 4,971,619,400.01
Add: Change of accounting policies
Correction to errors of the previous period
Others
II. Opening balance of the current year 1,952,780,764.00 2,169,622,381.22 253,637,154.50 110,581,751.29 427,339,516.81 564,932,141.19 4,971,619,400.01
III. Increase and decrease of the current year (enter“-”
-45,052,856.00 -564,140,252.58 -30,992,700.00 -33,565,798.21 124,879,713.89 835,242,036.99 348,355,544.09
for decrease)
(I). Total comprehensive income -33,565,798.21 1,248,797,138.93 1,215,231,340.72
(II). Capital invested or decreased by owners -45,052,856.00 -570,478,635.27 -30,992,700.00 -584,538,791.27
1. Ordinary shares invested by the owners 10,082,440.00 72,493,116.59 699,900,526.87 -617,324,970.28
2. Capitals invested by other equity instrument holders
3. Amount of share-based payment included in owner's
1,793,479.01 1,793,479.01
equity
4. Others -55,135,296.00 -644,765,230.87 -730,893,226.87 30,992,700.00
(III). Prot distribution 124,879,713.89 -413,555,101.94 -288,675,388.05
1. Accrual of surplus reserve 124,879,713.89 -124,879,713.89
2. Amount distributed to owners (or shareholders) -288,675,388.05 -288,675,388.05
3. Others
(IV). Internal carrying forward of owner's equity
1. Capital reserve transferred to increase capital (or
share capital)
2. Surplus reserve transferred to increase capital (or
share capital)
3. Surplus reserve compensating losses
4. Retained earnings carried over from changes in the
dened benet plan
5. Retained earnings carried over from other
comprehensive income
6. Others
(V). Special reserve
1. Accrual of the current year
2. Amount utilized in the current period
(VI). Others 6,338,382.69 6,338,382.69
IV. Closing balance of the current period 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
147
Statement of Changes in Owner's Equity of the Parent Company (Cont.)
From January to December, 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd. Unit: Yuan Currency: RMB
2020
Other equity instruments Other
tem Less: Treasury Special Undistributed Total owner's
Paid-up capital Preferred Perpetual Capital reserve comprehensive Surplus reserve
Others shares reserve prots equity
share debts income
I. Balance at the end of last year 1,938,033,338.00 2,045,946,209.82 144,971,531.20 365,413,188.92 316,018,713.39 4,810,382,981.33
Add: Change of accounting policies -
Correction to errors of the previous period -
Others -
II. Opening balance of the current year 1,938,033,338.00 2,045,946,209.82 - 144,971,531.20 365,413,188.92 316,018,713.39 4,810,382,981.33
III. Increase and decrease of the current year
14,747,426.00 123,676,171.40 253,637,154.50 -34,389,779.91 61,926,327.89 248,913,427.80 161,236,418.68
(enter“-”for decrease)
(I). Total comprehensive income -34,389,779.91 581,215,613.09 546,825,833.18
(II). Capital invested or decreased by owners 14,747,426.00 114,786,996.27 253,637,154.50 - - - -124,102,732.23
1. Ordinary shares invested by the owners 14,747,426.00 109,934,461.42 253,637,154.50 -128,955,267.08
2. Capitals invested by other equity instrument holders -
3. Amount of share-based payment included in owner's
4,852,534.85 4,852,534.85
equity
4. Others -
(III). Prot distribution - - - - 58,121,561.31 -366,545,084.51 -308,423,523.20
1. Accrual of surplus reserve 58,121,561.31 -58,121,561.31 -
2. Amount distributed to owners (or shareholders) -308,423,523.20 -308,423,523.20
3. Others -
(IV) . Internal carrying forward of owner's equity - - - - 3,804,766.58 34,242,899.22 38,047,665.80
1. Capital reserve transferred to increase capital
-
(or share capital)
2. Surplus reserve transferred to increase capital
-
(or share capital)
3. Surplus reserve compensating losses -
4. Retained earnings carried over from changes
-
in the dened benet plan
5. Retained earnings carried over from other
3,804,766.58 34,242,899.22 38,047,665.80
comprehensive income
6. Others -
(V) Special reserve - - - - - - -
1. Accrual of the current year -
2. Amount utilized in the current period -
(VI) Others 8,889,175.13 8,889,175.13
IV. Closing balance of the current period 1,952,780,764.00 2,169,622,381.22 253,637,154.50 110,581,751.29 427,339,516.81 564,932,141.19 4,971,619,400.01
Person-in-charge of the Company: Person-in-charge of the Company's accounting work: Person-in-charge of the accounting department:
Zhu Baoguo Qiu Qingfeng Qiu Qingfeng
148
Annual Report
2021
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
Shenzhen Aimier Food Co., Ltd., the predecessor of the Company, was a Sino-foreign joint venture ocially established on 18
December 1992 with the approval from Shenzhen Administration for Industry and Commerce. It was primarily engaged in the
production and sale of Taitai oral liquid.
On 19 January 1994, the Company changed its name to“Shenzhen Taitai Health Food Co., Ltd. * ( 深圳太太保健食品有限公司 )”
On 4 July 1995, the Company changed its name to“Shenzhen Taitai Pharmaceutical Co., Ltd. * ( 深圳太太药业有限公司 )”.
The Company was wholly reorganized into a company limited by shares with 31 August 1999 as the base date of joint-stock
system reorganization pursuant to the resolution of the General Meeting and upon approval by Shenzhen Municipal People's
Government Document [1999] No. 197 on 16 September 1999 and 10 November 1999. The Company convened the Founding
Meeting on 12 November 1999, completed the changes of the industrial and commercial registration on 24 November 1999,
renewed the business license with registration number of Qi He Yue Shen Zong Zi No. 103358A, and changed its name to
“Shenzhen Taitai Pharmaceutical Co., Ltd. *( 深 圳 太 太 药 业 股 份 有 限 公 司 )”. The Company set 1 September 1999 as the
eective date of the joint-stock system reorganization in accounting.
On 6 February 2001, the Company was approved by CSRC to issue domestic shares (A shares) to the public according to the
Notice on the Approval of Public Offering by Shenzhen Taitai Pharmaceutical Co., Ltd. (Zheng Jian Fa Xing Zi [2001] No.
21). On 8 June 2001, shares of the Company were listed and traded on Shanghai Stock Exchange.
On 25 May 2001, the Company went through the registration formalities for industrial and commercial changes and renewed
the business license with registration number of 4403011066279.
Pursuant to the resolution approved at the General Meeting on 21 May 2002, the Company issued 5 shares for every 10 shares
by way of conversion of capital reserve based on the share capital of the Company on 31 December 2001. The Company
renewed the business license with the registration number unchanged.
On 4 June 2003, the Company changed its name to Shenzhen Health Pharmaceutical Industry Group Co., Ltd.* ( 深 圳 健 康 药
业 集 团 股 份 有 限 公 司 ). On 29 September 2003, the Company changed its name to Joincare Pharmaceutical Group Industry
Co., Ltd. * ( 健康元药业集团股份有限公司 ).
Pursuant to the resolution approved at the General Meeting on 29 September 2003, the Company issued 5 shares for every
10 shares by way of conversion of capital reserve based on the share capital of the Company on 30 June 2003. The Company
renewed the business license with the registration number unchanged.
On 2 December 2005, the Company was changed to a company limited by shares with foreign investment (with proportion of
foreign investment lower than 25%) and renewed the business license with the registration number changed to Qi He Yue Shen
Zong Zi No. 111262 upon approval by the Ministry of Commerce of the People's Republic of China.
The Reform Scheme for Non-tradable Shares of the Company was approved at the General Meeting on 16 October 2006
and implemented on 23 November 2006. According to the Scheme, shareholders of tradable shares may obtain 3.80 shares
of share consideration implemented by shareholders of non-tradable shares for every 10 tradable shares they held. After
the implementation of the Reform Scheme for Non-tradable Shares, the number of shares held by shareholders and the
shareholding ratio of shareholders of the Company were changed, but the total share capital, assets, liabilities, owner's equities,
net prots and other nancial indicators of the Company were not changed.
149
Pursuant to the resolution approved at the General Meeting on 26 March 2008, the Company issued 8 shares for every 10
shares to all shareholders and distributed cash dividends of RMB1 (tax inclusive) based on 609,930,000 shares, the total
share capital of the Company at the end of 2007. The Company renewed the business license with the registration number
unchanged.
Pursuant to the resolution approved at the General Meeting on 31 March 2010, the Company issued 2 shares for every 10
shares by way of conversion of capital reserve based on the share capital of the Company on 31 December 2009. The Company
renewed the business license with the registration number unchanged.
Pursuant to the resolution approved at the General Meeting on 15 February 2011, it was agreed that the Company repurchased
certain public shares by way of centralized price bidding in the trading system of Shanghai Stock Exchange provided that
the total amount of funds for repurchase was no more than RMB300 million and the share repurchase price was no more
than RMB12.00/share, and canceled such shares in accordance with law, with a repurchase period of 12 months from the
date when the resolution was approved. As at 30 November 2011, the Company repurchased 29,252,223 shares, accounting
for approximately 2.220% of the total issued share capital. The maximum repurchase price was RMB11.33/share and the
minimum repurchase price was RMB7.07/share. The total amount paid was RMB299,999,708.87 (including stamp duty and
commission), reaching the cap of RMB300 million. The Company completed the Scheme for Repurchasing Certain Public
Shares and went through the formalities for cancellation of repurchased shares with the Shanghai Branch of China Securities
Depository and Clearing Corporation Limited. The post-repurchase share capital was 1,288,196,577 shares.
Pursuant to the resolution approved at the General Meeting on 20 April 2012, the Company issued 2 shares for every 10
shares by way of conversion of capital reserve based on the Company's share capital of 1,288,196,577 shares. The share
capital after the conversion was 1,545,835,892 shares. The Company renewed the business license with registration number of
440301501126176.
In May 2015, the Company implemented the Equity Incentive Scheme and issued 38,043,400 restricted shares to 214 equity
incentive participants. The registered capital was changed to 1,583,879,292 shares. The Company completed the changes of
securities registration with the Shanghai Branch of China Securities Depository and Clearing Corporation Limited in July
2015. Moreover, the Company completed the changes of the industrial and commercial registration on 23 February 2016, with
unied social credit code of 91440300618874367T.
On 21 December 2015, the Company granted the first batch of reserved restricted shares in the Equity Incentive Scheme in
May 2015 to 39 equity incentive participants, and the actual number of exercised options was 3,150,000. The Company's total
share capital following the exercise changed to 1,587,029,292 shares. In February 2016, the Company completed the changes
of securities registration with the Shanghai Branch of China Securities Depository and Clearing Corporation Limited.
On 16 May 2016, the Company granted the second batch of reserved restricted shares in the Equity Incentive Scheme in May
2015 to 38 equity incentive participants, and the actual number of exercised options was 1,360,000. The Company's total share
capital following the exercise changed to 1,588,389,292 shares. On 25 July 2016, the Company completed the changes of
securities registration with the Shanghai Branch of China Securities Depository and Clearing Corporation Limited.
Pursuant to“the Resolution on Repurchase and Cancellation of Restricted Shares Granted But Not Yet Unlocked Held by
Some Incentive Participants”considered and approved at the 20th Meeting of the 6th Session of the Board on 18 August 2016,
1,250,000 shares were repurchased. After the repurchase, the Company's total share capital changed to 1,587,139,292 shares.
On 18 November 2016, the Company completed the changes of securities registration with the Shanghai Branch of China
Securities Depository and Clearing Corporation Limited.
Pursuant to the“Resolution on Repurchase and Cancellation of Restricted Shares Granted But Not Yet Unlocked Held by
Some Incentive Participants”considered and approved at the 27th Meeting of the 6th Session of the Board on 23 November
2016, 1,238,000 shares were repurchased. After the repurchase, the Company's total share capital changed to 1,585,901,292
shares. On 25 January 2017, the Company completed the changes of securities registration with the Shanghai Branch of China
Securities Depository and Clearing Corporation Limited.
150
Annual Report
2021
Pursuant to the“Resolution on Repurchase and Cancellation of Restricted Shares Granted But Not Yet Unlocked Held by
Some Incentive Participants”considered and approved at the 33rd Meeting of the 6th Session of the Board on 27 April 2017,
12,123,020 shares were repurchased. After the repurchase, the Company's total share capital changed to 1,573,778,272 shares.
On 19 July 2017, the Company completed the changes of securities registration with the Shanghai Branch of China Securities
Depository and Clearing Corporation Limited.
Pursuant to the“Resolution on Repurchase and Cancellation of Restricted Shares Granted But Not Yet Unlocked Held by
Some Incentive Participants”considered and approved at the 46th Meeting of the 6th Session of the Board on 21 March 2018,
850,000 shares were repurchased. After the repurchase, the Company's total share capital changed to 1,572,928,272 shares.
On 19 June 2018, the Company completed the changes of securities registration with the Shanghai Branch of China Securities
Depository and Clearing Corporation Limited.
On 18 October 2018, pursuant to the resolutions of the 34th Meeting of the 6th Session of the Board on 11 May 2017, the 2016
Annual General Meeting on 8 June 2017, the 41st Meeting of the 6th Session of the Board on 16 November 2017, the 48th
Meeting of the 6th Session of the Board on 26 April 2018, and the 2017 Annual General Meeting on 22 May 2018, as approved
by China Securities Regulatory Commission ( 中 国 证 券 监 督 管 理 委 员 会 ) with“Approval in Relation to the Allotment of
Shares by Joincare Pharmaceutical Group Industry Co., Ltd. * ( 健康元药业集团股份有限公司 )”(Zheng Jian Xu Ke [2018]
No. 1284) on 17 August 2018, 365,105,066 ordinary shares denominated in Renminbi (A Shares) of the Company were
issued to the original shareholders through allotment of shares with a nominal value of RMB1.00 each. After the issuance,
the Company's total share capital changed to 1,938,033,338 shares. This capital increase was validated and confirmed by the
Capital Verication Report (Ruihua Yan Zi [2018] No. 40060006) issued by Ruihua Certied Public Accountants.
Pursuant to“the Resolution on 2018 Share Options Incentive Scheme (Draft) and its Summary”considered and approved at
the 2018 Third Extraordinary General Meeting on 13 December 2018 and the“Resolution in Relation to the Adjustment of
the Quantity to be Granted and the List of Incentive Participants of the Grant under 2018 Share Options Incentive Scheme”
considered and approved at the 7th Meeting of the 7th Session of the Board on 24 January 2019, 21 December 2018 was set
as the date of grant, on which 35.72 million share options were granted to 320 incentive participants at an exercise price of
RMB8.21 per share option. Pursuant to“the Resolution on the Grant of Share Options to Incentive Participants under the
Reserved Grant”considered and approved at the 16th Meeting of the 7th Session of the Board on 23 September 2019 and“the
Resolution in Relation to the Adjustment of the Quantity for the Reserved Grant and the List of Incentive Participants of the
Reserved Grant under 2018 Share Options Incentive Scheme”considered and approved at the 17th Meeting of the 7th Session
of th e Board on 28 October 2019, 23 September 2019 was set as the date of grant, on which 8.97 million reserved share
options were granted to 186 incentive participants at an exercise price of RMB10.47 per share option.
8,887,186 share options were exercised from January to March 2020, which was validated and confirmed by the Capital
Verification Report (Zhi Tong Yan Zi [2020] No. 442ZC0063) issued by Grant Thornton; 617,109share options were exercised
from April to June 2020, which was validated and confirmed by the Capital Verification Report (Zhi Tong Yan Zi [2020] No.
442ZC00200) issued by Grant Thornton; 3,249,839 share options were exercised from July to September 2020, which was
validated and conrmed by the Capital Verication Report (Zhi Tong Yan Zi [2020] No. 442ZC00368) issued by Grant Thornton;
and 1,993,292 share options were exercised from October to December 2020, which was validated and conrmed by the Capital
Verification Report (Zhi Tong Yan Zi [2021] No. 442C000002) issued by Grant Thornton. As at 31 December 2020, a total of
14,747,426 share options were exercised; and the Company's total share capital was increased to 1,952,780,764 shares.
3,848,413 share options were exercised from January to March 2021, which was validated and confirmed by the Capital
Verification Report (Zhi Tong Yan Zi [2021] No. 442C000151) issued by Grant Thornton (Special General Partnership);
and 1,964,040 share options were exercised from April to June 2021, which was validated and confirmed by the Capital
Verification Report (Zhi Tong Yan Zi [2021] No. 442C000453) issued by Grant Thornton (Special General Partnership).
1,899,922 share options were exercised from July to September 2021, which was validated and confirmed by the Capital
Verification Report (Zhi Tong Yan Zi [2021] No. 442C000667) issued by Grant Thornton; and 2,370,065 share options were
exercised from October to December 2021, which was validated and confirmed by the Capital Verification Report (Zhi Tong
Yan Zi [2022] No. 442C000008) issued by Grant Thornton.
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Pursuant to the Resolution on Share Repurchase Scheme by Way of Centralized Price Bidding and other resolutions
considered and approved at the 41st Meeting of the 7th Session of the Board and the 2021 First Extraordinary General
Meeting of the Company on 9 February 2021 and 25 February 2021, respectively, it was approved that the Company
repurchased company shares shall be cancalled and thus to reduce registered capital of the Company.The Company completed
the cancellation of repurchased 55,135,296 shares with the Shanghai Branch of China Securities Depository and Clearing
Corporation Limited on 16 September 2021.
As of 31 December2021, the total share capital of the Company was 1,907,727,908 shares after exercising options and
cancelling of the repurchased shares during 2021.
The controlling shareholder of the Company is Shenzhen Baiyeyuan Investment Co., Ltd. * ( 深圳市百业源投资有限公司 ),
and the de facto controller is Zhu Baoguo.
The Company is engaged in the integrated pharmaceutical industry.
The nature of business and principal activities of the Company and its subsidiaries: primarily engaged in the R&D, production
and sale of pharmaceutical products and healthcare products, which covered drug preparation products, active pharmaceutical
ingredients (“APIs”) and intermediates, diagnostic reagents and equipment as well as healthcare products.
During the Reporting Period, there was no change in the principal activities of the Company.
The financial statements and notes to the financial statements of the Company were approved at the 9th Meeting of the 8th
Session of the Board on 29 August 2022.
2. Scope of consolidated financial statements
√ Applicable □ N/A
Please refer to Note VII“Equity in other entities”for names of subsidiaries included in the consolidation in 2021. Please refer
to Note VI“Change to consolidation scope”for details of change to current consolidation scope of the Company.
II. Basis of Preparation for the Financial Statements
1. Basis of preparation
The Company's nancial statements have been prepared on the going-concern basis.
2. Continuing operation
√ Applicable □ N/A
The nancial statements have been prepared in accordance with the Accounting Standards for Business Enterprises issued by
the MOF and its application guidance, interpretations and the other related provisions (collectively, the“Accounting Standards
for Business Enterprises”). In addition, the Company also discloses relevant financial information in accordance with the
Information Disclosure and Presentation Rules for Companies Oering Securities to the Public No. 15 – General Provisions on
Financial Reporting (2014 Revision) issued by the CSRC.
The nancial statements have been prepared on the going-concern basis.
The Company's accounting is measured on an accrual basis. Except for certain nancial instruments, these nancial statements
are generally measured at historical cost. Non-current assets held for sale are stated at the lower of fair value less estimated
selling costs and their original carrying amount if they qualify as held for sale. In case of asset impairment, the Company shall
make provisions for impairment in accordance with applicable provisions.
III. Significant Accounting Policies and Accounting Estimates
Specic accounting policies and accounting estimate tips:
√ Applicable □ N/A
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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 production and operation characteristics. Details of accounting
policies are set out in Note III.16, Note III.20, Note III.21 and Note III.28.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The nancial statements comply with the Accounting Standards for Business Enterprises, which gave a true and complete view
of the consolidated and the Company's financial position as at 31 December 2021, and the consolidated and the Company's
operating results and the consolidated and the Company's cash ow and other relevant information for 2021.
2. Accounting period
The scal year of the Company is from 1 January to 31 December in each calendar year.
3. Business cycle
√ Applicable □ N/A
Business cycle of the Company consists of 12 months.
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (“RMB”). Overseas subsidiaries of the
Company usually recognise HK dollar, Macau dollar and US dollar as their functional currencies according to the primary
economic environment of which these subsidiaries operate. The Company prepares its nancial statements in RMB.
5. Accounting treatment for business combinations involving enterprises under common control and business
combinations involving enterprises not under common control
√ Applicable □ N/A
(1) Business combinations involving enterprises under common control
For the business combination involving entities under common control, the assets acquired and liabilities assumed are
measured based on their carrying amounts in the consolidated financial statements of the ultimate controlling party as at
the combination date, except the adjustment made due to different accounting policies. The difference between the carrying
amount of the consideration paid for the combination and the net assets acquired is adjusted against share premium in the
capital reserve, with any excess adjusted against retained earnings.
Business combination involving enterprises under common control and achieved in a number of transactions
In the separate financial statements, the initial investment cost will be recognised at the carrying amount of the Company's
share in the combined party's net assets in the consolidated nancial statements of the ultimate controlling party on the date of
combination. The dierence between the initial investment cost and the sum of the carrying amount of the investment held and
the carrying amount of consideration paid 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 based on their carrying
amounts in the consolidated financial statements of the ultimate controlling party as at the combination date, except the
adjustment made due to different accounting policies. The difference between sum of the carrying amount of the investment
held and the carrying amount of the consideration paid for the combination and the carrying amount of the net assets acquired
is adjusted against share premium in the capital reserve, with any excess adjusted against retained earnings. For long-term
equity investment held before the control over the combined party is obtained, profit or loss, other comprehensive income
and other changes to equity interest attributable to the owners recognised from the later of the acquisition of the original
equity interest and the date when the combing party and the combined party are placed under common control until the date
of combination shall be offset against retained profit at the beginning of the period of the comparative financial statements or
prot or loss of the period respectively.
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(2) Business combinations involving enterprises not under common control
For the business combinations involving enterprises not under common control, the combination cost shall be the fair value
of the assets transferred, liabilities incurred or assumed, and equity securities issued 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 fair value.
Where the combination cost exceeds the fair value of the acquiree's identifiable net assets in the business combination, the
dierence is recognised as goodwill and is subsequently measured at cost less accumulated impairment provisions. Where the
combination cost is less than the fair value of the acquiree's identiable net assets in the business combination, the dierence
shall be included in prot or loss for the period after review.
Business combination involving enterprises not under common control and achieved in a number of transactions.
In the separate financial statements, the initial cost of the investment is the sum of the carrying amount of the acquiree's
equity investment held before the acquisition date and the additional investment cost on the acquisition date. In respect of the
equity investment held prior to the acquisition date, other comprehensive 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 asset or liability by the investee at the time of disposal. Shareholder's equity recognised due to the changes of other
shareholder's equity other than the changes of net loss and profit, other comprehensive income and profit distribution shall
be transferred to profit or loss for current period when disposed. If the equity investment held prior to the acquisition date is
measured at fair value, the cumulative changes in fair value recognised in other comprehensive income shall be transferred to
prot or loss for current period when accounted for using cost method.
In the consolidated financial statements, the combination cost is the sum of consideration paid on the acquisition date and
fair value of the acquiree's equity held prior to the acquisition date. The equity of the acquirees held before the acquisition
date is re-measured at the fair value of the equity on the acquisition date and the differences between the fair value and the
carrying amount are recognised in the income for the current period; in respect of any other comprehensive income attributable
to the equity interest in the acquiree held prior to the acquisition date and any changes of other shareholder's equity shall be
transferred to investment profit or loss for current period on the acquisition date, except for the other comprehensive income
incurred due to the changes arising from remeasuring net assets or net 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 advisory for business
combinations are recognised in profit or loss when incurred. Transaction costs of equity or debt securities issued as the
considerations of business combination are included in the initial recognition amounts.
6. Preparation of consolidated financial statements
√ Applicable □ N/A
(1) Scope of consolidation
The scope of consolidated financial statements is determined based on control. Control means the Company has exposures
or rights to variable returns from its involvement with the investee and the ability to affect those returns through power over
such investee. Subsidiaries are the entities controlled by the Company（including enterprises, a dividable part of investees and
structured entities）.
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(2) Method for preparation of the consolidated nancial statements
The consolidated financial statements are based on the financial statements of the Company and its subsidiaries, and are
prepared by the Company in accordance with other relevant information. In preparing the consolidation financial statements,
the Company and its subsidiaries are required to apply consistent accounting policy and accounting period, intra-group
transactions and balances shall be oset.
A subsidiary or a business acquired through a business combination involving entities under common control in the reporting
period shall be included in the scope of the consolidation of the Company from the date when it is under control of the ultimate
controlling party, and then its operating results and cash flows will be included in the consolidated income statement and the
consolidated cash ow statement, respectively.
For a subsidiary or a business acquired through a business combination involving entities not under common control in the
reporting period, its income, expenses and profits are included in the consolidated income statement, and its cash flows are
included in the consolidated cash ow statement from the acquisition date to the end of the reporting date.
The shareholders' equity of the subsidiaries that are not attributable to the Company shall be presented under shareholders'
equity in the consolidated balance sheet as minority interests. The portion of net profit or loss of subsidiaries for the period
attributable to minority interest is presented in the consolidated income statement under the“profit or loss of minority
interest”. When the amount of loss attributable to the minority shareholders of a subsidiary exceeds the minority shareholders'
portion of the opening balance of owners' equity of the subsidiary, the excess amount shall be allocated against minority
interest.
(3) Purchase of the minority stake in the subsidiary
The difference between the long-term equity investments costs acquired by the purchase of minority interests and the share
of the net assets that the subsidiaries have to continue to calculate from the date of purchase or the date of consolidation in
proportion to the new shareholding ratio, and the difference between the disposal of the equity investment without losing
control over its subsidiary and the disposal of the long-term equity investment corresponding to the share of the net assets
of the subsidiaries from the date of purchase or the date of consolidation, shall be adjusted to the capital reserve (or share
premium), if the capital reserve is not sucient, 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 equity investment or other
reasons, the remaining equity is re-measured at its fair value on the date when the Company loses its control. The difference
between the sum of the consideration acquired due to the disposal of the equity and the fair value of the remaining equity, and
the Company's share in the sum of carrying value of net assets of the original subsidiary and goodwill calcu lated on an on-
going basis from the acquisition date based on the original shareholding proportion is recognised in the investment income for
the current period when the control is lost.
Other comprehensive income in relation to the original subsidiary's equity investment are transferred to profit or loss for the
current period when control ceases, except for those arising from re-measuring net assets or net liabilities of defined benefit
plan by the investee.
(5) Treatment of disposal through several transactions until the loss of control of subsidiaries
Where the Company disposes of the equity interests in the subsidiary through several transactions until it loses control, and
the transaction terms, conditions and economic effects satisfy one or several of the following circumstances, such several
transactions shall be deemed as a basket of transactions in accounting treatment:
① Such transactions are entered into simultaneously or upon the consideration of the mutual impacts;
② No complete commercial result will be realised without such transactions as a whole;
③ The occurrence of one transaction depends on the occurrence of at least another transaction;
④ The result of an individual transaction is not economical, but it would be economical after taken into account of other
transactions in the series.
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In the separate financial statements, where the Company disposes of the equity investment in the subsidiary through several
transactions until the loss of control, and such transactions are not regarded as“a basket of transactions”, the carrying amount
of the long-term equity investment involving each disposal will be carried forward, with the difference between the disposal
price and the carrying amount of 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 difference between the
consideration of each disposal and the carrying amount of the long-term equity investment involving the disposal before the
loss of the control, is recognised as the other comprehensive income and 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 the subsidiary through
several transactions until the loss of control, the measurement of the remaining equity interest and the accounting treatment
of the losses and gains of the disposal will be made with reference to the“Treatment of loss of control of subsidiaries”as
described above. For the difference between the consideration of each disposal before the loss of the control and the carrying
amount of the Company's share in the net assets involving the disposal of such subsidiary calculated on an on-going basis from
the acquisition date, the treatment will be made as follows:
① In case the transactions are“a basket of transactions”, such difference is recognised as the other comprehensive income
and will be carried forward to the prot or loss for the current period when the control is lost.
② In case the transactions are not“a basket of transactions”, such difference is accounted into the capital reserve (or share
premium) as equity, and shall not be carried forward to the prot or loss for the current 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 joint arrangement is classied
into the joint operation and the joint venture.
(1) Joint operation
A joint operation is a joint arrangement whereby the Company have rights and obligations to the relevant assets and liabilities.
The Company recognises the following items in relation to its interest in a joint operation, and makes corresponding
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 the arrangements.
The Company's investment in joint ventures is accounted for using the equity method according to the rules of the long-term
equity investment.
8. Standards for determination of cash and cash equivalents
Cash and cash equivalents of the Company include cash on hand, bank deposit readily available for payment and those
investments held by the Company that are short-term (normally due in three months since the acquisition date), highly liquid,
readily convertible into known amounts of cash and subject to an insignicant risk of change in value.
9. Foreign currency transactions and translation of financial statements in foreign currency
√ Applicable □ N/A
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(1) Foreign currency transactions
Foreign currency transactions incurred by the Company are translated to the functional currency at the spot exchange rates on
the date of the transactions upon initial recognition.
Monetary items denominated in foreign currencies are translated to functional currency at the spot exchange rate on the
balance sheet date. Exchange dierences arising from the dierences between the spot exchange rate prevailing at the balance
sheet date and those spot rates used on initial recognition or at the previous balance sheet date are recognised in prot or loss
for the current period; non-monetary items denominated in foreign currencies that are measured at historical cost are translated
using the spot exchange rate on the transaction date. Non-monetary items denominated in foreign currencies that are measured
at fair value are translated using the spot exchange rate on the date the fair value is determined; the resulting exchange
dierences between the amounts in functional currency upon translation and in original functional currency are recognised in
prot or loss for the current period.
(2) Translation of nancial statements in foreign currency
At the balance sheet date, when translating the foreign currency financial statements of overseas subsidiaries, the assets
and liabilities in the balance sheet are translated at the spot exchange rate at the balance sheet date; all items except for
“undistributed prots”of the shareholders' equity are translated at the spot exchange rate on the transaction date.
The revenue and expenses in prot or loss are translated at the spot exchange rate on the transaction date.
All items in the statement of cash ows are translated at the spot exchange rate on the transaction date. The eect of exchange
difference on cash is adjusted and separately presented as“Effect of changes in foreign exchange rates on cash and cash
equivalents”in the cash ow statement.
The exchange differences arising from translation of the financial statements are presented as the“other comprehensive
income”in the shareholders' equity of the balance sheet.
When the Company disposes of the overseas operation and loses control, the differences arising from the translation of the
financial statements in foreign currency that have been presented under the shareholders' equity in the balance sheet and
involving such overseas operation are carried forward to the profit or loss for the current period in whole or in the proportion
of the disposal of the overseas operation.
10. Financial instruments
√ Applicable □ N/A
Financial instruments are contracts creating financial assets of a party and financial liabilities or equity instruments of other
parties.
(1) Recognition and De-recognition of nancial instruments
A nancial asset or nancial liability is recognised when the Company becomes one of the parties under a nancial instrument
contract.
The nancial assets will be de-recognised if any of the following conditions is satised:
① The contractual right to receive the cash ow of the nancial assets is terminated;
② The financial assets have been transferred and the transferred financial asset satisfies the following conditions of de-
recognition.
If the current obligation of a nancial liability (or a part thereof) has been discharged, the nancial liability (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 existing financial liability, and the contract terms of the new financial liability are
substantially different with the original financial liability, the original financial liability shall be de-recognised, and the new
nancial liability shall be recognised at the same time.
The regular transactions of the nancial assets are recognised and derecognised at the transaction date.
157
(2) Classication and measurement of nancial assets
The Company classifies financial assets into three categories: financial assets at amortised cost; financial assets at fair value
through other comprehensive income; and financial assets at fair value through profit or loss based on the business model for
managing nancial assets and their contractual cash ow characteristics upon initial recognition.
Financial assets at amortised cost
The Company shall classify nancial assets that meet the following conditions and are not designated as nancial assets at fair
value through prot or loss for the current period as nancial assets measured at amortised cost:
A. The Company's business model for managing the nancial assets is to collect contractual cash ow;
B. The terms of the financial asset contract stipulate that the cash flow generated on a specific date is only 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 interest method. Gains
or losses arising from financial assets which are measured at amortised cost and not part of 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 income
The Company shall classify financial assets that meet the following conditions and are not designated as financial assets
measured at fair value through profit or loss for the current period as financial assets measured at fair value through other
comprehensive income:
A. The Company's business model for managing the financial assets is both to collect contractual cash flows and to sell the
nancial assets;
B. The terms of the financial asset contract stipulate that the cash flow generated on a specific date is only the payment for
principal and interest accrued on the outstanding principal.
After initial recognition, these nancial assets are subsequently measured at fair value. Interest, impairment losses or gains and
exchange losses and gains calculated using the eective interest method are recognised in prot or loss for the current period,
while other gains or losses are recognised in other comprehensive income. The cumulative prot or loss previously included in
other comprehensive income will be transferred to the prot or loss for the current period upon derecognition of the nancial
assets.
Financial assets at fair value through prot or loss for the current period
In addition to the above financial assets which are measured at amortised cost or at fair value a through other comprehensive
income, the Company classifies all other financial assets as financial assets measured at fair value through profit or loss for
the current period. When initial recognition, in order to eliminate or signicantly reduce accounting mismatches, the Company
irrevocably designates some financial assets that should have been measured at amortised cost or at fair value through other
comprehensive income as nancial assets at fair value through prot or loss for the current period.
After initial recognition, these financial assets are subsequently measured at fair value, and the profits or losses (including
interest and dividend income) generated from which are recognised in prot or loss for the current period, unless the nancial
assets are part of the hedging relationship.
However, with respect to non-trading equity instrument investments, the Company may irrevocably designate them as nancial
assets measured at fair value through other comprehensive income at initial recognition. The designation is made on the basis
of individual investment, and the relevant investment conforms to the denition of equity instruments from the issuer's point of
view.
After initial confirmation, financial assets are subsequently measured at fair value. Dividend income that meets the
requirements is recognised in profit and loss, and other gains or losses and changes in fair value are recognised in other
comprehensive gains. When derecognised, the accumulated gains or losses previously recognised in other comprehensive gains
are transferred from other comprehensive gains to retained earnings.
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The business model of managing financial assets refers to how the Company manages financial assets to generate cash flow.
The business model decides whether the source of cash ow of nancial assets managed by the Company is to collect contract
cash ow, sell nancial assets or both of them. Based on objective facts and the specic business objectives of nancial assets
management decided by key managers, the Company determines the business model of nancial assets management.
The Company evaluates the characteristics of the contract cash ow of nancial assets to determine whether the contract cash
flow generated by the relevant financial assets on a specific date is only to pay principal and interest based on the amount of
unpaid principal. Among them, principal refers to the fair value of financial assets at the time of initial confirmation; interest
includes the consideration of time value of money, credit risk related to the amount of unpaid principal in a specic period, and
other basic borrowing risks, costs and prots. In addition, the Company evaluates the terms and conditions of the contracts that
may lead to changes in the time distribution or amount of cash ow in nancial asset contracts to determine whether they meet
the requirements of the above contract cash ow's characteristics.
Only when the Company changes its business model of managing financial assets, all the financial assets affected shall be
reclassified on the first day of the first reporting period after the business model changes, otherwise, financial assets shall not
be reclassied after initial conrmation.
Financial assets are measured at fair value on initial recognition. The relevant transaction cost of nancial assets at fair value
through profit or loss is directly recognised in profit or loss for the current period, and that of other types of financial assets
is included in the initially recognised amount. Trade receivables or notes receivable arising from sales of goods or rendering
services, without significant financing component, are initially recognised based on the transaction price expected to be
entitled by the Company.
(3) Classication and measurement of nancial liabilities
On initial recognition, the Company's financial liabilities are classified into financial liabilities at fair value through profit or
loss and nancial liabilities at amortised cost. For nancial liabilities not classied as nancial liabilities at fair value through
prot or loss, the relevant transaction costs are included in the initially recognised amount.
Financial liabilities at fair value through prot or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated at fair value through profit or loss upon initial recognition. Such financial liabilities are subsequently measured at
fair value, all gains and losses arising from changes in fair value and dividend and interest expense relative to the financial
liabilities are recognised in prot or loss for the current period.
Financial liabilities at amortised cost
Other financial liabilities are subsequently measured at amortised cost using the effective interest method; gains and losses
arising from derecognition or amortisation is recognised in prot or loss for the current period.
Distinction between nancial liabilities and equity instruments
The nancial liability is the liability that meets one of following criteria:
① Contractual obligation to deliver cash or other nancial instruments to another entity.
② Under potential adverse condition, contractual obligation to exchange financial assets or financial liabilities with other
parties.
③ A contract that will or may be settled in the entity's own equity instruments and is a non-derivative for which the entity is
or may be obliged to deliver a variable number of the entity's own equity instruments.
④ A derivative that will or may be settled other than by the exchange of a xed amount of cash or another nancial asset for a
xed number of the entity's own equity instruments.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities.
If the Company cannot unconditionally avoid fullling a contractual obligation by delivering cash or other nancial assets, the
contractual obligation meets the denition of nancial liability.
159
If a nancial instrument must or are able to be settled by the Company's own equity instrument, the Company should consider
whether the Company's equity instrument as the settlement instrument is a substitute 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
nancial liability; if the latter, the tool is the equity instrument of the Company.
(4) Derivative nancial instruments and embedded derivatives
The Company's derivative nancial instruments include forward foreign exchange contracts, and are initially measured at fair
value on the date of the derivative contract signed and are subsequently measured at fair value. A derivative with positive fair
value shall be recognised as an asset, otherwise that with negative fair value shall be recognised as a liability. Any prot or loss
arising from changes of fair value and not compliance with the accounting provision of hedge shall be recognised as prot or
loss for current period.
For the hybrid instrument which includes embedded derivatives, where the host contract is a financial asset, requirements in
relation to the classification of financial assets shall apply to the hybrid instrument as a whole. Where the host contract is not
a nancial asset, and the hybrid instrument is not measured at fair value and its changes are included in the prot and loss for
the current period for accounting purposes, there is no close relation between the embedded derivatives and the host contract in
terms of economic features and risks, and the instrument that has the same condition with the embedded derivatives and exists
independently meets the definition of derivatives, the embedded derivatives shall be separated from the hybrid instrument
and treated as a separate derivative financial instrument. If it is unable to separately measure the embedded derivatives upon
acquisition or on the subsequent balance sheet date, the hybrid instrument shall be entirely designated as the nancial assets or
nancial liabilities measured at fair value and whose movements are included in the prot and loss of the current period.
(5) Fair value of the nancial instrument
The methods for determining the fair value of the nancial assets or nancial liabilities are set out in Note III.11.
(6) Impairment of nancial assets
The following items are subject to impairment accounting and recognition of loss allowances based on expected credit losses:
A. Financial assets measured at amortised cost;
B. Receivables and debt investments that are measured at fair value through other comprehensive income;
C. Contract assets as dened in the Accounting Standard for Business Enterprises No. 14 – Revenue;
D. Lease receivables;
E. Financial guarantee contracts, except for those carried at fair value through profit or loss, those which the transfer of
financial assets does not satisfy the derecognition condition or those formed as a result of continued involvement of the
transferred nancial 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
dierence between all receivable contractual cash ows according to the contract and all cash ows expected to be received by
the Company discounted to present value at the original eective interest rate, i.e. the present value of all cash shortfalls.
The Company takes into account reasonable and valid information on past events, current conditions and forecasts of future
economic conditions, with the risk of default as the weight, to calculate the probabilistic weighted amount of the present value
of the difference between the cash flow receivable from 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 different stages. If the credit
risk of the financial instrument does not increase significantly since the initial recognition, it would be classified in Stage 1,
the Company would measure loss allowance according to the future 12-month expected credit losses. If the credit risk of a
financial instrument has significantly increased since the initial recognition but not yet credit-impaired, it would be classified
in Stage 2, the Company would measure loss allowance according to the lifetime expected credit losses of that instrument. If
the financial instrument has credit-impaired since the initial recognition, it would be classified in Stage 3, and the Company
would measure loss allowance according to the lifetime expected credit losses of that instrument.
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For financial instruments with lower credit risk on the balance sheet date, the Company assumes that its credit risk has not
increased significantly since the initial recognition, and measures loss allowance according to the 12-month expected credit
losses.
Lifetime ECLs are the ECLs that result from all possible default event over the expected life of a nancial instrument. Future
12-month ECLs are the portion of ECL that results from default events on a nancial instrument that are possible within the 12
months after the balance sheet date (or the expected life of the instrument, if it is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Company 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, the Company would measure
the interest income by the book balance (that is, without deduction for credit allowance) and the effective interest rate. For
nancial instruments classied in Stage 3, the Company would measure the interest income by the amortised cost (that is, book
balance less impairment allowance) and the eective interest rate.
For notes receivable, trade receivables and contract assets, regardless whether it has significant financing components or not,
the Company has always measured its loss allowance at an amount equal to lifetime expected credit losses.
If the expected credit losses of one individual nancial asset cannot be estimated at a reasonable cost, the Company classies
notes receivable and trade receivables into portfolios based on credit risk characteristics, and measures expected credit losses
on portfolios basis to determine portfolios by the following basis:
A. Bills receivable
Bills receivable portfolio 1: Bank acceptance bills
Bills receivable portfolio 2: Commercial acceptance bills
B. 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 companies
Contract assets
Contract assets portfolio: Sale of products
For bills receivable classied as portfolio, the Company measures expected credit losses based on the risk exposures of default
and lifetime expected credit losses rate with reference to the historical credit loss experience, current situation and forecasts of
future economic conditions.
For accounts receivables classified as portfolio, the Company measures expected credit losses through preparing a table of
concordance between the aging of trade receivables and lifetime expected credit losses rate with reference to the historical
credit loss experience, current situation and forecasts of future economic conditions.
Other receivables
The Company classifies other receivables into certain portfolios based on credit risk characteristics, and measures 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 lease expenses
Other receivables portfolio 3: Other receivables
Other receivables portfolio 4: Receivables of consolidated companies
For other receivables classified as portfolio, the Company measures expected credit losses based on the risk exposures of
default and future 12-month or lifetime expected credit losses rate.
Long-term receivables
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The Company's long-term receivables include nance lease receivables and equity transfer receivables.
The Company classifies finance lease receivables and equity transfer receivables into certain portfolios based on credit risk
characteristics, and measures expected credit losses on portfolios basis to determine portfolios by the following basis:
A. Finance lease receivables
Portfolio of nance lease receivables: other receivables
B. Other long-term receivables
Portfolio of other long-term receivables: equity transfer receivables
For finance lease receivables and equity transfer receivables, the Company measures expected credit losses based on the risk
exposures of default and lifetime expected credit losses rate with reference to the historical credit loss experience, current
situation and forecasts of future economic conditions.
For other receivables and long-term receivables other than finance lease receivables and equity transfer receivables that
are classified as portfolio, the Company measures expected credit losses based on the risk 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 based on the nature of
investments, counterparties and various types of risk exposures and the risk exposures of default and future 12-month or
lifetime expected credit losses rate.
Assessment of signicant increase in credit risk
By comparing the risk of default of financial instruments occurring on the balance sheet date and on the initial recognition
date, the Company determines the relative changes in risk of default over the expected life of financial instruments and
assesses whether the credit risk of nancial instruments have increased signicantly since the initial recognition.
When determine whether credit risks have significantly increased since the initial recognition, the Company considers
information that is reasonable and supportable, including forward-looking information that is available without undue cost or
eort. The information considered by the Company includes:
Failure to make payments of principal or interest on debtors' contractually due dates;
An actual or expected signicant deterioration in a nancial instrument's external or internal credit rating (if any);
An actual or expected signicant deterioration in the operating results of debtors;
Existing or forecast changes in the technological, market, economic or legal environment that have a significant adverse
eect on the debtors' abilities to repay to the Company.
Depending on the nature of the financial instruments, the Company assesses whether credit risks have significantly increased
on either an individual nancial instrument basis or a collective nancial instrument basis. When the assessment is performed
on a collective financial instrument basis, the Company can classify the financial instruments based on the shared credit risk
characteristics, such as past due information and credit risk ratings.
The Company determines that the credit risk on a nancial instrument has increased signicantly if it is more than 30 days past
due.
Credit-impaired nancial assets
The Company assesses whether financial assets at amortised cost and debt investments measured at fair value through other
comprehensive income are credit-impaired at balance sheet date. A nancial asset is‘credit-impaired' when one or more events
that have an adverse impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial
asset is credit-impaired includes the following observable information:
Signicant nancial diculty of the issuer or debtor;
A breach of contract by debtor, such as a default or delinquency in interest or principal payments;
For economic or contractual reasons relating to the borrower's financial difficulty, the Company having granted to the
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borrower a concession that would not otherwise consider;
It is probable that the borrower will enter bankruptcy or other nancial reorganization;
The disappearance of an active market for that nancial asset because of nancial diculties.
Presentation of allowance for ECL
The Company re-measures the ECLs on each balance sheet date to reect changes in the nancial instruments' credit risk since
initial recognition, and the increase or reversal of the loss provision resulted therefrom is recognised as an impairment gain or
loss in prot or loss. For nancial assets measured at amortised cost, the loss provision is oset against their carrying amounts
in the balance sheet. For debt investments at FVOCI, the Company recognises the loss provision in other comprehensive
income and does not deduct the carrying amount of the nancial assets.
Write-o
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic
prospect of recovery. A write-o constitutes a derecognition event. This is generally the case the Company determines that the
debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the
write-o. However, nancial assets that are written o could still be subject to enforcement activities in order to comply with
the Company's procedures for recovery of amounts due.
Subsequent recoveries of an asset that was previously written o are recognised as a reversal of impairment in prot or loss in
the period in which the recovery occurs.
(7) Transfer of nancial assets
Transfer of nancial assets refers to the transfer or delivery of nancial assets to the other party (the transferee) other than the
issuer of nancial assets.
The Company derecognises a financial asset only if it transfers substantially all the risks and rewards of ownership of the
nancial asset to the transferee; the Company should not derecognise a nancial asset if it retains substantially all the risks and
rewards of ownership of the nancial asset.
The Company neither transfers nor retains substantially all the risks and rewards of ownership, shows as 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 control of the financial asset, the financial asset is recognised to the extent of
its continuing involvement in the transferred nancial asset and recognise an associated liability is recognised.
(8) Osetting nancial assets and nancial liabilities
When the Company has the legal right to offset recognised financial assets and financial liabilities, and the legal right can be
executed at present, and the Company has a plan to settle the nancial assets and nancial liabilities at the same time or at net
amount, the nancial assets and nancial liabilities can be presented on the balance sheet after osetting. Except for the above
circumstances, nancial assets and nancial liabilities cannot be oset 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 liability in 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 of asset selling or liability
transferring incurring in a principal market of relevant assets or liabilities. In the absence of a principal market for the asset or
liability, the Company assumes that the transaction takes place at the most advantageous market of relevant asset or liability. A
principal market (or the most advantageous 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 maximum economic benefit in
assets or liabilities pricing.
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If there exists an active market for the financial assets or financial liabilities, the Company uses the quotation on the active
market as its fair value. For those in the absence of active market, the Company uses valuation technique to recognise its
fair value. However, under limited circumstances, the Company may use all information about the results and operation of
the investee obtained after the date of initial recognition to determine whether cost represents fair value. Cost may represent
the best estimate of fair value of the relevant financial asset within the scope of distribution, and such cost represents the
appropriate estimate of fair value within the scope of distribution.
For non-nancial assets measured at fair value, the Company should consider the capacity of the market participants to put the
assets into optimal use thus generating the economic benet, or the capacity to sell assets to other market participants who can
put the assets into optimal use and generate economic benet.
The Company implements the valuation technique suitable for the current condition and supported by enough available data
and other information, gives priority in use of relevant observable inputs, only the observable inputs cannot be obtained or
impracticable before using unobservable inputs.
For the assets and liabilities measured or disclosed at fair value on nancial statements, fair value hierarchies are categorized
into three levels as the lowest level input that is significant to the entire fair value measurement: Level 1: inputs are
quoted prices (unadjusted) in active markets for identical assets and liabilities. Level 2: inputs are inputs other than quoted
prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: inputs are
unobservable inputs for the asset or liability.
At each balance sheet date, the Company re-evaluates the assets and liabilities recognised to be measured at fair value on the
nancial statements to make sure whether conversion occurs between fair value hierarchies.
12. Inventories
√ Applicable □ N/A
(1) Classication of inventories
The Company's inventories include raw materials, packaging materials, finished goods, work-in-progress, low-value
consumables, subcontracting materials, inventory goods and expendable biological assets.
(2) Method of costing
The method of costing of the Company's inventories: Cost of finished goods are measured at planned cost, and material cost
differences are carried forward at the end of the period to adjust planned cost to actual cost; other inventories are measured
at actual cost on acquisition and raw materials received are accounted for by the weighted-average method; low-value
consumables and packaging materials are amortised in full upon the use.
(3) The underlying factors in the determination and the basis of provision for diminution in net realisable value of inventories
On the balance sheet date, the inventories are calculated at the lower of cost and the net realisable value. When the net
realisable value is lower than the cost, the provision for diminution in value of inventories is made on an item-by-item basis
at the excess of the cost of the inventory over its net realisable value. For large volume inventories with low unit price,
the provision for diminution in the value of inventories is made by categories. Inventories that are related to a product line
manufactured and sold in the same region, have the same or similar end use or purpose, and are dicult to measure separately
from other items are consolidated the provision for diminution in the value of inventories.
(4) Inventory system
The Company maintains a perpetual inventory system.
(5) Amortisation methods of consumables
Low-value consumables of the Company are amortised in full when used.
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13. Assets held for sale
√ Applicable □ N/A
(1) Category and measurement of non-current assets or the disposal group held for sale
Non-current assets and disposal groups are classied as held for sale if the Company recovers its book value 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 fair value; the biological assets
measured with the basis of fair value less selling costs; the assets formed by employee benefits; financial assets and the right
arising from deferred income tax assets and insurance contracts.
A disposal group is a group of assets to be disposed through sale or other means as a whole in a single transaction, 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, a non-current asset or disposal group is
available for immediate sale at its present condition; the sale is likely to occur, that is, a decision has been made on a sale plan
and a determined purchase commitment is made, and the sale is expected to be completed within one year. Where the loss
of control over the subsidiaries is due to the sales of investment in subsidiaries, no matter whether the Company retains part
of the equity investment after selling or not, the investment in subsidiaries shall be classified as held for sale in the separate
financial statements when it satisfies the conditions for category of held for sale; all assets and liabilities of subsidiaries shall
be classied as held for sale in the consolidated nancial statements.
The dierence between carrying amount of non-current assets or disposal groups classied as held for sale and the net amount
of fair value less selling costs shall be recognised as impairment loss on assets upon initial measurement or when such non-
current assets or disposal groups are remeasured at the balance sheet date. For the amount of impairment loss on assets
recognised in disposal groups, the carrying amount of disposal groups' goodwill shall be offset against first, and then offset
against the carrying amount of non-current assets according to the proportion of carrying amount of the individual non-current
assets in the disposal groups.
If on a subsequent balance sheet date, the net amount of the fair value of a held-for-sale disposal group less its selling costs
increases, the amount reduced previously shall be recovered, and reversed in the asset impairment loss recognised on the non-
current asset which is applicable to the measurement requirements of Held-For-Sale Standards after the non-current asset is
classied into held-for-sale category. The reversed amount is credited to current prot or loss. The carrying value of goodwill
which has been oset cannot be reversed.
No depreciation or amortisation is provided for the non-current assets in the held-for-sale and the assets in the disposal group
held for sale. The interest on the liabilities and other costs in the disposal group held for sale is recognised continuously. As
far as all or part of investment in the associates and joint ventures is concerned, for the part classified into the held-for-sale
category, the accounting with equity method 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 influence on
the associates and joint venture due to the sale, the use of equity method shall be stopped.
When certain non-current asset or disposal group classified into the held-for-sale category no longer meets the classification
criteria for held-for-sale category, the Company shall stop classifying it into the held-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-sale category after being
adjusted with the depreciation, amortisation or impairment that could have been be recognised if it was not classied into
the held-for-sale category;
② The recoverable amount.
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(2) Discontinued operation
Discontinued operation refers to the component meeting one of the following conditions that has been disposed of by the
Company or classied by the Company into the held-for-sale type and can be identied separately:
① The component represents an independent principal business or a separate principal business place.
② The component is a part of the related plan for the contemplated disposal of an independent principal business or a separate
principal business place.
③ The component is a subsidiary acquired exclusively for the purpose of resale.
(3) Presentation
The Company presents the non-current assets held for sale and the assets in the disposal group held for sale under“assets
classied as held for sale”, and the liabilities in the disposal group held for sale under“liabilities classied as held for sale”in
the balance sheet.
The Company presents the prot and loss for continuing operation and prot and loss for discontinued operation in the income
statement, respectively. The impairment loss and reversal amount and disposal profit and loss of the non-current assets held
for sale or disposal group not meeting the definition of discontinued operation will be presented as the profit and loss of
continuing operation. The operating prot and loss (such as impairment loss and reversal amount) and disposal prot and loss
of the discontinued operation will be presented as the prot and loss of the discontinued operation.
The disposal group proposed for retirement rather than sale and meeting the condition about the relevant component in the
denition of the discontinued operation will be presented as discontinued operation from the date of retirement.
For the discontinued operation reported in the current period, the information formerly presented as profit and loss of
continuing operation will be presented as the prot and loss of discontinued operation for the comparable accounting period in
the financial statement of the current period. If the discontinued operation no longer meets the classification criteria for held-
for-sale category, the information formerly presented as prot and loss of discontinued operation will be presented as the prot
and loss of continuing operation for the comparable accounting period in the nancial statement of the current period.
14. Long-term equity investment
√ Applicable □ N/A
The long-term equity investment includes the equity investment in the subsidiary, joint ventures and associates. The investee
over which the Company has signicant inuence is the associates of the Company.
(1) Determination of initial investment cost
The long-term equity investment resulting from corporate merger: For the long-term equity investment resulting from merger
of companies under the same control, the carrying amount of the ownership equity of the merged party obtained on the merger
date presented in the consolidated nancial statement of the nal controlling party will be used as the investment cost. For the
long-term equity investment resulting from merger of companies under different controls, the merger cost will be used as the
investment cost of the long-term equity investment.
The long-term equity investment obtained by other means: For the long-term equity investment obtained by paying cash, the
actually paid purchase price will be used as the initial investment cost. For the long term equity investment obtained by issuing
equity securities, the fair value of the issued equity securities will be used as the initial investment cost.
(2) Subsequent measurement and recognition method of prot or loss
The investment in subsidiary will be accounted for using cost method, unless the investment meets the criteria of held-for-sale
category. The investment in associates and joint venture will be accounted with equity method.
For the long-term equity investment accounted for using cost method, except for the price actually paid upon the investment or
the cash dividend or prot in the consideration that has been declared but not released, the cash dividend or prot declared and
distributed by the investee is recognised as the investment income and recorded into the prot and loss for the current period.
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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 equity investment is higher than the Company's share in the
fair value of the identifiable net value of the investee at the time of investment; if the initial investment cost of the long-term
equity investment is lower 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 the difference recorded into the
prot and loss for the current period of investment.
When accounted for using the equity method, return on investment and other comprehensive income are recognised according
to the share in the investee's realised net prot or loss and other comprehensive income respectively, and the carrying amount
of the long-term equity investment is adjusted. The carrying amount of the long-term equity investment will be deducted
according to the prot distribution declared by the investee or cash dividend attributable to the Company. The carrying amount
of long term equity investment will be adjusted for changes to equity interest attributable to the owners of the investee other
than net profit or loss, other comprehensive income and profit distribution, and recorded into capital reserve (other capital
reserve). The Company's share of the net profit or loss of the investees will be recognised after adjustment of the net profit
of the investees according t o the accounting policy and accounting period of the Company on the basis of fair value of all
identiable assets of the investee on acquisition.
If the Company is able to exert significant influence or implement joint control (which does not constitute control) on the
investee through additional investment or other reason, the sum of the fair value 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 fair value of the original equity on the conversion date and its carrying amount, and the
accumulated change of fair value recorded into other comprehensive income will be transferred into the prot and loss for the
current period, which will be accounted for using equity method.
If an entity loses joint control or has no significant influence over investees due to the elimination of parts of the equity
investment, the surplus equity after disposal shall be recognised in accordance with“Accounting Standards for Business
Enterprises No. 22 – Recognition and Measurement of Financial Instruments”, and the difference between fair value and
carrying amount should be recognised as profit or loss for current period. Other comprehensive income of original equity
investment recognised under equity method shall be recognised in accordance with the same foundation used by the investees
when dispose the relevant assets or liabilities directly in the termination of equity method. Other changes of owners' equity
related to the original equity investment shall be transferred into prot or loss for current period.
If an entity loses control over investees due to the elimination of parts of the equity investment, the surplus owners' equity
that is able to implement joint control or have significant influence over investees shall be measured at equity method and
are deemed to be recognised under equity method since the acquisition date. The surplus owners' equity that are unable to
implement joint control or have no significant influence over investees shall be processed in accordance with“Accounting
Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments”, and the difference
between fair value and carrying amount at the day of loss of control shall be recognised as prot or loss for current period.
If the shareholding ratio of the Company is reduced due to the increase of capital of other investors, and thus the control is
lost, but the joint control or signicant inuence can be exerted on the invested entity, the Company should recognise net asset
according to the new shareholding ratio. The difference between the original book value of the long-term equity investment
corresponding to the decrease in the shareholding ratio should be included in the current prot and loss; then, according to the
new shareholding ratio, the equity method is used to adjust the investment.
The Company recognises the unrealised prot or loss of intra-transaction between the joint ventures or associates that belongs
to itself according to the proportion of the shares and recognises the investment income or loss after oset. However, the loss
arising from the unrealised intra-transaction between the Company and investees, which belongs to the impairment loss of
assets transferred, cannot be oset.
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(3) Basis of determining common control and signicant inuence on the investee
Joint control is the contractually agreed sharing of control over an arrangement under which the decisions relating to any
activity require the unanimous consent of the parties sharing control. In determining whether there is a joint control, the first
judge is to determine whether the relevant arrangement 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 should require the
unanimous consent of the parties involved. If the parties involved or the group of the parties involved must act consistently to
determine the relevant arrangement, it is considered that the parties involved or the group of the parties involved control the
arrangement. If two or more parties involve in the collectively control of certain arrangement, it shall not be considered as joint
control. Protection of rights shall not be considered in determining whether there is joint control.
Significant influence refers to the power to participate in the decision making process for financial and operational policies
of the investees without control or common control over the formulation of such policies. When determining whether it has
significant influence over the investee, the influence of the voting shares of the investee held by the investor directly and
indirectly and the potential voting rights held by the investor and other parties which are exercisable in the current period
and converted to the equity of the investee, including the warrants, stock options and convertible bonds that are issued by the
investee 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 signicant inuence over the investee, unless there is clear
evidence that it cannot participate in the production and operation decisions of the investee and does not have a significant
inuence under such circumstances. When the Company owns less than 20% (excluding) of the voting shares of the investee, it
is generally not considered to have signicant inuence on the investee unless there is clear evidence that it can participate in
the production and operation decisions of the investee and have signicant inuence under such circumstances.
(4) Held-for-sale equity investment
Refer to note III. 13 for the relevant accounting treatment of the equity investment to joint ventures or associates all or partially
classied as assets held for sale.
The surplus equity investments that are not classied as assets held for sale shall be accounted for using equity method.
The equity investment to joint ventures or associates already classied as held for sale no longer meets the conditions of assets
held for sale shall be adjusted retroactively using equity method from the date of being classied 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 impairment provision of assets.
15. Investment properties
Investment properties are properties held to earn rental or capital appreciation or both. The investment properties of the
Company include land use rights that have already been leased out, land use rights that are held for the purpose of sale after
capital appreciation, buildings that have been already been leased out, etc.
Investment properties of the Company are measured initially at cost upon acquisition, and subject to depreciation or
amortisation in the relevant periods according to the relevant provisions on xed assets or intangible assets.
The Company adopts the cost model for subsequent measurement of the investment properties. The method 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 the investment properties deducts
the book value and the relevant taxes shall be recorded into the prot and loss for the current period.
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16. Fixed asset
(1). Conditions for recognition of xed assets
√ Applicable □ N/A
The Company's xed assets represent the tangible assets held by the Company using in the production of goods, rendering of
services, rent and for operation and administrative purposes with useful life over one year.
The fixed asset can be recognised only when the economic benefit related to the fixed asset is probable to flow into the
company and the cost of the xed asset can be reliably measured.
The Company's xed assets are initially measured at the actual cost at the time of acquisition.
(2). Method of depreciation
√ Applicable □ N/A
Useful years Annual Residual
Category Depreciation methods
(year) depreciation rate %
Properties and Buildings Equal annual instalment method 20 4.5%-4.75% 5%-10%
Machine and equipment Equal annual instalment method 10 9%-9.5% 5%-10%
Transportation Equipment Equal annual instalment method 5 18%-19% 5%-10%
Electric equipment and others Equal annual instalment method 5-10 18%-19% 5%-10%
Where, for the fixed assets for which depreciation provision is made, to determine the depreciation rate, the accumulated
amount of the xed asset depreciation provision that has been made shall be deducted.
(3). The impairment testing and the impairment provision of xed assets
Refer to note III. 22 for the impairment testing and the impairment provision of xed assets.
(4). Recognition basis, valuation and depreciation method of nancial leased xed assets
√ Applicable □ N/A
When the Company's leased fixed assets meet one or more of the following criteria, it is recognized as finance 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 be much lower than the
fair value of the leased asset when the option is exercised. Therefore, it can be reasonably 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 life of the leased asset.
④ The present value of the Company's minimum lease payment on the lease start date is almost equivalent to the fair value of
the leased assets on the lease start date.
⑤ The leased assets are of special nature, and only our company can use them if they don't undergo major transformation.
For xed assets leased by nance leases, the lower of the fair value of the leased assets on the lease start date and the present
value of the minimum lease payment shall be the entry value. The minimum lease payment is taken as the entry value of the
long-term payable, and the difference is taken as the unrecognized 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 nancing costs shall be amortized by
the eective interest method during each period of the lease term.
The fixed assets acquired by finance lease adopt the same policy as self-owned fixed assets to calculate the depreciation of
leased assets. If it can be reasonably determined that the ownership of the leased asset will be obtained at the end of the lease
term, depreciation shall be accrued within the useful life of the leased asset; if it cannot be reasonably determined that the
ownership of the leased asset will be obtained at the end of the lease term, the leased asset is still usable during the lease term
Depreciation is accrued in the shorter of the two years.
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(5). The Company reviews the useful life and estimated net residual value of fixed asset and the depreciation method applied
annually at each of the period end.
The useful lives of xed asset are adjusted if their expected useful lives are dierent from the original estimates; the estimated
net residual values are adjusted if they are dierent from the original estimates.
(6). Overhaul costs
The overhaul costs occurred in regular inspection of f are recognised in the cost of property, plant and equipment if there
is undoubted evidence to confirm that they meet the recognition criteria of fixed assets, otherwise, the overhaul costs are
recognised in profit or loss for the current period. Property, plant and equipment are 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 expenditure incurred during
construction, borrowing cost that are eligible for capitalisation and other necessary cost incurred to bring the xed assets ready
for their intended use.
Construction in progress is transferred to xed assets when the assets are ready for their intended use.
For provision for impairment of construction in progress, refer to note III. 22.
In the balance sheet, the ending balance of construction materials is presented under“construction in progress”.
18. Borrowing costs
√ Applicable □ N/A
(1) Recognition principle of capitalisation of borrowing costs
For borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, they shall
be capitalised and included in the cost of related assets; other borrowing costs are recognised as expenses and included in prot
or loss when incurred. Capitalisation of such borrowing costs can commence only when all of the following conditions are
satised:
① Expenditures for the asset incurred, capital expenditure includes the expenditure in the form of cash payment, transfer
of non-cash assets or the interest bearing liabilities for the purpose of acquiring or constructing assets eligible for
capitalisation;
② Borrowing costs incurred;
③ Activities relating to the acquisition, construction or production of the asset that are necessary to prepare the asset for its
intended use or sale have commenced.
(2) Capitalisation period of borrowing costs
Capitalisation of such borrowing costs ceases when the qualifying assets being acquired, constructed or produced become
ready for their intended use or sale. The borrowing cost incurred after that is recognised as an expense in the period in which
they are incurred and included in prot or loss for the current period.
Capitalisation of borrowing costs is suspended during periods in which the acquisition, construction or production of a
qualifying asset is interrupted abnormally and when the interruption is for a continuous period of more than 3 months; the
borrowing costs in the normally interrupted period continue to capitalise.
(3) Calculation of the capitalisation rate and amount of borrowing costs
The interest expense of the specific borrowings incurred at the current period, deducting any interest income earned from
depositing the unused specific borrowings in bank or the investment income arising from temporary investment, shall be
capitalised. The capitalisation rate of the general borrowing is determined by applying the weighted average eective interest
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rate of general borrowings, to the weighted average of the excess amount of cumulative expenditures on the asset over the
amount of specic borrowings.
During the capitalisation period, exchange differences on foreign currency special borrowings shall be capitalised; exchange
dierences on foreign currency special borrowings shall be recognised as current prots or losses.
19. Biological assets
√ Applicable □ N/A
(1) Determination of biological assets
Biological assets refer to assets comprising living animals and plants. No biological asset shall be recognised unless 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 benets or service potential concerning this biological asset are likely to ow into the enterprise;
③ The cost of this biological asset can be measured reliably.
(2) Classication of biological assets
The Company's biological assets are consumable biological assets which include traditional Chinese medical herbal plant
species.
The consumable biological assets refer to the biological assets held for sale, or biological assets to be harvested as agricultural
products in the future, consisting of growing traditional Chinese medical herbal plant species. The consumable biological
asset is initially measured at cost. The cost of any consumable biological assets by way of self-planting, self-cultivating, self-
breading is the necessary cost directly attributable to this asset prior to the harvest, consisting of borrowing costs that meet
the conditions of capitalisation. The subsequent expenses for the maintenance, protection and cultivation of a consumable
biological asset after the harvest shall be included in the current prots or loss.
The cost of a consumable biological asset shall, at the time of harvest or sale, be carried over at its book value by 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 the excess of the carrying amount over the net realisable
value. If the factors aecting the impairment of consumable biological assets no longer exist, the amount of write-down shall
be resumed and shall be reversed from the original provision for the impairment loss before being recognised in the profit or
loss for the current period.
20. Intangible assets
(1). Pricing methods, useful lives and impairment tests
√ Applicable □ N/A
An intangible asset is an identiable non-monetary asset without physical substance owned or controlled by the Company. An
intangible asset is recognised only when all of the following conditions are satised: It is probable that the economic benets
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 at actual cost.
The Company's intangible assets include land use rights, patents and proprietary technologies, software, trademark rights, etc.
Intangible assets are initially measured at historical cost, and the Company shall make judgement to determine the useful
life of intangible assets upon acquisition. Intangible assets with finite useful life are amortised in the profit or loss over the
estimated useful life, using the method that reects the expected realisation of economic benets associated with the asset, and
if the expected realisation cannot be reliably determined, it is amortised using the straight-line method. Intangible assets with
indenite useful life is not amortised.
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Amortisation of intangible assets with nite useful life is as follows:
Category Expected useful life
Land use rights The useful life specied in the land use right certicate
Patent and technical know-how Protection period or benet period stipulated by relevant national laws and regulations
Trademark rights Ten years
Others Benet period
The useful life for an intangible asset with a nite useful life and the method of amortisation are reviewed at least once at the
end of each financial year. If the useful life and amortisation method for the intangible assets are different from the previous
estimate, the change of amortisation is recognised prospectively as the change of accounting estimate.
When the Company estimates an intangible asset can no longer bring future economic benets to the Company at the end of a
period, the carrying amount in which should be reversed to prot or loss for the current period.
Please refer to note III. 22 for the provision of impairment of intangible assets.
21. Research and development expenditures
√ Applicable □ N/A
Expenditures on an internal research and development project are classified into expenditures on the research phase and
expenditures on the development phase.
Expenditures on the research phase shall be recognised in prot or loss for the current period when incurred.
Expenditures on the development phase will be capitalised only when all of the following conditions are satisfied: it is
technically feasible to complete the intangible asset so that it will be available for use or sale; the Company intends to complete
the intangible asset and use or sell it; it can be demonstrated how the intangible asset will generate economic benefits,
including proving that the intangible assets or the products produced by it will have markets, or the intangible assets for
internal use will be useful; there are adequate technical, financial and other resources to complete the development and the
Company is able to use or sell the intangible assets; and expenditures on the development phase attributable to the intangible
assets can be reliably measured. The development expenditures that do not satisfy the above conditions shall be recognised in
prot or loss for the current period.
Our research and development projects enter the development stage after meeting the above conditions and forming the project
throught the technical and economic feasibility studies.
Capitalised expenditures on the development phase are shown as development expenditures on the balance sheet and
reclassied as intangible assets on the date the project meets the intended purpose.
Capitalisation conditions for specic research and development projects are as follows:
① For research and development projects that are not required to obtain clinical approvals, the period from the beginning of
research and development to the pilot phase is treated as the research phase, and all expenditures shall be recognised in
prot or loss for the current period when incurred; the period from the pilot phase to the obtaining of production approvals
is treated as the development phase, and all expenditures shall be recognised as development expenditures and reclassied
as intangible assets after the obtaining of production approvals.
② For research and development projects that require clinical approval, the period from the beginning of research and
development to the obtaining of clinical approval is treated as the research phase, and all expenditures incurred shall be
recognised in profit or loss for the current period when incurred; the period from the obtaining of clinical approval to
the obtaining of production approval is treated as the development phase, and the expenditures shall be recognised as
development expenditures and reclassied as intangible assets after the obtaining of production approval.
③ External technology transfer fees and the cost of purchasing clinical approvals can be recognised directly as development
expenditures, and subsequent expenditures are accounted for in accordance with ① and ② above.
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④ The Company reviews the latest research and development status of each project at the end of each year and if the research
and development project no longer qualifies for the development stage, the corresponding development expenditure are
recognised in prot or loss for the current period.
⑤ Where it is impossible to differentiate the expenditures on the research phase and the expenditures on the development
phase, all the research and development expenditures are recognised in prot or loss for the current period.
Please refer to note III.22 for the impairment testing methodology and impairment provision for intangible assets.
22. Impairment of assets
√ Applicable □ N/A
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-use assets, 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, if there is any, the Company
will estimate the recoverable amount for impairment, and then test for impairment. For goodwill arising from a business
combination, intangible assets with indenite useful life and the intangible assets that have not yet ready for use are tested for
impairment annually regardless of whether such evidence exists.
The recoverable amount of an asset is determined by the higher amount of fair value deducting disposal costs and net present
value of future cash flows expected from the assets. The Company estimates the recoverable amount based on individual
asset; for individual asset which is difficult to estimate the recoverable amount, the recoverable amount of the asset group is
determined based on the asset group involving the asset. The identication of the asset group is based on whether the cash ow
generated from the asset group is independent of the major cash inows from other assets or asset groups.
When the asset or asset group's recoverable amount is lower than its carrying amount, the Company reduces its carrying
amount to its recoverable amount, the reduced amount is included in prot 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 business combination, shall
be allocated to the related asset group in accordance with a reasonable basis at acquisition date. Those that are difficult to be
allocated to related assets shall be allocated to related asset group. Related assets or assets group refer to those that can benet
from the synergies of business combination 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 test for impairment for
asset and asset group excluding goodwill and calculate the recoverable amount and recognise the impairment loss accordingly.
The Company should test for impairment for asset or the asset group including goodwill and compare the asset or asset group's
recoverable amount with its carrying amount, provision for impairment of assets shall be recognised when the recoverable
amount of assets is lower than its carrying amount.
Once impairment loss is recognised, it cannot be reversed in subsequent accounting periods.
23. Long-term deferred expenses
√ Applicable □ N/A
The Company's long-term deferred expenses measured at cost actually incurred and evenly amortised on straight-line basis
over the expected beneficial period. For the long-term deferred expense items that cannot benefit in subsequent accounting
period, their amortised value is recognised through prot or loss.
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24. Employee compensation
(1)、The scope of employee compensation
Employee compensation are all forms of remuneration and compensation given by the Company in exchange for service
rendered by employees or the termination of employment. Employee compensation include short-term employee
compensation, post-employment benefits, termination benefits and other long-term employee benefits. Employee
compensation include benefits provided to employees' spouses, children, other dependants, survivors of the deceased
employees or to other beneciaries.
According to liquidity, employment compensations are presented separately as“accrued payroll”item and“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, social security contributions
(including medical insurance, injury insurance, maternity insurance, etc.) and house funding are recognised as liability and
included in the prot or loss for the current period or related asset costs. If the liability cannot be wholly settled within twelve
months after the end of the annual reporting period in which the employees render the related service and have significant
nancial impact, the liability shall be measured as the discounted amounts.
(3)、Post-employment benets
√ 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 the contributions to defined contribution plans
are recognised and included in prot or loss for the current period or related asset costs.
(4)、Termination benets
√ Applicable □ N/A
The liability of employee compensation arising from termination benefits is recognised and included in profit or loss for the
current period in the earlier date of the followings: The Company cannot unilaterally withdraw the oer of termination benets
because of an employment termination plan or a curtailment proposal; the Company recognises costs or expenses related to the
restructuring that involves the payment of termination benets.
For the implementation of the internal retirement plan for employees, the economic compensation before the ocial retirement
date is a termination benefit. The wage of and social insurance contributions for the internally retired employee which would
have incurred from the date on which the employee cease rendering services to the Company to the scheduled retirement date
will be included in the profit or loss for the current period. Economic compensation after the official retirement date (such as
normal pension) should be treated as post-employment benets.
(5)、Other long-term employee benets
√Applicable □ N/A
When other long-term employee benefits provided to the employees by the Company are satisfied the conditions of a defined
contribution plan, those benefits shall be accounted for in accordance with the relevant provisions of the above defined
contribution plans. When the benefits are satisfied the conditions of a defined benefit plan, those benefits shall be accounted
for in accordance with the relevant provisions of the above dened benet plans, except that the“change in remeasurement of
the net liability or net assets of the dened benet plans”in the cost of the related employee compensation shall be included in
prot or loss for the current period or related asset costs.
25. Provisions
√ Applicable □ N/A
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An obligations related to a contingency is recognised as a provision when all of the following conditions are satised:
(1) The obligation is a present obligation of the Company;
(2) It is probable that an outow of economic benets will be required to settle the obligation;
(3) The amount of the obligation can be measured reliably.
Provisions are initially measured at the best estimate of the payment to settle the associated obligations and consider 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 outow. The Comapany reviews the carrying amount of provisions at the balance
sheet date and adjusts the carrying amount to reect the best estimate.
If the expenses for clearing of provisions is fully or partially compensated by a third party, and the compensated amount can
be definitely received, it is recognised separately as asset. The compensated amount 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 assumed on 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-based payment.
① Equity-settled share-based payment
Equity-settled share-based payment is measured at the fair value of the equity instruments granted to employees. If vesting is
conditional upon completion of services in the pending period or fulllment of performance conditions, at each balance sheet
date during the pending period, based on the best estimates of the number of vested equity instruments, the services received
for the period are recognised as the costs or expenses on a straight-line basis. Instruments which are vested immediately upon
the grant are included in relevant costs or expenses at the fair value of equity instruments on the date of grant and capital
reserves are increased accordingly.
At each balance sheet date during the pending period, the Company makes the best estimate and revises the number of
equity instruments expected to be exercisable based on subsequent information such as changes in the number of exercisable
employees obtained from the latest available information. The eect of the above estimates is recognised as the relevant cost or
expense in the current period, and capital surplus is adjusted accordingly.
For the equity instruments granted under an equity-settled share-based payment for services from other parties, if the fair value
of services received from other parties can be measured reliably, the fair value of the equity instruments is measured at the fair
value of services from other parties on the grant date; if the fair value of services received from other parties cannot be measured
reliably but the fair value of the equity instruments can be measured reliably, the fair value of the equity instruments on the date on
which services are received shall be recognised as related costs or expenses, with a corresponding increase in owners' equity.
② Cash-settled share-based payment
Cash-settled share-based payments are measured at the fair value of the liabilities (share-based or other equity instrument-based)
assumed by the Company. Instruments which are vested immediately upon the grant are included in relevant costs or expenses
at the fair value of liabilities assumed by the Company on the date of grant and liabilities are increased accordingly. If vesting is
conditional upon completion of services in the pending period or fulllment of performance conditions, at each balance sheet date
during the pending period, based on the best estimates of the vesting situation, the services received for the period are recognised
as the costs or expenses and corresponding liabilities at fair value of the liabilities assumed by the Company.
At each balance sheet date and settlement date before the relevant liabilities are settled, the fair value of liabilities is re-
measured and the resulting changes are included in the prot and loss for the current period.
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（2）Accounting treatment for amendment and termination of share-based payments
When the Company modifies the share-based payment plan, and if such modification increases the fair value of the equity
instruments granted, the increase in services received will be recognised accordingly following the increase in fair value of
the equity instruments; if such modification increases the number of equity instruments granted, the increase in fair value of
the equity instruments is recognised as a corresponding increase in service achieved. The increase in fair value of the equity
instruments refers to the difference in fair value on the date of modification before and after the modification in respect of
the equity instruments. If the modification reduces the total fair value of the share-based payments or adopts any form that
is unfavorable to employees to modify the terms and conditions of the share-based payment plan, accounting treatment will
be continued to be conducted in respect of the services received and the modication will be deemed to have never occurred,
unless the Company had cancelled part or all of the equity instruments granted.
During the pending period, if the equity instruments granted are cancelled (except for failure to meet the non-market conditions
of the vesting conditions), the Company will undertake an accelerated vesting in respect of the cancelled equity instruments
that had been granted, include the remaining amount that shall be recognised during the pending period in the current profit
and loss immediately and recognise capital reserve accordingly. Where employees or other parties are permitted to choose
to fulfill non-vesting conditions but have not fulfilled during the pending period, the Company will treat the granted equity
instruments as cancelled.
(3) Accounting treatment for share-based payments involving the Company and the shareholders or the de facto controller of the
Company
For share-based payment transactions involving the Company and the shareholders or the de facto controller of the Company,
the settlement enterprise and the enterprise receiving services (one under the Company while another external to the Company)
shall follow the requirements below to conduct accounting treatment in the Company's consolidated nancial statements:
① For settlement enterprises settling through their own equity instruments, such share-based payment transaction will be treated
as equity-settled share-based payment; except for this, such share-based payment transaction will be treated as cash-settled
share-based payment.
Where a settlement enterprise is an investor of an enterprise receiving services, the fair value of the equity instruments on
the date of grant or the fair value of the liabilities that shall be assumed are recognised as long-term equity investment in the
enterprise receiving services, at the same time, capital reserve (other capital reserve) or liabilities are recognised.
② Where an enterprise receiving services has no settlement obligations or grants its own equity instruments to employees,
such share-based payment transaction will be treated as equity-settled share-based payment; where an enterprise receiving
services has settlement obligations and grants equity instruments (other than its own) to employees, such share-based payment
transaction will be treated as cash-settled share-based payment.
For a share-based payment transaction occurring among enterprises under the Company where the enterprise receiving services
and the settlement enterprise are not the same enterprise, such share-based payment transaction shall be recognised and
measured in each of the respective financial statements of the 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) Classication of nancial liabilities and equity instruments
The Company classies the nancial instrument or its components as nancial assets, nancial liabilities or equity instruments
at the initial recognition based on the contract terms of the issued nancial instrument and the economic substance it reects,
instead of only in legal form, and combine the denition of nancial assets, nancial liabilities and equity instruments.
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(2) Accounting treatment of preferred shares, perpetual bonds and other nancial instruments
The financial instruments issued by the Company are initially recognised and measured in accordance with the financial
instrument standards; thereafter, interest or dividends are accrued or distributed on each balance sheet date and processed in
accordance with relevant specic accounting standards for enterprises. That is, on the basis of the classication of the nancial
instrument issued, the accounting treatment of interest expenses or dividend distributions of the instrument is determined.
For financial instruments classified as equity instruments, interest expenses or dividend distributions are treated as profit
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 are in principle treated according to borrowing
costs, and gains or losses arising from repurchase or redemption are credited to prot or loss for the current period.
The transaction costs such as charges and commissions incurred by the Company when issuing financial instruments, if
classified as debt instruments and measured at amortised cost, are included in the initial measurement amount of the issued
instrument; if classied as equity instruments, are deducted from equity.
28. Income
√ Applicable □ N/A
The Company shall recognise revenue when the Company satisfies the performance obligation of the contract, that is, the
customer obtains control of relevant goods or services.
When the contract contains two or more performance obligations, on the eective date of the contract, the Company allocates
the transaction price to each performance obligation based on the percentage of respective unit price of a good or service
guaranteed by each performance obligation, and the revenue is measured according to the transaction price allocated to each
performance obligation.
If one of the following conditions is fullled, the Company satises a performance obligation over time; otherwise, it satises
a performance obligation at a point in time:
① When the customer simultaneously receives and consumes the benefits provided by the Company when the Company
performs its obligations under the contract.
② When the customer is able to control the commodity in progress in the course of performance by the Company under the
contract.
③ The product produced by the Company under the contract is irreplaceable and the Company has the right to payment for
performance completed to date during the term of the contract.
For a performance obligation satisfied over time, the Company shall recognise revenue over time by measuring the process
towards complete satisfaction of the performance obligation. When the progress of performance cannot be reasonably
determined, if the costs incurred by the Company are expected to be recoverable, the revenue will be recognised to the extent
of the costs incurred until the progress of performance can be reasonably determined.
For a performance obligation satisfied at a point in time, the Company shall recognise revenue when the customer obtains
control of relevant goods or services. When determining whether the customer has obtained 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 the customers have the
current payment obligations for the goods.
② The Company has transferred the legal title of the goods to the client, which is when the client possesses the legal title of
the goods.
③ The Company has transferred the physical possession of goods to the customer, which is when the customer obtains
physical possession of the goods.
④ The Company has transferred all of the substantial risks and rewards of ownership of the goods to the customer, which is
when the client obtains all of the substantial risks and rewards of ownership of the goods to the customer.
⑤ When the customer has accepted the goods or services.
⑥ When other information indicates that the customer has obtained control of the goods.
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A contract asset represents the Company's right to consideration in exchange for goods or services that it has transferred to
a customer when that right is conditioned on factors other than passage of time, for which the loss allowances for expected
credit loss is recognised (see Note III.10(6)). The Company shall present any unconditional (i.e. if only the passage of time is
required) rights to consideration separately as a receivable. A contract liability is the Company's obligation to transfer goods or
services to a customer for which the Company has received consideration (or the amount is due) from the customer.
The contract assets and liabilities under the same contract shall be shown on a net basis. If the net amount stated in debit
balance, it will be presented under the items of“Contract assets”or“Other non-current assets”according to its mobility; If
the net amount stated in credit balance, it will be presented under the 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 according to the invoiced amount
upon the delivery of goods to the designated carrier or purchaser according to the 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 export procedures.
29. Contract costs
√ Applicable □ N/A
Contract costs are either the incremental costs of obtaining a contract with a customer or the costs to fulfil a contract with a
customer.
Incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customer that it
would not have incurred if the contract had not been obtained e.g. an incremental sales commission. The Company recognises
as an asset the incremental costs of obtaining a contract with a customer if it expects to recover those costs. Other costs of
obtaining a contract are expensed when incurred.
If the costs to fulfil a contract with a customer are not within the scope of inventories or other accounting standards, the
Company recognises an asset from the costs incurred to full a contract only if those costs meet all of the following criteria:
① The costs relate directly to an existing contract or to a specically identiable anticipated contract, including direct labour,
direct materials, allocations of overheads (or similar costs), costs that are explicitly chargeable to the customer and other
costs that are incurred only because the Company entered into the contract;
② The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy)
performance obligations in the future;
③ The costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets recognised for the costs to fulfil a contract (the
“assets related to contract costs”) are amortised on a systematic basis that is consistent with the transfer to the customer of the
goods or services to which the assets relate and recognised in prot or loss for the current period.
The Company recognises an impairment loss in profit or loss to the extent that the carrying amount of an asset related to
contract costs exceeds:
① Remaining amount of consideration that the Company expects to receive in exchange for the goods or services to which
the asset relates;
② The cost estimated to be happened for the transfer of related goods or services.
The costs of contract performance recognised as assets, if the amortisation period is less than one year or a normal operating
cycle upon the initial recognition, are presented as“Inventories”item, and if the amortisation period is more than one year or a
normal operating cycle upon the initial recognition, are presented as“Other non-current assets”item.
The contract obtaining costs recognised as assets, if the amortisation period is less than one year or a normal operating cycle
upon the initial recognition, are presented as“Other current assets”item, and if the amortisation period is more than one year
or a normal operating cycle upon the initial recognition, are presented as“Other non-current assets”item.
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30. Government grants
√ Applicable □ N/A
A government grant shall be recognised only when the enterprise can comply with the conditions attaching 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 amount received. If a
government grant is in the form of a transfer of a non-monetary asset, the item is measured at fair value, when fair value is not
reliably determinable, the item is measured at a nominal amount of RMB1.
Government grant related to assets represents the government grant received for acquisition and construction of long term
assets, or forming long term assets in other ways. Except for these, all are government grant related to income.
Regarding to the government grant not clearly defined in the official documents and can form long term assets, the part of
government grant which can be referred to the value of the assets is classified as government grant related to assets and the
remaining part is government grant related to income. For the government grant that is difficult to distinguish, the entire
government grant is classied as government grant related to income.
The government grant related to assets is recognised as deferred income and would be transferred to prot or loss in reasonable
and systematic manner within the period of use of the relevant assets. The government grant related to income which is
used to compensate the relevant costs or losses incurred should be recognised in the profit or loss for the current period; the
government grant related to income which is used to compensate the relevant costs or losses for the subsequent period is
recognised as deferred income and shall be recognised in profit or loss during the relevant cost or loss confirmation period.
Government grants measured in nominal terms are directly included in the prot or loss for the current period. The Company
has adopted a consistent approach to the same or similar government grant business.
The government grants related to daily activities are recognised as other gains in accordance with the substance of economic
business. Government grants that are not related to daily activities are recognised as non-operating income and expenses.
If the recognised government grants need to be refunded, adjust the carrying amount of assets when the carrying amount of
assets is offset at the time of initial recognition; the balance of deferred income is offset against the carrying amount of the
balance of deferred income and the excess is recognised in the profit or loss for the current period. Other circumstances, it is
directly recognised in the prot or loss for the current period.
31. Deferred tax assets and deferred tax liabilities
√ Applicable □ N/A
(1) Current tax
At the balance sheet date, for the current tax liabilities (or assets) arising from the current period and the previous period,
should be measured by the tax of the estimated payable (returnable) amount which be calculated according to the regulations
of the tax law. The amount of the tax payable which is based by the calculation of the current tax expenses, are according to the
result measured from the corresponding adjustment of the pre-tax accounting prot of the current period which in accord to the
relevant regulations of the tax law.
(2) Deferred tax assets and deferred tax liabilities
The difference between the carrying amount of an asset or liability and its tax basis, as well as the temporary differences
arising from differences between the carrying amount and tax basis of items that are not recognised as assets and liabilities
but in accordance with the tax law, can be recognised as deferred tax assets and deferred tax liabilities by adopting the balance
sheet liability method.
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No deferred tax liability is recognised for a temporary difference arising from the initial recognition of goodwill the initial
recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting
profit nor taxable profit (or deductible loss). Besides, no deferred tax assets well be recognised for the taxable temporary
differences related to the investments in subsidiaries, associates and joint ventures, if the Company can control the time
of the reverse of temporary differences as well as the temporary differences are unlikely to be reversed in the foreseeable
future. Except for the above exceptions, the Company recognises all deferred income tax liabilities arising from other taxable
temporary dierences.
The deductible temporary dierences the initial recognition of assets or liabilities arising from transactions that are neither a
business combination, nor do they affect accounting profits and taxable income (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 joint ventures, if the Company is able to control the timing of the reversal of the temporary
differences, and the temporary differences may not be reversed in the foreseeable future, the related deferred income tax
assets will also not be recognised. Except for the above exceptions, the Company recognises a deferred tax asset arising from
other deductible temporary dierences, to the extent that it is probable that taxable income will be available against which the
deductible temporary dierences.
The Company recognises a deferred tax asset for the carry-forward of deductible losses and tax credits to subsequent periods,
to the extent that it is probable that future taxable prots will be available against which 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 rates that are expected to apply
to the period when the asset is realised or the liability is settled in accordance with the provisions of the tax law.
At the balance sheet date, the Company reviews the carrying amount of a deferred tax asset. If it is probable that sufficient
taxable profits will not be available in future periods to allow the benefit of the deferred tax asset to be utilised, the carrying
amount of the deferred tax asset is reduced. Any such reduction in amount is reversed when it becomes probable that sucient
taxable prots will be available.
(3) Tax expenses
The tax expenses comprise current tax and deferred tax.
The rest current tax and deferred tax expenses or revenue should be included into current gains and losses expect for the
current tax and the deferred tax related to the transaction and events that be confirmed as other comprehensive income or be
directly included in the shareholders' equity which should be included in other comprehensive income or shareholders' equity
as well as the book value for adjusting the goodwill of the deferred income tax occurs from the business combination.
(4) Oset of tax
The current tax assets and liabilities of the Company should be listed by the written-off net amount which intend to executes
the net amount settlement as well as the assets acquiring and liabilities liquidation 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-o net amount when having the legal rights
of settling the current tax assets and liabilities by net amount and the deferred tax and liabilities is relevant to the tax which
be collected from the same taxpaying bodies by the same tax collection and administration department or is relevant to the
dierent taxpaying bodies but during each period which there is signicant reverse of the deferred income assets and liabilities
in the future and among which the involved taxpaying bodies intend to settle the current income tax and liabilities by net
amount or are at the same time acquire the asset as well as liquidate the liabilities.
32. Leases
√ Applicable □ N/A
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(1) Identication of leases
At the inception of a contract, the Company, as a lessee or lessor, assesses if the customer in a contract has the right to obtain
substantially all the economic benets from use of the identied assets and the right to direct the use of the identied 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 of one or more identied 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 lease liabilities, except for the
short-term leases and the leases of low-value assets which are treated with a simplied approach.
For the accounting policies on the right-of-use assets, please refer to Note III.33.
Lease liabilities are initially measured based on the present value of outstanding lease payment at the inception of a lease,
discounted using the interest rate implicit in the lease or the incremental borrowing rate. Lease payment include: fixed
payments and in-substance xed payments, less any lease incentives (if there is a lease incentive); variable lease payment that
are based on an index or a rate; the exercise price of a purchase option if the lessee is reasonably certain to exercise that option;
payments of penalties for terminating the lease option, if the lease term reflects that the lessee will exercise that option; and
amounts expected to be payable under the guaranteed residual value provided by the lessee. The Company shall subsequently
calculate the interest expenses of lease liabilities over the lease term at the fixed periodic interest rate, and include it into the
prot or loss for the current period. Variable lease payments not included in the measurement of lease liabilities are charged to
prot or loss in the period in which they actually arise.
Short-term lease
Short-term lease refers to the lease that the lease term does not exceed 12 months from the inception of a 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 related asset or the prot or loss
for the current period, on a straight-line method over each period of the lease term.
Leases of low-value assets
For the Leases of low-value assets, the Company chooses to adopt the above simplified treatment method in accordance with
the specic conditions of each lease.
The Company recognised the lease payments for the leases of low-value assets in the relevant asset cost or the prot 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 related to the ownership of
assets is recognised as a nance lease, and leases other than nance leases are recognised as operating leases.
Finance leases
In a financial lease, the Company uses the net investment in leases as the carrying amount of finance lease receivables at the
inception of a lease. The net investment in leases is the sum of the unguaranteed residual 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 and recognises the interest income over each period of the lease term at a fixed periodic interest rate.
Variable lease payments not included in the measurement of the lease liability, which are obtained by the Company as a lessor,
are recognised in prot or loss as incurred.
The termination of recognition and impairment of nancial lease receivables is accounted for in accordance with the provisions
of“Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instrument”and
“Accounting Standards for Business Enterprises No. 23 – Transfer of Financial Assets”.
181
Operating leases
For the rental of operating leases, the Company recognises it in the prot or loss for the current period on a straight- line basis
over each period of the lease term. The initial direct cost incurred in connection with an operating lease shall be capitalised and
amortised on the same basis for recognition of rental income during the lease term, and shall be included in installments in the
profit or loss for the current period. The variable lease payment, which is obtained in connection with an operating lease and
not included in the lease receivables, shall be included in the prot and loss for the current period when they actually occur.
33. Right-of-use assets
√ Applicable □ N/A
(1) Recognition condition of right-of-use assets
The right-of-use assets of the Company are defined as the right of underlying assets in the lease term for the Company as a
lessee.
Right-of-use assets are initially measured at cost as at the commencement date of the lease, which consists of: the amount of
the initial measurement of the lease liability; any lease payments made at or before the commencement date of the lease less
any lease incentives received if any; initial direct expenses incurred by the Company as a lessee; costs to be incurred by the
Company as a lessee in dismantling and removing a leased asset, restoring the site on which it is located or restoring the leased
assets to the condition required by the terms and conditions of the lease. The Company as a lessee recognises and measures the
costs of demolition and restoration according to“Accounting Standards for Business Enterprises No.13 – Contingencies”, and
subsequently adjusts for any remeasurement of lease liability.
(2) Depreciation method of right-of-use assets
The Company calculates depreciation on a straight-line basis. Right-of-use assets in which the Company as a lessee is
reasonably certain to obtain ownership of the underlying leased assets at the end of the lease term are depreciated over the
remaining useful life. Otherwise, right-of-use assets are depreciated over 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 refer to note III. 22.
34. Repurchase of shares
Prior to cancellation or transfer of shares repurchased, the Company recognises all expenditures arising from share repurchase
as cost of treasury shares in the treasury share account. Considerations and transaction fee incurred from the repurchase of
shares shall lead to the elimination of owners' equity and does not recognise profit or loss when shares of the Company are
repurchased, transferred or cancelled.
The difference between the actual amount received and the carrying amount of the treasury stock are recognised as capital
reserve when the treasury stocks are transferred, if the capital reserve is not sufficient to be offset, the excess amount shall
be recognised to offset surplus reserve and undistributed profit. When the treasury stocks are cancelled, the capital shall be
eliminated according to the number of shares and par value of cancellation shares, the difference between the actual amount
received and the carrying amount of the treasury stock are recognised as capital reserve, if the capital reserve is not sucient
to be oset, the excess amount shall be recognised to oset surplus reserve and undistributed prot.
35. Restricted Shares
If the Company grants the Restricted Shares to incentive participants under the Share Options Incentive Scheme, the incentive
participants subscribe for the shares rst. If the unlocking conditions stipulated in the Share Options Incentive Scheme cannot
be fulfilled subsequently, the Company repurchases the shares at the predetermined price. If the registration and other capital
increase procedures for the Restricted Shares issued to employees are completed in accordance with relevant regulations, the
Company recognises share capital and capital reserve (or capital premium) based on the subscription money received from the
employees on the grant date; and recognises treasury shares and other payables for repurchase obligation.
182
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36. Significant accounting judgements and estimates
√ Applicable □ N/A
Significant accounting estimates and critical assumptions adopted by the Company are continually evaluated based on
historical experience and other factors, including expectations of future events that are believed to be reasonable. The
significant accounting estimates and critical assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next accounting year are set out below:
(1) Classication of nancial assets
Significant judgements involved in determining the classification of financial assets include analysis of business mode and
characteristics of the contractual cash ows.
Factors considered by the Company in determining the business model of nancial assets management for a group of nancial
assets include past experience on how financial asset's performance is evaluated and reported to key management personnel,
how risks affecting the performance of financial asset are assessed and managed and how managers of related businesses are
compensated.
When assessing whether the contractual cash flows of financial assets are consistent with basic lending arrangement, the
Company adopts the following significant judgements: whether the time distribution or 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 the consideration for cost and profit. For example, the amounts of early repayment
only reect principal unpaid, the interest based on principal unpaid and reasonable compensation paid for early termination of
a contract.
(2) Measurement of ECL for accounts receivables
The Company calculates ECL of accounts receivables according to their exposure at default and ECL rate, and determines
ECL rate based on probability of default and loss given default. When determining ECL rate, the Company adopts data like
historical credit loss experience in combination with current situation and forward-looking information to adjust historical
data. When considering forward-looking information, the Company uses indicators including the risk of economic downturn,
external market environment, technology environment and changes on customer situation. The Company periodically monitors
and reviews assumptions relevant to the measurement of ECL.
(3) Impairment of goodwill
The Company evaluates whether goodwill is impaired at least once a year. This requires an estimate of the value in use of the
asset groups to which the goodwill is allocated. In estimating the value in use, the Company needs to estimate the future cash
ows generated from the asset groups and also to choose an appropriate discount rate in order to calculate the present value of
the future cash ows.
(4) Development expenditure
Determining the amounts to be capitalised requires the management to make assumptions regarding the expected future cash
ows generated from the relevant assets, discount rates to be applied and the expected period of benets.
(5) Deferred income tax assets
The deferred income tax assets will be recognised for all unused tax losses to the extent that it is probable that there will be
sufficient taxable profits against which the loss is utilised. This requires the management to exert numerous judgments to
estimate the timing and amount of the future taxable prots so as to determine the amount of deferred income tax assets to be
recognised with reference to the tax planning strategy.
183
(6) Revenue recognition
As stated in note III. 28, the Company makes the following significant accounting judgements and estimates in terms of
revenue recognition: identifying customer contracts; estimating the recoverability of the considerations that are entitled to be
obtained by transferring goods to customers; identifying the performance obligation in the contract; estimating the variable
consideration in the contract and cumulative revenue recognised where it is highly probable that a signicant reversal therein
will not occur when the relevant uncertainty is resolved; assessing whether there is a significant financing component in the
contract; estimating the individual selling price of the individual performance obligation in the contract, etc. The Company
makes judgments primarily based on historical experiences and works. Changes in these significant judgments and estimates
may have signicant impacts on the operating income, operating costs, and prot or loss of the current or subsequent periods.
(7) Determination of the fair value of unlisted equity investment
The fair value of unlisted equity investments represents the expected future cash flows discounted at the prevailing discount
rate of items with similar terms and risk characteristics. It requires the Company to estimate the expected future cash ows and
discount rates, and therefore there is uncertainty. Under limited circumstances, if the information used to determine the fair
value is insucient, or the possible estimated amount of fair value is widely distributed, and cost represents the best estimate
of the fair value within such scope, the cost may represent an appropriate estimate of the fair value within such distribution
scope.
37. Changes in significant accounting policies and accounting estimates and correction to accounting errors
(1). Changes in signicant accounting policies
□ Applicable √ N/A
(2). Changes in signicant accounting estimates
□ Applicable √ N/A
(3). Description of adjustments in opening balances of line items in financial statements of the current year due to first
implementation of new lease standard since 2021
□ Applicable √ N/A
(4). Description of retrospective adjustments in comparative data in prior periods due to rst implementation of new lease standard
in 2021
□ Applicable √ N/A
184
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IV. Taxation
1. The main taxes and tax rates
√ Applicable □ N/A
Tax category Basis of taxation Statutory tax rate
Value added tax Taxable income 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 Turnover tax to be paid Note 2
Note 1: The Company and its subsidiaries that are incorporated in Zhuhai shall pay local education surcharges that are charged
as 2% of the turnover tax to be paid. Other subsidiaries shall pay local education surcharges according to the tax rate as
specied at their places of incorporation on the basis of turnover tax to be paid.
Note 2: Disclosure of taxpayers (if any) with dierent rates of enterprise income tax
√ Applicable □ N/A
Taxpayer Rate of enterprise income tax (%)
Hong Kong Health Pharmaceutical Industry Company Limited, Livzon
Pharmaceutical Biotechnology Co., Limited, Lian (Hong Kong) Co., Ltd., Livzon 16.5
Biologics Hong Kong Limited
0 or 12 (Tax rate is 12% where the
taxable income is MOP600,000 or
Companhia de Macau Carason Limitada, Li Zhu (Macau) Limitada more; for those with taxable income
less than MOP600,000, they are
exempted from income taxes.)
Shenzhen Taitai Pharmaceutical Co., Ltd, Shenzhen Haibin Pharmaceutical Co.,
Ltd, Xinxiang Haibin Pharmaceutical Co., Ltd, Jiaozuo Joincare Bio Technological
Co., Ltd, Shanghai Frontier Health Medicine Technology Co., Ltd, Guangzhou
Joincare Respiratory Medicine Engineering Technology Co., Ltd, Joincare Haibin
Pharmaceutical Co., Ltd., Livzon Group, Livzon Group Limin Pharmaceutical
Manufacturing Factory, Livzon Group Livzon Pharmaceutical Factory, Zhuhai
15
FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd., Shanghai Livzon
Pharmaceutical Manufacturing Co., Ltd., Livzon Group Xinbeijiang Pharmaceutical
Manufacturing Inc., Sichuan Guangda Pharmaceutical Manufacturing Co., Ltd.,
Zhuhai Livzon Diagnostics Inc., Livzon Group Fuzhou Fuxing Pharmaceutical
Co., Ltd., Shanghai Livzon Biotechnology Co., Ltd. and Livzon Group (Ningxia)
Pharmaceutical Manufacturing Co., Ltd.
Livzon MAB Pharm (US) Inc. 21
Health Investment Holdings Ltd, JoincarePharmaceutical Group Industry Co.,Ltd.,
Livzon International Limited, Livzon Biologics Limited, Livzon International 0
Ventures, Livzon International Ventures I, Livzon International Ventures II.
Other subsidiaries 25
Note : Companies registered in the British Virgin Islands and the Cayman Islands are not subject to enterprise income tax
185
2. Tax incentives
□ N/A
(1) Preferential value added tax
In accordance with the Announcement on Value Added Tax on Biological Products Sold by Pharmaceutical Operation
Enterprises issued by the State Administration of Taxation (Announcement of State Administration of Taxation 2012 No. 20)
and the Notice of the Ministry of Finance, the General Administration of Customs, the State Administration of Taxation and
the State Drug Administration on the Value-Added Tax Policies for Anti-Cancer Drugs (Caishui [2018] No. 47), the biological
products sold by the Company are subject to value added tax at 3% by the simple approach.
(2) Preferential enterprise income tax
The Company's subsidiaries, Shenzhen Taitai Phamaceutical Co., Ltd, Shenzhen Haibin Phamaceutical Co., Ltd, Xinxiang
Haibin Phamaceutical Co., Ltd and Shanghai Frontier Health Medicine Technology Co., Ltd are entitled to enjoy
preferential income tax policies applicable to high and new technology enterprises since 2020 for a valid period of three
years. Livzon Group and its subsidiaries, Livzon Group Limin Pharmaceutical Manufacturing Factory, Livzon Group
Livzon Pharmaceutical Factory, Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co. , Ltd., Shanghai Livzon
Pharmaceutical Manufacturing Co., Ltd., Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd. and Sichuan Guangda
Pharmaceutical Manufacturing Co., Ltd. are entitled to enjoy preferential income tax policies applicable to high and new
technology enterprises since 2020 for a valid period of three years; Livzon Group Xinbeijiang Pharmaceutical Manufacturing
Inc. and Zhuhai Livzon Diagnostics Inc. are entitled to preferential income tax policies applicable to high and new technology
enterprises since 2019 for a valid period of three years; Shanghai Livzon Biotechnology Co., Ltd. has reapplied and recognised
as the high and new technology enterprises for the Period; Livzon Group (Ningxia) Pharmaceutical Manufacturing Co., Ltd.
was approved to enjoy the enterprise taxation preference of the Encouraged Industries in Western China. Such companies were
subject to an enterprise income tax rate of 15% for the Period.
In accordance with Article 27 of the Enterprise Income Tax Law of the People's Republic of China and Article 86 of the
Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China, the business of
planting Chinese herbal medicines engaged by the subsidiaries of the Livzon, Datong Livzon Qiyuan Medicine Co., Ltd. and
Longxi Livzon Shenyuan Medicine Co., Ltd. are exempted from enterprise income tax.
According to the preferential tax policies for small low-prot enterprises, the portion of annual taxable income of a small low-
prot enterprise which does not exceed RMB1 million is subject to enterprise income tax at a tax rate of 2.5%; the portion over
RMB1 million but not exceeding RMB3 million is subject to enterprise income tax at a tax rate of 10%.
3. Others
√ N/A
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V. Notes to the Components of the Consolidated Financial Statements
1. Monetary funds
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at End of the Period Balance at Beginning of the Period
Amount in Amount in
Items Translation Amount in Translation Amount in
foreign foreign
rate RMB rate RMB
currency currency
Cash on hand: -- -- 225,179.98 -- -- 197,923.25
RMB -- -- 178,851.99 -- -- 148,845.40
HKD 30,607.30 0.8176 25,024.53 30,521.06 0.84164 25,687.74
USD 701.00 6.3757 4,469.37 706.00 6.5249 4,606.58
Euro 2,033.67 7.2197 14,682.49 2,063.67 8.025 16,560.95
GBP 250.00 8.6064 2,151.60 250.00 8.8903 2,222.58
Bank deposits: -- -- 11,554,754,721.43 -- -- 12,131,569,238.87
RMB -- -- 9,879,590,764.20 -- -- 10,797,711,400.19
HKD 563,828,766.21 0.8176 460,986,399.26 397,295,268.64 0.84164 334,379,589.89
USD 189,797,249.60 6.3757 1,210,090,324.28 152,908,866.07 6.5249 997,715,060.07
Euro 75,451.09 7.2197 544,734.23 78,241.56 8.025 627,888.52
JPY 43,429,022.00 0.055415 2,406,619.26 0.00 0.063126 0.00
MOP 1,412,971.92 0.7936 1,121,334.52 1,370,869.68 0.8172 1,120,274.70
GBP 1,690.10 8.6064 14,545.68 1,690.10 8.8903 15,025.50
Of bank deposits:
deposit with
-- -- 174,250,489.57 -- -- 157,331,451.07
nancial companies
Other monetary
-- -- 12,784,212.07 -- -- 67,550,057.63
funds:
RMB 67,298,631.20 0.81760 55,023,360.87 1,617,225.39 0.84164 1,361,121.58
HKD 13,562,944.28 6.37570 86,473,263.86 13,551,207.20 6.5249 88,420,271.86
USD 19,969,652.77
Total 11,729,230,390.98 12,289,098,613.19
Of which: total
1,309,853,620.27 1,147,163,147.28
overseas deposits
① Other monetary funds are mainly deposits for investments, deposits under guarantee of letter of guarantee, issuing letters of
credit and foreign exchange forward contracts, etc.
② Structured deposits, time deposits in bank deposit, and restricted funds relating to issuing letters of credit and foreign exchange
forward contracts, etc. in other monetary funds were deducted from cash and cash equivalents in the cash ow statement. Apart
from these restricted funds, there is no other charge, pledge or lock up on the balance of cash at bank and on hand that may
limit its use, is kept outside China and may have probable risks in its collection. Below are the details of the use of restricted
monetary funds:
Item 31 December 2021 31 December 2020
Time deposit 0.00 100,000,000.00
Letter of Credit Margin 1,788,607.74 6,378,736.56
Bank Acceptance Draft Margin 6,004,457.37 57,075,915.14
Other business margin 3,949,531.92 2,862,650.00
Total 11,742,597.03 166,317,301.70
187
2. Financial assets held for trading
□ N/A
（1）Classication
Unit: Yuan Currency: RMB
Balance at the Balance at the
Item
End of the Period Beginning of the Period
Financial asset measured at fair value through prot or loss 184,638,344.31 28,328,748.72
Of which:
Debt instrument investments 940,162.94 909,752.05
Equity instrument investments 176,321,853.05 14,351,400.72
Derivative nancial assets 7,376,328.32 13,067,595.95
Total 184,638,344.31 28,328,748.72
Other descriptions:
√ Applicable □ N/A
① The company's investments in equity instruments and debt instruments for financial assets held for trading at the End
of the Period were listed for trading on Shenzhen Stock Exchange and Hong Kong Stock Exchange. 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 and gains from unexpired
contracts measured at fair value which were recognised as nancial assets as at the balance sheet date.
（2）No restrictive nancial asset measured at fair value through prot or loss was realised in the ending balance.
（3）No hedging instruments in the ending balance and no hedging transactions have occurred during the Period.
3. Bills receivable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Balance at the
Types of bills
End of the Period Beginning of the Period
Bank acceptance bills 1,977,767,022.02 1,343,494,818.54
bad debts -481,000.00 -481,000.00
Total 1,977,286,022.02 1,343,013,818.54
(1). Pledged bills receivables at the End of the Period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Type Pledged amount at the End ofthe Period
Bank acceptance bills 870,153,979.75
Total 870,153,979.75
As at 31 December 2021, bills with carrying amount of RMB 870,153,979.75（31 December 2020: RMB 365,916,598.01）
were pledged for bank acceptance bills.
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(2). Endorsed or discounted bills receivables not yet mature as of the balance sheet date at the End of the Period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Derecognised amount at Amount not derecognised at
Type
the End of the Period the End of the Period
Bank acceptance bills not yet mature but already endorsed 186,290,992.91 0.00
Bank acceptance bills not yet mature but already discounted 67,908,033.05 0.00
Total 254,199,025.96 0.00
During the Year, the Company discounted RMB76,908,320 bank acceptance bills (Last Year: RMB208,990,920) to a bank. As
the main risks (such as interest rate risks) and rewards related to these bank acceptance bills were transferred to the bank, the
Company derecognised the undue bank acceptance bills that had been discounted. The discounted fee was RMB506,780 (Last
Year: RMB2,036,920).
(3). Bills transferred into account receivables for non-performance by the issuer as at the End of the Period
□ Applicable √ N/A
(4). Classication by method of provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Gross amount Provision for bad debt Gross amount Provision for bad debt
Expected Expected
Category
Percentage credit Carrying value Percentage credit Carrying value
Amount Amount Amount Amount
(%) loss (%) loss
rate (%) rate (%)
Provision for bad debt
481,000.00 0.02 481,000.00 100.00 0.00 481,000.00 0.04 481,000.00 100.00 0.00
on an individual basis
Of which:
Commercial acceptance
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
bills
Bank acceptance bills 481,000.00 0.02 481,000.00 100.00 0.00 481,000.00 0.04 481,000.00 100.00 0.00
Provision for bad debt
1,977,286,022.02 99.98 0.00 0.00 1,977,286,022.02 1,343,013,818.54 99.96 0.00 0.00 1,343,013,818.54
on a collective basis
Of which:
Bank acceptance bills 1,977,286,022.02 99.98 0.00 0.00 1,977,286,022.02 1,343,013,818.54 99.96 0.00 0.00 1,343,013,818.54
Total 1,977,767,022.02 100.00 481,000.00 0.02 1,977,286,022.02 1,343,494,818.54 100.00 481,000.00 0.04 1,343,013,818.54
(5). Provision for bad debt on an individual basis :
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period
Name Provision for bad Expected credit
Gross amount Reason for provision made
debt loss rate (%)
Henan Jiuzhoutong
431,000.00 431,000.00 100.00 Not expected to be recoverable
Pharmaceutical Co., Ltd.
Other customers 50,000.00 50,000.00 100.00 Not expected to be recoverable
Total 481,000.00 481,000.00 100.00 /
189
Descriptions of provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debt on a collective basis:
□ 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
Unit: Yuan Currency: RMB
Changes for the current period
Balance at the Beginning Balance at the End
Category Recovery or
of the Period Provision Removal/write-o of the Period
reversal
Provision for bad debts 481,000.00 0.00 0.00 0.00 481,000.00
Total 481,000.00 0.00 0.00 0.00 481,000.00
Signicant recovery or reversal of bad debt provision for the current period:
√ N/A
(7). Bills receivable actually written o for the current period
□ Applicable √ N/A
Other descriptions:
□ Applicable √ N/A
4. Account receivables
(1). Disclosed by aging analysis
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Age Balance at the End of the Period
Subtotal within 1 year: 2,872,710,981.81
1-2 years 18,541,236.06
2-3 years 12,869,985.75
3-4 years 7,835,031.26
4-5 years 1,332,259.38
Over 5 years 12,807,886.92
Total 2,926,097,381.18
According to the credit policy of the Company, the Company usually grants a credit period ranging from 30 to 90 days to its
customers.
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(2). Disclosure by category based on methods of provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Gross amount Provision for bad debt Gross amount Provision for bad debt
Category
Percentage Percentage Carrying value Percentage Percentage Carrying value
Amount Amount Amount Amount
(%) (%) (%) (%)
Provision for bad debt
9,709,854.02 0.33 5,513,168.82 56.78 4,196,685.20 10,426,275.67 0.41 6,229,590.47 59.75 4,196,685.20
on an individual basis
Of which:
Due from domestic
9,709,854.02 0.33 5,513,168.82 56.78 4,196,685.20 10,312,742.41 0.41 6,116,057.21 59.31 4,196,685.20
customers
Due from overseas
0.00 0.00 0.00 0.00 0.00 113,533.26 0.00 113,533.26 100.00 0.00
customers
Provision for bad debt
2,916,387,527.16 99.67 66,928,660.82 2.29 2,849,458,866.34 2,514,820,193.56 99.59 71,610,656.24 2.85 2,443,209,537.32
on a collective basis
Of which:
Due from domestic
2,333,938,533.50 79.76 58,705,544.56 2.52 2,275,232,988.94 2,028,481,823.13 80.33 64,858,199.12 3.20 1,963,623,624.01
customers
Due from overseas
582,448,993.66 19.91 8,223,116.26 1.41 574,225,877.40 486,338,370.43 19.26 6,752,457.12 1.39 479,585,913.31
customers
Total 2,926,097,381.18 100.00 72,441,829.64 2.48 2,853,655,551.54 2,525,246,469.23 100 77,840,246.71 3.08 2,447,406,222.52
Provision for bad debt on an individual basis:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period
Description
Gross amount Provision for bad debt Percentage (%) Reason for provision made
Payment for goods 9,709,854.02 5,513,168.82 56.78 Not expected to be recoverable
Total 9,709,854.02 5,513,168.82 56.78 /
Descriptions of provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debt on a collective basis:
√ Applicable □ N/A
Item: Due from domestic customers
Unit: Yuan Currency: RMB
Balance at the End of the Period
Name
Account receivables Provision for bad debt Percentage (%)
Within 1 year: 2,290,261,988.15 32,953,674.70 1.44
1-2 years（including 2 years） 18,541,236.06 2,450,973.15 13.22
2-3 years（including 3years） 4,476,615.34 2,960,042.15 66.12
3-4years（including 4 years） 7,550,258.06 7,277,583.42 96.39
4-5 years（including 5 years） 1,271,992.78 1,226,828.03 96.45
Over 5 years 11,836,443.11 11,836,443.11 100.00
Total 2,333,938,533.50 58,705,544.56 2.52
191
Standards of provision for bad debts on a collective basis and descriptions thereof:
□ Applicable √ N/A
Item: Due from overseas customers
Unit: Yuan Currency: RMB
Balance at the End of the Period
Name
Account receivables Provision for bad debt Percentage (%)
Within 1 year: 582,448,993.66 8,223,116.26 1.41
1-2 years（including 2 years） 0.00 0.00 0.00
2-3 years（including 3years） 0.00 0.00 0.00
3-4years（including 4 years） 0.00 0.00 0.00
4-5 years（including 5 years） 0.00 0.00 0.00
Over 5 years 0.00 0.00 0.00
Total 582,448,993.66 8,223,116.26 1.41
Standards of provision for bad debts on a collective 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
Balance at the Changes for the current period Balance at
Category Beginning of Recovery or Other the End of
Provision Removal/write-o
the Period reversal changes the Period
Provision for bad debts 77,840,246.71 9,189,454.14 0.00 14,572,969.66 -14,901.55 72,441,829.64
Total 77,840,246.71 9,189,454.14 0.00 14,572,969.66 -14,901.55 72,441,829.64
As of 31 December 2020 and of 31 December 2021, the Company had no accounts receivable that were past due but had not
be impaired.
Signicant recovery or reversal of bad debt provision for the current period:
□ Applicable √ N/A
(4). Actual write-o of account receivables for the Period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item Amount written-o
Accounts receivable actually written o 14,572,969.66
Signicant accounts receivable that are written o:
□ Applicable √ N/A
Descriptions of write-o of accounts receivable:
□ Applicable √ N/A
192
Annual Report
2021
(5). Total amount of account receivables of top ve balances of accounts receivables by debtors at the End of the Period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
A/R Percentage% as total A/R Bad Debt Provision
Name of Debtors
Ending Balance (Ending Balance) (Ending Balance)
Debtor 1 101,210,658.25 3.46 694,990.42
Debtor 2 70,072,167.75 2.39 679,833.87
Debtor 3 60,585,663.88 2.07 590,107.52
Debtor 4 56,782,566.75 1.94 554,141.08
Debtor 5 50,897,405.05 1.74 519,263.27
Total 339,548,461.68 11.60 3,038,336.16
Other descriptions:
The total amount of the top ve balances of accounts receivables by debtors at the End of the Year was RMB 339,548,461.68
for the Period, representing 11.60% of the total balances of accounts receivables at the End of the Year, and the corresponding
aggregate amount of the balances of provision for bad debt at the End of the Year was RMB 3,038,336.16.
(6). Derecognised account receivables due to the transfer of nancial assets.
□ Applicable √ N/A
(7). Assets or liabilities formed by its continuous involvement of transferring account receivables
□ Applicable √ N/A
Other descriptions:
□ Applicable √ N/A
5. Prepayments
(1) Disclosure of prepayments by aging analysis
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Age
Amount Percentage (%) Amount Percentage (%)
Within 1 year 354,340,559.20 95.97 199,646,272.88 95.11
1-2 years 8,031,100.50 2.17 8,545,039.74 4.07
2-3 years 6,323,201.42 1.71 552,633.55 0.26
Over 3 years 537,685.17 0.15 1,182,094.40 0.56
Total 369,232,546.29 100.00 209,926,040.57 100.00
(2) Prepayments with ve largest amounts by receivers of prepayments at the End of the Period
√ Applicable □ N/A
Percentage% as of Ending Balance
Name of Receivers Ending Balance of Prepayments
of Toal Prepayments
Receiver 1 41,409,303.20 11.21
Receiver 2 15,523,899.11 4.20
Receiver 3 13,160,000.00 3.56
Receiver 4 12,199,251.14 3.30
Receiver 5 11,105,927.86 3.01
Total 93,398,381.31 25.30
193
Other descriptions:
The aggregate amount of prepayments paid to the five largest receivers of prepayments at the End of the Period was
RMB93,398,381.31 for the Period, representing 25.30% of the total balance of prepayments at the End of the Period.
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
Interest receivable 365,873.64 0.00
Other receivables 87,687,951.48 177,240,162.81
Total 88,053,825.12 177,240,162.81
Other descriptions:
□ Applicable √ N/A
Interest receivable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Project Balance at the End of the Period Balance at the Beginning of the Period
Term interests 365,873.64 0.00
Total 365,873.64 0.00
Other receivables
(1) Disclosure by aging analysis
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Age Balance at the End of the Period
Subtotal within 1 year 53,953,012.32
1-2 years 33,803,432.35
2-3 years 1,821,553.83
3-4 years 2,532,015.23
4-5 years 807,025.60
Over 5 years 50,248,098.81
Provision for bad debt -55,477,186.66
Total 87,687,951.48
194
Annual Report
2021
(2) Disclosure by nature of amounts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End Balance at the Beginning
Nature
of the Period of the Period
Deposits under guarantee, deposits and lease expenses 11,003,281.04 10,427,225.66
Reserved fund and advances 17,870,245.40 22,442,315.38
Related party balances 20,323,903.96 34,057,672.41
External entities balances 22,421,780.76 20,635,951.11
Tax refund on exports 17,708,111.60 23,764,211.44
Treasury bonds and margin 17,968,386.04 18,982,036.71
Capital reduction 24,078,925.22 92,347,581.27
Amounts of exercised options 8,463,240.98 9,169,356.40
Others 3,327,263.14 2,610,860.99
Total 143,165,138.14 234,437,211.37
(3) Provision for bad debt
√ Applicable □ N/A
At the End of the Period, the provision for bad debt in Step 1 was as follows:
Expected credit Provision
Category Gross amount loss rate over the for bad Carrying value Reason
next 12 months (%) debt
Provision for bad debt on an individual basis 32,542,166.20 0.00 0.00 32,542,166.20
Amounts of exercised options 8,463,240.98 0.00 0.00 8,463,240.98 Recoverable
Capital reduction 24,078,925.22 0.00 0.00 24,078,925.22 Recoverable
Provision for bad debt on a collective basis 0.00 0.00 0.00 0.00
Total 32,542,166.20 0.00 0.00 32,542,166.20
At the End of the Period, the provision for bad debt in Step 2 was as follows:
Expected credit
Gross Provision for Carrying
Category loss rate over the Reason
amount bad debt value
lifetime (%)
Provision for bad debt on an individual basis 0.00 0.00 0.00 0.00
Provision for bad debt on a collective basis 63,594,020.80 13.28 8,448,235.52 55,145,785.28
Export tax refund receivable 17,708,111.60 1.12 198,927.69 17,509,183.91
Deposits under guarantee, deposits and lease
11,003,281.04 26.33 2,897,272.69 8,106,008.35
expenses receivable
Other receivables 34,882,628.16 15.34 5,352,035.14 29,530,593.02
Total 63,594,020.80 13.28 8,448,235.52 55,145,785.28
195
At the End of the Period, the provision for bad debt in Step 3 was as follows:
Expected credit
Gross Provision for Carrying
Category loss rate over the Reason
amount bad debt value
lifetime (%)
Provision for bad debt on an individual basis 47,028,951.14 100.00 47,028,951.14 0.00
Not expected
Other receivables 47,028,951.14 100.00 47,028,951.14 0.00 to be
recoverable
Provision for bad debt on a collective basis 0.00 0.00 0.00 0.00
Total 47,028,951.14 100.00 47,028,951.14 0.00
Provision for bad debt as at 31 December 2020
At the End of 2020, the provision for bad debt in Step 1 was as follows:
Expected credit Provision
Category Gross amount loss rate over the for bad Carrying value Reason
next 12 months (%) debt
Provision for bad debt on an individual basis 101,516,937.67 0.00 0.00 101,516,937.67
Amounts of exercised options 9,169,356.40 0.00 0.00 9,169,356.40 Recoverable
Capital reduction 92,347,581.27 0.00 0.00 92,347,581.27 Recoverable
Provision for bad debt on a collective basis 0.00 0.00 0.00 0.00
Total 101,516,937.67 0.00 0.00 101,516,937.67
At the End of 2020, the provision for bad debt in Step 2 was as follows:
Expected credit
Gross Provision for Carrying
Category loss rate over the Reason
amount bad debt value
lifetime (%)
Provision for bad debt on an individual basis 0.00 0.00 0.00 0.00
Provision for bad debt on a collective basis 84,877,671.89 10.79 9,154,446.75 75,723,225.14
Export tax refund receivable 23,764,211.44 1.05 250,463.32 23,513,748.12
Deposits under guarantee, deposits and lease
10,427,225.66 25.18 2,625,854.42 7,801,371.24
expenses receivable
Other receivables 50,686,234.79 12.39 6,278,129.01 44,408,105.78
Total 84,877,671.89 10.79 9,154,446.75 75,723,225.14
At the End of 2020, the provision for bad debt in Step 3 was as follows:
Expected credit
Gross Provision for Carrying
Category loss rate over the Reason
amount bad debt value
lifetime (%)
Provision for bad debt on an individual basis 48,042,601.81 100.00 48,042,601.81 0.00
Not expected
Other receivables 48,042,601.81 100.00 48,042,601.81 0.00 to be
recoverable
Provision for bad debt on a collective basis 0.00 0.00 0.00 0.00
Total 48,042,601.81 100.00 48,042,601.81 0.00
196
Annual Report
2021
(4) Provision for bad debts made, recovered or reversed during the Period
Unit: Yuan Currency: RMB
Step 1 Step 2 Step 3
Expected credit Expected credit loss over Expected credit loss
Provision for bad debt Total
loss over the next the lifetime (without over the lifetime (with
12 months impairment of credit) impairment of credit)
Balance at 1 January 2021 0.00 9,154,446.75 48,042,601.81 57,197,048.56
Movements of balance at 1
January 2021
– Transferred to Step 2 0.00 0.00 0.00 0.00
– Transferred to Step 3 0.00 -488,887.77 488,887.77 0.00
– Reversed to Step 2 0.00 0.00 0.00 0.00
– Reversed to Step 1 0.00 0.00 0.00 0.00
Provision made for the Period 0.00 -151,691.27 0.00 -151,691.27
Reversals during the Period 0.00 1,013,650.67 1,013,650.67
Settlement during the Period 0.00 0.00 0.00 0.00
Write-o during the Period 0.00 0.00 488,887.77 488,887.77
Other changes 0.00 -65,632.19 0.00 -65,632.19
Balance at 31 December 2021 0.00 8,448,235.52 47,028,951.14 55,477,186.66
Descriptions of the significant changes in the gross carrying amount of other receivables for which the changes 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 has
increased signicantly:
□ Applicable √ N/A
(5) Other receivables actually written o during the Period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item Amount written o
Other receivables actually written o 488,887.77
Signicant other receivables that are written o:
□ Applicable √ N/A
Descriptions of write-o of other receivables:
□ Applicable √ N/A
197
(6) Aggregate amount of other receivables due from the top ve parties with the largest amounts at the End of the Period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Percentage in the
Balance of other total balance of Provision for bad
Name of entity Nature of amount receivables at the Age other receivables debts at the end
End of the Period at the End of of the Period
the Period (%)
Shanghai Yunfeng Xinchuang
Capital reduction 24,078,925.22 1-2 years 16.82 0.00
Equity Investment Center
Shenzhen Jiekang Health Related party
18,577,246.63 Over 5 years 12.98 18,577,246.63
Care Co., Ltd. balances
Treasury bonds
Hua Xia Securities Co., Ltd. 17,968,386.04 Over 5 years 12.55 17,968,386.04
and margin
Tax refunds on exports Export tax refund 17,708,111.60 Within 1 year 12.37 198,927.69
China Securities Depository
Amount of
and Clearing Corporation 8,463,240.98 Within 1 year 5.91 0.00
exercised options
Limited (Shenzhen Branch)
Total / 86,795,910.47 / 60.63 36,744,560.36
(7) Other receivables due to the transfer of nancial assets
□ Applicable √ N/A
(8) Assets or liabilities formed by its continuous involvement of transferring other receivables:
□ Applicable √ N/A
Other descriptions
□ Applicable √ N/A
7. Inventories
(1). Classication of inventories
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Provision for Provision for
Item
Gross amount diminution Carrying amount Gross amount diminution Carrying amount
in value in value
Raw materials 553,234,567.88 16,068,254.74 537,166,313.14 449,307,601.96 24,992,444.56 424,315,157.40
Packaging materials 125,197,237.91 7,099,883.19 118,097,354.72 68,812,746.78 7,353,583.54 61,459,163.24
Goods in process
and Proprietary 538,151,968.97 2,891,675.04 535,260,293.93 372,253,640.56 2,679,118.64 369,574,521.92
semi-nished goods
Low-value
61,806,078.47 217,760.90 61,588,317.57 32,476,319.46 382,146.01 32,094,173.45
consumables
Finished goods and
834,035,538.26 30,182,179.43 803,853,358.83 947,677,545.58 33,908,986.43 913,768,559.15
stock goods
Sub-contracting
2,251,074.26 0.00 2,251,074.26 1,863,102.15 0.00 1,863,102.15
materials
Consumable
12,342,303.96 0.00 12,342,303.96 11,511,335.81 0.00 11,511,335.81
biological assets
Goods in transit 8,385,371.27 0.00 8,385,371.27 16,922,999.15 0.00 16,922,999.15
Total 2,135,404,140.98 56,459,753.30 2,078,944,387.68 1,900,825,291.45 69,316,279.18 1,831,509,012.27
198
Annual Report
2021
(2). Provision for diminution in value of inventories and provision for diminution in value of contract performance costs
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Increase during the Period Decrease during the Period Balance at the
Item Beginning Reversed or End of the
Provision Other Other
of the Year written o Period
Raw materials 24,992,444.56 23,244,030.42 0.00 32,168,220.24 0.00 16,068,254.74
Packaging materials 7,353,583.54 2,070,617.16 0.00 2,324,317.51 0.00 7,099,883.19
Goods in process and Proprietary
2,679,118.64 3,587,621.55 0.00 3,375,065.15 0.00 2,891,675.04
semi-nished goods
Low-value consumables 382,146.01 30,790.83 0.00 195,175.94 0.00 217,760.90
Finished goods and stock goods 33,908,986.43 33,506,690.02 0.00 37,233,497.02 0.00 30,182,179.43
Total 69,316,279.18 62,439,749.98 0.00 75,296,275.86 0.00 56,459,753.30
Provision for diminution in value of inventories (Continued)
Reason for reversal or write
o provision for diminution in
Basis for determination of net realisable value/
Item value of inventories/impairment
remaining consideration and the cost to be incurred
provision for contract performance
cost during the Period
The estimated selling price less the estimated costs Processing, sale of nished goods
Raw materials
of completion, selling expenses and related taxes and discard
The estimated selling price less the estimated costs Processing, sale of nished goods
Packaging materials
of completion, selling expenses and related taxes and discard
Goods in process and Proprietary The estimated selling price less the estimated costs Processing of nished goods and
semi-nished goods of completion, selling expenses and related taxes discard
Low-value consumables The estimated selling price less the related taxes Discard
The estimated selling price less the estimated selling
Finished goods and stock goods Sale and discard
expenses and related taxes
(3). Descriptions at the End of the Period of inventories including capitalised amount of borrowing costs
□ 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 317,381.23 11,414,376.07
Interest receivable due within one year 0.00 8,520,000.00
Total 317,381.23 19,934,376.07
Signicant debt investments and other debt investments at the end of the period:
□ Applicable √ N/A
199
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/attestation 53,179,328.86 49,003,571.19
Advance payment of income tax 30,667,849.83 9,094,478.01
Others 139,035.68 0.00
Total 83,986,214.37 58,098,049.20
10. Long-term receivables
(1) Descriptions of long-term receivables
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Range of
Provision Provision
Item Gross Carrying Gross Carrying discount
for for
amount value amount value rate
bad debts bad debts
Receivables from equity
0.00 0.00 0.00 10,967,767.26 0.00 10,967,767.26 5.00%
transferred by installments
Finance lease payment 584,285.36 0.00 584,285.36 1,030,893.17 0.00 1,030,893.17 4.75%
Long-term receivables
-317,381.23 0.00 -317,381.23 -11,414,376.07 0.00 -11,414,376.07
due within one year
Total 266,904.13 0.00 266,904.13 584,284.36 0.00 584,284.36
(2) Provision for bad debts
□ Applicable √ N/A
The provision amount of bad debt reservesin the current period and the basis for assessing whether the credit risk of nancial
instruments has increased signicantly:
□ Applicable √ N/A
(3) Long-term receivables derecognised out of transfer of nancial assets.
□ Applicable √ N/A
(4) Assets or liabilities formed by its continuous involvement of transferring long-term receivables.
□ Applicable √ N/A
Other descriptions:
□ Applicable √ N/A
200
Annual Report
2021
11. Long-term equity investments
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Change during the Period Balance of
Balance at Investment Adjustment Cash dividend provision for
Other Provision Balance at the
Investee the Beginning additional Decreased prot and loss in other or prot impairment at
equity for Others End of the Period
of the Period investment investment under the comprehensive distribution the End of the
changes impairment
equity method income declared Period
I. Subsidiaries
Zhongshan Renhe Health
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
Products Co., Ltd.
Guangzhou Hiyeah Industry
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
Co., Ltd.
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
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
Equipment (Plant) Co., Ltd.
Guangdong Blue Treasure
72,271,987.53 0.00 0.00 17,232,604.65 0.00 0.00 11,475,000.00 0.00 0.00 78,029,592.18 0.00
Pharmaceutical Co. Ltd.
Shenzhen City Youbao
1,080,543.04 0.00 0.00 141,855.85 0.00 0.00 0.00 0.00 0.00 1,222,398.89 0.00
Technology Co., Ltd.
AbCyte Therapeutics Inc. 16,183,551.42 0.00 0.00 -1,028,841.46 0.00 0.00 0.00 0.00 0.00 15,154,709.96 0.00
L&L Biopharma, Co. Ltd. 14,024,119.09 0.00 0.00 -1,650,109.20 0.00 2,658,626.68 0.00 0.00 -145,798.11 14,886,838.46 0.00
Zhuhai Sanmed Biotech Inc.* 31,649,784.72 0.00 0.00 -18,179,141.47 -30,268.27 69,715,182.18 0.00 0.00 0.00 83,155,557.16 0.00
Aetio Biotheraphy, Inc. 17,647,744.60 0.00 0.00 -1,619,256.12 0.00 0.00 0.00 0.00 0.00 16,028,488.48 0.00
Jiangsu Atom Bioscience and
70,260,600.00 0.00 0.00 -2,351,992.02 0.00 0.00 0.00 0.00 0.00 67,908,607.98 0.00
Pharmaceutical Co., Ltd.
Tianjin Tongrentang Group
0.00 724,000,000.00 0.00 52,620,894.45 14,820,196.44 148,673.03 40,040,000.00 0.00 0.00 751,549,763.92 0.00
Co., Ltd.*
Innite Intelligence
0.00 20,000,000.00 0.00 -1,199,311.93 0.00 1,137,221.57 0.00 0.00 0.00 19,937,909.64 0.00
Pharmaceutical Co. Ltd.
Jiaozuo Jinguan Jiahua
316,556,367.05 0.00 0.00 -31,936,458.04 0.00 0.00 0.00 0.00 0.00 284,619,909.01 0.00
Electric Power Co., Ltd.
Ningbo Ningrong Biomedical
28,301,318.36 0.00 0.00 -837,219.65 0.00 0.00 0.00 0.00 0.00 27,464,098.71 0.00
Co., Ltd.
Feellife Health Inc. 11,964,576.16 0.00 0.00 769,797.06 0.00 0.00 0.00 0.00 0.00 12,734,373.22 0.00
Novastage Pharmaceuticals
19,561,050.64 0.00 0.00 -1,480,167.43 0.00 0.00 0.00 0.00 0.00 18,080,883.21 0.00
(Shenzhen), Ltd.
Jiangsu Baining Yingchuang
28,777,957.12 0.00 0.00 -201,633.10 0.00 0.00 0.00 0.00 0.00 28,576,324.02 0.00
Medical Technology Co., Ltd.
Subtotal 629,479,599.73 744,000,000.00 0.00 10,281,021.59 14,789,928.17 73,659,703.46 51,515,000.00 0.00 -145,798.11 1,420,549,454.84 1,200,000.00
Total 637,767,316.53 744,000,000.00 0.00 10,281,021.59 14,789,928.17 73,659,703.46 51,515,000.00 0.00 -145,798.11 1,428,837,171.64 9,487,716.80
Note1: Other equity changes of L&L Biopharma Co., Ltd. ( 上海健信生物医药科技有限公司 ) and Zhuhai Sanmed Biotech
Inc.( 珠 海 圣 美 生 物 诊 断 技 术 有 限 公 司 ) are non-proportional capital increase, and Livzon Group's share of such
changes was calculated in proportion to its equity interest.
201
Note2: In April 2021, Livzon Group entered into the Share Transfer Agreement in relation to Tianjin Tongrentang Group Co.,
Ltd. with Tianjin Tasly Healthcare Industry Investment Partnership (Limited Partnership) ( 天津天士力健康产业投资
合 伙 企 业（ 有 限 合 伙 ）) (“Tianjin Tasly”), Livzon Group shall acquire 44,000,000 shares of Tianjin Tongrentang
Group Co., Ltd. ( 天 津 同 仁 堂 集 团 股 份 有 限 公 司 ) (“Tianjin Tongrentang”) held by Tianjin Tasly, representing
40.00% of the total number of shares of Tianjin Tongrentang at the consideration of RMB724 million. On 27 April
2021, Livzon Group obtained the Confirmation Letter for Securities Transfer and Registration from China Securities
Depository and Clearing Co., Ltd. conrming Livzon Group had acquired 40.00% equity of Tianjin Tongrentang.
Note3: In February 2021, Zhuhai Livzon Pharmaceutical Equity Investment Management Co., Ltd. ( 珠海市丽珠医药股权投
资 管 理 有 限 公 司 ), the subsidiary of Livzon Group (“Equity Investment Company”) entered into the Shareholder
Agreement with Beijing Innite Intelligence Pharmaceutical Technology Co., Ltd. ( 北 京 英 飞 智 药 科 技 有 限 公
司 ) (“Infinite Intelligence Pharma”), Equity Investment Company contribute a total of RMB20,000,000 to hold
11.7647% equity of Infinite Intelligence Pharma. According to the Shareholder Agreement and the provisions of the
articles of association, Equity Investment Company shall appoint one director to Infinite Intelligence Pharma. Since
the Equity Investment Company can have a significant impact on Infinite Intelligence Pharma, the investment in
Infinite Intelligence Pharma will be accounted as long-term equity investment; Other changes in equity shall be non-
proportional capital increase which is calculated according to the shareholding ratio of the Equity Investment Company.
After the capital increase, the shareholding ratio of the Equity Investment Company shall become 10.989%.
12. Other equity instrument investments
(1) Descriptions of other equity investment
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End Balance at the Beginning
Item
of the Period of the Period
China Galaxy Securities Co., Ltd. 212,384,666.97 237,438,086.13
Shanghai Yunfeng Xinchuang Equity Investment Center 94,040,236.88 112,254,757.06
Shanghai JingYi Investment Center 66,175,062.50 67,661,520.76
Qianhai Equity Investment Fund 264,930,500.00 253,987,145.00
Apricot Forest, Inc 137,711,800.01 149,384,486.40
PANTHEON D ,L.P. 3,715,566.69 12,680,875.63
Zhuhai China Resources Bank Co., Ltd. 164,395,200.00 170,772,300.00
GLOBAL HEALTH SCIENCE 235,133,216.46 246,837,324.35
SCC VENTURE VI 2018-B,L.P. 6,615,626.07 13,823,660.49
SCC VENTURE VII 2018-C,L.P. 0.00 176,752,020.58
Nextech V Oncology S.C.S., SICAV-SIF 30,667,263.04 29,583,312.39
Yizun Biopharmaceutics (Shanghai) Co., Ltd. 59,999,953.41 30,000,000.00
ELICIO THERAPEUTICS, INC. 31,878,510.16 32,624,491.32
CARIAMA THER APEUTICS INC. 31,876,936.63 32,622,880.98
Beijing Luzhu Biotechnology Co., Ltd. 41,944,015.67 0.00
Shanghai Keentai Biotechnology Co., Ltd. 12,000,000.00 0.00
Others 15,413,822.93 9,968,802.04
Total 1,408,882,377.42 1,576,391,663.13
202
Annual Report
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(2) Descriptions of investments in non-trading equity instruments
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Amount Reason for the
Dividend transferred designation
income Cumulative Cumulative from other as fair value Reason
Item
recognised gains losses comprehensive through other for transfer
for the Period income to comprehensive
retained earning income
China Galaxy Securities Co., Ltd. 4,175,569.86 0.00 0.00 0.00 non-trading
Shanghai Yunfeng Xinchuang Equity
0.00 0.00 0.00 0.00 non-trading
Investment Center
Shanghai JingYi Investment Center 0.00 0.00 0.00 0.00 non-trading
Qianhai Equity Investment Fund 12,224,832.07 0.00 0.00 0.00 non-trading
Apricot Forest, Inc 0.00 0.00 0.00 0.00 non-trading
PANTHEON D ,L.P. 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 0.00 0.00 0.00 0.00 non-trading
Corporate
lapsed and
SCC VENTURE VI 2018-B,L.P. 0.00 0.00 0.00 137,631,513.65 non-trading
investment
withdrawn
SCC VENTURE VII 2018-C,L.P. 0.00 0.00 0.00 0.00 non-trading
Nextech V Oncology S.C.S., SICAV-SIF 21,298,939.65 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
CARIAMA THER APEUTICS 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 25,000.00 0.00 0.00 34,295,275.82 non-trading Disposal
Total 37,724,341.58 0.00 0.00 171,926,789.47
Other descriptions:
□ Applicable √ N/A
203
13. Investment property
Measurementof investment properties
(1). Investment properties measured at cost
Unit: Yuan Currency: RMB
Item Plant and buildings Total
I. Original book value:
1. Balance at the Beginning of the Period 61,914,754.28 61,914,754.28
2. Additions for the Period 0.00 0.00
3. Decrease for the Period 0.00 0.00
4. Balance at the End of the Period 61,914,754.28 61,914,754.28
II. Accumulated depreciation and amortisation
1. Balance at the Beginning of the Period 55,723,278.85 55,723,278.85
2. Additions for the Period 0.00 0.00
(1) Provision or amortisation 0.00 0.00
3. Decrease for the Period 0.00 0.00
(1) Disposal 0.00 0.00
4. Balance at the End of the Period 55,723,278.85 55,723,278.85
III. Provisions for impairment
1. Balance at the Beginning of the Period 0.00 0.00
2. Additions for the Period 0.00 0.00
(1) Provision 0.00 0.00
3. Decrease for the Period 0.00 0.00
(1) Provision 0.00 0.00
4. Balance at the End of the Period 0.00 0.00
VI. Carrying Amount
1. Balance at the End of the Period 6,191,475.43 6,191,475.43
2. Balance at the Beginning of the Period 6,191,475.43 6,191,475.43
(2). Investment properties whose title certicate has not completed:
□ Applicable √ N/A
Other descriptions:
□ Applicable √ N/A
14. 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 4,839,005,169.81 4,380,285,156.93
Disposal of xed assets 0.00 0.00
Total 4,839,005,169.81 4,380,285,156.93
Other descriptions:
□ Applicable √ N/A
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Annual Report
2021
(1) Descriptions of xed assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Electronic
Plant and Machinery and
Item Motor vehicles devices and Total
building equipment
others
I. Original book value
1. Balance at the Beginning of the Period 3,779,641,227.70 4,557,020,864.75 104,791,052.69 662,702,629.16 9,104,155,774.30
2. Additions for the Period 203,437,875.03 658,030,999.87 11,324,491.83 152,589,581.07 1,025,382,947.80
(1) Acquisition 18,022,101.75 180,023,958.68 10,930,219.42 118,048,251.21 327,024,531.06
(2) Construction in progress transferred 185,415,773.28 478,007,041.19 394,272.41 34,541,329.86 698,358,416.74
3. Decrease for the Period 6,879,891.82 95,235,106.60 8,100,214.31 31,926,047.25 142,141,259.98
(1) Disposal or written-o 6,879,891.82 95,235,106.60 7,725,588.18 31,556,254.60 141,396,841.20
（2）Change in scope of consolidation 0.00 0.00 0.00 345,584.98 345,584.98
(3) Others 0.00 0.00 374,626.13 24,207.67 398,833.80
4. Balance at the End of the Period 3,976,199,210.91 5,119,816,758.02 108,015,330.21 783,366,162.98 9,987,397,462.12
II. Accumulated depreciation
1. Balance at the Beginning of the Period 1,465,544,461.45 2,615,640,767.17 73,194,504.98 450,208,988.22 4,604,588,721.82
2. Additions for the Period 168,842,593.41 310,165,425.29 10,522,291.37 51,197,171.85 540,727,481.92
(1) Provision 168,842,593.41 310,165,425.29 10,522,291.37 51,197,171.85 540,727,481.92
(2) Others 0.00 0.00 0.00 0.00 0.00
3. Decrease for the Period 1,123,788.48 75,345,139.96 7,217,655.38 23,229,897.71 106,916,481.53
(1) Disposal or written-o 1,123,788.48 75,345,139.96 6,856,704.38 23,118,823.33 106,444,456.15
（2）Change in scope of consolidation 0.00 0.00 0.00 86,866.71 86,866.71
(2) Others 0.00 0.00 360,951.00 24,207.67 385,158.67
4. Balance at the End of the Period 1,633,263,266.38 2,850,461,052.50 76,499,140.97 478,176,262.36 5,038,399,722.21
III. Impairment provision
1. Balance at the Beginning of the Period 26,619,980.48 73,464,504.43 77,435.52 19,119,975.12 119,281,895.55
2. Additions for the Period 0.00 848,789.03 0.00 342,933.27 1,191,722.30
(1) Provision 0.00 848,789.03 0.00 342,933.27 1,191,722.30
3. Decrease for the Period 55,196.03 10,127,065.20 35,856.87 262,929.65 10,481,047.75
(1) Disposal or written-o 55,196.03 10,127,065.20 35,856.87 262,929.65 10,481,047.75
4. Balance at the End of the Period 26,564,784.45 64,186,228.26 41,578.65 19,199,978.74 109,992,570.10
IV. Carrying amount
1. Carrying amount at the End of the Period 2,316,371,160.08 2,205,169,477.26 31,474,610.59 285,989,921.88 4,839,005,169.81
2. Carrying amount at the Beginning of the Period 2,287,476,785.77 1,867,915,593.15 31,519,112.19 193,373,665.82 4,380,285,156.93
The depreciation during the period was RMB540,727,481.92 (RMB518,267,264.56 during the previous period)
(2) Temporarily idled xed assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Original Accumulated Provision for Carrying
Item Note
book value depreciation impairment amount
Plant and building 23,926,279.99 14,125,840.52 5,155,770.80 4,644,668.67
Machinery and equipment 187,653,120.50 129,431,802.20 40,715,156.36 17,506,161.94
Electronic devices and others 3,631,593.98 2,596,927.70 215,250.11 819,416.17
Total 215,210,994.47 146,154,570.42 46,086,177.27 22,970,246.78
205
(3) Fixed assets leased in under nancing leases
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item Carrying Amount at the End of the Period
Plant and building 1,555,592.77
(4) Fixed assets whose title certicate has not completed
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item Carrying Amount Reason for pending for certicate of ownership
Plant and building 224,266,766.47 Being in progress
Other descriptions
□ Applicable √ N/A
15. 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 742,533,534.23 647,937,496.92
Construction supplies 465,209.52 540,545.50
Total 742,998,743.75 648,478,042.42
Other descriptions:
□ Applicable √ N/A
(1) Descriptions of construction in progress
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Item Provision for carrying Provision for carrying
Gross amount Gross amount
impairment amount impairment amount
Haibin Pharma Pingshang New Factory 144,364,877.42 0.00 144,364,877.42 229,735,516.02 0.00 229,735,516.02
Guangda New Factory Project 179,745,064.48 0.00 179,745,064.48 64,845,632.88 0.00 64,845,632.88
Fuxing Company Phase I & II Projects
36,580,114.83 0.00 36,580,114.83 95,851,873.91 0.00 95,851,873.91
and others
Project of Shijiao New Factory 61,845,397.73 0.00 61,845,397.73 154,752,745.97 0.00 154,752,745.97
Transformation Project of
19,579,452.17 0.00 19,579,452.17 16,500,619.41 0.00 16,500,619.41
Pharmaceutical Factory Workshop
Construction Project for Microsphere
Workshop (including Gose) of Livzon 15,616,651.12 0.00 15,616,651.12 7,805,534.78 0.00 7,805,534.78
Group Livzon Pharmaceutical Factory
P06 Construction Project of Livzon
Group Livzon 83,020,966.01 0.00 83,020,966.01 1,559,405.27 0.00 1,559,405.27
Pharmaceutical Factory
Project of lyophilized powder injection
70,673,332.62 0.00 70,673,332.62 8,495,072.05 0.00 8,495,072.05
workshop
206
Annual Report
2021
Balance at the End of the Period Balance at the Beginning of the Period
Item Provision for carrying Provision for carrying
Gross amount Gross amount
impairment amount impairment amount
P09 Construction Project of Livzon
Group Livzon 54,924,595.61 0.00 54,924,595.61 307,744.41 0.00 307,744.41
Pharmaceutical Factory
P04/P05 Construction Project of
Livzon Group Livzon Pharmaceutical 257,441.66 0.00 257,441.66 0.00 0.00 0.00
Factory
Technology transformation project
for Microsphere Phase II of Shanghai 10,123,776.54 0.00 10,123,776.54 0.00 0.00 0.00
Livzon
Others 65,971,204.50 169,340.46 65,801,864.04 68,252,692.68 169,340.46 68,083,352.22
Total 742,702,874.69 169,340.46 742,533,534.23 648,106,837.38 169,340.46 647,937,496.92
(1) Changes in signicant construction in progress during the period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Accumulated Of which: Interest Percentage of
Balance
amount Interest capitalised Balance at the accumulated cost
at the Additions for Transferred Other Budgeted Construction Sources of
Name of Project of the capitalised rate for End of the incurred over
Beginning the Period to xed asset deduction amount progress funds
interest for the the Period Period budgeted amount
of the Year
capitalised Period (%) (%)
Completion of Self-funding
Haibin Pharma Pingshang New Factory 229,735,516.02 85,431,217.12 134,074,241.43 36,727,614.29 0.00 0.00 0.00 144,364,877.42 1,037,000,000.00 58.19
some projects and funds raised
Under
Guangda New Factory Project 64,845,632.88 114,899,431.60 0.00 0.00 0.00 0.00 0.00 179,745,064.48 646,000,000.00 27.82 Self-funding
construction
Fuxing Company Phase I & II Projects and Completion of
95,851,873.91 73,773,985.30 133,045,744.38 0.00 0.00 0.00 0.00 36,580,114.83 378,090,800.00 67.07 Self-funding
others some projects
Completion of Self-funding
Project of Shijiao New Factory 154,752,745.97 65,846,744.88 158,754,093.12 0.00 0.00 0.00 0.00 61,845,397.73 377,005,000.00 59.88
some projects and funds raised
Transformation Project of Pharmaceutical Completion of
16,500,619.41 44,486,202.38 41,407,369.62 0.00 0.00 0.00 0.00 19,579,452.17 306,558,388.48 38.01 Self-funding
Factory Workshop some projects
Construction Project for Microsphere
Completion of Self-funding
Workshop (including Gose) of Livzon 7,805,534.78 10,557,699.98 2,746,583.64 0.00 0.00 0.00 0.00 15,616,651.12 262,445,000.00 53.95
some projects and funds raised
Group Livzon Pharmaceutical Factory
P06 Construction Project of Livzon Group Under
1,559,405.27 81,461,560.74 0.00 0.00 0.00 0.00 0.00 83,020,966.01 117,710,000.00 70.53 Self-funding
Livzon Pharmaceutical Factory construction
Project of lyophilized powder injection Under Self-funding
8,495,072.05 62,178,260.57 0.00 0.00 0.00 0.00 0.00 70,673,332.62 143,500,000.00 49.25
workshop construction and funds raised
P09 Construction Project of Livzon Group Under
307,744.41 203,607,526.48 148,990,675.28 0.00 0.00 0.00 0.00 54,924,595.61 296,580,000.00 68.76 Self-funding
Livzon Pharmaceutical Factory construction
P04/P05 Construction Project of Livzon Under
0.00 257,441.66 0.00 0.00 0.00 0.00 0.00 257,441.66 126,880,000.00 0.2 Self-funding
Group Livzon Pharmaceutical Factory construction
Technology transformation project for Under
0.00 10,123,776.54 0.00 0.00 0.00 0.00 0.00 10,123,776.54 40,500,000.00 25 Self-funding
Microsphere Phase II of Shanghai Livzon construction
Others 68,252,692.68 86,619,992.91 79,339,709.27 9,561,771.82 0.00 0.00 0.00 65,971,204.50 -- -- -- Self-funding
Total 648,106,837.38 839,243,840.16 698,358,416.74 46,289,386.11 0.00 0.00 0.00 742,702,874.69 3,732,269,188.48 / / /
Other deduction mainly refers to transfer of long-term deferred expenses.
Other descriptions
□ Applicable √ N/A
207
16. Right-of-use assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item Plant and building Total
I. Original book value:
1. Balance at the Beginning of the Period 29,133,700.11 29,133,700.11
2. Addition during the Period 54,745,418.58 54,745,418.58
(1) Leasing 54,745,418.58 54,745,418.58
3. Decrease during the Period 13,918,600.42 13,918,600.42
4. Balance at the End of the Period 69,960,518.27 69,960,518.27
II. Accumulated depreciation
1. Balance at the Beginning of the Period 11,103,567.42 11,103,567.42
2. Addition during the Period 26,000,791.57 26,000,791.57
(1) Provision 26,000,791.57 26,000,791.57
3. Decrease during the Period 13,918,600.41 13,918,600.41
4. Balance at the End of the Period 23,185,758.58 23,185,758.58
III. Provision for impairment
1. Balance at the Beginning of the Period 0.00 0.00
2. Addition during the Period 0.00 0.00
3. Decrease during the Period 0.00 0.00
4. Balance at the End of the Period 0.00 0.00
IV. Carrying amount
1. Carrying amount at the End of the Period 46,774,759.69 46,774,759.69
2. Carrying amount at the Beginning of the Period 18,030,132.69 18,030,132.69
Other descriptions:
As of 31 December 2021, the Company recognised lease expenses related to short-term leases and the leases of low value
assets of RMB7.4548 million.
208
Annual Report
2021
17. Intangible assets
(1). Descriptions of intangible assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Patent and
Trademark
Item Land use right technical Software Others Total
rights
know-how
I. Original book value
1. Balance at the Beginning of the Period 423,486,347.87 487,561,318.73 71,984,555.87 62,765,000.00 10,985,294.53 1,056,782,517.00
2. Additions for the Period 0.00 55,624,707.48 7,354,491.28 4,716.98 0.00 62,983,915.74
(1) Acquisition 0.00 3,353,641.70 7,354,491.28 4,716.98 0.00 10,712,849.96
(2) Internal R&D 0.00 52,271,065.78 0.00 0.00 0.00 52,271,065.78
3. Decrease for the Period 9,723,610.00 23,372,149.54 106,656.46 0.00 0.00 33,202,416.00
(1) Disposal or written-o 9,723,610.00 16,705,482.54 106,656.46 0.00 0.00 26,535,749.00
(2) Change in scope of consolidation 0.00 6,666,667.00 0.00 0.00 0.00 6,666,667.00
4. Balance at the End of the Period 413,762,737.87 519,813,876.67 79,232,390.69 62,769,716.98 10,985,294.53 1,086,564,016.74
II. Accumulated amortisation
1. Balance at the Beginning of the Period 118,722,931.47 339,090,486.99 51,118,566.22 62,765,000.00 4,485,661.92 576,182,646.60
2. Additions for the Period 8,560,052.42 38,940,864.05 5,226,425.06 196.55 1,098,529.45 53,826,067.53
(1) Provision 8,560,052.42 38,940,864.05 5,226,425.06 196.55 1,098,529.45 53,826,067.53
3. Decrease for the Period 4,285,813.60 8,395,834.01 57,098.93 0.00 0.00 12,738,746.54
(1) Disposal or written-o 4,285,813.60 7,895,833.97 57,098.93 0.00 0.00 12,238,746.50
(2) Change in scope of consolidation 0.00 500,000.04 0.00 0.00 0.00 500,000.04
4. Balance at the End of the Period 122,997,170.29 369,635,517.03 56,287,892.35 62,765,196.55 5,584,191.37 617,269,967.59
III. Provision for impairment
1. Balance at the Beginning of the Period 981,826.94 11,530,127.41 0.00 0.00 0.00 12,511,954.35
2. Additions for the Period 0.00 0.00 0.00 0.00 0.00 0.00
(1)Provision 0.00 0.00 0.00 0.00 0.00 0.00
3. Decrease for the Period 0.00 0.00 0.00 0.00 0.00 0.00
4. Balance at the End of the Period 981,826.94 11,530,127.41 0.00 0.00 0.00 12,511,954.35
IV. Carrying amount
1. Carrying amount at the End of the Period 289,783,740.64 138,648,232.23 22,944,498.34 4,520.43 5,401,103.16 456,782,094.80
2. Carrying amount at the Beginning of the Period 303,781,589.46 136,940,704.33 20,865,989.65 0.00 6,499,632.61 468,087,916.05
The amortisation for the period was RMB53,826,067.53 (RMB 14,424,153.41 for the previous period).
The proportion of intangible assets created due to the internal R&D in the balance of intangible assets at the End of the Period
is 24.65%
(2). Intangible assets pending for certicates of ownership
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item Carrying amount Reason for pending for certicate of ownership
Land use rights 4,164,314.22 Being in progress
Other descriptions
√ Applicable □ N/A
The land use rights represent the state-owned land use rights obtained by the Company in accordance with PRC laws in China,
and the term of grant will be 50 years commencing from the date of obtaining the land use rights.
209
18. Development Expenditure
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Increase for the Period Decrease for the Period
Balance at the Recognised in Balance at
Internal
Item Beginning of Other Recognised as prot and loss the End of
development
the Period increases intangible assets for current the Period
expenditure
period
Chemical drug
138,564,375.18 133,042,483.22 0.00 13,033,255.30 79,161,936.76 179,411,666.34
preparation
Biologics 213,261,084.53 51,186,161.19 0.00 38,805,707.06 12,539,408.55 213,102,130.11
Vaccine 0.00 314,172,937.62 0.00 0.00 0.00 314,172,937.62
APIs and others 47,294,144.07 43,542,133.89 0.00 432,103.42 10,097,472.90 80,306,701.64
Total 399,119,603.78 541,943,715.92 0.00 52,271,065.78 101,798,818.21 786,993,435.71
Other descriptions:
Time for Progress of research and
Item commencement of Specic basis of capitalisation development as at the End
capitalisation of the Period
Chemical drug preparation Clinical trial Obtain approval for clinical trial Clinical stage
Biologics Clinical trial Obtain approval for clinical trial Clinical stage
Vaccine Clinical trial Obtain approval for clinical trial Clinical stage
APIs and others Pilot stage Pilot related information Post-pilot stage
19. Goodwill
(1). Original book value of goodwill
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Decrease for the
Increase for the Period
Balance at the Period Balance at
Name of investee or matter from which goodwill arose Beginning of Arose from the End of
the Period business Others Disposal Others the Period
combination
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
3,492,752.58 0.00 0.00 0.00 0.00 3,492,752.58
Manufacturing Co., Ltd.
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
7,271,307.03 0.00 0.00 0.00 0.00 7,271,307.03
Inc.
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
Total 640,550,053.67 0.00 0.00 0.00 0.00 640,550,053.67
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(2). Provision for impairment of goodwill
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Increase for the Period Decrease for the Period Balance at the
Name of investee or the matter of
Beginning of End of
goodwill arisen Provision Others Disposal Others
the Period the Period
Livzon Group Xinbeijiang
7,271,307.03 0.00 0.00 0.00 0.00 7,271,307.03
Pharmaceutical Manufacturing Inc.
Livzon Group Fuzhou Fuxing
11,200,000.00 0.00 0.00 0.00 0.00 11,200,000.00
Pharmaceutical Co., Ltd.
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
1,610,047.91 0.00 0.00 0.00 0.00 1,610,047.91
Co., Ltd.
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 goodwill belongs
√ Applicable □ N/A
Goodwill of the Company arose from its business combination involving enterprises not under common control in previous
years.
(4). Descriptions of the process of goodwill impairment testing, key parameters (such as the growth rate of the forecast period, the
growth rate of the stable period, the prot rate, the discount rate and the forecast period, etc. when the present value of future
cash ows are expected, if applicable) and the recognition method of the impairment losses on goodwill
√ Applicable □ N/A
On the balance sheet date, the Company conducted impairment test on goodwill and adopted the asset groups related to
goodwill to estimate the present value of the future cash ow when estimating the recoverable amount of the investment cost.
The estimated future cash flow of asset groups is calculated according to the five-year financial budget plan made by the
management, the cash ows in the years beyond the ve-year budget plan remain stable.
Key assumptions of discounted future cash ow for goodwill impairment test are as follows:
For the calculation of estimated present value of future cash flow of the asset groups related to goodwill of Livzon Group,
key assumptions are a gross margin of 63.24%-63.43% and a business revenue growth rate of 0-9.07% as well as a cash
flow discount rate of 12.99%. The management took into account historical 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 goodwill of Shenzhen
Haibin Pharmaceutical Co., Ltd., key assumptions are a gross margin of 58.33%-59.13% and a business revenue growth
rate of 0-5.27% as well as a cash flow discount rate of 11.78%. The management took into account historical conditions and
predictions for future market development in making the above assumptions.
As tested, the management of the Company expects that no impairment provision is needed during the Reporting Period.
(5). The impact of goodwill impairment test
□ Applicable √ N/A
Other descriptions:
□ Applicable √ N/A
211
20. Long-term deferred expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Balance at the
Increase for Amortisation Other
Item Beginning of End of
the Period for the Period decrease
the Period the Period
Renovation costs of oces 23,058,574.53 7,850,405.20 3,332,198.97 636,080.74 26,940,700.02
Renovation costs of plants 82,549,157.36 6,780,069.68 10,953,783.19 38,348.62 78,337,095.23
Plants reconstruction project 38,063,547.08 35,995,971.86 13,691,355.23 0.00 60,368,163.71
Certication costs of GMP project 432,295.36 0.00 120,640.57 0.00 311,654.79
Others 25,946,027.65 24,703,242.62 15,891,143.09 0.00 34,758,127.18
Total 170,049,601.98 75,329,689.36 43,989,121.05 674,429.36 200,715,740.93
21. Deferred income tax assets/ deferred income tax liabilities
(1). Deferred income tax assets without osetting
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Deductible Deferred Deductible Deferred
Item
temporary income tax temporary income tax
dierence assets dierence assets
Provision for impairment of assets 323,372,877.26 54,704,601.96 348,200,387.60 59,268,643.32
Accrued expenses 945,774,497.50 166,481,490.01 889,520,767.20 148,230,373.91
Deductible losses 497,850,865.29 84,167,365.69 183,558,004.28 33,002,594.88
Deferred income 375,321,674.10 60,145,851.14 395,262,933.81 63,372,920.07
Unrealised gains from intra-company transactions 560,934,298.63 84,185,529.66 617,172,492.65 101,762,569.57
Changes in fair value of other equity instruments 146,653,568.40 36,663,392.10 116,897,135.04 29,224,283.76
Share incentive costs 77,872,943.63 11,933,224.52 55,129,055.25 8,614,498.87
Changes in fair value of nancial assets held for trading 6,918,505.67 1,158,336.82 5,004.11 1,229.82
Other deductible temporary dierence 282,821,670.90 53,103,074.81 148,783,538.98 25,421,355.03
Total 3,217,520,901.38 552,542,866.71 2,754,529,318.92 468,898,469.23
(2). Deferred income tax liabilities without osetting
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Taxable Deferred Taxable Deferred
Item
temporary income tax temporary income tax
dierence liabilities dierence liabilities
Changes in fair value of nancial assets held for trading 19,970,547.94 3,215,329.05 18,644,355.09 3,365,228.40
Accelerated depreciation of xed assets 752,180,706.08 114,114,492.09 564,348,918.93 85,208,619.02
Changes in fair value of other equity instruments 359,110,036.65 70,405,084.25 497,704,254.93 92,895,008.26
Unrealised gains from intra-company transactions 105,940,000.00 20,791,000.00 105,940,000.00 20,791,000.00
Total 1,237,201,290.67 208,525,905.39 1,186,637,528.95 202,259,855.68
(3). Deferred income tax assets or liabilities listed as net amount after oset
□ Applicable √ N/A
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(4). Details of unrecognised deferred tax assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End Balance at the Beginning
Item
of the Period of the Period
Deductible temporary dierence 175,707,417.84 316,754,374.35
Deductible losses 1,365,909,940.62 1,116,620,167.81
Total 1,541,617,358.46 1,433,374,542.16
(5). Deductible loss of deferred income tax assets not recognised will be due in the following years
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of Balance at the Beginning
Year Note
the Period of the Period
2021 0.00 108,384,223.02
2022 129,386,282.40 141,475,583.52
2023 182,300,761.96 197,436,530.74
2024 385,138,859.92 385,190,825.59
2025 254,360,863.53 277,697,732.91
2026 389,994,598.37 0.00
Indenite 24,728,574.44 6,435,272.03
Total 1,365,909,940.62 1,116,620,167.81 /
Other descriptions:
□ Applicable √ N/A
22. Other non-current assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Item Gross carrying Provision for Gross carrying Provision for
Carrying amount Carrying amount
amount impairment amount impairment
Term deposit and
52,127,500.00 0.00 52,127,500.00 0.00 0.00 0.00
interests
Remaining VAT credit 56,384,552.60 0.00 56,384,552.60 33,826,183.51 0.00 33,826,183.51
Prepayment for
acquisition of project 491,703,933.59 0.00 491,703,933.59 300,277,977.91 0.00 300,277,977.91
and equipment
Prepayment for
acquisition of 63,368,017.61 0.00 63,368,017.61 39,453,749.30 0.00 39,453,749.30
technical know-how
Total 663,584,003.80 0.00 663,584,003.80 373,557,910.72 0.00 373,557,910.72
213
23. Short-term loans
(1) Classication of short-term loans
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Loans on credit 1,666,838,964.15 1,850,000,000.00
Loans on guarantee 851,645,870.94 260,942,804.06
Total 2,518,484,835.09 2,110,942,804.06
(2) Outstanding and overdue short-term loans
□ Applicable √ N/A
Other descriptions:
□ Applicable √ N/A
24. Financial liabilities held for trading
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Beginning Increase for the Decrease for the Balance at the End
Item
of the Period Period Period of the Period
Financial liabilities held for trading 212.07 143,090.17 0.00 143,302.24
Of which:
Derivative nancial liabilities 212.07 143,090.17 0.00 143,302.24
Total 212.07 143,090.17 0.00 143,302.24
Other descriptions:
Derivative financial liabilities represent foreign currency forward contracts, loss from unexpired contracts measured at fair
value was recognised as nancial liabilities held for trading at balance sheet date.
25. Bills payables
√ 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 1,582,386,767.93 1,087,759,353.31
Total 1,582,386,767.93 1,087,759,353.31
The total of bills payable due but not yet paid during the period is RMB 0.00.
26. Accounts payables
(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 809,539,858.35 770,352,354.22
Over 1 year 62,013,352.16 62,279,852.31
Total 871,553,210.51 832,632,206.53
(2). Signicant accounts payable aged more than one year
□ Applicable √ N/A
Other descriptions:
□ Applicable √ N/A
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27. 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 208,025,612.34 125,816,111.93
Over 1 year 26,115,089.95 7,606,242.10
Total 234,140,702.29 133,422,354.03
(2). Signicant 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 aged over 1 year; the amount of income recognised
during the Period which was included in the carrying amount of the contract liabilities at the Beginning of the Period was RMB
89,991,623.98.
28. Employee benefits payables
(1) Descriptions of employee benets payables
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Beginning Increase for the Decrease for the Balance at the End
Item
of the Period Period Period of the Period
I. Short-term salary 474,099,711.48 1,842,060,745.21 1,842,354,099.29 473,806,357.40
II. Post-resignation benets-dened
981,049.03 127,168,164.64 127,807,489.87 341,723.80
contribution plans
III. Dismissal benets 1,441,038.00 3,266,253.11 3,424,549.11 1,282,742.00
Total 476,521,798.51 1,972,495,162.96 1,973,586,138.27 475,430,823.20
(2) Descriptions of Short-term remuneration
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Beginning Increase for the Decrease for the Balance at the End
Item
of the Period Period Period of the Period
I. Salaries, bonuses, allowances and
317,711,687.49 1,516,182,208.88 1,508,769,918.24 325,123,978.13
subsidies
II. Employee welfare 5,159,583.88 67,739,188.41 67,546,637.63 5,352,134.66
III. Social insurance 648,169.59 57,770,394.32 57,849,075.16 569,488.75
Of which: Medical insurances 479,191.24 50,045,894.76 50,057,523.09 467,562.91
Work-related injury insurances 120,278.27 3,269,300.48 3,326,867.38 62,711.37
Maternity insurances 48,700.08 4,455,199.08 4,464,684.69 39,214.47
IV. Housing provident fund 1,812,818.16 54,197,763.39 54,516,861.67 1,493,719.88
V. Labour union fees and employee
268,119.84 5,341,149.46 5,067,704.70 541,564.60
education fees
VI. Special funds of the share
148,499,332.52 140,830,040.75 148,603,901.89 140,725,471.38
ownership scheme
Total 474,099,711.48 1,842,060,745.21 1,842,354,099.29 473,806,357.40
215
(3) Dened contribution plan
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Beginning Increase for the Decrease for the Balance at the End
Item
of the Period Period Period of the Period
Post-resignation benets
Of which: 1. Basic pension insurance 891,463.38 122,881,458.07 123,469,339.38 303,582.07
2. Unemployment insurance 89,585.65 4,286,706.57 4,338,150.49 38,141.73
Total 981,049.03 127,168,164.64 127,807,489.87 341,723.80
Other descriptions:
√ Applicable □ N/A
The Company participates in pension insurance and unemployment insurance plans established by the government in
accordance with relevant requirements. According to the plans, the Company makes contributions to these plans in accordance
with relevant requirements of the local government. Save for the above contributions, the Company no longer undertakes
further payment obligation. The corresponding cost is charged to the prot or loss for the current period or the cost of relevant
assets when it occurs.
29. Taxes payables
√ 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 91,860,518.74 73,761,952.33
Urban maintenance and construction tax 10,047,715.71 8,540,571.43
Enterprise income tax 145,106,168.70 197,934,880.78
Property tax 2,178,644.31 3,335,394.01
Land use tax 1,716,626.70 1,861,774.91
Individual income tax 9,991,974.56 5,176,424.28
Stamp duty 676,792.62 573,412.18
Education surcharges 6,594,414.24 5,877,893.41
Others 2,445,327.83 1,279,879.11
Total 270,618,183.41 298,342,182.44
30. 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 6,951,984.46 8,418,590.50
Other payables 3,285,456,005.33 2,839,269,475.09
Total 3,292,407,989.79 2,847,688,065.59
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Dividends payable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End Balance at the Beginning
Item
of the Period of the Period
Dividends on ordinary shares 20,174.46 20,174.46
Dividends payable--Qingyuan Xinbeijiang
1,200,710.00 1,200,710.00
(Group) Company
Dividends payable--Other legal persons and
3,311,300.00 3,311,300.00
individual shares of subsidiaries
Dividends payable--Sta shares of subsidiaries 2,419,800.00 2,419,800.00
Dividends payable--Zhuhai Zhong Hui Yuan
0.00 1,466,606.04
Investment Partnership (Limited Partnership)
Total 6,951,984.46 8,418,590.50
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
Oce expenses 66,603,733.56 54,902,934.12
Deposits under guarantees 85,316,947.15 84,683,431.06
Business promotion expenses 1,385,121,675.36 1,188,695,632.04
Technology transfer funds 10,000,000.00 10,072,731.53
Accrued expenses 1,696,272,218.54 1,432,467,048.13
Others 42,141,430.72 68,447,698.21
Total 3,285,456,005.33 2,839,269,475.09
The obligations of repurchasing restricted shares of the directors, the senior management and their spouses amounted
RMB0.00 at the End of the Period.
(2) Signicant other payables aged over 1 year
□ Applicable √ N/A
Other descriptions:
√ Applicable □ N/A
Of which, the breakdown of accrued expenses was as follows:
Reason for outstanding
Item 31 December 2021 31 December 2020
at the End of the Period
Utilities expenses 23,611,733.95 28,252,339.28 Not yet paid
Research expenses 122,637,625.45 31,246,236.75 Not yet paid
Business development and promotion expenses 1,459,695,485.76 1,282,377,335.13 Not yet paid
Audit and information disclosure expenses 4,893,299.88 3,876,590.50 Not yet paid
Others 85,434,073.50 86,714,546.47 Not yet paid
Total 1,696,272,218.54 1,432,467,048.13
217
31. 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 21,295,233.00 8,539,077.05
Long-term loans and interest due within 1 year 70,280,833.33 0.00
Total 91,576,066.33 8,539,077.05
32. 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
Tax for items pending for settlement 15,626,224.29 6,267,034.79
Total 15,626,224.29 6,267,034.79
Other descriptions:
□ Applicable √ N/A
33. Long-term loans
(1) Classication of long-term loans
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the
Balance at the End
Item interest rate range Beginning of the interest rate range
of the Period
Period
Loans on credit 897,061,086.11 3.45%-3.70% 360,324,027.48 3.55%-3.60%
Long-term loans due within 1 year -70,280,833.33 0.00
Total 826,780,252.78 360,324,027.48
Other descriptions, including interest rate range:
□ Applicable √ N/A
34. Lease liabilities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Amount payable under lease 46,367,027.32 18,356,857.09
Lease liabilities due within one year -21,295,233.00 -8,539,077.05
Total 25,071,794.32 9,817,780.04
Other descriptions:
During January to December 2021, the amount of interest expenses of lease liabilities was RMB2.2757 million, which was
recorded in nance expenses – interest expenses.
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35. Deferred income
Deferred income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Beginning Increase for the Decrease for the Balance at the End
Item Reason
of the Period Period Period of the Period
Government grants 467,562,770.49 53,936,373.61 87,955,791.70 433,543,352.40 /
Total 467,562,770.49 53,936,373.61 87,955,791.70 433,543,352.40 /
Projects involving government grants:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Amount
Amount Amount
Balance at the charged to Balance
of additional charged to Related to assets/
Liabilities Beginning Non-operating Other changes at the End
grant for Other income Related to income
of the Year income for the of the Period
the Period for the Period
Period
Study on the technology of antifungal drug caspofungin
1,500,000.00 0 0 1,500,000.00 0 0 Related to assets
(抗真菌药卡泊芬净工艺研究)
Laboratory project of respiratory system inhalation preparation engineering
5,000,000.00 0 0 1,346,750.00 151,700.00 3,501,550.00 Related to assets
laboratory project(呼吸系统吸入制剂工程实验室项目)
Construction of a recycling production base for carbapenem products
3,625,000.00 0 0 0 0 3,625,000.00 Related to assets
（碳青霉烯类系列产品循环化生产基地建设）
Research and development and industrialization of non-steroidal anti-inammatory
drug Celecoxib capsules 5,000,000.00 0 0 0 5,000,000.00 0 Related to assets
（非甾体抗炎药物塞来昔布胶囊研发及产业化）
Construction of an integrated production line for fully automatic blister-type dry
powder inhalant micro-lling and winding 2,420,000.00 0 0 1,492,333.34 0 927,666.66 Related to assets
（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）
Change in National Science and Technology Major Project* Research funding for
lipid injection * Baiyunshan Hanfang transfer 150,000.00 0 0 0 0 150,000.00 Related to assets
（国家重大专项项目变更*注射脂质研究经费*白云山汉方转入）
Research on common key technologies for the large-scale development of new
365,700.00 0 0 0 0 365,700.00 Related to assets
inhalation preparations（新型吸入制剂规模化发展共性关键技术研究）
Large-scale development subsidy for new inhalation preparations
2,262,600.00 0 0 0 0 2,262,600.00 Related to assets
（新型吸入制剂规模化发展补助）
Meropenem special fund subsidy（美罗培南专项资金补助） 10,000,000.00 0 0 0 10,000,000.00 0 Related to assets
Project Subsidy of Meropenem internationalization（美罗培南国际化项目补助） 3,300,000.00 0 0 0 3,300,000.00 0 Related to assets
Project Subsidy of Marine mollusk kinetic protein
23,840,000.00 0 0 0 0 23,840,000.00 Related to assets
（海洋软体动物动能蛋白项目补助）
New inhalation drug formulation creation project（新型吸入给药制剂创制项目） 54,154,400.00 13,094,000.00 0 0 0 67,248,400.00 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
Glucocorticoid inhalation suspension project（糖皮质混悬液项目） 0 3,600,000.00 0 0 0 3,600,000.00 Related to assets
Financial appropriations for small molecule peptide projects
399,999.84 0 0 80,000.04 0 319,999.80 Related to assets
（财政拨款用于小分子肽项目）
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
R&D of active substances with bone and joint repair and health care functions
1,077,356.16 0 0 119,706.24 0 957,649.92 Related to assets
（具有骨关节修复与保健功能的活性物质研发）
Key technology research and development of budesonide nebulized inhalation
solution 4,500,000.00 0 0 1,991,666.67 0 2,508,333.33 Related to assets
（布地奈德雾化吸入溶液关键技术研发）
Return of land holding tax（土地使用税返还） 3,674,691.16 0 0 107,029.74 0 3,567,661.42 Related to assets
Special Fund for environmental protection of wastewater membrane concentration
9,708.66 0 0 9,708.66 0 0 Related to assets
system（废水膜浓缩系统环保专项资金）
219
Amount
Amount Amount
Balance at the charged to Balance
of additional charged to Related to assets/
Liabilities Beginning Non-operating Other changes at the End
grant for Other income Related to income
of the Year income for the of the Period
the Period for the Period
Period
Subsidies for The development of pharmaceutical APIs industry
41,960,547.60 0 0 1,219,192.66 0 40,741,354.94 Related to assets
（医药原料药行业发展支持资金补助）
Innovation voucher（Jingjin Filter Press Equipment）（创新券（景津压滤设备）） 313,332.99 0 0 80,000.20 0 233,332.79 Related to assets
Xinxiang High-tech Project Fund Support（新乡高新技术项目资金扶持） 1,917,508.44 0 0 56,397.36 0 1,861,111.08 Related to assets
Hepatitis B vaccine methanol yeast expression system
500,000.00 0 0 500,000.00 0 0 Related to assets
（乙肝疫苗甲醇酵母表达系统）
New recombinant protein vaccine technology platform and Industrialization of
9,000,002.00 0 0 9,000,002.00 0 0 Related to assets
Cervical Cancer Vaccine（新型重组蛋白疫苗技术平台及宫颈癌疫苗产业化）
Research on Common Co-construction Technology of Pharmaceutical Inhalation
Preparations 1,900,000.00 900,000.00 0 0 0 2,800,000.00 Related to assets
（开发区财政局拔款创业领军人才项目:药品吸入制剂共性共建技术的研究）
Research and development of respiratory system drug and clinical research
technology service platform project talent funding 1,500,000.00 0 0 0 0 1,500,000.00 Related to assets
（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）
Science and technology help the economy key special projects
500,000.00 0 0 0 0 500,000.00 Related to assets
（科技助力经济重点专项）
City Service Development Special（市服务发展专项） 800,000.00 0 0 0 0 800,000.00 Related to assets
Patent funding（专利资助） 0 200,000.00 0 0 0 200,000.00 Related to assets
2020 Shanghai Professional Technology Platform Capacity Enhancement Project
0 1,000,000.00 0 0 0 1,000,000.00 Related to assets
（2020年度上海市专业技术平台能力提升项目立项）
high-growth small and micro innovation enterprises（高成长小微科创企业） 0 400,000.00 0 0 0 400,000.00 Related to assets
Research and development subsidy for ω-3-Fish Oil Medium and Long Chain Fat
350,000.00 0 0 0 0 350,000.00 Related to assets
Emulsion Injection（ω-3鱼油中/长链脂肪乳注射液研究开发补助）
R&D and industrialization of innovative Ilaprazole Series
20,988,166.29 0 0 4,910,000.04 0 16,078,166.25 Related to assets
（艾普拉唑系列创新药物研发及产业化）
Research and development funds for new drug for Class I Treatment of Necrosis
Factor in Human Tumour from Human Source 8,000,000.00 0 0 0 0 8,000,000.00 Related to income
（I类治疗用人源化抗人肿瘤坏死因子α单克隆抗体新药研制资金）
Strategic emerging industries in 2014 (sustained release microspheres)
16,700,000.00 0 0 0 0 16,700,000.00 Related to assets
（2014年战略性新兴产业（缓释微球））
Fund for industrialization of prolonged-action microsphere preparation
13,300,000.00 0 0 750,000.00 0 12,550,000.00 Related to assets
（长效微球制剂的产业化款项）
Construction project for industrialization of prolonged-action microsphere
7,024,025.85 15,329,800.00 0 1,634,320.37 0 20,719,505.48 Related to assets
preparation (phase I)（长效微球制剂产业化建设项目（一期工程））
Pilot-scale enlargement and industrialization of prolonged-action injection
2,400,000.00 0 0 2,400,000.00 0 0 Related to assets
microsphere products（长效注射微球产品的中试放大和产业化）
Project subsidy from the Ministry of Industry and Information Technology
2,400,000.00 0 0 0 0 2,400,000.00 Related to assets
（工业和信息化部项目补助款）
Project subsidy from the Ministry of Industry and Information Technology
1,597,750.00 0 0 231,000.00 0 1,366,750.00 Related to assets
（工业和信息化部项目补助款）
Construction of Drug Conformity Evaluation Research Center Platform
1,200,000.10 0 0 159,999.96 0 1,040,000.14 Related to assets
（药物一致性评价研究中心平台建设）
R&D and Commercialisation of Mouse Nerve Growth Factor for Injection
50,606,036.20 0 0 10,560,089.27 0 40,045,946.93 Related to assets
（注射用鼠神经生长因子研发及产业化）
Demonstration project on the application of solar photovoltaic architecture
3,557,499.51 0 0 1,102,000.08 0 2,455,499.43 Related to assets
（太阳能光电建筑应用示范项目）
Subsidy for the Tender of Technology Upgrade Project for PVC Soft Bag Supported
3,111,850.32 0 0 408,365.76 0 2,703,484.56 Related to assets
by Provincial Finance Departments（省财政支持技改招标项目补助金PVC软袋）
Technical transformation project of Shenqi Fuzheng Injection with exible bag
19,500,000.02 0 0 3,823,529.40 0 15,676,470.62 Related to assets
（软袋参芪扶正注射液技改项目）
Provision for technology transformation funds and subsequent grants
6,589,119.08 0 0 1,129,563.36 0 5,459,555.72 Related to assets
（技术改造资金拨款及事后补奖）
220
Annual Report
2021
Amount
Amount Amount
Balance at the charged to Balance
of additional charged to Related to assets/
Liabilities Beginning Non-operating Other changes at the End
grant for Other income Related to income
of the Year income for the of the Period
the Period for the Period
Period
Provision for technology transformation funds and subsequent grants
10,648,600.33 0 0 3,288,929.52 0 7,359,670.81 Related to assets
（技术改造资金拨款及事后补奖）
Electricity distribution transformer performance enhancement for energy-saving and
428,000.00 0 0 48,000.00 0 380,000.00 Related to assets
emission reduction projects（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
1,000,000.00 1,008,000.00 0 473,166.56 0 1,534,833.44 Related to assets
（化药液体制剂研发与产业化团队）
Innovation capacity building of technology center (antibody laboratory)
5,248,234.16 0 0 445,755.36 0 4,802,478.80 Related to assets
（技术中心创新能力建设（抗体药物实验室））
Innovation capacity building of technology center (antibody laboratory)
241,769.82 0 0 75,330.36 0 166,439.46 Related to income
（技术中心创新能力建设（抗体药物实验室））
Achievement transfer of blood screening (BCI) nucleic acid detection testing
6,000,000.00 0 0 2,038,717.56 0 3,961,282.44 Related to assets
（血液筛查（BCI）核酸检测试剂成果转化）
Technological upgrading and transformation projects of workshop for acarbose
(APIs for α-glucosidase inhibitor) 571,428.64 0 0 107,142.84 0 464,285.80 Related to assets
（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）
R&D and industrialization of Statins（降血脂他汀类药物的研发与产业化） 60,000.36 0 0 29,999.88 0 30,000.48 Related to assets
Scientic technology award and subsidy for technological innovative project
139,491.80 0 0 110,925.60 0 28,566.20 Related to assets
（科学技术奖及科技创新项目资助）
Scientic technology award and subsidy for technological innovative project
3,400,000.00 0 0 1,200,000.00 0 2,200,000.00 Related to income
（科学技术奖及科技创新项目资助）
Zhuhai industrial enterprise“cloud and platform”service coupons supporting funds
114,972.73 0 0 25,540.87 0 89,431.86 Related to income
（珠海市工业企业“云上平台”服务券支持资金）
Commissioner workstation（特派员工作站） 145,000.00 0 0 60,000.00 0 85,000.00 Related to assets
Industrial revitalisation supporting funds（产业振兴扶持资金） 3,603,500.01 0 0 1,158,000.00 0 2,445,500.01 Related to assets
Phase IV clinical study of innovative drug Ilaprazole
8,210,800.00 0 0 0 0 8,210,800.00 Related to assets
（创新药物艾普拉唑IV期临床研究）
Government grant for industrial transformation（工业转型政府扶持资金） 508,333.67 0 0 199,999.92 0 308,333.75 Related to assets
New industrialization development grant（新型工业化发展奖金） 1,304,166.42 2,629,900.00 0 350,000.04 0 3,584,066.38 Related to assets
Policy fund for leading industrial enterprises loan Interests
566,666.61 0 0 200,000.04 0 366,666.57 Related to assets
（工业龙头企业贷款贴息政策资金）
Supporting funds for ve advantageous industrial clusters and one high-tech
industry 400,000.16 0 0 99,999.96 0 300,000.20 Related to assets
（五优一新扶持资金）
Subsidy for new R&D institution（新型研发机构补助） 2,000,000.00 0 0 2,000,000.00 0 0 Related to assets
Zhuhai innovation and enterprising team and high-level talent enterprising project
(paclitaxel micellar for injection) 2,700,000.00 6,300,000.00 0 0 9,000,000.00 0 Related to assets
（珠海市创新创业团队和高层次人才创业项目（注射液紫杉醇胶束））
Capital project for innovation and entrepreneurship team funding program
8,500,000.00 4,000,000.00 0 0 0 12,500,000.00 Related to assets
（创新创业团队资助计划资金项目）
2020 Zhuhai City Innovation and Entrepreneurship Team（Nanocrystalline）
0 1,500,000.00 0 0 0 1,500,000.00 Related to assets
（2020年度珠海市创新创业团队（纳米晶））
Fund for R&D and industrialization of innovative Ilaprazole series
5,600,000.00 0 0 0 0 Related to assets
（艾普拉唑系列创新药物研发及产业化项目资金）
Key projects of industrial core and key technologies of Zhuhai (Ryanodex)
3,000,000.00 0 0 0 0 Related to assets
（珠海市产业核心和关键技术攻关方向项目（丹曲林钠））
Data-driven industrial chain collaboration platform demonstration project
0 3,650,000.00 0 0 0 3,650,000.00 Related to assets
（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)
2,000,000.00 0 0 0 0 2,000,000.00 Related to assets
（珠海市产业核心和关键技术攻关方向项目资金（第二批））
Innovative drug of Ilaprazole sodium for injection
2,400,000.00 0 0 0 0 2,400,000.00 Related to assets
（创新药注射用艾普拉唑钠针剂）
221
Amount
Amount Amount
Balance at the charged to Balance
of additional charged to Related to assets/
Liabilities Beginning Non-operating Other changes at the End
grant for Other income Related to income
of the Year income for the of the Period
the Period for the Period
Period
Technological transformation projects of new Cefuroxime
1,533,100.00 0 0 0 0 1,533,100.00 Related to assets
（新型头孢粉针剂技术改造项目）
Internet benchmarking project for advanced drug Manufacturing
765,000.00 0 0 90,000.00 0 675,000.00 Related to assets
（先进药品制造互联网标杆项目）
Cleaner Production Audit Project（清洁生产审核项目） 190,000.04 0 0 9,999.96 0 180,000.08 Related to assets
Green factory（绿色工厂） 1,261,666.67 0 0 129,999.96 0 1,131,666.71 Related to assets
HCG project construction（HCG项目建设） 3,783,485.81 0 0 395,649.97 0 3,387,835.84 Related to assets
Sewage treatment system upgrade project（污水处理系统升级改造项目） 72,269.96 0 0 8,030.04 0 64,239.92 Related to assets
R&D and industrialization of Recombinant Human Chorionic Gonadotropin for
1,287,500.00 0 0 150,000.00 0 1,137,500.00 Related to assets
Injection（注射用重组人绒促性素研发及产业化）
Subsidies for online monitoring equipment and installations of coalred boilers
105,000.00 0 0 22,500.00 0 82,500.00 Related to assets
（燃煤锅炉在线监控设备装置补助资金）
Funds for joint R&D and industrialization of integrated platform for molecular
1,550,000.00 0 0 1,368,367.88 0 181,632.12 Related to assets
diagnostics（集成一体化分子诊断平台的合作研发及产业化资金）
Project supporting fund for the rst batch of special funds for scientic and
technological innovation in 2019 850,000.00 0 0 250,000.00 0 600,000.00 Related to assets
（2019年度第一批科技创新专项资金立项配套资助）
Provincial industrial innovation (provincial enterprise technology center) project in
1,403,733.33 0 0 357,200.00 0 1,046,533.33 Related to assets
2019（2019年省产业创新（省级企业技术中心）项目）
Guangdong Province Science and Technology Department special emergency fund
for scientic and technological research on prevention and control of COVID-19 350,000.00 0 0 350,000.00 0 0 Related to assets
（广东省科学技术厅汇防控新型冠状病毒感染科技攻关应急专项款）
Zhuhai Financial Bureau cum COVID-19 emergency technology special emergency
250,000.00 0 0 250,000.00 0 0 Related to assets
fund（珠海市财政局汇新冠应急科技攻关专项款）
China Postdoctoral Science Foundation subsidy funds
160,000.00 0 0 0 80,000.00 80,000.00 Related to income
（中国博士后科学基金会资助经费）
Pre-appropriation of special grants for industrialization of diagnostic reagents for
4,601,200.00 0 0 484,784.35 0 4,116,415.65 Related to assets
COVID-19（新型冠状病毒检测试剂产业化项目补助金预拨）
Xiangzhou District equipment purchase subsidy supporting funds (special funds for
prevention and control of pandemic) 13,555.75 0 0 2,088.50 0 11,467.25 Related to assets
（香洲区购置设备补贴扶持资金（疫情防控专项资金））
Zhuhai innovation and enterprising team and high-level talent enterprising project
12,000,000.00 0 0 0 0 12,000,000.00 Related to assets
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）
Overall relocation and deployment expansion project（整体搬迁调迁扩建项目） 20,000,000.00 0 0 0 0 20,000,000.00 Related to assets
Environmental protection bureau RTO project special funds
200,000.00 0 0 20,000.04 0 179,999.96 Related to assets
（环保局RTO项目资金）
Structure-eciency optimization of marine microorganisms and evaluation of
0 324,673.61 0 12,307.34 0 312,366.27 Related to income
antitumor activity(海洋微生物构效优化与抗肿瘤活性评价)
Total 467,562,770.49 53,936,373.61 0 60,424,091.70 27,531,700.00 433,543,352.40
Other descriptions:
□ Applicable √ N/A
36. Other non-current liabilities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End Balance at the Beginning
Item
of the Period of the Period
The overall relocation and expansion project of Sichuan
78,000,000.00 78,000,000.00
Guangda Pharmaceutical Manufacturing
Total 78,000,000.00 78,000,000.00
222
Annual Report
2021
37. Share capital
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Changes for the Period (+ -) Balance at
Beginning of Issuance of Reserve fund the End of
Others Sub-total
the Period new shares capitalised the Period
I. Tradable shares subject to selling restrictions
1. Domestic legal person shares 0 0 0 0 0 0
2. Domestic natural person shares 0 0 0 0 0 0
3. Overseas legal person shares 0 0 0 0 0 0
Tradable shares subject to selling restrictions
0 0 0 0 0 0
in aggregate
II. Tradable shares
1. Ordinary shares denominated in RMB 1,952,780,764 10,082,440 0 -55,135,296 -45,052,856 1,907,727,908
2.Domestically listed foreign shares 0 0 0 0 0 0
Tradable shares in aggregate 1,952,780,764 10,082,440 0 -55,135,296 -45,052,856 1,907,727,908
Total number of shares 1,952,780,764 10,082,440 0 -55,135,296 -45,052,856 1,907,727,908
Other descriptions: The reduced registered capical during the Reporting Period is due to the cancellation of the repurased
shares.
38. Capital reserve
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Beginning Increase for the Decrease for the Balance at the End
Item
of the Period Period Period of the Period
Capital premium (Share premium) 2,531,019,936.35 369,115,622.89 747,275,331.40 2,152,860,227.84
Other capital reserve 2,268,737.93 114,769,391.67 4,541,045.52 112,497,084.08
Total 2,533,288,674.28 483,885,014.56 751,816,376.92 2,265,357,311.92
Other descriptions, including changes for the current period and reasons therefor:
Reasons for increase in chaiptal premium: 1) 10,082,440 shares of the Company's stock options were exercised, increasing
the capital premium by RMB 72,493,116.59, and the corresponding accrued share incentive fee of RMB 1,457,178.93 was
transferred from other capital reserves to the capital premium; 2) The Company's subsidiary Livzon's stock options are
exercised, according to the shareholding ratio of the Company, the corresponding increase in the share capital premium of
88,109,304.98 yuan, and the corresponding accrued equity incentive expenses of 3,083,866.59 yuan are transferred from other
capital reserves to the share capital premium; 3) After the stock options are exercised,the difference between the pre-taxable
expenses and the accrued expenses will reduce the income tax payable by RMB 13,609,184.27, and the share capital premium
will be increased accordingly; 4) Since the overseas financing of the subsidiary Livzon is transferred to the Mainland China
and thus the reduced registered capical of the subsidiaries are not in the same proportion. Correspondingly, the capital premium
is increased by RMB 190,362,971.53 for the difference between the net assets of the subsidiaries owned by the Company
before and after the reduction of share capital.
The decrease in share capital premium of RMB 747,275,331.4 for the period was due to the cancellation of shares repurchased
by the Company and the subsidiary Livzon.Group.
Reasons for changes in Other capital reserves: 1) The Company and its subsidiary Livzon Group provided equity incentive
expenses of RMB 11,652,295.42; 2) The subsidiary Livzon Group's equity method accounting units increased capital in
different proportions, resulting in changes in the Company's shareholding ratio and changes in other equity instrument
investment;Thus the capital reserve increased by RMB 35,846,098.47. 3) The exercise of the stock options of the incentive
223
plan and and repurchase of the subsidiary Livzon Group lead to changes in the Company's shareholding ratio and changes in
other equity instrument investment; thus the capital reserve decreased by RMB 55,295,829.27; 4) the capital reserve of RMB
11,975,168.51 transferred to prot and loss asThe Company disposed of the subsidiaries;
Other capital reserves decreased as the equity incentive expenses of RMB 4,541,045.52 was transferred to the share capital
premium
39. Treasury shares
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Balance at the
Increase for the Decrease for the
Item Beginning of End of
Period Period
the Period the Period
Repurchase of A Shares due to Share Ownership
253,637,154.50 0.00 30,992,700.00 222,644,454.50
Scheme and Share Options Incentive Scheme
Repurchase of shares to be cancelled 0.00 699,900,526.87 699,900,526.87 0.00
Total 253,637,154.50 699,900,526.87 730,893,226.87 222,644,454.50
Other descriptions, including changes for the current period and reasons therefor:
The reason for decreases in the ending balances of Repurchase of A Shares due to Share Ownership Scheme and Share Options
Incentive Scheme is that the shares repurchased transferred to the designated special account of the Share Ownership Scheme
The increase of treasury shares during the period represented: The Company repurchased 55,135,296 shares totally through
centralized bidding transactions by the Company. The decrease in treasury shares during the Year: the cancellation of
repurchased shares.
40. Other comprehensive income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
For the Period
Less: amount recognised
Balance at the Amount in other comprehensive Attributable to Attributable Balance at the
Less:
Item Beginning of incurred before income in the Previous the parent to minority End of the
income tax
The Period income tax Period transferred to prot company interests after Period
expenses
for the Period or loss or retained earnings after tax tax
for the Period
I. Other comprehensive income not to be re-
180,616,463.38 43,382,751.21 171,926,789.47 2,196,770.08 -78,059,481.21 -52,681,327.13 102,556,982.18
classied into prot or loss
Of which: Other comprehensive income not
to be reclassied into prot or loss under 0.00 14,820,196.44 0.00 0.00 6,658,847.65 8,161,348.794 6,658,847.65
equity method
Change in fair value of other investments in
180,616,463.38 28,562,554.77 171,926,789.47 2,196,770.08 -84,718,328.85 -60,842,675.92 95,898,134.53
equity instruments
II. Other comprehensive income to be
-64,315,904.10 -46,945,392.92 0.00 0.00 -32,853,532.10 -14,091,860.81 -97,169,436.20
reclassied into prot or loss
Of which:Other comprehensive income to
be reclassied into prot or loss under the 51,589.71 -30,268.270 0.00 0.00 -13,599.80 -16,668.468 37,989.91
equity method
Translation dierences of nancial
-64,367,493.82 -46,915,124.650 0.00 0.00 -32,839,932.30 -14,075,192.346 -97,207,426.12
statements denominated in foreign currency
Total of other comprehensive income 116,300,559.28 -3,562,641.71 171,926,789.47 2,196,770.08 -110,913,013.31 -66,773,187.94 5,387,545.97
224
Annual Report
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41. Surplus reserve
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the Balance at the
Increase for Decrease for
Item Beginning of End of
the Period the Period
the Period the Period
Statutory surplus reserve 474,626,867.82 124,879,713.89 0.00 599,506,581.71
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 515,941,465.19 124,879,713.89 0.00 640,821,179.08
42. Retained earnings
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Retained earnings for the end of Last Period before adjustment 6,231,451,582.26 5,443,313,968.30
Adjustment for total retained earnings as at the beginning of the
0.00 0.00
Period (+ for increase and – for decrease)
Retained earnings at the beginning of the Period after adjustment 6,231,451,582.26 5,443,313,968.30
Add: Net earnings attributable to the owners of the parent
1,328,499,432.05 1,120,439,799.25
company for the Period
Gain on disposal of other equity investments 77,248,253.85 38,047,665.80
Less: Appropriation to statutory surplus reserve 124,879,713.89 61,926,327.89
Appropriation to discretionary surplus reserve 0.00 0.00
Dividends payable to ordinary shares 288,675,388.05 308,423,523.20
Dividends of ordinary shares capitalised 0.00 0.00
Retained earnings at the end of the Period 7,223,644,166.22 6,231,451,582.26
Descriptions of appropriation of prots
Unit: Yuan Currency: RMB
Item 2020 2019
Dividends:
Final dividends in respect of the year 2020 paid during the year (Note 2) 288,675,388.05
Final dividends in respect of the year 2019 paid during the year (Note 3) 308,423,523.20
Dividends proposed after the balance sheet date:
Final dividends proposed for the year 2021 (Note 1) 0.00
Final dividends proposed for the year 2020 (Note 2) 288,675,388.05
Note 1: On 29 March 2022, the Company convened the 9th meeting of the 8th Session of the Board, at which the Company's
Prot Distribution Proposal for 2021 was approved: a cash dividend of RMB 1.50 (tax inclusive) will be distributed to
all shareholders for every 10 shares, based on the total share capital of the Company on the equity registration date as
determined for implementation of the Company's prot distribution plan for 2021, minus the total number of shares in
the Company's special securities account for repurchase, with the remaining undistributed prots to be carried forward
to the following year.
Note 2: According to the 2020 Annual Profit Distribution Plan approved at 2020 Annual General Meeting of Shareholders
on 21 May 2021 of the Company, it is expected to distribute cash dividend of RMB0.15 for every share to all
Shareholders of the Company. And the total cash distributed is RMB288,675,388.05 based on 1,924,502,587 shares,
which calculated by the 1,958,593,217 issued shares registered in the Shanghai Branch of China Securities Depository
and Clearing Co., Ltd on 24 June of 2021after deducting the 34,090,630 shares repurchased in the repurchase account.
225
Note 3: According to the 2019 Annual Profit Distribution Plan approved at 2019 Annual General Meeting of Shareholders
on 29 May 2020 of the Company, it is expected to distribute cash dividend of RMB0.16 for every share to all
Shareholders of the Company. And the total cash distributed is RMB 308,423,523.20 based on 1,927,647,020 shares,
which calculated by the 1,947,537,633 issued shares registered in the Shanghai Branch of China Securities Depository
and Clearing Co., Ltd on 2 July of 2020 after deducting the 19,890,613 shares repurchased in the repurchase account.
43. Operating income and operating cost
(1) Operating income and operating cost
√ Applicable □ N/A
Unit: Yuan Currency: RMB
For the Period For the Previous Period
Item
Income Cost Income Cost
Principal activities 15,746,624,848.53 5,604,702,296.12 13,445,875,833.84 4,821,005,051.41
Other activities 157,063,418.06 111,591,591.46 75,729,934.36 53,181,846.64
Total 15,903,688,266.59 5,716,293,887.58 13,521,605,768.20 4,874,186,898.05
Other descriptions:
Breakdown information of principal activities income
① Breakdown by product types
January to December 2021 January to December 2020
Item
Income Cost Income Cost
Chemical APIs and Intermediates 4,690,255,375.73 3,184,889,165.53 3,934,784,153.44 2,625,972,440.71
Chemical drug preparation products 9,102,675,799.95 1,769,561,792.01 6,699,175,307.66 1,362,807,966.99
Traditional Chinese drug preparation
1,109,344,037.45 295,328,306.33 1,247,075,910.10 339,295,382.97
products
Health care products 115,164,422.30 33,652,500.02 145,411,197.65 45,682,412.00
Diagnostic reagents and equipment 723,917,736.81 319,168,131.72 1,382,748,085.32 414,163,893.55
Others 254,849.67 328,336.21 30,387,281.00 30,330,859.23
Industry and Commerce Subtotal 15,741,612,221.92 5,602,928,231.82 13,439,581,935.17 4,818,252,955.45
Service industry 5,012,626.61 1,774,064.30 6,293,898.67 2,752,095.96
Total 15,746,624,848.53 5,604,702,296.12 13,445,875,833.84 4,821,005,051.41
② Breakdown by major operating regions
January to December 2021 January to December 2020
Item
Income Cost Income Cost
Domestic 13,175,044,906.28 3,837,751,076.40 10,785,410,799.31 3,182,220,956.99
Overseas 2,571,579,942.25 1,766,951,219.72 2,660,465,034.53 1,638,784,094.42
Total 15,746,624,848.53 5,604,702,296.12 13,445,875,833.84 4,821,005,051.41
③ Breakdown by time of income recognition
January to December 2021 January to December 2020
Item
Income Cost Income Cost
Commodities (recognised at a point
15,746,624,848.53 5,604,702,296.12 13,445,875,833.84 4,821,005,051.41
of time)
Total 15,746,624,848.53 5,604,702,296.12 13,445,875,833.84 4,821,005,051.41
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④ Operating income of top ve customers
Total operating income of the top Proportion of main business income
Period
ve customers in the same period (%)
January to December 2021 1,372,032,796.69 8.71
January to December 2020 1,005,534,593.73 7.48
⑤ Breakdown of non-core businesses
January to December 2021 January to December 2020
Item
Income Cost Income Cost
Selling raw materials 50,440,716.79 40,772,550.07 27,671,720.97 21,411,470.46
Processing charges 6,794,908.37 1,660,944.94 1,069,292.89 388,143.68
Lease 9,381,937.42 112,497.34 14,606,830.90 6,646,206.06
Inspection fees 0.00 0.00 213,284.91 0.00
Power and Utilities 11,855,332.16 11,464,416.78 15,067,776.06 14,223,405.64
Others 78,590,523.32 57,581,182.33 17,101,028.63 10,512,620.80
Total 157,063,418.06 111,591,591.46 75,729,934.36 53,181,846.64
44. Taxes and surcharges
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Urban maintenance and construction tax 78,915,243.23 71,147,999.02
Education surcharges 57,919,345.89 53,550,431.82
Property tax 22,448,547.60 20,276,839.64
Land use tax 9,853,262.81 10,150,547.58
Stamp duty and others 13,680,250.49 7,516,286.05
Total 182,816,650.02 162,642,104.11
Other descriptions:
The bases of calculations for major taxes and surcharges are set out in Note IV. Taxation.
45. Selling expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Marketing and promotional expenses 4,477,764,584.15 3,476,022,898.97
Sta salaries 397,170,070.40 324,928,316.74
Oce, entertainment and travelling expenses 65,297,664.11 58,624,951.47
Business meeting expenses 23,554,731.43 15,451,969.22
Others 63,025,095.32 65,308,968.89
Total 5,026,812,145.41 3,940,337,105.29
227
46. Administrative expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Sta salaries 458,139,486.90 419,321,625.18
Depreciation and amortisation 118,237,699.36 99,360,656.37
Loss on suspension of operations 67,730,993.25 102,477,386.51
Share incentive expenses 27,642,491.39 35,587,152.92
Advisory, consultancy and information disclosure fees 28,176,640.22 26,248,855.50
Quality project expenses 46,075,518.11 51,118,220.20
Oce, entertainment and travelling expenses 60,231,705.78 71,244,309.60
Repair of utilities, transportation and miscellaneous expenses 41,571,843.51 33,397,279.98
Recruitment and sta training expenses 10,648,299.29 12,434,260.13
Others 80,798,766.52 99,637,816.08
Total 939,253,444.33 950,827,562.47
47. R&D expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Material costs 289,853,404.42 246,044,210.79
Sta salaries 399,459,964.18 278,021,637.62
Share incentive expenses 6,884,591.21 704,431.47
Testing fees 434,694,547.02 350,009,783.09
Depreciation and amortisation 130,493,088.54 89,801,938.18
Acquired Technology 7,318,927.47 19,773,674.13
Others 128,426,750.49 87,356,306.67
Total 1,397,131,273.33 1,071,711,981.95
48. Finance expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Interest expenses 90,253,042.69 35,689,153.09
Interest income -191,964,051.82 -203,479,591.12
Exchange (gains)/losses 2,737,152.59 62,347,543.47
Commission charges and others 6,079,104.82 6,557,073.98
Total -92,894,751.72 -98,885,820.58
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49. Other income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Related to assets/
Item For the Period For the Previous Period
Related to income
Government grants 59,110,913.13 37,465,591.29 Related to assets
Government grants 186,224,227.56 208,797,326.66 Related to income
Tax withholding commission charges 2,011,794.27 2,038,723.31
Extra tax deductions for tax refunds 0.00 23,224.44
Total 247,346,934.96 248,324,865.70
Other descriptions:
For specic information on government grants, please refer to Note V. 62. Government grants for details.
50. Investment income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Long-term equity investments income under equity method 10,281,021.59 17,271,121.06
Investment income from disposal of long-term equity investments -9,552,139.31 103,699,130.93
Investment income from nancial assets held for trading during the
2,421,216.08 337,875.68
holding period
Dividend income from other equity instrument investments 37,114,395.95 23,065,993.55
Investment income from disposal of nancial assets held for trading 31,616,770.34 30,282,438.65
Income generated from revaluation of remaining equity measured at
0.00 7,958,514.22
fair value upon loss of control
Others 0.00 -298,617.11
Total 71,881,264.65 182,316,456.98
51. 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 -23,363,035.92 10,204,016.16
Of which: Debt instrument investments 30,410.89 14,481.37
Equity instrument investments -17,702,179.18 152,493.76
Derivative nancial assets -5,691,267.63 10,037,041.03
Financial liabilities held for trading -143,090.17 13,703.93
Of which: Derivative nancial liabilities -143,090.17 13,703.93
Total -23,506,126.09 10,217,720.09
52. Credit impairment loss
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Bad debt loss of bills receivables 0.00 -431,000.00
Bad debt loss of accounts receivables -9,189,454.14 -5,248,048.75
Bad debt loss of other receivables 1,165,341.94 -1,159,898.79
Total -8,024,112.20 -6,838,947.54
229
53. 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
-61,759,256.42 -76,606,295.55
impairment of contract performance costs
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 xed assets -1,191,722.30 -3,100,286.17
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 -1,080,293.98
XI. Losses on impairment of goodwill 0.00 0.00
XII. Others 0.00 0.00
Total -62,950,978.72 -80,786,875.70
54. Gains on disposal of assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Gains on disposal of xed assets (“-”represents losses) 6,780,989.95 -1,064,564.68
Gains on disposal of Intangible assets (“-”represents losses) 17,263,196.60 0.00
Total 24,044,186.55 -1,064,564.68
55. Non-operating income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
For the For the Previous Amount charged to non-recurring
Item
Period Period gains or losses during the Period
Gains on destruction or retirement of
631,652.20 111,294.41 631,652.20
non-current assets
Income from scraps 3,106,514.85 1,048,932.53 3,106,514.85
Compensation income 890,504.89 2,473,510.35 890,504.89
Waiver of payables 891,816.68 4,165,953.70 891,816.68
Others 3,121,342.24 2,632,556.61 3,121,342.24
Total 8,641,830.86 10,432,247.60 8,641,830.86
Government grants included in current prot or loss
□ Applicable √ N/A
230
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56. Non-operating expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
For the For the Previous Amount charged to non-recurring
Item
Period Period gains or losses during the Period
Total losses on disposal of
7,057,428.39 6,125,145.64 7,057,428.39
non-current assets
External donation 29,101,247.20 22,163,382.60 29,101,247.20
Others 3,220,598.10 4,938,235.61 3,220,598.10
Total 39,379,273.69 33,226,763.85 39,379,273.69
57. 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 375,813,164.01 455,645,093.01
Deferred income tax -36,332,858.72 -83,951,512.84
Total 339,480,305.29 371,693,580.17
(2) Reconciliation of income tax expenses to the accounting prot
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period
Total prot 2,952,329,343.96
Income tax expenses calculated at legal/applicable tax rate 738,082,335.99
Eect of dierent tax rates applicable to subsidiaries -157,284.13
Eect of tax reduction and exemption -461,501,254.72
Eect of non-deductible costs, expenses and losses 11,222,334.85
Eect of deductible tax losses for which no deferred tax assets were recognised in prior periods -1,262,016.75
Eect of deductible tax losses or deductible temporary dierences for which no deferred tax asset
91,064,540.85
was recognised in the current period
Others -37,968,350.80
Income tax expenses 339,480,305.29
Other descriptions:
□ Applicable √ N/A
231
58. Items in the cash flow statement
(1). Cash received relating to other operating activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Government grants 231,492,540.63 284,761,193.77
Interest income 177,822,721.68 204,437,373.98
Recovery of employee loans 8,237,323.25 7,821,420.99
Deposits under guarantee 75,737,734.89 65,972,530.31
Indemnity received 83,043.02 2,450,218.35
Movements in capital and others 51,664,073.17 89,773,459.35
Total 545,037,436.64 655,216,196.75
(2). Cash paid relating to other operating activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Oce Expenses 98,749,129.18 71,351,485.02
Travel expenses 69,905,127.66 70,653,292.94
Business entertainment expense 84,266,002.56 80,329,323.97
Freight expenses 107,473,996.66 84,344,464.94
advertising fee 3,789,481.18 10,191,855.40
Conference fees 34,011,851.22 34,126,734.10
Agency and consulting services Fees 87,616,669.78 39,464,688.93
R&D expenses 756,535,241.25 621,409,966.49
Bank charges 5,874,566.03 6,557,073.98
Reserves 1,008,235.84 24,280,755.52
Promotion Fees 4,788,794,823.81 3,537,165,014.07
Letter of credit and bank acceptance deposit 33,459,360.54 2,943,454.22
Other Expenses paid and current payments 214,400,075.57 301,474,163.25
Total 6,285,884,561.28 4,884,292,272.83
(3). Cash received relating to other investing activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Structured Deposits and Term Deposits 100,000,000.00 33,000,000.00
Deposits under guarantee 12,557,736.54 450,000.00
Insurance claims 0.00 19,828,856.24
Compensation for demolition 0.00 8,000,000.00
Payments received due to bankruptcy and
1,013,650.67 0.00
liquidation of Huaxia Securities Co., Ltd.
Others 2,700.00 229,160.14
Total 113,574,087.21 61,508,016.38
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(4). Cash paid relating to other investing activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Structured Deposits and Term Deposits 50,000,000.00 0.00
Deposits under guarantee 235,000.00 8,846,941.28
Foreign exchange forward contract losses 2,831,260.72 3,564,544.29
Others 3,779.69 179,618.71
Total 53,070,040.41 12,591,104.28
(5). Cash received relating to other nancing activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Equity Transfer fee paid to Guosen Securities
30,992,700.00 0.00
Employee Stock Ownership Plan Account
Collection and advance payment of individual
6,859,477.42 2,778,643.64
income tax
Total 37,852,177.42 2,778,643.64
(6). Cash paid relating to other nancing activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Repurchase of shares 938,084,088.14 503,698,567.66
Capital reduction in minority interests in subsidiary 324,225,000.00 0.00
Rental 27,862,261.10 0.00
Collection and advance payment of individual
1,716,145.57 64,678.67
income tax
Dividend handling fee 152,691.48 0.00
Total 1,292,040,186.29 503,763,246.33
233
59. Supplemental information to cash flow statement
(1) Supplemental information to cash ow statement
√ Applicable □ N/A
Unit: Yuan Currency: RMB
For the Previous
Supplemental information For the Period
Period
1. Reconciliation from net prot to cash ow from operating activities:
Net prot 2,612,849,038.67 2,578,466,495.34
Add: Asset impairment loss 62,950,978.72 80,786,875.70
Credit impairment loss 8,024,112.20 6,838,947.54
Depreciation of xed assets, depletion of oil and gas assets, depreciation of
540,627,410.92 512,674,285.79
bearer biological assets
Amortisation of use of right assets 26,000,791.57 0.00
Amortisation of intangible assets 53,826,067.53 34,235,699.61
Amortisation of long-term prepaid expenses 43,989,121.05 39,277,350.86
Losses on disposal of xed assets, intangible assets and other long-term
-24,044,186.55 1,064,564.68
assets (gain is indicated by“-”)
Losses on retirement of xed assets (gain is indicated by“-”) 6,425,776.19 6,013,851.23
Losses on changes in fair values (gain is indicated by“-”) 23,506,126.09 -10,217,720.09
Financial expenses (gain is indicated by“-”) 100,946,504.76 77,412,457.94
Investment losses (gain is indicated by“-”) -71,881,264.65 -182,316,456.98
Decrease in deferred tax assets (increase is indicated by“-”) -75,082,337.68 -75,956,091.84
Increase in deferred tax liabilities (decrease is indicated by“-”) 28,755,973.72 -7,995,421.00
Decrease in inventories (increase is indicated by“-”) -306,334,662.14 -384,205,022.18
Decrease in receivables from operating activities (increase is indicated by“-”) -1,593,686,129.41 -647,413,039.05
Increase in payables from operating activities (decrease is indicated by“-”) 1,036,581,635.58 963,799,874.60
Others 89,634,088.67 32,532,940.09
Net cash ow from operating activities 2,563,089,045.24 3,024,999,592.24
2. Major investment and nancing activities irrelevant to cash income and
expenses:
Conversion of debts into capital 0.00 0.00
Convertible corporate bonds due within 1 year 0.00 0.00
Fixed assets capitalised under nance leases 0.00 0.00
3. Net change in cash and cash equivalents:
Cash balance at the end of the period 11,697,518,141.18 12,122,781,311.49
Less: Cash balance at the beginning of the period 12,122,781,311.49 10,940,305,225.81
Add: Balance of cash equivalents at the end of the period 0.00 0.00
Less: Balance of cash equivalents at the beginning of the period 0.00 0.00
Net increase in cash and cash equivalents -425,263,170.31 1,182,476,085.68
(2) Net cash payment for acquisition of subsidiaries during the Period
□ Applicable √ N/A
234
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(3). Net cash received from disposal of subsidiaries during the Period Item
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item For the Period
Cash or cash equivalents received during the Period from disposal of subsidiaries during the Period 10,000,000.00
Of which: Zhuhai Qiao Biotechnology Co., Ltd. ( 珠海启奥生物技术有限公司 ) 10,000,000.00
Less: Cash and cash equivalents held by subsidiaries on the date when the Company loses control 6,688,779.47
Of which:Zhuhai Qiao Biotechnology Co., Ltd. ( 珠海启奥生物技术有限公司 ) 6,688,779.47
Add: Cash or cash equivalents received during the Period from disposal of subsidiaries during previous
0.00
periods
Net cash received from disposal of subsidiaries 3,311,220.53
(4). Composition of cash and cash equivalents
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End Balance at the Beginning
Item
of the Period of the Period
Ⅰ Cash 11,697,518,141.18 12,122,781,311.49
Of which: Cash on hand 225,179.98 197,923.25
Bank deposits that are readily available for payment 11,554,754,721.43 12,031,569,238.87
Other monetary funds that are readily available for payment 142,538,239.77 91,014,149.37
Ⅱ Cash equivalents 0.00 0.00
Of which: Bond investments due within three months 0.00 0.00
III. Balance of cash and cash equivalents at the end of the period 11,697,518,141.18 12,122,781,311.49
Other descriptions:
√ Applicable □ N/A
Cash and cash equivalents excluded restricted cash and cash equivalents used by the Company.
60. Assets with restricted ownership or right of use
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Carrying amount at the
Item Reasons for restriction
End of the Period
Other monetary funds 11,742,597.03 Deposits for L/C, bank acceptance draft and forward settlement
Bills receivables 870,153,979.75 Bills pooling business, pledged bills receivables
Total 881,896,576.78 /
235
61. Monetary items denominated in foreign currencies
(1). Monetary items denominated in foreign currencies
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance in foreign currency Equivalent RMB balance
Item Exchange rate
at the End of the Period at the End of the Period
Monetary funds - -
Of which: USD 203,360,894.88 6.3757 1,296,568,057.51
Euro 77,484.76 7.2197 559,416.72
HKD 631,158,004.71 0.8176 516,034,784.66
MOP 1,412,971.92 0.7936 1,121,334.52
JPY 43,429,022.00 0.055415 2,406,619.25
GBP 1,940.10 8.6064 16,697.28
Accounts receivables - -
Of which: USD 90,823,295.30 6.3757 579,062,083.84
Euro 622,350.00 7.2197 4,493,180.30
MOP 3,559,534.45 0.7936 2,824,846.54
Other receivables - -
Of which: HKD 3,317,918.13 0.8176 2,712,729.86
MOP 581,188.00 0.7936 461,230.80
Accounts payables - -
Of which: USD 33,452.83 6.3757 213,285.21
Euro 5,665.41 7.2197 40,902.56
MOP 13,870.44 0.7936 11,007.58
Other payables - -
Of which: HKD 3,061,615.96 0.8176 2,503,177.21
USD 2,514,960.49 6.3757 16,034,633.60
(2). Descriptions of overseas operating entities, including disclosure of the main overseas
business locations, functional currency and the basis for selection of important overseas operating entities, and the reasons for
changes in functional currency (if any)
□ Applicable √ N/A
62. Government grants
1. Basic information of government grants
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Amount included in prot or
Category Amount Line item
loss for the current period
Related to assets 53,611,700.00 Deferred income
Related to income 324,673.61 Deferred income
Related to assets 59,110,913.13 Other income 59,110,913.13
Related to income 186,224,227.56 Other income 186,224,227.56
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Annual Report
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2. Return of government grants
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Items Amount Reasons
Respiratory system inhalation preparation engineering laboratory project 151,700.00 Balance returned
Research and development and industrialization of non-steroidal
5,000,000.00 Project withdrawal
anti-inammatory drug Celecoxib capsules
Meropenem special fund subsidy 10,000,000.00 Project withdrawal
Meropenem Internationalization Project Subsidy 3,300,000.00 Project withdrawal
Zhuhai innovation and enterprising team and high-level talent
9,000,000.00 Project withdrawal
enterprising project (paclitaxel micellar for injection)
China Postdoctoral Science Foundation subsidy funds 80,000.00 Re-appropriation
Export credit insurance subsidies 407,687.30 Re-appropriation
Total 27,939,387.30
Other descriptions
(1). Government grants included in deferred income will be measured by gross amount method
Amount Amount Amount
Balance at the Balance Related to
of additional charged to Other charged to
Items of grants Type Beginning at the End assets/
grant for prot and loss changes prot and loss
of the Year of the Period income
the Period for the Period for the Period
Study on the technology of antifungal drug caspofungin Fiscal Related to
1,500,000.00 0 1,500,000.00 0 0 other income
(抗真菌药卡泊芬净工艺研究) appropriation assets
Laboratory project of respiratory system inhalation preparation engineering Fiscal Related to
5,000,000.00 0 1,346,750.00 151,700.00 3,501,550.00 other income
laboratory project (呼吸系统吸入制剂工程实验室项目) appropriation assets
Construction of a recycling production base for carbapenem products( Fiscal Related to
3,625,000.00 0 0 0 3,625,000.00 other income
碳青霉烯类系列产品循环化生产基地建设) appropriation assets
Research and development and industrialization of non-steroidal anti-
Fiscal Related to
inammatory drug Celecoxib capsules 5,000,000.00 0 0 5,000,000.00 0 other income
appropriation assets
（非甾体抗炎药物塞来昔布胶囊研发及产业化）
Construction of an integrated production line for fully automatic blister-type
Fiscal Related to
dry powder inhalant micro-lling and winding 2,420,000.00 0 1,492,333.34 0 927,666.66 other income
appropriation assets
（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）
Change in National Science and Technology Major Project* Research funding
Fiscal Related to
for lipid injection * Baiyunshan Hanfang transfer 150,000.00 0 0 0 150,000.00 other income
appropriation assets
（国家重大专项项目变更*注射脂质研究经费*白云山汉方转入）
Research on common key technologies for the large-scale development of Fiscal Related to
365,700.00 0 0 0 365,700.00 other income
new inhalation preparations（新型吸入制剂规模化发展共性关键技术研究） appropriation assets
Large-scale development subsidy for new inhalation preparations Fiscal Related to
2,262,600.00 0 0 0 2,262,600.00 other income
（新型吸入制剂规模化发展补助） appropriation assets
Fiscal Related to
Meropenem special fund subsidy（美罗培南专项资金补助） 10,000,000.00 0 0 10,000,000.00 0 other income
appropriation assets
Project Subsidy of meropenem internationalization Fiscal Related to
3,300,000.00 0 0 3,300,000.00 0 other income
（美罗培南国际化项目补助） appropriation assets
Project Subsidy of Marine mollusk kinetic protein Fiscal Related to
23,840,000.00 0 0 0 23,840,000.00 other income
（海洋软体动物动能蛋白项目补助） appropriation assets
New inhalation drug formulation creation project Fiscal Related to
54,154,400.00 13,094,000.00 0 0 67,248,400.00 other income
（新型吸入给药制剂创制项目） appropriation assets
Fiscal Related to
Zhimu total sapogenin project（知母总皂甙元项目） 8,900,000.00 0 0 0 8,900,000.00 other income
appropriation assets
Fiscal Related to
Glucocorticoid inhalation suspension project（糖皮质混悬液项目） 0 3,600,000.00 0 0 3,600,000.00 other income
appropriation assets
237
Amount Amount Amount
Balance at the Balance Related to
of additional charged to Other charged to
Items of grants Type Beginning at the End assets/
grant for prot and loss changes prot and loss
of the Year of the Period income
the Period for the Period for the Period
Receive nancial appropriations for small molecule peptide projects Fiscal Related to
399,999.84 0 80,000.04 0 319,999.80 other income
（收财政拨款用于小分子肽项目） appropriation assets
Fiscal Related to
Leulu total sterone project（漏芦总甾酮项目） 2,500,000.00 0 0 0 2,500,000.00 other income
appropriation assets
R&D of active substances with bone and joint repair and health care functions Fiscal Related to
1,077,356.16 0 119,706.24 0 957,649.92 other income
（具有骨关节修复与保健功能的活性物质研发） appropriation assets
Key technology research and development of budesonide nebulized inhalation Fiscal Related to
4,500,000.00 0 1,991,666.67 0 2,508,333.33 other income
solution（布地奈德雾化吸入溶液关键技术研发） appropriation assets
Fiscal Related to
Return of land holding tax（土地使用税返还） 3,674,691.16 0 107,029.74 0 3,567,661.42 other income
appropriation assets
Special Fund for environmental protection of wastewater membrane Fiscal Related to
9,708.66 0 9,708.66 0 0 other income
concentration system（废水膜浓缩系统环保专项资金） appropriation assets
Subsidies for The development of pharmaceutical APIs industry Fiscal Related to
41,960,547.60 0 1,219,192.66 0 40,741,354.94 other income
（医药原料药行业发展支持资金补助） appropriation assets
Receive innovation voucher（Jingjin Filter Press Equipment） Fiscal Related to
313,332.99 0 80,000.20 0 233,332.79 other income
（收创新券（景津压滤设备）） appropriation assets
Fiscal Related to
Xinxiang High-tech Project Fund Support（新乡高新技术项目资金扶持） 1,917,508.44 0 56,397.36 0 1,861,111.08 other income
appropriation assets
Hepatitis B vaccine methanol yeast expression system Fiscal Related to
500,000.00 0 500,000.00 0 0 other income
（乙肝疫苗甲醇酵母表达系统） appropriation assets
New recombinant protein vaccine technology platform and Industrialization
Fiscal Related to
of Cervical Cancer Vaccine 9,000,002.00 0 9,000,002.00 0 0 other income
appropriation assets
（新型重组蛋白疫苗技术平台及宫颈癌疫苗产业化）
Development Zone Finance Bureau funded Start-ups Pioneer Entrepreneurs
Project:Research on Common Co-construction Technology of Pharmaceutical Fiscal Related to
1,900,000.00 900,000.00 0 0 2,800,000.00 other income
Inhalation Preparations（开发区财政局拔款创业领军人才项目:药品吸入 appropriation assets
制剂共性共建技术的研究）
Research and development of respiratory system drug and clinical research
Fiscal Related to
technology service platform project talent funding 1,500,000.00 0 0 0 1,500,000.00 other income
appropriation assets
（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）
Science and technology help the economy key special projects Fiscal Related to
500,000.00 0 0 0 500,000.00 other income
（科技助力经济重点专项） appropriation assets
Fiscal Related to
City Service Development Special（市服务发展专项） 800,000.00 0 0 0 800,000.00 other income
appropriation assets
Fiscal Related to
Patent funding（专利资助） 0 200,000.00 0 0 200,000.00 other income
appropriation assets
2020 Shanghai Professional Technology Platform Capacity Enhancement Fiscal Related to
0 1,000,000.00 0 0 1,000,000.00 other income
Project (2020年度上海市专业技术平台能力提升项目立项) appropriation assets
Fiscal Related to
high-growth small and micro innovation enterprises(高成长小微科创企业) 0 400,000.00 0 0 400,000.00 other income
appropriation assets
Research and development subsidy for ω-3-Fish Oil Medium and Long
Fiscal Related to
Chain Fat Emulsion Injection 350,000.00 0 0 0 350,000.00 other income
appropriation assets
（ω-3鱼油中/长链脂肪乳注射液研究开发补助）
R&D and industrialization of innovative Ilaprazole Series Fiscal Related to
20,988,166.29 0 4,910,000.04 0 16,078,166.25 other income
（艾普拉唑系列创新药物研发及产业化） appropriation assets
Research and development funds for new drug for Class I Treatment of
Fiscal Related to
Necrosis Factor in Human Tumour from Human Source 8,000,000.00 0 0 0 8,000,000.00 other income
appropriation income
（I类治疗用人源化抗人肿瘤坏死因子α单克隆抗体新药研制资金）
Strategic emerging industries in 2014 (sustained release microspheres) Fiscal Related to
16,700,000.00 0 0 0 16,700,000.00 other income
（2014年战略性新兴产业（缓释微球）） appropriation assets
Fund for industrialization of prolonged-action microsphere preparation Fiscal Related to
13,300,000.00 0 750,000.00 0 12,550,000.00 other income
（长效微球制剂的产业化款项） appropriation assets
Construction project for industrialization of prolonged-action microsphere Fiscal Related to
7,024,025.85 15,329,800.00 1,634,320.37 0 20,719,505.48 other income
preparation (phase I)（长效微球制剂产业化建设项目（一期工程）） appropriation assets
238
Annual Report
2021
Amount Amount Amount
Balance at the Balance Related to
of additional charged to Other charged to
Items of grants Type Beginning at the End assets/
grant for prot and loss changes prot and loss
of the Year of the Period income
the Period for the Period for the Period
Pilot-scale enlargement and industrialization of prolonged-action injection Fiscal Related to
2,400,000.00 0 2,400,000.00 0 0 other income
microsphere products（长效注射微球产品的中试放大和产业化） appropriation assets
Project subsidy from the Ministry of Industry and Information Technology Fiscal Related to
2,400,000.00 0 0 0 2,400,000.00 other income
（工业和信息化部项目补助款） appropriation assets
Project subsidy from the Ministry of Industry and Information Technology Fiscal Related to
1,597,750.00 0 231,000.00 0 1,366,750.00 other income
（工业和信息化部项目补助款） appropriation assets
Construction of Drug Conformity Evaluation Research Center Platform Fiscal Related to
1,200,000.10 0 159,999.96 0 1,040,000.14 other income
（药物一致性评价研究中心平台建设） appropriation assets
R&D and Commercialisation of Mouse Nerve Growth Factor for Injection Fiscal Related to
50,606,036.20 0 10,560,089.27 0 40,045,946.93 other income
（注射用鼠神经生长因子研发及产业化） appropriation assets
Demonstration project on the application of solar photovoltaic architecture Fiscal Related to
3,557,499.51 0 1,102,000.08 0 2,455,499.43 other income
（太阳能光电建筑应用示范项目） appropriation assets
Subsidy for the Tender of Technology Upgrade Project for PVC Soft Bag
Fiscal Related to
Supported by Provincial Finance Departments 3,111,850.32 0 408,365.76 0 2,703,484.56 other income
appropriation assets
（省财政支持技改招标项目补助金PVC软袋）
Technical transformation project of Shenqi Fuzheng Injection with flexible Fiscal Related to
19,500,000.02 0 3,823,529.40 0 15,676,470.62 other income
bag（软袋参芪扶正注射液技改项目） appropriation assets
Provision for technology transformation funds and subsequent grants Fiscal Related to
6,589,119.08 0 1,129,563.36 0 5,459,555.72 other income
（技术改造资金拨款及事后补奖） appropriation assets
Provision for technology transformation funds and subsequent grants Fiscal Related to
10,648,600.33 0 3,288,929.52 0 7,359,670.81 other income
（技术改造资金拨款及事后补奖） appropriation assets
Electricity distribution transformer performance enhancement for energy-
Fiscal Related to
saving and emission reduction projects 428,000.00 0 48,000.00 0 380,000.00 other income
appropriation assets
（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 Fiscal Related to
1,000,000.00 1,008,000.00 473,166.56 0 1,534,833.44 other income
（化药液体制剂研发与产业化团队） appropriation assets
Innovation capacity building of technology center (antibody laboratory) Fiscal Related to
5,248,234.16 0 445,755.36 0 4,802,478.80 other income
（技术中心创新能力建设（抗体药物实验室）） appropriation assets
Innovation capacity building of technology center (antibody laboratory) Fiscal Related to
241,769.82 0 75,330.36 0 166,439.46 other income
（技术中心创新能力建设（抗体药物实验室）） appropriation income
Achievement transfer of blood screening (BCI) nucleic acid detection testing Fiscal Related to
6,000,000.00 0 2,038,717.56 0 3,961,282.44 other income
（血液筛查（BCI）核酸检测试剂成果转化） appropriation assets
Technological upgrading and transformation projects of workshop for
Fiscal Related to
acarbose (APIs for α-glucosidase inhibitor)（α-葡萄糖苷酶抑制剂类原料 571,428.64 0 107,142.84 0 464,285.80 other income
appropriation assets
药阿卡波糖生产车间工艺升级技术改造项目）
Fiscal Related to
R&D and industrialization of Statins（降血脂他汀类药物的研发与产业化） 60,000.36 0 29,999.88 0 30,000.48 other income
appropriation assets
Scientic technology award and subsidy for technological innovative project Fiscal Related to
139,491.80 0 110,925.60 0 28,566.20 other income
（科学技术奖及科技创新项目资助） appropriation assets
Scientic technology award and subsidy for technological innovative project Fiscal Related to
3,400,000.00 0 1,200,000.00 0 2,200,000.00 other income
（科学技术奖及科技创新项目资助） appropriation income
Zhuhai industrial enterprise“cloud and platform”service coupons supporting Fiscal Related to
114,972.73 0 25,540.87 0 89,431.86 other income
funds（珠海市工业企业“云上平台”服务券支持资金） appropriation income
Fiscal Related to
Commissioner workstation（特派员工作站） 145,000.00 0 60,000.00 0 85,000.00 other income
appropriation assets
Fiscal Related to
Industrial revitalisation supporting funds（产业振兴扶持资金） 3,603,500.01 0 1,158,000.00 0 2,445,500.01 other income
appropriation assets
Phase IV clinical study of innovative drug Ilaprazole Fiscal Related to
8,210,800.00 0 0 0 8,210,800.00 other income
（创新药物艾普拉唑IV期临床研究） appropriation assets
Fiscal Related to
Government grant for industrial transformation（工业转型政府扶持资金） 508,333.67 0 199,999.92 0 308,333.75 other income
appropriation assets
Fiscal Related to
New industrialization development grant（新型工业化发展奖金） 1,304,166.42 2,629,900.00 350,000.04 0 3,584,066.38 other income
appropriation assets
239
Amount Amount Amount
Balance at the Balance Related to
of additional charged to Other charged to
Items of grants Type Beginning at the End assets/
grant for prot and loss changes prot and loss
of the Year of the Period income
the Period for the Period for the Period
Policy fund for leading industrial enterprises loan Interests Fiscal Related to
566,666.61 0 200,000.04 0 366,666.57 other income
（工业龙头企业贷款贴息政策资金） appropriation assets
Supporting funds for ve advantageous industrial clusters and one high-tech Fiscal Related to
400,000.16 0 99,999.96 0 300,000.20 other income
industry（五优一新扶持资金） appropriation assets
Fiscal Related to
Subsidy for new R&D institution（新型研发机构补助） 2,000,000.00 0 2,000,000.00 0 0 other income
appropriation assets
Zhuhai innovation and enterprising team and high-level talent enterprising
Fiscal Related to
project (paclitaxel micellar for injection) 2,700,000.00 6,300,000.00 0 9,000,000.00 0 other income
appropriation assets
（珠海市创新创业团队和高层次人才创业项目（注射液紫杉醇胶束））
Capital project for innovation and entrepreneurship team funding program Fiscal Related to
8,500,000.00 4,000,000.00 0 0 12,500,000.00 other income
（创新创业团队资助计划资金项目） appropriation assets
2020 Zhuhai City Innovation and Entrepreneurship Team (Nanocrystalline) Fiscal Related to
0 1,500,000.00 0 0 1,500,000.00 other income
(2020年度珠海市创新创业团队（纳米晶）) appropriation assets
Fund for R&D and industrialization of innovative Ilaprazole series Fiscal Related to
5,600,000.00 0 0 0 other income
（艾普拉唑系列创新药物研发及产业化项目资金） appropriation assets
Key projects of industrial core and key technologies of Zhuhai (Ryanodex) Fiscal Related to
3,000,000.00 0 0 0 other income
（珠海市产业核心和关键技术攻关方向项目（丹曲林钠）） appropriation assets
Data-driven industrial chain collaboration platform demonstration project Fiscal Related to
0 3,650,000.00 0 0 3,650,000.00 other income
（数据驱动的产业链协同平台示范项目） appropriation assets
Fund for key projects of industrial core and key technologies of Zhuhai (2nd Fiscal Related to
2,000,000.00 0 0 0 2,000,000.00 other income
batch)（珠海市产业核心和关键技术攻关方向项目资金（第二批）） appropriation assets
Innovative drug of Ilaprazole sodium for injection Fiscal Related to
2,400,000.00 0 0 0 2,400,000.00 other income
（创新药注射用艾普拉唑钠针剂） appropriation assets
Technological transformation projects of new Cefuroxime Fiscal Related to
1,533,100.00 0 0 0 1,533,100.00 other income
（新型头孢粉针剂技术改造项目） appropriation assets
Internet benchmarking project for advanced drug Manufacturing Fiscal Related to
765,000.00 0 90,000.00 0 675,000.00 other income
（先进药品制造互联网标杆项目） appropriation assets
Fiscal Related to
Cleaner Production Audit Project（清洁生产审核项目） 190,000.04 0 9,999.96 0 180,000.08 other income
appropriation assets
Fiscal Related to
Green factory（绿色工厂） 1,261,666.67 0 129,999.96 0 1,131,666.71 other income
appropriation assets
Fiscal Related to
HCG project construction（HCG项目建设） 3,783,485.81 0 395,649.97 0 3,387,835.84 other income
appropriation assets
Fiscal Related to
Sewage treatment system upgrade project（污水处理系统升级改造项目） 72,269.96 0 8,030.04 0 64,239.92 other income
appropriation assets
R&D and industrialization of Recombinant Human Chorionic Gonadotropin Fiscal Related to
1,287,500.00 0 150,000.00 0 1,137,500.00 other income
for Injection（注射用重组人绒促性素研发及产业化） appropriation assets
Subsidies for online monitoring equipment and installations of coalfired Fiscal Related to
105,000.00 0 22,500.00 0 82,500.00 other income
boilers（燃煤锅炉在线监控设备装置补助资金） appropriation assets
Funds for joint R&D and industrialization of integrated platform for
Fiscal Related to
molecular diagnostics 1,550,000.00 0 1,368,367.88 0 181,632.12 other income
appropriation assets
（集成一体化分子诊断平台的合作研发及产业化资金）
Project supporting fund for the first batch of special funds for scientific and
Fiscal Related to
technological innovation in 2019 850,000.00 0 250,000.00 0 600,000.00 other income
appropriation assets
（2019年度第一批科技创新专项资金立项配套资助）
Provincial industrial innovation (provincial enterprise technology center) Fiscal Related to
1,403,733.33 0 357,200.00 0 1,046,533.33 other income
project in 2019（2019年省产业创新（省级企业技术中心）项目） appropriation assets
Guangdong Province Science and Technology Department special emergency
fund for scientific and technological research on prevention and control of Fiscal Related to
350,000.00 0 350,000.00 0 0 other income
COVID-19 appropriation assets
（广东省科学技术厅汇防控新型冠状病毒感染科技攻关应急专项款）
Zhuhai Financial Bureau cum COVID-19 emergency technology special Fiscal Related to
250,000.00 0 250,000.00 0 0 other income
emergency fund（珠海市财政局汇新冠应急科技攻关专项款） appropriation assets
240
Annual Report
2021
Amount Amount Amount
Balance at the Balance Related to
of additional charged to Other charged to
Items of grants Type Beginning at the End assets/
grant for prot and loss changes prot and loss
of the Year of the Period income
the Period for the Period for the Period
China Postdoctoral Science Foundation subsidy funds Fiscal Related to
160,000.00 0 0 80,000.00 80,000.00 other income
（中国博士后科学基金会资助经费） appropriation income
Pre-appropriation of special grants for industrialization of diagnostic reagents Fiscal Related to
4,601,200.00 0 484,784.35 0 4,116,415.65 other income
for COVID-19（新型冠状病毒检测试剂产业化项目补助金预拨） appropriation assets
Xiangzhou District equipment purchase subsidy supporting funds (special
Fiscal Related to
funds for prevention and control of pandemic) 13,555.75 0 2,088.50 0 11,467.25 other income
appropriation assets
（香洲区购置设备补贴扶持资金（疫情防控专项资金））
Zhuhai innovation and enterprising team and high-level talent enterprising
Fiscal Related to
project Phase I funds 12,000,000.00 0 0 0 12,000,000.00 other income
appropriation assets
（珠海市创新创业团队和高层次人才创业项目首期资金）
Overall relocation and deployment expansion project Fiscal Related to
20,000,000.00 0 0 0 20,000,000.00 other income
（整体搬迁调迁扩建项目） appropriation assets
Environmental protection bureau RTO project special funds Fiscal Related to
200,000.00 0 20,000.04 0 179,999.96 other income
（环保局RTO项目资金） appropriation assets
Structure-eciency optimization of marine microorganisms and evaluation of Fiscal Related to
0 324,673.61 12,307.34 0 312,366.27 other income
antitumor activity (海洋微生物构效优化与抗肿瘤活性评价) appropriation income
Total 467,562,770.49 53,936,373.61 60,424,091.70 27,531,700.00 433,543,352.40
(2) Government grants charged to prot and loss for the Period by adopting gross amount method
Amount Amount
Presentation
charged to charged to Related to assets/
Projects with grants Type item in prot
prot and loss prot and loss income
and loss
for Last Year for the Year
Social security subsidy（社保补助） Fiscal appropriation 417,699.36 72,684.89 Other income Related to income
Patent grant（专利补助） Fiscal appropriation 300,000.00 300,000.00 Other income Related to income
Job stabilization subsidy（稳岗补贴） Fiscal appropriation 802,889.91 122,853.35 Other income Related to income
Electricity subsidy（用电补助） Fiscal appropriation 1,293,613.03 1,245,193.22 Other income Related to income
Maternity benets（生育津贴） Fiscal appropriation 56,229.56 298,510.00 Other income Related to income
Marine small molecule peptide beauty moisturizing health drink project
Fiscal appropriation 80,000.04 80,000.04 Other income Related to assets
（海洋小分子肽美容补水保健饮料项目）
The acceptance of the budesonide project is transferred to other income
Fiscal appropriation 0 1,991,666.67 Other income Related to assets
（布地奈德项目验收转其他收益）
Recruitment subsidy for college graduates (高校毕业生招用补贴) Fiscal appropriation 0 59,000.00 Other income Related to income
Enterprise pre job training subsidy in 2020 (20年企业岗前培训补贴) Fiscal appropriation 0 7,400.00 Other income Related to income
Enterprise R&D investment plan (企业研发投入计划) Fiscal appropriation 0 2,000,000.00 Other income Related to income
Domestic and foreign invention patent funding in 2020 (20年国内外发明专利资助款) Fiscal appropriation 0 2,500.00 Other income Related to income
Job training subsidy (适岗培训补贴) Fiscal appropriation 0 236,835.00 Other income Related to income
2020 National High-tech Enterprise Recognition Award Subsidy Fund
Fiscal appropriation 0 50,000.00 Other income Related to income
(2020年国家高新技术企业认定奖补助资金)
Subsidy for waste treatment costs in 2020 (20年污废处理费用补助) Fiscal appropriation 0 63,500.00 Other income Related to income
National High-tech Enterprise Cultivation Support Program (国家高新技术企业培增支持计划） Fiscal appropriation 0 100,000.00 Other income Related to income
Construction of an integrated production line for fully automatic blister-type dry powder inhalant
Fiscal appropriation 0 1,492,333.34 Other income Related to assets
micro-lling 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)
Study on the technology of antifungal drug caspofungin (抗真菌药卡泊芬净工艺研究) Fiscal appropriation 0 1,500,000.00 Other income Related to assets
Laboratory project of respiratory system inhalation preparation engineering laboratory project
Fiscal appropriation 0 1,346,750.00 Other income Related to assets
(呼吸系统吸入制剂工程实验室项目)
Zhang Bin Industry and Information Development Special Fund * 2018 Technology Center
Fiscal appropriation 0 260,527.00 Other income Related to income
Improvement (张斌工信发展专项经费*2018技术中心提升)
241
Amount Amount
Presentation
charged to charged to Related to assets/
Projects with grants Type item in prot
prot and loss prot and loss income
and loss
for Last Year for the Year
Subsidy funds for the improvement of atmospheric environment quality *Shenzhen Ecological
Fiscal appropriation 0 153,240.00 Other income Related to income
Environment Bureau (大气环境质量提升补贴资金*深圳生态环境局)
Amortization of special funds for powder spray production line (粉雾生产线专项资金项目摊销) Fiscal appropriation 0 200,000.00 Other income Related to income
Grant on the technology of antifungal drug caspofungin (抗真菌药卡泊芬净工艺补助) Fiscal appropriation 0 87,438.00 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) Fiscal appropriation 0 72,400.00 Other income Related to income
Export insurance premium subsidy（June-December, 2019)
Fiscal appropriation 0 10,000.00 Other income Related to income
(2019年06-12月出口用保险保费补助款)
The 9th batch of job training subsidies for enterprises in Yantian District in 2020
Fiscal appropriation 0 2,880,000.00 Other income Related to income
(2020年盐田区企业适岗培训补贴第9批次)
The rst batch of funding support for the development of science and technology industries in 2021
Fiscal appropriation 0 3,000,000.00 Other income Related to income
（2021年第一批科技类产业发展资金扶持资助）
Export insurance premium subsidy（January-June, （2020年01-06月出口用保险保费资助款） Fiscal appropriation 0 50,000.00 Other income Related to income
2015 Pilot Project of United Development of Emerging Strategic Industrial Regions in Guangdong
Fiscal appropriation 0 9,500,002.00 Other income Related to assets
Province (2015年广东省战略性新兴产业区域集聚发展试点项目)
Return of land holding tax（土地使用税返还） Fiscal appropriation 107,029.74 107,029.74 Other income Related to assets
Construction of 500 cubic meters/day wastewater membrane concentration system
Fiscal appropriation 58,252.42 9,708.66 Other income Related to assets
（建设500立方米/日废水膜浓缩系统）
Subsidy funds allocated by the Bureau of Finance（财政局拨付补助资金） Fiscal appropriation 1,219,192.66 1,219,192.66 Other income Related to assets
Innovation voucher- buy Jingjin Filter Press Equipment (创新券-购买景津压滤设备) Fiscal appropriation 80,000.14 80,000.20 Other income Related to assets
Export insurance premium subsidy（January-June, 2019)
Fiscal appropriation 403,700.00 0 Other income Related to income
（2019年上半年出口信保补贴资金）
2020 Special Fund for Foreign Economic and Trade Development (2020年度外经贸发展专项资金) Fiscal appropriation 365,000.00 0 Other income Related to income
Special funds for the development of advanced manufacturing industry in Henan Province
Fiscal appropriation 2,000,000.00 0 Other income Related to income
（河南省先进制造业发展专项资金）
Subsidies for Credit insurance and SME in second half of 2018 (2018年下半年信报和中小开补贴) Fiscal appropriation 714,100.00 0 Other income Related to income
Subsidies for SME in the second half of 2016 (2016年下半年中小开补贴) Fiscal appropriation 90,700.00 0 Other income Related to income
Export insurance premium subsidy（January-June, 2017) (2017年上半年出口信保项目补贴) Fiscal appropriation 333,200.00 0 Other income Related to income
Export insurance premium subsidy in 2016 (2016年出口信保项目补贴) Fiscal appropriation 522,000.00 0 Other income Related to income
Government grants special funds for the development of small and medium-sized enterprises
Fiscal appropriation 1,412,200.00 0 Other income Related to income
(政府补助中小企业发展专项资金)
Subsidies for work-based training（以工代训补贴） Fiscal appropriation 387,358.50 77,547.17 Other income Related to income
Advanced Group and Advanced Individual Subsidy in 2020（2020年度先进集团和先进个人补助） Fiscal appropriation 0 20,000.00 Other income Related to income
Special funds for corporate R&D nancial subsidies in 2020（2020年企业研发财政补助专项资金） Fiscal appropriation 0 720,000.00 Other income Related to income
Government subsidies for ood (政府洪涝补助) Fiscal appropriation 0 200,000.00 Other income Related to income
Special funds for foreign trade and economic development(外经贸发展专项资金) Fiscal appropriation 0 200,000.00 Other income Related to income
Special funds for corporate R&D nancial subsidies in 2021（2021年企业研发财政补助专项资金） Fiscal appropriation 0 270,000.00 Other income Related to income
Provincial special funds for basic conditions of science and technology (省科技基础条件专项经费) Fiscal appropriation 10,000.00 0 Other income Related to income
Government subsidy - support the elimination of national Ⅲ-car incentives
Fiscal appropriation 18,000.00 0 Other income Related to income
(政府补助-支持淘汰国三车奖励)
The second batch of patent funding in 2018 (2018年第二批专利资助) Fiscal appropriation 10,000.00 0 Other income Related to income
National Quality Enterprise Supporting Award (国家级优势企业配套奖) Fiscal appropriation 200,000.00 0 Other income Related to income
Overseas trademark subsidies (境外商标补贴) Fiscal appropriation 10,000.00 0 Other income Related to income
Corporate Income Tax Return (企业所得税返还) Fiscal appropriation 419.73 0 Other income Related to income
Amortized Study of Donipenem Government Subsidies (摊销研究多尼培南政府补贴) Fiscal appropriation 300,000.00 0 Other income Related to assets
Subsidies for work-based training（以工代训） Fiscal appropriation 541,500.00 0 Other income Related to income
Pandemic Donation (疫情捐赠) Fiscal appropriation 78,230.09 0 Other income Related to income
242
Annual Report
2021
Amount Amount
Presentation
charged to charged to Related to assets/
Projects with grants Type item in prot
prot and loss prot and loss income
and loss
for Last Year for the Year
Intellectual Property Rights Protection Funding (知识产权维权资助) Fiscal appropriation 131,740.03 0 Other income Related to income
Government Patent Grants in 2020 (2020年政府专利资助) Fiscal appropriation 0 9,000.00 Other income Related to income
The third batch of biopharmaceutical industry leader (第三批次生物医药产业领航) Fiscal appropriation 0 500,000.00 Other income Related to income
Quality brand double promotion support plan (质量品牌双提升扶持计划) Fiscal appropriation 0 400,000.00 Other income Related to income
The rst batch of funding for the 2019 Enterprise Research and Development Funding Program
Fiscal appropriation 1,018,000.00 0 Other income Related to income
(2019年企业研究开发资助计划第一批资助)
The rst batch of funding for the 2020 Enterprise Research and Development Funding Program
Fiscal appropriation 0 871,000.00 Other income Related to income
(2020年企业研究开发资助计划第一批资助)
The Shenzhen Industrial Stable Growth Fund 100 million key enterprise funding in 2019
Fiscal appropriation 300,000.00 0 Other income Related to income
(2019年深圳市工业稳定增长资金1亿级重点企业资助经费)
The second and third batches of atmospheric environment quality improvement subsidies in 2020
Fiscal appropriation 200,000.00 0 Other income Related to income
*Shenzhen Finance Bureau (2020年第二、三批大气环境质量提升补贴*深圳市财政局)
2020 Shenzhen Intellectual Property Operation Service System Construction Special Fund-funded
Fiscal appropriation 226,000.00 0 Other income Related to income
Project (2020年度深圳市知识产权运营服务体系建设专项资金资助项目)
Support Program Grants in 2020 (2020年扶持计划资助款) Fiscal appropriation 953,000.00 0 Other income Related to income
Subsidy for sewage charges (排污费补贴） Fiscal appropriation 72,785.25 0 Other income Related to income
Enterprise les and cards for poor labor subsidies（企业建档立卡贫困劳动力补贴） Fiscal appropriation 15,000.00 0 Other income Related to income
Enterprises absorb one-time subsidy for poor labor and employment
Fiscal appropriation 10,000.00 0 Other income Related to income
（企业吸纳建档立卡贫困劳动就业一次性补贴）
Export credit insurance funding in 2018（2018年出口信用保险资助经费） Fiscal appropriation 184,732.00 0 Other income Related to income
Donation of COVID-19 (新冠疫情捐赠) Fiscal appropriation 312,920.35 0 Other income Related to income
Industrial Development Fund in Yantian Distict (盐田区产业发展资金) Fiscal appropriation 500,000.00 0 Other income Related to income
Government funding* (technical transformation) (政府资助*（技术改造）) Fiscal appropriation 70,000.00 60,000.00 Other income Related to income
Government funding* (COVID-19) (政府资助*（新冠肺炎）) Fiscal appropriation 200,000.00 0 Other income Related to income
Government subsidies for the Quality and Brand Double Improvement Funding Program
Fiscal appropriation 800,000.00 0 Other income Related to income
(质量品牌双提升资助计划政府补助)
Enterprise support funds (企业扶持资金) Fiscal appropriation 350,000.00 0 Other income Related to income
2019 fresh graduates apply for living allowance (2019应届毕业生申请生活补贴) Fiscal appropriation 7,333.00 0 Other income Related to income
District Innovation Voucher Funding（区创新券资助） Fiscal appropriation 17,600.00 150,000.00 Other income Related to income
2019 fresh graduates apply for living allowance (2019应届毕业生社保补贴) Fiscal appropriation 1,338.30 0 Other income Related to income
Recognition and reward of high-tech enterprises (高企认定奖励) Fiscal appropriation 200,000.00 200,000.00 Other income Related to income
R&D Innovation Award (研发创新奖励) Fiscal appropriation 779,900.00 19,764.00 Other income Related to income
Resumption of work and production (复工复产) Fiscal appropriation 6,500.00 1,000.00 Other income Related to income
Shanghai Pudong New District Intellectual Property Protection Center
Fiscal appropriation 4,000.00 0 Other income Related to income
(上海市浦东新区知识产权保护中心)
Training allowance (培训补贴) Fiscal appropriation 4,200.00 3,000.00 Other income Related to income
Supporting the Industrialization of Innovative Achievements - Biomedicine
Fiscal appropriation 2,000,000.00 0 Other income Related to income
(支持创新成果产业—生物医药)
Research and development of respiratory system drug and clinical research technology service
Fiscal appropriation 1,500,000.00 0 Other income Related to income
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)
Special subsidy of Guangzhou technology-based small and medium-sized enterprises technology
Fiscal appropriation 1,500,000.00 0 Other income Related to assets
innovation in 2020 (2020年广州市科技型中小企业技术创新专题补助)
Subsidies for leading talents in Guangzhou Development Zone Science and Technology Innovation
Bureau (Huangpu Science and Technology Bureau) Fiscal appropriation 226,844.00 278,460.00 Other income Related to income
(广州开发区科技创新局（黄埔区科技局）区领军人才场地补贴)
Social insurance subsidies for recruiting non-employment diculties in 2020
Fiscal appropriation 24,905.08 61,986.60 Other income Related to income
(2020年招用非就业困难人员社会保险补贴)
243
Amount Amount
Presentation
charged to charged to Related to assets/
Projects with grants Type item in prot
prot and loss prot and loss income
and loss
for Last Year for the Year
Value-added tax deduction (增值税加计抵减) Fiscal appropriation 65,792.65 114,614.53 Other income Related to income
Supporting funds for science and technology awards in the rst half of 2020
Fiscal appropriation 750,000.00 0 Other income Related to income
(2020年上半年科技奖励配套资金)
2020 provincial science and technology innovation strategy special fund
Fiscal appropriation 100,000.00 0 Other income Related to income
(2020年度省科技创新战略专项资金)
Subsidies for work-based training in 2020（2020年以工代训补贴） Fiscal appropriation 17,000.00 0 Other income Related to income
Shanghai domestic invention patent (上海市国内发明专利) Fiscal appropriation 0 5,500.00 Other income Related to income
One-time employment (一次性吸纳就业) Fiscal appropriation 0 16,000.00 Other income Related to income
Preclinical study of targeted anti-tumor innovative drug JK00265
Fiscal appropriation 0 500,000.00 Other income Related to income
(靶向抗肿瘤创新药物JK00265临床前研究)
Innovative talent support during the“13th Five-Year Plan”period in Pudong New Distict
Fiscal appropriation 0 28,800.00 Other income Related to income
(浦东新区“十三五”期间创新型人才扶持)
Shanghai Zhangjiang Special Fund (上海张江专项资金) Fiscal appropriation 0 100,000.00 Other income Related to income
Science and Technology Development Fund for Enterprise R&D Institutions in Pudong New District
Fiscal appropriation 0 800,000.00 Other income Related to income
浦东新区科技发展基金企业研发机构专项
Gazelle Enterprise Direct Recognition Award (one-time) (瞪羚企业直接认定奖励（一次性）) Fiscal appropriation 0 50,000.00 Other income Related to income
Special subsidy for research and development expenses of gazelle enterprises
Fiscal appropriation 0 500,000.00 Other income Related to income
(瞪羚企业研发费专项补助)
Recruitment of social insurance subsidies for non-employment diculties in 2021
Fiscal appropriation 0 122,726.92 Other income Related to income
(2021年招用非就业困难社会保险补贴)
Venue Subsidy of Guangzhou entrepreneurship leading team in 2020
Fiscal appropriation 0 278,460.00 Other income Related to income
(广州市创业领军团队2020年场地补贴)
2019 SME subsidies（2019年中小开补贴） Fiscal appropriation 0 107,500.00 Other income Related to income
Export credit insurance subsidy in the second half of 2019（2019年下半年出口信保补贴资金） Fiscal appropriation 0 304,900.00 Other income Related to income
Subsidy for the second batch of patent applications in Shenzhen in 2018
Fiscal appropriation 8,000.00 0 Other income Related to income
(2018年深圳第二批专利申请资助款)
The rst batch of enterprise research and development funding plan in 2019
Fiscal appropriation 806,000.00 0 Other income Related to income
(2019年度企业研究开发资助计划第一批)
Support for further steady growth in 2019 (2019年进一步稳增长资助) Fiscal appropriation 400,000.00 0 Other income Related to income
The 20th China Patent Award (第二十届中国专利奖) Fiscal appropriation 200,000.00 0 Other income Related to income
Pre-job training subsidy (岗前培训补贴) Fiscal appropriation 6,200.00 9,200.00 Other income Related to income
bone and joint repair and health care (骨关节修复与保健) Fiscal appropriation 119,706.80 119,706.24 Other income Related to assets
Funding for the integration of industrialization and industrialization (两化融合资助款) Fiscal appropriation 50,000.00 0 Other income Related to income
Nanshan District Science and Technology Award Support Program (2019)
Fiscal appropriation 200,000.00 0 Other income Related to income
(南山区科技奖励支持计划（2019年）)
Nanshan District Enterprise R&D Investment Support Plan (2019)
Fiscal appropriation 658,500.00 0 Other income Related to income
(南山区企业研发投入支持计划（2019年）)
Nanshan District Patent Support Program (2019) (南山区专利支持计划（2019年）) Fiscal appropriation 28,500.00 5,000.00 Other income Related to income
Shenzhen Economic and Trade Bureau Electricity Cost Reduction Subsidy
Fiscal appropriation 1,421,280.76 0 Other income Related to income
(深圳经贸局用电降成本补助)
Unemployment Insurance Rebate (失业保险返还款) Fiscal appropriation 750,931.65 0 Other income Related to income
Sewage treatment fee subsidy (污水处理费补贴) Fiscal appropriation 74,884.95 0 Other income Related to income
Return of land transfer fee (土地出让金返还) Fiscal appropriation 56,397.36 0 Other income Related to assets
Invention patent maintenance awards for more than 6 years (Science and Technology Bureau of
Xinxiang High-tech District Management Committee) Fiscal appropriation 4,400.00 0 Other income Related to income
(6年以上发明专利维护奖补（新乡高新区管委会科学技术局）)
244
Annual Report
2021
Amount Amount
Presentation
charged to charged to Related to assets/
Projects with grants Type item in prot
prot and loss prot and loss income
and loss
for Last Year for the Year
Invention Patent Authorization Award (Xinxiang High-tech District Science and Technology Bureau)
Fiscal appropriation 16,000.00 0 Other income Related to income
(发明专利授权奖补（新乡高新区管委会科学技术局）)
Provincial R&D Platform Certication Award Supplement (Xinxiang High-tech District Science and
Fiscal appropriation 100,000.00 0 Other income Related to income
Technology Bureau) (省级研发平台认定奖补（新乡高新区管委会科学技术局）)
Enterprise R&D Subsidy Fund (Xinxiang High-tech District Science and Technology Bureau)
Fiscal appropriation 560,000.00 0 Other income Related to income
(企业研发费补贴资金（新乡高新区管委会科学技术局）)
2019 Special Fund for Cross-border E-commerce Comprehensive Pilot Zone (Service Industry
Promotion Bureau of Xinxiang High-tech District Management Committee) Fiscal appropriation 1,400.00 0 Other income Related to income
(2019年跨境电商综合实验区专项资金（新乡高新区管委会服务业促进局))
High-tech District Promotion Bureau Henan Province Investment Promotion Incentive Fund
Fiscal appropriation 750,000.00 0 Other income Related to income
(高新区促进局河南省招商引资奖励资金)
High-tech District Promotion Bureau platform online funding subsidy
Fiscal appropriation 40,000.00 0 Other income Related to income
(高新区促进局平台上线资金补贴)
2020 Xinxiang major science and technology special fund of High-tech District Science and
Fiscal appropriation 400,000.00 0 Other income Related to income
Technology Bureau (高新区科技局2020年度新乡市重大科技专项资金)
The third batch of special funds for provincial science and technology basic conditions of High-tech
Fiscal appropriation 40,000.00 0 Other income Related to income
District Science and Technology Bureau (高新区科技局三批省科技基础条件专项经费)
Inland Revenue Department refunds overpaid stamp duty (税务局退多交印花税) Fiscal appropriation 20,000.00 0 Other income Related to income
Special funds for corporate R&D nancial subsidies in 2020（2020年企业研发财政补助专项资金） Fiscal appropriation 0 265,000.00 Other income Related to income
Land Support Fund in 2020 (2020土地扶持资金) Fiscal appropriation 0 56,397.36 Other income Related to assets
Job stabilization subsidy in 2020 (Xinxiang Unemployment Insurance Management Center)
Fiscal appropriation 77,116.86 15,006.57 Other income Related to income
2020年稳岗补贴（新乡失业保险管理中心）
2020 Provincial Foreign Economic and Trade Development Special Fund (Xinxiang High-tech
District Management Committee Service Industry Promotion Bureau) Fiscal appropriation 8,000.00 0 Other income Related to income
(2020年省级外经贸发展专项资金（新乡高新区管委会服务业促进局）
Export credit insurance subsidy (Xinxiang High-tech District Management Committee Service
Fiscal appropriation 24,400.00 0 Other income Related to income
Industry Promotion Bureau) (出口信保补贴（新乡高新区管委会服务业促进局）)
Subsidies for work-based training（以工代训补助） Fiscal appropriation 20,500.00 0 Other income Related to income
Special Subsidies for Epidemic Support Enterprises (疫情支持企业专项资助) Fiscal appropriation 10,300.00 0 Other income Related to income
One-time subsidy for enterprises to absorb and le poor laborers
Fiscal appropriation 0 5,000.00 Other income Related to income
(企业吸纳建档立卡贫困劳动力就业一次性补贴)
The second batch of funding plans for technological transformation investment projects in 2021
Fiscal appropriation 0 1,710,000.00 Other income Related to income
(2021年技术改造投资项目第二批资助计划)
Science and Technology Innovation Special Fund Government Subsidy-Shenzhen Pingshan District
Science and Technology Innovation Bureau Fiscal appropriation 0 1,085,794.00 Other income Related to income
(科技创新专项资金政府补助-深圳市坪山区科技创新局)
Subsidies for work-based training（以工代训） Fiscal appropriation 0 2,000.00 Other income Related to income
Export credit insurance subsidy (出口信保补贴) Fiscal appropriation 2,410,489.14 1,991,489.70 Other income Related to income
R&D subsidy（研究开发费补助） Fiscal appropriation 6,331,169.33 6,267,222.00 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 Fiscal appropriation -8,000,000.00 0 Other income Related to income
(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)
Government Subsidy for Long-acting Microspheres Major New Drug Creation
Fiscal appropriation 1,206,390.00 0 Other income Related to income
（长效微球重大新药创制政府补助）
Government Subsidy for Long-acting Microspheres Major New Drug Creation
Fiscal appropriation 828,374.15 4,784,320.37 Other income Related to assets
（长效微球重大新药创制政府补助）
R&D and industrialization of innovative Ilaprazole series（艾普拉唑系列创新药物研发及产业化） Fiscal appropriation 4,910,000.04 4,910,000.04 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） Fiscal appropriation 748,129.50 560,000.00 Other income Related to income
245
Amount Amount
Presentation
charged to charged to Related to assets/
Projects with grants Type item in prot
prot and loss prot and loss income
and loss
for Last Year for the Year
Construction of Drug Conformity Evaluation Research Center Platform
Fiscal appropriation 159,999.96 159,999.96 Other income Related to assets
（药物一致性评价研究中心平台建设）
Conformity Evaluation Research of Quality of Varieties such as Livzon Dele
Fiscal appropriation 231,000.00 231,000.00 Other income Related to assets
（丽珠得乐等品种质量一致性评价研究）
Internet Benchmarking Project for Advanced Drug Manufacturing（先进药品制造互联网标杆项目） Fiscal appropriation 90,000.00 90,000.00 Other income Related to assets
R&D and commercialisation of Recombinant Human Chorionic Gonadotropin for Injection
Fiscal appropriation 150,000.00 150,000.00 Other income Related to assets
（注射用重组人绒促性素研发及产业化）
Construction of HCG Project（HCG项目建设） Fiscal appropriation 161,921.69 395,649.97 Other income Related to assets
Fiscal Subsidy and Operating Subsidy（财政补贴及经营运营补贴） Fiscal appropriation 119,079,372.24 119,047,484.00 Other income Related to income
R&D and Commercialisation of Mouse Nerve Growth Factor for Injection
Fiscal appropriation 10,560,089.16 10,560,089.27 Other income Related to assets
（注射用鼠神经生长因子研发及产业化）
Capital projects of innovation and entrepreneurship team funding program
Fiscal appropriation 2,500,000.00 0 Other income Related to income
（创新创业团队资助计划资金项目）
Provincial Science and Technology Innovation Strategy Special Fund（省科技创新战略专项资金） Fiscal appropriation 1,500,000.00 473,166.56 Other income Related to assets
Project of astragalus base（黄芪基地项目） Fiscal appropriation 4,641,357.94 0 Other income Related to assets
Promoting Imports of Foreign Trade Development Special Fund（外贸经济发展专项资金） Fiscal appropriation 697,650.00 50,352.00 Other income Related to income
Production safety subsidy（安全生产补助） Fiscal appropriation 62,000.00 0 Other income Related to income
Subsidy for Rental and Property Fee of the Investment and Promotion Center
Fiscal appropriation 0 67,500.00 Other income Related to income
（投促中心租金及物业费补贴）
Technological Upgrading and Transformation Projects of Workshop for Acarbose (API of Glucosidase
Fiscal appropriation 107,142.84 107,142.84 Other income Related to assets
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)
Subsidy for the Tender of Technology Upgrade Project for PVC Soft Bag Supported by Provincial
Fiscal appropriation 194,365.80 408,365.76 Other income Related to assets
Finance Departments (省财政支持技改招标项目补助金PVC软袋)
Technical transformation project of Shenqi Fuzheng Injection with exible bag
Fiscal appropriation 1,213,999.92 3,823,529.40 Other income Related to assets
(软袋参芪扶正注射液技改项目)
Financial grant for the quality control technologies of Shenqi (参芪质量控制技术财政拨款) Fiscal appropriation 2,823,529.44 0 Other income Related to assets
Demonstration project on the application of solar photovoltaic architecture
Fiscal appropriation 1,102,000.08 1,102,000.08 Other income Related to assets
(太阳能光电建筑应用示范项目)
Electricity Incentive Funds (用电奖励资金) Fiscal appropriation 217,903.00 364,257.43 Other income Related to income
Subsidies for high and new technology enterprises and high and new technology products
Fiscal appropriation 504,000.00 1,071,346.00 Other income Related to income
(高新技术企业及高新技术产品项目补贴)
Grants to high-growth technology companies from Dazhangjiang project A04
Fiscal appropriation 0 1,500,000.00 Other income Related to income
(大张江项目A04对高增长技术企业资助款)
Small and medium enterprise market development project funds (中小企业开拓市场项目资金) Fiscal appropriation 33,135.00 0 Other income Related to income
Provision for technology transformation funds and subsequent grants
Fiscal appropriation 335,100.00 1,576,000.00 Other income Related to income
(技术改造资金拨款及事后补奖)
Provision for technology transformation funds and subsequent grants
Fiscal appropriation 3,687,744.59 4,131,600.00 Other income Related to assets
(技术改造资金拨款及事后补奖)
R&D and commercialisation of Statins (降血脂他汀类药物的研发与产业化) Fiscal appropriation 29,999.88 29,999.88 Other income Related to assets
Technology transformation of recycling system of Acarbose project
Fiscal appropriation 1,239,575.06 397,818.48 Other income Related to assets
(阿卡波糖糖回收系统技术改造项目)
Commissioner workstation (特派员工作站) Fiscal appropriation 60,000.00 60,000.00 Other income Related to assets
Special Fund and Encouraging funds for Energy Saving and Emission Reduction
Fiscal appropriation 50,000.00 352,000.00 Other income Related to income
(节能减排专项资金及奖励金)
Energy-saving and emission reduction projects (节能减排项目) Fiscal appropriation 12,030.04 86,030.04 Other income Related to assets
Scientic technology award and subsidy for technological innovative project
Fiscal appropriation 4,027,272.76 7,352,000.00 Other income Related to income
(科学技术奖及科技创新项目资助)
246
Annual Report
2021
Amount Amount
Presentation
charged to charged to Related to assets/
Projects with grants Type item in prot
prot and loss prot and loss income
and loss
for Last Year for the Year
Scientic technology award and subsidy for technological innovative project
Fiscal appropriation 0 250,000.00 Other income Related to assets
(科学技术奖及科技创新项目资助)
Set-up and research fund for postdoctoral Station (博士后建站和科研补贴) Fiscal appropriation 500,000.00 100,000.00 Other income Related to income
Patent (Intellectual Property) Support Fund (专利（知识产权）资助资金) Fiscal appropriation 2,055,068.00 849,370.00 Other income Related to income
Optimization of structural eect of sea organisms and valuation of anti-tumor activity
Fiscal appropriation 0 12,307.34 Other income Related to income
(海洋微生物构效优化与抗肿瘤活性评价)
Policy fund for leading industrial enterprises loan interests (工业龙头企业贷款贴息政策资金) Fiscal appropriation 200,000.00 200,000.04 Other income Related to assets
Government grant for industrial transformation (工业转型政府扶持资金) Fiscal appropriation 199,999.92 199,999.92 Other income Related to assets
Reward Fund for Industry Growth and Production Expansion (工业保值增长及增产奖励) Fiscal appropriation 27,794,500.00 5,050,000.00 Other income Related to income
New industrialization development funds (新型工业化发展资金) Fiscal appropriation 300,000.04 350,000.04 Other income Related to assets
Industrial revitalisation supporting funds (产业振兴扶持资金) Fiscal appropriation 1,158,000.00 1,158,000.00 Other income Related to assets
Industrial supporting funds（产业扶持资金） Fiscal appropriation 0 13,000.00 Other income Related to income
Supporting funds for ve advantageous industrial clusters and one high-tech industry
Fiscal appropriation 150,000.00 99,999.96 Other income Related to assets
(五优一新扶持资金)
Employment Assurance and Re-employment and Attraction to Graduates of Tertiary Academic
Fiscal appropriation 5,760,396.73 5,024,018.69 Other income Related to income
Institutions Subsidy (企业稳岗及再就业和吸纳高校毕业生补贴款)
New Scientic Research Institution Subsidy (新型科研机构补助资金) Fiscal appropriation 0 2,000,000.00 Other income Related to assets
Enterprise Technology Center Innovation Capacity Development (Antibody Laboratory)
Fiscal appropriation -3,179,362.63 445,755.36 Other income Related to assets
(企业技术中心创新能力建设（抗体药物试验室）)
Enterprise Technology Center Innovation Capacity Development (Antibody Laboratory)
Fiscal appropriation 86,916.30 75,330.36 Other income Related to income
(企业技术中心创新能力建设（抗体药物试验室）)
Special funds for industry and informatization (工业和信息化专项资金) Fiscal appropriation 0 48,000.00 Other income Related to income
Supporting subsidy for“Talents Plan”and subsidy for talents introduction and cultivation
Fiscal appropriation 0 646,759.03 Other income Related to income
(“人才计划”配套补贴及引才育才补贴)
Bounties for import and export growth to BRICS countries (对金砖国家进出口增长奖励金) Fiscal appropriation 1,011,750.00 0 Other income Related to income
Incentive funds for expansion of export scale (扩大出口规模奖励基金) Fiscal appropriation 389,300.00 519,700.00 Other income Related to income
Subsidy for online monitoring equipment for coalred boilers (燃煤锅炉在线监控设备装置补助) Fiscal appropriation 22,500.00 22,500.00 Other income Related to assets
Special funds for key leading enterprises in the 13th Five-Year Plan (2019)
Fiscal appropriation 4,784,100.00 0 Other income Related to income
(十三五重点领军企业专项资金（2019年）)
Green factory (绿色工厂) Fiscal appropriation 48,333.29 129,999.96 Other income Related to assets
Special capital replenishment for industrial enterprise Restructuring
Fiscal appropriation 1,940,000.00 130,000.00 Other income Related to income
(工业企业结构调整专项资补资)
National Key R&D Program“Network Collaborative Manufacturing and Smart Factory”Special
Fiscal appropriation 610,000.00 0 Other income Related to income
Project (国家重点研发计划”网络协同制造和智能工厂”专项)
Research on transformation of bacterial strains and fermentation process
Fiscal appropriation 480,000.00 160,000.00 Other income Related to income
(菌种改造与发酵工艺研究)
Network reconstruction and system optimization of actinomycete drug synthesis biological system
Fiscal appropriation 1,170,000.00 0 Other income Related to income
(放线菌药物合成生物体系的网络重构与系统优化)
Refund of unemployment insurance fees (失业保险费返还款) Fiscal appropriation 2,067,505.76 29,476.67 Other income Related to income
Subsidies for work-based training（以工代训） Fiscal appropriation 901,700.00 848,400.00 Other income Related to income
Subsidies for insurance fees (保险费用补贴) Fiscal appropriation 478,471.45 200,000.00 Other income Related to income
Subsidies and supporting funds for production of emergency materials in Xiangzhou District
Fiscal appropriation 200,000.00 1,000.00 Other income Related to income
(香洲区应急物资生产补贴扶持资金）
Subsidies and supporting funds for production of emergency materials in Xiangzhou District
Fiscal appropriation 1,044.25 2,088.50 Other income Related to assets
（香洲区应急物资生产补贴扶持资金）
Special Funds for Promoting High-quality Economic Development（促进经济高质量发展专项资金） Fiscal appropriation 0 357,200.00 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） Fiscal appropriation 476,266.67 3,540,020.00 Other income Related to income
247
Amount Amount
Presentation
charged to charged to Related to assets/
Projects with grants Type item in prot
prot and loss prot and loss income
and loss
for Last Year for the Year
Funds for projects of proactively expanding import in Zhuhai（珠海市主动扩大进口项目资金） Fiscal appropriation 133,505.00 0 Other income Related to income
Special funds for expenditures in respect of projects for other causes including people's livelihood for
Fiscal appropriation 200,000.00 0 Other income Related to income
2020 (Silver Age Project) (20年民生补助等其他事业性发展支出（银龄专项）项目资金)
Funds for joint R&D and industrialization of integrated platform for molecular diagnostics
Fiscal appropriation 865,100.00 1,368,367.87 Other income Related to assets
(集成一体化分子诊断平台的合作研发及产业化)
Research of high-throughput screening technology for toxic substances in aquatic products
Fiscal appropriation 80,000.00 0 Other income Related to income
(水产品中有害物质高通量检测技术研究)
Employment tax incentives for key groups and retired soldiers (重点群体及退役士兵就业税收优惠) Fiscal appropriation 0 66,400.00 Other income Related to income
Funds for industrial volatile organic pollution control projects (工业挥发性有机污染治理项目资金) Fiscal appropriation 0 628,000.00 Other income Related to income
Achievement transfer of blood screening BCI nucleic acid detection testing
Fiscal appropriation 0 2,038,717.57 Other income Related to assets
(血液筛查BCI核酸检测试剂成果转化)
COVID-19 emergency technology special emergency fund and special grants for industrialization
Fiscal appropriation 0 1,084,784.35 Other income Related to assets
(新冠应急科技攻关专项款及产业化项目补助金)
“Specialized and new”subsidy (“专精特新”补贴) Fiscal appropriation 0 175,000.00 Other income Related to income
Exchange rate hedging subsidy (汇率避险补贴) Fiscal appropriation 0 106,605.00 Other income Related to income
National foreign special fund for 2020 allocated by Guangdong Province Science and Technology
Fiscal appropriation 0 300,000.00 Other income Related to income
Department (广东省科学技术厅拨来2020年度国家外专款)
Several measures to pay enterprises to tide over diculties in response to COVID-19 pandemic –
funds for nancial support project Fiscal appropriation 0 6,093,000.00 Other income Related to income
(应对新型冠状病毒肺炎疫情支付企业共渡难关的若干措施-金融支持项目资金)
Others Fiscal appropriation 258,657.39 68,848.09 Other income Related to income
Total 246,262,917.95 245,335,140.69
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
248
Annual Report
2021
4. Disposal of subsidiaries
Was there any circumstance under which a single disposal of the investment in subsidiaries will lose control
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Dierences arising from
Amount of Time of Recognisation disposal amount and portion
Disposal Mode of
Name of subsidiary disposal for ceased for the time of of net assets held by disposal
ratio% disposal
equity control ceased control investment for the range of
consolidated nancial statement
Zhuhai Qiao Biotechnology
Co., Ltd. ( 珠海启奥生物技 10,000,000.00 60 Sale 2021.6.11 Asset delivery 2,423,029.20
术有限公司 )
Continued:
Percentage Book value Fair value Recognisation Prot or loss
of the of the of the and major arising from
Gain/loss
remaining remaining remaining assumptions for transformation of
arising from
Name of subsidiary equity at equity at equity at fair value of the other comprehensive
remeasurement
the date the date the date remaining equity income which is
at fair value
of ceased of ceased of ceased at the date of related to equity
control control control ceased control investment
Zhuhai Qiao Biotechnology
Co., Ltd.( 珠海启奥生物技 - - - - - -
术有限公司 )
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 a new subsidiary and
liquidation of a subsidiary, etc.) and their relevant information:
√ Applicable □ N/A
(1). On 30 March 2021, the Livzon Group and Shanghai Frontier Health Pharmaceutical Technology Co., Ltd. ( 上 海 方 予 健 康 医
药科技有限公司 ) established Shanghai Liyu Biotechnology Co., Ltd. ( 上海丽予生物医药有限责任公司 ) with a registered
capital of RMB 3 million, of which Livzon Group contributed RMB 1.65 million and is interested in 55% of its registered
capital, and Shanghai Frontier contributed RMB 0.81 million and is interested in 45% of its registered capital.
(2). On 9 February 2021, Zhuhai Livzon Diagnostics Inc. ( 珠 海 丽 珠 试 剂 股 份 有 限 公 司 ), a subsidiary of Livzon Group,
established Zhuhai Liye Biotechnology Co., Ltd. ( 珠 海 市 丽 业 生 物 技 术 有 限 公 司 ) with a registered capital of RMB50
million, and is interested in 100% of its registered capital. On 13 August 2021, Zhuhai Livzon Diagnostics Inc. ( 珠 海 丽 珠 试
剂股份有限公司 ) established Changsha Lijin Baokang Medical Technology Co., Ltd. ( 长沙丽瑾葆康医疗科技有限公司 )
with a registered capital of RMB1 million, and is interested in 100% of its registered capital.
(3). On 25 May 2021, Fuzhou Fuxing Pharmaceutical Co. Ltd. ( 福 州 市 福 兴 制 药 有 限 公 司 ), a subsidiary of Livzon Group,
completed deregistration at the Administration for Industry and Commerce. On 31 December 2021, Both of Livzon
International Limited and Livzon Biologics Limited, subsidiaries of Livzon Group, completed deregistration.
249
VII EQUITY IN OTHER ENTITIES
1. Equity in subsidiaries
(1). Group structure
√ Applicable □ N/A
Principal Percentage of
Place of Nature of
Name of subsidiary Place of Shareholding (%) Acquisition Method
Registration Business
Business Direct Indirect
Topsino Industries Limited Hong Kong Hong Kong Business 100 0 Set-up
Shenzhen Taitai Genomics Inc. Co., Ltd. Shenzhen Shenzhen Industry 75 25 Set-up
Shenzhen Taitai Pharmaceutical Industry Co., Ltd. Shenzhen Shenzhen Industry 100 0 Set-up
Health Investment Holdings Ltd. The British The British
Investment 0 100 Set-up
(Health Investment) Virgin Islands Virgin Islands
The British The British
Joincare Pharmaceutical Group Industry Co.,Ltd.(BVI)* Investment 0 100 Set-up
Virgin Islands Virgin Islands
Joincare Pharmaceutical Group Industry Co., Ltd.
Cayman Cayman Investment 0 100 Set-up
(CAYMAN ISLANDS)
Zhuhai Jiankangyuan Biology Medicine Co., Ltd. Note 1 Zhuhai Zhuhai Industry 90.89 0 Set-up
Xinxiang Haibin Pharmaceutical Co., Ltd.（Xinxiang Haibin） Xinxiang Xinxiang Industry 0 100 Set-up
Shenzhen Fenglei Electric Power Investment Co., Ltd.
Shenzhen Shenzhen Investment 100 0 Set-up
（Fenglei Electric Power）
Jiaozuo Joincare Bio Technological Co., Ltd.
Jiaozuo Jiaozuo Industry 75 25 Set-up
（Jiaozuo Joincare）
Shanghai Frontier Health Pharmaceutical Technology Co., Ltd.
Shanghai Shanghai Industry 65 0 Set-up
（Shanghai Frontier）Note 2
Shenzhen Taitai Biological Technology Co., Ltd. (Taitai
Shenzhen Shenzhen Industry 100 0 Set-up
Biological)
Guangzhou Joincare Respiratory Medicine Engineering
Guangzhou Guangzhou Industry 0 26 Set-up
Technology Co., Ltd.（Joincare Respiratory）
Guangdong Taitai Forenstic Test Institute Shenzhen Shenzhen Business 0 100 Set-up
Joincare Haibin Pharmaceutical Co., Ltd. Shenzhen Shenzhen Industry 25 75 Set-up
Shenzhen Haibin Pharmaceutical Co., Ltd. Shenzhen Shenzhen Industry 97.87 2.13 Consolidation not under common control
Joincare Daily-Use & Health Care Co., Ltd. Shenzhen Shenzhen Business 80 20 Consolidation not under common control
Health Pharmaceuticals (China) Limited Zhuhai Zhuhai Industry 0 100 Consolidation not under common control
Livzon Pharmaceutical Group Inc. (Livzon Group) Note 3 Zhuhai Zhuhai Industry 23.69 21.14 Consolidation not under common control
Hong Kong Health Pharmaceutical Industry Company Limited Hong Kong Hong Kong Investment 0 100 Consolidation not under common control
Health Pharmaceutical Industry Company Limited Hong Kong Hong Kong Investment 0 100 Consolidation not under common control
Shenzhen Hiyeah Industry Co., Ltd. Shenzhen Shenzhen Business 97.58 2.42 Consolidation not under common control
Guangzhou Hiyeah Industry Co., Ltd. Guangzhou Guangzhou Industry 0 100 Consolidation not under common control
Zhongshan Renhe Health Products Co., Ltd. Zhongshan Zhongshan Industry 0 100 Consolidation not under common control
Shenzhen Jiekang Health Care Co., Ltd. Shenzhen Shenzhen Industry 0 100 Consolidation not under common control
Joincare (Guangdong) Special medicine Food Co., Ltd. Shaoguan Shaoguan Industry 100 0 Set-up
Henan Joincare Biomedical Research Institute Co., Ltd. Note 4 Jiaozuo Jiaozuo Industry 0 70.14 Set-up
250
Annual Report
2021
Other descriptions:
Noe 1: On 8 September 2021, Zhuhai Jiankangyuan Biology Medicine Co., Ltd. completed the cancellation of the business
license.
Note 2: On 30 March 2021, Shanghai Frontier Health Pharmaceutical Technology Co., Ltd. ( 上 海 方 予 健 康 医 药 科 技 有 限
公 司 ) and the Livzon Group, a subsidiary of the Company, established Shanghai Liyu Biotechnology Co., Ltd. ( 上
海丽予生物医药有限责任公司 ), of which Livzon Group is interested in 55% of its registered capital, and Shanghai
Frontier interested in 45% of its registered capital.
Note 3: Zhuhai Livzon Biomedical Technology Co., Ltd. was a subsidiary within the scope of Livzon Group's consolidation.
It was originally 100% indirectly held by Livzon Group. In this period, due to the restructuring of the shareholding
structure of Livzon Group's holding subsidiary, it was adjusted to Livzon Group holding 55.13% of the shares, the
company holding 35.75% of the shares, and YF Pharmab Limited holding 9.12% of the shares.
Note 4: On 26 October 2020, Jiaozuo Joincare Bio Technological Co., Ltd. (a subsidiary of the Company) and Livzon
Xinbeijiang Pharmaceutical Co., Ltd. (a subsidiary of the Company's subsidiary Livzon Group) co-founded Henan
Joincare Biomedical Research Institute Co., Ltd., in which, the former holding 51% of the shares. The joint venture
completed the business registration on 26 October 2020.
Subsidiaries not included in the scope of consolidation in the current period:
Name of subsidiary Registered Capital Actual investment Own interest
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%
Shenzhen Jiekang Health Care Co., Ltd. 4,000,000.00 4,000,000.00 100%
Guangzhou Hiyeah Industry Co., Ltd., Zhongshan Renhe Health Products Co., Ltd., and Shenzhen Jiekang Health Care Co.,
Ltd. are wholly-owned subsidiaries of Hiyeah Industry. They entered the liquidation process in 2008. They have been closed
for many years and completed the tax cancellation procedures. So they are not included in the scope of the consolidated
statement.
(2). Important non-wholly owned subsidiaries
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Gain or loss for the Dividends distributed to Balance of minority
Percentage of
Name of subsidiary Period attributable to the minority interest for interest at the End of
minority interest
minority interest the Period the Period
Livzon Group 55.1743% 977,852,785.18 644,923,997.09 7,174,735,557.32
Descriptions of the dierence between the shareholding ratio of minority shareholders and their
proportion of voting rights in a subsidiary:
□ Applicable √ N/A
Other descriptions:
□ Applicable √ N/A
251
(3). Important non-wholly owned subsidiaries
√ Applicable □ N/A
Unit: 10,000 Yuan Currency: RMB
Balance at the End of the Period
Name of
Non-current Current Non-current
subsidiary Current assets Total assets Total liabilities
assets liabilities liabilities
Livzon Group 1,467,309.66 769,881.90 2,237,191.56 692,506.81 113,582.27 806,089.08
Balance at the Beginning of the Period
Name of
Non-current Current Non-current
subsidiary Current assets Total assets Total liabilities
assets liabilities liabilities
Livzon Group 1,462,735.70 596,345.88 2,059,081.58 608,288.89 86,784.49 695,073.38
Name of Amount for the Period
subsidiary Revenue Net prot Total Comprehensive income Cash ow from operating activities
Livzon Group 1,206,386.33 195,210.12 183,489.81 190,232.81
Name of Amount for the Previous Period
subsidiary Revenue Net prot Total Comprehensive income Cash ow from operating activities
Livzon Group 1,052,040.98 213,132.67 227,271.22 216,076.06
(4). Signicant restrictions on the use of enterprise group assets and settlement of enterprise
group debts:
□ Applicable √ N/A
(5). Financial supports or other supports oered for the structured entities included in the
scope of consolidated nancial statements:
□ Applicable √ N/A
Other descriptions:
□ Applicable √ N/A
2. Transactions that Result in Change of Owners' Equity in Subsidiaries without Losing Control
□ Applicable √ N/A
3. Interests in joint ventures or associates
√ Applicable □ N/A
(1). Signicant joint ventures or associates
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Main Shareholding(%) Accounting treatment
Name of
business Place of registration Business nature of investment in joint
subsidiary Direct Indirect
place ventures or joint ventures
Jiaozuo Zhaozhanggong Village, Electricity production,
Jiaozuo Jinguan
City, Daiwang Town, Macun power supply,
Jiahua Electric 0.00 49 Equity method
Henan District, Jiaozuo City, comprehensive
Power Co., Ltd.
Province Henan Province utilisation of y ash
(2). Key nancial information of signicant joint ventures
√ N/A
252
Annual Report
2021
(3). Key nancial information of signicant associates
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End Balance at the Beginning
of the Period / Amount of the Period / Amount
for the Period for the Previous Period
Jinguan Electric Power Jinguan Electric Power
Current assets 900,929,930.10 747,232,522.21
Of which: cash equivalents 151,817,021.98 174,001,731.35
Non-current assets 295,290,603.34 319,027,493.06
Total assets 1,196,220,533.44 1,066,260,015.27
Current liabilities 621,231,810.54 423,866,168.40
Non-current liabilities 13,660,568.14 14,902,039.03
Total liabilities 634,892,378.68 438,768,207.43
Net asset 561,328,154.76 627,491,807.84
Of which: Minority interests 0.00 0.00
Total equity attributable to shareholders of the parent company 561,328,154.76 627,491,807.84
Share of net assets calculated by shareholding ratio 275,050,795.83 307,470,985.84
Adjustment items 9,569,113.18 9,085,381.21
Goodwill
Unrealised prot on internal transactions
Provision for diminution in value
Others 9,569,113.18 9,085,381.21
Book value of equity investment in associates 284,619,909.02 316,556,367.05
Fair value of equity investment in associates with public quotation
Revenue 702,123,322.31 714,896,011.60
Finance expenses 14,968,954.50 10,183,170.92
Income tax expense -1,540,629.99 22,033,077.65
Net prot -65,176,444.97 33,227,689.56
Net prot from discontinued operations
Other comprehensive income
Total Comprehensive income -65,176,444.97 33,227,689.56
Cash ow from operating activities -135,982,225.15 108,439,599.85
Dividends received from associates in the current year
(4). Summarized accounting information for other non-important associates
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End Balance at the Beginning
of the Period / Amount of the Period / Amount
for the Period for the Previous Period
Associates:
Total carrying amount of investment 1,134,729,545.83 311,723,232.68
Total amount calculated by percentage of shareholding
net prot 42,217,479.63 334,745.24
other comprehensive income 14,789,928.17 -40,317.61
total comprehensive income 57,007,407.80 294,427.63
253
(5). Descriptions of signicant restrictions on the ability of joint ventures or associates to transfer funds to the Company
□ Applicable √ N/A
VIII Risks Management of Financial Instruments
√ Applicable □ N/A
The major nancial instruments of the Company include cash, bills receivable and accounts receivable, other receivables, non-
current assets due within one year, other current assets, financial assets held for trading, other equity instrument investments,
long-term receivables, bills payable and accounts payable, other payables, short-term borrowings, financial liabilities held
for trading, non-current liabilities due within one year, short-term borrowings, bonds payable and long-term payables.. The
details of these financial instruments are disclosed in the respective notes. The financial risk of these financial instruments
and nancial management policies used by the Company to minimize the risk are disclosed as below. The management of the
Company manages and monitors the exposure of these risks to ensure the 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 nancial risks: market risks (mainly including foreign exchange
risks and interest rate risks), credit risks and liquidity risks. The Company formulates an overall risk management plan with
respect to the unforeseeability of the financial market in 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 were denominated and settled in
Renminbi. However, the Company still has certain imports and exports businesses regarding APIs and diagnostic reagents that
are settled in U.S. dollar 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 Eurodollar. In addition, the Company will have foreign currency loans
according to the operating needs. In respect of the above, the Company still exposes to certain foreign exchange risks. Taking
into account the foreign exchange risks acceptable by the Company, the Company adopted Derivative instruments to control
foreign exchange risk. However, as to the foreign exchange 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 are stated below:
① 31 December 2021
Unit: 1,000 Yuan
Item HKD item USD item Euro item JPY item GBP item MOP item
Financial assets in foreign currency:
Monetary funds 516,034.78 1,296,568.06 559.42 2,406.62 16.70 1,121.33
Financial assets held for trading 163,071.45 0.00 0.00 0.00 0.00 0.00
Accounts receivables 0.00 579,062.08 4,493.18 0.00 0.00 2,824.85
Other receivables 2,712.73 0.00 0.00 0.00 0.00 461.23
Other equity instrument investments 480,531.75 0.00 0.00 0.00 0.00 0.00
Subtotal: 1,162,350.71 1,875,630.14 5,052.60 2,406.62 16.70 4,407.41
Financial liabilities in foreign currency: 0.00 0.00 0.00 0.00 0.00 0.00
Accounts payables 0.00 213.29 40.90 0.00 0.00 11.01
Other payables 2,503.18 16,034.63 0.00 0.00 0.00 0.00
Subtotal: 2,503.18 16,247.92 40.90 0.00 0.00 11.01
254
Annual Report
2021
② 31 December 2020
Unit: 1,000 Yuan
Item HKD item USD item Euro item JPY item GBP item MOP item
Financial assets in foreign currency:
Monetary funds 335,766.40 1,086,139.94 644.45 0.00 17.25 1,120.27
Financial assets held for trading 5,596.91 0.00 0.00 0.00 0.00 0.00
Accounts receivables 0.00 483,761.81 1,275.65 0.00 0.00 2,335.99
Other receivables 3,042.50 435.46 0.00 0.00 0.00 474.95
Other equity instrument investments 697,310.50 0.00 0.00 0.00 0.00 0.00
Subtotal: 1,041,716.32 1,570,337.22 1,920.10 0.00 17.25 3,931.21
Financial liabilities in foreign currency:
Accounts payables 0.00 218.39 45.46 6,688.92 0.00 0.00
Other payables 206.06 7,401.12 0.00 0.00 0.00 0.00
Subtotal: 206.06 7,619.51 45.46 6,688.92 0.00 0.00
As at 31 December 2021, in respect of the Company’s nancial assets and liabilities denominated in foreign currencies such
as Hong Kong dollar, U.S. dollar, Euro, Japanese Yen and Macau dollar, should the value of RMB appreciate or depreciate by
5% against foreign currencies such as Hong Kong dollar, U.S. dollar, Euro, Japanese Yen and Macau dollar, and other factors
remain unchanged, the Company would be subject to an increase or decrease in prot of approximately RMB 151,553,060 (31
December 2020: approximately RMB130,168,110).
(2). Interest rate risk
The Company's exposures to interest rate risk are mainly arising from interest-bearing liabilities such as bank borrowings and
bonds payables. The interest rates are aected by the macro monetary policies of China, hence the Company will face the risks
arising from uctuation of interest rates in the future.
The nance department of the head oce of the Company continues to monitor the level of interest rate of the Company. The
rise in the interest rate will increase the cost of additional interest-bearing liabilities and the interest expenses of the Company's
outstanding interest-bearing liabilities of which the interests are calculated at floating rates, and impose material adverse
impact on the financial results of the Company. The management will make timely adjustment based on the updated market
conditions. The directors of the Company consider that the future changes in the interest rate will have no material adverse
impact on the operating results of the Company.
(3). Credit risk
Credit risk is primarily attributable to cash and cash equivalents, restricted funds, accounts receivables and other receivables.
In respect of cash at banks, they were placed at several banks with good reputations, for which the credit risk was limited.
In respect of receivables, the Company shall assess the credit limit granted to customers for credit purpose. Moreover, as the
customer base of the Company is large, the credit risk on accounts receivables is not concentrated. In terms of bills receivable
settlement, external payments are settled with bills receivable with priority and most of the remaining bills are high-quality
bills with maturity within three months; thus none expected major credit risk exits. In addition, the provision made on the
impairment of accounts receivables and other receivables are adequate to manage the credit risk.
Among the accounts receivables of the Company, the accounts receivable of the top five customers accounted for 11.60%
(31 December 2020: 11.32%); among the other receivables of the Company, the other receivables of the top five customers
accounted for 60.63% (31 December 2020: 71.95%).
255
(4). Liquidity risk
The Company adopts prudent liquidity risk management for the sufficient supply of monetary funds and liquidity. It secures
readily available credit loans from banks mainly by maintaining adequate monetary funds and banking facilities. Apart from
indirect financing from banks, a number of financing channels were available, such as direct financing by inter-bank market
including short-term financing bills and medium-term financing bills, corporate bonds etc. These instruments can effectively
reduce the effects of scale of financing and the macro monetary policies of China on indirect bank financing, which shall
secure adequate funds in a exible manner.
As at the date of the balance sheet, the contractual cash ows of nancial assets and nancial liabilities are presented below by
term of maturity:
① 31 December 2021
Item Within 1 year 1-2 years 2-5 years Over 5 years Total
Financial assets:
Monetary funds 11,729,230,390.98 0.00 0.00 0.00 11,729,230,390.98
Financial assets held for
184,638,344.31 0.00 0.00 0.00 184,638,344.31
trading
Bills receivables 1,977,286,022.02 0.00 0.00 0.00 1,977,286,022.02
Accounts receivables 2,853,655,551.54 0.00 0.00 0.00 2,853,655,551.54
Other receivables 88,053,825.12 0.00 0.00 0.00 88,053,825.12
Non-current assets due
317,381.23 0.00 0.00 0.00 317,381.23
within one year
Long-term receivables 0.00 266,904.13 0.00 0.00 266,904.13
Subtotal: 16,833,181,515.20 266,904.13 0.00 0.00 16,833,448,419.33
Financial liabilities:
Short-term borrowings 2,518,484,835.09 0.00 0.00 0.00 2,518,484,835.09
Financial liabilities held
143,302.24 0.00 0.00 0.00 143,302.24
for trading
Bills payables 1,582,386,767.93 0.00 0.00 0.00 1,582,386,767.93
Accounts payables 871,553,210.51 0.00 0.00 0.00 871,553,210.51
Other payables 3,292,407,989.79 0.00 0.00 0.00 3,292,407,989.79
Non-current liabilities
91,576,066.33 0.00 0.00 0.00 91,576,066.33
due within one year
Lease liabilities 0.00 13,186,526.27 11,885,268.05 0.00 25,071,794.32
Long-term borrowings 0.00 466,780,252.78 360,000,000.00 0.00 826,780,252.78
Subtotal: 8,356,552,171.89 479,966,779.05 371,885,268.05 0.00 9,208,404,218.99
256
Annual Report
2021
② 31 December 2020
Item Within 1 year 1-2 years 2-5 years Over 5 years Total
Financial assets:
Monetary funds 12,289,098,613.19 0.00 0.00 0.00 12,289,098,613.19
Financial assets held for
28,328,748.72 0.00 0.00 0.00 28,328,748.72
trading
Bills receivables 1,343,013,818.54 0.00 0.00 0.00 1,343,013,818.54
Accounts receivables 2,447,406,222.52 0.00 0.00 0.00 2,447,406,222.52
Other receivables 177,240,162.81 0.00 0.00 0.00 177,240,162.81
Non-current assets due
19,934,376.07 0.00 0.00 0.00 19,934,376.07
within one year
Long-term receivables 0.00 584,284.36 0.00 0.00 584,284.36
Subtotal: 16,305,021,941.85 584,284.36 0.00 0.00 16,305,606,226.21
Financial liabilities:
Short-term borrowings 2,110,942,804.06 0.00 0.00 0.00 2,110,942,804.06
Financial liabilities held
212.07 0.00 0.00 0.00 212.07
for trading
Bills payables 1,087,759,353.31 0.00 0.00 0.00 1,087,759,353.31
Accounts payables 832,632,206.53 0.00 0.00 0.00 832,632,206.53
Other payables 2,847,688,065.59 0.00 0.00 0.00 2,847,688,065.59
Non-current liabilities
8,539,077.05 0.00 0.00 0.00 8,539,077.05
due within one year
Lease liabilities 0.00 6,266,093.09 3,551,686.95 9,817,780.04
Long-term borrowings 0.00 0.00 360,324,027.48 0.00 360,324,027.48
Subtotal: 6,887,561,718.61 6,266,093.09 363,875,714.43 0.00 7,257,703,526.13
2. Capital management
The capital management policies are made to keep the continuous operation of the Company, to enhance the return to
shareholders, to benet other stakeholders and to maintain the best capital structure to minimize the cost of capital.
For the maintenance or adjustment of the capital structure, the Company might adjust financing method, the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares and other equity instruments or make an asset
disposal to reduce the liabilities.
The Company monitors the capital structure with gearing ratio (calculated by dividing total liabilities by total assets). On 31
December 2021, the Company’s gearing ratio is 35.12% (31 December 2020: 31.68%).
257
3. Transfer of financial assets
(1). Financial assets which are transferred but have not been derecognised in their entirety
Nil.
(2). Financial assets which have been transferred and ceased to be recognised but still have involvement with the transferor
On 31 December 2021, the Company's carrying amounts of bank acceptance bills undue and endorsed to suppliers for settling
account payables is RMB186,290,992.91 (31 December 2020: RMB327,932,359.58); the Company has no commercial
acceptance bills undue and endorsed to suppliers for settling account payables (31 December 2020: RMB0.00). The Company's
bank acceptance bill discounted to bank is RMB67,908,033.05 (Last year: RMB208,990,917.90). On 31 December 2021,
the due dates fall into 1 to 12 months. In accordance with the Law of Negotiable Instruments, the holders of the bills have a
right of recourse against the Company if payment is refused by the bank of acceptance (the“Continuing Involvement”). In
the opinion of the Company, the Company has transferred substantially all risks and rewards. Accordingly, their full carrying
amounts and the associated account payables have been derecognised. The maximum loss and the undiscounted cash flows
from the Continuing Involvement and repurchasing is equal to their carrying amounts. In the opinion of the Company, the fair
values of the Continuing Involvement are not signicant.
During 2021, no gain or loss was generated by the Company on the date of transfer of the bills. The Company had no current
or accumulated gain or expense arising from the Continuing Involvement in nancial assets which had been derecognised. The
endorsement was incurred evenly 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
Closing balance of fair value
Level 1 Level 2 Level 3
Item
fair value fair value fair value Total
measurement measurement measurement
I. Continuous fair value
measurement
（Ⅰ）Financial assets held for trading 177,262,015.99 7,376,328.32 0.00 184,638,344.31
1. Financial assets at fair value through prot or loss
（1）Debt instrument investments 940,162.94 0.00 0.00 940,162.94
（2）Equity instrument investments 176,321,853.05 0.00 0.00 176,321,853.05
（3）Derivative nancial assets 0.00 7,376,328.32 0.00 7,376,328.32
2. Financial asset designated as at fair value through prot or loss
（1）Investments in debt instruments
（2）Investments in equity instruments
(II) Other debt investments
(III) Other investments in equity instruments 212,384,666.97 0.00 196,497,710.45 1,408,882,377.42
(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 continuously measured at fair value 389,646,682.96 7,376,328.32 1,196,497,710.45 1,593,520,721.73
258
Annual Report
2021
Closing balance of fair value
Level 1 Level 2 Level 3
Item
fair value fair value fair value Total
measurement measurement measurement
(VI) Held-for-trading nancial liabilities
1. Financial liabilities at fair value through prot or loss 0.00 143,302.24 0.00 143,302.24
Of which: Issued tradable bonds
Derivative nancial liabilities 0.00 143,302.24 0.00 143,302.24
Others
2. Financial liabilities designated as at fair value through prot or
loss
Total liabilities measured at fair value on a recurring basis 0.00 143,302.24 0.00 143,302.24
II. Non-recurring fair value measurement
( Ⅰ )Held-for-sale assets 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
In 2021, there were no transfers of the fair value measurements 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 value
measurement items
√ Applicable □ N/A
The basis for determining the market price of level 1 fair value measurement items is when listed and traded on the Shanghai
Stock Exchange, Shenzhen Stock Exchange, Hong Kong Stock Exchange and the United States, its fair value is determined by
the closing price on the last trading day of the reporting period.
3. Valuation techniques and qualitative and quantitative information of key parameters adopted for continuous and non-
continuous level 2 fair value measurement items
√ Applicable □ N/A
Valuation techniques and quantitative and quantitative information of key parameters adopted for level 2 fair value
measurement items (1) The derivative financial instruments are foreign exchange forward contracts, and the fair value is
calculated and determined based on the corresponding forward exchange rate of the expiring contract. (2) The fair value
of some other equity instruments held is determined by the equity value recorded in the equity notice provided by the
counterparty at the end of the year.
Fair value at the End
Item Valuation techniques
of the Period
The fair value is measured at the forward exchange rate quoted by
Derivative nancial assets 7,376,328.32
the respective matured contract
The fair value is measured at the forward exchange rate quoted by
Derivative nancial liabilities 143,302.24
the respective matured contract
259
4. Valuation techniques and qualitative and quantitative information of key parameters adopted for continuous and non-
continuous level 3 fair value measurement items
√ Applicable □ N/A
The fair value of some other equity instruments held is the best estimate based on the cost or the present value of expected
future net cash ows.
5. Reconciliation between opening and closing carrying amounts and sensitivity analysis of
unobservable parameters for continuous level 3 fair value measurement items
√ Applicable □ N/A
Fair value at the
Item Valuation techniques
End of the Period
Other equity instrument investments- Shanghai Yunfeng Xinchuang Equity
94,040,236.88 Net asset method
Investment Center
Other equity instrument investments - Shanghai JingYi Investment Center (L.P.) 66,175,062.50 Net asset method
Other equity instrument investments-Qianhai Equity Investment Fund(L.P.) 264,930,500.00 Net asset method
Other equity instrument investments –Apricot Forest, Inc 137,711,800.01 Income approach
Other equity instrument investments – China Resources Bank of Zhuhai Co., Ltd. 164,395,200.00 Market method
Other equity instrument investments -PANTHEOND,L.P. 3,715,566.69 Net asset method
Other equity instrument investments –GLOBAL HEALTH SCIENCE 235,133,216.46 Net asset method
Other equity instrument investments –SCC VENTURE VI 2018-B,L.P. 6,615,626.07 Net asset method
Other equity instrument investments –Nextech V Oncology S.C.S., SICAV-SIF 30,667,263.04 Net asset method
Other equity instrument investments - Yizun Biopharmaceutics (Shanghai) Co.,
59,999,953.41 latest nancing price
Ltd.
Other equity instrument investments - Zhuhai Medpha Biotechnology Co., Ltd. 6,971,000.00 latest nancing price
Other equity instrument investments- Beijing Luzhu Biotechnology Co., Ltd. 41,944,015.67 latest nancing price
Other equity instrument investments -Others 84,198,269.72 Cost method
Total 1,196,497,710.45
6. In case of transfers among levels for the current period, explain the transfer reasons and policies for determining
transfer time point for continuous fair value measurement items
□ Applicable √ N/A
7. Changes in valuation techniques for the current period and reasons for changes
□ Applicable √ N/A
8. Fair value of financial assets and liabilities not measured at fair value
□ Applicable √ N/A
9. Others
□ Applicable √ N/A
260
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2021
X RELATED PARTIES AND RELATED TRANSACTIONS
1. Parent company of the Company
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Percentage of the Percentage of the
Name of
Place of Registered entity's shareholding entity's voting rights
parent Nature of business
registration capital held by the parent held by the parent
company
company (%) company (%)
Shenzhen investment and establishment
Baiyeyuan of industry, domestic
Shenzhen 80,000,000.00 46.95 46.95
Investment commerce, and material
Co., Ltd. supply and marketing
Notes to the parent company of the Company:
The parent company of the Company is Shenzhen Baiyeyuan Investment Co., Ltd., which was established on 21 January
1999, and its main business scope is investment and establishment of industry, domestic commerce, and material supply and
marketing.
The ultimate controller of the Company: Zhu Baoguo
Other descriptions:
(1) Parent company's registered capital and its changes
Balance at the Beginning Increase for Decrease for Balance at the End
Name of parent company
of the Period the Period the Period of the Period
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 their changes
Balance at the Balance at the
Increase for Decrease for
Name of parent company Beginning of Proportion End of Proportion
the Period the Period
the Period the Period
Shenzhen Baiyeyuan
895,653,653.00 45.87% 0.00 0.00 895,653,653.00 46.95%
Investment Co., Ltd.
2. The Company's subsidiaries
For details of the subsidiaries of the Company, please refer to notes Ⅶ .1.
√ Applicable □ N/A
Please refer to notes Ⅶ .1. for the details of subsidiaries.
261
3. Joint ventures and associates of the Company
For details of the signicant joint ventures or associates of the Company, please see the notes.
√ Applicable □ N/A
Please refer to notes Ⅶ .2. for the details of the joint ventures and associates.
Other joint ventures or associates entered into transactions with the Company during the Period, or during 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
Novastage Pharmaceuticals (Shenzhen), 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
Innite Intelligence Pharma Associate
Zhuhai Sanmed Gene Diagnostics Ltd. A company controlled by the associate
Zhuhai Hengqin Weisheng Precision Medicine Technology Co., Ltd. A company controlled by the 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 Health Deer 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 One Winner Medical Technology Co., Ltd. Others
Directors, Supervisors and other senior management personnel Others
262
Annual Report
2021
5. Related 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
Description of related Amount for the Amount for the
Related party
party transaction Period Previous Period
Guangdong Blue Treasure Pharmaceutical Co., Ltd. Raw materials 2,786,053.10 3,938,902.64
Zhuhai Sanmed Biotech Inc. Finished goods 28,558.55 184,070.79
Zhuhai Medpha Biotechnology Co., Ltd. Raw materials 0.00 27,079.65
Sichuan Healthy Deer Hospital Management Co., Ltd. Finished goods,
887,872.67 0.00
and its subsidiaries Business promotion
Finished goods,
Jiangsu One Winner Medical Technology Co., Ltd. 408,427.00 0.00
Business promotion
Zhuhai Sanmed Gene Diagnostics Ltd. Testing 14,377.36 52,415.09
L&L Biopharma, Co. Ltd. R&D 943,396.20 0.00
Shenzhen City Youbao Technology Co., Ltd. Business promotion 1,062,850.00 0.00
Zhuozhou Jingnan Yongle Golf Club Co., Ltd. Membership service 84,037.00 0.00
Innite Intelligence Pharma R&D 148,514.85 0.00
Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. Electricity, steam 212,585,953.81 157,947,440.20
Sales of goods, provision of services
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Description of related Amount for the Amount for the
Related party
party transaction Period Previous Period
Guangdong Blue Treasure Pharmaceutical Co., Ltd. Finished goods 63,972,886.45 41,584,936.24
Macromolecule
Zhuhai Medpha Biotechnology Co., Ltd. 0.00 209,736.83
materials
Zhuhai Sanmed Gene Diagnostics Ltd. Finished goods 577,453.14 428,384.87
Sichuan Healthy Deer Hospital Management Co., Ltd.
Finished goods 4,951,551.99 0.00
and its subsidiaries
Water, electricity,
Zhuhai Sanmed Biotech Inc. 667,998.89 1,337,996.41
power and others
Descriptions of related party transactions with respect to the sales and purchase of goods, rendering and receipt of services
□ Applicable √ N/A
(2). Related entrusted management/contracting and entrusting management/outsourcing
Table 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
263
(3). Related party leases
The Company as a lessor
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Lease income Lease income
Type of leased
Name of lessee recognised for the recognised for the
assets
Period Previous Period
Zhuhai Sanmed Biotech Inc. Buildings 2,226,299.00 3,067,097.00
Zhuhai Sanmed Gene Diagnostics Ltd. Buildings 240,000.00 140,000.00
Shenzhen Baiyeyuan Investment Co., Ltd. Buildings 18,891.76 18,891.76
Buildings &
Novastage Pharmaceuticals (Shenzhen), Ltd. 315,457.80 81,594.55
Equipment
Shenzhen Taitelixing Investment Development Co., Ltd. Buildings 18,720.00 18,720.00
Shenzhen Healthy Deer Information Technology Co., Ltd. Buildings 17,174.32 17,174.32
Shenzhen City Youbao Technology Co., Ltd. Buildings 17,174.32 17,174.32
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
Performance
Name of guaranteed party Guarantee amount Actual date of event Guarantee maturity date
completed or not
Jinguan Electric Power 4,800.00 2021/2/23 2022/2/23 No
Jinguan Electric Power 10,000.00 2021/3/3 2022/2/25 No
Jinguan Electric Power 4,000.00 2021/7/8 2022/7/8 No
Jinguan Electric Power 5,000.00 2021/7/14 2022/7/14 No
Jinguan Electric Power 3,000.00 2021/7/16 2022/6/16 No
Jinguan Electric Power 3,000.00 2021/8/12 2022/8/12 No
Jinguan Electric Power 3,200.00 2021/9/23 2022/9/22 No
Jinguan Electric Power 3,200.00 2021/10/11 2022/10/11 No
Jinguan Electric Power 3,800.00 2021/10/13 2022/10/12 No
Sanmed Biotech 2,900.00 2021/1/1 2021/5/6 Yes
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, the Company and its
controlling subsidiary Jiaozuo Joincare jointly provided a revolving guarantee line with balance of no more than RMB350
million (inclusive) for Jinguan Electric Power (specific guarantors shall be specified in the guarantee contracts) according
to“the Resolution on Providing Loan Guarantee for Jinguan Electric Power by the Company and Its Controlling Subsidiary
Jiaozuo Joincare”considered and approved at the First Extraordinary General Meeting of the Company on 6 July 2016, with
the guarantee period starting from the date when the resolution was considered and approved to 31 December 2019. Pursuant
264
Annual Report
2021
to“the Resolution on Providing Loan Guarantee for Jinguan Electric Power by the Company and Its Controlling Subsidiary
Jiaozuo Joincare”considered and approved at the 2017 Annual General Meeting of the Company on 22 May 2018, the
Company and its controlling subsidiary Jiaozuo Joincare jointly provided a revolving guarantee line with balance of no more
than RMB350 million (inclusive) for Jinguan Electric Power (specic guarantors shall be specied in the guarantee contracts),
with the guarantee period starting from the date when the resolution was considered and approved to 31 December 2022. In
order to ensure the stable development of production and operation of Jinguan Electric Power, the revolving guarantee line
with balance of no more than RMB350 million (inclusive) for Jinguan Electric Power (specic guarantors shall be specied in
the guarantee contracts) considered and approved at the 2017 General Meeting of the Company was changed to the revolving
guarantee line with balance of no more than RMB450 million (inclusive) on 16 April 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
31 December 2022.
As at 31 December 2021, the Company provided Jinguan Electric Power with guarantees for loans of RMB400 milliom;
RMB100 million in Shenzhen Branch of China Zheshang Bank, RMB80 million in Shenzhen Branch of Nanyang Commercial
Bank, and RMB220 million in Shenzhen Branch of China Everbright Bank.
In order to ensure the safety of secured loans, Jinguan Electric Power provided counter guarantees for the said guarantees
provided by the Company based on its owned assets, and undertook that it would unconditionally provide mutual guarantees
for the Company or its controlling subsidiary designated with total line of no more than RMB450 million (inclusive) whenever
the Company deemed necessary.
② The Company has provided a“Letter of Undertaking for Counter Guarantee”, pursuant to which it has undertaken to provide
a joint liability guarantee for 33.07% of the obligation of Livzon Group under the guarantee provided to Livzon MABPharm
Inc. * ( 珠海市丽珠单抗生物技术有限公司 ), and the guarantee period of which will be expired on the expiry date of Livzon
Group's obligation thereunder.
③ Zhuhai Liying Investment Management Partnership (Limited Partnership) ( 珠 海 丽 英 投 资 管 理 合 伙 企 业 ( 有 限 合 伙 )), the
other shareholder of Livzon Diagnostics, has provided a“Letter of Undertaking for Counter Guarantee”, pursuant to which
it has undertaken to provide a joint liability guarantee for 9.025% of the obligation of Livzon Group under the guarantee
provided to Livzon Diagnostics, and the guarantee period of which will be expired on the expiry date of Livzon Group's
obligation thereunder.
④ Zhuhai Zhong Hui Yuan Investment Partnership (Limited Partnership) ( 珠 海 中 汇 源 投 资 合 伙 企 业（ 有 限 合 伙 ）), the
other shareholder of Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc. ( 丽 珠 集 团 新 北 江 制 药 股 份 有 限 公
司 ), has provided a“Letter of Undertaking for Counter Guarantee”, pursuant to which it has undertaken to provide a joint
liability guarantee for 8.44% of the obligation of Livzon Group under the guarantee provided to Livzon Group Xinbeijiang
Pharmaceutical Manufacturing Inc.( 丽珠集团新北江制药股份有限公司 ) and the guarantee period of which will be expired
on the expiry date of Livzon Group's obligation thereunder.
⑤ Other shareholders of Zhuhai Sanmed Biotech Inc. ( 珠 海 圣 美 生 物 诊 断 技 术 有 限 公 司 ) including Li Lin and Shi Jianfeng
have provided“Letter of Undertaking for Counter Guarantee”, pursuant to which they have undertaken to provide a joint
liability guarantee for a total of 74.0822% of the obligation of Livzon Group under the guarantee provided to Zhuhai Sanmed
Biotech Inc. ( 珠 海 圣 美 生 物 诊 断 技 术 有 限 公 司 ) and the guarantee period of which will be expired on the expiry date of
Livzon Group's obligation under the guarantee.
⑥ On 24 December 2020, Livzon Group signed a guarantee agreement with Zhuhai Branch of Industrial and Commercial Bank
of China Limited * ( 中 国 工 商 银 行 股 份 有 限 公 司 珠 海 分 行 ) in the amount of RMB29 million to secure the credit facility
granted to Zhuhai Sanmed Biotech Inc. ( 珠海圣美生物诊断技术有限公司 ) by Zhuhai Branch of Industrial and Commercial
Bank of China Limited * ( 中国工商银行股份有限公司珠海分行 ) and the guarantee period of which will be expired on 24
December 2021. During the Period, Livzon Group provided guarantee to Zhuhai Sanmed Biotech Inc. ( 珠海圣美生物诊断技
术 有 限 公 司 ) at an actual amount of RMB29 million. As at 31 December 2021, the total balance of actual amount guaranteed
by Livzon Group to Zhuhai Sanmed Biotech Inc. ( 珠海圣美生物诊断技术有限公司 ) was nil.
265
(5). Lending funds of related parties
□ Applicable √ N/A
(6). Asset transfer and debt restructuring between related parties
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Amount for the Amount for the
Related party Description of related party transaction
current period prior period
L&L Biopharma, Co., Ltd.
Acquisition of technical know-how 0.00 3,773,584.80
( 上海健信生物医药科技有限公司 )
Zhuhai Sanmed Biotech Inc. Transfer of equity interest in Zhuhai
0.00 20,000,000.00
( 珠海圣美生物诊断技术有限公司 ) Sanmed Gene Diagnostics Ltd.
Zhuhai Hengqin Weisheng Precision
Medicine Technology Co., Ltd. Sales of equipment 17,699.12 0.00
( 珠海横琴维胜精准医学科技有限公司 )
(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 1734.05 1,719.66
Remuneration of key management personnel is disclosed as follows:
2021
Unit: 10,000 Yuan Currency: RMB
Fees of Salaries Housing Compensation
Social
Director/ and provident Bonus for loss of Others Total
insurance
Supervisor allowances fund oce
Directors:
Zhu Baoguo
330.94 0.00 6.22 2.40 0.00 0.00 0.00 339.56
( 朱保国 )
Liu Guangxia ( 刘广霞 ) 330.94 17.91 8.01 2.40 0.00 0.00 0.00 359.27
Yu Xiong ( 俞雄 ) 0.00 240.00 0.00 0.00 95.00 0.00 0.00 335.00
Qiu Qingfeng ( 邱庆丰 ) 0.00 135.00 6.22 2.40 30.00 0.00 0.00 173.62
Lin Nanqi ( 林楠棋 ) 0.00 135.00 6.22 2.40 30.00 0.00 0.00 173.62
Cui Liguo ( 崔利国 ) 10.00 0.00 0.00 0.00 0.00 0.00 0.00 10.00
Huo Jing ( 霍静 ) 10.00 0.00 0.00 0.00 0.00 0.00 0.00 10.00
Qin Yezhi ( 覃业志 ) 10.00 0.00 0.00 0.00 0.00 0.00 0.00 10.00
Peng Juan（彭娟） 3.60 0.00 0.00 0.00 0.00 0.00 0.00 3.60
Supervisors:
Yu Xiaoyun ( 余孝云 ) 4.00 38.16 6.01 2.18 17.95 0.00 0.00 68.29
Peng Jinhua ( 彭金花 ) 4.00 32.73 0.00 1.36 0.00 0.00 0.00 38.09
Xie Youguo（谢友国） 4.00 36.35 0.00 1.17 2.86 0.00 0.00 44.38
Other senior management:
Zhao Fenguang ( 赵凤光 ) 0.00 135.00 6.22 2.40 25.00 0.00 0.00 168.62
Total 707.48 770.14 38.88 16.74 200.81 0.00 0.00 1,734.05
Note: Mr. Zhu Baoguo serves as the chairman of Livzon, a controlled subsidiary of the Company; and Mr. Yu Xiong and Mr.
Qiu Qingfeng serve as non-executive directors of Livzon. The remuneration listed above does not include the part paid by
Livzon. Please refer to Livzon's 2021 Annual Report for details.
266
Annual Report
2021
2020
Unit: 10,000 Yuan Currency: RMB
Fees of Salaries Housing Compensation
Social
Director/ and provident Bonus for loss of Others Total
insurance
Supervisor allowances fund oce
Directors:
Zhu Baoguo
312.52 0.00 4.33 2.16 0.00 0.00 0.00 319.01
( 朱保国 )
Liu Guangxia ( 刘广霞 ) 312.52 0.00 4.35 2.16 0.00 0.00 0.00 319.03
Qiu Qingfeng ( 邱庆丰 ) 0.00 260.09 4.35 2.16 0.00 0.00 0.00 266.60
Lin Nanqi ( 林楠棋 ) 0.00 82.04 4.35 2.16 68.32 0.00 0.00 156.87
Cui Liguo ( 崔利国 ) 9.60 0.00 0.00 0.00 0.00 0.00 0.00 9.60
Huo Jing ( 霍静 ) 9.60 0.00 0.00 0.00 0.00 0.00 0.00 9.60
Qin Yezhi ( 覃业志 ) 5.60 0.00 0.00 0.00 0.00 0.00 0.00 5.60
Hu Qin ( 胡庆 )（Resigned ） 4.00 0.00 0.00 0.00 0.00 0.00 0.00 4.00
Supervisors:
Yu Xiaoyun ( 余孝云 ) 3.60 26.01 3.81 1.51 16.93 0.00 0.00 51.87
Peng Jinhua ( 彭金花 ) 3.60 60.09 0.00 2.16 34.83 0.00 0.00 100.67
Xie Youguo 谢友国 3.60 36.82 0.00 2.01 2.86 0.00 0.00 45.29
Other senior management:
Yu Xiong ( 俞雄 ) 0.00 109.37 0.00 0.00 70.30 0.00 0.00 179.67
Zhao Fengguang ( 赵凤光 ) 0.00 91.22 4.35 2.16 61.98 0.00 0.00 159.71
Tang Lingzhi ( 汤凌志 )
0.00 60.81 4.35 2.16 24.83 0.00 0.00 92.14
（Resigned）
Total 664.65 726.45 29.90 18.61 280.05 0.00 0.00 1,719.66
Note: Mr. Zhu Baoguo serves as the chairman of Livzon, a controlled subsidiary of the Company; and Mr. Yu Xiong and Mr.
Qiu Qingfeng serve as non-executive directors of Livzon. The remuneration listed above does not include the part paid by
Livzon. Please refer to Livzon's 2020 Annual Report for details.
(8). Other related transactions
√ Applicable □ N/A
The Company, Livzon Group (a subsidiary of the Company), International Limited (“Livzon International”, a wholly-owned
subsidiary of the Company), Joincare Pharmaceutical Group Industry Co., Ltd. (“Joincare BVI”, a wholly-owned subsidiary
of the Compang), YF Pharmab Limited (“YF”) and Livzon Biologics Limited (“Livzon Cayman”, a controlling company
of the Livzon Group), as well as its controlled entities, including Livzon Biologics Hong Kong Limited ( 丽 珠 生 物 科 技 香 港
有限公司 ), (“Livzon HK”), Zhuhai Livzon Biotechnology Co., Ltd. ( 珠海市丽珠生物医药科技有限公司 )(“LivzonBio”),
Livzon MABPharm Inc. ( 珠 海 市 麗 珠 單 抗 生 物 技 術 有 限 公 司 ) (“Livzon MAB”), Zhuhai Kadi Medical Biotechnology
Inc. ( 珠 海 市 卡 迪 生 物 医 药 有 限 公 司 ) (“Kadi”) (collectively known as the“Subsidiaries under Livzon Cayman”) have
jointly entered into the reorganization framework agreement (the“Reorganization Framework Agreement”), pursuant to
which the parties have agreed to implement the proposed reorganization of shareholding structures of the Subsidiaries under
Livzon Cayman, so that LivzonBio will become the controlling company of the domestic and overseas Subsidiaries under
Livzon Cayman. On 8 January 2021, the Resolution on the Connected Transactions in relation to the Reorganization of the
Shareholding Structures of the Controlling Subsidiaries of the Company was passed at the 2021 first extraordinary general
meeting of the Livzon Group, at which the above transaction was considered and approved. Details of the transaction were set
out as below:
A. The equity transfer and capital increase of LivzonBio: the Livzon Group and the Company agreed to acquire 51% and 49%
equity interest in LivzonBio from Livzon HK at a consideration of RMB24,316,290 and RMB23,362,710, respectively.
267
Meanwhile, the registered capital of LivzonBio was increased from RMB250 million to RMB600 million with pro rata
registered capital subscription from the Livzon and the Company on the basis of RMB1 of the registered capital for RMB1 of
the subscription, of which Livzon Group contributed RMB281,722,419.00 and the Company contributed RMB270,674,481.00,
respectively.
B. Transfer to the domestic market from the overseas through Series A Financing:Livzon Group and YF made investment in
LivzonBio, pursuant to which Livzon Group and YF subscribed for the increased registered capital of RMB147,401,875 and
RMB74,954,742 of LivzonBio at a consideration of US$98,299,320 (equivalent to RMB637,421,940.54) and US$50,000,000
(equivalent to RMB324,225,000.00), respectively.
C. Equity transfer of Livzon Mab: LivzonBio acquired the 100% equity interest of Livzon MAB from Livzon HK at a
consideration of RMB1.48 billion.
D. Equity transfer and capital reduction of Livzon HK: LivzonBio acquired the 100% equity interest of Livzon HK from
Livzon Cayman at a consideration of US$6.10 million (equivalent to RMB39,445,700). Livzon HK returned capital to Livzon
Cayman, so that Livzon Cayman recovered part of the investment amount in Livzon HK, which is equivalent to the total
capital reduction paid to Livzon International, Joincare BVI and YF upon capital reduction of Livzon Cayman.
E. Streamline the overseas shareholding structure: Each of Livzon International, YF and Joincare BVI issued a Repurchase
Letter to Livzon Cayman, pursuant to which Livzon Cayman repurchased its shares held by them. As at 13 May 2021, Livzon
Cayman had repurchased an aggregate of 137,074,829 issued shares and had fully settled the corresponding consideration. The
above share repurchases have been completed and Livzon Cayman only preserves 1 issued ordinary share, which will be held
by Livzon International, and Livzon Cayman has become a wholly-owned subsidiary of Livzon International.
6. Amounts due from/to related parties
(1). Amounts due from related parties
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Item Related parties Provision for Provision for
Book balance Book balance
bad debts bad debts
Bills receivables Guangdong Blue Treasure Pharmaceutical Co. Ltd. 5,492,960.00 0.00 0.00 0.00
Accounts receivables Guangdong Blue Treasure Pharmaceutical Co. Ltd. 18,889,500.00 490,875.00 5,092,960.00 52,457.49
Accounts receivables Zhuhai Sanmed Gene Diagnostics Inc. 224,023.83 8,578.07 38,563.14 374.06
Sichuan Healthy Deer Hospital Management Co., Ltd.
Accounts receivables 337,395.02 48,933.97 0.00 0.00
and its subisidaries
Sichuan Healthy Deer Hospital Management Co., Ltd.
Prepayments 0.00 0.00 153,900.00 0.00
and its subisidaries
Prepayments Zhuhai Sanmed Biotech Inc. 211,200.00 0.00 211,200.00 0.00
Prepayments Shenzhen City Youbao Technology Co., Ltd 154,500.00 0.00 0.00 0.00
Prepayments Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. 8,240,517.56 0.00 0.00 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 Jiekang Health Care Co., Ltd. 18,577,246.63 18,577,246.63 18,577,246.63 18,577,246.63
Other receivables Shenzhen Health Deer Technology Co., Ltd. 4,680.00 74.38 0.00 0.00
Other receivables Guangdong Blue Treasure Pharmaceutical Co. Ltd. 1,271,496.55 21,233.99 0.00 0.00
Other receivables Zhuhai Sanmed Biotech Inc. 0.00 0.00 15,000,000.00 415,461.96
Other receivables Zhuhai Sanmed Gene Diagnostics Inc. 5,265.00 87.93 10,530.00 291.65
Non-current assets Zhuhai Zhong Hui Yuan Investment Partnership
0.00 0.00 10,967,767.26 0.00
due within one year: (Limited Partnership)
Other non-current
L&L Biopharma, Co. Ltd. 0.00 0.00 1,740,994.29 0.00
assets:
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Annual Report
2021
(2). Amount due to related parties
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End Balance at the Beginning
Item Related parties
of the Period of the Period
Bills payables Guangdong Blue Treasure Pharmaceutical Co. Ltd. 379,960.00 0.00
Accounts
Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. 0.00 31,681,080.57
payables
Dividends Zhuhai Zhong Hui Yuan Investment Partnership
0.00 1,466,606.04
payable (Limited Partnership)
Sichuan Healthy Deer Hospital Management Co., Ltd.
Other payables 8,936.17 0.00
and its subisidaries
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 0
Total equity instruments exercised during the Current Period by the Company 10,082,440
Total equity instruments of the Company expired during the Current Period 0
Range of exercise price of share option of the Company outstanding and remaining
Note
term of contract as at the End of the Period
Range of exercise price of other equity instruments of the Company and remaining
-
term of contract as at the End of the Period
Note: Share Option
① On 13 December 2018,“the Resolution on 2018 Share Options Incentive Scheme (Draft) and its summary”,“the Resolution
on Administrative Measures for Appraisal System of the 2018 Share Options Incentive Scheme of Livzon Pharmaceutical
Group Inc.”and“the Resolution on the General Meeting for Granting Mandate to the Board to Deal with Matters Regarding
the 2018 Share Options Incentive Scheme”were considered and approved at the 2018 Third Extraordinary General Meeting.
On 21 December “the Resolution in Relation to the Adjustment of the Quantity to be Granted and the List of Incentive
Participants of the Grant under 2018 Share Options Incentive Scheme”and“the Resolution on the First Grant of Share
Options to Incentive Participants”were considered and approved at the 6th Meeting of the 7th Session of the Board and the 5th
Meeting of the 7th Session of the Supervisory Committee. On 24 January 2019,“the Resolution in Relation to the Adjustment
of the Quantity to be Granted and the List of Incentive Participants of the Grant under 2018 Share Options Incentive Scheme”
was considered and approved at the 7th Meeting of the 7th Session of the Board and the 6th Meeting of the 7th Session of
the Supervisory Committee, pursuant to which,21 December 2018 was set as the date of grant, on which 35.72 million share
options were granted to 320 incentive participants at an exercise price of RMB8.21 per share option.
Pursuant to“the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not Yet Exercised
under the 2018 Share Option Incentive Plan”considered and approved at the 12th Meeting of the 7th Session of the Board
of the Company on 10 June 2019, 3.95 million share options that have been granted but not yet exercised by 39 Incentive
Participants who resigned due to personal reasons and did not meet the incentive conditions are canceled. After the completion
of the cancellation, the number of Incentive Participants for the first grant of the 2018 share options incentive scheme of the
Company was adjusted from 320 to 281, while the number of share options under the first grant was adjusted from 35.72
269
million to 31.77 million.
Pursuant to“the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not Yet Exercised
under the 2018 Share Option Incentive Plan”considered and approved at the 17th Meeting of the 7th Session of the Board
of the Company on 28 October 2019, 2.46 million share options that have been granted but not yet exercised by 23 Incentive
Participants who resigned due to personal reasons and did not meet the incentive conditions are canceled. After the completion
of the cancellation, the number of Incentive Participants for the first grant of the 2018 share options incentive scheme of the
Company was adjusted from 281 to 258, while the number of share options under the first grant was adjusted from 31.77
million to 29.31 million.
Pursuant to“the Resolution on Fulfillment of Exercise Conditions for the First Exercise Period of the First Grant under the
2018 Share Options Incentive Scheme”considered and approved at the 19th Meeting of the 7th Session of the Board of the
Company on 4 December 2019, it was believed that the exercise conditions for the rst exercise period of the rst grant under
the Incentive Scheme had been achieved, and it was agreed that the 258 incentive participants who had fulfilled the exercise
conditions might exercise the share options on voluntary basis. The number of exercisable share options was 11.724 million,
and the exercise period was from 21 December 2019 to 20 December 2020.
Pursuant to“the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not Yet Exercised
under the 2018 Share Option Incentive Plan”considered and approved at the 30th Meeting of the 7th Session of the Board
of the Company on 14 August 2020, 1.488 million share options that have been granted but not yet exercised by 23 Incentive
Participants under the rst grant who resigned due to personal reasons and did not meet the incentive conditions are canceled.
After the completion of the cancellation, the number of Incentive Participants for the first grant of the 2018 share options
incentive scheme of the Company was adjusted from 258 to 235, while the number of share options under the first grant was
adjusted from 18,928,900 to 17,444,100.
Pursuant to“the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not Yet Exercised
under the 2018 Share Option Incentive Plan”considered and approved at the 33rd Meeting of the 7th Session of the Board
of the Company on 16 November 2020, 96,000 share options that have been granted but not yet exercised by 2 Incentive
Participants under the rst grant who resigned due to personal reasons and did not meet the incentive conditions are canceled.
After the completion of the cancellation, the number of Incentive Participants for the first grant of the 2018 share options
incentive scheme of the Company was adjusted from 235 to 233, while the number of share options under the first grant was
adjusted from 16,940,000 to 16,844,400.
As at 31 December 2021, the number of share options exercised for the Period was 20,503,580 and the number of outstanding
share options was 6,484,420.
② Pursuant to“the Resolution on the Grant of Share Options to Incentive Participants under the Reserved Grant”considered and
approved at the 16th Meeting of the 7th Session of the Board of the Company on 23 September 2019, 23 September 2019 was
set as the date of grant, on which 8.99 million share options were granted to 187 incentive participants at an exercise price of
RMB10.47 per share option.
Pursuant to“the Resolution in Relation to the Adjustment of the Quantity to be Granted and the List of Incentive Participants
of the Reserved Grant under 2018 Share Options Incentive Scheme”considered and approved at the 17th Meeting of the 7th
Session of the Board of the Company on 28 October 2019, the number of Incentive Participants for the Reserved Grant of
share options was adjusted from 187 to 186, while the number of share options under the Reserved Grant was adjusted from
8.99 million to 8.97 million.
Pursuant to“the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not Yet Exercised
under the 2018 Share Option Incentive Plan”considered and approved at the 30th Meeting of the 7th Session of the Board
of the Company on 14 August 2020, 1.88 million share options that have been granted but not yet exercised by 28 Incentive
Participants under the Reserved Grant who resigned due to personal reasons and did not meet the incentive conditions are
canceled. After the completion of the cancellation, the number of Incentive Participants for the Reserved Grant of the 2018
Share Options Incentive Scheme of the Company was adjusted from 186 to 158, while the number of share options under the
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Annual Report
2021
Reserved Grant was adjusted from 8.97 million to 7.09 million.
Pursuant to“the Resolution on Fulfillment of Exercise Conditions for the First Exercise Period of the Reserved Grant under
the 2018 Share Options Incentive Scheme”considered and approved at the 31st Meeting of the 7th Session of the Board of
the Company on 27 August 2020, it was believed that the exercise conditions for the rst exercise period of the reserved grant
under the Incentive Scheme had been achieved, and it was agreed that the incentive participants who had fullled the exercise
conditions might exercise the share options on voluntary basis. The number of exercisable share options was 3,545,000, and
the exercise period was from 23 September 2020 to 22 September 2021.
Pursuant to“the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not Yet Exercised
under the 2018 Share Option Incentive Plan”considered and approved at the 33rd Meeting of the 7th Session of the Board
of the Company on 16 November 2020, 450,000 share options that have been granted but not yet exercised by 8 Incentive
Participants under the Reserved Grant who resigned due to personal reasons and did not meet the incentive conditions are
canceled. After the completion of the cancellation, the number of Incentive Participants for the reserved grant of the 2018 share
options incentive scheme of the Company was adjusted from 158 to 150, while the number of share options under the reserved
grant was adjusted from 4,616,500 to 4,166,500.
As at 31 December 2021, the number of share options exercised for the Period was 4,326,286 and the number of outstanding
share options was 2,153,714.
（2）Livzon Group, a subsidiary of the Company
Total equity instruments granted during the Current Period by the Company (share) -
Total equity instruments exercised during the Current Period by the Company (share) 5,752,133
Total equity instruments of the Company expired during the Current Period (share) -
Range of exercise price of share option of the Company outstanding and remaining term
Note 1
of contract as at the end of the Period
Range of exercise price of other equity instruments of the Company and remaining term
Note 2
of contract as at the end of the Period
Note 1: Share Option
① On 5 September 2018,“the Resolution on 2018 Share Options Incentive Scheme (Revised Draft) and its summary”, the
“Resolution on Administrative Measures for Appraisal System of the 2018 Share Options Incentive Scheme of Livzon
Pharmaceutical Group Inc.”and“the Resolution on the General Meeting For Granting Mandate to the Board to Deal with
Matters Regarding the 2018 Share Options Incentive Scheme”were considered and approved at the 2018 Third Extraordinary
General Meeting, the 2018 Third Class Meeting of A Shareholders and the 2018 Third Class Meeting of H Shareholders of
Livzon Group. Pursuant to“the Resolution in Relation to the Adjustment of the List of Incentive Participants of the First Grant
and the Quantity to be Granted for the First Grant under 2018 Share Options Incentive Scheme”and“the Resolution on the
Related Matters of the First Grant of 2018 Share Options Incentive Scheme”considered and approved at the 19th Meeting of
the 9th Session of the Board of Livzon Group on 11 September 2018, 11 September 2018 was set as the date of grant, on which
17,475,500 Share Options were granted to 1,050 Incentive Participants at an exercise price of RMB47.01 per share option.
Pursuant to“the Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option Incentive Plan”
considered and approved at the 32nd Meeting of the 9th Session of the Board of Livzon Group on 18 September 2019, 254,995
share options that have been granted but not yet exercised by 17 Incentive Participants who resigned due to personal reasons
and did not meet the incentive conditions are canceled. After the completion of the cancellation, the number of Incentive
Participants for the rst grant of the 2018 share options incentive scheme of Livzon Group was adjusted from 1,050 to 1,033,
271
while the number of share options under the rst grant was adjusted from 22,718,150 to 22,463,155.
Pursuant to“the Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option Incentive Plan”
considered and approved at the 4th Meeting of the 10th Session of the Board of Livzon Group on 23 October 2020, 162,912
share options under the rst exercise period held but not yet exercised by 55 Incentive Participants and 1,535,765 share options
granted and no longer meeting the exercising conditions to 129 Incentive Participants who had resigned due to personal
reasons and were therefore no longer qualified for the incentive are canceled. After the completion of the cancellation, the
number of Incentive Participants for the rst grant of the 2018 Share Options Incentive Scheme of Livzon Group was adjusted
from 1,033 to 904, while the number of share options under the rst grant was adjusted from 22,463,155 to 20,764,478.
Pursuant to“Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option Incentive Plan”
considered and approved at the the 25th meeting of the tenth session of the Board of Livzon Group on 10 November 2021,
323,274 share options under the second exercise period held but not yet exercised by 80 Incentive Participants and 673,422
share options granted and no longer meeting the exercising conditions to 107 Incentive Participants who were no longer
qualied for the incentive are cancelled. After the completion of the cancellation, the number of Incentive Participants for the
first grant of the 2018 Share Options Incentive Scheme of the Company was adjusted from 904 to 797, while the number of
share options under the rst grant was adjusted from 20,764,478 to 19,767,782.
As at 31 December 2021, the number of share options exercised was 14,598,360 and the number of outstanding share options
was 5,169,422.
② Pursuant to“the Resolution relating to Relevant Issues concerning the Reserved Grant under the 2018 Share Options Incentive
Scheme”considered and approved at the 31st Meeting of the 9th Session of the Board of Livzon Group on 28 August 2019,
the Board approved 28 August 2019 as the date of grant, on which 2,535,000 share options were granted to 145 Incentive
Participants and the exercise price was RMB28.87 per A share.
Pursuant to“the Resolution relating to Adjusting the List of Incentive Participants under the Reserved Grant of the 2018 Share
Options Incentive Scheme”considered and approved at the 32nd Meeting of the 9th Session of the Board of Livzon Group
on 18 September 2019, the number of Incentive Participants under the reserved grant of the share option incentive plan was
adjusted from 145 to 170.
On 28 October 2019, the Reserved Grant of the share options has completed registration. During the process of registration, 1
Incentive Participant was no longer qualied for incentive due to his resignation, and 2 Incentive Participants voluntarily gave
up the Share Options to be granted by Livzon Group due to personal reasons. Therefore, the number of Incentive Participants
under the Reserved Grant is adjusted from 170 to 167, and the total number of Share Options under the Reserved Grant is
adjusted from 2,535,000 to 2,524,500.
Pursuant to“the Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option Incentive Plan”
considered and approved at the 4th Meeting of the 10th Session of the Board of Livzon Group on 23 October 2020, 309,900
share options granted and no longer meeting the exercising conditions to 10 incentive participants who had resigned due to
personal reasons and were therefore no longer qualied for the incentive are canceled. After the completion of the cancellation,
the number of Incentive Participants under the Reserved Grant of the 2018 Share Options Incentive Scheme of Livzon Group
was adjusted from 167 to 157, while the number of share options under the Reserved Grant was adjusted from 2,524,500 to
2,214,600.
Pursuant to“Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option Incentive Plan”
considered and approved at the the 25th meeting of the tenth session of the Board of Livzon Group on 10 November 2021,
31,150 share options under the first exercise period held but not yet exercised by 7 Incentive Participants and 129,400 share
options granted and no longer meeting the exercising conditions to 18 incentive participants who were no longer qualied for
the incentive are cancelled. After the completion of the cancellation, the number of Incentive Participants under the Reserved
Grant of the 2018 Share Options Incentive Scheme of the Company was adjusted from 157 to 139, while the number of share
options under the Reserved Grant was adjusted from 2,214,600 to 2,054,050.
As at 31 December 2021, the number of share options exercised was 1,226,494 and the number of outstanding share options
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2021
was 827,556.
Note 2: Other equity incentives
Pursuant to“the Resolution on the Disposal of Certain Equity of a Holding Subsidiary and Connected Transaction”considered
and approved at the 34th Meeting of the 9th Session of the Board of Livzon Group on 8 November 2019, it was agreed that
9.5% equity interests (totally 8,382,100 shares) in Zhuhai Livzon Diagnostics Inc. ( 珠 海 丽 珠 试 剂 股 份 有 限 公 司 ) held by
Livzon Group shall be transferred to Zhuhai Liying Investment Management Partnership (Limited Partnership) ( 珠 海 丽 英
投 资 管 理 合 伙 企 业（ 有 限 合 伙 ）) at the consideration of RMB21,122,892. Pursuant to the Assets Appraisal Report on the
Valuation of the Shareholders'
Equity as a Whole of Zhuhai Livzon Diagnostics Inc. in Relation to the Proposed Equity Transfer by Livzon Pharmaceutical
Group Inc. (Huaya Zhengxin Appraisal Report [2019] No. A02-0011), the valuation of the shareholders’equity as a whole
of Zhuhai Livzon Diagnostics Inc. as at 30 June 2019 was RMB647.3075 million, and the above equity transfer price was
lower than its fair value, therefore it constitutes a share-based payment. The total share-based payment of the transaction is
RMB40.4017 million, which should be amortized within 5 years according to the partnership agreement and share incentive
expenses were recognised due to the share-based payment as a result of the change in the shareholding of the shareholders of
Zhuhai Liying Investment Management Partnership (Limited Partnership).
Pursuant to“the Resolution on the Implementation of Employee Equity Incentive Scheme by a Holding Subsidiary”
considered and approved at the 34th Meeting of the 9th Session of the Board of Livzon Group on 8 November 2019, the
total number of shares of new issuance by Zhuhai Livzon Diagnostics Inc. for implementation of employee equity incentive
scheme shall not be more than 4,643,839 shares, and the scheme participants shall contribute a total of RMB11,702,474.28 to
directly subscribe for the above shares or indirectly subscribe for the such shares through the holding of the limited partnership
shares of the employee shareholding platform. In December 2019, pursuant to the Capital Increase Agreement of Zhuhai
Livzon Diagnostics Inc., the total shares of Zhuhai Livzon Diagnostics Inc. increased from 88,232,932 shares to 92,876,771
shares with par value of RMB1 per share. The increased number of shares were subscribed for by 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 (Limited Partnership) ( 珠海熠臣企业管理咨询合伙企业（有限合伙）) and
Zhuhai Qijing Enterprise Management Consulting Partnership (Limited Partnership) ( 海启靖企业管理咨询合伙企业（有限
合 伙 ）) at the consideration of RMB11,702,474. The subscription price is lower than the fair value, therefore it constitutes a
share-based payment. The total share-based payment of the transaction is RMB20,709,000, which should be amortized within
5 years according to the Partnership Agreement, and share incentive expenses were recognized due to the share-based payment
as a result of the change in the shares/shareholding of the shareholders of Zhuhai Livzon Diagnostics Inc.
On 31 August 2021, the general meeting of LivzonBio considered and approved the Equity Incentive Scheme of Zhuhai
Livzon Biotechnology Co., Ltd. ( 珠 海 市 麗 珠 生 物 醫 藥 科 技 有 限 公 司 ), granting 66,666,667 restricted shares of Livzon
Biologics to incentive participants, among which 42 million shares were granted in the rst batch and 24,666,667 shares were
reserved. Incentive participants indirectly subscribed for the above 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 total share-based payment of the transaction is RMB33.6 million, which should be amortized during the lock-up
period according to the Equity Incentive Scheme of LivzonBio and the Grant Agreement and RMB6,533,300 was amortized in
2021.
2. Equity settled share-based payments
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Determination on fair value of equity instruments as the date of grant Black-Scholes Model, market price
Basis for determining quantity of exercisable equity instruments -
Reasons for signicant discrepancies between estimate for the Period and Previous Period Nil
Accumulated amount of equity settled share-based payments included in capital reserve 169,298,762.65
Total expense recognised for equity settled share-based payments for the Period 34,527,082.60
273
3. Cash settled share-based payments
□ Applicable √ N/A
XII COMMITMENTS AND CONTINGENCIES
1. Significant commitments
√ Applicable □ N/A
Signicant commitments to outsiders as of the balance sheet data, and their nature and amount
（1）Capital commitments
Balance at the End Balance at the Beginning
Contracted but not recognised in the nancial statement
of the Period of the Period
Commitments in relation to acquisition of long-term assets 322,611,032.41 673,900,118.24
Commitments in relation to external investment 8,000,000.00 0.00
Commitments in relation to research and development
309,313,880.64 0.00
expenditures
（2）Operating lease commitments
As at 31 December 2021, the Company signed the non-cancellable operating leases as follows:
Minimum lease payments under non-cancellable operating leases payable Balance at the End of the Period
Within one year from the balance sheet date 21,295,233.00
In the second year from the balance sheet date 13,186,526.27
In the third year from the balance sheet date 9,161,217.34
Subsequent years 3,535,180.85
Total 47,178,157.46
（3）Other commitments
Nil.
（4）Performance of previous commitments
The Company has duly performed the capital expenditure commitments and the operating lease commitments as at 31
December 2021 and the other commitments.
2. Contingencies
(1). Signicant contingencies as of the balance sheet date
□ Applicable √ N/A
(2). Please also make explanations thereof if the Company has no signicant contingency to be disclosed:
√ Applicable □ N/A
As at 31 December 2021, there were no signicant contingencies required to be disclosed by the Company.
3. Others
□ Applicable √ N/A
XIII Events after the Balance Sheet Date
1. Significant non-adjustment events
□ Applicable √ N/A
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2021
2. Profit distribution
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Prots or dividends to be distributed 283,540,214.25
Prots or dividends declared after deliberation and approval
Note: The amount of cash dividends proposed in 2021 (tax included) listed above are calculated based on the company's total
share capital at the end of 2021 minus the ending balance in the company's special account for share repurchase. The actual
dividends paid shall be based on the implementation of the company's 2021 prot distribution plan, in which the calculation is
based on the company's total share capital on the plan's date of record minus the total shares in the company's special securities
account for share repurchase.
On 29 March 2022, the Company held the 9th meeting of the eighth session of the Board of the Company and passed the
resolution of 2021 annual profit distribution plan. It is expected to distribute cash dividend of RMB 1.50(tax inclusive) for
every 10 shares to all Shareholders of the Company, based on the Company’s total share capital (excluding total number of
shares in the Company's special securities accoun) as at the registration date of shareholding as determined by implementation
of the 2021 annual prot distribution plan. The remaining undistributed prots are carried forward to distribution in subsequent
years.
The above mentioned profit distribution plan shall be submitted to the annual general meeting of 2021 of the Company for
consideration and approval.
3. Sales returns
□ Applicable √ N/A
4. Descriptions of other events after the balance sheet date
√ Applicable □ N/A
（1）Exercise of share options
As of 29 March 2022, shares option involving 4,005,170 shares were exercised by the incentive participants and the share
capital of the Company was changed to 1,911,733,078 shares.
（2）Matters about share repurchase
Pursuant to the Resolution on Share Repurchase Scheme by Way of Centralized Price Bidding and other resolutions considered
and approved at the 6th Meeting of the 8th Session of the Board on 6 December 2021, it was approved that the Company
repurchased company shares by way of centralized price bidding through the trading system of Shanghai Stock Exchange;
the total amount of repurchase funds should be no less than RMB300 million (inclusive) and no more than RMB600 million
(inclusive); the repurchase price should be no more than RMB15/share (inclusive), and all the shares repurchased shall be
cancelled for reducing its registered capital. The repurchase funds come from the company's own funds or self-raised funds.
The repurchase term should be no more than 12 months from the date when the repurchase scheme was approved by the
General Meeting of the Company, from Decmber 23, 2021 to December 22, 2022.
Pursuant to the Resolution on Share Repurchase Scheme by Way of Centralized Price Bidding and other resolutions considered
and approved at he 2021 Fifth Extraordinary General Meeting of the Company on 23 December 2021.
As of 29 March 2022, the Company cumulatively repurchased 20,942,771 shares, the total amount paid was
RMB249,971,630.73 (including transaction costs).
As of 29 March 2022, the Company has no other events that needed to be disclosed after the balance sheet date.
275
XIV Other significant events
√ Applicable □ N/A
(I) Important supplier
Jiaozuo Xincheng Huai Medicine Co., Ltd. (hereinafter referred to as“Xincheng Company”) is a supplier of Chinese herbs
of the Company. The Company purchased Chinese herbs of RMB 21.55 million (tax inclusive) from Xincheng Company
during the current period, accounting for 100% of the total amount of purchases of Chinese herbs (excluding Livzon Group).
Xincheng Company delivered commodities to the Company according to the Purchase Contract of the Company and issued
VAT special invoices after acceptance by the Company. As at 31 December 2021, the balance of prepayment of the Company
to Xincheng Company was RMB12,199,251.14.
(II) Adjustment to the use of proceeds from Fund-Raising in Investment Projects
(1) The Company
Pursuant to“the Resolution on Extension of Certain Projects Invested with Proceeds”considered and approved at the 44th
Meeting of the 7th Session of the Board of the Company on 29 March 2021, it was agreed that the Company extended the time
to start construction of the project of Zhuhai Health Industry Base to the second half of 2021. The specific commencement
time was up to the construction completion time of municipal supporting works on the project construction site.
Pursuant to the“Resolution on Change of Certain Projects Invested with Proceeds”considered and approved at the 8th
meeting of the 8th Session of the Board of the Company on 24 January 2022, it was agreed that Zhuhai Health Industry Base
Construction Project was changed to the New Product R&D Project, Haibin Pharma Pingshan Pharmaceutical Industrialization
Base Expansion Project and the Information Platform Construction Project. The resolution was approved at the 2022 1st
extraordinary general meeting of the Company on 11 February 2022.
Before the alteration of the projects invested with the Proceeds is as follows:
Unit: 10,000 Yuan
Total amount Use of Balance of
Total amount
Project name of proceeds proceeds as at 31 proceeds as at 31
of investment
investment December 2021 December 2021
Zhuhai Health Industry Base Construction
98,066.84 76,974.02 3,386.29 73,587.73
Project（珠海大健康产业基地建设项目）
Haibin Pharma Pingshan Pharmaceutical
Industrialization Base Project 125,471.35 90,000.00 66,745.58 23,254.42
（海滨制药坪山医药产业化基地目）
Total 223,538.19 166,974.02 70,131.87 96,842.15
Given the facts that the“Zhuhai Health Industry Base Construction Project”has been postponed for several times for not
meeting the conditions for commencement, and the market environment and the Company's business situation have changed,
which resulted in changes in the project feasibility, that the Company has an urgent need of funds for R&D investment and
other projects, and that other financing channels are time-consuming and costly, the Company changed the aforementioned
project to the New Product R&D Project, Haibin Pharma Pingshan Pharmaceutical Industrialization Base Expansion Project
and the Information Platform Construction Project. See below for details:
276
Annual Report
2021
Unit: 10,000 Yuan
Before alteration After alteration
Total amount Total amount
Total amount Total amount
Project name of proceeds Project name of proceeds
of investment of investment
investment investment
New Product R&D Project
110,000.00 54,587.73
( 新产品研发项目 )
Haibin Pharma Pingshan
Zhuhai Health Industry
Pharmaceutical Industrialization
Base Construction
Base Expansion Project 18,139.39 16,000.00
Project 98,066.84 76,974.02
( 海滨制药坪山医药产业化基地
（珠海大健康产业基地
扩建项目 )
建设项目）
The Information Platform
Construction Project 3,000.00 3,000.00
( 信息化平台建设项目 )
Total 98,066.84 76,974.02 Total 131,139.39 73,587.73
The details of alteration of the projects invested as follows:
1) The New Product R&D Project
The total investment amount of the project is RMB 1,100,000,000, in which RMB 545,877,300 is raised, mainly for the
research and development of inhalation preparations, complex injections, and new drug delivery devices among others. In
particular, the investment is used to acquire R&D equipment, pre-clinical and clinical R&D inputs. Main products involved
in this project are: 1) respiratory drugs: the main purpose of the project as a part of the Company's strategic layout in the
respiratory drug market, in a bid to increase sources of profit and enhance the Company's comprehensive competitiveness in
the pharmaceutical market; 2) complex injections: mainly micronano injections. The Company has built a complex injection
technology development platform, specializing in the development of special injection products such as nanocrystals,
microcrystals, liposomes and emulsions. The micronano preparations proposed with this platform will be developed based
on existing drugs with exact clinical value to further expand the clinical use of the drug; and (3) new drug delivery devices:
to be developed based on the progress of R&D of drugs for respiratory diseases, so as to improve the industrial chain of core
products, and enhance the added value and core competitiveness of products to be marketed.
2) Haibin Pharma Pingshan Pharmaceutical Industrialization Base Expansion Project
The total investment amount of this project is RMB 181,393,900, in which RMB 160,000,000 is raised. Expanded from the
Haibin Pharma Pingshan Pharmaceutical Industrialization Base Expansion Project, this project established new production
lines of Tobramycin Solution for Inhalation, Fluticasone Propionate Suspension for Inhalation, among others and expanded
existing production lines of Budesonide Suspension for Inhalation and Levosalbutamol Hydrochloride Nebuliser Solution.
This project is implemented for two key reasons: 1) New products are to be marketed, which requires related production lines.
With inhalation preparations incorporated in its key layout in recent years, the Company has continuously invested in the
R&D of several new products with high clinical value and broad market space. As new products like Tobramycin Solution for
Inhalation and Fluticasone Propionate Suspension for Inhalation are to be marketed, related production lines are necessary
to make preparation for commercial production. 2) The capacity is unable to meet demand of some products: Budesonide
Suspension for Inhalation was involved in the fifth batch of national centralized drug procurement in June 2021, and will be
supplied to 7 provincial public hospitals in the country, meeting 70% of the drug needs according to policies. Levosalbutamol
Hydrochloride Nebuliser Solution is the first approved exclusive generic drug in China. So far, no originator manufacturers
or other generic drug manufacturers have been approved for market in China. However, the market demand is huge. The
original capacity of the above two products is unable to meet such market demand, making capacity expansion a must.3. The
Information Platform Construction Project
277
3) The Information Platform Construction Project
The total investment amount of this project is RMB 30,000,000, in which RMB 30,000,000 is raised. The investment is used to
purchase information management software and hardware as well as computer room facilities. The project planned to upgrade
and improve: (1) the information infrastructure of existing information management system, including disaster recovery and
infrastructure of the server, and security equipment; (2) nancial management system, including nancial sharing system and
tax administration system; (3) group management and control system, including HR system and SAP system.
(2) Livzon Group, a subsidiary of the Company
On 22 March 2021, the Board of Livzon Group considered and approved“the Resolution on Adjustment to Certain Projects
Invested with Proceeds” to adjust the“Project for Indepth Development and Industrialization Upgrade of Innovative
Ilaprazole Series, after which the remaining proceeds to be invested in the project is RMB203,996,700 and the project
is expected to be ready for its intended use by 31 December 2024. The expected annual investment amount will be
RMB119,924,000, RMB54,676,000, RMB16,000,000 and RMB13,396,700 in the next four years.
(III) Leases
The Company had adopted a simplified approach for short-term leases and leases of low value assets and did not recognize
right-of-use assets and lease liabilities. The expense of short-term leases, leases of low value assets and variable lease
payments not included in the measurement of lease liabilities are included in the expenses in the current period as follows:
Item For the period
Short-term leases 7,454,872.21
Leases of low value assets 0.00
Total 7,454,872.21
(IV) Medium to Long-term Business Partner Share Ownership Scheme
(1) The Company
On 29 June 2021, the 2021 second extraordinary general meeting of the Company reviewed and approved“the Resolution on
the First Phase Ownership Scheme under Medium to Long-term Business Partner Share Ownership Scheme of the Company
(Draft) and its Summary”. On 4 August 2021, the First Phase Ownership Scheme under Medium to Long-term Business
Partner Share Ownership Scheme of the Company purchased a total of 2,430,800 shares of the Company through the“Joincare
Pharmaceutical Group Industry Co., Ltd.-the First Phase Ownership Scheme under Medium to Long-term Business Partner
Share Ownership Scheme-Employee Ownership Scheme No. 1 Single Asset Management Plan of Guosen Securities and
Joincare” 健康元药业集团股份有限公司－中长期事业合伙人持股计划之第一期持股计划 - 国信证券健康元员工持
股 1 号 单 一 资 产 管 理 计 划 ) by way of non-trade transfer, representing 0.12% of total share capital of the Company, with an
average transaction price of RMB12.75 per share and a transaction amount of RMB30,992,700.00. The purchase of shares
under the First Phase Ownership Scheme under Medium to Long-term Business Partner Share Ownership Scheme of the
Company has been completed, and these shares will be locked up for 36 months (from 4 August 2021 to 3 August 2024) as
required.
(2) Livzon Group, a subsidiary of the Company
On 6 May 2021, the 2021 second extraordinary general meeting of Livzon Group reviewed and approved relevant resolutions
including the Resolution on the First Phase Ownership Scheme under Medium to Long-term Business Partner Share
Ownership Scheme of the Company (Draft) and its Summary. On 26 May 2021, the First Phase Ownership Scheme under
Medium to Long-term Business Partner Share Ownership Scheme of Livzon Group purchased a total of 2,348,960 shares of
the Company through the“CITIC Securities – the First Phase Business Partner Share Ownership Scheme of Livzon Group
– Medium and Long-term Business Partner Employee Ownership Scheme No. 1 Single Asset Management Plan of CITIC
Securities and Livzon Group” 中信证券－丽珠集团事业合伙人持股计划第一期－中信证券丽珠集团中长期事业合伙
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Annual Report
2021
人 员 工 持 股 计 划 1 号 单 一 资 产 管 理 计 划 ) by way of centralized price bidding, representing 0.25% of total share capital of
Livzon Group, with an average transaction price of RMB49.92 per share and a transaction amount of RMB117,268,338.21.
The purchase of shares under the First Phase Ownership Scheme under Medium to Long-term Business Partner Share
Ownership Scheme of Livzon Group has been completed, and these shares will be locked up for 36 months (from 27 May
2021 to 26 May 2024) as required.
As at the date of the balance sheet, other than the matters mentioned above, the Company has no other significant events that
need to be disclosed.
XV Notes to the Key Components of Financial Statements of the Parent Company
1. Bills receivables
Balance at the End of the Period Balance at the Beginning of the Period
Provision Provision
Type of bill
Book balance for bad Carrying value Book balance for bad Carrying value
debts debts
Bank acceptance bills 374,296,302.21 0.00 374,296,302.21 53,571,233.65 0.00 53,571,233.65
Commercial acceptance bill 0.00 0.00 0.00 0.00 0.00 0.00
Total 374,296,302.21 0.00 374,296,302.21 53,571,233.65 0.00 53,571,233.65
（1）Bills receivables that were pledged at the End of the Period
Type of bill Pledged amount at the End of the Period
Bank acceptance bills 285,562,300.65
（2）Bills receivable endorsed or discounted at the End of the Period but not yet mature at the date of balance sheet
Amount derecognised at Amount not derecognised at
Item
the End of the Period the End of the Period
Bank acceptance bills endorsed but not yet mature 19,391,291.49
Bank acceptance bills discounted but not yet mature 22,858,934.79
Total 42,250,226.28
（3）There were no bills transferred into accounts receivables for non-performance by the issuer at the End of the Period.
（4）Classication by the method of bad debt provision
Balance at the End of the Period Balance at the Beginning of the Period
Book balance Provision for bad debts Provision for bad debts Book balance Provision for bad debts
Type Book balance
Percentage Percentage Percentage Percentage
Amount Amount Amount Amount Amount Carrying value
(%) (%) (%) (%)
Provision for bad debt on
an individual basis
Provision for bad debt on
374,296,302.21 100.00 0.00 0.00 374,296,302.21 53,571,233.65 100.00 0.00 0.00 53,571,233.65
a collective basis
Of which:
Bank acceptance bills 374,296,302.21 100.00 0.00 0.00 374,296,302.21 53,571,233.65 100.00 0.00 0.00 53,571,233.65
Total 374,296,302.21 100.00 0.00 0.00 374,296,302.21 53,571,233.65 100.00 0.00 0.00 53,571,233.65
279
（5）Provision for bad debt made, recovered or reversed during the Period
Nil
（6）There are no bills receivables actually written-o 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 538,967,095.90
1-2 years 1,410,787.21
2-3 years 733,293.23
3-4 years 388,712.49
4-5 years 360,879.34
Over 5 years 7,723,623.65
Total 549,584,391.82
(2). Classication by the method of bad debt provision
√ Applicable □ N/A
Unit: Yuan Currency: RMB
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
Type Expected Expected
Percentage Carrying value Percentage Carrying value
Amount Amount credit loss Amount Amount credit loss
(%) (%)
rate (%) rate (%)
Provision for bad debt
771,300.68 0.14 771,300.68 100.00 0.00 1,120,703.15 0.29 1,120,703.15 100.00 0.00
on an individual basis
Of which:
Amount due from
771,300.68 0.14 771,300.68 100.00 0.00 1,120,703.15 0.29 1,120,703.15 100.00 0.00
domestic customers
Amount due from
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
overseas customers
Provision for bad debt
548,813,091.14 99.86 13,270,020.90 2.42 535,543,070.24 386,433,230.10 99.71 16,938,369.88 4.38 369,494,860.22
on a collective basis
Of which:
Amount due from
548,813,091.14 99.86 13,270,020.90 2.42 535,543,070.24 386,433,230.10 99.71 16,938,369.88 4.38 369,494,860.22
domestic customers
Amount due from
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
overseas customers
Total 549,584,391.82 100 14,041,321.58 2.55 535,543,070.24 387,553,933.25 100.00 18,059,073.03 4.66 369,494,860.22
Provision for bad debt on an individual basis:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period
Name Provision for bad Expected credit loss
Book balance Reason for provision made
debts rate (%)
Payment for goods 771,300.68 771,300.68 100.00 Not expected to be recoverable
Total 771,300.68 771,300.68 100.00 /
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2021
Provision for bad debt on an individual basis:
□ Applicable √ N/A
Provision for bad debt on a collective basis:
√ Applicable □ N/A
Item on a collective basis: Due from domestic customers
Unit: Yuan Currency: RMB
Balance at the End of the Period
Aging
Accounts receivables Provision for bad debts Carrying Value (%)
Within 1 year 538,967,095.90 5,259,670.96 0.98
1-2 years (including 2 years) 1,410,787.21 150,539.36 10.67
2-3 years (including 3 years) 733,293.23 239,987.97 32.73
3-4 years (including 4 years) 103,939.29 81,969.65 78.86
4-5 years (including 5 years) 300,612.74 240,490.19 80.00
Over 5 years 7,297,362.77 7,297,362.77 100.00
Total 548,813,091.14 13,270,020.90 2.42
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
Balance at the Changes for the current period Balance at
Item Beginning of Recovery Other the End of
Provision Removal/write-o
the Period or reversal changes the Period
Accounts receivables 18,059,073.03 1,857,142.19 0.00 5,874,893.64 0.00 14,041,321.58
Total 18,059,073.03 1,857,142.19 0.00 5,874,893.64 0.00 14,041,321.58
As at 31 December 2021 and 31 December 2020, the Company had no accounts receivables that are past due but not impaired.
Signicant recovery or reversal of bad debt provision for the current period:
□ Applicable √ N/A
(4). Accounts receivable actually written o for the current period
√ Applicable □ N/A
Item Amount written o
Accounts receivable actually written o 5,874,893.64
Signicant accounts receivables written o.
□ Applicable √ N/A
281
(5). The top ve balances of accounts receivable by debtors as at the End of the Period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End Proportion in total balance of account balance for bad debts as at
Name of company
of the Period receivables for the End of the Year (%) the End of the Period
Unit 1 17,455,040.43 3.18 174,550.40
Unit 2 15,755,536.96 2.87 157,555.37
Unit 3 14,641,981.20 2.66 146,419.81
Unit 4 14,588,288.80 2.65 145,882.89
Unit 5 14,396,812.58 2.62 143,968.13
Total 76,837,659.97 13.98 768,376.60
Other descriptions:
The total of the top five balances of accounts receivable by debtors as at the End of the Period was RMB76,837,659.97 for
the Period, representing13.98% of the total balance of account receivables for the End of the Period, the aggregate balance of
corresponding provisions for bad debts as at the End of the Period was RMB768,376.60.
(6). Derecognised accounts receivables in the Company due to the transfer of nancial assets.
□ Applicable √ N/A
(7). Amount of assets or liabilities for which accounts receivable have been transferred but involvement continues in the Company.
□ Applicable √ N/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
Dividend receivables 814,041,000.00 69,999,500.00
Other receivables 322,196,811.25 306,776,204.09
Total 1,136,237,811.25 376,775,704.09
Other descriptions:
□ Applicable √ N/A
(1). Dividend receivables
Dividend receivables
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Topsino 749,999,500.00 49,999,500.00
Haibin Pharma 44,041,500.00 0.00
Fenglei Electric Power 20,000,000.00 20,000,000.00
Provision for bad debts 0.00 0.00
Total 814,041,000.00 69,999,500.00
282
Annual Report
2021
Other receivables
(1). Disclosure by aging
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Aging Balance at the End of the Period
Subtotal within 1 year 321,955,080.06
1-2 years 149,812.10
2-3 years 206,676.00
3-4 years 126,228.36
4-5 years 20,000.00
Over 5 years 19,085,586.00
Provision for bad debts -19,346,571.27
Total 322,196,811.25
(2). 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
294,833,504.86 209,567,199.87
within the scope of combination
Capital reduction 24,078,925.22 92,347,581.27
Treasury bonds and Margin 17,968,386.04 18,982,036.71
External entities balances 3,763,793.73 2,074,984.69
Margin 848,272.56 1,452,703.18
Others 50,500.11 3,517,018.63
Total 341,543,382.52 327,941,524.35
(3). Provision made for bad debts
√ Applicable □ N/A
As at the End of the Period, provision for bad debts at step 1:
Expected credit
losses rate over Provision for
Type Book balance Carrying value Reason
the next 12 bad debts
months (%)
Provision for bad debt on an individual basis 24,078,925.22 0.00 0.00 24,078,925.22
Expected
Capital reduction 24,078,925.22 0.00 0.00 24,078,925.22 to be
recoverable
Provision for bad debt on a collective basis 294,833,504.86 0.00 0.00 294,833,504.86
Expected
Other receivables of each company within
294,833,504.86 0.00 0.00 294,833,504.86 to be
the scope of combination
recoverable
Total 318,912,430.08 0.00 0.00 318,912,430.08
283
As at the End of the Period, provision for bad debts at step 2:
Expected credit
Provision for Carrying
Type Book balance losses rate over Reason
bad debts value
the lifetime (%)
Provision for bad debt on an individual basis
Provision for bad debt on a collective basis 4,662,566.40 29.56 1,378,185.23 3,284,381.17
Receivable deposits 877,102.56 17.99 157,778.54 719,324.02
Other receivables 3,785,463.84 32.24 1,220,406.69 2,565,057.15
Total 4,662,566.40 29.56 1,378,185.23 3,284,381.17
As at the End of the Period, provision for bad debts at step 3:
Expected credit
Provision for Carrying
Type Book balance losses rate over Reason
bad debts value
the lifetime (%)
Provision for bad debt on an individual basis 17,968,386.04 100.00 17,968,386.04 0.00
Not
expected
National debt and Margin 17,968,386.04 100.00 17,968,386.04 0.00
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
As at 31 December 2020, provision made for bad debts:
As at 31 December 2020, provision for bad debts at step 1:
Expected credit
losses rate over Provision for
Type Book balance Carrying value Reason
the next 12 bad debts
months (%)
Provision for bad debt on an individual basis 92,347,581.27 0.00 0.00 92,347,581.27
Expected
Capital reduction 92,347,581.27 0.00 0.00 92,347,581.27 to be
recoverable
Provision for bad debt on a collective basis 209,567,199.87 0.00 0.00 209,567,199.87
Expected
Other receivables of each company within
209,567,199.87 0.00 0.00 209,567,199.87 to be
the scope of combination
recoverable
Total 301,914,781.14 0.00 0.00 301,914,781.14
284
Annual Report
2021
As at 31 December 2020, provision for bad debts at step 2:
Expected credit
Provision for
Type Book balance losses rate over Carrying value Reason
bad debts
the lifetime (%)
Provision for bad debt on an individual basis 0.00 0.00 0.00 0.00
Provision for bad debt on a collective basis 7,044,706.50 30.99 2,183,283.55 4,861,422.95
Receivable deposits and deposits and rental
1,452,703.18 41.56 603,754.83 848,948.35
fees
Other receivables 5,592,003.32 28.25 1,579,528.72 4,012,474.60
Total 7,044,706.50 30.99 2,183,283.55 4,861,422.95
As at 31 December 2020, provision for bad debts at step 3:
Expected credit
Provision for
Type Book balance losses rate over Carrying value Reason
bad debts
the lifetime (%)
Provision for bad debt on an individual basis 18,982,036.71 100.00 18,982,036.71 0.00
Not
expected
Treasury bonds and Margin 18,982,036.71 100.00 18,982,036.71 0.00
to be
recoverable
Provision for bad debt on a collective basis 0.00 0.00 0.00 0.00
Total 18,982,036.71 100.00 18,982,036.71 0.00
Provision for bad debts made, recovered or reversed during the Period
Unit: Yuan Currency: RMB
Step 1 Step 2 Step 3
Expected credit losses Expected credit losses
Expected credit
Provision for bad debts over the lifetime over the lifetime Total
losses over the
(without impairment (with impairment
next 12 months
of credit) of credit)
Balance at the Beginning of the Period 0.00 2,183,283.55 18,982,036.71 21,165,320.26
Balance at the Beginning of the Period
transferred for the Period
-- Transferred to step 2 0.00 0.00
-- Transferred to step 3 0.00 -165,600.00 165,600.00 0.00
-- Reversed in step 2 0.00 0.00
-- Reversed in step 1 0.00 0.00
Provisions made for the Period 0.00 -639,498.32 -639,498.32
Reversals for the Period 0.00 1,013,650.67 1,013,650.67
Write-o for the Period 0.00 0.00
Settlement for the Period 0.00 0.00 165,600.00 165,600.00
Other changes 0.00 0.00 0.00 0.00
Balance at the End of the Period 0.00 1,378,185.23 17,968,386.04 19,346,571.27
Descriptions of the significant changes in the gross carrying amount of other receivables for which the changes in loss
allowance occur for the current period:
□ Applicable √ N/A
285
Provision for bad debts in the current period and the basis for assessing whether the credit risk of
nancial instruments has increased signicantly:
□ Applicable √ N/A
(4). Other receivables with ve largest amount by creditors at the End of the Period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Proportion Balance of
Balance at to total other provision for
Name of unit Nature of receivables the End of the Ageing receivables at bad debts at
Period the End of the the End of the
Period (%) Period
Other receivables of each
Shenzhen Fenglei Electric
company within 129,956,104.29 1-2 years 38.05
Power Investment Co., Ltd.
the scope of combination
Other receivables of each
Joincare Haibin
company within 111,500,000.25 Within 1 year 32.65
Pharmaceutical Co., Ltd.
the scope of combination
Other receivables of each
Topsino Industries Limited company within 36,954,169.56 1-2 years 10.82
the scope of combination
Shanghai Yunfeng Xinchuang
Capital Management Center Capital reduction 24,078,925.22 1-2 years 7.05
(L.P.)
Huaxia Securities Co., Ltd National debt and Margin 17,968,386.04 Above 5 years 5.26 17,968,386.04
Total / 320,457,585.36 / 93.83 17,968,386.04
(5). Other receivables derecognised due to the transfer of nancial assets
□ Applicable √ N/A
(6). Assets and liabilities generated by the transfer of other receivables and continuing
involvement therein
□ Applicable √ N/A
Other descriptions:
□ Applicable √ N/A
4. Long-term equity investments
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Item Provision for Provision for
Book balance Carrying value Book balance Carrying value
impairment impairment
Investments in
3,453,138,312.11 7,010,047.91 3,446,128,264.20 3,193,969,921.11 7,010,047.91 3,186,959,873.20
subsidiaries
Investments in
associates and 84,810,888.09 0.00 84,810,888.09 86,816,710.23 0.00 86,816,710.23
joint ventures
Total 3,537,949,200.20 7,010,047.91 3,530,939,152.29 3,280,786,631.34 7,010,047.91 3,273,776,583.43
286
Annual Report
2021
(1). Investments in subsidiaries
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Provision for Balance of
Balance at Increase Decrease Balance at
impairment provision for
Investee the Beginning during the during the the End of
for the impairment at the
of the Year Period Period the Period
Period 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
Joincare Biology 59,868,800.00 0.00 59,868,800.00 0.00 0.00 0.00
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 75,000,000.00 25,000,000.00 0.00 100,000,000.00 0.00 0.00
Joincare (Guangdong) Special
3,000,000.00 0.00 0.00 3,000,000.00 0.00 0.00
medicine Food Co., Ltd.
Zhuhai Livzon Biotechnology
0.00 294,037,191.00 0.00 294,037,191.00 0.00 0.00
Co., Ltd.*
Total 3,193,969,921.11 319,037,191.00 59,868,800.00 3,453,138,312.11 0.00 7,010,047.91
Note 1: Zhuhai Jiankangyuan completed the industrial and commercial deregistration on 8 September , 2021;
Note 2: In April 2021, the Company and its subsidiary Haibin Pharma completed the capital increase in Joincare Haibin
Pharmaceutical Co., Ltd.
Note 3: Zhuhai Livzon Biotechnology Co., Ltd. is a subsidiary within the consolidation scope of Livzon Group. Which originally
held 100% indirectly by Livzon Group. In this period, due to the restructuring of the equity structure of the holding
subsidiary of Livzon Group, Livzon Group held 55.13% of its equity, and the Company held 35.75% of its equity.
(2). Investments in associates
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Change during the Period
Balance of
Adjustment Cash
Balance at the Investment Balance provision for
Decreased in other Other dividend Provision
Investee Beginning Increased prot and at the End of impairment
invest com equity or prot for Im Others
of the Year investmen loss under the the Period at the End
ment -prehensive changes distribution -pairment
equity method of the Period
income declared
Associates
Ningbo Ningrong Biological
28,301,318.36 0.00 0.00 -837,219.65 0.00 0.00 0.00 0.00 0.00 27,464,098.71 0.00
Medicine Co., Ltd.
Feellife Health Inc. 10,176,384.11 0.00 0.00 513,198.04 0.00 0.00 0.00 0.00 0.00 10,689,582.15 0.00
Novastage Pharmaceuticals
19,561,050.64 0.00 0.00 -1,480,167.43 0.00 0.00 0.00 0.00 0.00 18,080,883.21 0.00
(Shenzhen), Ltd.
Jiangsu Baining Yingchuang
28,777,957.12 0.00 0.00 -201,633.10 0.00 0.00 0.00 0.00 0.00 28,576,324.02 0.00
Medical Technology Co., Ltd
Total 86,816,710.23 0.00 0.00 -2,005,822.14 0.00 0.00 0.00 0.00 0.00 84,810,888.09 0.00
287
5. Operating income and operating cost
Operating income and operating cost
√ Applicable □ N/A
Unit: Yuan Currency: RMB
For the Period For the Previous Period
Item
Cost Income Cost Income
Principal activities 1,997,946,818.28 1,345,944,915.00 1,415,902,371.85 915,525,922.84
Other activities 23,227,007.34 10,880,121.11 17,173,139.38 5,717,311.02
Total 2,021,173,825.62 1,356,825,036.11 1,433,075,511.23 921,243,233.86
Other descriptions:
Descriptions of operating income
① Operating income and operating cost presented by product types
For the Period For the Previous Period
Item
Cost Income Income Cost
Health care products 115,187,552.33 73,483,571.30 138,445,501.80 89,635,887.75
Chemical drug preparation products 1,844,258,573.30 1,249,873,341.86 1,237,805,648.80 801,249,508.12
Traditional Chinese drug preparation 38,481,963.54 22,519,595.22 38,914,059.05 23,894,996.93
Others 18,729.10 68,406.62 737,162.20 745,530.04
Total 1,997,946,818.28 1,345,944,915.00 1,415,902,371.85 915,525,922.84
② Operating income and operating cost presented by major operating regions
For the Period For the Previous Period
Item
Cost Income Cost Income
Domestic 1,997,946,818.28 1,345,944,915.00 1,415,902,371.85 915,525,922.84
Total 1,997,946,818.28 1,345,944,915.00 1,415,902,371.85 915,525,922.84
③ Operating income and operating cost presented by time of income recognition
For the Period For the Previous Period
Item
Income Cost Income Cost
Commodities (transferred at a point in
1,997,946,818.28 1,345,944,915.00 1,415,902,371.85 915,525,922.84
time)
Total 1,997,946,818.28 1,345,944,915.00 1,415,902,371.85 915,525,922.84
(3) Descriptions of other activities
For the Period For the Previous Period
Item
Income Cost Income Cost
Processing fee 1,403,169.59 1,712,962.53 0.00 0.00
Rental fees 13,104,696.50 1,989,089.05 14,722,066.99 3,333,402.42
Others 8,719,141.25 7,178,069.53 2,451,072.39 2,383,908.60
Total 23,227,007.34 10,880,121.11 17,173,139.38 5,717,311.02
288
Annual Report
2021
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 1,351,395,397.50 545,238,761.01
Long-term equity investments income under equity method -2,005,822.14 -1,887,802.59
Investment income from disposal of long-term equity investments -59,868,800.00 -2,807,961.97
Dividend income from other equity instrument investments 4,175,569.86 3,836,778.08
Investment income from disposal of nancial assets held for trading 50,958.36 0.00
Total 1,293,747,303.58 544,379,774.53
XVI Supporting Information
1. Statement of non-recurring profit or loss
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item Amount
Prot or loss from disposal of non-current assets 14,492,047.24
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 prot 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 specic amount or quantity 245,335,140.69
according to certain standards
Funds occupation fees charged from non-nancial enterprises 0.00
Gains resulting from the investment cost of the enterprise for the purpose of acquisition of the subsidiaries, joint operation and joint
0.00
ventures is lower than the fair value of net identiable assets of the investee as entitled at the time of receipt of the investment
Prot or loss from exchange of non-monetary assets 0.00
Prot 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
Prot or loss from debts restructuring 0.00
Enterprise restructuring fees, such as the expenses for employees’settlement and the integration fees 0.00
Prot or loss exceeding the fair value and generated from the transaction of which the transaction price is obviously unfair 0.00
Net prot or loss over the current period of the subsidiaries as a result of business combination under common control from the
0.00
beginning of the year to the date of consolidation
Prot or loss from contingent issues irrelevant to the Company's normal business 0.00
Except for the ecient hedging related to the Company's normal business, prot or loss from changes in fair value as generated
from nancial assets and nancial liabilities held for trading and gains from investment as a result of the disposal of nancial assets 8,110,644.25
and nancial liabilities held for trading and debt investments
Reversals of provision for impairment of accounts receivable with individual impairment test 1,013,650.67
Prot 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 prot 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 -30,737,442.83
Other items that conform to the denition of non-recurring prot or loss 0.00
Less: Eect of income tax 39,580,260.30
Eect of minority equity 95,131,719.24
Total 103,502,060.48
289
Provide explanations for classifying non-recurring profit and loss items defined in the Explanatory Announcement No. 1 for
Public Company Information Disclosures –Non-recurring Prots and Losses, and for classifying non-recurring prot and loss
items listed in the Explanatory Announcement No. 1 for Public Company Information Disclosures –Non-recurring Prots and
Lossesas recurring prot and loss item.
□ Applicable √ N/A
2. Rate of return on net assets and earnings per share
√ Applicable □ N/A
Weighted average Earnings per share
Prot for the Reporting Period
return on equity (%) Basic EPS Diluted EPS
Net loss attributable to the Company's ordinary shareholders 11.50 0.6864 0.6858
Net prot attributable to the parent company's shareholders,
10.60 0.6329 0.6324
excluding non-recurring prot or loss
3. Differences in accounting data under domestic and foreign accounting standards
□ Applicable √ N/A
4. Others
□ Applicable √ N/A
Chairman: Zhu Baoguo
Date of Submission Approved by the Board: 29 March 2022
Revised information
□ Applicable √ N/A
290
