Joincare Pharmaceutical Group Annual Report 2022
Stock Code: 600380 Stock Short Name: 健康元
JOINCARE PHARMACEUTICAL GROUP INDUSTRY CO., LTD.
2022 Annual Report
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Joincare Pharmaceutical Group Annual Report 2022
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 legal responsibility.
II. All directors of the Company attended the Board meeting.
III. Grant Thornton (Special General Partnership) issued a standard unqualified 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 financial 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), in 2022, the Parent
Company generated net profit of RMB849,731,957.95, 10% of which was contributed to the
statutory surplus reserve, namely RMB84,973,195.80, the remainder of which, together with
undistributed profits for the last year of RMB1,400,174,178.18 and gain on disposal of other equity
investments of RMB80,749,859.60, subtracting cash dividends for the last year of
RMB277,557,631.65, is the profits available for distribution to shareholders for the year of
RMB1,968,125,168.28. The Company plans to distribute cash dividends for the fiscal year 2022,
based on the total number of shares for dividend distribution, which is defined 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 Company plans to distribute cash dividend of
RMB1.80 (tax inclusive) for every 10 shares of to all shareholders of the Company, and the
remaining undistributed profits will 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
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Joincare Pharmaceutical Group Annual Report 2022
No
IX. Whether more than half of directors cannot warrant the truthfulness, accuracy and
completeness of the Report disclosed by the Company
No
X. Significant 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 risk, market risk, risk of safety and environmental protection,
risk in price and supply of raw materials and R&D risk. For more information, please refer to
“Potential risks” part in Chapter 3 Management Discussion and Analysis.
XI. Others
□Applicable √N/A
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Joincare Pharmaceutical Group Annual Report 2022
Table of Contents
Important Notice.........................................................................................................................2
Chairman's Statement .................................................................................................................5
Financial Highlights .................................................................................................................10
Chapter 1 Definitions ...............................................................................................................12
Chapter 2 Company Profile and Major Financial Indicators ....................................................14
Chapter 3 Management Discussion and Analysis ....................................................................19
Chapter 4 Corporate Governance .............................................................................................78
Chapter 5 Environmental and Social Responsibility ................................................................99
Chapter 6 Major Events .........................................................................................................123
Chapter 7 Changes in Equity and Shareholders .....................................................................141
Chapter 8 Information on Preferred Shares ............................................................................148
Chapter 9 Information on Bonds ............................................................................................149
Chapter 10 Financial Statements ............................................................................................150
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 documents The original document of the auditors’ report sealed by the accounting
available for inspection firm and signed and sealed by the certified 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 (China Securities Regulatory Commission) during
the Reporting Period
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Joincare Pharmaceutical Group Annual Report 2022
Chairman's Statement
Dear shareholders,
2022 was a year of both carrying forward and breaking new ground for the implementation of the
“14th Five-Year” Plan and a crucial year for deeply promoting the “Healthy China’ initiative, and
deepening the reform of the medical and healthcare systems. During this year, the pharmaceutical
industry underwent significant structural adjustments and steadily entered the “new normal” of
transformation and upgrading with more opportunities than challenges. Under the guidance of the
national “14th Five-Year” Plan, a number of major policies and guidelines related to the
pharmaceutical industry have been released and the theme of high-quality development has become
the focus of the new era.
2022 was the 30th anniversary of the establishment of Joincare. During the 30 years with significant
changes in the industry, the Group adhered to the mission of “For the health, For the future” and the
vision to “Diligently make high-quality and innovative drugs”, focused on the high-quality
development of the principal pharmaceutical business, maintained its strategic focuses, and
tactically demonstrated its resilience and potential. Based on the development blueprint outlined in
the Report to the 20th National Congress of the CPC, the Group achieved effective qualitative
improvement and reasonable quantitative growth in expediting product innovation, achieving
technical breakthroughs, expanding industrial chains, enhancing the comprehensive
competitiveness, and accelerating the pace of internationalization. With the fortitudinous and
steadfast efforts of all staff, the Group recorded sustained and steady performance growth and
successfully achieved its annual business goals.
In 2022, the Group realized total revenues of RMB17,143 million, representing a year-on-year
increase of approximately 7.79%; realized a net profit attributable to shareholders of listed
companies of RMB1,503 million, representing a year-on-year increase of approximately 13.10%;
and realized a net profit attributable to shareholders of listed companies after deduction of the
extraordinary gains and losses of RMB1,419 million, representing a year-on-year increase of
approximately RMB194 million or 15.84%.
We maintained steady performance growth and strived to create higher returns for our
shareholders. Based on the operating results and overall financial position of the Group in 2022,
the Board of Directors proposed that we continue to adopt a stable profit distribution scheme in
2022. Specifically, a cash dividend of RMB1.80 (tax inclusive) for every 10 shares will be
distributed to all shareholders of the Company, based on the total number of shares (excluding the
number of shares repurchased but not cancelled by the Company) on the equity registration date
designated by the annual profit distribution plan for 2022. No bonus shares will be distributed and
no conversion of capital reserve into share capital will be carried out. The profit distribution scheme
for 2022 is yet to be reviewed and approved at the Company’s 2022 Annual General Meeting.
In 2022, the Group deeply implemented the dual-drive strategy of developing platforms of
both innovative medicines and high-barrier complex formulations, focused on unmet clinical
needs and constantly created and developed new drivers and new advantages. In terms of
R&D innovation, the Group continuously increased R&D expenditures while constantly refining
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Joincare Pharmaceutical Group Annual Report 2022
differentiated innovation R&D strategies. It combined “long-term” and “short-term” plans on
strategic plannings and pipeline deployments and concentrated on the construction of R&D systems
covering the full lifecycle of drugs development and production.
We continued to increase our R&D expenditures and boosted efforts in the construction of
innovative R&D technology platforms for high-barrier complex formulations, including inhalation
formulation, antibody, and sustained-release microspheres for injections. We have achieved
remarkable results. In 2022, the R&D of many innovative medicine products and high-barrier
complex formulations in the Group’s pipeline made significant progress with 6 products approved
for launching, 5 products applied for production and 5 products approved for clinical trials.
The birth of each new drug or the initiation of each new therapy represents a process of perception
to diseases. In October 2022, Tobramycin Inhalation Solution (妥布霉素吸入溶液), a blockbuster
product of the Group, was approved for launching. It is the first inhalation drug for bronchiectasis
in the world as well as the first nebulizer inhalation antibiotic launched in China, marking that the
situation of “no drugs available” faced by bronchiectasis patients in China will be significantly
relieved. Meanwhile, it further validates our strategic correctness and the market leader advantages
in the inhalation formulation products market.
While adhering to strengthening independent innovation, the Group also pays close attention to
domestic and overseas cutting-edge technologies and opportunities. In 2022, Joincare and its
subsidiary, Livzon Group, jointly established an industrial investment entity and contributed a total
of RMB1 billion to strategically invest in high-quality healthcare industry projects, demonstrating
the strength and determination of the Group in boosting industrial innovation through “bringing in
investments”, establishing diversified platforms for incubating and introducing R&D and
innovation projects, rapidly diversifying core pipeline products of the Company and further
bolstering the sustained profitability of the Group.
In terms of business scope innovation, we continued to use our existing strength as a “springboard”
for new businesses, expanding our business territory at a steady pace. In 2022, the Recombinant
SARS-CoV-2 Fusion Protein (CHO Cell) Vaccine “Likang V-01”, jointly developed by the Institute
of Biophysics of the Chinese Academy of Sciences and Joincare, was successfully developed and
approved to be included for heterologous booster vaccination.
Our success in R&D of Likang V-01 relies on our ability of R&D transform R&D achievements in
the whole chain from clinical research and production to approval, marketing and terminal
promotion; and the launch of Likang V01 represents significant breakthroughs in both the
construction of the recombinant protein vaccine platform and the commercialization capability in
vaccine market niche.
In the end of 2022, we adopted new measures in the expansion of the business scope. Relying on
the strategic advantages in “APIs-formulations vertical integration” and the leading position in core
pet drugs’ APIs of the two listed companies, Joincare and Livzon Group, we integrated our
advantageous resources in the R&D, production, brand promotion, online and offline marketing
through all channels in the pet drugs sector, coordinated the operation of animal health care products
and further boosted the layout on animal health care formulations.
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Joincare Pharmaceutical Group Annual Report 2022
In terms of business model innovation, in 2022, the Group continued to strengthen and upgrade
the “patient-centered” digital marketing ecosystem, adopted new digital marketing models for
respiratory drugs, namely “to empower all links including education, screening, diagnosis, treatment,
and medication monitoring, form a closed-loop consisting of doctors, hospitals, patients and
pharmaceutical companies, and explore the external huge market of chronic disease management
with owned traffic, so as to realize real-time interaction between consumers and brands” to expand
to gastroenterological, psychiatric and other advantageous sectors of the Group. In 2022, healthcare
products & OTC segment of the Group successfully promoted the iteration and upgrading of “Taita”
(太太) and other core classical brands through omni-channel strategy. On one hand, it continuously
promoted the reform of the offline team structure, upgraded the distribution channel, integrated the
key chain stores and empowered the Company with resources; on the other hand, it continued to
improve online self-operated channels such as platforms of Tmall, Jingdong (JD), Douyin e-
commerce and WeChat Mall, Leveraging on online quality content platforms, it conveyed the
scientifically based healthcare concept, accurately reached target users and empowered the
revitalization of time-honored brands.
We always adhered to the strategy on the coordinated development of industry and capital
operation. With our top-notch intuition, courage and industry standard, while leveraging on
the opportunities in the capital market, Joincare has maintained the fast-moving edge in the
integration of industry and capital market for three decades.
In September 2022, the Global Depository Receipts (GDRs) of Joincare were successfully listed on
the SIX Stock Exchange, making us the first domestic bio-pharmaceutical enterprise with GDRs
issued and successfully listed in Switzerland. As a result, the two listed companies under the Group
jointly set a precedent for being listed on, in total, four exchanges in China, Hong Kong and
Switzerland. The Group has been paying close attention to policies and opportunities for the
innovative development of the capital market and actively serving the strategic development and
business layout of enterprises through the capital market. The successful issuance of GDRs in
Switzerland represents a key milestone in the internationalization strategy of Joincare, facilitates the
Group’s internalization strategy in expanding businesses overseas, and allows the Company to
develop an international horizon, pattern and operating logic to improve international recognition,
so as to enhance the overall profitability and comprehensive competitiveness of the Company.
We always actively undertake social responsibilities and integrate the ESG concept into all
links of the strategy and operation of the Group with practical actions. We proactively focus
on the internal regulatory environment and external policy guidance and practice the CSR strategy
and social welfare initiatives adapted to our current business situation in combination with China’s
14th Five-Year Plan and the local government’s development plan.
As a leader in domestic market niche of inhalation formulations, we shoulder the undertakings of
pharmaceutical enterprises to serve the country and people. Following the listing of three inhalation
formulation products in the fifth-round national volume-based procurement, including 雾舒, 舒
坦琳,丽雾安 and 特瑞通, a new product, successfully won the bidding in the seventh round of
national volume-based procurement in July 2022. We have been implementing the concept of
inclusive health through academic works, public welfare actions and the promotion of scientific
popularization to increasingly enhance the awareness on the diagnosis, treatment and management
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Joincare Pharmaceutical Group Annual Report 2022
of chronic diseases and improve the accessibility of drugs. As of the end of 2022, “Respiratory
Experts' Views” ( 呼 吸 专 家 说 ), a public welfare patient education platform in the domestic
respiratory diseases sector under the Group, which is the first of its kind in the industry, had joined
hands with thousands of doctors in popularizing the scientific concept on the prevention of chronic
respiratory diseases among millions of followers. It focused on Chronic obstructive pulmonary
disease (COPD), bronchiectasis and other respiratory diseases with high morbidity but low
awareness and rate of standardized treatment, supporting the “Healthy China 2030” with practical
actions. In 2022, the segment of inhalation formulations of Joincare realized revenues of RMB1.174
billion, representing a year-on-year increase of 103.37%. Such figures mean that an increasing
number of Chinese people obtain high-quality domestic new drugs at a more affordable price.
In 2022, the Recombinant SARS-CoV-2 Fusion Protein (CHO Cell) Vaccine “Likang V-01” under
the Group was included into the preferred combinations under the Implementation Plan for
Vaccination of Second Booster Dose of COVID-19 Vaccines. During the fight against the COVID-
19 pandemic, the Group contributed the strength of pharmaceutical enterprises in building
immunologic barriers for people with underlying diseases, the elderly, people exposed to high risks
and other key groups through vaccines with excellent protection and high safety. In addition, the
Tocilizumab Solution for Injection (Atvtia) (托珠单抗注射液(安维泰)) was approved for market
launch in January 2023 and listed in the Diagnosis and Treatment Protocol for COVID-19 (Trial
Version 10) and the Diagnosis and Treatment Protocol for Severe COVID-19 Cases (Trial Version
4), effectively relieving the shortage of drugs for severe COVID-19 patients.
The Group has actively responded to national policies and calls for years. In combination with its
own industrial advantages, the Group jointly launched the “Access to Public Welfare for Chronic
Diseases Prevention and Treatment (普惠慢病防治公益项目)”program, which currently covers 8
provinces and 1 autonomous region. It brought drugs and other materials for patients with chronic
diseases in remote areas, alleviated their medical burdens and further improved the accessibility of
drugs. In 2022, the Group’s public welfare donations amounted to approximately RMB12.117
million.
2023 is the first year for implementing the spirit of the 20th National Congress of the CPC. Based
on the new situation and new stage of the pharmaceutical industry, the Group will anchor in high-
quality development, conduct in-depth layout with the focus on the two strategic orientations of
innovation and internationalization, and review current opportunities and challenges while
continuing to balance aspiration with practicality. Firstly, we will stick to and speed up in R&D
innovation and continuously launch products with high quality and accurate efficacy. Secondly, we
will boost technological and management innovation and vigorously advance the progress of
internationalization. Thirdly, we will bravely try new technologies and models, and implement the
digital and intelligent transformation in all links of industrial chains from R&D, production and
sales to management, so as to improve the operational efficiency and adapt to the new trends of the
pharmaceutical industry and market. The Group will continue to deeply penetrate into the markets
of innovative drugs and high-barrier complex formulations, keep an acute insight on market changes,
break conventional thinking and path dependence, continuously consolidate the industrial position
of the Group in all segments and speed up in promoting the high-quality development of industries.
In 1992, Joincare embarked on its journey with a strong sense of purpose and determination. Over
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Joincare Pharmaceutical Group Annual Report 2022
the past three decades, it has overcome many challenges and navigated through significant changes
in the industry. This top integrated pharmaceutical enterprise with revenues of RMB17.1 billion,
was not a surf boat but became an aircraft carrier in the domestic field of innovation. It will not only
ride through the ups and downs of the industry firmly and confidently, but also attract, match and
carry more and more like-minded partners to sail, at full speed, towards the new era for the
pharmaceutical industry with a bright future.
On behalf of the Board of the Company, I would like to take this opportunity to express my sincere
gratitude to all Shareholders, all staff of the Group and business partners for their long-lasting care,
companion and support.
Chairman: Zhu Baoguo
7 April 2023
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Joincare Pharmaceutical Group Annual Report 2022
Financial Highlights
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Joincare Pharmaceutical Group Annual Report 2022
Financial Highlights
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Joincare Pharmaceutical Group Annual Report 2022
Chapter 1 Definitions
I. Definitions
In this Report, unless the context otherwise requires, the following expressions shall have the
following meanings:
Definitions of common terms
CSRC Refers to China Securities Regulatory Commission
SSE Refers to Shanghai Stock Exchange
SZSE Refers to Shenzhen Stock Exchange
Baiyeyuan or the Controlling Shenzhen Baiyeyuan Investment Co., Ltd. * (深圳市百业
Refers to
Shareholder 源投资有限公司)
Company, the Company, Group or Joincare Pharmaceutical Group Industry Co., Ltd.* (健康
Refers to
the Group 元药业集团股份有限公司)
GMP Refers to Good Manufacturing Practice
GSP Refers to Good Supply Practice
The certification of the products by European Union,
indicating that the product has complied the safety
requirements specified in the European Directives. The
CE Refers to access condition for a product to enter the EU market is
that the product has undergone the appropriate conformity
assessment procedures and the declaration of conformity
of a manufacturer, with attachment of CE mark
Certificate of Suitability to Monograph of European
CEP Refers to
Pharmacopoeia
BE Refers to Bioequivalence
BLA Refers to Biologics License Application
IND Refers to Investigational New Drug Application
R&D Refers to Research and Development
TCM Refers to Traditional Chinese Medicine
NHSA Refers to National Health Security Administration
NMPA Refers to National Medical Products Administration
Livzon Pharmaceutical Group Inc.* (丽珠医药集团股份
Livzon Group Refers to
有限公司)
Shenzhen Haibin Pharmaceutical Co., Ltd.* (深圳市海滨
Haibin Pharma Refers to
制药有限公司)
Joincare Haibin Pharmaceutical Co., Ltd.* (健康元海滨药
Joincare Haibin Refers to
业有限公司)
Xinxiang Haibin Pharmaceutical Co., Ltd. * (新乡海滨药
Xinxiang Haibin Refers to
业有限公司)
Shenzhen Taitai Pharmaceutical Co., Ltd. * (深圳太太药
Taitai Pharmaceutical Refers to
业有限公司)
Shenzhen Taitai Genomics Inc. Co., Ltd. * (深圳太太基因
Taitai Genomics Refers to
工程有限公司)
Shenzhen Taitai Biotechnology Co., Ltd. *(深圳太太生物
Taitai Biotechnology Refers to
科技有限公司)
Henan Province Joincare Biopharmaceutical Research
Joincare Biopharmaceutical
Refers to Institute Co., Ltd. *（河南省健康元生物医药研究院有
Research Institute
限公司）
Jiaozuo Joincare Bio Technological Co., Ltd.*（焦作健
Jiaozuo Joincare Refers to
康元生物制品有限公司）
Joincare Daily-Use & Health Care Co., Ltd. * (健康元日
Joincare Daily-Use Refers to
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）
Health Pharmaceutical (China) Co., Ltd. * (健康药业(中国)
Health Pharmaceutical Refers to
有限公司)
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Joincare Pharmaceutical Group Annual Report 2022
Shenzhen Hiyeah Industry Co., Ltd. * ( 深圳市喜悦实业
Hiyeah Industry Refers to
有限公司)
Shanghai Frontier Health Pharmaceutical Technology Co.,
Shanghai Frontier Refers to Ltd. *(上海方予健康医药科技有限公司)
Joincare (Guangdong) Special Medicine Food Co., Ltd.
Joincare Special Medicine Food Refers to *(健康元(广东)特医食品有限公司)
Livzon MABPharm Inc. * (珠海市丽珠单抗生物技术有
Livzon MAB Refers to
限公司)
Zhuhai Livzon Diagnostics Inc. * ( 珠海丽珠试剂股份有
Livzon Diagnostics Refers to
限公司)
Livzon Group Fuzhou Fuxing Pharmaceutical Co.,
Fuzhou Fuxing Refers to Ltd.*(丽珠集团福州福兴医药有限公司)
Livzon Group Xinbeijiang Pharmaceutical Manufacturing
Livzon Xinbeijiang Refers to Inc.*( 丽珠集团新北江制药股份有限公司)
Livzon Group (Ningxia) Pharmaceutical Manufacturing
Ningxia Pharmaceutical Refers to
Co., Ltd.* ( 丽珠集团 ( 宁夏) 制药有限公司)
Gutian Fuxing Pharmaceutical Co., Ltd. * ( 古田福兴医
Gutian Fuxing Refers to
药有限公司)
Zhuhai FTZ Livzon Hecheng Pharmaceutical
Livzon Hecheng Refers to Manufacturing Co., Ltd. * ( 珠海保税区丽珠合成制药有
限公司)
Livzon Group Limin Pharmaceutical Manufacturing
Livzon Limin Refers to Factory *(丽珠集团利民制药厂)
Livzon Group Livzon Pharmaceutical Factory * (丽珠集
Livzon Pharmaceutical Factory Refers to
团丽珠制药厂)
Jiaozuo Livzon Hecheng Pharmaceutical Manufacturing
Jiaozuo Hecheng Refers to
Co., Ltd.* ( 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. *( 焦作金
Jinguan Electric Power Refers to
冠嘉华电力有限公司)
Tianjin Tongrentang Group Co., Ltd. * ( 天津同仁堂集团
Tianjin Tongrentang Refers to
股份有限公司)
Zhuhai Sanmed Biotech Inc. * ( 珠海圣美生物诊断技术
Sanmed Biotech Refers to
有限公司)
Zhuhai Livzon Biotechnology Co., Ltd.*( 珠海市丽珠生
LivzonBio Refers to
物医药科技有限公司)
Greenanew Refers to Greenanew (Shanghai) Biotechnology Co., Ltd.
COVID-19 Refers to A new coronavirus (SARS-CoV-2)
The outbreak of the disease caused by a new coronavirus
COVID- 19 pandemic or pandemic Refers to
called SARS-CoV-2
Ruihua Certied Public Accountants (Special General
Ruihua Certied Public Accountants Refers to
Partnership)
Grant Thornton Refers to Grant Thornton (Special General Partnership)
Reporting Period Refers to From 1 January 2022 to 31 December 2022
End of the Reporting Period Refers to 31 December 2022
Currency or unit Refers to RMB unless otherwise specied
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Joincare Pharmaceutical Group Annual Report 2022
Chapter 2 Company Profile and Major Financial Indicators
I. Company profile
Chinese name of the Company 健康元药业集团股份有限公司
Abbreviation of the Chinese name 健康元
English name of the Company Joincare Pharmaceutical Group Industry Co., Ltd.
Abbreviation of the English name Joincare
Legal representative of the Company Zhu Baoguo(朱保国)
II. Contact persons and contact information
Board Secretary Representatives of Securities Aairs
Name Zhao Fengguang ( 赵凤光 ) Li Hongtao( 李洪涛 ) and Luo Xiao( 罗逍 )
Joincare Pharmaceutical Group Building, No. Joincare Pharmaceutical Group Building, No. 17,
Address 17, Langshan Road, North District, Hi-tech Langshan Road, North District, Hi-tech Zone,
Zone, Nanshan District, Shenzhen Nanshan District, Shenzhen
Telephone 0755-86252656, 0755-86252388 0755-86252656, 0755-86252388
Fax 0755-86252165 0755-86252165
lihongtao@joincare.com
E-mail zhaofengguang@joincare.com
luoxiao@joincare.com
III. Introduction of the Company's basic information
Registered Joincare Pharmaceutical Group Building, No. 17, Langshan Road, North District, Hi-tech
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 2 3 / F, Diwang Building, Shun Hing Square, No . 3 3 3 ,
Historical Shennan East Road, Shenzhen on 20 June 1997
changes in
Changed its registered address to Taitai Pharmaceutical Industrial Building, the 5th
registered
Industrial Area, Nanshan District, Shenzhen on 22 September 2000
address
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
518057
Oce address
Website www.joincare.com
E-mail joincare@joincare.com
IV. Information disclosure and place for inspection
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Joincare Pharmaceutical Group Annual Report 2022
Designated media and website for disclosing China Securities Journal, Securities Times, Securities Daily, and
annual report Shanghai Securities News
Stock exchange website for disclosing annual
www.sse.com.cn
report
The place for inspection of annual report Oce address of the Company
V. Company stock profile
Company Stock Profile
Stock abbreviation prior to
Class of stock Listed on Stock Abbreviation Stock code
change
A Share Shanghai Stock Exchange 健康元 600380 太太药业, S健康元
Joincare Pharmaceutical
GDR SIX Swiss Exchange JCARE /
Group Industry Co., Ltd.
VI. Other relevant information
Name Grant Thornton (Special General Partnership)
5th Floor, Scitech Palace, 22 Jianguomen Wai Avenue,
Accounting firm appointed Oce address
Chaoyang District, Beijing
by the Company (domestic) Name of the
signing Wang Yuan (王远) 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 Jianguomen Nei Avenue, Dongcheng District, Beijing
performing the duty of representatives
continuous supervisory signing the Yu Chunyu (于春宇) and Ma Chujin (马初进)
responsibilities during the report
Reporting Period 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 2 01 9 . Furthermore, according to “Article 13 of the Guidelines of Shanghai
Stock Exchange for Self-Regulation Rules for Listed Companies No. 1 1 - 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.
VII. Major accounting data and financial indicators in the last three years
(1) Major accounting data
Unit: Yuan Currency: RMB
YoY Change
Major accounting data 2022 2021 2020
(%)
Revenues 17,142,753,068.82 15,903,688,266.59 7.79 13,521,605,768.20
Net prot attributable to
shareholders of the listed 1,502,595,840.48 1,328,499,432.05 13.10 1,120,439,799.25
company
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Joincare Pharmaceutical Group Annual Report 2022
Net prot attributable to
shareholders of the listed
company after deduction of 1,419,050,912.26 1,224,997,371.57 15.84 966,680,220.14
extraordinary gains and
losses
Net cash ow from
3,977,705,139.29 2,563,089,045.24 55.19 3,024,999,592.24
operating activities
Increase or
decrease at
the end of the
End of 2022 End of 2021 period over End of 2020
the same
period of last
year(%)
Net assets attributable to
shareholders of the listed 13,121,820,410.55 11,820,293,656.69 11.01 11,096,125,890.51
company
Total assets 35,729,253,651.41 31,103,900,389.29 14.87 28,156,977,599.07
(2) Major financial indicators
YoY Change
Major nancial indicators 2022 2021 2020
(%)
Basic earnings per share (RMB/share) 0.7933 0.6864 15.57 0.5753
Diluted earnings per share (RMB/share) 0.7921 0.6858 15.50 0.5728
Basic earnings per share after deduction
of extraordinary gains and losses 0.7492 0.6329 18.38 0.4964
(RMB/share)
Increased by 0.73
Weighted average return on net assets (%) 12.23 11.50 10.41
percentage points
Weighted average return on net assets
Increased by 0.95
after deduction of extraordinary gains and 11.55 10.60 8.98
percentage points
losses (%)
Statement on major accounting data and nancial indicators within three years before the End of the
Reporting Period
√Applicable □N/A
The net cash flow from operating activities was RMB3,978 million, representing a year-on-year
increase of 55.19%, mainly due to the combined effect of an increase in sales receipts and a decrease
in payment of marketing expenses during the Reporting Period.
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
IX. Major financial indicators in 2022 by quarter
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Joincare Pharmaceutical Group Annual Report 2022
Unit: Yuan Currency: RMB
1st quarter 2nd quarter 3rd quarter 4th quarter
(Jan. - Mar.) (Apr.- Jun.) (Jul. - Sept.) (Oct. - Dec.)
Revenues 4,657,343,538.89 3,907,601,746.66 4,447,021,452.61 4,130,786,330.66
Net prot attributable to
shareholders of the listed 460,537,813.53 340,730,705.97 325,293,433.73 376,033,887.25
company
Net profit attributable to
Shareholders of the listed
company after deducting 457,193,702.95 346,800,729.08 312,360,089.27 302,696,390.96
the extraordinary gains or
losses
Net cash flow from
871,904,476.98 1,031,048,747.81 706,039,308.18 1,368,712,606.32
operating activities
Statement on differences 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 2022 2021 2020
Gain or loss on disposal of non-current
-705,357.30 14,492,047.24 102,634,566.25
assets
Government grants recognized in profit or
loss for the current period (excluding
government grants that are closely related
to the business of the Company and are 286,842,932.33 245,335,140.69 246,707,925.30
provided in fixed amount or quantity
continuously according to the applicable
polices and standards of the country)
Profit or loss on debt restructuring 0.00 0.00 -298,617.11
Gains and losses on fair value changes
incurred from financial assets held for
trading, derivative financial assets,
financial liabilities held for trading and
derivative financial liabilities, and
investment income on disposal of financial
-109,887,696.11 8,110,644.25 48,458,672.96
assets held for trading, derivative financial
assets, financial liabilities held for trading,
derivative financial liabilities and other
debt investments, except for effective
hedging activities related to the ordinary
operating business of the Company
Reversal of impairment loss on accounts
receivable and contract assets tested for 158,470.77 1,013,650.67 0.00
impairment individually
Other non-operating income and expenses
-23,830,838.49 -30,737,442.83 -22,794,516.25
apart from the above items
Less: Effect of income tax 31,919,034.26 39,580,260.30 51,541,134.41
Effect of minority equity (after tax) 37,113,548.72 95,131,719.24 169,407,317.63
Total 83,544,928.22 103,502,060.48 153,759,579.11
Explanations for the Company’s extraordinary gain or loss items as defined in the ‘“Explanatory
Announcement No.1 for Public Company Information Disclosures – Extraordinary Gains or
Losses’”, and the extraordinary gain or loss items as illustrated in the ‘“Explanatory Announcement
No.1 for Public Company Information Disclosures – Extraordinary Gains or Losses’” which has
been defined as its recurring gain or loss items.
□ Applicable √ N/A
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Joincare Pharmaceutical Group Annual Report 2022
XI. Items measured at fair value
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Change for the Effect on profits &
Item Beginning balance Ending balance
period losses for the period
Financial assets
184,638,344.31 109,015,664.98 -75,622,679.33 -113,211,242.08
held for trading
Other equity
instrument 1,408,882,377.42 1,193,958,879.05 -214,923,498.37 18,713,637.23
investments
Financial liabilities
143,302.24 755,634.43 612,332.19 -612,332.19
held for trading
Total 1,593,664,023.97 1,303,730,178.46 -289,933,845.51 -95,109,937.04
XII. Others
□ Applicable √ N/A
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Joincare Pharmaceutical Group Annual Report 2022
Chapter 3 Management Discussion and Analysis
I. Discussion and analysis of business operation
2022 was a crucial year for China to promote the implementation of the “14th Five-Year” Plan and
the 30th anniversary of the establishment of Joincare. Facing the complex and volatile external
environment and various unexpected hardships and challenge, the Company adhered to the
corporate vision of “Diligently make high-quality and innovative drugs” and the core values of
“Putting People First, Valuing Workmanship and Quality, Pursuing Innovation and Truth, Promoting
Cooperation and Sharing”, and achieved sustained and stable growth by focusing on its principal
business, fully leveraging its comprehensive strengths, increasing investments in R&D to improve
its innovative capability, optimizing the product structure at a faster pace and adapting to the in-
depth market-oriented reform and innovation of the marketing system.
(I) Focusing on innovative drugs and high-barrier complex formulations to promote high-
quality development
Driven by R&D and innovation, the Company has been concentrating on developing innovative
drugs and high-barrier complex preparations to meet the needs of patients. The Company carried
out the R&D of differentiated products covering the full lifecycle of drugs, gradually broke through
technological barriers in segmented industries and developed competitive advantages in the market.
While deeply cultivating inhalation administration, sustained-release microspheres, antibody
technology and other platforms with technical strength, the Company continued to develop and
deploy on platforms for complex injections represented by nanocrystals and liposomes and
constantly consolidated the leading position of the Company in the domestic high-end complex
formulations. During the Reporting Period, the Company made a significant headway in developing
multiple medicines in our R&D pipeline and sped up the innovation process. Tobramycin Solution
for Inhalation (妥布霉素吸入溶液) was approved for market launch. The Recombinant SARS-
CoV-2 Fusion Protein Vaccine (Likang) was successfully included for the emergency use for
heterologous booster vaccination. Indacaterol Maleate Powder for Inhalation (马来酸茚达特罗吸
入粉雾剂) and Ilaprazole Sodium for injection (注射用艾普拉唑钠) with new indication had
applied for production. Salmeterol Xinafoate-Fluticasone Propionate Powder for Inhalation (沙美
特罗替卡松吸入粉雾剂), Aripiprazole Microspheres for Injection (注射用阿立哌唑微球) (1-
month sustained release), 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) and XYP-001 were currently under
clinical studies. The Company has been paying attention to the R&D of drug-device combinations.
Two products developed by the Company have obtained the registration certificates of class II
medical devices and one product has obtained the filing certificate for medical devices.
While continuously strengthening independent innovation, the Company has been paying close
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Joincare Pharmaceutical Group Annual Report 2022
attention to cutting-edge technologies, enhancing external cooperation and actively promoting
innovative business cooperation models in global market. It has been actively seeking opportunities
for frontier technology expansion and global product layout through cooperative development and
licensing, among other means, to strengthen its commercialization and integration capabilities. The
Company has been strengthening the licensing on introduction of products in core sectors,
authorizing the introduction of various projects in the fields of respiratory, psychiatry and
gastroenterology and expanding the R&D pipeline of the Group. It has made phased progress in
collaborative projects. XYP-001 and Asenapine transdermal patch licensed-in were approved for
clinical trials in China. Moreover, the Company succeeded in exporting its products under research,
with its R&D strength gradually recognized by overseas markets. The Company is still continuously
advancing international cooperation and licensing on innovative products and pipelines, and
conducting negotiations on cooperation with various parties in the international community. For
Tobramycin Inhalation Solution (妥布霉素吸入溶液), an modified new drug, the Company is
conducting negotiations on licensing with customers in Europe, Southeast Asia and other regions.
(II) Innovating a diversified marketing model to enhance corporate brand value
In 2022, the marketing teams of prescription medicines actively implemented the sales strategies
and completed the following key tasks: strengthening product and brand promotion, integrating
resources of end-users, focusing on appraisal of hospitals at above grade II, and enhancing the
hospital coverage of core brands and fulfillment rate of evaluation indicators. During the Reporting
Period, the hospital coverage rate of key products continued to rise, and the overall sales revenues
of prescription medicines showed a steady increase compared with the previous period. As Online
and offline linkage of prescription drugs were enhanced, and with “patients” as the starting point,
online digital marketing was continuously promoted, content construction on doctors intensified,
diseases management knowledge spread, cooperation between hospitals and chain pharmacies
deepened, and offline patient services, brand reputation and patient satisfaction improved. We
continued to carry out evidence marketing, boost academic marketing and maintain close
communication with domestic and international academic communities. Tobramycin Inhalation
Solution (妥布霉素吸入溶液), Ilaprazole series(艾普拉唑系列) and other key products were
incorporated into several core guides and clinical consensus. The clinical and pharmacoeconomic
study for key products went on smoothly, boosting continuous growth of products. We actively
follow up the implementation of policies on national medical reform, and two products are included
into the 7th round national volume-based procurement to reduce the price and improve the
accessibility to patients.
Actively expanding overseas markets remained the focus for API marketing this year. Against the
backdrop of the complicated and severe global economic situation and increasingly fierce
competition in API sales in 2022, the sales team of the Company deeply explored in the market and
advanced against headwinds, achieving remarkable performance. The Company increasingly
became the preferred strategic partner of global leading pharmaceutical enterprises. Sales of high-
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Joincare Pharmaceutical Group Annual Report 2022
end antibiotics and high-end pet drugs achieved remarkable growth. More than ten products further
consolidated their advantages while maintaining the biggest market share in the global export
market. In addition, after over ten years of development, the pet API of the Company occupied a
large global market share, and it has established strategic partnerships with many multinational
animal healthcare companies. The Company’s first pet formulation product - Imidacloprid and
Moxidectin Spot-on Solutions (吡虫啉莫昔克丁滴剂)-had been launched for sale in 2022.
(III) Attaching equal importance to quality and efficiency, and entering a new stage 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 always adheres to the principle
of sustainable development and integrates the concept of green development into operation and
management processes. It promoted lean production of major products through green chemical
technological means and the improvement and upgrading of equipment and facilities to improve the
production efficiency, achieving comprehensive cost reduction and efficiency improvement. While
constantly consolidating the foundation for environmental protection and safety, improving the
quality study on existing products, optimizing the production process, and promoting the
normalization of GMP, all production enterprises have been actively applying for international
certification, thus the internationalization process is further accelerated.
With respect to formulation products, the Company strengthened overseas market access, product
registration and promotion of inhalation products, assisted reproductive products,
gastroenterological products, antiviral products, etc. Ilaprazole Sodium for injection (注射用艾普
拉唑钠) and Ilaprazole Enteric-Coated Tablets (艾普拉唑肠溶片), key products of the Company,
were approved to be launched for market in Indonesia. The work related to overseas registration of
Recombinant Human Choriogonadotropin alfa for Injection (注射用重组人绒促性素) is being
promoted, the submission of registration materials has been completed in Indonesia, Pakistan, five
countries in Central and South America and 2 countries in Central Asia, and it has been approved to
be launched for market in Tajikistan. Budesonide Suspension for Inhalation (布地奈德吸入混悬
液), Compound Ipratropium Bromide Solution for Inhalation (吸入用复方异丙托溴铵溶液) and
other products are undergoing registration in the Philippines and other countries. Budesonide
Suspension for Inhalation has completed registration in Macau and the company completed the first
overseas sale of inhaled formulation products. With respect to APIs, during the Reporting Period,
the Company obtained 4 international authentication certificates for APIs and intermediates, namely
1 EU GMP certificate for Teicoplanin (替考拉宁) and Vancomycin Hydrochloride (盐酸万古霉素);
and 3 CEP certificates, namely the CEP certificate for Moxidectin (莫昔克丁), the CEP certificate
for Acarbose (阿卡波糖) and the CEP certificate for Tobramycin (妥布霉素).
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Joincare Pharmaceutical Group Annual Report 2022
(IV) Implementing scientifically-based lean management and improving the overall operating
efficiency
During the Reporting Period, the Company ensured that the management processes follow the
development of the Company by improving the management efficiency through formulating and
optimizing management processes and strengthening standardized operation and risk control. The
Company raised higher requirements and targets on work related to the sustainable development,
released appraisal rules on ESG indicators and actively performed social responsibilities. The
Company intensified the management by an objective 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 talent acquisition and
team building, implemented the A/B role working mechanism, enhanced the working capability of
employees, continued to introduce global high-end talents while strengthening identification,
training and promotion of internal talents to ensure stability of the core talent team, actively
disseminated the corporate culture and developed highly unified core values of enterprises to
enhance their sense of happiness and enterprise identity, so as to achieve greater cohesiveness and
affinity in the workplace.
(V) Practicing corporate social responsibility to boost sustainable development
The Company adhered to the path of green development and facilitated the achievement of “carbon
peaking and carbon neutrality” targets with practical actions. Through the formulation of the
“Energy Conservation and Emission Reduction Targets 2021-2025”, it continuously promotes all
its production enterprises to carry out energy saving and emissions reduction and complete the
environmental management targets for 2022. During the Reporting Period, the Company introduced
the Environmental Management Targets on Carbon Emissions and strived to achieve carbon
neutrality by 2055. While focusing on its own development, the Company always participates in
social welfare initiatives and vigorously undertakes social responsibilities. The Group has actively
responded to national policies and calls for years. In combination with its own industrial advantages,
the Group jointly launched the “Access to Public Welfare for Chronic Diseases Prevention and
Treatment ( 普 惠 慢 病 防 治 公 益 项 目 )”program, which currently covers 8 provinces and 1
autonomous region. It provided drugs and other materials for patients with chronic diseases in
remote areas, alleviated their medical burdens and further improved the affordability of drugs. In
addition, the Company actively conducted public welfare and science popularization activities,
deeply spread knowledge on diseases through preparing videos on public welfare and science
popularization, invited experts to conduct livestreaming on public welfare and science
popularization, and hosted public welfare lectures. It carried out bronchiectasis assistance programs
as well. Through the “Enterprise WeCom Expert’s little helper”, it provided one-to-one services for
bronchiectasis patients and offered medication consultation, disease consultation, free expert
diagnosis and other services. In 2022, the Company’s public welfare donations amounted to
approximately RMB12.117 million.
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Joincare Pharmaceutical Group Annual Report 2022
II. Overview on the industry in which the Company operates during the Reporting Period
The pharmaceutical industry is a national strategic emerging industry bearing on the national
economy and people's livelihood, and an important part of the national economy. According to the
14th Five-Year Plan for the Development of Pharmaceutical Industry(《“十四五”医药工业发展规
划》), the overall development of the pharmaceutical industry will reach a new level. During the
"13th Five-Year Plan" period, the average annual growth rate of the added value of pharmaceutical
industry above designated scale was 9.5%, 4.2 percentage points higher than the overall growth rate
of all the industries, and the proportion of the total added value of the pharmaceutical industry to
that of all the industries increased from 3.0% to 3.9%; the average annual growth rate of the
operating revenues and total profit of enterprises above designated scale were 9.9% and 13.8%,
respectively, being at the forefront of various industries in terms of growth rate. At the same time,
the scale of leading pharmaceutical manufacturers has further expanded with the steadily increasing
industry concentration. In 2022, with the deepening reform of the national medical and healthcare
system and increasing improvement in the innovation environment, the pharmaceutical industry
continued to advance towards high-quality development featuring transformation as well as
upgrading and encouraging innovation. With the aging population and the increasing urbanization
rate in China, from the long-term and holistic perspective, China's pharmaceutical industry will
continue to present a promising development trend.
The R&D expenditures in new drugs in the pharmaceutical industry remained high and the pipeline
of new drugs under research was increasingly diversified. In 2022, 10 innovative chemical drugs,
31 modified new chemical drugs, 6 innovative biological drugs and 5 new TCM drugs were
approved for market launch. The number of new drugs approved for market launch remained
relatively stable. Meanwhile, the time from the launching of innovative drugs to the inclusion in the
medical insurance system was shortened from the original 4-5 years to the current about 1 year. The
application of innovative drugs with “clinical value” in hospitals was further accelerated. Data of
National Bureau of Statistics shows that in 2022, enterprises in the pharmaceutical manufacturing
industry above designated scale in China recorded revenues of RMB2,911.14 billion, representing
a year-on-year decrease of 1.6%; operating costs of RMB1,698.46 billion, representing a year-on-
year increase of 7.8%; and total profits of RMB428.87 billion, representing a year-on-year decrease
of 31.8%.
III. Overview on the businesses of the Company during the Reporting Period
(I) Principal businesses and products of the Company
The Company is primarily engaged in the R&D, production and sales of pharmaceutical products
and health care products. The business scope of the Company covers chemical pharmaceuticals,
biologics, chemical active pharmaceutical ingredients (APIs) and intermediates, traditional Chinese
medicine, diagnostic reagents, equipment, 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:
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Joincare Pharmaceutical Group Annual Report 2022
(II) Business model of the Company
With the stable operation and rapid development over the years, the Company has become an
integrated pharmaceutical group that is driven by scientific research and innovation, integrating the
R&D, production, sale and service of pharmaceutical and health care products. It has complete
systems of R&D, procurement, production and sale. Main business models of the Company are as
follows:
1. R&D
Taking independent R&D as the mainstay and combining external introduction and cooperative
development, the Company has been paying attention to the cutting-edge technology and unmet
clinical needs, with efforts focused on innovative drugs and high-barrier complex formulations and
has established an efficient R&D innovation management model. In terms of independent
innovation, the Company has a diversified and multi-dimensional R&D organization with mature
R&D teams for chemical pharmaceuticals, biologics, TCM drugs, APIs, diagnostic reagents and
health care products. Based on technology platform construction, the Company has built a clear
product R&D pipeline centering on key areas such as respiratory, 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 has introduced new technologies and products that meet the strategic development
goal of the Company through technology transfer or license-in to implement industrial
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Joincare Pharmaceutical Group Annual Report 2022
transformation, so as to reinforce and strengthen our position and strategy in the leading and
emerging fields.
2. Procurement
In terms of procurement, the Company pays strict attention to effectiveness, quality and cost 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 files of market prices so as to promptly acquire market information for
procurement through comparisons of quality and price.
3. Production
In terms of production, the Company adopts the principle of market demand-oriented approach
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 specifications. 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 has been carrying 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 has established a strict and sound
production quality assurance system, and is geared to international standards and subject to
international certification while in compliance with national standards. The Company conducts
annual GMP self-inspection, ISO9001 internal and external audits, and is 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. The system is running well.
4. Sales
(1) Drug formulation products
End customers of drug formulation products (chemical pharmaceuticals, biologics, traditional
Chinese medicine) of the Company are mainly hospitals, clinics, and retail pharmacies. In line with
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Joincare Pharmaceutical Group Annual Report 2022
the pharmaceutical industry practice and the sales model of most peers in the industry, the Company
has conducted sales of drug formulation 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 revenue recognition.
(2) APIs and intermediates
Main target customers of APIs are large pharmaceutical manufacturers. The selling prices are
determined based on a set of integrated factors such as costs of production, inventory levels, industry
rivalry and market trend. Specific pricing method: The sales and marketing department conduct
weekly or bi-weekly meetings to analyze the current market conditions, 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
effective 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 in areas with high market and political risks, products are sold
through distributors. At present, products of the Company are mainly exported to over 60 countries
and regions in Asia, Europe, North America, and Africa.
(3) Diagnostic reagents and equipment
Diagnostic reagents and equipment sold by the Company both domestically 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, with 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, financial strength, credit record, and operation scale.
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Joincare Pharmaceutical Group Annual Report 2022
(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 25
provincial branches and 92 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 distribution line and approximately 25 businesses in food
distribution line with more than 150,000 subordinate secondary businesses and terminal businesses
in drug and food distribution lines. Products are well managed and promoted through the tiered
marketing channel. In addition to the traditional distribution management model, the Company
realizes synergetic development through online channels. At present, the Company has set up
official flagship stores on mainstream e-commerce platforms such as Tmall(天猫), Jingdong（京
东）, Douyin（抖音）, Kuaishou (快手) and Pinduoduo (拼多多).
(III) Industry status of the Company
Through years of development, the Company has become a comprehensive pharmaceutical
enterprise covering multiple areas including chemical pharmaceuticals, biologics, chemical APIs
and intermediates, traditional Chinese medicine, diagnostic reagents and equipment, health care
products, etc. In terms of revenues in 2021, the Company ranked sixth among the listed integrated
pharmaceutical enterprises in China. Chemical pharmaceuticals are the largest revenue generator of
the Company, among which gastroenterological products, anti-infection products and gonadotropic
hormones products are traditional competitive products of the Company, with key products securing
a long-standing leading position in national drug formulation market segment. Respiratory and
psychiatric products have been the focus of the Company, with key products maintaining a strong
sales growth momentum.
In terms of R&D expenditures in 2021, the Company ranked fifth among listed integrated
pharmaceutical enterprises in China. During the Reporting Period, with solid strength in R&D,
production, and steady marketing presence, the Company ranked Top 10 in 2021 Annual Ranking
of Top 100 Chinese Chemical Drug Enterprises and Top 100 in the “2022 Annual Ranking of
Chinese Pharmaceutical R&D Comprehensive Strength”.
(IV) Performance drivers during the Reporting Period
In 2022, the Company actively implemented sales deployment, strengthened market promotion and
reinforced sales specialization. In addition, the Company increased digital marketing and enhanced
delicacy management. That is how we can realize steady growth of main business revenues and
consolidate the foundation and ability of sustainable development of enterprises. During the
Reporting Period, sales of main varieties in key specialist areas, especially in fields of respiratory
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Joincare Pharmaceutical Group Annual Report 2022
and psychiatry of the Company, kept steady growth, and contribution of sales revenues from key
preparation products to overall revenues was continuously improved. In addition, the proportion of
sales and profit of high-end APIs increased as the Company has been taking measures to integrate
resources, optimize product structure, and reinforce international certification while actively using
advanced technologies including synthetic biology and continuous production to ensure green
production.
IV. Analysis of core competitive strengths during the Reporting Period
√Applicable □N/A
1. Leading integrated pharmaceutical company under continuous innovation and
development in China
The Company is primarily engaged in the R&D, production and sale of pharmaceutical products
and health care products. The business scope of the Company covers chemical pharmaceuticals,
biologics, chemical APIs and intermediates, TCM drugs, diagnostic reagents and equipment, as well
as health care products, allowing the Company to establish competitive advantages across various
therapeutic areas such as respiratory, anti-infection, assisted reproduction, gastroenterology,
psychiatry, and tumor immunity. 1) Innovative R&D drives growth: The Company has developed
and launched a number of innovative medicine products and high-barrier complex formulation
products, strengthening the Group’s product portfolio and drug candidates in the pipeline. 2) The
Company has first-tier commercialization ability, and its sales network covers all provinces in China
and over 80 overseas countries and regions in the world. The Company emphasizes scientific
promotion and evidence-based marketing. By building a professional marketing team, the Company
has established a comprehensive marketing system, and market education and brand building have
been deeply strengthened through digital marketing. Leveraging our comprehensive sales channels,
broad market coverage, leading digital marketing and brand awareness, the Company is able to sell
the products at scale in an efficient manner. 3) Cross-industry and multi-specialist innovative R&D
and coordinated development: On one hand, the Company actively adapts to the changes in the
pharmaceutical market and constantly adjusts its product strategy and R&D direction according to
policies and clinical needs. This will realize the continuous iteration and upgrade of the main
products. On the other hand, the Company fully utilizes external scientific research and commercial
resources, such as strategic collaboration with Chinese Academy of Sciences, Tencent Quantum
Lab and other scientific research institutes and innovative companies and invests in cutting-edge
biotechnology companies to expand the Company’s product portfolio and R&D pipeline, thus
realizing the Company’s sustainable development.
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Joincare Pharmaceutical Group Annual Report 2022
2. Strong R&D capabilities, diversified product portfolio and leading commercialization
capabilities
Focusing on innovative medicines and high-barrier complex formulation, the Company has formed
diversified product portfolio. With the huge clinical demand and high product quality, it has
established market competitive advantages in many pharmaceutical segments. The Company’s
chemical pharmaceuticals cover gastroenterology, assisted reproduction, anti-infection, respiratory,
psychiatry, tumor and other fields, among which alimentary tract proton pump inhibitor (PPI) drugs,
gonadorelin hormone drugs, and inhalation formulation for respiratory diseases have an
advantageous market position. Relying on APIs production, the Company’s core products, together
with our chemical APIs and intermediates, form an integrated and stable pharmaceutical industrial
chain of “APIs-formulations vertical integration”. Meanwhile, the Company actively develops
overseas markets, and our products are marketed and distributed worldwide, facilitating strategic
cooperation with many internationally renowned pharmaceutical companies. In addition, the
Company also has a number of TCM drugs and in vitro diagnostic reagent products and has
accumulated resources and extensive brand influence in healthcare products for many years.
3. Making breakthroughs in the key R&D and industrialization technologies of complex
formulation
The technology platform, which has been developed over the years in the field of innovative
medicines and high-barrier complex formulation, enables the Company to address the complex
process problems in the R&D and production of relevant drugs. Guided by clinical value, the
Company develops R&D projects with high short-term certainty and cutting-edge technologies with
long-term growth potential (such as AI-driven drug molecular design, proteolysis targeted chimeric
(PROTAC), synthetic biology, gene-editing, cellular treatment, etc.). All in all, the Company’s
R&D system covers through-cycle of drug development and production. Based on the mature R&D
platform of innovative drugs and high-barrier complex formulations, the Company has designed
extensive pipeline in fields with significant clinical demand such as respiratory, gastroenterology,
assisted reproduction, psychiatry, and tumor.
4. Stable management and R&D team with expertise, long-term vision and commitment to
social responsibility
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 of the Company has over 30 years of expertise in the pharmaceutical industry as well as a
global vision and a strategic mindset. With a deep industry insight, the founder has led us develop
platform technologies centered on high-barrier complex formulations, which has established leading
position of the Group with sustainable development in the broader healthcare industry. The senior
29
Joincare Pharmaceutical Group Annual Report 2022
management team of the Company has over 20 years of industry experience on average, with an
average of more than 10 years of service in the Company, and has a thorough understanding of
market demand, industry development and growth opportunities. Each key R&D field of the
Company is led by industry-leading scientists and accompanied by an efficient R&D management
team. In addition, the Company has upheld the core value of “Putting People First, Valuing
Workmanship and Quality, Pursuing Innovation and Truth, Promoting Cooperation and Sharing”
and laid emphasis on talent team training to 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
jointly contribute to the sustainable development of the enterprise through teamwork and
collaboration.
V. Overview of business operations during the Reporting Period
During the Reporting Period, the Company realized revenues of RMB17,143 million, representing
a year-on-year increase of approximately 7.79%; a net profit attributable to shareholders of the listed
company of RMB1,503 million, representing a year-on-year increase of approximately 13.10%, and
a net profit attributable to shareholders of the listed company after deducting the extraordinary gains
or loss of RMB1,419 million, representing a year-on-year increase of approximately 15.84%. In
2022, business development of various segments of the Company is as follows:
(1) Livzon Group (excluding Livzon MAB)
As at the End of the Reporting Period, the Company directly and indirectly held 44.77% equity
interest in Livzon Group (000513.SZ, 01513.HK). During the Reporting Period, Livzon Group
(excluding Livzon MAB) realized revenues of RMB12,424 million, representing a year-on-year
increase of approximately 3.35%; and realized a net profit of approximately RMB1,038 million
attributable to shareholders of the Company.
During the Reporting Period, the sales of the drug formulation segment of Livzon Group increased
steadily, and recorded the steady growth in the proportion and profitability of high-end specialty
APIs in the API segment. The sales of its products in the key therapeutic areas are as follows:
Gastroenterology products realized revenues of RMB3,436 million, representing a year-on-year
decrease of approximately 6.48%; gonadotropic hormones products realized revenues of RMB2,591
million, representing a year-on-year increase of approximately 5.64%; and psychiatry products
realized revenues of RMB545 million, representing a year-on-year increase of approximately
32.19%.
(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 55.90%, and the amount affecting the Company's net profit
attributable to the parent company for the current period was approximately RMB-446 million.
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Joincare Pharmaceutical Group Annual Report 2022
During the Reporting Period, Livzon MAB focused on promoting the application on conditional
marketing approval of the Recombinant SARS-CoV-2 Fusion Protein Vaccine (重组新型冠状病
毒融合蛋白疫苗) (Likang). Livzon MABcompleted the Phase III clinical master analysis report
for sequential immunization and basic immunization and submitted related application materials to
CDE in February and May 2022, respectively. It was approved for the domestic heterologous
booster vaccination in June 2022 and was officially included into the national immunization plans
in September of the same year. Currently, it has been applied in the booster vaccination in over 20
provinces and municipalities across China. To meet the market demand, Livzon MAB has
completed the construction of the third preparation workshop (2-tests and 10-tests production line),
which has been fully put into operation, on the basis of the existing 1 stock solution production line
and 2 preparation production lines. In addition, in response to the global trend of COVID-19
pandemic and the prevalence of COVID-19 variants, Livzon MAB developed several vaccines
against the variants and related bivalent vaccines and carried out explorations on enhanced
immunization with portfolios of various types of vaccines. During the Reporting Period, Livzon
MAB carried out the R&D of bivalent vaccine BV-01-B5 on prototype strain + Omicron strain.
Data showed that BV-01-B5 has outstanding cross-neutralization effects on Omicron BA.4/5 and
other subtypes. Currently, complete clinical application materials for the bivalent vaccine have been
submitted and are under CDE’s review.
On the other hand, Livzon MAB continued to focus on new molecules, new targets and
differentiated molecular designs in the fields of tumors, immune diseases and assisted reproduction.
During the Reporting Period, Livzon MAB made phased progress in the R&D of the following
projects: Recombinant Human Choriogonadotropin alfa for Injection (注射用重组人绒促性素)
was approved for launching in 2021 and had started sales, which is the first generic drug of its kind
in China. Livzon MAB had been actively promoting overseas registrations. Its submission of
registration materials had been completed in Indonesia, Pakistan, five countries in Central and South
America and 2 countries in Central Asia and the drug had been approved for launching in Tajikistan.
The application for launch approval on 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) , with the indication of rheumatoid arthritis, had been
approved. Meanwhile, it was listed in the Diagnosis and Treatment Protocol for COVID-19 (Trial
Version 10) and the Diagnosis and Treatment Protocol for Severe COVID-19 Cases (Trial Version
4). With tight domestic supply of brand-name drugs at the end of 2022 and the beginning of 2023,
the approval for market launch of Tocilizumab Solution for Injection of Livzon MAB relieved the
tight supply to a certain extent. The phase II clinical trials for 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 completed and Livzon MAB was about to conduct the phase III clinical trials. Results showed
that such product has fast action, outstanding efficacy, long maintenance of efficacy and other
clinical advantages. It has better efficacy than IL-17A single-target drug and is expected to provide
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Joincare Pharmaceutical Group Annual Report 2022
better solutions for psoriasis treatment in China. Moreover, the product with ankylosing spondylitis
indication jointly applied for clinical trial by Livzon MAB and Beijing Kanova was under the
preliminary analysis of interim data of the phase II clinical trials.
In addition to advancing projects in the clinical phase, Livzon MAB is also exploring through R&D
in areas such as bispecific antibodies and NKT cell therapy. With more and more products approved
for market launch, Livzon MAB expanded its pharmacovigilance, production quality, production
and sales linkage and other relevant teams, gradually enhanced the GMP system and
industrialization capability and improved the overall operational capability.
(3) Joincare (excluding Livzon Group and Livzon MAB)
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized
revenues of RMB4,832 million, representing a 17.04% year-on-year increase of approximately, and
realized a net profit attributable to shareholders of listed companies of RMB929 million,
representing a year-on-year increase of approximately 43.00%. Joincare realized a net profit
attributable to shareholders of the listed company after deducting the extraordinary gains and losses
of RMB863 million, representing a year-on-year increase of approximately 39.73%. Key results of
the main business segments are as follows:
① Prescription medicines
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized sales
revenues of RMB2,120 million from prescription drug segment, representing a year-on-year
increase of approximately 18.46%. Among which, the sales revenues and year-on-year change of
key therapeutic areas are as follows: the revenues generated from the field of respiratory totaled
RMB1,174 million, representing a year-on-year increase of 103.37%; the revenues generated from
the field of anti-infection totaled RMB921 million, representing a year-on-year decrease of 22.76%.
In 2022, the Company gradually enhanced the national sales team in respiratory line, established a
three-level fine marketing development system of regional managers, provincial managers, and
development managers, actively taking various measures to speed up the penetration of key products
into hospitals: 1. The coverage and fulfillment rate of evaluation indicators were enhanced; the
development speed of respiratory variety was obviously accelerated; drug formulary expansion of
more than 2,200 hospitals above grade II was newly conducted throughout the year; 2. Rapid
coverage and sales growth of the Levosalbutamol Hydrochloride Nebulizer Solution (盐酸左沙丁
胺醇雾化吸入溶液) was realized by taking the opportunity that the drug was included in the China’s
National Reimbursement Drug List (“NRDL”); 3. Construction of digital marketing platforms was
continuously advanced, marketing process accelerated through digital means and the brand
comprehensively communicated via the platform of “Respiratory Experts' Views” (呼吸专家说);
4. With three inhalation formulations being included to the fifth batch of the volume-based
procurement and one inhalation formulation being included to the seven batch of the volume-based
32
Joincare Pharmaceutical Group Annual Report 2022
procurement, the Company has rapidly tapped into the domestic sales market and gradually
improved market share for inhalation formulation products; 5. Construction of regional warehouses
in 10 regions across the country completed, including Shijiazhuang, Wuhan and Zhengzhou and
were put into operation in 2022, which effectively ensured the timely and efficient distribution of
drugs.
② APIs and intermediates
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized sale
revenues of RMB2,360 million from APIs and intermediates segment, representing a year-on-year
increase of approximately 16.05%.
During the Reporting Period, in the API segment, Joincare adhered to the management concept of
“green production, cost reduction and efficiency enhancement”, focused on the transformation and
upgrading of production equipment, enhanced the establishment of the quality management system
and strengthened the construction of safety and environmental management, guaranteeing the steady
improvement in the production and yield of key products of the Company. In terms of marketing,
Joincare actively expanded domestic and international markets for the key product 7-ACA by
optimizing strategic cooperation channels and strengthening in-depth cooperation with strategic
customers. Leveraging the advantages in the upstream and downstream industry chains, we
continued to increase our market share. The export share of Meropenem Trihydrate (美罗培南混
粉) has repeatedly set a new high. Despite increased competition in the market this year, the
Company continued to strengthen its position in the market through making plans in advance, thus
the sales and profit of the product hit a historical high. In addition, the Company applied the
registration for Meropenem Trihydrate and Meropenem Crude (美罗培南粗品) in Japanese market
and Italian market, respectively, boosting market development efforts for the products to expand
overseas market share. With the implementation of the centralized procurement of Meropenem for
injection, the Company displayed the advantages of APIs-preparations vertical integration and
actively explored domestic API markets in response to the impacts of centralized procurements.
In terms of API R&D, the Company focuses on two frontier fields to carry out key scientific research.
Firstly, through the transformation and selection systems previously established and in combination
with metabolic engineering, gene editing, systems biology, enzyme directed evolution, high-
throughput screening and other technologies, the Company further optimized conditions for all
processes of genetic modification, gene editing and strains selection. The Company has obtained
more than 450 potential Cephalosporin C (头孢菌, CPC) high-yielding mutant strains from over
65,000 acremonium chrysogenum (产黄支顶孢霉) strains in the initial screening. It obtained 3 new
CPC high-yielding mutant strains for large-scale industrial fermentation through selection, which
made the average CPC yield per unit increased remarkably. Secondly, leveraging on the computer-
assisted protein engineering technology platform and through the omics research, rational
transformation and metabolic regulation on strains, the Company successfully developed screening
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Joincare Pharmaceutical Group Annual Report 2022
strategies on metabolite biosensor applicable to aromatic amino acid and its intermediate products
relying on the optimization of metabolic pathways guided by machine learning. Moreover, the
Company made phased progress in the selection of doramectin, Acarbose, pleocidin, erythrocin,
vitamin B2, levodopa, α-arbutin and other industrial strains and in the improvement of production
process.
③ Health care products and OTC drugs
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized
revenues of RMB309 million from health care products and OTC segment, representing a year-on-
year increase of approximately 7.24%.
During the Reporting Period, the Company established a data-driven digital marketing system with
user operation as the core to drive sales growth. On content marketing front, it focused on
strengthening its exposure on social media platforms such as Douyin, RED(小红书) and WeChat,
established cooperative relationships with several professional KOLs and promoted brands and
products through graphics, short videos and livestreaming, to greatly enhance its brand exposure
and at the same time to spread common knowledge on healthcare. In terms of brand marketing, it
jointly unveiled the White Paper on Melasma Prevention and Treatment with industry associations
and professional physicians, carried out common knowledge education and conveyed scientifically-
based health concepts to foster its professional brand image and reputation. In terms of channel sales,
in addition to maintaining the existing sales model of offline channels, we focused on expanding
businesses through online channels such as Tmall, JD.com and Douyin to increase the penetration
rate of channels, thereby boostering brand sales.
(I) Analysis of principal business
1. Analysis of changes in items of income statement and cash flows statement
Unit: Yuan Currency: RMB
Amount for the same
Item Amount for the period Change (%)
period of last year
Revenues 17,142,753,068.82 15,903,688,266.59 7.79
Operating costs 6,252,265,308.40 5,716,293,887.58 9.38
Selling expenses 4,950,802,456.16 5,026,812,145.41 -1.51
Administrative expenses 992,483,591.51 939,253,444.33 5.67
Financial expenses -352,447,424.62 -92,894,751.72 N/A
R&D expenses 1,742,088,079.94 1,397,131,273.33 24.69
Net cash flow from operating
3,977,705,139.29 2,563,089,045.24 55.19
activities
Net cash flow from investing activities -2,252,167,188.62 -1,964,157,731.17 N/A
Net cash flow from financing
566,122,659.80 -974,904,353.44 N/A
activities
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Joincare Pharmaceutical Group Annual Report 2022
Reasons for changes in financial expenses: Mainly due to the increase in interest income and the
increase in foreign exchange gains as a result of exchange rate changes during the Period.
Reasons for changes in net cash flow from operating activities: Mainly due to the combined effect
of an increase in sales receipts and a decrease in payment of marketing expenses during the
Reporting Period.
Reasons for changes in net cash flow from financing activities: Mainly due to the combined effect
of new borrowing and investment absorption (through GDR issuance) during the Reporting Period.
Details of material changes in business type, components or source of profits during the
current period
□Applicable √N/A
2. Analysis of revenues and costs
√Applicable □N/A
During the Reporting Period, the Company realized revenues of RMB17,143 million, representing
a year-on-year increase of 7.79%; the operating costs totaled RMB6,252 million, representing a
year-on-year increase of 9.38%.
(1). Composition of principal businesses by industry, product, region and sales model
Unit: Yuan Currency: RMB
Principal business by industry
YoY YoY
YoY change in
Gross profit change in change in
By industry Revenues Operating costs gross profit
margin (%) revenues operating
margin (%)
(%) costs
Pharmaceutical Decreased by
manufacturing 17,005,972,382.14 6,157,580,341.92 63.79 8.03 9.90 0.62 percentage
Industry points
Decreased by
Service industry 6,761,356.72 2,750,242.27 59.32 34.89 55.02 5.28 percentage
points
Principal business by product
YoY YoY
YoY change in
Gross profit change in change in
By product Revenues Operating costs gross profit
margin (%) revenues operating
margin (%)
(%) costs
Increased by
Chemical
9,226,385,569.43 1,813,969,087.68 80.34 3.94 3.44 0.09 percentage
pharmaceuticals
points
Chemical APIs Increased by
and 5,229,641,907.04 3,409,781,896.55 34.80 11.50 7.06 2.70 percentage
intermediates points
Traditional Decreased by
Chinese 1,296,583,761.24 427,894,665.07 67.00 16.88 44.89 6.38 percentage
medicine points
Diagnostic Decreased by
reagents and 723,535,115.00 352,636,503.06 51.26 -0.05 10.49 4.65 percentage
equipment points
Decreased by
Biologics 408,488,131.90 106,811,638.64 73.85 80.94 568.08
19.07 percentage
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Joincare Pharmaceutical Group Annual Report 2022
points
Decreased by
Health care
121,235,545.22 46,223,021.02 61.87 5.27 37.35 8.91 percentage
products
points
Principal business by region
YoY YoY
YoY change in
Gross profit change in change in
By region Revenues Operating costs gross profit
margin (%) revenues operating
margin (%)
(%) costs
Decreased by
Domestic 14,170,771,017.92 4,326,229,111.25 69.47 7.56 12.73 1.40 percentage
points
Increased by
Overseas 2,841,962,720.94 1,834,101,472.94 35.46 10.51 3.80 4.17 percentage
points
Principal business by sales model
YoY YoY
YoY change in
Gross profit change in change in
By sales model Revenues Operating costs gross profit
margin (%) revenues operating
margin (%)
(%) costs
Decreased by
Channel sales 11,185,248,628.68 2,566,303,271.29 77.06 4.51 11.47 1.43 percentage
points
Increased by
Direct sales 5,827,485,110.18 3,594,027,312.90 38.33 15.54 8.83 3.80 percentage
points
Note: Biological products include Recombinant SARS-CoV-2 Fusion Protein Vaccine (重组新型
冠状病毒融合蛋白疫苗), Mouse Nerve Growth Factor for Injection (注射用鼠神经生长因子),
Bifidobacterium Viable Capsule (双歧杆菌活菌胶囊), Recombinant Human Choriogonadotropin
alfa for Injection (注射用重组人绒促性素), etc.
Explanations on composition of principal businesses by industry, product, region and sales
model
During the Reporting Period, the Company’s principal businesses generated revenues of
RMB17,013 million, representing a year-on-year increase of RMB1,266million or 8.04%.
The growth of the Company’s revenues of principal businesses was primarily due to the Company’s
continuous efforts in promoting marketing reforms, fully facilitating the mass market product
channels and accelerating sales in key specialist fields. Sales of main varieties in the key fields of
chemical pharmaceuticals kept sustained robust growth. In addition, the sales revenues of APIs
segment grew noticeably with an obvious increase of gross profit margin as the Company taken
measures to integrate resources, adjust product portfolio, reinforce international certification while
actively using advanced technologies including synthetic biology and continuous production to
ensure green production.
(2). Analysis of production and sales
√Applicable □N/A
36
Joincare Pharmaceutical Group Annual Report 2022
YoY
YoY YoY change in
Main Inventory change in
Unit Production Sales change in Inventory
products level production
sales (%) （%）
(%)
Ilaprazole Ten
sodium for thousand 1,866.33 1,956.16 225.38 29.94 57.12 -28.71
injection boxes
Leuprorelin
Ten
Acetate
thousand 151.98 151.94 - -2.39 10.47 -
Microspheres
ampules
for Injection
Ilaprazole
Ten
Enteric-
thousand 2,502.09 2,257.23 482.82 28.25 9.82 101.71
Coated
boxes
Tablets
Ten
Meropenem
thousand 1,873.59 2,011.01 13.32 2.59 1.71 -91.16
for Injection
ampules
7-ACA
(including D- Ton 3,065.58 3,018.95 102.50 5.57 1.07 83.43
7ACA)
Explanations on production and sales
In 2022, the Company actively implemented sales planning, stepped up efforts in marketing, and
enhanced specialized and fine sale management, thus leading to significant increase in the output
and sales volume of our major product, Ilaprazole sodium for injection. The change in inventory
was mainly due to the supply and demand at the end of the year and the stock preparation for the
new year.
(3). Performance of major procurement contracts and major sales contracts
□Applicable √N/A
(4). Cost analysis
Unit: Yuan
As a
As a percentage
percentage Amount incurred of total
Amount incurred YoY
Cost of total in the same costs in
By industry in the current change
components costs in period of the same
period (%)
the current previous year period of
period (%) previous
year (%)
Costs of
3,908,782,585.27 62.52 3,426,827,118.77 59.95 14.06
materials
Labor costs 809,277,538.94 12.94 619,622,563.47 10.84 30.61
Pharmaceutical
Manufacturing
manufacturing 1,684,532,284.52 26.94 1,487,278,456.52 26.02 13.26
costs
Industry
Depreciation 406,107,662.76 6.50 322,761,251.80 5.65 25.82
Others -559,185,005.37 -8.94 -141,969,567.28 -2.48 N/A
Subtotal 6,249,515,066.13 99.96 5,714,519,823.28 99.97 9.36
Service Costs of 512,284.05 0.01 408,782.66 0.01 25.32
37
Joincare Pharmaceutical Group Annual Report 2022
industry materials
Labor costs 1,757,712.56 0.03 1,022,280.28 0.02 71.94
Manufacturing
327,719.99 0.01 223,280.63 0.00 46.77
costs
Depreciation 152,525.67 0.00 119,720.73 0.00 27.40
Subtotal 2,750,242.27 0.04 1,774,064.30 0.03 55.02
Costs of
3,909,294,869.32 62.53 3,427,235,901.43 59.96 14.07
materials
Labor costs 811,035,251.51 12.97 620,644,843.75 10.86 30.68
Manufacturing
Total 1,684,860,004.51 26.95 1,487,501,737.14 26.02 13.27
costs
Depreciation 406,260,188.43 6.50 322,880,972.53 5.65 25.82
Others -559,185,005.37 -8.94 -141,969,567.28 -2.48 N/A
Subtotal 6,252,265,308.40 100.00 5,716,293,887.58 100.00 9.38
As a
As a percentage
percentage Amount incurred of total
Amount incurred YoY
Cost of total in the same costs in
By product in the current change
components costs in period of the same
period (%)
the current previous year period of
period (%) previous
year (%)
Costs of
36,089,962.70 0.58 26,560,959.72 0.46 35.88
materials
Labor costs 11,329,854.63 0.18 6,336,694.50 0.11 78.80
Health care Manufacturing
9,444,348.04 0.15 2,677,541.36 0.05 252.72
products costs
Depreciation 5,463,682.37 0.09 2,564,510.61 0.04 113.05
Others -16,104,826.72 -0.26 -4,487,206.18 -0.08 N/A
Subtotal 46,223,021.02 0.74 33,652,500.02 0.59 37.35
Costs of
3,841,254,506.51 61.44 3,359,165,272.77 58.76 14.35
materials
Labor costs 795,400,898.83 12.72 611,624,924.03 10.70 30.05
Pharmaceutical Manufacturing
1,620,338,814.98 25.92 1,435,952,937.90 25.12 12.84
Products costs
Depreciation 400,238,957.27 6.40 320,084,243.85 5.60 25.04
Others -546,139,386.60 -8.74 -157,879,982.96 -2.76 N/A
Subtotal 6,111,093,791.00 97.74 5,568,947,395.59 97.42 9.74
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 Influence of price fluctuation
medicinal herb model
The supply of Livzon Limin’s
codonopsis root and astragalus root is Codonopsis Root: the supply
relatively stable. Both medicinal price fall compared with the
Shenqi herbs are supplied by plantation bases Supplied by same period last year;
Fuzheng and external suppliers. Plantation Livzon Limin Astragalus Root: the supply
Codonopsis Root
Injection(参芪 Base of Livzon Limin Pharmaceutical Base and maintained relatively stable,
and Astragalus Root
扶正注 Manufacturing Factory (“Livzon external and the supply price edged up
射液) Limin Base”) maintains safety stock suppliers due to the increase in
of medicinal herbs, which ensures the processing costs, labor costs
supply quantity and stabilizes the and other expenses.
supply price. Meanwhile, Limin
38
Joincare Pharmaceutical Group Annual Report 2022
signed annual demand-based supply
agreements with external suppliers
who are obligated to stock up
according to Limin's quality
requirements, so as to ensure
sufficient supply of herbs with stable
quality.
For main raw medicinal herbs
used in Anti-Viral Granules,
compared with the same
period of the previous year,
price of Rehmanniae Radix
fell largely as the plantation
area was supplemented
stimulated by the high price at
There is sufficient supply of main raw
the earlier stage; price of
Indigowoad Root, medicinal herbs used in Anti-Viral
Radix Curcumae decreased as
Fructus Forsythiae, Granules. Indigowoad Root, Acori
Anti-Viral results of expansion of the
Anemarrhena, Acori Graminei Rhizome, Anemarrhena, Tendering
Granules, plantation area; the prices of
graminei Rhizoma, Patchouli, Rehmanniae Radix and procurement,
Anti-Viral some medicinal herbs such as
Gypsum, Rhizoma Radix Curcumae are supplied by supplied by
Granules Indigowoad Root, Fructus
Phragmitis, plantation bases and external plantation base
(Sugar-free), Forsythiae, Rhizoma
Patchouli, suppliers; some wild medicinal herbs and external
Anti-Viral Phragmitis, Patchouli,
Rehmanniae Radix, such as Fructus Forsythiae and Acori suppliers
Syrup, Anti- Anemarrhena, Acori graminei
Radix Curcumae, Graminei Rhizome have a certain
Viral Tablets Rhizoma stayed relatively the
Dahurian Angelica amount of safety stock to ensure
same. However, as the
Root basically stable supply and price.
demand for certain
varieties of medicinal herbs
such as Indigowoad Root,
Fructus Forsythiae, Rhizoma
Phragmitis and Patchouli
increased significantly in the
market at the end of 2022,
their prices rose to varying
degrees.
(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
(7). Major customers of sales and major suppliers
A. Major customers of sales
√Applicable □N/A
Sales to the top 5 customers were RMB1,524.4901 million, representing 8.89% of the total annual
sales; of which the sales to related parties were RMB0 million, representing 0.00% of the total
annual sales.
Sales to any individual customer in excess of 50% of the total, any new customer in the top 5
customers or heavy dependence on a few customers during the Reporting Period
□Applicable √N/A
39
Joincare Pharmaceutical Group Annual Report 2022
B. Information on major suppliers
√Applicable □ N/A
Purchases from top 5 suppliers were RMB835.906 million, representing 17.24% of the total annual
purchase cost, of which the purchases from related parties were RMB268.667 million, representing
5.54 % of the total annual 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
YOY
Item 2022 2021 Explanations
Change(%)
Selling expenses 4,950,802,456.16 5,026,812,145.41 -1.51 No material change
Administrative
992,483,591.51 939,253,444.33 5.67 No material change
expenses
Mainly due to the
increase in interest
income and the increase
Financial expenses -352,447,424.62 -92,894,751.72 N/A in foreign exchange
gains as a result of
exchange rate changes
during the Period.
R&D expenses 1,742,088,079.94 1,397,131,273.33 24.69 No material change
4. Investment in R&D
(1). Investment in R&D
√Applicable □ N/A
Unit: Yuan
Current expensed R&D expenditure 1,583,502,138.74
Current capitalized R&D expenditure 175,159,872.18
Total R&D expenditure 1,758,662,010.92
Total amount R&D expenditure as a percentage of Revenues (%) 10.26
Ratio of capitalized R&D expenditure (%) 9.96
(2). R&D Staff
√Applicable □ N/A
Number of R&D staff 1,717
Proportion of R&D staff to the total employees (%) 12.20
Education background of R&D staff
Education composition Number
PhD 58
Postgraduate 417
Bachelor 774
Junior college graduate 350
40
Joincare Pharmaceutical Group Annual Report 2022
High school and below 118
Age composition of R&D staff
Age composition Number
Under 30 years old (exclusive) 842
30-40 years old (including 30 years old, excluding 40 years old) 640
40-50 years old (including 40 years old, excluding 50 years old) 187
50-60 years old (including 50 years old, excluding 60 years old) 48
Over 60 years old 0
(3). Explanations
□Applicable √ N/A
(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 flows
√Applicable □ N/A
YOY Change
Item 2022 2021 Explanations
（%）
Mainly due to the combined
effect of an increase in sales
Net cash flow from
3,977,499,939.73 2,563,089,045.24 55.19 receipts and a decrease in
operating activities
payment of marketing expenses
during the Reporting Period.
Net cash flow from -
-2,252,167,188.62 N/A No material change
investing activities 1,964,157,731.17
Mainly due to the combined
effect of new borrowing and
Net cash flow from
566,327,859.36 -974,904,353.44 N/A investment absorption (through
financing activities
GDR issuance) during the
Reporting Period.
(II) Statement on material changes in profits arising from non-principal businesses
√Applicable □ N/A
Unit: Yuan
As a percentage Sustainable or
Item Amount Cause
of total profit not
Primarily due to changes in gains or losses
Investment income 55,973,114.29 1.62% No
of the associates.
Gains or losses from Primarily due to fluctuations in market
-76,262,989.83 -2.21% No
changes in fair value value of the securities investment held.
Primarily due to the impairment provision
Impairment of assets -142,627,936.44 -4.13% No
for inventories.
Primarily due to income from disposal of
scrap and transfer to non-operating income
Non-operating income 8,229,847.57 0.24% No
from buying on credit for longer terms and
not required to be paid.
Primarily due to donation expenses and
Non-operating expenses 32,060,686.06 0.93% No
loss on retirement of fixed assets.
Primarily due to government grants
Other income 289,868,006.44 8.39% Yes
received.
41
Joincare Pharmaceutical Group Annual Report 2022
(III) Analysis of assets and liabilities
√Applicable □ N/A
1. Status of assets and liabilities
Unit: Yuan
The
Proportion proportion of
of ending Ending ending
Change in
Ending balance balance of balance of balance of
Item amount Explanations
of this period this period previous previous
(%)
to the total period period to the
assets (%) total assets
(%)
Primarily due to fluctuations in
Financial assets market value of the securities
109,015,664.98 0.31 184,638,344.31 0.59 -40.96
held for trading investment held by Livzon Group, a
subsidiary of the Company.
Primarily due to the collection of
Other receivables 52,535,740.14 0.15 88,053,825.12 0.28 -40.34 capital reduction proceeds for the
period.
Primarily due to the reclassification
Non-current
of time deposit due within one year
assets due within 54,048,611.11 0.15 317,381.23 0.00 16,929.55
to non-current assets due within one
one year
year.
Primarily due to the increase in cash
Other current management businessof Livzon
163,539,900.32 0.46 83,986,214.37 0.27 94.72
assets Group, a subsidiary of the
Company, for the period.
Primarily due to the recovery of
Long-term finance lease payments by Livzon
0.00 0.00 266,904.13 0.00 -100.00
receivables Group, a subsidiary of the
Company.
Primarily due to the fact that the
“Recombinant SARS-CoV-2 Fusion
Protein Vaccine (重组新型冠状病
毒融合蛋白疫苗)” of Livzon MAB
was included in the emergency use
Intangible assets 802,115,125.75 2.24 456,782,094.80 1.47 75.60 in sequential booster immunization
against a novel coronavirus SARS-
CoV-2 in September 2022, and the
accumulated development
expenditure of this project was
transferred to intangible assets.
Primarily due to the fact that the
“Recombinant SARS-CoV-2 Fusion
Protein Vaccine (重组新型冠状病
毒融合蛋白疫苗)” of Livzon MAB
was included in the emergency use
Development
428,284,884.17 1.20 786,993,435.71 2.53 -45.58 in sequential booster immunization
expenditure
against a novel coronavirus SARS-
CoV-2 in September 2022, and the
accumulated development
expenditure of this project was
transferred to intangible assets.
Long-term 277,867,716.95 0.78 200,715,740.93 0.65 38.44 Primarily due to the transfer of
42
Joincare Pharmaceutical Group Annual Report 2022
prepaid expenses completion of plant decoration to
long-term prepaid expenses for the
period.
Primarily due to the reclassification
Other non-
1,156,772,182.99 3.24 663,584,003.80 2.13 74.32 of time deposit to other non-current
current assets
assets.
Financial Primarily due to changes in fair
liabilities held for 755,634.43 0.00 143,302.24 0.00 427.30 value of foreign currency forward
trading contracts.
Non-current Primarily due to the repayment of
liabilities due 63,077,260.98 0.18 91,576,066.33 0.29 -31.12 long-term loans due within one
within one year year.
Primarily due to the increase in
Other current expected refunds payable of Livzon
101,276,714.35 0.28 15,626,224.29 0.05 548.12
liabilities Group, a subsidiary of the
Company, for the period.
Primarily due to the newly incurred
Long-term loans 3,230,844,042.88 9.04 826,780,252.78 2.66 290.77 long-term bank borrowings of for
the period.
Primarily due to the increase in
Treasury shares 347,176,561.29 0.97 222,644,454.50 0.72 55.93 repurchase of shares to be
cancelled.
2. Overseas assets
√Applicable □ N/A
(1) Asset size
Of which: Overseas assets were 42.03 (Unit: 100 million Currency: RMB), representing 11.76 % 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
Unit: Yuan
Carrying value at the
Item Cause of restriction
end of the period
Letters of credit, bank acceptances and forward exchange
Other monetary funds 1,392,407.76
settlement deposits, etc.
Notes receivable 469,659,266.19 Notes pool business and pledge of notes receivable
Total 471,051,673.95
4. Others
□Applicable √ N/A
(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 the CSRC, the Company is operating in the pharmaceutical manufacturing industry.
Adhering to the mission of “For the health, For the future” and the vision of “diligently make high-
quality and innovative drugs”, the Company has been committed to the pharmaceutical business
43
Joincare Pharmaceutical Group Annual Report 2022
and been strengthening R&D, production, marketing and management of medical products, to strive
to become a domestic leading integrated 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. Influence of industry policies
The year of 2022 is the second year of the 14th Five-Year Plan, and the pharmaceutical industry is
still magnificent, as opportunities and challenges coexist. Various key programmatic documents and
policies on the pharmaceutical industry have been released, and the major policies that had a
significant impact on the Company are as follows.
① Release of the 14th Five-Year Plan for the Development of the Pharmaceutical Industry
In January 2022, nine departments, including the Ministry of Industry and Information Technology,
the National Development and Reform Commission, jointly issued the “14th Five-Year Plan for the
Development of the Pharmaceutical Industry” (the “Plan”). The Plan clarifies the development goals
for the next five years: by 2025, major economic indicators will achieve medium-high growth,
innovation achievements in frontier fields will be prominent, innovation driving force will be
strengthened, the modernization level of industrial chain will be significantly improved, the supply
and guarantee system of pharmaceutical devices will be further improved, and internationalization
will be advanced in an all-round way. The Plan puts forward goals for the pharmaceutical industry
in terms of scale efficiency, innovation-driven development transformation, industrial chain and
supply chain, drug and equipment supply and international development, it also proposes the
specific development direction of chemical pharmaceuticals, traditional Chinese medicine,
biological medicine and medical device. The pharmaceutical industry is expected to enter into a
new era of sustainable development.
② Routine operation of volume-based procurement
In July 2022, the Notice on the Results of National Centralized Drug Procurement (GY-YD2022-1)
《关于公布全国药品集中采购（GY-YD2022- 1）中选结果的通知》 was released by the National
Organization Office for Centralized Procurement of Pharmaceuticals. A total of 60 drugs were
successfully procured in this round of centralized procurement, with an average price reduction of
48% for the drugs to be selected. In order to better ensure the stable supply of the drugs for
centralized procurement, the mechanism of "reserve supply enterprises" was introduced in the
procurement documents initially for the seventh batch of centralized drug procurement, to explore
the implementation of "double supply in one province", each province not only has a selected
44
Joincare Pharmaceutical Group Annual Report 2022
enterprise, that is, the main supply enterprise, but also has a reserve supply enterprise.
③ Adjustment of the catalog of medicines covered by medical insurance
In June 2022, the NHSA issued the 2022 Work Plan of the Adjustment to the Catalogue of Drugs
for National Basic Medical Insurance, Work-related Injury Insurance and Maternity Insurance
(《2022 年国家基本医疗保险、工伤保险和生育保险药品目录调整工作方案》) and related
documents for public comments, marking commencement of a new round of adjustment work for
the National Medical Insurance Catalogue. The adjustment work for the Medical Insurance
Catalogue has been continuously improved and has entered the era of dynamic adjustment. While
continuing to support COVID-19 treatment drugs and innovative drugs, the new medical adjustment
plan issued in June 2022 fully reflects the attention to treatment drugs for rare disease and drugs for
children. In September 2022, the NHSA issued the 2022 National Medical Insurance Catalogue
Adjustment through Initial Review of Drugs and Information (2022 年国家医保药品目录调整通
过初步形式审查药品及信息), with 344 varieties shortlisted.
④ New Notice of reform of DRG/DIP payment method
In April 2022, the NHSA issued the Notice on the Convergence of the Use of DRG/DIP Functional
Module of the Payment Method Management Subsystem (《关于做好支付方式管理子系统
DRG/DIP功能模块使用衔接工作的通知》), which clarified that the NHSA had developed the
basic version of the DRG/DIP functional module based on the nationally unified medical insurance
information platform, and would promote the DRG/DIP payment method reform to a deeper level.
According to the arrangement, the DRG/DIP functional module would be implemented and applied
nationwide by the end of November 2022.
⑤ Promoting innovation in traditional Chinese medicine
In March 2022, the General Office of the State Council issued the 14th Five-Year Plan for the
Development of Traditional Chinese Medicine (《“十四五”中医药发展规划》) , which specifies
the guiding ideology, basic principles and development goals for the development of TCM during
the 14th Five-Year Plan period, proposes 10 major tasks and 11 work columns, and specific
measures for each of the major tasks. By 2025, the capacity of TCM health services will be
significantly enhanced, the policy and system for high-quality development of TCM will be further
improved, positive results will be achieved in the revitalization and development of TCM, and its
unique advantages in the construction of a healthy China will be given full play.
In December 2022, the National Administration of Traditional Chinese Medicine issued the 14th
Five-ear Plan for the Development of Traditional Chinese Medicine Informatization (《“十四五”
中医药信息化发展规划》), which clearly proposed the construction of TCM internet hospitals, the
development of telemedicine and internet diagnosis and treatment, and providing support for the
construction of intelligent hospitals in about 20 Class III TCM hospitals. Meanwhile, governments
at various levels actively support the development of TCM informatization through existing funding
45
Joincare Pharmaceutical Group Annual Report 2022
channels, and through guiding social investment to increase investment in TCM informatization and
statistics.
⑥ In-depth reform of medical and healthcare system
In May 2022, the General Office of the State Council issued the Key Tasks for Deepening the
Reform of the Medical and Health System in 2022 (《深化医药卫生体制改革2022年重点工作任
务》)(the "Tasks"), which put forward 21 key tasks from 4 aspects covering accelerating the
construction of a new pattern of orderly access to medical diagnosis and treatment, deeply
promoting the experience of Sanming's medical reform, making efforts to enhance the capacity of
public health services, and promoting the high-quality development of medicine and health. The
general requirements of the Tasks are to comprehensively promote the construction of a healthy
China, deeply promote the experience of Sanming's medical reform, promote the expansion and
balanced layout of high-quality medical resources, deepen the linkage reform of medical care,
medical insurance and medicine, continuously promote the shift from focusing on the treatment to
focusing on people's health, and continuously promote to solve the difficult problems of the lack of
accessibililty to and the high costs of medical treatment. For the pharmaceutical industry, new
requirements for development at stages have also been put forward.
⑦ Market exclusivity of new drugs for rare diseases
In May 2022, the NMPA conducted a study on the Implementation Rules of the Law of the PRC on
the Administration of Drugs (《中华人民共和国药品管理法实施条例》)，forming an amended
consultation draft for public comments (the “Consultation Draft"). The Consultation Draft proposes
for the first time to grant a period of market exclusivity to new drugs such as drugs for rare diseases.
The Consultation Draft proposes that the state encourages the development and innovation of drugs
for rare diseases, supports the development of drugs for rare diseases by the holders of drug
marketing licenses, encourages the development of launched drugs for new indications of rare
diseases, and gives priority to the review and approval of drugs for rare diseases that are in urgent
clinical need. During drug development and registration filing, communication with sponsors will
be strengthened to facilitate the speedy launch of drugs for rare diseases and meet the clinical needs
of patients with rare diseases. For new drugs approved for marketing for rare diseases, a period of
market exclusivity of up to seven years will be granted under the commitment of the drug's
marketing licensee to safeguard the supply of the drug, during which time the same variety will not
be approved for marketing.
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. Meanwhile, the Company will actively increase
the research, development and innovation of new products, drive development through R&D,
continuously optimize and adjust the product structure, strenuously apply for medical insurance
46
Joincare Pharmaceutical Group Annual Report 2022
coverage, and maintain the competitive sales of large varieties while keeping striving for market
access and promoting sales to lower-tier markets. The Company will 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 in order to establish its own advantageous position and core
competitiveness.
II. Basic information on the sector where the Company operates
The Company is primarily engaged in the R&D, production and sale of hundreds of varieties of
pharmaceutical products and health care products in areas such as chemical pharmaceuticals,
biologics, chemical active pharmaceutical ingredients (APIs), TCM, and health care products. Basic
information on the market niches in which the Company operates are follows:
Chemical pharmaceuticals: In recent years, influenced by policies regarding medical insurance
payment control, volume-based procurement and consistency evaluation, chemical pharmaceuticals
have recorded a slower growth in revenues and profit. The market of chemical pharmaceuticals is
relatively competitive as there are many domestic manufacturers. However, innovative drugs and
high-barrier formulations 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 pharmaceuticals 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, and accelerate the product
structure optimization and strategic planning to cope with the increasingly fierce market competition.
Biologics: Biologics include monoclonal antibodies, vaccines, recombinant therapeutic proteins and
other biological therapies. Globally, the development of biologics has been relatively late compared
to chemical pharmaceuticals products, and it is only in the last 40 years that they have entered the
large-scale industrialization stage. However, due to the safety, efficacy, and other clinical needs met
by biologics that chemical pharmaceuticals could not satisfy, the biologics industry has grown
rapidly in recent years, especially in emerging markets such as China, where the biologics industry
is growing at a much faster rate than the general pharmaceutical industry. China's biologics market
is still in a period of unstable segment structure, continued increase in unmet clinical needs, more
frequent technology iteration, and rapid growth of emerging segments such as monoclonal
antibodies. LivzonBio is the primary biopharmaceutical R&D platform of the Company and
principally engages in the independent innovative R&D and commercialization of
biopharmaceuticals, including innovative mAbs (monoclonal antibodies), mAb biosimilars,
bispecific antibodies, antibody drug conjugates, CAR-T cell therapies, etc., with its products
covering multiple fields such as tumor, autoimmune disease, vaccine, etc.
Chemical APIs: At present, the Company has the following chemical APIs: cephalosporin series,
47
Joincare Pharmaceutical Group Annual Report 2022
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 fierce
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,
to give more added value to pharmaceutical intermediates and APIs, and to accelerate integration
into the global industrial chain and value chain.
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 the14th Five-Year
Plan for the Development of Traditional Chinese Medicine. These policies emphasize the need to
optimize the TCM evaluation and approval management, to improve the classification and
registration management, to implement suitable payment policies, to strengthen the price
management, to adopt integrative medicine approach, and to 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 profitability.
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 make the demand for
different kinds of in vitro diagnostic reagents fully released, 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
48
Joincare Pharmaceutical Group Annual Report 2022
platform that supports ELISA test, colloidal gold rapid test, chemiluminescence assay, multiplex
liquid-chip assay, and nucleic acid assay. It has strong market influence in such fields 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 profit, the domestic market is highly
competitive with serious product homogeneity issues and low market concentration. The
Company’s well-known health care foods brands such as “Taita” (太太),“ Jingxin” (静心) and
“Eagle's” (鹰牌) deeply rooted in people's minds and have high market awareness. Faced with
intense market competition, while staying committed to traditional pharmaceutical chain channels,
the Company also actively 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 functional food by leveraging its R&D and market strengths to enrich product
pipelines and enhance core competitiveness.
(2). Basic information on main drugs (products)
√Applicable □N/A
Basic information on main drugs (products) by segment and therapeutic areas
√Applicable □N/A
Included
New drug
Effective and in the
(product)
Protected expiration Catalog Included
Main Name of launched
Registration Prescription TCM date of patent of in
Segment therapeutic drug Indications during the
Category drug or not or not (if right for National NRDL
area (product) Reporting
applicable) invention (if Essential or not
Period or
applicable) Drugs or
not
not
From 23
Ilaprazole Chemical
Chemical Peptic ulcer October
Gastroenterology Sodium for drugs Class Yes No No No No
pharmaceuticals bleeding 2009 to 23
Injection 2
October 2029
From 23
Leuprorelin Endometriosis,
Chemical December
Chemical Gonadotropic Acetate hysteromyoma,
drugs Class Yes No 2010 to 23 No No Yes
pharmaceuticals hormones Microspheres breast cancer,
6 December
for Injection etc.
2030
Ilaprazole From 24
Chemical Duodenal ulcer
Chemical Enteric- March 2006 to
Gastroenterology drugs and reflux Yes No No No Yes
pharmaceuticals Coated 24 March
Class 1.1 esophagitis
Tablets 2026
Used to treat
infection caused From 6 June
Chemical by one 2006 to 6 June
Chemical Meropenem
Anti-infection drugs Class bacterium Yes No 2026 From 31 No No Yes
pharmaceuticals for Injection
4 or more bacteria July 2012 to
sensitive to 31 July 2032
meropenem.
Note: The starting and expiration dates listed above refer to the corresponding term of patents of
core products in each product category.
49
Joincare Pharmaceutical Group Annual Report 2022
Main drugs (products) newly added into and exited from the National Reimbursement Drug
List during the Reporting Period
√Applicable □N/A
Catalog of National Essential National Reimbursement Drug
Name of main products
Drugs List
Ilaprazole Sodium for Injection Not included Included
Leuprorelin Acetate Microspheres Not included Included
for Injection
Ilaprazole Enteric-Coated Tablets Not included Included
Meropenem for Injection Not included Included
Winning bids for main drugs in centralized drug procurement during the Reporting Period
√Applicable □N/A
Total actual
procurement
Name of main drugs Bid-winning price range volume by Unit
medical
institutions
Ilaprazole Sodium for Injection RMB71.00 1,697.62 Ten thousand boxes
Leuprorelin Acetate Microspheres for
RMB1,272.58-1,275.90 153.70 Ten thousand ampules
Injection
Ilaprazole Enteric-Coated Tablets (6 tablets) RMB78.34-99.58 1,490.93 Ten thousand boxes
Ilaprazole Enteric-Coated Tablets (10 tablets) RMB156.30-158.12 118.60 Ten thousand boxes
Meropenem for Injection 0.25g RMB6.30-54.66 638.23 Ten thousand ampules
Meropenem for Injection 0.5g RMB10.71-86.53 1,178.07 Ten thousand ampules
Meropenem for Injection 1g RMB18.21-167 73.49 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 bid-winning price of the issuer province and newly
implemented winning prices during the Reporting Period.
③ Meropenem for Injection was included in the seventh batch of national volume-based drug
procurement in July 2022, with a significant price adjustment.
Operating data by therapeutic areas or main drug (products)
√Applicable □N/A
Unit: 10,000 Yuan Currency: RMB
YoY YoY
YoY Gross profit
Gross change change
change margin of
Operating Operating profit in in gross
Therapeutic area in products in the
income costs margin operating profit
operating same field in the
(%) income margin
costs (%) same industry
(%) (%)
Gastroenterology 343,589.84 47,011.06 86.32 -6.48 5.00 -1.50 79.23
Gonadotropic
259,068.36 82,191.10 68.27 5.64 -4.66 3.43 -
hormones
Anti-infection 130,468.34 24,765.24 81.02 -16.44 -2.24 -2.76 58.39
Respiratory 117,364.29 20,014.56 82.95 103.37 87.69 1.43 84.95
Psychiatry 54,484.55 2,845.42 94.78 32.19 44.07 -0.43 82.92
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Joincare Pharmaceutical Group Annual Report 2022
Explanations
√Applicable □N/A
① The gross profit margin of products in the field of gastroenterology is derived from that of the
relevant industry in “Major products of metabolism and alimentary system” in Fosun Pharma's
2021 Annual Report.
② No comparable data on gross profit margin in the field of gonadotropic hormones has been
found.
③ The data on the gross profit margin of products in the field of anti-infection comes from that
of “anti-infection category” in the 2021 Annual Report of Tianyao Co., Ltd.
④ The gross profit margin data of products in the field of the respiratory comes from that of
“respiratory system category” in Luoxin Pharmaceutical's 2021 Annual Report.
⑤ The gross profit margin data of products in the psychiatric field comes from that of “psychiatric
category” in Nhwa Pharmaceutical 's 2021 Annual Report.
2. Drug (product) R&D of the Company
(1). Overview of R&D of the Company
√Applicable □N/A
（1）Chemical pharmaceuticals
① High-barrier complex formulations: There were a total of 45 projects under research, of which,
4 had been launched to the market, 6 had been applied for production, 11 were under the clinical/BE
study and 2 received clinical trial approvals. The progress of the major projects was as follows:
Inhalation formulations: Terbutaline Sulfate Nebulizer Solution (硫酸特布他林雾化吸入用溶
液) and Levosalbutamol Hydrochloride Nebulizer Solution (盐酸左沙丁胺醇雾化吸入溶液)
(3ml:1.25mg), Acetylcysteine solution for inhalation(吸入用乙酰半胱氨酸溶液) and Tobramycin
Inhalation Solution (妥布霉素吸入溶液) had been launched for market. Fluticasone Propionate
Inhalation Suspension (丙酸氟替卡松雾化吸入用混悬液) had been applied for production; The
clinical trial of Indacaterol Maleate Powder for Inhalation (马来酸茚达特罗吸入粉雾剂) had been
completed and the drug had been applied for production; The registration application of Salmeterol
Xinafoate -Fluticasone Propionate Powder for Inhalation (沙美特罗替卡松吸入粉雾剂) was
submitted after the completed PK-BE study, the notice of clinical trial approval was received, and
the phase III clinical study was quickly started; Phase I clinical trials of Levosalbutamol
Hydrochloride and Ipratropium Bromide Inhalation Solution (盐酸左沙丁胺醇异丙托吸入溶液)
and Formoterol Fumarate Inhalation Aerosol (富马酸福莫特罗吸入气雾剂) were completed; For
class 2 new drug XYP-001, the Company had received the notice of the clinical trial approval and
started phase I clinical trials;
Sustained-release microspheres: The project of Triptorelin Acetate Microspheres for Injection (注
射 用 醋 酸 曲 普 瑞 林 微 球 ) (1-month sustained release) for treatment of prostate cancer had
completed all registration verification, GMP compliance checks, the first registration inspection,
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Joincare Pharmaceutical Group Annual Report 2022
and the supplementary data studywhich was submitted to CDE; the project of Triptorelin Acetate
Microspheres for Injection (注射用醋酸曲普瑞林微球) (1-month sustained release) for treatment
of endometriosis has completed patient enrollment, the follow-up period close to end; Aripiprazole
Microspheres for Injection (注射用阿立哌唑微球) (1-month sustained release) completed phase I
multiple-dosing clinical trial; Octreotide Acetate Microspheres for Injection (注射用醋酸奥曲肽
微球) (1-month sustained release) and Leuprorelin Acetate Microspheres for Injection (注射用醋
酸亮丙瑞林微球) (3-month sustained release) were undergoing BE trials; Alarelin Microspheres
for Injection (注射用丙氨瑞林微球) (1-month sustained release) was undergoing phase I clinical
trial; Triptorelin Pamoate Microspheres for Injection (注射用双羟萘酸曲普瑞林微球) (3-month
sustained release) was in phase I clinical trial; Triptorelin microspheres of dihydroxynaphthoate for
injection (3-month sustained release) was prepared for phase I clinical trial; Goserelin Acetate
Sustained-release Implant (醋酸戈舍瑞林缓释植入剂) (1-month sustained-release) had carried out
the bridging study of pilot-scale and full-scale production.
②Conventional formulations: There were a total of 42 projects under research, of which, 6
projects had applied for production, 5 projects were under the clinical/BE study and 3 projects
received clinical trial approval. The progress of the major projects was as follows: New indications
of Ilaprazole Sodium for injection (注射用艾普拉唑钠), Blonanserin Tablets(布南色林片) and
Lurasidone Hydrochloride Tablets (盐酸鲁拉西酮片) had been applied for production; LZ001 and
Ilaprazole Enteric-coated Tablets(艾普拉唑微丸肠溶片) have been approved for phase I clinical
trials; and Progesterone Injection(黄体酮注射液) was undergoing BE trial.
③Consistency evaluation: There were a total of 16 projects under research, of which, 6 projects
have been approved for launching and 3 projects applied for review. 6 varieties such as
Clarithromycin Tablets(克拉霉素片), Valsartan Capsules(缬沙坦胶囊), and Cefodizime Sodium
for Injection (注射用头孢地嗪钠) had been approved for launching; Supplemental information had
been submitted for Imipenem and Cilastatin Sodium( 亚 胺 培 南 西 司 他 丁 钠 ), Cyclosporine
Softgels(环孢素软胶囊) (50 mg), Vancomycin Hydrochloride for Injection and Bismuth Potassium
Citrate Capsule (枸橼酸铋钾胶囊).
（2）Biologics
There were a total of 8 projects under research, of which, 1 was approved for launching, 1 in the
conditional marketing application stage; 1 in the marketing application (BLA) stage (approved for
marketing in January 2023), 1 in the phase III clinical trial, 2 in the phase Ib or phase II clinical trial
and 2 in the phase I clinical trial.
Therapeutic biological products: Recombinant Human Choriogonadotropin Alfa for injection was
approved for launching in China in 2021 and overseas registration is underway; the BLA application of
Tocilizumab injection (托珠单抗注射液) has been accepted by CDE and approved for launching in
China in January 2023; phase II clinical trials of Recombinant Anti-human IL-17A/F Humanized
52
Joincare Pharmaceutical Group Annual Report 2022
Monoclonal Antibody for Injection (重组抗人 IL-17A/F 人源化单克隆抗体注射液)were completed;
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 ) is undergoing phase Ib/II clinical trials; Recombinant Human Follicle Stimulating
Hormone for Injection (重组人促卵泡激素注射液) completed Phase I clinical trials; and Recombinant
Tumor Enzyme Specific Interferon α-2bFc Fusion Protein for Injection (注射用重组肿瘤酶特异性干
扰素 α-2bFc 融合蛋白) was undergoing phase I clinical trials. The diabetic drug Semaglutide injection
(司美格鲁肽注射液) was approved for clinical trials, and the first phase III clinical center was launched
in December 2022.
Preventive biological products: The Recombinant SARS-CoV-2 Fusion Protein Vaccine (Likang V-01)
was approved for emergency use in domestic heterologous booster vaccination in June 2022, and was
included in the national immunization program in September 2022. Meanwhile, a conditional marketing
application of such vaccine had been submitted to the NMPA, which was under review.
（3）APIs and intermediates
There were a total of 39 projects under research, of which 23 were new product R&D projects and
16 were tech-upgradation projects of existing products. For new product R&D projects, the API of
Fluticasone Furoate ( 糠 酸 氟 替 卡 松 ) had been approved for launching, and the registration
application for the API of Biapenem(比阿培南) and the API of Caspofungin Acetate (醋酸卡泊芬
净)were submitted. For technological upgrading projects of existing products, the key project
Cephalosporin C-High Producing Mutant Strains (头孢菌素 C 高产突变株) was progressing
smoothly. After screening, the scale production verification of the strains had been completed, and
the average unit yield had been steadily increased; in the development and selection project of new
L-phenylalanine – High Producing Strains (L-苯丙氨酸新型高产菌株) driven by IBT technology,
high-value natural product chassis strains such as L-phenylalanine, L-tyrosine and shikimic acid
had been screened, strain modification and selection was proceeding and shake-flask cultivation has
achieved initial results.
（4）Traditional Chinese medicine
There were 8 projects under research for new TCM, of which, SXSHL gel, a new improved
traditional Chinese medicine, had completed pre-clinical trial experiment research, and its
application materials were being prepared and collected. The single-center clinical trial of in-
hospital preparations was completed for TGDX Granules, a class 1.1 new traditional Chinese
medicine, and initial draft of the clinical trial summary report was obtained.
（5）Diagnostic reagents and equipment
There were 86 projects under research, of which, 1 was in the clinical stage (including evaluation); there
were a total of 15 technological upgradation projects, including 7 projects were filed for change of
registration. In March 2022, Livzon Diagnostics actively responded to the national pandemic prevention
and control policy, and promptly initiated the registration of Livzon Rapid Test for 2019-nCoV Antigen
53
Joincare Pharmaceutical Group Annual Report 2022
(Lateral Flow) (新型冠状病毒 (2019-nCoV)抗原检测试剂盒(乳胶法)), which was successfully
approved for launching on April 9, 2022. Diagnostic Kit for Immunoglobulin G4 (Chemiluminescence
Immunoassay) (免疫球蛋白 G4 测定试剂盒(化学发光法)) and its supporting calibrators and quality
control products obtained registration certificates in June 2022; mycoplasma pneumoniae IgM antibody
detection kit (chemiluminescence) and four diabetes specific autoantibodies were registered successively
in November 2022; three items of chromatography platform blood type card were registered in August
2022. In addition, 6 projects, including Livzon Rapid Test for 2019-nCoV Antigen (Lateral Flow) (新型
冠状病毒(2019-nCoV)抗原检测试剂盒(乳胶法)) and Nucleic Acid Test Kit for Monkeypox Virus
(Real-time PCR) ( 猴 痘 病 毒 核 酸 检 测 试 剂 盒 (PCR- 荧 光 探 针 法 )), and full automated
chemiluminescence analyzer successively obtained CE certificates.
(2). Basic information on main R&D projects
√Applicable □N/A
Protected
R&D projects
Name of drug Registration Prescription TCM or not R&D stage
(including projects Indications
(product) Category drug or not (if (registration)
subject to GCE)
applicable)
It is suitable for maintenance
therapy of bronchiectasis to
Indacaterol Maleate Indacaterol Maleate Chemical relieve symptoms in adults with Application
Powder for Powder for drugs Class chronic obstructive pulmonary Yes No for
Inhalation Inhalation 4 disease (COPD), including registration
chronic bronchitis and
emphysema.
Fluticasone Fluticasone
Chemical Application
Propionate Propionate Treatment of moderate and
drugs Class Yes No for
Inhalation Inhalation severe persistent asthma.
4 registration
Suspension Suspension
Suitable for the maintenance
treatment of bronchoconstriction
Formoterol Formoterol Chemical Application
in patients with chronic
Fumarate Inhalation Fumarate Inhalation drugs Class Yes No for
obstructive pulmonary disease
Solution Solution 3 registration
(COPD), including chronic
bronchitis and emphysema.
In combination (bronchodilators
Salmeterol Salmeterol
and inhaled corticosteroids) for
Xinafoate and Xinafoate and Chemical
the regular treatment of
Fluticasone Fluticasone drugs Class Yes No Clinical trial
reversible obstructive airways
Propionate Powder Propionate Powder 4
disease, including asthma in
for Inhalation for Inhalation
adults and children.
Chemical
drugs Class For the treatment of Idiopathic
XYP-001 XYP-001 Yes No Clinical trial
2.2; Class pulmonary fibrosis (IPF)
2.4
Mometasone Mometasone
Furoate and Furoate and Chemical Suitable for bronchial asthma
Formoterol Formoterol drugs Class and chronic obstructive Yes No Clinical trial
Fumarate Dihydrate Fumarate Dihydrate 3 pulmonary disease.
Inhalation Aerosol Inhalation Aerosol
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Joincare Pharmaceutical Group Annual Report 2022
Formoterol Formoterol Chemical Suitable for bronchial asthma
Fumarate Inhalation Fumarate drugs Class and chronic obstructive Yes No Clinical trial
Aerosol Inhalation Aerosol 2.2 pulmonary disease.
Recombinant Novel Preventive
Coronavirus Fusion biological Prevention of diseases caused by Launched
V-01（COVID-19） Yes No
Protein Vaccine product novel coronavirus infection under EUA
(Class 1.1)
Recombinant
Humanized Anti- Therapeutic Application
LZM009（PD-1） PD-1 Monoclonal biological Advanced solid tumors Yes No for
Antibody For product registration
Injection
Triptorelin acetate Metastatic prostate cancer,
sustained-release Triptorelin Acetate Chemical endometriosis (stage I to IV), Application
microspheres for Microspheres for drugs Class female infertility, preoperative Yes No for
injection (1 month Injection 2.2 treatment of uterine fibroids, registration
release) precocious puberty
Recombinant Anti-
Human IL-17A/F Therapeutic
LZM012 （ IL- Humanized biological Moderate to severe plaque
Yes No Clinical trial
17A/F） Monoclonal product psoriasis
Antibody for (Class 1)
Injection
Chemical Application
Blonanserin Blonanserin drugs Class Schizophrenia Yes No for
4 registration
(3). Drugs (products) filed for regulatory approval and granted approval during the
Reporting Period
√Applicable □N/A
① Drugs (products) filed for regulatory approval during the Reporting Period
Registration
Name of drug Approval items Indications
Category
Fluticasone Propionate Chemical Application for Treatment of mild to moderate acute asthma attacks in
Nebulized Suspension drugs Class 4 registration children and adolescents aged 4-16 years.
This product is a bronchodilator suitable for maintenance
Indacaterol maleate Chemical Application for
treatment of adult patients with chronic obstructive
inhalation powder drugs Class 4 registration
pulmonary disease (COPD).
Triptorelin Acetate
Chemical
Microspheres for Application for
drugs Class Prevent stress ulcer bleeding in severe patients.
Injection (new registration
2.4
indications)
Chemical Application for
Blonanserin Tablets Schizophrenia.
drugs Class 4 registration
Lurasidone Hydrochloride Chemical Application for
Schizophrenia.
Tablets drugs Class 4 registration
Used for routine treatment of reversible obstructive
Salmeterol Xinafoate and
Chemical Application for airway diseases through combination of drugs
Fluticasone Propionate
drugs Class 4 Clinical trials (bronchodilators and inhaled corticosteroids), including
Powder for Inhalation
asthma in adults and children.
55
Joincare Pharmaceutical Group Annual Report 2022
Chemical
Application for
XYP-001 drugs Class Temporarily used for idiopathic pulmonary fibrosis
Clinical trials
2.2 and 2.4
Recombinant Novel
Coronavirus Fusion Preventive
Protein Bivalent Biological Application for Used for treatment of novel coronavirus infection
(prototype strain/Omicron products Clinical trial （COVID-19）.
strain) Vaccine (CHO Class 1.1
cells)
Chemical Application for Luteal function supplementation in infertile women
Progesterone Injection
drugs Class 3 Clinical trials undergoing assisted reproductive technology.
1. Treat duodenal ulcer and reflux esophagitis.2.
Treatment of duodenal ulcer and reflux esophagitis in
Chemical
Ilaprazole enteric-coated Application for children (12-17 years old).3. Treat non-erosive
drugs Class
pellets Clinical trials gastroesophageal reflux disease.4. Treat gastric ulcer.5.
2.2 and 2.4
Eradication of helicobacter pylori.6. Prevent gastric ulcer
caused by non-steroidal anti-inflammatory drugs.
Chemical
Application for Treatment of schizophrenia in adults; treatment of manic
Asenapine patch drugs Class
Clinical trials or mixed episodes of bipolar I disorder.
2.2
Bismuth potassium citrate Chemical
Supplemental Used for chronic gastritis and relieving stomach pain,
capsules (under drugs
application heartburn and acid regurgitation caused by hyperacidity.
consistency evaluation)
Intravenous infusion of this product is indicated for
infections caused by methicillin-resistant staphylococcus
aureus and other bacteria: septicemia, infective
endocarditis, osteomyelitis, arthritis, burns, surgical
Vancomycin trauma and other superficial secondary infections,
Chemical
Hydrochloride for Supplemental pneumonia, lung abscess, empyema, peritonitis and
drugs
injection (under application meningitis. It may be administered orally for antibiotic-
consistency evaluation) associated pseudomembranous colitis due to clostridium
difficile and staphylococcal enterocolitis, while
administration by injection has not been shown to be
effective for either indication. Oral vancomycin is not
effective for other types of infections.
1. Duodenal ulcer. 2.Stomach ulcer. 3.Moderate and
Pantoprazole sodium for Chemical
Supplemental severe reflux esophagitis. 4.Acute upper gastrointestinal
injection (consistency drugs
application bleeding caused by duodenal ulcer, gastric ulcer, acute
evaluation)
gastric mucosal lesion, compound gastric ulcer, etc.
② Drugs (products) granted clinical approval during the Reporting Period
Registration
Name of drug Indications
Category
Salmeterol Xinafoate Chemical drugs Asthma: In combination (bronchodilators and inhaled
and Fluticasone Class 4 corticosteroids) for the regular treatment of reversible
56
Joincare Pharmaceutical Group Annual Report 2022
Propionate Powder for obstructive airways disease, including asthma in adults and
Inhalation children.
Chemical drugs
XYP-001 Treatment of idiopathic pulmonary fibrosis (tentative)
Class 2.2 and 2.4
Therapeutic
biological
Semaglutide Injection Type II diabetes
products Class
3.3
Chemical drugs Advanced solid tumours carrying NTRK1/2/3, ROS1 or ALK
LZ001
Class 1 gene fusions
1. treat duodenal ulcer and reflux esophagitis.2. treatment of
duodenal ulcer and reflux esophagitis in children (12-17 years
Ilaprazole enteric-coated Chemical drugs old).3. Treat non-erosive gastroesophageal reflux disease.4.
pellets Class 2.2 and 2.4 treat gastric ulcer.5. eradication of helicobacter pylori. 6.
prevent gastric ulcer caused by non-steroidal anti-
inflammatory drugs.
Chemical drugs Luteal function supplementation in infertile women
Progesterone injection
Class 3 undergoing assisted reproductive technology.
③ Drugs (products) granted registration approval during the Reporting Period
Registration
Name of drug Indications
classification
Levosalbutamol
Used for treating respiratory diseases such as bronchial asthma
Hydrochloride Nebuliser Supplemental
or asthmatic bronchitis accompanied by bronchospasm in
Solution application
children.
（3ml:1.25mg）
Terbutaline sulfate
Chemical drugs Relieves bronchospasm associated with bronchial asthma,
solution for nebulized
Class 4 chronic bronchitis, emphysema and other lung diseases.
inhalation
Used for the treatment of respiratory diseases with excessive
Acetylcysteine solution Chemical drugs secretion of thick mucus, such as acute bronchitis, chronic
for inhalation Class 4 bronchitis and its exacerbation, emphysema, mucoviscidosis,
and bronchiectasis
It is indicated for bronchiectasis in adults with pulmonary
Tobramycin Solution for Chemical drugs
Pseudomonas aeruginosa infection to control infection and
Inhalation Class 2.4
improve symptoms.
Ilaprazole Sodium for
Injection (Application in NDA Peptic ulcer bleeding
Indonesia)
Preventive
Recombinant SARS-
biological
CoV-2 Fusion Protein Prevention of novel coronavirus infection
products
Vaccine (EUA)
Class 1.1
Clarithromycin is indicated for the treatment of infections
caused by pathogens sensitive to clarithromycin, including:
1.Lower respiratory tract infection (bronchitis, pneumonia)
Clarithromycin Tablets
Chemical drugs 2.Upper respiratory tract infection (pharyngitis, sinusitis)
(consistency evaluation)
3.Skin and soft tissue infections (folliculitis, cellulitis,
erysipelas) 4.Local or disseminated infection 5.Mixed infection
6.Eradication of Helicobacter pylori 7.Dental infection
Valsartan Capsules
(consistency Chemical drugs Used for treatment of mild to moderate essential hypertension.
evaluation)
Long-term treatment of coronary heart disease; prevention of
Isosorbide Mononitrate
angina pectoris; treatment of persistent angina pectoris after
Tablets (consistency Chemical drugs
myocardial infarction; treatment of chronic congestive heart
evaluation)
failure in combination with digitalis and/or diuretics.
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Joincare Pharmaceutical Group Annual Report 2022
This product is indicated for cefodizine-sensitive
streptococcus, streptococcus pneumoniae, neisseria
gonorrhoeae, branhamella catarrhalis, escherichia coli,
Cefodizime sodium for citrobacter, klebsiella, enterobacter, serratia, roteus, morganella
injection (consistency Chemical drugs morganii, providencia, haemophilus influenzae,
evaluation) peptostreptococcus, bacteroides, the infections caused by
prevotella including upper urinary tract infection, lower
urinary tract infection, lower respiratory tract infection and
gonorrhea.
It is indicated for the following conditions caused by sensitive
bacteria:
1.Respiratory tract infection;
2.Ear, nose and throat infections;
Cefuroxime sodium for
3.Urinary tract infection;
injection (consistency Chemical drugs
4.Skin and soft tissue infections;
evaluation)
5.Bone and joint infections;
6.Obstetric and gynaecological infections;
7.Gonorrhea;
8. Other infections;
1.Duodenal ulcer.
2.Stomach ulcer.
Pantoprazole sodium for
3.Moderate and severe reflux esophagitis.
injection (consistency Chemical drugs
4.Acute upper gastrointestinal bleeding caused by duodenal
evaluation)
ulcer, gastric ulcer, acute gastric mucosal lesion, compound
gastric ulcer, etc.
(4). Cancellation of main 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 profit 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 finish the development of the intangible asset so that it will
be available for use or sale; the Company intends to finish the development of 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 profit or loss for the current period.
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Joincare Pharmaceutical Group Annual Report 2022
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 reclassified as intangible assets on the date the project meets the intended purpose.
Capitalization conditions for specific research and development projects are as follows:
① For research and development projects that are not required to obtain clinical approvals, the
period from the beginning of research and development to before the pilot phase is treated as the
research phase, and all expenditures shall be recognized in profit 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
reclassified as intangible assets after the obtaining of production approvals.
② For research and development projects that require clinical approval, the period from the
beginning of research and development to the obtaining of clinical approval is treated as the research
phase, and all expenditures 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 reclassified as intangible assets after the obtaining of production approval.
③External 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.
④The 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 profit or loss for the current period.
⑤Where 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 profit
or loss for the current period.
(6). R&D expenditures
Horizontal comparison
√Applicable □N/A
Unit: 10,000 Yuan Currency: RMB
Proportion of Ratio of
Proportion of
R&D capitalized R&D
Comparable peer R&D
R&D expenditures amount expenditures to expenditures
companies expenditures to
revenues (%) (%)
net assets (%)
Fosun Pharma 497,500.00 12.75 10.28 22.93
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Joincare Pharmaceutical Group Annual Report 2022
Kelun Pharma 179,953.47 10.42 12.99 3.50
CR Double-Crane 63,974.38 7.02 6.11 35.98
Humanwell Healthcare
106,053.87 5.16 8.19 23.58
(Group)
North China
50,467.67 4.86 8.29 74.85
Pharmaceutical
Average R&D expenditures in the same industry 179,589.88
Proportion of R&D expenditures to revenues during
10.26
the Reporting Period (%)
Proportion of R&D expenditures to net assets during
7.99
the Reporting Period (%)
Ratio of capitalized R&D expenditures during the
9.96
Reporting Period (%)
Notes: 1. The data regarding comparable companies listed above are from each company's 2021
annual report;
2. The average R&D expenditures in the same industry is the arithmetic average of the R&D
expenditures of five comparable companies listed above.
Statement on material changes in R&D expenditures and rationality of R&D expenditures
proportion and capitalization proportion
√Applicable □N/A
Mainly due to the fact that the “Recombinant SARS-CoV-2 Fusion Protein Vaccine (重组新型冠
状病毒融合蛋白疫苗)” of Livzon MAB was included in the emergency use in sequential booster
immunization against a novel coronavirus SARSCoV-2 in September 2022, and the accumulated
development expenditure of this project was transferred to intangible assets.
Investment in major R&D projects
√Applicable □N/A
Unit: 10,000 Yuan Currency: RMB
Proportion of
R&D Expensed Capitalized
R&D YoY
R&D project expenditures R&D R&D
expenditures to change (%)
amount expenditures expenditures
revenues (%)
Indacaterol Maleate
1,318.71 0.02 1,318.69 0.08 206.37
Powder for Inhalation
Fluticasone Propionate
646.40 646.40 - 0.04 -32.98
Nebulizable Suspension
Formoterol Fumarate
1,116.59 219.48 897.11 0.07 -28.97
Solution for Inhalation
Salmeterol Xinafoate and
Fluticasone Propionate 3,042.37 577.16 2,465.20 0.18 131.93
Powder for Inhalation
XYP-001 2,589.01 479.56 2,109.45 0.15 5,527.28
Mometasone Furoate and
Formoterol Fumarate
145.08 145.08 - 0.01 -65.44
Dihydrate Inhalation
Aerosol
Formoterol Fumarate
432.91 432.91 - 0.03 9.13
Inhalation Aerosol
V-01（COVID-19） 39,010.09 32,244.11 6,765.98 2.27 -20.57
LZM009（PD-1） 6,661.86 4,796.98 1,864.88 0.39 31.18
Triptorelin acetate 6,359.08 6,219.99 139.10 0.37 44.42
60
Joincare Pharmaceutical Group Annual Report 2022
sustained-release
microspheres for injection
(1 month release)
LZM012（IL-17A/F） 3,932.42 3,932.42 - 0.23 154.78
Blonanserin 181.04 181.04 - 0.01 -84.84
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 change in our R&D expenditure is that our R&D
projects were in different R&D stages during the Reporting Period.
3. Sales of drugs (products) of the Company
(1). Analysis of main sales model
√Applicable □N/A
Please refer to the “Overview on the businesses of the Company during the Reporting Period” in
this Chapter.
(2). Analysis of selling expenses
Components of selling expenses
√Applicable □N/A
Unit: 10,000 Yuan Currency: RMB
Amount incurred in the Proportion of amount incurred in the
Item
current period current period to total selling expenses (%)
Business promotion expenses 437,208.76 88.31
Employee compensation 45,687.52 9.23
Entertainment and travel
5,036.34 1.02
expenses
Business meeting expenses 1,369.68 0.28
Others 5,777.95 1.17
Total 495,080.25 100.00
Horizontal comparison
√Applicable □N/A
Unit: 10,000 Yuan Currency: RMB
Proportion of selling expenses to
Comparable peer companies Selling expenses
revenues (%)
Fosun Pharma 909,900.00 23.33
Kelun Pharma 502,233.28 29.07
CR Double-Crane 280,731.43 30.81
Humanwell Healthcare (Group) 400,667.12 19.50
North China Pharmaceutica 216,131.38 20.81
Total selling expenses of the Company during the Reporting Period 495,080.25
Proportion of selling expenses to revenues during the Reporting
28.88
Period (%)
Note: The data regarding comparable companies listed above are from each company's 2021
annual report.
Statement on material changes in selling expenses and rationality of selling expenses
√Applicable □N/A
During the Reporting Period, the Company's selling expenses were RMB4,950.8025 million,
accounting for 28.88% of revenues, representing a year-on-year decrease of 1.26%. The increase
was mainly due to more efforts to promote products and brands, and an increase in selling expenses
61
Joincare Pharmaceutical Group Annual Report 2022
in prescription drugs which recorded significant sales growth during this period. Looking forward,
the Company will continue to deepen the reform of the marketing system to optimize sales channels
and increase the cost efficiency for high profitability.
4. Others
√Applicable □N/A
(V) Analysis of investments
Overall analysis of equity investments
√Applicable □N/A
During the Reporting Period, the Company carried out strategic investments in accordance with
our development plans as follow:
62
Joincare Pharmaceutical Group Annual Report 2022
1. Major equity investment
√Applicable □N/A
Unit: 10,000 Yuan Currency: RMB
Whether Litig
In the Item on the Impact
the target is Invest Expect ation Disclos Disclos
Consolidation financial Source Status as of of gain
Name of primarily Investment Investment Percentage of Partner (if ment ed invol ure ure
Principal business scope of the statement of balance sheet or loss
investee engaged in method amount shareholding applicable) period return ved date (if index
Company or (if funds date for the
investment (if any) (if any) or any) (if any)
not applicable) period
business not
Primarily engaged
in technology
development,
technology
Shanghai Sheo
consulting,
Pharma
technology transfer Long-term Capital
Technology Capital Own Long
and technology No 1,700.00 21.70% No equity N/A contribution - 230.92 No N/A N/A
Co., Ltd.(上海 injection funds term
services in the investment was completed
偕怡医药科技
fields of medical
有限公司)
technology,
biotechnology and
computer
technology.
Primarily engaged
The parties
in pharmaceutical
have
manufacturing;
Jiaozuo completed a
health care food
Jianfeng total capital
manufacturing; New
Biotech Co., Own Long contribution of
food No establishme 3,325.00 66.50% Yes N/A Greenanew - - No N/A N/A
Ltd.(焦作健风 funds term RMB10
manufacturing; nt
生物科技有限 million in
food additive
公司) proportion to
manufacturing;
their
cosmetics
shareholdings
manufacturing, etc.
63
Joincare Pharmaceutical Group Annual Report 2022
Primarily engaged
in the research and
development of
Jiangsu Atom human medicine,
Bioscience & veterinary
Pharmaceutica medicine, Long-term Capital
Capital Own Long
l Technology pesticides, health No 3,000.00 3.35% No equity N/A contribution - -510.52 No N/A N/A
injection funds term
Co., Ltd.(江苏 care products and investment was completed
新元素医药科 chemical products,
技有限公司) product technology
transfer, technology
consulting, project
cooperation.
Engaged in all the
business of
manufacturers,
producers,
importers,
exporters,
purchasers,
vendors,
distribution agents
and distributors of
LIVZON Capital
patents, New
BIOLOGICS Own Long contribution
pharmaceuticals, No establishme 0.0152 60.43% Yes N/A N/A - - No N/A N/A
(MALAYSIA) funds term was not yet
medicines, nt
SDN. BHD completed
nutritional supplem
ents, health care
products, drugs and
vaccine products,
and all goods,
compounds, and
substances
commonly used in
connection
therewith.
Shenzhen Biochemical Capital
Kangti product technology Long-term contribution of
Capital Own Long
Biomedical research and No 1,000.00 1.42% No equity N/A RMB6 million - No N/A N/A
injection funds term
Technology development; investment was completed
Co., Ltd.(深圳 technology
64
Joincare Pharmaceutical Group Annual Report 2022
康体生物医药 services,
科技有限公 technology
司) development,
technical
consulting,
technology
exchange,
technology transfer,
technology
promotion
Total / / / 9,025.0152 / / / / / / / -279.60 / / /
Note: Jiangsu Atom Bioscience & Pharmaceutical Technology Co., Ltd. completed its Series C financing on 18 March 2022.
2. Major non-equity investment
□Applicable √N/A
3. Financial assets measured at fair value
√Applicable □N/A
Unit: Yuan Currency: RMB
Amount at the Gain or loss on Accumulated Impairment Amount of Amount of disposal
Amount at the end of
Type of assets beginning of the change in fair value change in fair value provision for the purchase during / redemption during Other change
the period
period for the period included in equity period the period the period
Shares 215,317,489.90 - 6,682,661.01 - - 212,384,666.97 - 9,615,483.94
Private Equity 701,277,471.64 - 33,186,359.03 - 884,764.97 48,229,068.96 - 687,119,526.68
Derivatives 7,376,328.32 -1,943,816.75 - - - - - 5,432,511.57
Others 492,287,415.88 - 40,418,396.69 - - 35,481,944.14 - 497,223,868.43
Others 177,262,015.99 -73,706,840.89 - - 27,978.31 - - 103,583,153.41
Total 1,593,520,721.73 -75,650,657.64 80,287,416.73 - 912,743.28 296,095,680.07 - 1,302,974,544.03
Information on investment in securities
Unit: Yuan Currency: RMB
65
Joincare Pharmaceutical Group Annual Report 2022
Amount
Carrying Gain or loss on Accumulated Profit Carrying
Initial of Amount of
Type of Securities Securities Source of amount at the change in fair change in fair or loss amount at the Accounting
investment purchase disposal during
securities code abbreviation fund beginning of value for the value included for the end of the item
cost during the the period
the period period in equity period period
period
Other equity
Own
Shares 601881 China Galaxy 144,915,000.00 212,384,666.97 - - 0.00 212,384,666.97 - - instrument
funds
investment
Financial
Kunlun Own
Shares 00135 4,243,647.64 5,976,656.00 -1,001,142.10 - 0.00 0.00 - 4,975,513.90 assets held
Energy funds
for trading
Financial
Penghua Own
Funds 206001 150,000.00 940,162.94 -5,873.00 - 0.00 0.00 - 934,289.94 assets held
Fund funds
for trading
Financial
Huadong Own
Shares 000963 39,851.86 13,250,402.40 2,175,439.20 - 0.00 0.00 - 15,425,841.60 assets held
Medicine funds
for trading
Beam Financial
Own
Shares BEAM(US) Therapeutics, 34,209,846.54 157,094,794.65 -74,876,557.68 - 0.00 0.00 - 82,218,236.97 assets held
funds
Inc. for trading
Financial
Own
Others 27,978.31 - 1,292.69 - 27,978.31 0.00 - 29,271.00 assets held
funds
for trading
Total / / 134,376,477.81 / 389,646,682.96 -73,706,840.89 - 27,978.31 212,384,666.97 - 103,583,153.41 /
Information on investment in private equity fund
√Applicable □N/A
Gain or
Amount of
loss on Impairment Amount of
Amount at the Accumulated change disposal / Amount at the
change in provision purchase Other
Type of assets beginning of the in fair value included redemption end of the
fair value for the during the change
period in equity during the period
for the period period
period
period
Qianhai Equity Investment Fund(前海股权
264,930,500.00 - -21,551,757.83 - - - - 243,378,742.17
投资基金)
66
Joincare Pharmaceutical Group Annual Report 2022
PANTHEON D,L.P. 3,715,566.69 - 2,238,734.51 - - - - 5,954,301.20
Shanghai Yunfeng Xinchuang Equity
Investment Center(上海云锋新创股权投资 94,040,236.88 - 8,210,913.25 - - 34,315,445.77 - 67,935,704.36
中心)
Shanghai Jingyi Investment Center(上海经
66,175,062.50 - 7,441,297.41 - - - - 73,616,359.91
颐投资中心)
Information on investment in derivatives
√Applicable □N/A
Unit: 10,000 Yuan
Is this a Initial Investment Percentage of
Name of the Investment Amount of
related Type of investment Amount of amount at investment amount Actual gain or
operator of Related Commence Maturity amount disposal Impairment
party derivatives amount of purchase during the to the net assets of loss for the
derivatives relationship ment date date at the beginning during the provision (if any)
transact investment derivatives the period end of the the Company at the period
investment of the period period
ion investment period end of the period
Forward foreign
Financial Non-related
No exchange contract 2,108.32 2021/8/3 2022/2/8 2,269.07 - 2,071.02 - - 0.00% 58.89
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 7,708.90 2021/9/2 2022/3/31 7,835.52 - 7,572.32 - - 0.00% 399.98
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 11,312.51 2021/10/11 2022/4/7 11,589.76 - 11,227.57 - - 0.00% 183.27
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 18,301.91 2021/11/1 2022/5/9 18,602.45 - 18,387.38 - - 0.00% 40.70
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 17,268.19 2021/12/10 2022/6/13 17,664.55 - 9,153.79 - - 0.00% -21.70
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 17,960.93 2022/1/5 2022/7/26 - 17,960.93 18,439.57 - - 0.00% -384.03
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 8,197.90 2022/2/10 2022/8/8 - 8,197.90 8,582.48 - - 0.00% -345.20
institution party
(sell)
67
Joincare Pharmaceutical Group Annual Report 2022
Forward foreign
Financial Non-related
No exchange contract 18,437.37 2022/3/11 2022/9/1 - 24,878.83 26,386.53 - - 0.00% -1,310.43
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 12,507.52 2022/4/7 2022/10/10 - 16,323.43 16,845.74 - - 0.00% -769.47
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 7,037.84 2022/5/5 2022/11/30 - 7,037.84 7,349.49 - - 0.00% -292.77
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 10,888.09 2022/6/2 2022/12/23 - 14,447.06 15,034.70 - - 0.00% -559.15
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 9,319.83 2022/7/4 2023/1/30 - 14,702.35 14,645.26 - 607.17 0.03% -519.13
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 10,632.66 2022/8/2 2023/2/3 - 16,163.56 14,514.10 - 2,183.36 0.10% -480.15
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 10,560.82 2022/9/5 2023/2/24 - 12,986.49 7,733.99 - 5,376.80 0.24% -142.27
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 17,297.95 2022/10/8 2023/4/4 - 19,447.09 8,612.85 - 10,392.16 0.47% 214.17
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 12,377.21 2022/11/1 2023/4/24 - 15,220.85 3,494.34 - 11,361.13 0.52% 0.41
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 9,034.15 2022/12/2 2023/6/26 - 9,034.15 80.36 - 8,939.17 0.41% 0.80
institution party
(sell)
Forward foreign
Financial Non-related
No exchange contract 14,528.73 2022/4/21 2022/8/4 - 14,528.73 14,986.04 - - 0.00% 333.01
institution party
(buy)
Forward foreign
Financial Non-related
No exchange contract 925.07 2022/5/10 2022/12/15 - 925.07 893.48 - - 0.00% -38.11
institution party
(buy)
Financial Non-related Forward foreign
No 1,358.88 2022/9/22 2023/3/21 - 1,358.88 - - 1,355.92 0.06% -
institution party exchange contract
68
Joincare Pharmaceutical Group Annual Report 2022
(buy)
Forward foreign
Financial Non-related
No exchange contract 831.80 2022/11/14 2023/2/15 - 831.80 386.81 - 461.69 0.02% 1.12
institution party
(buy)
Forward foreign
Financial Non-related
No exchange contract 2,402.70 2022/12/2 2023/6/26 - 2,402.70 1,174.90 - 1,257.76 0.06% 1.89
institution party
(buy)
Forward foreign
Financial Non-related
No exchange contract - 2022/12/22 2023/1/30 - 2,091.39 - - 2,089.38 0.09% -
institution party
(buy)
Forward foreign
Financial Non-related
No exchange contract - 2022/12/29 2023/2/3 - 2,093.79 - - 2,089.38 0.09% -
institution party
(buy)
Total 220,999.29 -- -- 57,961.35 200,632.85 207,572.71 - 46,113.94 2.09% -3,786.71
Source of funds for derivatives investment Own funds
Litigation involved (if applicable) Not applicable
Disclosure date of the announcement in relation to the
approval of investment in derivatives by the Board (if 31 March 2022
any)
Disclosure date of the announcement in relation to the
approval of derivatives investment by the general Not applicable
meeting of shareholders (if any)
To effectively manage the uncertainty of exchange rate fluctuations on assets denominated in foreign currency of the Company, foreign exchange forward contracts and other
financial derivatives are employed to lock relevant exchange rates for the purpose of hedging. The Company has formulated the Management System for Financial Derivatives
Trading (《金融衍生品交易业务管理制度》) in relation to the operation and control of foreign exchange derivatives: 1. Market risk: the uncertainty of exchange rate
fluctuations in the foreign exchange market has led to higher market risk in foreign exchange forward business. Control measures: The Company’s foreign exchange forward
business is entered into for hedging exchange rate risk associated with assets denominated in US dollar and lock the future exchange settlement price of such assets. It is
designed to be used as a hedging instrument. Such foreign exchange derivatives shall not be used for speculative trading. The principle of prudence and conservation shall be
Risk analysis of derivatives position held during the
observed so as to effectively prevent market risk. 2. Operational risk: operational risk arises from imperfect internal process, improper operation, system failure and other
Reporting Period and explanation of control measures
factors. Control measures: The Company has formulated the corresponding management measures, clearly defined the responsibilities of all parties, improved the review and
(including but not limited to market risk, liquidity risk,
approval process and established supervisory mechanism, so as to effectively reduce operational risk. 3. Legal risk: The Company’s foreign exchange forward business is
credit risk, operational risk, legal risk, etc.)
subject to applicable laws and regulations, and shall clearly stipulate the relationship of rights and obligations with financial institutions. Control measures: In addition to
strengthening the knowledge of laws and regulations and market rules in the Company’s responsible department, the Company’s legal department shall also strictly review
various business contracts, agreements and other documents, specify the rights and obligations, and strengthen compliance inspection, so as to ensure that the Company’s
investment and operation in derivatives have met the requirements of applicable laws and regulations as well as the Company’s internal systems.
In order to manage the uncertainty risk caused by price fluctuations of bulk commodities on the purchase cost of raw materials of the Company, financial derivatives such as
commodity futures contracts are employed to hedge raw materials. The Company has formulated the Internal Control System for Commodity Futures Hedging Business (《商
69
Joincare Pharmaceutical Group Annual Report 2022
品期货套期保值业务内部控制制度》) to standardize the management and risk control of commodity futures derivatives: 1. Market risk: the uncertainty of price changes of
bulk commodities has led to greater market risk in futures business. Control measures: The Company’s futures hedging business shall not carry out speculative trading, the
operation principle of prudence and conservation shall be observed, the number of hedging transactions shall be strictly limited, such that it does not exceed the actual number
of spot transactions, and the futures position shall not exceed the spot volume for hedging purpose. 2. Operational risk: operational risk arises from imperfect internal process,
improper operation, system failure and other factors. Control measures: The Company has formulated the corresponding management system, clearly defined the division of
responsibilities and approval process, and established an improved supervisory mechanism, so as to effectively reduce operational risk through risk control of business process,
decision-making process and transaction process. 3. Legal risk: The Company’s commodity futures hedging business is subject to applicable laws and regulations, and shall
clearly stipulate the relationship of rights and obligations with financial institutions. Control measures: In addition to strengthening the knowledge of laws and regulations and
market rules in the Company’s responsible department, the Company’s legal department shall also strictly review various business contracts, agreements and other documents,
specify the rights and obligations, and strengthen compliance inspection, so as to ensure that the Company’s investment and operation in derivatives have met the requirements
of applicable laws and regulations as well as the Company’s internal systems.
Change in market price or fair value of the derivatives
invested during the Reporting Period, the specific
Gains and losses arising from change in fair value of the forward foreign exchange contracts, option contracts and commodity futures contracts during the Reporting Period
method, related assumptions and parameters used in the
were RMB-2.5561 million.
analysis of the fair value of derivatives shall be
disclosed
Explanation as to whether there has been a material
change in the accounting policy and accounting
principles for the Company’s derivatives during the No
Reporting Period as compared with the previous
reporting period
Due to the growing import and export business of the Company, a large amount of foreign exchange transactions are required. To avoid and prevent foreign exchange risk,
we are of the view that the forward foreign exchange derivatives trading business carried out by the Company and its subsidiaries are in line with the actual development
Specific opinion of independent Directors on
needs of the Company. When the Board reviewed this proposal, the relevant
investment in derivatives and risk control of the
decision-making procedures were in compliance with the Company Law, the Securities Law, the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange and
Company
other relevant laws and regulations and the provisions in the Articles of Association of the Company. In view of above, we concurred that the Company conducted foreign
exchange derivatives trading business with its own funds within the limit approved by the Board.
70
Joincare Pharmaceutical Group Annual Report 2022
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 Main products and Registered Operating
Company Asset size Net assets Revenues Net profit
business services capital profit
R&D, production and
sale of oral liquids,
tablets (hormone-
containing), aerosols
(including hormone-
Taitai containing aerosols),
Industry 10,000 48,195.86 35,935.68 26,623.31 9,040.71 8,470.05
Pharmaceutical inhalation formulations
(solution for inhalation)
(hormone-containing),
nasal sprays (hormone-
containing), and dietary
supplements
Wholesale and retail of
skincare products,
cosmetics, and other
Taitai
Industry daily necessities; 500 462.49 59.47 293.69 -56.39 -64.87
Biotechnology
domestic trading
business, and R&D of
dietary supplements
Powders for injection
(including penicillin-
containing powders),
tablets, hard capsules,
APIs, sterile APIs,
inhalation formulations
Haibin Pharma Industry (solution for inhalation), 70,000 270,567.22 157,802.84 176,563.89 39,159.15 33,810.82
powders for inhalation,
pharmaceutical
excipients, R&D
technical services, and
testing technical
services
Manufacturing and sale
of pharmaceutical
intermediates and APIs
Xinxiang (excluding proprietary
Industry 17,000 157,414.92 38,007.93 76,236.57 7,717.10 6,803.30
Haibin Chinese medicine or
TCM decoction pieces)
(excluding hazardous
chemicals)
Production and sale of
self-produced dietary
Health
Industry supplements, TCM HKD7,317 13,541.87 9,352.64 3,113.88 -552.83 -498.57
Pharmaceutical
decoction pieces, and
drug products
R&D of new
pharmaceutical
products, dietary
supplements, medical
devices, diagnostic
Shanghai reagents, and
Industry 5,000 16,314.32 11,460.04 9,813.17 2,808.70 2,666.34
Frontier pharmaceutical
intermediates, and
provision of relevant
technical consulting,
technical services and
technology transfer
71
Joincare Pharmaceutical Group Annual Report 2022
Technology
development of
biologics; investment in
industry, domestic
trading and economic
information consulting.
Hiyeah Industry Commerce Production of beverages 17,800 617.63 566.30 6.25 -41.55 -41.55
and solid beverages;
whole sale of pre-
packaged food
(excluding reheatable
food)
Wholesale and retail of
skincare products,
cosmetics, and other
Joincare Daily-
Commerce daily necessities; 2,500 3,858.95 3,852.62 - -0.08 -1.46
Use
domestic trading
business, and R&D of
dietary supplements
Screening of human
disease-specific genes,
R&D, production, sale
and technical consulting
service for genetic
engineering drugs and
Taitai
Industry diagnostic reagents, 5,000 3,635.48 3,635.48 0.17 5.81 5.81
Genomics
wholesale of medical
devices, and in vitro
diagnostic reagents
(except for diagnostic
reagents under special
management)
Forensic evidence
identification; forensic
Appraisal toxicology identification
Commerce (limited to ethanol - 964.40 888.16 153.10 -54.39 -57.01
institution
detection and drug
detection)。
Investment in power
and industry; domestic
Fenglei Electric
Investment commerce, and material 10,000 29,278.31 14,282.70 - 91.86 91.86
Power
supply and marketing
industry
Hong Kong
Investment Investment and trading HKD1 35,457.68 835.04 - 131.87 120.99
Pharmaceutical
R&D, production and
sale of pharmaceuticals,
chemical APIs,
Jiaozuo
Industry biological APIs, 50,000 185,715.54 88,087.38 159,030.74 29,330.87 25,470.94
Joincare
pharmaceutical
intermediates, and
biological products
Topsino Commerce Investment and trading HKD89,693 185,901.35 128,993.00 - 44,136.90 44,080.67
According to the laws
Health
Investment where it was USD5 2,834.63 2,834.63 - - -
Investment
incorporated
R&D, production,
storage, transportation
and sale of chemical
APIs (including
intermediates) and
Joincare Haibin Industry pharmaceuticals. Import 50,000 98,129.06 82,133.68 68,579.14 42,109.14 36,773.72
and export business and
domestic trading
(excluding State
controlled or franchised
goods)
R&D, production and
sale of formula food,
Joincare Special
Industry dietary products and 2,000 1,720.47 4.46 - -311.98 -228.08
Medicine Food
food for special medical
use
Drug R&D, production,
Livzon Group Industry 93,555 2,486,482.54 1,493,625.16 1,262,957.90 235,055.56 195,554.02
manufacturing and sale
(VIII) Structured entities controlled by the Company
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Joincare Pharmaceutical Group Annual Report 2022
□ Applicable √N/A
VI. Discussion and analysis of the Company's future development
(I) Industry landscape and trend
For details, please refer to the “Basic information on industry” in this chapter.
(II) Company's strategies for business development
√Applicable □N/A
Taking scientific and technological innovation as a strategic priority and executing our dual-drive strategy
of developing platforms of both innovative medicines and high-barrier complex formulation, we have
been evolving into a world-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 an integrated
pharmaceutical enterprise covering multiple areas including chemical pharmaceuticals, biologics,
chemical APIs and intermediates, traditional Chinese medicine, diagnostic reagents and equipment. In the
future, the Company will continue to increase R&D expenditures 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.
(III) Business plan
√Applicable □N/A
The year of 2023 is crucial for the transformation of the Chinese market to the “post-pandemic” era, as
well as an important window period for the reshaping of the pharmaceutical industry and the
transformation and upgrading of enterprises. The main business plans for each business segment of the
Company in 2023 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 one hand, define the direction of research and development strategy, and screen and evaluate key high-
barrier varieties, to enrich and diversify the pipelines; and will, on the other hand, promote product
transformation, and effectively advance the research and clinical development of existing core products, to
accelerate the launching process.
(1) Strategic plannings of R&D and innovation: In recent years, focusing on inhalation formulations, the Group
has conducted in-depth research on a few of carefully selected new products with high clinical value and
promising market potential, and has achieved good performance. In the future, under the existing R&D pipeline,
the Group will focus on the following R&D areas: 1) Inhalation formulations: continue to enrich the pipeline
and portfolio of inhalation formulations; 2) Complex injections: Complex injections are mainly microcrystals
and liposome injections, with broad clinical application prospect and high technical barrier, and will be added
to the Company’s R&D platforms of high-barrier complex formulation ; 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 formulations, and enhance the added value and core competitive
strengths of products to be launched.
(2) Accelerating the commercialization of existing drugs candidates under R&D: Currently, the Company has
244 drug candidates under R&D, including 45 high-barrier complex formulations. In 2023, the Company will
focus on promoting the marketing application of indacaterol maleate powder for inhalation, salmeterol
xinafoate - fluticasone propionate powder for inhalation, triptorelin acetate microspheres for injection (1-month
73
Joincare Pharmaceutical Group Annual Report 2022
sustained release) and clinical research of XYP-001, Recombinant Anti-Human IL-17A/F Humanized
Monoclonal Antibody Injection and other key varieties, while actively promoting the establishment and
research of innovative high-barrier complex formulations.
(3) In addition to independent research and development, the Company will continue to focus on cutting-
edge technologies, enhance external cooperation, proactively carry out innovative business cooperation in
the global market, and actively seek opportunities for international expansion of cutting-edge technologies
and products through licensing-in, cooperative development and other means. By focusing on its
advantageous fields, the Company will also strive to realize product iteration, build its technology platform,
and improve the construction of product portfolio in its core and advantageous fields, thus achieving long-
term sustainable development.
2. Sales Center
The key work deployments in marketing of prescription drugs are as follows: 1. Strengthen team building and
improve comprehensive quality through expanding and reinforcing the sales team of hospital channels and the
sales team of OTC channels, attracting excellent talents to join the sales team, making brand building a goal,
and enhancing the practical capability and comprehensive quality of marketing teams nationwide; 2. Continue
to strengthen integration of terminal resources, focus on establishing national benchmark areas, benchmark
hospitals and benchmark sales teams, include key hospitals above grade II in appraisal system, and
comprehensively enhance the coverage and fulfillment rate of evaluation indicators; 3. Make continuous efforts
in commerce, production, end-users and other links, rapidly increase market share and raise brand awareness
in all aspects; 4. Continue to advance construction of digital marketing platform and support for end-user market
activities, effectively combine online and offline methods, and enhance in-depth brand recognition among
doctors and patients; 5. Follow up in real time national medical reform-related policies, strengthen clinical and
pharmacoeconomic research of launched products , and actively respond to medical insurance policy
adjustments and volume-based procurement.
In terms of marketing and promotion of APIs and intermediates, the Company will further strengthen
construction of sales team, make full use of OKR and strengthen management by objectives, to build a vigorous
and highly efficient sales team; continue to deepen cooperation with global strategic customers, pursue further
development in segments, actively develop customer resources, maintain partnership, give full play to the
strength of the company brand, and establish a long-term, stable and win-win cooperation model with strategic
partners. Moreover, the Company will build good brand reputation in global market through close cooperation
with world-class enterprises. In addition, the Company will pay close attention to changes in exchange rates
and market conditions and promptly adjust sales strategies. The Company’s pet formulation product,
imidacloprid moxidectin drops, was launched in 2022. Considering the characteristics and promising
development prospects of animal health products-related business, the Company and our controlled subsidiary
Livzon Group jointly invested in the establishment of a joint venture, aiming at integrating the advantages of
both sides in the fields of R&D, production, brand promotion, online and offline omni-channel marketing, and
further accelerating the business plannings and enhancing efforts of promotion in the field of animal health care.
It is conducive to reinforce and enhance the Company’s inherent advantages in the field of animal health care
APIs and comprehensive competitiveness of business, and enter the rapidly developing consumer market of
animal health care formulations.
Health care products, as the Company’s first business segment developed, are attached great importance to the
Company's entire marketing strategies. In the future, the Group will implement digital marketing system for
increasing the on-line sale; meanwhile, strengthening the “online + offline” synergy to upgrade the offline
marketing model. We will continue to promote organizational structure reform of offline channels, channel in-
depth distribution and integration of key chains, and strengthen the sales empowerment of offline channels
through market resources empowerment, “Menopause Experts’ Views” and chain live-streaming. We will
continue to promote digital marketing system, attract off-site drainage and enhance on-site linkage, while we
deeply conduct big sales events and deliver festival gift boxes to drive online sales. In terms of content
marketing, we expand the KOL cooperation, continue to break through audience boundaries from vertical KOL
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Joincare Pharmaceutical Group Annual Report 2022
to non-vertical KOL, constantly expanding brand exposure. In terms of brand marketing and building, we will
continue to deepen the cooperation with industry associations and professional forums, strengthen the
professional building of brands, and carry out corresponding joint cooperation in platform promotion and
festival marketing to expand brand exposure and enhance brand sales. In addition, we will continue to increase
investment in user operations, and have established a special user operation team to attract, activate and operate
users with Wecom as the carrier, improve the WeChat digital mall, loyalty points and content operation system,
cultivate original users through user operation, and develop loyal fans belonging to the brand.
3.Production Center
On the production side, the Company will continue to strengthen internal operation management, enhance
the linkage of production, supply and sales plans and improve the operational efficiency of the supply
chain; continue to strengthen quality management throughout the life cycle, attach great importance to the
quality control of products and the effective operation of the quality system to prevent major quality and
safety incidents; further deepen the promotion of lean production, promote the construction of green
energy projects and continue to enhance production efficiency and the domestic driver of energy saving,
emission reduction and green environment protection; actively adopt intelligent technology to optimize
the production process, achieve cost reduction and efficiency enhancement, and further enhance the
competitive edge of core products.
4.Functions and strategies
In 2023, in respect of function management, the major tasks are as follows: firstly, we will further improve
the Company’s organizational structure and its set-up, and comprehensively promote lean management to
reduce costs and improve efficiency; secondly, we will continue to promote the construction of corporate
culture, strengthen the publicizing and following of the corporate culture among the Group and its
subsidiaries, and enhance corporate cohesion and centripetal force; thirdly, we will continue to strengthen
the construction of talents and systems, and improve the objective management system of OKR and KPI
in parallel; fourthly, we will actively practice corporate social responsibility, strive to improve corporate
governance and promote high-quality and sustainable development of the Company; fifthly, we will
actively leverage on our the advantages of internal and external resources to enhance the Group’s brand
influence.
(IV) Potential risks
√ Applicable □ N/A
1. Risks of changes in industrial policies
The pharmaceutical manufacturing industry is significantly affected by changes in industrial policies. The
pharmaceutical industry will face great challenge in development in the future with 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 Catalogue, expansion of volume-based procurement, and other industrial
policies that have been successively launched. In July 2022, the Company’s key product Meropenem for
Injection (注射用美罗培南) was selected in the seventh batch of volume-based procurement organized
by the PRC Government. This volume-based procurement was implemented in November 2022 and 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
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Joincare Pharmaceutical Group Annual Report 2022
reimbursement drug list and negotiation and 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 volume-based drug procurement is becoming a regular practice.
In the face of the seventh batch of volume-based drug procurement and the possible impact on the business
performance of the Company, the Company will continue to strengthen innovation and improve its
competitiveness, to ensure sound operation. With the Company’s new high-barrier complex formulation,
represented by inhalation formulations 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. The Company will make continued efforts
to innovate and develop innovative medicines and high-barrier complex formulation with high added value
that are urgently needed for clinical research, explore the types of existing products with market potential
and technical barriers, actively reevaluate key medicines after their marketing and assess the consistency
of relevant medicines, continuously optimize the product structure, and actively explore and expand
overseas markets.
2. Market risk
With advancement of supply-side structural reform in the pharmaceutical manufacturing industry and two
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 profitability by reinforcing
marketing. Meanwhile, the Company will offset 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 profit growth point by increasing product varieties in the future.
3. Risk of safety and environmental protection
The Company is an integrated 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 inflammable, 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 as well as 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
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Joincare Pharmaceutical Group Annual Report 2022
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 affected 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 final products
5. Risk of R&D for new drugs
New drug R&D is characterized by high input, high risk and long period. The State has frequently issued
drug R&D 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 focus on innovative medicines and high-barrier complex
formulation, pay attention to unmet clinical needs, and continuously invest in innovative research and
development. 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 formulations to ensure the long-term sustainable development of the
Company.
(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
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Joincare Pharmaceutical Group Annual Report 2022
Chapter 4 Corporate Governance
I. Corporate Governance
√Applicable □N/A
The Company is in compliance with the corporate governance requirements applicable to it as a PRC
public company listed on the Shanghai Stock Exchange in all material aspects, including but not limited
to 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. During the
Reporting Period, the Company continued to improve its corporate governance structure, strengthen
information disclosure management and enhance investor relations management and internal control to
standardize the operation of the Company.
1. Shareholders and General Meetings
During the Reporting Period, 1 annual general meeting and 4 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 the 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 Appropriating Funds of the Company, and has 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 embezzled 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 14 Board meetings in multiple ways, including on-site
meeting, voting through electronic means and the combination of on-site meeting and electronic means,
providing convenience for the attending directors. During the Reporting Period, the Board of the Company
performed its duties actively and effectively in strict compliance with the relevant regulations, including
the Company Law, the Articles of Association, and the Rules of Procedure for the 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
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Joincare Pharmaceutical Group Annual Report 2022
play to their expertise, so as to ensure the legality, scientificity, 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 the Board Meetings, and all directors of the Company have attended
meetings including the board meetings and general meetings in a conscientious, responsible and honest
manner, actively participated in relevant business training, familiarized themselves with relevant laws and
regulations, and clarified the rights, obligations and responsibilities of directors.
4. Supervisors and the Supervisory Committee
During the Reporting Period, the Company held 12 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 financial position of the Company, and focused on
significant 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 2022. Based on the result of performance assessment, the
performance bonus and remuneration of senior management in 2022 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 is able 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.
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Joincare Pharmaceutical Group Annual Report 2022
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 as well as advance
the steady and healthy development of the Company.
9. Establishment and implementation of insider registration management system for insider
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
III. Introduction of General Meetings
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Joincare Pharmaceutical Group Annual Report 2022
Query index of
the designated
Date of Disclosure
Meeting session website for Meeting resolution
meeting date
publishing the
resolution
Eight (8) resolutions were considered and
approved, including the Resolution on
Changing Certain Projects Invested with
Proceeds, the Resolution on Revision of
Certain Clauses of Articles of Association and
2022 First
11 February 12 February the Resolution on Revision of Certain Clauses
Extraordinary www.sse.com.cn
2022 2022 of the Rules of Procedure for the Board
General Meeting
Meetings. See the Announcement on
Resolutions of Joincare Pharmaceutical Group
Industry Co., Ltd. at the 2022 First
Extraordinary General Meeting (Lin 2022-
014) for details
Fourteen (14) resolutions were considered and
approved, including the 2021 Annual Work
Report of the Supervisory Committee, the
Resolution on Election of Mr. Xing Zhiwei as
2021 Annual 19 May Supervisor of the Company and 2021 Annual
18 May 2022 www.sse.com.cn
General Meeting 2022 Work Report of the Board of Directors. See the
Announcement on Resolutions of Joincare
Pharmaceutical Group Industry Co., Ltd. at the
2021 Annual General Meeting (Lin 2022-051)
for details
Ten (10) resolutions were considered and
approved, including the Resolution on the
Company’s Issuance of GDRs, listing on the
SIX Swiss Exchange and Conversion into a
Joint Stock Limited Company Offering Shares
Overseas, the Resolution on the Plan for the
2022 Second
Company’s Issuance of GDRs and Listing on
Extraordinary 8 July 2022 www.sse.com.cn 9 July 2022
the SIX Swiss Exchange and the Resolution on
General Meeting
Report on the Utilization of the Proceeds
Previously Raised by the Company. See the
Announcement on Resolutions of Joincare
Pharmaceutical Group Industry Co., Ltd. at the
2022 Second Extraordinary General Meeting
(Lin 2022-077) for details
The Resolution on 2022 Share Options
Incentive Scheme (Draft) and its Summary,
the Resolution on the Administrative
Measures for Appraisal System of the 2022
Share Options Incentive Scheme of the
Company and the Resolution on the General
2022 Third
29 August 30 August Meeting for Granting Mandate to the Board to
Extraordinary www.sse.com.cn
2022 2022 Deal with Matters Regarding the Share
General Meeting
Options Incentive Scheme were considered
and approved. See the Announcement on
Resolutions of Joincare Pharmaceutical Group
Industry Co., Ltd. at the 2022 Third
Extraordinary General Meeting (Lin 2022-
095) for details
Four (4) resolutions were considered and
approved, including the Resolution on
Repurchase of Shares of the Company through
Centralized Bidding Transactions, the
Resolution on the General Meeting for
2022 Fourth 19 Granting Mandate to the Board to Deal with
18 November
Extraordinary www.sse.com.cn November Matters Regarding the Repurchase and the
2022
General Meeting 2022 Resolution on Change in Registered Capital of
the Company. See the Announcement on
Resolutions of Joincare Pharmaceutical Group
Industry Co., Ltd. at the 2022 Fourth
Extraordinary General Meeting (Lin 2022-
134) for details
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Joincare Pharmaceutical Group Annual Report 2022
Holders of preferred shares with resumed voting rights requesting to hold extraordinary general
meeting
□ Applicable √ N/A
Explanations of 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
remuneration
Receive any
received
Number Number remuneration
Change in from the
Start date of shares of shares from any
End date of shareholding Reason for Company
Name Position (Note) Gender Age of the held at the held at the related party
the tenure during the change during the
tenure beginning end of the of the
year Reporting
of the year year Company or
Period
not
(RMB Ten
thousand)
Zhu 28 August 27 August
Chairman Male 61 334.09 No
Baoguo 2021 2024
Liu 28 August 27 August
Vice Chairman Female 54 347.98 No
Guangxia 2021 2024
28 August 27 August Equity
Yu Xiong Director, President Male 62 660,000 800,000 140,000 360.00 No
2021 2024 incentive
Director, Vice
Qiu 28 August 27 August Equity
President, Chief Male 52 537,409 717,409 180,000 224.93 Yes
Qingfeng 2021 2024 incentive
Financial Officer
Director, Vice 28 August 27 August Equity
Lin Nanqi Male 41 1,051,040 1,291,040 240,000 224.93 Yes
President 2021 2024 incentive
28 August 27 August
Cui Liguo Independent Director Male 53 11.54 No
2021 2024
28 August 27 August
Huo Jing Independent Director Female 47 11.54 No
2021 2024
28 August 27 August
Qin Yezhi Independent Director Male 49 11.54 No
2021 2024
28 August 27 August
Peng Juan Independent Director Female 59 11.54 No
2021 2024
Chairman of
Yu 28 August 27 August
the Supervisory Male 55 70.13 No
Xiaoyun 2021 2024
Committee
Peng 28 August 27 August
Supervisor Female 61 38,043 38,043 0 4.80 No
Jinhua 2021 2024
Purchase
Xing 18 May 27 August from the
Supervisor Male 37 61,100 0 -61,100 168.88 No
Zhiwei 2022 2024 secondary
market
Xie 28 August 18 May
Supervisor(resigned) Male 66 75,442 75,442 0 38.75 No
Youguo 2021 2022
Vice President,
Zhao 28 August 27 August Equity
Secretary to the Male 48 588,000 768,000 180,000 2,010.58 No
Fengguang 2021 2024 incentive
Board
Total / / / / / 2,949,934 3,689,934 740,000 / /
Notes: 1. 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 2022 Annual Report for details.
2.Upon the consideration and approval at the 2021 annual general meeting of the Company, Mr. Xing Zhiwei has
been a Supervisor of the Company with effect from 18 May 2022, after that there was not any change in shareholding.
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.,
Zhu Baoguo
Ltd., and had been the general manager and vice chairman of the Company since 1992. He is currently
the chairman of the Company and the chairman of Livzon Pharmaceutical Group Inc. Mr. Zhu Baoguo
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Joincare Pharmaceutical Group Annual Report 2022
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
Liu Guangxia the vice 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 chairman of Pharmaceutical Engineering
Yu Xiong
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 Certified Public Accountants (non-
practicing). He worked at Tianjin No.1 Machine Tool Works. Since 1996, he had served successively
Qiu Qingfeng as the finance 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 financial officer 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 deputy
Lin Nanqi 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
Cui Liguo Company, APT 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) and Beijing Life Insurance Co., Ltd.
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
Huo Jing
Committee of 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
Qin Yezhi
Accounting Firm, 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
Certified 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
Peng Juan
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 Research Society of Shanghai Jiao Tong University, adviser
of China Financial Cloud Institute, a member of Behavioral Science Council, a member of Finance and
Accounting Association of Shanghai Jiao Tong University, and a member of Green Finance Center of
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Joincare Pharmaceutical Group Annual Report 2022
Shanghai Environment and Energy Exchange. She served concurrently as independent director of
Shanghai Sunglow Packaging Technology Co., Ltd. (stock code: 603499), Dynamiker Biotechnology
(Tianjin) Co., Ltd. and Shanghai Sunmi 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
Yu Xiaoyun
manager of the 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
Peng Jinhua Co., Ltd. She joined the Company in March 1994, and served successively as finance supervisor,
manager of planning and finance department, manager of finance department, manager of tax
department, administration manager, and general manager assistant. She is currently a supervisor of the
Company.
Male, born in 1986. He graduated from Sichuan University majoring in light industry biotechnology
with a bachelor's degree. He currently serves as the deputy director of the Center of the Production
Management and a supervisor of the Company, the general manager and vice president of the
Company’s subsidiary Jiaozuo Joincare Bio Technological Co., Ltd. and a director and the general
Xing Zhiwei
manager of the Company’s subsidiary Henan Province Joincare Biopharmaceutical Research Institute
Co., Ltd. He served successively as workshop supervisor and workshop manager of Livzon Group
Xinbeijiang Pharmaceutical Manufacturing Inc., and workshop manager, production director and
deputy general manager of Jiaozuo Joincare Bio Technological Co., Ltd.
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
Zhao Natural Products, and assistant to director of Chinese Medicine Laboratory of Research Institute of
Fengguang Tsinghua University in 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 22 April 2022, the Company held the ninth meeting of the eighth session of the Supervisory Committee
to consider and approve the Resolution on Nominating Mr. Xing Zhiwei as a Candidate for Supervisor of
the Supervisory Committee, and the Supervisory Committee agreed to nominate Mr. Xing Zhiwei as a
candidate for Supervisor of the eighth session of the Supervisory Committee of the Company, and
submitted this resolution to the general meeting for consideration. On 18 May 2022, the Resolution on
Election of Mr. Xing Zhiwei as Supervisor of the Company was considered and approved at the 2021
Annual General Meeting of the Company, pursuant to which Xing Zhiwei serves as the supervisor of the
Company for a term commencing from the date of consideration and approval at the General Meeting to
the date of expiry of the term of the eighth session of the Supervisory Committee.
(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
End date
Start date of the
Name Corporate shareholder Posts held of the
tenure
tenure
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, Vice Chairman of the Company, directly holds 10% of shares in
Note
Baiyeyuan. Both of them are directors of Baiyeyuan, and Mr. Zhu Baoguo is the spouse of
Ms. Liu Guangxia.
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Joincare Pharmaceutical Group Annual Report 2022
2. Posts held at other entities
√Applicable □N/A
End date
Start date of the
Name Other entities Posts held of the
tenure
tenure
Shenzhen Federation of Industry and Honorary Vice
November 2014 /
Commerce President
Federation of Shenzhen Commerce Director April 2015 /
Council Member,
Zhu TNC Greater China Council of Advisors December 2012 /
Secretary General
Baoguo
The Paradise International Foundation Director April 2015 /
China Entrepreneur Club Council Member April 2017 /
Central China Management Company
Independent Director May 2021 /
Limited
Shanghai Society of Chemistry and
Honorary Director October 2016 /
Chemical Industry
Tianjin Tianyao Pharmaceuticals Co., Ltd. Independent Director December 2016 /
Shanghai Huatai Investment Development
Director May 2018 /
Co., Ltd.
East China University of Science and
Yu Xiong Adjunct Professor July 2019 /
Technology
Sichuan Biokin Pharmaceutical Co., Ltd. Independent Director September 2019 /
Pharmaceutical Engineering Specialized
Committee of Chinese Pharmaceutical Honorary Chairman November 2019 /
Association
Chinese Pharmaceutical Association Honorary Director January 2022 /
Jiaozuo Jinguan Jiahua Electric Power Co.,
Director November 2015 /
Qiu Ltd.
Qingfeng Jiangsu Baining Yingchuang Medical
Director November 2020 /
Technology Co., Ltd.
Jiaozuo Jinguan Jiahua Electric Power Co.,
Lin Nanqi Director January 2022 /
Ltd.
Founding Partner,
Director of
Beijing Guantao Law Firm February 1994 /
Management
Committee
APT Satellite Holdings Limited (listed Independent non-
July 2007 /
overseas) executive director
Independent non-
CNNC International Ltd. (listed overseas) November 2008 /
executive director
Frontier Services Group Ltd.(listed Independent non-
Cui Liguo June 2020 /
overseas) executive director
China Electronics Information Service Co.,
External Director July 2016 /
Ltd.
December
Essence Securities Co., Ltd. Independent Director November 2016
2022
Beijing Life Insurance Co., Ltd. Independent Director March 2018 /
CEC Xinze (Beijing) Investment
External Director May 2018 /
Management Co., Ltd.
China Coal Xinji Energy Co., Ltd. Independent Director May 2019 /
Huo Jing Guangdong Sun Law Firm Lawyer, Partner June 2007 /
China Shu Lun Pan Certified Public
Accountants LLP (Special General Partner July 2014 /
Qin Yezhi Partnership)
Shenzhen Yongpeng CTA Firm (Special
Partner September 2013 /
General Partnership)
Associate Professor of
Antai College of Economics and
Department of
Peng Juan Management of Shanghai Jiao Tong September 1997 /
Accounting, Doctoral
University
Supervisor
85
Joincare Pharmaceutical Group Annual Report 2022
Kexin Development Co., Ltd., Shanxi Independent Director July 2016 June 2022
August
Zhejiang Dibay Electric Co., Ltd. Independent Director August 2016
2022
Jiangsu Pizhou Rural Commercial Bank Independent Director September 2016 July 2022
Dynamiker Biotechnology (Tianjin) Co.,
Independent Director July 2020 /
Ltd.
Shanghai Sunglow Packaging Technology
Independent Director March 2022 /
Co., Ltd.
Shanghai Sunmi Technology Co., Ltd. Independent Director May 2022 /
Shanghai Jiaopeng Technology Co., Ltd. Supervisor July 2019 /
Shanghai Jiaoshang Digital Technology
General Manager December 2022 /
Co., Ltd.
Yu Shenzhen Science and Technology
Review Expert November 2022 /
Xiaoyun Innovation Commission
Shenzhen Nanbei Shengying Industrial
Director July 2017
Development Co., Ltd.
Peng Jinhua
Shenzhen Xinfengfan Technology
Supervisor August 2005
Development Co., Ltd.
Note Not applicable
(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 provisions of the tax laws. On 29 March 2022 and 18 May 2022,
the Company convened the ninth meeting of the eighth session of the Board of Directors and
the 2021 Annual General Meeting, respectively, at which the Resolution on Adjusting the
Emolument of Independent Directors of the Company(《关于调整公司独立董事津贴的议
案》) was considered and approved, the emolument of each independent director shall be
adjusted to RMB10,000 (before tax) from RMB9,000 (before tax) per month, with the
individual income tax withheld and remitted by the Company in accordance with the relevant
provisions of the tax laws.
On 10 August 2021 and 28 August 2021, the Company convened the 39th meeting of the
seventh session of the Supervisory Committee and the 2021 Third Extraordinary General
Meeting, respectively, at which Resolution on Adjusting the Emolument of the Supervisors of
the Company( 《 关于调 整公 司监事津 贴的议 案》 ) was considered and approved, the
emolument of each supervisor shall be adjusted to RMB4,000 (before tax) per month from
Decision-making RMB3,000 (before tax) per month, with the individual income tax withheld and remitted by
procedure regarding the Company in accordance with the relevant provisions of the tax laws. During the Reporting
remuneration of Period, the remuneration received by supervisors is the wage based on the wage system of the
directors, supervisors Company plus the emolument paid to them.
and senior
management The remuneration of senior management of the Company shall follow the resolution of the 52th
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 to the
basic remuneration, pursuant to the regulations such as the Management Policy on the
Remuneration and Performance Assessment of Senior Management (《高级管理人员薪酬及
绩效考核管理制度》), individual assessment shall be performed and performance-based
bonuses shall be paid according to the assessment result. In case of holding concurrent
positions, the highest remuneration among 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 16 January 2023, the Remuneration Committee under the Board of the Company convened
the 8th meeting of the 8th session of the Board, at which the Resolution on the 2022 Annual
Performance Assessment Result and Remuneration Distribution of Senior Management of the
Company (《关于公司高级管理人员 2022 年度绩效考核结果及薪酬分配的议案》) was
86
Joincare Pharmaceutical Group Annual Report 2022
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 2022 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 2022. On 16 January 2023, the
Board of the Company convened the 22th meeting of the 8th session of the Board, at which the
Resolution on Remuneration Distribution of Senior Management for the year 2022 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.
Pursuant to the regulations such as the Management Policy on the Remuneration and
Basis for determining Performance Assessment of Senior Management, the result of performance assessment of
remuneration of senior management is determined based on the completion of business objectives of the
directors, supervisors Company and work objectives of the senior management in 2022. Based on the result of
and senior performance assessment, the performance bonus and remuneration of senior management in
management 2022 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 to
As at the date of the Report, remuneration of directors, supervisors and senior management has
directors, supervisors
been fully paid.
and senior
management
Total remuneration
paid to all directors,
supervisors and senior
RMB20.1058 million.
management as of the
end of the Reporting
Period
(IV) Changes in directors, supervisors and senior management
√Applicable □N/A
Name Position Change Reason for change
Xie Youguo Supervisor Resigned Resigned
Xing Zhiwei Supervisor Elected Nominated by the Supervisory Committee and elected at the general meeting
(V) Statement on punishments imposed by securities regulatory authorities in the last three years
□Applicable √N/A
(VI) Others
□Applicable √N/A
V. Board meetings held during the Reporting Period
Meeting Date of
Meeting resolution
session meeting
Eighteen (18) resolutions were considered and approved, including the Resolution on
Changing Certain Projects Invested with Proceeds, the Resolution on the Opening a New
8th meeting of Special Account Designated for Proceeds and Proposed Signing the Proceeds Escrow
the 8th session 2022-01-24 Agreement by the Company and the Resolution on the 2021 Annual Performance
of the Board Assessment Result and Remuneration Distribution of Senior Management of the Company.
See the Announcement on Resolutions of Joincare Pharmaceutical Group Industry Co., Ltd.
at the 8th meeting of the 8th session of the Board (Lin 2022-006) for details
Nineteen (19) resolutions were considered and approved, including the 2021 Annual Work
Report of the President, 2021 Annual Work Report of the Board of Directors, 2021 Final
9th meeting of
Account Report, 2021 Annual Profit Distribution Plan and 2021 Annual Report of Joincare
the 8th session 2022-03-29
Pharmaceutical Group Industry Co., Ltd. (Full Text and Abstract). See the Announcement
of the Board
on Resolutions of Joincare Pharmaceutical Group Industry Co., Ltd. at the 9th Meeting the
8th Session of the Board of (Lin 2022-026) disclosed on 31 March 2022 for details
87
Joincare Pharmaceutical Group Annual Report 2022
The 2022 Q1 Report of Joincare Pharmaceutical Group Industry Co., Ltd., the Resolution
on the Second Phase Ownership Scheme under Medium to Long-term Business Partner
Share Ownership Scheme of the Company (Draft) and its Summary, the Resolution on the
10th meeting of General Meeting for Granting Mandate to the Board to Deal with Matters Related to the
the 8th session 2022-04-22 Second Phase Ownership Scheme under Medium to Long-term Business Partner Share
of the Board Ownership Scheme of the Company and the Resolution on Convening the 2021 Annual
General Meeting of the Company were considered and approved. See the Announcement on
Resolutions of Joincare Pharmaceutical Group Industry Co., Ltd. at the 10th Meeting of the
8th Session of the Board (Lin 2022-047) disclosed on 25 April 2022 for details
The Resolution on the Amendment to the Second Phase Ownership Scheme under Medium
to Long-term Business Partner Share Ownership Scheme of the Company (Draft) and its
11th meeting of
Summary was considered and approved. See the Announcement of Joincare Pharmaceutical
the 8th session 2022-05-31
Group Industry Co., Ltd. on the Amendment to the Second Phase Ownership Scheme under
of the Board
Medium to Long-term Business Partner Share Ownership Scheme of the Company (Draft)
and its Summary (Lin 2022-053) disclosed on 1 June 2022 for details
The Resolution on Planning to Issue Global Depository Receipts Overseas and Listing on
12th meeting of the SIX Stock Exchange was considered and approved. See the Indicative Announcement of
the 8th session 2022-06-15 Joincare Pharmaceutical Group Industry Co., Ltd. on Planning to Issue Global Depository
of the Board Receipts Overseas and List on the SIX Stock Exchange (Lin 2022-061) disclosed on 16 June
2022 for details
Twenty (12) resolutions were considered and approved, including the Resolution on the
Company’s Issuance of GDRs and Listing on the SIX Stock Exchange and Conversion into
a Joint Stock Limited Company Offering Shares Overseas, the Resolution on the Plan for
13th meeting of
the Company’s Issuance of GDRs and Listing on the SIX Swiss Exchange and the
the 8th session 2022-06-22
Resolution on Report on the Utilization of the Proceeds Previously Raised by the Company.
of the Board
See the Announcement on Resolutions of Joincare Pharmaceutical Group Industry Co., Ltd.
at the 13th Meeting of the 8th Session of the Board (Lin 2022-063) disclosed on 23 June
2022 for details
The Resolution on Adjusting the Exercise Price of the 2018 Share Options Incentive Scheme
14th meeting of of the Company was considered and approved. See the Announcement of Joincare
the 8th session 2022-06-30 Pharmaceutical Group Industry Co., Ltd. on Adjusting the Exercise Price of the 2018 Share
of the Board Options Incentive Scheme of the Company (Lin 2022-069) disclosed on 1 July 2022 for
details
Six (6) resolutions were considered and approved, including the 2022 Interim Report of
Joincare Pharmaceutical Group Industry Co., Ltd. and its Summary, the Special Report of
15th meeting of Joincare Pharmaceutical Group Industry Co., Ltd. on Deposit and Actual Use of Proceeds
the 8th session 2022-08-10 for the half year of 2022 and the Resolution on the 2022 Share Options Incentive Scheme
of the Board (Draft) and its Summary. See the Announcement on Resolutions of Joincare Pharmaceutical
Group Industry Co., Ltd. at the 15th Meeting of the 8th Session of the Board (Lin 2022-083)
disclosed on 11 August 2022 for details
The Resolution on Matters Related to the Adjustment of the 2022 Share Options Incentive
16th meeting of Scheme and the Resolution on the First Grant of Share Options to Incentive Participants
the 8th session 2022-09-05 were considered and approved. See the Announcement on Resolutions of Joincare
of the Board Pharmaceutical Group Industry Co., Ltd. at the 16th Meeting of the 8th Session of the Board
(Lin 2022-100) disclosed on 6 September 2022 for details
The Resolution on the Cancellation of Certain Share Options Granted but Not Yet Exercised
under the 2018 Share Options Incentive Scheme, the Resolution on Repurchase of Shares
17th meeting of through Centralized Bidding Transactions and the Resolution on the General Meeting for
the 8th session 2022-10-14 Granting Mandate to the Board to Deal with Matters Regarding the Repurchase. See the
of the Board Announcement on Resolutions of Joincare Pharmaceutical Group Industry Co., Ltd. at the
17th Meeting of the 8th Session of the Board (Lin 2022-119) disclosed on 17 October 2022
for details
The 2022 Q3 Report of Joincare Pharmaceutical Group Industry Co., Ltd.,
the Resolution on Change in Registered Capital of the Company, the Resolution on the
18th meeting of Amendment to Certain Clauses of the Articles of Association and the Resolution on
the 8th session 2022-10-26 Convening the 2022 Fourth Extraordinary General Meeting of the Company were
of the Board considered and approved. See the Announcement on Resolutions of Joincare Pharmaceutical
Group Industry Co., Ltd. at the 18th Meeting of the 8th Session of the Board (Lin 2022-124)
disclosed on 17 October 2022 for details
The Resolution on Co-investment with Controlling Subsidiary Livzon Group was considered
19th meeting of
and approved. See the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd.
the 8th session 2022-11-28
on Co-investment with Controlling Subsidiary Livzon Group (Lin 2022-136) disclosed on
of the Board
29 November 2022 for details
20th meeting of The Resolution on the Establishment of a Joint Venture with Controlling Subsidiary Livzon
the 8th session 2022-12-12 Group and the Resolution relating to the Adjustment to Projected Daily Connected
of the Board Transactions between Controlling Subsidiaries Jiaozuo Joincare and Jinguan Electric Power
88
Joincare Pharmaceutical Group Annual Report 2022
were considered and approved. See the Announcement on Resolutions of Joincare
Pharmaceutical Group Industry Co., Ltd. at the 20th Meeting of the 8th Session of the Board
(Lin 2022-141) disclosed on 13 December 2022 for details
The Resolution on the Temporary Replenishment of Working Capital with Idle Proceeds was
21th meeting of
considered and approved. See the Announcement of Joincare Pharmaceutical Group
the 8th session 2022-12-29
Industry Co., Ltd. on the Temporary Replenishment of Working Capital with Idle Proceeds
of the Board
(Lin 2022-146) disclosed on 30 December 2022 for details
VI. Performance of duties by directors
(1) Attendance by directors of the Board meetings and general meetings
Attendance
Attendance of the Board meetings at general
meetings
Whether Number Whether the
indepen of Number director Number of
Name Number of Number of Numb
dent meetings of has been attendances
meetings the meetings er of
director attended meetings absent from at the
director should attended Absen
through attended two general
attend for the year in person ces
electronic by proxy consecutive meetings
means meetings
Zhu Baoguo No 14 14 8 0 0 No 4
Liu
No 14 14 8 0 0 No 3
Guangxia
Yu Xiong No 14 14 8 0 0 No 5
Qiu
No 14 14 8 0 0 No 5
Qingfeng
Lin Nanqi No 14 14 8 0 0 No 5
Cui Liguo Yes 14 14 8 0 0 No 5
Huo Jing Yes 14 14 8 0 0 No 5
Qin Yezhi Yes 14 14 8 0 0 No 5
Peng Juan Yes 14 14 8 0 0 No 4
Statement on absence from two consecutive meetings
□Applicable √N/A
Board meetings held during the year 14
In which: On-site meetings 6
Meetings held through electronic means 8
Meetings held both in the form of on-site 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
Zhu Baoguo, Lin Nanqi, Cui Liguo
(CSR) Committee
89
Joincare Pharmaceutical Group Annual Report 2022
(2). 7 meetings were held by the Audit Committee during the Reporting Period
Important
opinion
Date of meeting Content
and
suggestion
Review of the 2021 Annual Financial Statements of Joincare harmaceutical Group
21 January 2022 Approved
Industry Co., Ltd. (Unaudited)
Review of the Draft Audit Opinions for the 2021 Annual Financial Statements of
21 March 2022 Approved
Joincare Pharmaceutical Group Industry Co., Ltd.
Review of the Audit Report for the 2021 Annual Financial Statements of the
Approved
Company (Final)
Review of the Audit Report for the 2021 Annual Internal Control of the Company
Approved
(Final)
Review of the Summary Report on Audit Work for the Year 2021 from Grant Thornton
Approved
(Special General Partnership)
Review of the Self-Assessment Report of Joincare Pharmaceutical Group Industry Co.,
29 March 2022 Approved
Ltd. on Risk Management and Internal Control for the Year 2021
Review of the Resolution on Appointment of Grant Thornton (Special General
Approved
Partnership) as the Auditor of the Company for the Year 2022
Review of the Resolution on Daily Connected Transactions between the Controlling
Approved
Subsidiaries Jiaozuo Joincare and Jinguan Electric Power
Review of the Resolution on Providing Loan Guarantee for Jinguan Electric Power by
Approved
the Company and its Controlling Subsidiary Jiaozuo Joincare
22 April 2022 Review of the 2022 Q1 Report of Joincare Pharmaceutical Group Industry Co., Ltd. Approved
26 October 2022 Review of the 2022 Q3 Report of Joincare Pharmaceutical Group Industry Co., Ltd. Approved
28 November Review of the 2022 Financial Statements and Internal Control Audit Proposal of
Approved
2022 Joincare Pharmaceutical Group Industry Co., Ltd.
12 December the Resolution relating to the Adjustment to Projected Daily Connected Transactions
Approved
2022 between Controlling Subsidiaries Jiaozuo Joincare and Jinguan Electric Power
(3). 4 meetings were held by the Remuneration Committee during the Reporting Period
Important
Date of
Content opinion and
meeting
suggestion
24 January Review of the Resolution on the 2021 Annual Performance Assessment Result and
Approved
2022 Remuneration Distribution of Senior Management of the Company
Review of the Review of the Resolution on the 2022 Share Options Incentive Scheme
Approved
10 August (Draft) and its Summary
2022 Resolution on the Administrative Measures for Appraisal System of the 2022 Share
Approved
Options Incentive Scheme of the Company
Review of the Resolution on Matters Related to the Adjustment of the 2022 Share Options
5 September Approved
Incentive Scheme
2022
Review of the Resolution on the First Grant of Share Options to Incentive Participants Approved
14 October Review of the Resolution relating to Cancellation of Certain Share Options of the
Approved
2022 Company Granted but Not Yet Exercised under the 2018 Share Options Incentive Scheme
(4). 4 meetings were held by the Strategy Committee during the Reporting Period
Date of Important opinion
Content
meeting and suggestion
Review of the Resolution on Planning to Issue Global Depository Receipts
15 June 2022 Approved
Overseas and Listing on the SIX Stock Exchange
Review of the Resolution on the Company’s Issuance of GDRs and Listing on the
SIX Stock Exchange and Conversion into a Joint Stock Limited Company Offering Approved
Shares Overseas
22 June 2022 Review of the Resolution on the Plan for the Company’s Issuance of GDRs and
Approved
Listing on the SIX Swiss Exchange
Review of the Resolution on the Plan for the Use of Proceeds Raised by the
Approved
Issuance of GDRs
28 November Review of the Resolution on Co-investment with Controlling Subsidiary Livzon
Approved
2022 Group
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Joincare Pharmaceutical Group Annual Report 2022
12 December Review of the Resolution on the Establishment of a Joint Venture with Controlling
Approved
2022 Subsidiary Livzon Group
(5). 2 meetings were held by the Corporate Responsibility Committee during the Reporting Period
Important opinion
Date of meeting Content
and suggestion
Review of the 2021 Corporate Social Responsibility Report of Joincare
Approved
Pharmaceutical Group Industry Co., Ltd.
Review of the Resolution on the Set-up of Environmental Management
Approved
29 March 2022 Targets for Carbon Emissions of Joincare Group
Review of the Resolution on the Introduction of ESG Indicator Assessment
Mechanism into Individual Performance of the Corporate Responsibility Work Approved
Group of Joincare Pharmaceutical Group
Review of the Resolution on the Establishment of 2022 Corporate
23 November
Responsibility Work Group of Joincare Pharmaceutical Group Industry Co., Approved
2022
Ltd.
(6). 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.
IX. Employees of the parent company and major subsidiaries
(I) Employees
Number of active employees of the parent company 517
Number of active employees of major subsidiaries 13,599
Total number of employees 14,116
Number of retired employees for whom the parent company and major
669
subsidiaries need to pay certain expenses
Profession
Category Number
Production staff 8,312
Sales staff 2,635
Technical staff 2,181
Financial staff 258
Administrative staff 730
Total 14,116
Education background
Education background Number
PhD 64
Postgraduate 620
Undergraduate 3,730
Junior college diploma 4,021
Others 5,681
Total 14,116
(II) Compensation policy
√Applicable □N/A
The Company implements scientific, reasonable and incentive-based compensation strategies. Based on
scientific 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: fixed income and variable income. Variable
income is linked to business results of the Company and individual performance of employees. In this
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Joincare Pharmaceutical Group Annual Report 2022
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 2022, 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, training and 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
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. Cash dividend distribution policy and its formulation
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 the CSRC (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, clarified 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
profits, 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 distribution policy in 2022
On 18 May 2022, the Company convened the 2021 Annual General Meeting, at which the Company's
Profit Distribution Plan for 2021 was considered and approved: a cash dividend of RMB1.50 (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 profit distribution plan
for 2021, minus the total number of shares in the Company's special securities account for repurchase,
with the remaining undistributed profits to be carried forward to the following year. As of the end of this
Reporting Period, the above cash dividends have been fully distributed.
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Joincare Pharmaceutical Group Annual Report 2022
3. Profit distribution scheme for 2022
Based on the audit conducted by Grant Thornton (Special General Partnership), in 2022, the Parent
Company generated net profit of RMB849,731,957.95, 10% of which was contributed to the statutory
surplus reserve, namely RMB84,973,195.80, the remainder of which, together with undistributed profits
for the last year of RMB1,400,174,178.18 and gain on disposal of other equity investments of
RMB80,749,859.60, subtracting cash dividends for the last year of RMB277,557,631.65, is the profits
available for distribution to shareholders for the year of RMB1,968,125,168.28.The Company plans to
distribute cash dividends for the fiscal year 2022, based on the total number of shares for dividend
distribution, which is defined 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 Company
plans to distribute cash dividend of RMB1.80 (tax inclusive) for every 10 shares of to all shareholders of
the Company, and the remaining undistributed profits will be carried forward to the following year.
4. Modification and adjustment of the cash dividend distribution policy during the Reporting Period
The Company's cash dividend policy was not modified or adjusted during the Reporting Period.
(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 defined and clear distribution qualifications 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 and
√Yes □No
whether their legitimate rights and interests have been well protected
(III) If the Company made a profit during 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
(IV) Profit distribution and conversion of capital reserve into share capital for the Reporting
Period
√Applicable □N/A
Unit: Yuan Currency: RMB
Number of bonus shares to be distributed for every ten shares (share) 0
Amount to be distributed for every ten shares (RMB) (tax inclusive) 1.80
Number of shares to be converted into share capital for every ten shares (share) 0
Amount of cash dividend (tax inclusive) 342,139,018.68
Net profit attributable to ordinary shareholders of the listed company in the consolidated
1,502,595,840.48
financial statement during the year of distribution
Percentage of the net profit attributable to ordinary shareholders of the listed company
22.77
in the consolidated financial statement (%)
Amount of repurchase of shares under cash offer included in cash dividend 724,513,822.62
Total amount of dividend (tax inclusive) 1,066,652,841.30
Total amount of dividend as a percentage of the net profit attributable to ordinary
70.99
shareholders of the listed company in the consolidated financial statement (%)
Note: The Company proposes to distribute cash dividend of RMB1.80 (tax inclusive) for every 10 shares to all
shareholders of the Company (except for those in the Share Repurchase Account of the Company). The cash dividends
proposed to be distributed for 2022 will be RMB342,139,018.68 (tax inclusive) based on the total share capital of
1,929,189,374 shares less the 28,417,048 shares in the Share Repurchase Account of the Company as of 31 December 2022.
The final and actual total distribution amount is calculated based on the total shares entitled to participate in the equity
distribution on the equity registration date for the implementation of equity distribution.
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Joincare Pharmaceutical Group Annual Report 2022
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 share options exercised was 4,005,170 from 1
See the Announcement on 2022 Q1 Independent Exercise
January 2022 to 31 March 2022. As of 31 March 2022, the
Results of the 2018 Share Options Incentive Scheme of
number of options cumulatively exercised and completing share
Joincare Pharmaceutical Group Industry Co., Ltd. &
transfer registration during the exercise period of the first grant
Changes in Shares (Lin 2022-038) disclosed by the
and reserved grant under the 2018 Share Options Incentive
Company on 2 April 2022 for details.
Scheme of the Company was 28,835,036.
The Resolution on the Second Phase Share Ownership Scheme
under Medium to Long-term Business Partner Share Ownership
See the relevant Announcements on the Second Phase
Scheme of the Company (Draft) and its Summary and the
Share Ownership Scheme under Medium to Long-term
Resolution on the General Meeting for Granting Mandate to the
Business Partner Share Ownership Scheme of Joincare
Board to Deal with Matters Related to the Second Phase Share
Pharmaceutical Group Industry Co., Ltd. (Draft) and its
Ownership Scheme under Medium to Long-term Business
Summary disclosed by the Company on 25 April 2022 for
Partner Share Ownership Scheme of the Company were
details;
considered and approved at the Congress of Workers and Staff,
See the Announcement on Resolutions of Joincare
the 10th Meeting of the 8th Session of the Board, and the 9th
Pharmaceutical Group Industry Co., Ltd. at the 2021
Meeting of the 8th Session of the Supervisory Committee on 22
Annual General Meeting (Lin 2022-051) disclosed by the
April 2022.
Company on 19 May 2022 for details.
The said resolutions were considered and approved at the 2021
Annual General Meeting on 18 May 2022.
See the Announcement on Resolution in Relation to
Revision of the Second Phase Share Ownership Scheme
The Resolution on Revision of the Second Phase Share
under Medium to Long-term Business Partner Share
Ownership Scheme under Medium to Long-term Business
Ownership Scheme of Joincare Pharmaceutical Group
Partner Share Ownership Scheme of Joincare Pharmaceutical
Industry Co., Ltd. (Draft) and its Summary (Lin 2022-
Group Industry Co., Ltd. (Draft) and its Summary was
053), and the Second Phase Share Ownership Scheme
considered and approved at the 11th Meeting of the 8th Session
under Medium to Long-term Business Partner Share
of the Board and at the 10th Meeting of the 8th Session of the
Ownership Scheme of Joincare Pharmaceutical Group
Supervisory Committee on 31 May 2022.
Industry Co., Ltd. (Revised Draft) and its Summary
disclosed by the Company on 1 June 2022 for details.
On 1 June 2022, the First Holders’ Meeting of the Second Phase
Share Ownership Scheme of Medium to Long-term Business
Partners was held by the Company, at which the Resolution on
See the Announcement on Resolutions of Joincare
Establishing the Management Committee of the Second Phase
Pharmaceutical Group Industry Co., Ltd. at the First
Share Ownership Scheme of the Company, the Resolution on
Holders’
Electing Members of the Management Committee of the Second
Meeting of the Second Phase Share Ownership Scheme of
Phase Share Ownership Scheme and the Resolution on
Medium to Long-term Business Partners (Lin 2022-056)
Authorizing the Management Committee of the Second Phase
disclosed by the Company on 2 June 2022 for details.
Share Ownership Scheme of the Company to Handle Matters
Related to the Employee Share Ownership Scheme were
considered and approved.
As of 7 June 2022, the Second Phase Share Ownership Scheme
of the Company has purchased a total of 6,275,372 shares by See the Announcement of Joincare Pharmaceutical Group
way of secondary market centralized bidding trading, Industry Co., Ltd. on Completing the Purchase of Shares
representing 0.33% of the total share capital of the Company at for the Second Phase Share Ownership Scheme under
that time, with a total turnover of RMB75,740,661.60 and an Medium to Long-term Business Partner Share Ownership
average transaction price of approximately RMB12.07 per share. Scheme (Lin 2022-059) disclosed by the Company on 8
Then the Company has completed the purchase of the underlying June 2022 for details.
shares for the Second Phase Share Ownership Scheme.
The Resolution on Adjusting the Exercise Price of the 2018
Share Options Incentive Scheme of the Company was
See the Announcement on Adjusting the Exercise Price of
considered and approved at the 14th Meeting of the 8th Session
the 2018 Share Options Incentive Scheme of the Company
of the Board and at the 12th Meeting of the 8th Session of the
by Joincare Pharmaceutical Group Industry Co., Ltd. (Lin
Supervisory Committee on 30 June 2022. Due to profit
2022-069) disclosed by the Company on 1 July 2022 for
distribution, the exercise price under the first grant was adjusted
details.
to RMB7.59 per share, while that under the reserved grant was
adjusted to RMB10.01 per share.
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Joincare Pharmaceutical Group Annual Report 2022
The number of options exercised in total was 807,589 from 1 See the Announcement on 2022 Q2 Independent Exercise
April 2022 to 30 June 2022. As at 30 June 2022, the number of Results of the 2018 Share Options Incentive Scheme of
options cumulatively exercised and completing share transfer Joincare Pharmaceutical Group Industry Co., Ltd. &
registration under the first grant and reserved grant of the 2018 Changes
Share Options Incentive Scheme of the Company was in Shares (Lin 2022-071) disclosed by the Company on 2
29,642,625. July 2022 for details.
See the Announcement on the 2022 Share Options
The Resolution on the 2022 Share Options Incentive Scheme Incentive Scheme (Draft) and its Summary of Joincare
(Draft) and its Summary of the Company and other relevant Pharmaceutical Group Industry Co., Ltd. (Lin 2022-087)
resolutions were considered and approved at the 15th Meeting and relevant announcements disclosed by the Company on
of the 8th Session of the Board and at the 13th Meeting of the 11 August 2022 for details;
8th Session of the Supervisory Committee on 10 August 2022. See the Announcement on Resolutions of Joincare
The above resolutions were considered and approved at the 2022 Pharmaceutical Group Industry Co., Ltd. at the 2022 third
third extraordinary general meeting on 29 August 2022. extraordinary general meeting (Lin 2022-095) disclosed
by the Company on 30 August 2022 for details.
The Resolution on the Matters Related to the Adjustment of the
2022 Share Options Incentive Scheme and the Resolution on the
See the Announcement on the Matters Related to the
First Grant of Share Options to Incentive Participants were
Adjustment of the 2022 Share Options Incentive Scheme
considered and approved at the 16th Meeting of the 8th Session
of Joincare Pharmaceutical Group Industry Co., Ltd. (Lin
of the Board and at the 14th Meeting of the 8th Session of the
2022-101), the Announcement on the First Grant of Share
Supervisory Committee on 5 September 2022. The number of
Options to Incentive Participants of Joincare
incentive participants under this incentive scheme was adjusted
Pharmaceutical Group Industry Co., Ltd. (Lin 2022-102)
from 430 to 423, while the number of share options granted was
and other relevant announcements disclosed by the
adjusted from 55,000,000 to 54,950,000. The first grant date was
Company on 6 September 2022 for details.
5 September 2022, and 49,450,000 share options were granted
to 423 incentive participants.
The number of options exercised was 2,249,270 from 1 July
See the Announcement on 2022 Q3 Independent Exercise
2022 to 30 September 2022. As at 30 September 2022, the
Results of the 2018 Share Options Incentive Scheme of
number of options cumulatively exercised and completing share
Joincare Pharmaceutical Group Industry Co., Ltd. &
transfer registration under the first grant and reserved grant of
Changes in Shares (Lin 2022-115) disclosed by the
the 2018 Share Options Incentive Scheme of the Company was
Company on 11 October 2022 for details.
31,891,895.
The Resolution relating to the 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 17th meeting of the 8th session of the Board and
the 15th meeting of the 8th session of the Supervisory See the Announcement on the Cancellation of Certain
Committee of the Company on 14 October 2022, 26,000 share Share Options of the Company Granted but Not Yet
options under the reserved grant that have been granted but not Exercised under the 2018 Share Option Incentive Plan of
yet exercised by certain incentive participants were cancelled Joincare Pharmaceutical Group Industry Co., Ltd. (Lin
due to not being exercised by them within the validity period of 2022-120) disclosed by the Company on 17 October 2022
the options. for details.
Upon review and confirmation by the Shanghai Branch of China
Securities Depository and Clearing Corporation Limited, the
said cancellation of 26,000 share options was completed on 24
October 2022.
The number of options exercised was 1,534,105 from 1 October
See the Announcement on 2022 Q4 Independent Exercise
2022 to 31 December 2022. As at 31 December 2022, the
Results of the 2018 Share Options Incentive Scheme of
number of options cumulatively exercised and completing share
Joincare Pharmaceutical Group Industry Co., Ltd. &
transfer registration under the first grant and reserved grant of
Changes in Shares (Lin 2023-001) disclosed by the
the 2018 Share Options Incentive Scheme of the Company was
Company on 4 January 2023 for details
33,426,000.
(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
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Joincare Pharmaceutical Group Annual Report 2022
Other incentive program
□Applicable √N/A
(3) Equity incentives granted to directors and senior management during the Reporting Period
√Applicable □N/A
Unit: 10,000 shares
Number Number of Number
Number Market
of share newly Number of of
of share price at
options granted exercisable exercised
Exercise price options the end of
held at share options options
Name Title of share held at the
the options during the during
options(RMB) the end Reporting
beginning during the Reporting the
of the Period
of the Reporting Period Reporting
period (RMB)
year Period Period
Director,
Yu Xiong 14 80 14 14 7.74 80 11.29
President
Director, Vice
Lin Nanqi 24 80 24 24 7.74 80 11.29
President
Director, Vice
Qiu
President, Chief 18 60 18 18 7.74 60 11.29
Qingfeng
Financial Officer
Zhao Vice President,
18 60 18 18 7.59 60 11.29
Fengguang Board Secretary
Total / 74 280 74 74 / 280 /
(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, the plans on performance appraisal results and
remuneration of senior management for the year 2022 are set based on the completion of the operation
targets of the Company and the corresponding personal performance of each senior management for the
year 2022. The plans shall be submitted to the Board for review and approval. During the Reporting Period,
senior management of the Company faithfully performed their duties in strict accordance with the
Company Law, the Articles of Association and other relevant regulations, actively implemented the
relevant resolutions of the Company's General meetings and the Board meetings, actively adjusted
business plans under the guidance of the Board, continuously strengthened internal control management,
and strived 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, as well as the authenticity, accuracy and completeness of accounting
information, safeguarding the interests of the Company and all shareholders.
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Joincare Pharmaceutical Group Annual Report 2022
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 2022. 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 2022 of Joincare Pharmaceutical Industry
Group Co., Ltd. disclosed by the Company on 11 April 2023 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, the management of the Board,
the general meetings and the Supervisory Committee, special transactions, legal person's authorization
and relevant issues, to improve the Company's overall operating efficiency 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
effectiveness of internal control.
XIV. Related information on internal control audit report
√Applicable □N/A
In accordance with relevant standards, guidelines and regulatory documents, and upon the 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 2022. 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 2022, and issued a standard
internal control audit report with unqualified opinion. See the Internal Control Audit Report 2022 of
Joincare Pharmaceutical Industry Group Co., Ltd. disclosed by the Company on 11 April 2023 for details.
Disclosure of internal control auditor's report: Yes
Types of internal control auditor's opinion: Standard unqualified opinion
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
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.
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Joincare Pharmaceutical Group Annual Report 2022
Rectification 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 special committees. In
particular, on-site meetings or on-site + virtual means will be held for matters related to major asset
purchase or sale or major connected transactions in the future. In 2022, the Company held 6 meeting
through a combination of on-site + virtual means, accounted for 42.86% of the number of all meetings,
representing an increase of 38.51% over 2021
2. Improvement of the audit institution selection and engagement review process
Description: The special self-inspection found that the Company engaged the audit institution based on
inquiry into public available information on its professional competence and integrity, without consulting
the record of integrity of the audit institution in the securities and futures market through the China
Securities Regulatory Commission in advance.
Rectification measures: From 2021, in addition to the inquiry into public available information, the
Company would, before selecting and engaging an audit institution, consult the records of integrity of the
audit institution and relevant certified 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
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Joincare Pharmaceutical Group Annual Report 2022
Chapter 5 Environmental and Social Responsibility
I. Environmental information
If the environment protection mechanism was
Yes
established
Amount of funds invested in environment protection
12,273.48
during the Reporting Period (Unit: RMB0’000)
(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
ⅰJiaozuo Joincare
Pollutant Total
Number Total
Name of Name of major Number of Discharge discharge amount of
Mode of of amount of Excessive
company or pollutants and discharge concentratio standards discharge
discharge discharge discharge discharge
subsidiary specific pollutants outlets n (mg/L) implemented approved
outlets (t/a)
(mg/L) (t/a)
Chemical oxygen Master outlet in
Continuous 119 220 757 942.1 Nil
Jiaozuo demand sewage
1
Joincare Ammonia treatment
Continuous 14 35 91 105.3 Nil
nitrogen workshop
ⅱTaitai Pharmaceutical
Pollutant Total
Name of major Number Total
Name of Number of Discharge discharge amount of
pollutants and Mode of of amount of Excessive
company or discharge concentratio standards discharge
specific discharge discharge discharge discharge
subsidiary outlets n (mg/L) implemented approved
pollutants outlets (t/a)
(mg/L) (t/a)
Chemical
39.44 345 0.35 19.34 Nil
oxygen demand
Biochemical Master outlet in
sewage 3.05 150 0.021 / Nil
oxygen demand Intermittent 1
treatment
Suspended
Taitai workshop 4 250 0.034 / Nil
solids
Pharmaceutical
pH value 7.66 6～9 / / Nil
Sulfur dioxide 1.69 50 0.20 / Nil
Discharge
Nitrogen oxide 13.92 150 0.16 / Nil
Intermittent 1 outlet of boiler
Particulate
exhaust gas 14.26 20 0.15 / Nil
matter
iii Haibin Pharma
Pollutant Total
Name of major Number Total
Name of Discharge discharge amount of
pollutants and Mode of of Number of discharge amount of Excessive
company or concentratio standards discharge
specific discharge discharge outlets discharge discharge
subsidiary n (mg/L) implemented approved
pollutants outlets (t/a)
(mg/L) (t/a)
Chemical
54.8 500 3.2 41.65 Nil
oxygen demand Master outlet in
Ammonia 1 sewage treatment
0.99 45 0.06 3.75 Nil
nitrogen workshop
Total nitrogen 6.09 70 0.3374 5.83 Nil
Haibin
Total volatile Intermittent
Pharma Discharge outlet of
organic 1 0.42 100 0.0013 0.50 Nil
process exhaust gas
compounds
Discharge outlet of
Non-methane
1 exhaust gas in 11.27 60 0.87 5.04 Nil
hydrocarbon
sewage station
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Joincare Pharmaceutical Group Annual Report 2022
iv Xinxiang Haibin
Name of Pollutant Total
Number Total
Name of major Discharge discharge amount of
Mode of of Number of amount of Excessive
company or pollutants and concentration standards discharge
discharge discharge discharge outlets discharge discharge
subsidiary specific (mg/L) implemented approved
outlets (t/a)
pollutants (mg/L) (t/a)
Chemical
oxygen Master outlet in 66.01 220 9.8 14.81 Nil
Xinxiang
demand Continuous 1 sewage treatment
Haibin
Ammonia workshop
5.22 35 0.78 1.66 Nil
nitrogen
v Fuzhou Fuxing
Name of Pollutant Total
Number
Name of major Discharge discharge Total amount of
Mode of of Number of discharge Excessive
company or pollutants concentration standards amount of discharge
discharge discharge outlets discharge
subsidiary and specific (mg/L) implemente discharge (t) approved
outlets
pollutants d (mg/L) (t/a)
Chemical
oxygen
demand 16.59 100 19.41 102.19 Nil
Fuzhou The northwest side
Intermittent 1
Fuxing （COD） of the factory
Ammonia
0.22 15 0.255 10.22 Nil
nitrogen
Note: The discharge concentration represents the actual discharge concentration. 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 Livzon Xinbeijiang
Name of Pollutant Total
Number Total
Name of major Discharge discharge amount of
Mode of of Number of discharge amount of Excessive
company or pollutants and concentration standards discharge
discharge discharge outlets discharge discharge
subsidiary specific (mg/L) implemente approved
outlets (t)
pollutants d (mg/L) (t/a)
Chemical
oxygen 88.3 240 70.95 213.6 Nil
Livzon Sewage treatment
demand Intermittent 1
Xinbeijiang workshop
Ammonia
3.3 70 2.69 24.5 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
Name of Total
Number Discharge discharge Total
Name of major Number of amount of
Mode of of concentration standards amount of Excessive
company or pollutants and discharge discharge
discharge discharg (mg/L)/(mg/ implemented discharge discharge
subsidiary specific outlets approved
e outlets m3) (mg/L)/(mg/ (t)
pollutants (t/a)
m3)
Chemical
oxygen 120 192 15.37 26.68 Nil
Wastewater
demand
Intermittent 1 treatment
Ammonia
station
nitrogen 1.78 40 1.38 5.48 Nil
(NH3-N)
Sulfur
3 Boiler room 3 50 0.125 / Nil
Livzon dioxide
Hecheng Nitrogen
3 Boiler room 74.85 150 2.051 / Nil
oxide
Organized
Particulate
continuous 3 Boiler room 1.43 20 0.034 / Nil
matter
emission
Hydrogen
7 Workshop 2.29 100 0.829 / Nil
chloride
Non-methane
7 Workshop 11.41 60 7.551 77.76 Nil
hydrocarbon
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Joincare Pharmaceutical Group Annual Report 2022
Non-methane
1 RTO 5.25 60 0.815 Nil
hydrocarbon
Nitrogen
1 RTO 30 200 2.278 / Nil
oxide
Sulfur
1 RTO 3 200 0.467 / Nil
dioxide
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
Name of Pollutant Total
Number
Name of major Number of Discharge discharge Total amount amount of
Mode of of Excessive
company or pollutants discharge concentration standards of discharge discharge
discharge discharge discharge
subsidiary and specific outlets (mg/L) implemented (t) approved
outlets
pollutants (mg/L) (t/a)
Chemical
oxygen Southeastern 46.37 120 11.274 108 Nil
Gutian
demand Continuous 1 part of the
Fuxing
Ammonia factory zone
9.80 35 2.381 31.5 Nil
nitrogen
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
Name of Pollutant Total
Number
Name of major Number of Discharge discharge Total amount amount of
Mode of of Excessive
company or pollutants and discharge concentratio standards of discharge discharge
discharge discharge discharge
subsidiary specific outlets n (mg/L) implemented (t) approved
outlets
pollutants (mg/L) (t/a)
Chemical
oxygen Wastewater 19.00 110 4.86 Nil Nil
Livzon
demand Intermittent 1 treatment
Limin
Ammonia station
0.51 15 0.14 Nil Nil
nitrogen
Note: The wastewater of Livzon Limin was discharged into Shaoguan Second Sewage Treatment Plant (韶关市第
二污水处理厂) and the standard adopted for pollutant discharge represented the standard stipulated in the pollutant
discharge license of the company, i.e. COD ≤110mg/L, ammonia nitrogen ≤15mg/L, while the data detected by third
party inspection was adopted as the discharge concentration.
x Livzon Pharmaceutical Factory
Name of Pollutant Total
Number
Name of major Number of Discharge discharge Total amount of
Mode of of Excessive
company or pollutants discharge concentration standards amount of discharge
discharge discharge discharge
subsidiary and specific outlets (mg/L) implemented discharge (t) approved
outlets
pollutants (mg/L) (t/a)
Chemical Wastewater
oxygen 1 treatment 17.65 120 2.22 Nil Nil
Livzon
demand station
Pharmaceutical Intermittent
Wastewater
Factory Ammonia
1 treatment 0.10 20 0.012 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), and
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Joincare Pharmaceutical Group Annual Report 2022
the level 1 of phase II standard of “Guangdong Provincial Capping on Polluted Effluents Discharge” (《广东省水
污染物排放限值》) (DB44/26–2001).
xi Ningxia Pharmaceutical
Pollutant Total
Name of Total
Number discharge amount
Name of major Number of Discharge amount
Mode of of standards of Excessive
company or pollutants and discharge concentration of
discharge discharge implemented discharge discharge
subsidiary specific outlets (mg/L)/(mg/m3) discharge
outlets (mg/L)/(mg/ approved
pollutants (t)
m3) (t/a)
Chemical Sewage
oxygen treatment 108 200 110.47 Nil Nil
demand workshop on
1
the north side
Ammonia
of the factory 0.6 25 0.74 Nil Nil
nitrogen
zone
Sulfur
92 200 24.46 156.816 Nil
dioxide Boiler
Ningxia Nitrogen workshop on
Continuous 1 138 200 72.72 156.816 Nil
Pharmaceutical oxide north side of
Particulate factory zone
14 30 6.11 23.522 Nil
matter
4 outlets for
fermentation, 3
Volatile
outlets for
organic 9 2.2 100 5.38 79.535 Nil
refinery and 2
compounds
outlets for
sewage
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 Ningxia Pharmaceutical 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
Name of Pollutant Total
Number
Name of major Number of Discharge discharge Total amount of
Mode of of Excessive
company or pollutants and discharge concentratio standards amount of discharge
discharge discharge discharge
subsidiary specific outlets n (mg/L) implemented discharge (t) approved
outlets
pollutants (mg/L) (t/a)
Chemical
Master outlet in
oxygen 99.213 220 8.037 60.8 Nil
Jiaozuo industrial
demand Continuous 1
Hecheng wastewater
Ammonia
workshop 3.483 35 0.281 8.8 Nil
nitrogen
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
Name of Pollutant Total
Number Discharge
Name of major Number of discharge Total amount amount of
Mode of of concentration Excessive
company or pollutants discharge standards of discharge discharge
discharge discharge (mg/L)/(mg/ discharge
subsidiary and specific outlets implemented (t) approved
outlets m3)
pollutants (mg/L)/(mg/m3) (t/a)
Chemical
Shanghai Master outlet
oxygen Intermittent 1 39.92 50 3.30 6.291 Nil
Livzon in the park
demand
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Joincare Pharmaceutical Group Annual Report 2022
Ammonia
4.72 5-8 0.38 0.923 Nil
nitrogen
No. 5 and 6
Particulate
2 outlets on the - - 0.008 0.054 Nil
matter
Organized roof
intermittent No.1, 2, 3, 4,
Volatile
discharge 7, 8, 9 and 10
organic 8 1.35 60 0.03 0.82 Nil
outlets on the
compounds
roof
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 was among other key pollutant
discharge units, but not among the key pollutant discharge units of water environment and atmospheric environment.
xiv Livzon MAB
Name of Pollutant Total
Number
Name of major Number of Discharge discharge Total amount of
Mode of of Excessive
company or pollutants and discharge concentratio standards amount of discharge
discharge discharge discharge
subsidiary specific outlets n (mg/L) implemented discharge (t) approved
outlets
pollutants (mg/L) (t/a)
Chemical Wastewater
oxygen 1 treatment 17.65 120 2.88 Nil Nil
Livzon demand station
Intermittent
MAB Wastewater
Ammonia
1 treatment 0.10 20 0.016 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),
and the level 1 of phase II standard of “Guangdong Provincial Capping on Polluted Effluents Discharge” (《广东省
水污染物排放限值》) (DB44/26–2001).
xv Sichuan Guangda
Name of Pollutant Total
Number Total
Name of major Number of Discharge discharge amount of
Mode of of amount of Excessive
company or pollutants and discharge concentratio standards discharge
discharge discharge discharge discharge
subsidiary specific outlets n (mg/L) implemented approved
outlets (t)
pollutants (mg/L) (t/a)
Chemical
oxygen Wastewater 35.85 500 3.26 Nil Nil
Sichuan
demand Intermittent 1 treatment
Guangda
Ammonia station
1.61 45 0.15 Nil Nil
nitrogen
Note: The wastewater of Sichuan Guangda was discharged into Pengzhou First Sewage Treatment Plant (彭州市第
一污水处理厂) and the standard adopted for pollutant discharge represented the standard stipulated in the pollutant
discharge license of the company, i.e. COD ≤500mg/L, ammonia nitrogen ≤45mg/L, while the discharge
concentration of pollutants in the wastewater discharge outlet represents the average concentration detected by a
qualified third party engaged.
2. Construction and operation of pollution preventive facilities
√ Applicable □ N/A
Name of company or
Construction and operation of pollution preventive facilities
subsidiary
Exhaust gas: The treatment process of “water spray + acid spray + alkali spray + mist
eliminator + dry filter + adsorption concentrator + RCO” + “secondary alkali spray”
Jiaozuo Joincare 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
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Joincare Pharmaceutical Group Annual Report 2022
facilities in wastewater treatment station. The treatment process of “alkali adsorption”
was adopted for process acid waste gas. The treatment process of “tertiary finned
condenser + bag type dust collector + secondary alkali spray + RTO”/“-20 ℃
condensation + activated carbon adsorption device (including regenerating device) +
RTO”/“adsorption device (including regenerating device) Jiaozuo Joincare +
secondary alkali spray + biological uptake + secondary alkali spray”/“secondary alkali
spray + biological uptake + secondary alkali spray” was adopted for process organic
exhaust gas. 15 discharge outlets were constructed. All of them enable stable and up-
to-standard discharge through self-monitoring in 2022.
Wastewater: The treatment process of “regulating pool + hydrolysis acidification pool
+ UASB + (CASS + air flotation) / modified A/O + secondary settling tank +
coagulating sedimentation” was primarily adopted. Standard wastewater outlets were
set; online automatic monitoring control system was installed at outlets for real-time
monitoring of COD, ammonia nitrogen, total nitrogen, pH, fluorion and flow.
Wastewater treatment process sections can be stably operated. Moreover, wastewater
control factors can be stably emitted in compliance with the required standard.
Pollution preventive facilities functioned properly and ensured up-to-standard
Taitai Pharmaceutical
discharge.
A set of laboratory exhaust gas treatment system was set up and functioned properly.
Haibin Pharma Pollution preventive facilities functioned properly and ensured up-to-standard
discharge.
Wastewater: The wastewater treatment system with daily processing capacity of 600
tonnes through patented H/O process designed by East China University of Science
and Technology started operation in April 2016 and functioned properly in 2022. In
March 2022, a set of lift aerator system and a set of magnetic levitation blower were
added in the biochemical system, and they have been put into operation and
functioning properly at present. A new sewage anaerobic treatment system had been
building and is under debugging. The H/O biochemical system increased two
nitrification reflux pumps of 100m3/h through upgrading and constantly functioned
properly.
Exhaust gas: The 40000m/h regenerative oxidation exhaust gas treatment system
Xinxiang Haibin designed by Jiangsu Ruiding started operation on 2 November 2019, functioned
properly throughout 2022 and was emitted in compliance with the required standard.
After reconstruction of dry tail gas self-circulating process, the activated carbon
adsorption device designed by Beijing Rixin Daneng Technology Co., Ltd. functioned
properly in 2022. After UV photolysis+two-level alkali spray and one-level water
spray treatment, the waste gas from biochemical aerobic process of wastewater
treatment was emitted in compliance with the required standard. The organic waste
gas from the workshop process was recycled by membrane and then by resin, and
finally delivered into the RTO waste gas treatment system, it ran normally in 2022.
The resin recovery organic waste gas pretreatment facilities were completed and run
normally.
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
wastewater treatment process known as “Regulating pool + Hydrolysis acidification
tank + Sequencing Batch Reactor Activated Sludge Process (SBR) + Air float”. After
the wastewater from production has gone through the above treatment process, all
Fuzhou Fuxing indicators are stable and satisfy the discharge standard. After meeting the discharge
standards, the wastewater is discharged to Jiangyin sewage treatment plant operated
by Fujian Huadong Water Treatment Co., Ltd. (福建华东水务有限公司) via sewage
pipe network at the industrial park area for further treatment. In 2022, the waste gas
treatment facilities for Fenton pool and regulating pool have been added, and the waste
gas was treated by secondary spraying.
The “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 the first half of 2022,
the third round of environmental protection improvement has been carried out,
Livzon Xinbeijiang
including replacing biological deodorization boxes of the sewage station, adding spray
towers and reinstalling pretreatment waste gas collection pipeline to reduce the
fugitive emission of waste gas, which has greatly eliminated the peculiar smell around
the sewage station. Mufflers were installed at the air emission outlets of the sewage
station and the second fermentation division to reduce the airflow sound of air
emissions. Sound-absorbing cotton panels have been used to surround the circulating
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Joincare Pharmaceutical Group Annual Report 2022
pump and steam compressor of the MVR, which have greatly reduced the noise
transmitted by the MVR. Meanwhile, equipment with loud noises has been surrounded
by sound-absorbing cotton panels to reduce noise and control the generation and
transmission of noise from the source.
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 pollutant
discharge was stable and in compliance with the required standard. The treatment
process of “pre-treatment of drainage from the production process + hydrolytic
Livzon Hecheng acidification + Upflow Anaerobic Sludge Bed (UASB) + advanced oxidation + Cyclic
Activated Sludge System (CASS) process + air floatation/ozonation advanced
treatment” was adopted. Treated sewage was discharged through the municipal sewage
pipeline network into Zhuhai Leaguer Environmental Protection Co., Ltd. (珠海力合
环保有限公司) (water purification plant in the South District).
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 “Anarerobic-Oxic activated
sludge process (A/O) + SBR + nitrogen removal by denitrification + Fenton
decolorizing + air flotation” wastewater treatment process, 6,000 m3 of effective
reservoir capacity of the treatment system and more than 20 sets of treatment
Gutian Fuxing
equipment with 350 KW installed capacity to improve the water treatment process,
thus ensuring that all wastewater treatment indicators are stable and satisfy the
discharge standard. Treated sewage that reaches the grade II discharge standard is
directly discharged into Minjiang River. The hazardous waste of the company is
entrusted to qualified companies for compliant disposal according to the requirements
of environmental impact assessment and acceptance inspection opinions. In 2022,
boiler air pollutant treatment facilities were upgraded and reconstructed.
The “Three Simultaneous” system was strictly implemented by the company for the
treatment of “Three Wastes” by collecting and treating the “Three Wastes” effectively.
The original sewage treatment plant with an investment amount of over RMB13
million has a designed processing capacity of 1,500t/d and adopts the treatment
process of “Pre-treatment + Hydrolysis acidification tank + Facultative tank + Aerobic
pool + Secondary sedimentation”, and the sewage after treatment was discharged
Livzon Limin
through the municipal pipeline network into Shaoguan Second Sewage Treatment
Plant (韶关市第二污水处理厂). In respect of waste gas treatment, biomass boilers
were all replaced by gas boilers. The technical transformation project of the R&D
center has installed waste gas treatment facilities such as activated carbon adsorption
and acid mist spray tower. In respect of control of noise pollution, investment was
made 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” effectively.
For wastewater: an investment of over RMB10 million was made for phase I and phase
II sewage treatment station with a designed processing capacity of 1,000t/d, which
Livzon
adopted the CASS process for phase I and the A/O process for phase II, and the sewage
Pharmaceutical
after treatment was discharged through the municipal pipeline network into sewage
Factory
treatment plants. For waste gas: currently, the company uses purchased steam and
takes the boilers as backups, greatly reducing air emissions. The waste gas of the
wastewater treatment stations is treated by a combination of first-level spray towers,
Ultra Violet (UV) photoion equipment and second-level spray towers.
Through strict enforcement of the “Three Simultaneous” system, the “Three Wastes”
were collected and treated effectively. The designed total processing capacity of
sewage treatment was 7,500 m3/d (including one plant with capacity of 5,000 m3/d and
one plant with capacity of 2,500 m3/d), and the actual total treatment amount was 3,100
m3/d. Treated sewage that reaches the standard stipulated in the pollutant discharge
license is discharged to Xin’an Company through the sewage pipeline network in the
industrial park. In 2021, the installation and use of waste gas collection and treatment
Ningxia facilities for hazardous waste stations were completed, and doramectin fermentation
Pharmaceutical waste gas of fermentation workshop 101 was introduced into the specific waste gas
treatment facilities for doramectin fermentation waste gas of fermentation workshop
102, and a primary sedimentation tank was added to the sewage treatment station to
lead out waste gas for treatment. In 2022, the construction of the following pollution
prevention and control facilities was mainly completed: 1. Construction of the exhaust
sampling port and sampling platform of the waste gas collection and treatment facility
in the hazardous waste storage vault; 2. Renovation of the fresh air supply facility in
the bacteria residue crushing room. The original fresh air supply fan installed in the
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Joincare Pharmaceutical Group Annual Report 2022
middle of the wall was moved to the bottom of the wall, and installation of a new fresh
air supply fan; 3. Upgrade and improvement of the original waste gas treatment
facilities in 103-2 fermentation workshop, mainly including a new set of "sodium
hypochlorite spray absorption + water spray absorption + biphasic superoxide water +
micro-nano bubbles" process treatment facilities; 4. Construction of anti-leakage
facilities in the emergency pool of hazardous chemicals warehouse; 5. Replacement of
damaged cover plate of sludge storage tank; 6. reseal the cover plate of the sewage
treatment pre-aeration tank and seal and repair of the water-sealing groove of the cover
plate of the sedimentation tank, sealing the original cover plate of the pre-aeration tank
integrally with glass fiber cloth and epoxy resin, applying paint on the rusted pipeline,
and welding and plugging the damaged part of the water-seal groove of the cover plates
of original sedimentation tank; 7. the construction of rainwater and sewage diversion
facilities in the plant area, and laying and installing rainwater collection pipe network
facilities with a total length of about 1,000 meters.
The “Three Wastes” were collected and treated effectively in strict compliance with
the “Three Simultaneous” system. The designed sewage treatment capacity was
3,000t/d, the treatment process of “hydrolytic acidification tank + UASB + aerobic
pool + materialized treatment” was adopted, the treated wastewater would be
discharged 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
waste gas: in 2021, the three-stage sewage spraying was replaced, and a set of waste
gas treatment facilities was added in the UV photolysis sewage station. Waste gas
would be discharged after standard was met. Waste gas generated from technical
process in the production zone would be collected and treated by adopting two sets of
processes of “water spray + activated carbon and -20℃ condensation + water spray +
activated carbon” and then discharged after reaching the required standard. Solid waste
and hazardous waste would be stored in the hazardous waste station constructed in
compliance with the requirements of “Three Protections” (protection against leaks,
erosion and rain) according to the requirements under the (Pilot) Guidelines for
Standardized Management of Hazardous Waste in Henan Province (《河南省危险废
Jiaozuo Hecheng 物规范化管理工作指南(试行)》) for hazardous waste. In January 2022, a self-
monitoring and automatic monitoring equipment comparison contract was signed with
Henan Zhongfang Quality Inspection Technology Co., Ltd. (河南中方质量检测技术
有限公司) to monitor the company’s discharge outlets on a regular basis; in January
2022, an operation and maintenance contract in relation to online continuous
monitoring system for water quality was signed with Jiaozuo Lansheng Environmental
Technology Service Co., Ltd. (焦作市蓝晟环保技术服务有限公司) to maintain the
water quality by the company’s online continuous monitoring system. In April 2022,
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 waste on regular basis. Other general solid waste would
be disposed of in compliance with the relevant requirements. In March 2022, we
signed a wastewater discharge water quality standard agreement with Kangda
Environmental Protection Water Co., Ltd. (康达环保水务有限公司) Xiuwu Branch,
and in the same month, we signed an LDAR test agreement with Shandong Xianglong
Environmental Testing Co., Ltd. In July 2022, we signed a gas online operation and
maintenance contract with Jiaozuo City Kailin Environmental Protection Technology
Co., Ltd. (焦作市凯霖环保科技有限公司).
The company designed and built a sewage treatment station with a processing capacity
of 200 m3/d in 2018. The company’s wastewater was treated by such sewage treatment
station and then entered the park’s sewage treatment station for secondary treatment,
and finally discharged into the municipal pipeline network. The company had the
hazardous waste station in compliance with the requirements of “Three Preventions”
to store hazardous waste and appointed a qualified company for compliant disposal.
Shanghai Livzon
The company’s main discharge outlets were treated with activated carbon adsorption
and filtration, and the activated carbon was replaced every half a year to ensure that
the air emissions met the standards. In January 2022, the company demolished the
solid preparation workshop on the third floor and transformed it into a microsphere
workshop, and there is no particulate matter emission from the No. 5 and No.6
discharge outlets accordingly.
The “Three Simultaneous” system was strictly implemented by the company for the
treatment of “Three Wastes” by collecting and treating the “Three Wastes” effectively.
Livzon MAB
For wastewater (relying on the wastewater treatment of Pharmaceutical Factory in the
park): an investment of over RMB10 million was made for phase I and phase II sewage
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treatment station with designed processing capacity of 1,000t/d, which adopted the
CASS process for phase I and the A/O process for phase II, and the sewage after
treatment was discharged through the municipal pipeline network into sewage
treatment plants. For waste gas: currently, the company uses purchased steam and
takes the boilers as backups, greatly reducing air emissions. The waste gas of the
wastewater treatment stations is treated by a combination of first-level spray towers,
Ultra Violet (UV) photoion equipment and second-level spray towers.
The “Three Simultaneous” system was strictly implemented by the company for the
treatment of “Three Wastes” by collecting and treating the “Three Wastes” effectively.
For wastewater (relying on the wastewater treatment station with an investment of over
RMB5 million and designed processing capacity of 400t/d, which adopted the process
of “Regulating pool+Anaerobic pool+Aerobic pool+Air float” forsewage treatment,
Sichuan Guangda the sewage after treatment was discharged through the municipal pipeline network into
Pengzhou No.1 Sewage Treatment Plant (彭州市第一污水处理厂). For waste gas:
currently, the company adopts biomass boiler with "cyclone + cloth bag
+SNCR+SCR" to treat the waste gas produced. The waste gas of sewage station is
treated by alkali washing spray.
3. Environmental impact assessment of construction projects and other environmental
protection administrative licensing
√Applicable □N/A
Name of company or Environmental impact assessment of construction projects and other
subsidiary environmental protection administrative licensing
The Approval of Environmental Impact Report on New 12T Natural Gas Boiler Project
for Jiaozuo Joincare Pharmaceutical Industry Co., Ltd. (Jiao Huan Shen Ma [2022] No.
Jiaozuo Joincare
2) was granted on 11 May 2022. The environmental protection inspection for the new
boiler project was carried out on 26 October 2022.
The environmental impact assessment report of new products was under the stage of
Taitai Pharmaceutical
preparation and approval.
No environmental impact assessment project was required in 2022; with strict
enforcement of the “Three Simultaneous” system in the production process and
implementation of the environmental protection measures required under the
Haibin Pharma
environmental impact assessment, the environmental protection facilities have been
functioning properly; the change of pollutant discharge license was applied for and
obtained approval in November 2022.
Approval of Environmental Impact Report on 20 Tonnes/Year Meropenem
Pharmaceutical Intermediate Project (Yu Huan Jian [2005] No. 84), Opinions on
Environmental Protection Inspection and Acceptance for 20 Tonnes/Year Meropenem
Pharmaceutical Intermediate F9 Project (Yu Huan Bao Yan [2008] No. 89), Approval
of Environmental Impact Report on 100 Tonnes/Year Meropenem Pharmaceutical
Intermediate Expansion Project (Yu Huan Shen [2014] No. 564), Independent
acceptance of Approval of Environmental Impact Report on 100 Tonnes/Year
Xinxiang Haibin
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 was granted for
Fuzhou Fuxing the application of a new national pollutant discharge license on 27 December 2017 and
the renewal of the national pollutant discharge license was completed in December 2020.
The company has been discharging pollutants in strict compliance with the licensing and
administrative requirements. The Environmental Impact Report on the Phase IV High-
end Antibiotics Project of Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd. was
approved on 12 October 2022.
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
Livzon Xinbeijiang
公司项目现状环境影响报告书》) was approved and filed on 6 December 2016. With
strict enforcement of the “Three Simultaneous” system and implementation of the
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environmental protection measures required under the environmental impact
assessment, the environmental protection facilities have been functioning properly. On
29 December 2017, an approval was granted for the application of a new national
pollutant discharge license. The environmental protection policies were strictly
enforced. On 28 April 2022, the company completed the application for the pollutant
discharge license for Shijiao New Factory. On 16 June 2022, the company completed
the environmental impact assessment of the new plant for the addition of mixed
compound veterinary drugs and obtained the environmental assessment approval
(Qingcheng Shen Pi Huan Biao [2022] No. 12). The work for changing and renewing
the pollutant discharge license was completed in December 2022.
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
Livzon Hecheng 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 expert review and was approved on 20 January 2022. The
company strictly enforced the “Three Simultaneous” system and implemented
environmental protection measures as required under environmental impact assessment
with normal operation of the environmental protection facilities. In 2022, it was awarded
the green card enterprise of environmental credit rating by Zhuhai Municipal Ecology
and Environment Bureau. In March 2022, the company completed the filing of the
revised environmental emergency contingency plan.
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
Gutian Fuxing enforced the “Three Simultaneous” system and implemented environmental protection
measures as required under environmental impact assessment with normal operation of
the environmental protection facilities. The clean production passed the on-site audit and
acceptance by the Bureau of Ecology and Environment in September 2022, and the audit
and inspection opinion of the Ningde Environmental Science Institute was obtained in
October 2022.
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.
The expert meeting of acceptance was held on 24 April 2021, in which the independent
acceptance was completed. The “Environmental Impact Report for Workshop II of Small
capacity Injection” (《小容量注射剂二车间项目环境影响报告表》) was approved on
23 November 2020. On 15 September 2021, the expert meeting of acceptance was held,
in which the independent review was completed. The National Sewage Permit was
Livzon Limin updated on 22 October 2021. The “Three Simultaneous” system was strictly enforced to
implement the environmental protection measures required under the environmental
impact assessment, and the environmental protection facilities were under normal
operation. In September 2022, Limin Pharmaceutical Manufacturing Factory passed the
on-site audit of cleaner production by the expert group. In the future, it will continue to
tap the potential of energy conservation and emission reduction, establish and improve
the cleaner production mechanism, and continuously improve the level of cleaner
production. From 2019 to 2022, it was consecutively rated as a green card enterprise by
Shaoguan Ecology and Environment Bureau.
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 Report on Expansion Project for Sewage
Treatment Stations of Livzon Group Livzon Pharmaceutical Factory was approved in
Livzon Pharmaceutical
April 2019. The Environmental Impact Assessment Report on Expansion Project for
Factory
Production Line of lyophilized Powder Injection of Livzon Group Livzon
Pharmaceutical Factory was approved in November 2020. The Environmental Impact
Report Form of P07 New Wet Granulation Line Project of Livzon Group Livzon
Pharmaceutical Factory was approved on 18 May 2022. The pharmaceutical factory
obtained an updated sewage permit in June 2022. The Environmental Impact Report on
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Joincare Pharmaceutical Group Annual Report 2022
the Project of New Boiler and Low Nitrogen Transformation of Boiler was approved on
19 August 2022. 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 Branch of Shizuishan Municipal
Ecology and Environment Bureau in December 2021. In December 2022, the company
passed the certification of Shizuishan municipal green plant and prepared the
environmental impact assessment report on the increase in production capacity of
Ningxia Pharmaceutical phenylalanine (currently under review by experts). The company reported to the national
pollution discharge license management information platform (pollution discharge
implementation report) and the ecological environment statistics business system
(enterprise environment statistics report) quarterly. In 2022, the second round of
rectification of central environmental protection supervision issues, independent
acceptance by enterprises and government acceptance were also completed. The
company strictly enforced the “Three Simultaneous” system to implement the
environmental protection measures as required by environmental assessment, while the
environmental protection facilities were under normal operation.
The “Environmental Impact Assessment Report on Current Status of Jiaozuo Livzon
Hecheng Pharmaceutical Manufacturing Co., Ltd.” (《焦作丽珠合成制药有限公司现
状环境影响评估报告》) was approved and filed on 15 December 2016. The “Three
Simultaneous” system was strictly enforced, the environmental protection measures as
required by environmental assessment were implemented and the environmental
protection facilities were under normal operation. The application for the national
Jiaozuo Hecheng pollutant discharge license was completed in December 2020, the environmental
protection policies were strictly enforced and various management measures were
implemented. According to the spirit of the document “Notice of the Office of the
Leading Group of Jiaozuo City’s Pollution Prevention and Control Battle on Doing a
Good Job in the Key Work of Air Pollution Prevention and Control in May 2022”, the
company formulated the “one policy for one enterprise” plan for Jiaozuo Hecheng VOCs
emission enterprise in 2022. In May 2022, the letter of commitment for environmental
protection and law-abiding operation of enterprises for 2022 was formulated.
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
Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd.” (《上海丽珠制药有限公司配套工程及实验
室项目环境影响报告》 on 10 January 2020, and completed the construction and passed
the acceptance inspection in September 2020. The company strictly implemented the
“Three Simultaneous” system and took environmental protection measures required for
environmental assessment, while the environmental protection facilities were under
normal operation.
The “Environmental Impact Assessment Report on V-01 Industrialization Project of
Livzon Group Livzon Pharmaceutical Factory” (《关于丽珠集团丽珠制药厂 V-01 产
业 化 项 目 环 境 影 响 报 告 书 》 ) was approved in April 2021. The Third Line
Environmental Impact Report of the Expanded Preparation of the Large-scale
Livzon MAB Production Capacity Construction Project of Recombinant SARS-CoV-2 Fusion Protein
Vaccine (V-01) was approved in March 2022. The company obtained an updated sewage
permit in November 2022. The company strictly implemented the “Three Simultaneous”
system and took environmental protection measures required for environmental
assessment.
The “Filing Report of Environmental Impact on the Technical Upgrading Project of
Production Line for Chinese Patent Medicine of Sichuan Guangda Pharmaceutical
Manufacturing Co., Ltd.” (《四川光大制药有限公司中成药生产线技术改造项目环
Sichuan Guangda 境影响备案报告》) was approved and filed on 27 May 2016, and was granted a national
pollutant discharge license on 23 July 2020. The company strictly implemented the
“Three Simultaneous” system and took environmental protection measures required for
environmental assessment, and the environmental protection facilities were under
normal operation.
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Joincare Pharmaceutical Group Annual Report 2022
4. Environmental emergency contingency plan
√ Applicable □ N/A
Name of company or
Environmental emergency contingency plan
subsidiary
Revision of the environmental emergency contingency plan of Jiaozuo Joincare was
completed in May 2022 and was filed in the Macun Branch of Ecology and Environment
Bureau of Jiaozuo City on 19 May 2022.
Jiaozuo Joincare
Revision of the environmental emergency contingency plan for hazardous waste pollution
accident of Jiaozuo Joincare was completed in December 2020, which currently is in
effect.
Taitai Pharmaceutical Review and filing was completed in July 2020, which currently is in effect.
The Environmental Emergency Contingency Plan was filed (File No. 440308-2020-
0029M). Trainings and drills on emergency responses were provided for employees to
Haibin Pharma
improve the capability of the Company for dealing with environmental emergencies. In
2022, four emergency drills for environmental emergencies were held.
Environmental Emergency Contingency Plan of Xinxiiang Haibin Pharmaceutical Co.,
Xinxiang Haibin Ltd. was filed with the Ecology and Environment Bureau on 23 August 2022 with the file
reference number 410771-2022-006-M.
Pursuant to relevant provisions and requirements, the “Environmental Emergency
Contingency Plan of Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd.” （《(丽珠
集团福州福兴医药有限公司突发环境事件应急预案》) was prepared based on the
principles of “prevention-oriented, self-help-oriented, unified command, and division of
responsibility”, which has been filed on 15 April 2022 (File No. 350181-2022-024-M).
After environmental emergencies occur, immediate, quick, effective and orderly
Fuzhou Fuxing emergency rescue actions shall be taken to control and prevent the spread of accident and
contamination, protect the surrounding environment and safeguard life and property of all
employees, the company and nearby communities. In accordance with the contents and
requirements of the plan, the company provides trainings and drills for its employees to
get them well-prepared for environmental emergencies, so that timely rescue can be taken
and the accident can be controlled in a short period of time in case of any environmental
emergencies. In May 2022, the second comprehensive emergency drill for four leakage
accidents in the workshop was conducted.
Based on the principles of “prevention-oriented, on-alert all the time; classified
management, level-by-level response; cross-department cooperation, responsibility by
levels; scientific prevention and efficient handling”, Livzon Xinbeijiang re-signed and
issued the “Environmental Emergency Contingency Plan of Livzon Group Xinbeijiang
Pharmaceutical Manufacturing Inc.” （《(丽珠集团新北江制药股份有限公司突发环境
Livzon Xinbeijiang 事件应急预案》) (File No. 441802-2021-0162-H) on 30 September 2021, which has been
approved and filed by Qingyuan Municipal Ecology and Environment Bureau on 22
October 2021. Livzon Xinbeijiang conducted exercises regularly to identify environmental
factors and sources of hazards, as well as drills on the emergency contingency plan. An
environmental emergency contingency drill was conducted in June 2022 to improve the
operability thereof, and enhance the performance of the emergency rescue staff and the
responsiveness and coordination ability of the rescue team.
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”, which has been approved, filed and issued
Livzon Hecheng
(File No. 440462-2019-001-M). Trainings on emergency response and handling measures
were held regularly for employees to enable implementation of safety measures in a timely,
fast, effective and orderly manner to control and prevent the spread of accident and
contamination when encountering any environmental emergencies, so as to alleviate or
eliminate the impact of the accident and resume production as soon as possible.
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, Centralized Command, and Division of Responsibility”.
Gutian Fuxing The contingency plan was approved in May 2017 (File No. 352200-2017-005-L) and
amended in June 2020, and has passed expert review and completed filing (File No.
350922-2020-002-M).
According to the plan, the company conducted emergency drill for sudden hydrochloric
acid leakage in September 2022. After environmental emergencies occur, immediate,
quick, effective and orderly emergency rescue actions shall be taken to control and prevent
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Joincare Pharmaceutical Group Annual Report 2022
the spread of accident and contamination, and to protect the surrounding environment and
safeguard life and property of all employees, the company and nearby communities. In
accordance with the content and requirements of the plan, the company provides trainings
for its employees to get them well-prepared for environmental emergencies, so that timely
rescue can be taken and the accident can be controlled in a short period of time in case of
any environmental emergencies.
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. Identification of environmental factors
was performed seriously and preventive measures were adopted for significant
environmental factors, while the governance of the “Three Wastes” was strengthened to
enhance the ability of control over the “Three Wastes” and ensure that the discharge of the
“Three Wastes” had reached the discharge standards. The “Environmental Emergency
Contingency Plan of Livzon Group Limin Pharmaceutical Manufacturing Factory” (《丽
Livzon Limin
珠集团利民制药厂突发环境事件应急预案》) 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 a regular basis to improve the operability of the contingency
plan, and enhance the performance of the emergency rescue staff and the responsiveness
and coordination ability of the rescue team.
Pursuant to relevant provisions, the “Environmental Emergency Contingency Plan of
Livzon Group Livzon Pharmaceutical Factory” (《丽珠集团丽珠制药厂突发环境事件
应急预案》) was reformulated by the company in 2021, and has been approved, filed and
issued (File No. 440404-2021-0212-L). The company conducted a fire emergency
evacuation drill in the P10 workshop in April 2022 to improve employees’ emergency
Livzon Pharmaceutical handling ability and to alleviate or eliminate the impact of the accident. On 21 October
Factory 2022, the special emergency drill for alcohol leakage (causing fire and explosion) was
carried out to provide training to the emergency response team, thus enhancing the
emergency execution and disposal ability of the emergency drill participants, further
clarifing the responsibilities and tasks of relevant personnel, and improving the emergency
linkage mechanism. The company improved the awareness of risk prevention and the
ability of self-rescue and mutual-rescue.
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 approved filed and issued in May 2019 (File No. 640221-2019-005-
II). Identification of environmental factors and sources of hazards and drills for emergency
Ningxia Pharmaceutical were conducted internally in the company on a regular basis to improve the operability of
the contingency plan, and enhance the performance of the emergency rescue staff and the
responsiveness and comprehensive coordination ability of the rescue team. The
Environmental Emergency Contingency Plan was amended in May 2021, and has passed
expert review and the review by and the filing with government environmental department
in August 2021.
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 “prevention-oriented, on-alert all the time; classified
management, level-by-level response; cross-department cooperation, responsibility by
levels; scientific prevention and efficient handling”. The contingency plan was approved,
issued and filed in April 2021 (File No. 4108042018005L). The “Hazardous Waste
Environmental Pollution Emergency Contingency Plan of Jiaozuo Livzon Hecheng
Pharmaceutical Manufacturing Co., Ltd.” (《焦作丽珠合成制药有限公司危险废物环境
Jiaozuo Hecheng 污染事故应急预案》) was prepared under the above provisions, requirements and
principles as well, which was approved and filed in January 2018. Identification of
environmental factors and sources of hazards and drills for emergency were conducted
internally in the company on a regular basis to improve the operability of the contingency
plan, and enhance the performance of the emergency rescue staff and the responsiveness
and coordination ability of the rescue team. 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
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Joincare Pharmaceutical Group Annual Report 2022
Pharmaceutical Manufacturing Co., Ltd. In November 2021, the “Operation Regulations
for Exhaust Gas UV Photolysis Equipment” was added and the “Spray Towers Operation
Regulations” was amended, and relevant trainings were conducted to increase the
environmental protection knowledge of staff. In March 2022, the company amended some
environmental protection documents, including the “Enterprise Environmental
Information Disclosure System”, “Discharge Permit System” and “Operating Procedures
for Sewage Treatment”.
In March 2022, the company issued and filed the “Environmental Emergency Contingency
Plan of Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd.” (《上海丽珠制药有
Shanghai Livzon 限公司突发环境事件应急预案》) (File No. 02-310115-2022-108-L). The company
conducts drills and reviews of the plan every year to improve its emergency response
capabilities through such regular trainings.
Pursuant to relevant provisions, the “Environmental Emergency Contingency Plan of
Livzon MAB” (《丽珠单抗突发环境事件应急预案》) was prepared by the company in
Livzon MAB 2022. The company conducted an emergency response drill for hazardous chemical
leakage in the dangerous goods warehouse in June 2022 to improve employees’
emergency handling ability and alleviate or eliminate the impact of the accident.
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. Identification of environmental factors
was performed seriously and preventive measures were adopted for significant
environmental factors, while the governance of the “Three Wastes” was strengthened to
Sichuan Guangda 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” (《(四
川光大製藥有限公司突发环境事件应急预案》 ) was prepared and issued on 23
December 2022. Identification of environmental factors and sources of hazards and drills
for emergency were conducted internally in the company on a regular basis.
5. Environmental self-monitoring program
√ Applicable □N/A
Name of company or
Environmental self-monitoring program
subsidiary
As required by the self-monitoring program for pollutant discharge licenses, Jiaozuo Joincare
developed the 2022 self-monitoring program for wastewater and waste gas and carried out
self-monitoring according to the program. Up to the end of December, Jiaozuo Joincare has
completed the self-monitoring for wastewater and waste gas for the year of 2022.
Jiaozuo Joincare
The company is a key enterprise in terms of soil monitoring, and should carry out self-
monitoring of soil once a year as required. In August 2022, the company has completed the
preparation, on-site sampling and review of self-monitoring program and published on the
website of the Group on 26 August 2022.
Wastewater was monitored once a quarter; boiler exhaust gas and plant boundary noise were
monitored once a year; exhaust gases generated from technical process was monitored once
Taitai Pharmaceutical
half a year; online 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 monitoring data. Online wastewater monitoring equipment was installed
Haibin Pharma
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.
A self-monitoring program was prepared, the annual self-monitoring of exhaust gas,
Xinxiang Haibin wastewater and soil has been completed throughout the year in accordance with the pollutant
discharge license.
According to the relevant requirements of the “Measures for Self-Monitoring and Information
Disclosure by Enterprises subject to Intensive Monitoring and Control of the State (Trial
Implementation)” (《国家重点监控企业自行监测及信息公开办法 (试行)》) and the
Fuzhou Fuxing “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
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Joincare Pharmaceutical Group Annual Report 2022
available to the public after being examined by and filed with Fuqing Environment Protection
Bureau and Fuzhou Environment Protection Bureau. The analysis methods of the monitoring
program comply with the national environmental monitoring technical standards and methods;
the monitoring and analysis instruments have been examined and calibrated in strict
compliance with the relevant national requirements; the automated monitoring equipment has
been installed in accordance with the requirements of environmental assessment technical
standards, connected to the network of competent environmental protection authorities and
passed the acceptance inspection conducted by the competent environmental protection
authorities. The automated monitoring equipment was sound, and the monitoring information
was accurate, valid and authentic. In June 2022, the volatile organic matters (VOCs) leak
detection and repair (LDAR) work in the first half of the year was finished. In November 2022,
the volatile organic matters (VOCs) leak detection and repair (LDAR) work in the second half
of the year was finished. 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
filed with Qingyuan Environment Protection Bureau. The analysis methods of the monitoring
program comply with the national environmental monitoring technical standards and methods;
the monitoring and analysis instruments have been examined and calibrated in strict
compliance with the relevant national requirements. The automated monitoring equipment for
Livzon Xinbeijiang wastewater (COD, ammonia nitrogen, pH, flow) and waste gas (non-methane hydrocarbons)
has been installed in accordance with the requirement of environmental assessment technical
standards, while online monitoring equipment has passed the inspection and acceptance of the
relevant environmental protection authorities and the connection between online information
and national development platform and Qingyuan municipal platform has been completed. The
automated monitoring equipment was sound, and the monitoring information was accurate,
valid and authentic. A third party is entrusted to conduct LDAR detection and repair every half
year in the workshop using VOCs in compliance with the specification requirements. The
fugitive volatile organic compounds around the workshop of the first refinery division were
monitored every half year, and the monitoring results met the standard in 2022.
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
Livzon Hecheng verification and calibration of monitoring analyzing devices were carried out in strict
compliance with relevant provisions and connected with the national development platform as
required. In 2022, a third party was entrusted to carry out regular LDAR testing, emission port
testing, boundary noise monitoring and soil testing, and the test results were in line with the
requirements.
According to the relevant requirements of the “Measures for Self-Monitoring and Information
Disclosure by Enterprises subject to Intensive Monitoring and Control of the State (Trial
Implementation)” (《国家重点监控企业自行监测及信息公开办法(试行)》), the company
has completed the establishment of the self-monitoring program based on its own situation in
a timely manner and made the program available to the public after being examined by and
filed with Ningde Bureau of Ecology and Environment and Ningde Gutian Bureau of Ecology
and Environment. The analysis methods of the monitoring program comply with the national
environmental monitoring technical standards and methods; the monitoring and analysis
Gutian Fuxing instruments have been examined and calibrated in strict compliance with the relevant national
requirements; the automated monitoring equipment has been installed in accordance with the
requirements of environmental assessment technical standards, connected to the network of
competent environmental protection authorities and passed the acceptance inspection
conducted by the competent environmental protection authorities. The automated monitoring
equipment was sound, and the monitoring information was accurate, valid and authentic. In
June and December 2022, a qualified third party was engaged to complete volatile organic
matter leak detection and repair (LDAR) 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. In view of its own
specific conditions, the company appointed the inspection party to carry out water pollutant
detection monitoring every quarter, boiler exhaust gas monitoring every month and VOCs
Livzon Limin
exhaust gas monitoring in R&D center every half year, with every monitoring strictly in
compliance with the relevant national requirements to ensure the accuracy, validity and
authenticity of the monitoring data. The inspection acceptance of the online monitoring
equipment for COD, ammonia nitrogen water quality was completed and it was put into use in
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Joincare Pharmaceutical Group Annual Report 2022
January 2021, and the equipment was monitored every 2 hours. The pollution source sharing
data were completed and filed to the Shaoguan Ecology and Environment Bureau on a timely
basis, and the relevant data were announced to the public after being reviewed by Shaoguan
Municipal Bureau Ecology and Environment.
An entity with national qualification on inspection was engaged to conduct monitoring strictly
in compliance with the relevant national laws and regulations and standards. In view of its own
specific conditions, the company appointed the inspection party to carry out monitoring on
Livzon Pharmaceutical
sewage and waste gas every month, with every monitoring 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 2022, which was reviewed by and
filed with the Ecology and 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, unorganized environmental air monitoring above
plant boundary, noise and recycled water TOC. The monitoring results would be announced
to the public through the “System of National Pollution Sources Monitoring Information
Ningxia 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》). Volatile organic matter leak detection and
repair (LDAR) work was carried out. The automated monitoring equipment passed the
inspection conducted by the competent environmental protection authority and was connected
to the network of the competent environmental protection authority. The automated
monitoring equipment was sound, and the monitoring information was accurate, valid and
authentic.
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 specific conditions
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. Volatile organic matter
Jiaozuo Hecheng
leakage detection and repair (LDAR) was completed in June 2022. Equipment and facilities
such as solvent pipelines and flanges in the workshop were detected, and places with leakage
were repaired and rectified. The automated monitoring equipment for sewage has been
installed online in accordance with the requirement of environmental assessment technical
standards. The online monitoring equipment of COD, ammonia nitrogen, pH, flow and total
nitrogen was installed, which has been connected to the national development platform as
required. Monthly and quarterly monitoring was carried out strictly in accordance with the
requirements of the self-monitoring program, which focused primarily on organized exhaust
gas emission, waste water discharge, plant boundary unorganized environmental air and noise.
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》) (HJ819-2017) and the
relevant requirements (including those on pollution discharge license), the company organized
self-monitoring and information disclosure of the pollutants it has discharged, and formulated
Shanghai Livzon
the Self-monitoring Program. In 2022, the company monitored main exhaust gas outlets once
a month, common discharge outlets once half year, noise once every quarter and sewage once
a month. The monitoring items and frequency meet the requirements of the pollutant discharge
license.
Entities with national qualification on inspection were engaged to conduct monitoring strictly
in compliance with the relevant national laws and regulations and standards. By considering
its own specific conditions, the Company appointed the inspection party to carry out regular
Livzon MAB monitoring on sewage and waste gas according to the requirements of the implementation plan
of the pollutant discharge permit, each time the monitoring would be conducted strictly in
compliance with the relevant national requirements to ensure the accuracy, validity and
authenticity of the monitoring data.
Entities with national qualification on inspection were engaged to conduct monitoring strictly
in compliance with the relevant national laws and regulations and standards. By considering
its own specific conditions, the Company appointed the third-party inspection party to carry
Sichuan Guangda
out regular monitoring on sewage and waste gas according to the requirements of the
implementation plan of the pollutant discharge permit. COD water quality online monitoring
equipment was installed at the main sewage outlet of the company, which was monitored every
114
Joincare Pharmaceutical Group Annual Report 2022
2 hours, and the data were automatically uploaded to the platform of the government regulatory
department.
6. Administrative penalties imposed for environmental issues during the Reporting Period
□ Applicable √ N/A
7. Other environmental information to be disclosed
□ Applicable √ N/A
(II) Statement on environmental protection measures of companies except for key pollutant
discharge units
√ Applicable □N/A
The rest subsidiaries of the Company strictly 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. They constantly
increased investment in environmental protection, continuously invested in energy conservation and
consumption reduction projects, actively promoted cleaner production, improved comprehensive
utilization efficiency of resources, and reduced and avoided pollutants so as to ensure mental and
physical health of employees and the coordinated and sustainable development of economic,
environmental and social benefits.
1. Administrative penalties imposed for environmental issues
□ Applicable √ N/A
2. Refer to other environmental information disclosed by key pollutant discharge units
□ Applicable √ N/A
3. Reason for non-disclosure of other relavant environmental information
□ Applicable √ N/A
(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
or subsidiary control, and fulfillment of environmental responsibilities
Jiaozuo Joincare LDAR leak detection and repair was conducted twice in 2022.
Creation of environmental safety standardization, management of hazardous waste
standardization, onsite inspection, cooperation with the Department of Ecology and
Taitai Environment or its entrusted third-party evaluation agency to carry out the safety evaluation and
Pharmaceutical inspection of corporate environmental facilities, operating systems and online inspection
systems, prompt rectification of hidden hazards proposed were carried out as required by the
Municipal Department of Ecology and Environment.
The company completed LDAR detection in 2022, to timely repair leakage points and reduce
Haibin Pharma unorganized emission of VOCs. Laboratory exhaust gas treatment system was newly built to
reduce emission of VOCs.
The company completed LDAR detection in 2022, submit environmental protection
Xinxiang Haibin commitment to the management department and purchased environmental pollution liability
insurance for the company.
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.
LDAR leak detection and repair was completed; the amendment and filing of the Environmental
Fuzhou Fuxing Emergency Contingency Plan was completed; preparation and inspection of “one policy for one
enterprise 2.0” was completed; the preparation of the “Environmental Impact Assessment Report
115
Joincare Pharmaceutical Group Annual Report 2022
on the Phase IV High-end Antibiotics” was in process; in the environmental credit evaluation
completed, the company was rated as an environmentally credible enterprise. The monthly and
quarterly self-monitoring on waste water, waste gas and noise was completed as required. Self-
monitoring of soil and groundwater in 2022 was completed. The construction of 3000m3/d
sewage treatment facilities was completed. The installation of waste gas collection and treatment
pipeline between the sludge and bacterial residue plate and frame workshop was completed to
improve the air quality of the plate and frame workshop.
Two rounds of LDAR leak detection and repair was completed as required; unorganized
emission of VOCs was reduced; a series of exhaust gas and noise control and improvement
measures, such as connecting the exhaust gas fan of Workshop II of Refining I to the exhaust
gas treatment equipment, were made to reduce unorganized emission of VOCs; the old biological
deodorization tank in the sewage treatment station was replaced, and 2 new exhaust gas spray
towers were introduced; exhaust gas collection and treatment in the sewage treatment station
was upgraded; pollutants in exhaust gas were degraded efficiently; silencers were installed in
the sewage treatment station and on the exhaust gas vent of Fermentation II to reduce air-flow
Livzon Xinbeijiang
noise; fermentation II and the first floor of power freezer room were enclosed with brick wall to
diminish the impact of noise on the surrounding environment; 3 energy-saving silent cooling
towers newly purchased were installed on the south side of the freezer to reduce noise generation
and effectively use the freezer building to block noise transmission to the community. Other
equipment with much noise in the plant was enclosed with sound-absorbing cotton board to
reduce noise. The self-monitoring plan of the year was completed and the results of wastewater,
exhaust gas and noise met the emission standards. A qualified third party is entrusted to dispose
of the waste in compliance with laws and regulations.
LDAR leak detection and repair was completed in the year with a reduction of 1.11 tonnes as
compared with that befor repair; the equipment for RTO exhaust was maintained regularly to
ensure its safe operation and the emission of exhaust gas within the emission standards; items
were washed after the completion of RTO process to reduce sulfur dioxide emissions and smell;
the trichloromethane liquid nitrogen cryogenic equipment in Workshop 102 was put into use to
Livzon Hecheng
increase the reuse of trichloromethane to reduce emissions. Qualified units were entrusted to
treat hazardous waste with a compliance treatment rate of 100%; and tail gas treatment facilities
were added at gas collection station by the QC Testing and Technical Development Department.
The self-monitoring program was completed and environmental responsibilities were fulfilled
as required.
LDAR leak detection and repair was completed; cover and sealing were added to sewage
treatment regulating pool; waste gas was collected and treated so as to avoid odor emit; HV
frame was replaced in the sewage treatment workshop; water content of sludge was reduced;
total volume of sludge was reduced; sludge generated was entrusted to qualified units for
treatment; the collection, recovery, treatment of VOCs were completed and online monitoring
Gutian Fuxing
facilities was installed and put into operation to reduce the random emission of VOCs; and the
entrusted testing of waste water, waste gas, soil and groundwater in 2022 was completed, with
the results showing they all met standards. the upgrading and reconstruction of boiler tail gas
treatment facilities were completed. Hazardous waste was entrusted to qualified companies for
compliant treatment to reduce the risk of environmental pollution.
Pollutants was discharged according to the standards in the pollution discharge license and the
annual self-monitoring of pollution discharge was completed; the measures on energy
conservation and emission reduction were formulated according to ESG objectives; solid
preparations and steam equipment in high-capacity workshop were renovated; steam usage was
Livzon Limin
reduced effectively; locations of different drugs in the overhead cabin and TCM cabin were
adjusted; storage energy consumption of the two cabins was reduced; three idle water pumps of
the factory were used; post-treated waste water was used for watering flowers, trees and grass
in the factory in three lines.
Installation and debugging of online monitoring equipment were completed; the monthly and
quarterly self-monitoring was completed as required; a qualified third party was entrusted to
detect waste water and waste gas; compliant treatment of hazardous wastes was made to reduce
Livzon
the risk of environmental pollution. Environmental impact assessment was conducted for new
Pharmaceutical
workshops and acceptance of environmental protection project of the newly-built workshop was
Factory
completed 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 efficiency.
In 2022, the exhaust sampling port and sampling platform of the hazardous waste storage and
waste gas collection and treatment facility was constructed; the fresh air supply facility of the
fungus residue crushing room was reconstructed, the original fresh air supply fan installed in
Ningxia the middle of the wall was moved to the bottom of the wall, and a new fresh air supply fan was
Pharmaceutical installed; the original waste gas treatment facilities of the fermentation workshop of 103-2 were
upgraded and improved, and a set of "sodium hypochlorite spray absorption + water spray
absorption + dual-phase superoxygen water + micro-nano bubbles" process governance facilities
were added; the emergency pool leakage prevention facilities of hazardous chemicals warehouse
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Joincare Pharmaceutical Group Annual Report 2022
were built; the damaged cover plate of sludge storage tank was replaced;the cover plate of the
pre-aeration tank for sewage treatment and the water seal tank of the cover plate of the primary
sedimentation tank were repaired and sealed. The original cover plate for the pre-aeration tank
was sealed with glass fiber cloth and epoxy resin, and the rusted pipes were painted. The
rainwater and sewage collection pipe network facilities with a total length of about 1,000 meters
were laid and installed. In December 2022, it was recognized as a city-level green factory in
Shizuishan. The monthly and quarterly enterprise self-monitoring work was completed as
required.
Carried out automation construction; completed the repair and inspection of LDAR; completed
the green development evaluation of the pharmaceutical industry in Henan Province; replaced
the waste gas treatment part to ensure that the treatment effect of hazardous waste was entrusted
to a qualified unit for disposal, and the compliance disposal rate reached 100%; entrusted a
qualified third party to detect the waste gas; entrusted a qualified third party to provide operation
and maintenance services for wastewater system equipment; completed the implementation of
“one policy for one plant” for emergency emission reduction in heavily polluted weather by the
Jiaozuo Hecheng Municipal Environmental Protection Bureau; the RTO incinerator equipment operated normally
this year, and modified the environmental protection documents such as “Enterprise
Environmental Information Disclosure System”, “Pollutant Discharge Permit System and
Sewage Treatment Process Operating Procedures”, “Enterprise Environmental Information
Disclosure System” 《企业环境信息公开制度》), the “Sewage Discharge Permit System” 《排
污许可证制度》) and the “Sewage Treatment Process Operation Regulations’ (《污水处理工
艺操作规程》).
The company has completed the Filing and Registration of the Contingenvy Plan for Emergenty
Environmental Incidents; completed the VOCs emission reduction milestone of " one plan for
one factory " in accordance with the plan; discharged pollutants in strict accordance with the the
Sewage Discharge Permit System obtained, formulated the annual emission self-monitoring
programme at the beginning of the year and implemented emission self-monitoring according to
the programme, and completed the annual implementation report of the emission permits without
Shanghai Livzon any violations of laws or regulations. Meanwhile, we strengthened the daily supervision of the
operation of the waste gas treatment facilities and sewage treatment stations, and entrusted a
third party to test the emissions of waste gas and sewage every month to ensure the effective
operation of the equipment and facilities. The safety facilities, occupational disease protection
facilities and pollution prevention facilities of the "Preparation Line 3 and Assembly Line 2
Purification Plant and Utility System" project were designed, constructed and put into
production and use at the same time as the workshop renovation project.
Entrusted a qualified third party CTI to test the waste water and waste gas according to the
requirements of the pollutant discharge license, and entrusted a qualified entity, Dongjiang
Environmental-protection Doumen Yongxingsheng Environmental-protection, Co., Ltd. of
Dongjiang Environmental Protection (东江环保斗门永兴盛环保公司), to dispose of hazardous
wastes in accordance with the regulations, so as to reduce the risk of environmental pollution.
Livzon MAB
Carried out the environmental impact assessment of the new workshop according to the
requirements of "Three Simultaneities" for construction of wotkshops newly built, rebuilt and
expanded. The production and R&D sewage was uniformly discharged into the sewage station
of Livzon Pharmaceutical Factory in Livzon Industrial Park for treatment and discharge up to
the standard.
According to the requirements, the company has formulated an annual self-monitoring plan for
sewage discharge, entrusted a qualified third party to carry out regular testing of waste water,
waste gas and noise at the factory boundary, and the testing results were all qualified; entrusted
a qualified unit to carry out compliance disposal of hazardous wastes to reduce the risk of
Sichuan Guangda environmental pollution; completed the preparation and filing of the Contingency Plan for
Environmental Emergent Incidents of the Company; the environmental protection credit
evaluation has been completed, and the preliminary evaluation result was: the entity with good
environmental protection credit; the annual implementation report of pollutant discharge permit
has been completed.
(IV) Measures Taken and Effects on Reducing Carbon Emissions During the Reporting
Period
Whether to take carbon reduction measures Yes
Equivalent of carbon emission reduction (unit: ton) 2,171
Types of carbon emission reduction measures (e.g. Use of "clean energy for power
use of clean energy for power generation, use of generation", adopt carbon emission
carbon reduction technologies in production, reduction technologies in production" and
research and development of new products that other measures, as detailed in "Specific
contribute to carbon reduction, etc.) descriptions" below.
117
Joincare Pharmaceutical Group Annual Report 2022
Specific descriptions
√ Applicable □N/A
Name of company or
Measures taken and effects on reducing carbon emissions during the Reporting Period
subsidiary
1. by upgrading the preheater of the No. 1 rectification tower in the solvent storage, saved about
2,000 tons of steam and reducing about 600 tons of carbon emissions annually;
2. by changing the structure of isopropyl alcohol distillation tower and the number of distillation,
Jiaozuo Joincare
saved about 100 tons of steam annually, reduce carbon emissions about 30 tons;
3. by upgrading and replacing an air suspension aeration fan, saved 120,000 kWh of electricity
and reduce carbon emissions by about 60 tons per year.
1. in response to the call of the municipal government, the lighting in the park was replaced with
energy-saving lamps, obtaining remarkable power-saving effect;
2. in accordance with the energy-saving requirements of the municipal government, we
Taitai Pharmaceutical organized to replace the high-power motor in the factory with a high-efficiency energy-saving
motor and installed a frequency conversion device to maximize energy saving;
3. upgraded 4T boilers with low nitrogen burners;
4. chose public transport for daily traffic, low-carbon travel, and turned off lights and machines.
Carried out carbon verification and energy saving diagnosis, sorted out key energy-use
Haibin Pharma
equipment, and implemented targeted energy saving transformation to reduce carbon emissions.
1. by using diaphragm pump to replace centrifugal pump, saved 27,000 kWh of electricity per
year, reduced carbon emissions about 14 tons;
2. adding preheater for solvent recovery and using steam condensate to preheat mother liquor
raw materials can save about 3,600 tons of steam and reduce carbon emissions about 1,080 tons
Xinxiang Haibin per year;
3. the existing chemical pump was replaced by high efficiency and energy saving pump in the
circulating water system, which is expected to save 774,000 kWh of electricity and reduce
carbon emissions of about 387 tons per year;
4. chose public transport for daily traffic and low-carbon travel.
Purchased new standard energy-saving equipment, developed the habit and thinking of saving
electricity, saved natural gas and carried out multiple maintenance in daily use of boiler, and
Joincare Haibin
frequemt;y inspected pipelines, took good insulation measures, and used pure electric cars to
save fuel when going out. Adopted solar water heater in the dormitory.
Used photovoltaic power generation to reduce power consumption; renovated high-
energyconsuming pumps for energy conservation to effectively reduce energy consumption;
replaced with high-efficiency motor water pumps to save energy consumption; vigorously
Fuzhou Fuxing
promoted energy conservation and consumption reduction, and called on employees to realize
the concept of “turning off lights, air conditioners and computers before leaving office” during
their daily work.
Introduced photovoltaic power generation to reduce power consumption; used water kinetic
energy instead of electric motors to drive the cooling tower fans to reduce the electric energy
consumption while ensuring the cooling effect; pre-heated the soft water of the boiler by the heat
generated from the operation of the air compressor to raise the temperature of the inlet water of
the boiler and effectively reduce the consumption of natural gas; regularly cleaned the inner wall
Livzon Xinbeijiang
of the MVR equipment to increase the evaporation rate of sugar water of the MVR equipment
by about 40%, hence effectively reducing the running time of the MVR equipment and greatly
reducing electricity onsumption; replaced old boilers of high energy consumption and high
maintenance cost with new boilers. Accordingly, the average natural gas consumption reduced
by 1.06 m3 per tonne of steam generated.
Maintained and updated chiller units to make more rational use of energy and saved electricity
consumption for production through more reasonable production scheduling by the production
department; used natural gas as fuel for canteens and boilers; replaced sewage treatment Roots
blowers in the environmental protection center with magnetic levitation blowers with an energy
Livzon Hecheng saving rate of about 30%, saving about 107,000 kWh of electricity consumption per year; called
on all employees of the factory to respond to electricity conservation, turn off lights and air
conditioners before leaving office, and limited the minimum temperature of air conditioners;
promoted green travel, encouraged the use of public transportation when going out to work, and
set up shuttle buses to transport employees to and from work.
Installed 4 air compressors with a capacity of 130m3/min to replace the original air compressor
with high power consumption to reduce power consumption; replaced one chiller unit to reduce
Gutian Fuxing electricity consumption; called on all employees to “save every drop of water, save every
kilowatt of electricity”, so that the lights are turned off and the equipment is powered off before
leaving office.
Appropriately adjusted the temperature and humidity settings of the air conditioning system
Livzon Limin
(within the standard range) in the solid workshop to keep it as close to the outside temperature
118
Joincare Pharmaceutical Group Annual Report 2022
and humidity as possible, thus reducing steam consumption; reduced energy consumption by
controlling the number of running compressors in the air conditioning units and setting
parameters by the Quality Control Department, and by implementing intermittent use mode for
the bioassay lab; used hot tailwater from the water distiller in the production workshop to heat
the boiler soft water, thus reducing the consumption of natural gas; renovated the air
conditioning ventilation system at the R&D Centre to save electricity.
Reduced electricity consumption by replacing incandescent lamps with LED lamps; refurbished
photovoltaic inverter cabinets and roof-mounted photovoltaic modules, improving the
photovoltaic power generation efficiency after refurbishment, saving about 600,000 kWh of
Livzon
electricity per year; introduced purchased steam to reduce boiler combustion and save energy;
Pharmaceutical
further strengthened the energy conservation management of functional departments, turned off
Factory
lights during the lunch break, encouraged employees to turn off lights and computers to save
electricity before leaving seats or office; set up shuttle buses to transport employees to and from
work.
Renovated the phenylalanine concentration system and adopted MVR concentration to replace
the original triple-effect concentration system, thus reducing energy consumption by about 50%.
Ningxia
Regularly overhauled and maintained the boiler system to ensure the efficient operation of the
Pharmaceutical
boiler body and the desulfurization and dust removal facilities. Increased the consumption of
steam from external supply to cut the use of coal and reduce carbon emissions.
Collected and reused steam condense to reduce steam consumption, so as to reduce carbon
emissions; changed the packaging equipment to automatic packaging to improve production
efficiency; vigorously promoted energy saving and consumption reduction internally, called on
all employees to “save every drop of water, save every kilowatt of electricity”, and uniformly
managed the paint in the workshop to eliminate waste; installed additional mirrors behind the
Jiaozuo Hecheng steam pipeline drainage valves to observe whether there is steam loss; led the steam condense to
the production auxiliary system of the hot water tank and the crystallization tank to reduce the
use of steam; changed the lighting in the common areas of the workshop, corridors, etc. to sound-
or light-controlled switches and gradually replaced the workshop lighting with LED lights;
gradually replaced high energy consuming equipment and facilities in workshops with low
energy consuming or automated interlocking devices.
Further strengthened the daily energy-saving management according to the established energy-
saving plan, effectively improved the energy-saving awareness of employees through inspection,
publicity and other means, and cultivated good habit of saving water and electricity among
employees; optimized the peptide splicing process, increased the peptide splicing yield by more
Shanghai Livzon than 10%, thus reducing the power consumption per unit of product; transformed the solid
preparation workshop into the powder injection workshop which produces less waste and
conserves electricity; while comfortable air conditioning unit (cooling) utilized the chilled water
unit in the power room, the multi-expansion air conditioning unit was placed outdoors to use air
cooling, saving cooling capacity and reducing energy consumption.
Introduced purchased steam to save energy. Effectively improved the energy-saving awareness
of employees through inspection, publicity and other means, and cultivated good habit of saving
Livzon MAB water and electricity among employees; used LED lights to reduce electricity consumption, and
encouraged employees to turn off lights and computers to save electricity before leaving office.
Set up shuttle buses to transport employees to and from work.
Clean energy was used, energy use efficiency was improved and outdated equipment was
eliminated. For example, Class 1 energy-efficient motors and related power products was used
Sichuan Guangda for all new plant construction, and the highly efficient, energy-saving and low-cost MVR
concentration technology was used for concentration equipment. In addition, the energy-saving
awareness among staff is effectively raised by strengthening daily management.
II.Work on Corporate Social Responsibility
(I) Whether to disclose separate corporate social responsibility report, sustainable
development report or ESG report
√Applicable □N/A
The Company has separately disclosed its corporate social responsibility report. For details, please
refer to the 2022 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 11 April 2023 for details.
(II)Specific situation of work on corporate social responsibilities
√Applicable □N/A
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Joincare Pharmaceutical Group Annual Report 2022
External donation, public
Quantity/content Description
welfare
Mainly include investment in public welfare
projects for chronic diseases, industrial
Total investment (RMB’0,000) 1,211.7
assistance, community health, and nature
conservation.
Mainly include investment in nature
Including: Funds (RMB’0,000) 569.9
conservation project.
Cash converted from materials Mainly include investment in public welfare
641.8
(RMB’0,000) projects for chronic diseases.
Mainly include projects of low-income
Number of beneficiary (person) 1,485 chronic disease patients and industrial
revitalization.
Specific description
√Applicable □N/A
The Company 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 RMB1,668 million, paid RMB2,261million in salary to employees, distributed
dividends and paid interest worth RMB1,351 million to banks and other creditors, donated funds
and goods totaling RMB12.217 million to the society, and achieved a social contribution per share
of approximately RMB3.52 for the society in 2022.
For our performance of social responsibility, see the 2022 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 11 April 2023 for details.
III.Consolidation and expansion of achievements in poverty alleviation and rural
revitalization
Targeted Poverty Alleviation and Rural
Quantity/content Description
Revitalization Project
Public welfare projects for chronic
Total investment (RMB’0,000) 300
diseases to help rural revitalization
Including: Funds (RMB’0,000)
Cash converted from materials (RMB’0,000) 300 Donation of drugs for chronic diseases
Low-income patients with chronic
Number of beneficiary (person) 1,400
diseases
Forms of assistance (such as industrial
Poverty alleviation
poverty alleviation, vocational poverty
through industrial
alleviation, educational poverty alleviation,
development
etc. )
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Joincare Pharmaceutical Group Annual Report 2022
Specific description
√Applicable □N/A
1. Industrial revitalization
The Company follows important guiding principles of the CPC Central Committee and the General
Secretary. In accordance with the relevant requirements, we establish and implement the plan of
“Revitalization of Astragalus Root (黄芪) Industry” and adopt the model of “Company + Base” and
“Company + Professional Cooperative”, encouraging locals to cultivate and process astragalus root
and develop the astragalus root industry based on the local conditions. Making it a pillar industry
for local economy in the long-term and a new path to improve the lives of the people, the Company
explores the development of the featured astragalus root industry to promote the construction of the
“Chinese Medicine Ecological Base”.
The “Revitalization of Astragalus Root Industry” program was initiated in 2017 and is still in
operation today. 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 controlled subsidiary Livzon Group, built
cultivation bases independently in Hunyuan County of Datong City in Shanxi Province and Zizhou
County of Yulin City in Shaanxi Province. And Datong Livzon cooperated with 12 cooperatives
and 3 individuals to jointly build cultivation bases for astragalus root in Tianzhen County of Datong
City and Ying County of Shuozhou City in Shanxi Province and Yulin City of Shaanxi Province.
The total area of the self-built bases and jointly constructed bases is about 33,000 mu and a total of
265 people have been assisted. This program has effectively boosted the economy of corresponding
areas in Shanxi and Shaanxi.
During the Reporting Period, the planting area of the self-built base in Hunyuan County of Datong
City in Shanxi Province increased by 300 mu, and the number of newly hired local workers reached
55. In addition, in line with the country's "rural revitalization strategy," Datong Livzon cooperated
with the village committee of Mazhuang Village, Guaner Township, Hunyuan County, Datong City,
Shanxi Province to initiate the “Joint Construction by Villages and Enterprises” program to
construct the initial processing plant for cultivation bases for astragalus root, which has been
completed and put into use. In addition, the Company provided training on the new version of "Good
Agricultural Practice of Medicinal Plants and Animals" for management staff of joint construction
bases and about 30 growers in Zizhou County, Yulin District, Shaanxi Province, and provided
technical guidance and practical training on the traceability system of Chinese medicinal materials.
At the same time, meteorological observation stations were set up in the joint-built base in Tianzhen
County of Datong City, Shanxi Province and the joint-built base in Zizhou County of Yulin City,
Shaanxi Province, and environmental inspection was carried out for all the joint-built bases,
providing data support for their field operations. This year, Shanxi and Shaanxi joint-built bases
employed 85 local workers, harvesting a total of 184.50 tons of fresh astragalus root.
2. Access to public welfare for rural revitalization 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 common chronic
diseases such as hypertension, hyperlipidemia, cardiovascular and cerebrovascular diseases, and
treatment drugs have been donated to remote areas, including Pravastatin Capsules (普伐他汀钠胶
囊), Amlodipine Besylate Capsules (苯磺酸氨氯地平胶囊), Valsartan Capsules (缬沙坦胶囊),
and Isosorbide Bononitrate Tablets ( 单硝酸异山梨酯片), which could be worth millions of RMB.
These drugs can really help families in remote areas, make it convenient for patients in the regions
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Joincare Pharmaceutical Group Annual Report 2022
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. The project also helps
to promote local development of rural revitalization and contributes to the state strategic goal of
common prosperity.
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, Tianzhu County, Linze County and Shandan 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 benefits to many patients. Joincare won the awards of “19th Shenzhen Care Action Top
100 Projects of Residents Satisfaction (第十九届深圳关爱行动百佳市民满意项目)” and
“Pioneering Enterprise Award in Social Responsibility (社会责任先锋企业奖)” for its excellent
projects supporting urban revitalization.
As at 31 December 2022, the project covered 8 provinces and one autonomous region, among which
17 were remote areas in need of help and one was natural reserve at state level, which helped more
than 6,400 low-income patients. In 2023, it is expected to donate drugs to areas including Hubei,
Gansu, Anhui and Sichuan.
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Joincare Pharmaceutical Group Annual Report 2022
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
Specific Next plan
Whether
Whether reasons for should be
Time and time there is a
Commitment Commitment Commitment commitment is failure in stated in case of
Subject limit of time limit
background type content strictly fulfilled timely failure in
commitment for
in time fulfillment timely
fulfillment
shall be given fulfillment
Shenzhen Baiyeyuan Investment Co., Ltd., the 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
Settlement of or activity constituting horizontal competition with the Company after the
30 April 2001,
horizontal Baiyeyuan founding of the Company, including but not limited to the research, production No Yes - -
long-term
competition and sales of any products that were the same 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 controlled
subsidiary of the Company, sought listing 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, de facto
Commitment controller of the Company and the Company entered into relevant undertakings
related to initial with Livzon Group as follows: 1. The controlling shareholders, de facto
public offering controller and persons acting-in-concert of the Company, the Company and its
controlled subsidiaries except for Livzon Group did not or would not be,
Baiyeyuan, de
directly or indirectly, engaged in any business that constituted competitive
Settlement of facto controllers 10 January
relation or potential competitive relation with drug research, development,
horizon and persons 2014, long- No Yes - -
production and sale businesses (“Restricted Businesses”) of Livzon Group
competition acting-in concert, term
from time to time. For the avoidance of doubt, the scope of Restricted
and the Company
Businesses did not cover products that were researched, developed,
manufactured and sold on the date of relevant letter of undertaking by the
controlling shareholders and de facto controller of the Company, the Company
and its controlled subsidiaries except for Livzon Group; 2. If any new business
opportunity was found to constitute competitive relation with Restricted
Businesses, 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 inform Livzon Group in written form
immediately and firstly provide Livzon Group with the business opportunity in
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Joincare Pharmaceutical Group Annual Report 2022
accordance with reasonable 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 controlled 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 controlled
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
first refusal, the controlling shareholders, de facto controllers and persons
acting-in-concert of the Company, the Company and its controlled subsidiaries
except for Livzon Group would carry out these Sales and Transfers to a third
party in accordance with main terms that were not superior to those offered to
Livzon Group; 4. The controlling shareholders, de facto controllers and persons
acting-in-concert of the Company, the Company and its controlled subsidiaries
except for Livzon Group would not be engaged in or involved in any business
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
controlled subsidiaries except for Livzon Group would not or cause its contact
persons (except for Livzon Group) to directly or indirectly: (1) induce or
attempt to induce any director, senior management 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 Livzon Group on
Restricted Businesses to terminate its transaction with Livzon Group or reduce
its normal business volume with Livzon Group, or ask for more favorable
transaction terms to any member of Livzon Group. 6. The controlling
shareholders, de facto controllers and persons acting-in-concert of the
Company, the Company and its controlled subsidiaries except for Livzon Group
further undertook that: (1) They would allow and cause relevant contact persons
(except for Livzon Group) to allow independent directors of Livzon Group to
review if the Company and its controlled subsidiaries except for Livzon Group
obeyed the Letter of Undertaking at least once a year; (2) They would provide
all the data required for annual review and implementation of the Letter of
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Joincare Pharmaceutical Group Annual Report 2022
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 controlled
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 controlled subsidiaries except for Livzon Group) would provide Livzon
Group with the Letter of Confirmation 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 relevant letter of undertaking from the date of
issuance thereof by the Company (or the Company's controlled 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 controlled subsidiaries were not
the controlling shareholders of Livzon Group anymore; (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).
From 8 March
2016 to the
date of
completion of
The Company remedial
Do not interfere in the operation and management activities of Livzon Group
Others and de facto measures in Yes Yes - -
or encroach on the interests of Livzon Group
controllers connection
with the non-
public offering
of Livzon
Group
Pursuant to the Guiding Opinions on Matters Relating to the Dilution of Current
Commitment Returns As a Result of Initial Public Offering, Refinancing and Major Asset
related to seasoned Restructuring (Announcement of CSRC [2015] No. 31), the company shall
offerings undertake to adopt specific remedial measures relating to dilution of current From 11 May
returns as a result of the company's initial public offering, refinancing of the 2017 to the
listed company, or major asset restructuring and shall fulfill such undertaking. date of
Pursuant to relevant provisions of CSRC, Zhu Baoguo, the de facto controller completion of
Baiyeyuan and
of Shenzhen Baiyeyuan Investment Co., Ltd., a controlling shareholder:1. Do remedial
Others the de facto Yes Yes - -
not intervene in the operation and management activities or encroach on the measures in
controller
interests of the company; 2. If CSRC issued other new regulatory provisions on connection
the remedial measures in relation to returns and the relevant undertakings and with rights
the aforesaid undertakings did not conform to such provisions from the date of issue of
issuance of the undertaking to the completion of IPO share allotment, the Joincare
Company/the de facto controller would undertake to issue a supplemental
undertaking in accordance with the latest provisions of CSRC; 3. The
Company/the de facto controller undertook to practically take the remedial
125
Joincare Pharmaceutical Group Annual Report 2022
measures in relation to returns formulated by the company and fulfill the
undertaking concerning the remedial measures. In case of violation of the
undertaking, causing losses to the company or investors, the Company/the de
facto controller was willing 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 them according to the disclosure in the announcement, and carry out the From the date
policies, including deposit in special account, approval by specially-assigned of proceeds
person, and special use of special funds in accordance with management for issuance of
measures for proceeds of the Company. The Board of the Company would the Rights
Others The Company regularly check the progress of projects invested with proceeds, issue a special issue in place No Yes - -
report on deposit and use of proceeds, engage an accounting firm during the to the date of
annual audit to issue an verification report on deposit and use of proceeds, completion of
would be supervised by regulators and sponsors at any time, and would not use of
make major investment, asset purchase or similar financial investment though proceeds
proceeds in disguise.
1. While transferring tradable shares subject to selling restrictions held by the
company in Livzon Group, the company shall strict obey relevant provisions of
Other commitments Guidelines of Listed Companies on Transfer of Stock Shares Subject to
made to the Selling
Restrictions ([2008] No. 15); 2. If the Company had shares subject to 17 December
medium and small Others The Company selling restrictions held by it in Livzon Group that were planned to be sold 2008, long- No Yes - -
shareholders of the through the bid trading system of Shenzhen Stock Exchange and reduced more term
company than 5% shares within six months from the first share reduction, the Company
would pass the
Announcement on Sales disclosed by Livzon Group within
two trading days before the first share reduction.
126
Joincare Pharmaceutical Group Annual Report 2022
(II) If the Company has made profit forecast on its assets or projects and the Reporting Period 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. The Board's statement on the “non-standard opinion auditor's report” issued by the
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 material 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
material accounting errors
□Applicable √N/A
(III) Communication with former appointed accounting firm
□Applicable √N/A
(IV) Others
□Applicable √N/A
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Joincare Pharmaceutical Group Annual Report 2022
VI. Appointment and termination of appointment of accounting firm
Unit: 10,000 Yuan Currency: RMB
Current accounting firm
Name of domestic accounting firm Grant Thornton (Special General Partnership)
Remuneration for domestic accounting firm 128
Continuous years of auditing services provided by domestic
4
accounting firm
Name of certified public accountant (“CPA”) of domestic
Wang Yuan(王远) and Wang Qilai（王其来）
accounting firm
Continuous years of CPA audit services of domestic accounting
1 and 4
firms
Name Fee
Accounting firm for internal control audit Grant Thornton (Special General Partnership) 32
Statement on appointment and termination of appointment of accounting firm
□Applicable √N/A
Statement on re-engagement of accounting firm 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
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Joincare Pharmaceutical Group Annual Report 2022
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
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 See the “Announcement on Resolutions
Ordinary Course of Business of the Majority-owned Subsidiaries Considered and Approved at the 9th Meeting of
of Jiaozuo Joincare and Jinguan Electric Power” considered and the 8th Session of the Board of Joincare
approved at the 9th Meeting of the 8th Session of the Board on 29 Pharmaceutical Group Industry Co., Ltd.” (Lin
March 2022, Jiaozuo Joincare intended to purchase no more than 2022-026) and the “Announcement of Joincare
RMB270 million (inclusive) of steam and power from Jinguan Pharmaceutical Group Industry Co., Ltd. on the
Electric Power in 2022 so as to satisfy the demands of Jiaozuo Connected Transactions in the Ordinary Course of
Joincare for steam and power in the process of production and Business of the Majority-owned Subsidiaries of
operation. The independent directors of the Company gave prior Jiaozuo Joincare and Jinguan Electric Power” (Lin
approval opinions on the Resolution and gave opinions on the 2022-032) disclosed by the Company on 31 March
approval of the independent directors at the Board meeting. 2022 for details.
The “Resolution on the Adjustment 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 20th Meeting of the 8th Session of
the Board on 12 December 2022: given that the actual power See the “Announcement on Resolutions
consumption of Jiaozuo Joincare was higher than forecast at the Considered and Approved at the 20th Meeting of
beginning of the year, the annual transaction amount estimated at the 8th Session of the Board of Joincare
the beginning of the year between Jiaozuo Joincare and Jinguan Pharmaceutical Group Industry Co., Ltd.” (Lin
Electric Power is not sufficient to cover Jiaozuo Joincare's actual 2022-141) and the “Announcement of Joincare
production requirements in 2022, to satisfy the demands of Jiaozuo Pharmaceutical Group Industry Co., Ltd. on the
Joincare for steam and power in the process of production and Adjustment of Connected Transactions in the
operation, purchase from Jinguan Electric Power, was changed Ordinary Course of Business of the Majority-
from RMB270 million (inclusive) to RMB280 million (inclusive) owned Subsidiaries of Jiaozuo Joincare and
in 2022. The independent directors of the Company gave prior Jinguan Electric Power” (Lin 2022-143) disclosed
approval opinions on the Resolution and gave opinions on the by the Company on 13 December 2022 for details.
approval at the Board meeting.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 RMB268.6670 million.
2. Matters already disclosed in interim announcements about which new information is available
□Applicable √N/A
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Joincare Pharmaceutical Group Annual Report 2022
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. Fulfillment of performance covenants (if any) during the Reporting Period
□Applicable √N/A
(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
Offer funds to related parties Receive funds from related parties
Related party Relationship Amount Amount
Opening Closing Opening Closing
incurred in the incurred in the
balance balance balance balance
current period current period
Guangdong Blue Treasure
Pharmaceutical Co., Ltd.* Others 25,653,956.55 -16,371,152.26 9,282,804.29 379,960.00 -379,960.00 0.00
(广东蓝宝制药有限公司)
130
Joincare Pharmaceutical Group Annual Report 2022
Zhuhai Sanmed Gene
Diagnostics Ltd.* (珠海市圣 Others 229,288.83 -127,761.85 101,526.98
美基因检测科技有限公司)
Subsidiaries of Sichuan
Healthy Deer Hospital
Management Co., Ltd. (四川 Others 337,395.02 160,433.28 497,828.30 8,936.17 12,011.72 20,947.89
健康阿鹿医院管理有限公司
之子公司)
Zhuhai Sanmed Biotech Inc.*
(珠海圣美生物诊断技术有 Others 211,200.00 0.00 211,200.00
限公司)
Shenzhen Youbao
Technology Co., Ltd. (深圳 Others 154,500.00 33,600.00 188,100.00
市有宝科技有限公司)
Zhongshan Renhe Health
Product Co., Ltd. (中山市仁 Others 469,895.78 0.00 469,895.78
和保健品有限公司)
Shenzhen Jiekang Health
Care Co., Ltd.* (深圳市捷康 Others 18,577,246.63 -18,577,246.63 0.00
保健有限公司)
Shenzhen Health Deer
Technology Co., Ltd.（深圳
Others 4,680.00 0.00 4,680.00
市健康阿鹿信息科技有限公
司）
Jiaozuo Jinguan Jiahua
Electric Power Co., Ltd. * Associated
8,240,517.56 67,484,396.01 75,724,913.57
(焦作金冠嘉华电力有限公 company
司)
Total 53,878,680.37 32,602,268.55 86,480,948.92 388,896.17 -367,948.28 20,947.89
During the Reporting Period, the Company had normal operating fund transactions with connected
Cause for claims and debts with related parties
parties.
Impact of claims and debts with related parties The said credits and debts with connected persons are operating fund transactions; there was no non-
on the Company operating use of funds of the Company by shareholders and connected part.
(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 fulfilments
(I) Trusteeship, contracting and lease
1. Trusteeship
□Applicable √N/A
2. Contracting
□Applicable √N/A
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Joincare Pharmaceutical Group Annual Report 2022
3. Lease
□Applicable √N/A
(II) Guarantees
√Applicable □N/A
Unit: 10,000 Yuan Currency: RMB
Date of
Relation-ship
guarantee Whether Guaranteed
between the
Guaranteed Guaranteed (signing Effective Expiration Guarantee Fulfilled Overdue Overdue there's a for a
Guarantor guarantor and Relationship
party amount date of date date type or not or not amount counter- related
the listed
agreement guarantee party or not
company
)
Headquarter Jinguan Joint
Joincare of the Electric 3,840.00 2022/2/14 2022/2/14 2022/11/30 liability Yes No 0 Yes Yes Assoiate
Company Power guarantee
Headquarter Jinguan Joint
Joincare of the Electric 4,960.00 2022/2/24 2022/2/24 2022/12/26 liability Yes No 0 Yes Yes Assoiate
Company Power guarantee
Headquarter Jinguan Joint
Joincare of the Electric 3,000.00 2022/6/8 2022/6/8 2023/6/8 liability No No 0 Yes Yes Assoiate
Company Power guarantee
Headquarter Jinguan Joint
Joincare of the Electric 3,000.00 2022/6/22 2022/6/22 2023/6/23 liability No No 0 Yes Yes Assoiate
Company Power guarantee
Headquarter Jinguan Joint
Joincare of the Electric 4,000.00 2022/7/11 2022/7/11 2023/7/11 liability No No 0 Yes Yes Assoiate
Company Power guarantee
Headquarter Jinguan Joint
Joincare of the Electric 3,000.00 2022/7/11 2022/7/11 2023/7/11 liability No No 0 Yes Yes Assoiate
Company Power guarantee
Headquarter Jinguan Joint
Joincare of the Electric 2,000.00 2022/7/15 2022/7/15 2023/7/15 liability No No 0 Yes Yes Assoiate
Company Power guarantee
Headquarter Jinguan Joint
Joincare of the Electric 3,000.00 2022/8/8 2022/8/8 2023/8/8 liability No No 0 Yes Yes Assoiate
Company Power guarantee
Headquarter Jinguan Joint
Joincare of the Electric 3,200.00 2022/9/16 2022/9/16 2023/9/16 liability No No 0 Yes Yes Assoiate
Company Power guarantee
Headquarter Jinguan Joint
Joincare of the Electric 3,800.00 2022/10/9 2022/10/9 2023/10/9 liability No No 0 Yes Yes Assoiate
Company Power guarantee
Headquarter Jinguan Joint
Joincare of the Electric 3,200.00 2022/10/12 2022/10/12 2023/10/12 liability No No 0 Yes Yes Assoiate
Company Power guarantee
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Joincare Pharmaceutical Group Annual Report 2022
Headquarter Jinguan Joint
Joincare of the Electric 3,000.00 2022/11/24 2022/11/24 2023/11/24 liability No No 0 Yes Yes Assoiate
Company Power guarantee
Headquarter Jinguan Joint
Joincare of the Electric 4,640.00 2022/12/19 2022/12/19 2023/12/19 liability No No 0 Yes Yes Assoiate
Company Power guarantee
Wholly- Jinguan Joint
Jiaozuo
owned Electric 2,000.00 2022/3/28 2022/3/28 2022/12/13 liability Yes No 0 Yes Yes Assoiate
Joincare
subsidiary Power guarantee
Wholly- Jinguan Joint
Jiaozuo
owned Electric 2,000.00 2022/12/14 2022/12/14 2023/12/14 liability No No 0 Yes Yes Assoiate
Joincare
subsidiary Power guarantee
Total guaranteed amount occurred during the Reporting Period
48,640.00
(excluding guarantees to subsidiaries)
Total guaranteed amount as of the End of the Reporting Period (A)
37,840.00
(excluding guarantees to subsidiaries)
Guarantee provided by the Company and its subsidiaries to subsidiaries
Total amount of guarantees to subsidiaries during the Reporting Period 346,492.65
Total amount of guarantees to subsidiaries as of the End of the Reporting
250,888.69
Period (B)
Total guaranteed amount of the Company (including guarantees to subsidiaries)
Total guaranteed amount (A+B) 288,728.69
Percentage of total guaranteed amount in the Company's net assets (%) 13.11
In which:
Amount of guarantees provided to shareholders, de facto controllers and
0.00
their related parties (C)
Amount of debt guarantee directly or indirectly provided to a guaranteed
194,335.71
party with an asset-liability ratio exceeding 70% (D)
Portion of total guaranteed amount exceeding 50% of net assets (E) 0.00
Total guaranteed amount of the above three items (C+D+E) 194,335.71
Statement on the contingent joint liability that might be assumed in
N/A
connection with outstanding guarantee
The above connected guarantees are detailed in Note X 5(4) to the Financial Statements of
Statement on guarantees
this report.
(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
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Joincare Pharmaceutical Group Annual Report 2022
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
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. The planned proceeds from the share allotment amounted to RMB2,000 million; the
total actual proceeds amounted to RMB1,715.9938 million; after deducting distribution expenses of
RMB46.2536 million, the net proceeds amounted to RMB1,669.7402 million. 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).
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Joincare Pharmaceutical Group Annual Report 2022
(1) Temporary replenishment of working capital by use of proceed
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 RMB700 million of idle proceeds from 1 January 2022 to 31 December 2022 so as to improve the use
efficiency of proceeds and reduce financial expenses of the Company. For details, please refer to the
Announcement on the Temporary Replenishment of Working Capital with Certain Idle Proceeds of Joincare
Pharmaceutical Group Industry Co., Ltd. (Lin 2021-159). On 21 December 2022, the Company returned
the temporary replenishment of working capital of RMB700 million to the special account, and the period
of use did not exceed 12 months.
Pursuant to the Resolution on the Temporary Replenishment of Working Capital with Idle Proceeds
considered and approved at the 21st Meeting of the 8th Session of the Board and the 18th Meeting of the 8th
Session of the Supervisory Committee of the Company on 29 December 2022, it was agreed that the
Company temporarily replenished the working capital with no more than RMB500 million of idle proceeds
from 1 January 2023 to 31 December 2023 so as to improve the use efficiency of proceeds and reduce
financial expenses of the Company. For details, please refer to the “Announcement on the Temporary
Replenishment of Working Capital with Certain Idle Proceeds of Joincare Pharmaceutical Group Industry
Co., Ltd.” (Lin 2022-146).
(2) Change of projects invested with proceeds
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. For details of the aforesaid change of projects invested with proceeds, see
the “Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Change of Certain Projects
Invested with Proceeds” (Lin 2022-007).
Meanwhile, based on the aforesaid change of projects invested with proceeds, the Company, Taitai
Pharmaceutical, a wholly-owned subsidiary of the Company, Haibin Pharma and Joincare Haibin,
together with Minsheng Securities Co., Ltd., signed the “Three-party Supervision Agreement for Deposit
into the Special Account for the Proceeds” 《募集资金专户存储三方监管协议》 with China Merchants
Bank Co., Ltd. (Shenzhen Branch), Industrial Bank Co., Ltd. (Shenzhen Bagualing Sub-branch),
Industrial and Commercial Bank of China Limited (Shenzhen Hongwei Sub-branch) and China
Everbright Bank Co., Ltd. (University Town of Shenzhen Sub-branch), respectively. For details, please
refer to the “Announcement on the Signing of the Three-party Supervision Agreement for Deposit into
the Special Account for the Proceeds of Joincare Pharmaceutical Group Industry Co., Ltd.” (《健康元
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Joincare Pharmaceutical Group Annual Report 2022
药业集团股份有限公司关于签订募集资金专户存储三方监管协议的公告》) (Lin 2022-015).
For details about deposit and actual use of proceeds in 2022, please refer to the Special Report of Joincare
Pharmaceutical Group Industry Co., Ltd. on Deposit and Actual Use of Proceeds in 2022 disclosed by the
Company on 11 April 2023.
2. Matters about share repurchase
(1) First share repurchases in 2022
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, and the repurchased shares will be used to reduce the registered capital; the total amount of
repurchase funds should be no less than RMB300 million (inclusive) and no more than RMB600 million
(inclusive); the repurchase price should be no more than RMB15/share (inclusive); the repurchase term
should be no more than 12 months from the date when the repurchase scheme was approved by the General
Meeting of the Company. For details, please refer to 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 7 July 2022, the Company completed the repurchase and has repurchased a total of 50,959,668 shares by
way of centralized bidding transactions, representing 2.66% of total share capital (1,912,540,667 shares) of
the Company. The highest purchase price was RMB13.02/share, the lowest, RMB10.02/share, and the
average, RMB11.77/share. The total amount paid was RMB599,981,715.83 (including handling fee), and
50,959,668 shares repurchased were cancelled on 11 July 2022. For details, please refer to the
“Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Implementation Results of Share
Repurchase and Share Changes” (Lin 2022-076).
(2) Second share repurchases in 2022
Pursuant to the Resolution on Share Repurchase Scheme by Way of Centralized Bidding Transactions and
other resolutions considered and approved at the 17th Meeting of the 8th Session of the Board and the 2022
Fourth Extraordinary General Meeting of the Company on 14 October 2022 and 18 November 2021, it was
approved that the Company repurchased company shares by way of centralized bidding transactions with its
own funds, and the repurchased shares will be used to reduce the registered capital; the total amount of
repurchase funds should be no less than RMB300 million (inclusive) and no more than RMB600 million
(inclusive); the repurchase price should be no more than RMB16/share (inclusive); the repurchase term
should be from 18 November 2022 to 17 November 2023. For details, please refer to the “Announcement of
Joincare Pharmaceutical Group Industry Co., Ltd. on the Share Repurchase Scheme by Way of Centralized
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Joincare Pharmaceutical Group Annual Report 2022
Bidding Transactions” (Lin 2022- 121) and the “Repurchase Report of Joincare Pharmaceutical Group
Industry Co., Ltd. on Share Repurchase by Way of Centralized Bidding Transactions” (Lin 2022-137).
On 14 December 2022, the Company initially repurchased 348,400 shares by way of centralized bidding
transactions, representing 0.02% of the total share capital of the Company. For details, please refer to the
“Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Initial Share Repurchase by Way
of Centralized Bidding Transactions” (Lin 2022-144).
As of 31 March 2023, the Company has repurchased a total number of 40,662,579 shares by way of
centralized bidding transactions, representing 2.11% of the total share capital (1,929,189,374) of the
Company. The total amount paid was RMB494.4911 million (including handling fee). For details, please
refer to the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the Progress of Share
Repurchase by Way of Centralized Bidding Transactions (Lin 2023-027).
3. GDRs of the Company was issued and listed on the SIX Swiss Exchange
Pursuant to the “Resolution on the Planning of Overseas Issuance of GDRs and Listing on the SIX Swiss
Exchange of the Company” (《关于公司筹划境外发行全球存托凭证并在瑞士证券交易所上市的议
案》) considered and approved at the 12th Meeting of the 8th Session of the Board of the Company on 15
June 2022. In order to broaden the Company’s international financing channels and enhance its
international brand and image, the Company intends to plan to issue Global Depositary Receipts (“GDRs”)
overseas and list on the SIX Swiss Exchange. For details, please refer to the “Reminder Announcement
of Joincare Pharmaceutical Group Industry Co., Ltd. on the Planning of Overseas Issuance of GDRs and
Listing on the SIX Swiss Exchange” (《健康元药业集团股份有限公司关于筹划境外发行全球存托凭
证并在瑞士证券交易所上市的提示性公告》) (Lin 2022-061).
Pursuant to the “Resolution on the Issuance of GDRs and Listing on the SIX Swiss Exchange and the
Conversion of the Company into a Company Limited by Shares that Issues and Lists Its Shares Abroad”
(《关于公司发行 GDR 并在瑞士证券交易所上市及转为境外募集股份有限公司的议案》), the
“Resolution on the Company’s Plan of the Issuance of GDRs and Listing on the SIX Swiss Exchange”
(《关于公司发行 GDR 并在瑞士证券交易所上市方案的议案》) and other relevant resolutions
considered and approved at the 13th Meeting of the 8th Session of the Board of the Company on 22 June
2022, the Company intends to issue GDRs representing newly issued RMB ordinary A Shares as underlying
securities. The additional underlying A Shares represented by the GDRs to be issued shall be no more than
191,254,066 Shares (including securities issued upon the exercise of any overallotment option, if any) and
shall not account for more than 10% of the Shares capital (1,912,540,667 Shares) of the Company prior to
the issuance. The number of the additional underlying A Shares represented by the GDRs to be issued shall
be adjusted according to relevant regulations if the share capital of the Company increases or decreases as
a result of bonus issue, capitalization issue or rights issue, share repurchase etc. during the period from the
date of approval of the issuance by the Board to the issuance date. The Company has simultaneously
formulated the “Confidentiality and Records Management System for Overseas Issuance of Securities and
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Joincare Pharmaceutical Group Annual Report 2022
Listing of Joincare Pharmaceutical Group Industry Co., Ltd.” (《健康元药业集团股份有限公司境外发
行证券与上市相关保密和档案管理工作制度》) and amended the “Articles of Association”, the “Rules
of Procedure for the Shareholders’ General Meetings” and other relevant company rules and regulations in
relation to GDRs. For details, please refer to the “Announcement on Resolutions Considered and Approved
at the 13th Meeting of the 8th Session of the Board of Joincare Pharmaceutical Group Industry Co., Ltd.”
( 《 健 康 元药 业 集团 股 份有 限 公 司八 届 董事 会 十三 次 会 议决 议 公告 》 ) (Lin 2022-063), the
“Confidentiality and Records Management System for Overseas Issuance of Securities and Listing of
Joincare Pharmaceutical Group Industry Co., Ltd.” (《健康元药业集团股份有限公司境外发行证券与
上市相关保密和档案管理工作制度》) and the “Announcement on the Formulation of the Articles of
Association and its Annexes Applicable to the Company upon the Listing of GDRs of Joincare
Pharmaceutical Group Industry Co., Ltd.” (《健康元药业集团股份有限公司关于制定公司 GDR 上市
后适用的《公司章程》及其附件的公告》(Lin 2022-064).
On 8 July 2022, the Company held the 2022 Second Extraordinary General Meeting to consider and approve
the aforesaid resolutions for the issuance of GDRs and listing in Switzerland and to request the general
meeting of the Company to authorize the Board and its authorized persons to deal with matters relating to
the issuance of GDRs and listing in full, as detailed in the “Announcement on Resolutions of Joincare
Pharmaceutical Group Industry Co., Ltd. at the 2022 Second Extraordinary General Meeting” (Lin 2022-
077).
On 19 August 2022, the Company obtained the conditional approval for the issuance and listing of GDRs
on the SIX Swiss Exchange from SIX Exchange Regulation AG, and the SIX Swiss Exchange Regulation
AG agreed to the listing of the Company’s GDRs on the SIX Swiss Exchange subject to the satisfaction of
customary conditions.
On 2 September 2022, the Company received the “Approval for the Initial Public Offering and Listing
of Global Depositary Receipts on the SIX Swiss Exchange by Joincare Pharmaceutical Group Industry
Co., Ltd.” (《关于核准健康元药业集团股份有限公司首次公开发行全球存托凭证并在瑞士证券交
易所上市的批复》) (Zheng Jian Xu Ke [2022] No. 1960) granted by the CSRC.
On 26 September 2022, the Company’s GDRs were listed on the SIX Swiss Exchange in an offering of
6,382,500 GDRs representing 63,825,000 underlying A shares, representing 3.31% of the Company’s total
share capital at that time, at an issue price of USD$14.42 per GDR, with the final gross proceeds of
approximately USD$92.04 million.
The lock-up restriction period for the redemption of the GDRs issued by the Company is from 26
September 2022 (Swiss time) to 23 January 2023 (Swiss time). As 23 January 2023 falls in the Chinese
New Year holiday, the transfer and settlement of A shares in relation to the cross-border conversion of
GDRs cannot proceed during the period from 23 January to 27 January 2023. In accordance with the
relevant regulations on stock connect, the GDRs with the expiry of the lock-up restriction period for the
redemption can be converted into A shares of the Company from 30 January 2023 (Beijing time). As of
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Joincare Pharmaceutical Group Annual Report 2022
the closing of the Shanghai Stock Exchange on 30 January 2023, the number of A shares of the Company
represented by the outstanding GDRs was less than 50% of the number of underlying A shares represented
by the GDRs actually issued by the Company as approved by the CSRC.
The proceeds from the Company’s issuance of GDRs, after deducting the issuance fees, are intended for
the business development and strategic investment of the Company, aimed at improving the Company's
capabilities of global research and development, industrialization and commercialization, thus further
deepening the international business presence and replenishing the working capital of the Company. As
of the end of this Reporting Period, the proceeds from the Company’s issuance of GDRs have not been
used.
4. Overall relocation and expansion project of Sichuan Guangda
On 6 March 2019, the board of directors of Livzon Group, the controlling subsidiary of the Company,
considered and approved that Livzon Group 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, the Company 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 the Company. 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 plants to the Company.
As at 31 December 2022, the total investment of the Project under specific contracts amounted to
RMB542.2556 million, and subsidies received from governments at all levels totaled RMB138.9817 million.
After the QC decoration and renovation, equipment installation and warehousing system establishment, the
equipment was put into running for commissioning and the storage system was delivered for acceptance;
after the decoration, renovation and equipment installation of the extraction workshop and after the pre-
treatment workshop were completed, the equipment was put into running for commissioning and the
remaining work of local decoration was completed. The construction of the granulation workshop, the
integrated preparation workshop and the packaging workshop commenced, the remaining work of the
decoration and renovation of the alcohol extraction workshop was completed, and the pipeline equipment
had not installed for commissioning. The overall project went smoothly.
5. Progress of the initial public offering and listing of shares of Tianjin Tongrentang, a non-
controlling invested company
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 audit institution engaged by Tianjin Tongrentang for the initial public offering
of its shares and listing on the ChiNext Board.
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Joincare Pharmaceutical Group Annual Report 2022
Considering that ShineWing Certified Public Accountants (Special General Partnership), the auditor
appointed by Tianjin Tongrentang, has issued a review report, the Shenzhen Stock Exchange has resumed
the review of the listing of Tianjin Tongrentang on 30 March 2022.
In addition to the above disclosure, details of the non-controlling invesmtnet in Tianjin Tongrentang are set
out in the Company’s annual report for 2021.
6. Progress of Livzon Group's plan to spin off 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 off its subsidiary Zhuhai Livzon Diagnostics Inc. 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 details, 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 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-off listing. For details, see the “Announcement of Joincare Pharmaceutical Group Industry Co.,
Ltd. on the Progress of Livzon Group's Planned Spin-off of Its Subsidiary Livzon Diagnostics for A-share
Listing” (Lin 2020-131).
Livzon Diagnostics would go spin-off listing on the ChiNext Board of Shenzhen Stock Exchange pursuant
to the 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-off of Its Subsidiary Livzon Diagnostics for A-
share Listing” (Lin 2020-134).
The spin-off listing of Livzon Diagnostics was approved at the 2020 4th extraordinary general meeting of
Livzon Group 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 nine 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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Joincare Pharmaceutical Group Annual Report 2022
Chapter 7 Changes in Equity and Shareholders
I. Changes in Share Capital
(I) Table of changes in shares
1. Table of changes in shares
Unit: 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
0 0 0 0 0 0 0 0 0
selling restrictions
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 without
1,907,727,908 100 72,421,134 0 0 -50,959,668 21,461,466 1,929,189,374 100
selling restrictions
1. Ordinary shares
denominated in 1,907,727,908 100 72,421,134 0 0 -50,959,668 21,461,466 1,929,189,374 100
Renminbi
2. Domestically
listed foreign
shares
3. Overseas listed
foreign shares
4. Others
III. Total number
1,907,727,908 100 72,421,134 0 0 -50,959,668 21,461,466 1,929,189,374 100
of shares
2.Explanations on changes in shares
√Applicable □N/A
(1) Share repurchase for cancellation
From 24 December 2021 to 23 December 2022, the Company expected to repurchase shares at a price of
no more than RMB15 per share (inclusive) and the total amount of repurchase funds shall be not less than
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Joincare Pharmaceutical Group Annual Report 2022
RMB300 million (inclusive) and not more than RMB600 million (inclusive). The repurchased shares will
be used to reduce the Company's registered capital. The Company has repurchased a total of 50,959,668
shares as of 7 July 2022, and cancelled such shares with the Shanghai Branch of China Securities
Depository and Clearing Corporation Limited on 11 July 2022.
(2) Issuance of GDRs
The Company held the 2022 second extraordinary general meeting on 8 July 2022, at which it reviewed
and approved the Resolution on the Company’s Issuance of GDRs, Listing on the SIX Swiss Exchange
and Conversion into a Joint Stock Limited Company Offering Shares Overseas (《关于公司发行 GDR
并在瑞士证券交易所上市及转为境外募集股份有限公司的议案》) and other relevant resolutions.
6,382,500 GDRs were issued by the Company, representing 63,825,000 underlying A shares, with one
GDR represents 10 A Shares of the Company, and were listed on the SIX Swiss Exchange on 26 September
2022. The total share capital of the Company increased by 63,825,000 shares as a result of the issuance
and listing of the GDRs mentioned above.
(3) Exercise of the 2018 share options
The third exercise period for the options first granted under the Company's 2018 Share Options Incentive
Plan commenced on 21 December 2021, namely from 21 December 2021 to 20 December 2022. The
second exercise period for the reserve options commenced on 23 September 2021, namely from 23
September 2021 to 22 September 2022. During the Reporting Period, the cumulative number of share
options exercised and completing share transfer registration was 8,596,134.
3.The influence of changes in shares on financial 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
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Joincare Pharmaceutical Group Annual Report 2022
(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
93,510
Reporting Period
Total number of shareholders of ordinary shares as of the end of the
87,173
month immediately prior to the publish date of this annual report
(II) Shares held by top 10 shareholders and top 10 holders of tradable shares (or shares without
selling restrictions) as of the End of the Reporting Period
Unit: shares
Shareholdings of the Top 10 shareholders
Number of Pledge, mark or lock-up
Change Number of shares
Name of shareholder (Full during the shares held at Percentage held Nature of
name) Reporting the end of the (%) subject to Share status Number shareholder
Period Period selling
restrictions
Shenzhen Baiyeyuan Domestic
Investment Co., Ltd.* (深圳市 -17,380,900 878,272,753 45.53 0 Pledge 95,679,725 non-state-
百业源投资有限公司) owned entity
Hong Kong Securities Clearing
21,294,741 113,256,167 5.87 0 Unknown Unknown
Company Limited
Foreign
Citibank, National Association 63,825,000 63,825,000 3.31 0 Unknown
entity
Foreign
Might Seasons Limited -14,371,900 57,487,434 2.98 0 Unknown
entity
Huaxia Life Insurance Co., Ltd.
163,100 9,275,718 0.48 0 Unknown Unknown
- Equity fund
Agricultural Bank of China
Limited - CSI 500 Exchange
2,663,000 8,060,294 0.42 0 Unknown Unknown
Traded Index Securities
Investment Fund
Domestic
He Zhong -50,000 7,800,024 0.40 0 Unknown natural
person
Joincare Pharmaceutical Group
Industry Co., Ltd. — the
Second Phase Ownership
6,275,372 6,275,372 0.33 0 Unknown Others
Scheme under Medium to
Long-term Business Partner
Share Ownership Scheme
Abu Dhabi Investment Foreign
4,808,605 5,920,342 0.31 0 Unknown
Authority entity
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Joincare Pharmaceutical Group Annual Report 2022
Bosera Funds Management
Co., Ltd. - 419 portfolio of -3,696,377 5,036,569 0.26 0 Unknown Unknown
social security funds
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.* (深圳
878,272,753 Ordinary shares denominated in Renminbi 878,272,753
市百业源投资有限公司)
Hong Kong Securities Clearing Company Limited 113,256,167 Ordinary shares denominated in Renminbi 113,256,167
Citibank, National Association 63,825,000 Ordinary shares denominated in Renminbi 63,825,000
Might Seasons Limited 57,487,434 Ordinary shares denominated in Renminbi 57,487,434
Huaxia Life Insurance Co., Ltd. - Equity fund 9,275,718 Ordinary shares denominated in Renminbi 9,275,718
Agricultural Bank of China Limited - CSI 500
Exchange Traded Index Securities Investment 8,060,294 Ordinary shares denominated in Renminbi 8,060,294
Fund
He Zhong 7,800,024 Ordinary shares denominated in Renminbi 7,800,024
Joincare Pharmaceutical Group Industry Co., Ltd.
— the Second Phase Ownership Scheme under
6,275,372 Ordinary shares denominated in Renminbi 6,275,372
Medium to Long-term Business Partner Share
Ownership Scheme
Abu Dhabi Investment Authority 5,920,342 Ordinary shares denominated in Renminbi 5,920,342
Bosera Funds Management Co., Ltd. - 419
5,036,569 Ordinary shares denominated in Renminbi 5,036,569
portfolio of social security funds
As at the End of the Reporting Period, the special repurchase account of the Company (special
Notes on the special repurchase account among
securities repurchase account of Joincare Pharmaceutical Group Industry Co., Ltd.) owned 28,417,048
the Top 10 shareholders
shares in total, accounting for 1.47%.
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 Investment
Description of connection or acting-in-concert
Co., Ltd., a controlling shareholder of the Company, and other shareholders; whether there is connection
relationship of the above shareholders
or acting-in-concert relationship among other shareholders is unknown.
Notes: 1. As of the End of the Reporting Period, the balance of shares lent by Shenzhen Baiyeyuan Investment Co., Ltd. *
(深圳市百业源投资有限公司), a controlling shareholder of the Company, by participating in the refinancing business was
17,380,900, and the ownership transfer of such shares does not take place.
2. Citibank, National Association is the depositary for GDRs of the Company, and the underlying domestic A shares
represented by the GDRs are registered in its name according to law. The GDRs issued by the Company may not be
converted into A shares from 26 September 2022 (Swiss time) to 23 January 2023 (Swiss time).
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
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Joincare Pharmaceutical Group Annual Report 2022
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 21 January 1999
Investment in industry, domestic commerce, and material supply and
Principal business
marketing industry
Equity held in other domestic and Except for the daily trading of securities assets in the secondary market,
overseas listed companies during the Baiyeyuan did not hold or participate in the equity of other domestic and
Reporting 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.Block diagram describing controlling shareholders' ownership of and control over the Company
√Applicable □N/A
Note: As of the End of the Reporting Period, the balance of shares lent by Shenzhen Baiyeyuan Investment Co., Ltd. * (深
圳市百业源投资有限公司), a controlling shareholder of the Company, by participating in the refinancing business was
17,380,900, and the ownership transfer of such shares does not take place.
(II) Information on the de facto controller
1.Legal person
□Applicable √N/A
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Joincare Pharmaceutical Group Annual Report 2022
2.Natural person
√Applicable □N/A
Name Zhu Baoguo
Nationality China
Hold the right of residence in other countries
No
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.Block diagram describing de facto controllers' ownership of and control over the Company
√Applicable □N/A
Note: As of the End of the Reporting Period, the balance of shares lent by Shenzhen Baiyeyuan Investment Co., Ltd. * (深
圳市百业源投资有限公司), a controlling shareholder of the Company, by participating in the refinancing business was
17,380,900, and the ownership transfer of such shares does not take place.
6.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. 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
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Joincare Pharmaceutical Group Annual Report 2022
VI. Other Corporate Shareholders Holding More Than 10% Shares
□Applicable √N/A
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
Name of share repurchase plan Plan on share repurchase by centralized bidding
Disclosure date of share repurchase plan 7 December 2021
Number of shares to be repurchased and its
1.05~2.10
percentage in total share capital (%)
Proposed repurchase amount 30,000~60,000
12 months after the date when the share repurchase plan is
Proposed repurchase period
approved at the general meeting
Purpose of repurchase To reduce registered capital of the Company
Repurchased number (shares) 50,959,668
Percentage of repurchased shares in the target shares
Not applicable
under share incentive scheme (%) (if any)
The progress of the Company's reduction of
Not applicable
repurchased shares by centralized bidding
Remarks On 11 July 2022, 50,959,668 repurchased shares were cancelled.
Name of share repurchase plan Plan on share repurchase by centralized bidding
Disclosure date of share repurchase plan 17 October 2022
Number of shares to be repurchased and its
0.97~1.95
percentage in total share capital (%)
Proposed repurchase amount 30,000~60,000
12 months after the date when the share repurchase plan is
Proposed repurchase period
approved at the general meeting
Purpose of repurchase To reduce registered capital of the Company
Repurchased number (shares) 10,957,235
Percentage of repurchased shares in the target shares
Not applicable
under share incentive scheme (%) (if any)
The progress of the Company's reduction of
Not applicable
repurchased shares by centralized bidding
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Joincare Pharmaceutical Group Annual Report 2022
Chapter 8 Information on Preferred Shares
□Applicable √N/A
148
Joincare Pharmaceutical Group Annual Report 2022
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
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Joincare Pharmaceutical Group Annual Report 2022
Chapter 10 Financial Statements
I Auditor’s report
√Applicable □N/A
GTCNSZ（2023）NO.442A008607
To all shareholders of Joincare Pharmaceutical Group Industry Co., Ltd.:
I. Auditor's Opinion
We have audited the financial statements of Joincare Pharmaceutical Group Industry Co.,
Ltd. (健康元药业集团股份有限公司) (the “Group”), which comprise the Consolidated
and Company balance sheets as at 31 December 2022, and the Consolidated and Company
income statements, the Consolidated and Company cash flow statements, the Consolidated
and Company statements of changes in shareholders' equity for the year ended 2022, and
notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects,
the Consolidated and Company financial positions as at 31 December 2022, and their
financial performance and their cash flows for the year then ended in accordance with the
requirements of Accounting Standards for Business Enterprises.
II. Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing. 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
Company and have fulfilled our other ethical responsibilities in accordance with the China
Code of Ethics for Certified Public Accountants. We believe that the audit evidence we
have obtained is sufficient 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 for the current year. 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
For relevant disclosure, please refer to Note III. 28 and Note V. 43 to the financial
statements.
1. Description of the matter
The Group generated revenue from primary operation in year ended 31 December 2022
were RMB 17,036.97 million. We identified revenue recognition as a key audit matter due
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Joincare Pharmaceutical Group Annual Report 2022
to the materiality of revenue to the financial statements as a whole and the risk of material
misstatement as to the occurrence and accuracy for in the appropriate accounting period.
2. Addressed in the context of our audit
(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 verified
the key terms of the contracts, such as shipment and acceptance, payment and settlement,
exchange and return policies.
(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 significant abnormalities that affected revenue
recognition.
(5) For revenue transactions recorded in the year ended 31 December 2022, we selected
samples to check contracts, purchase orders, shipping documents, transportation documents,
bookkeeping vouchers, payback documents, periodic reconciliation letters and other
supporting documents; and selected samples to perform external confirmation procedures
on major customer sales and accounts receivable.
(6) We performed analytical procedures for the reasonableness on changes in revenue by
considering the product type and factors such as market trends, industry trends, business
expansion plan as well as market data collected by third-party consultants.
(7) We selected samples of 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
For relevant disclosure, please refer to Note III. 10 and Note V. 4 to the financial statements
1. Description of the matter
As of 31 December 2022, the Group's closing balance of accounts receivable as reported in
the consolidated balance sheet was RMB 3,176.23 million and the allowance for bad debts
was RMB 72.48 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 time or were not
recovered resulting in a bad debt loss. Therefore, we identified allowance for bad debts of
accounts receivable as a key audit matter.
2. Addressed in the context of our audit
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Joincare Pharmaceutical Group Annual Report 2022
(1) We obtained an understanding of and assessed the management's design and operating
effectiveness of key internal controls over the management of accounts receivable
(2) We obtained an understanding of the methodology and process of recognizing the
expected credit loss ratio and the key parameters and assumptions applied in the expected
credit loss model, including the method of assessing the customers' credit risk
characteristics for the grouping accounts receivable and the historical migration rate data
used 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 calculation method was implemented in accordance with the policy for bad
debts; and recalculated the amount of allowance for bad debts to ensure its accuracy.
(4) We analysed the ratio of the closing balance of allowance for bad debts to accounts
receivable and compared the allowance for bad debts in the previous period to the actual
amount, and analyzed whether the allowance for bad debts on accounts receivable was
adequate.
(5) We evaluated the reasonableness of the allowance for bad debts by analyzing the aging
of accounts receivable and the reputation of customers, and performing audit procedures
such as audit confirmation and subsequent collection of receivables.
IV. Other Information
Management of the Company is responsible for the other information. The other
information comprises the information included in the Company’s 2022 annual report, 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. Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management of the Company is responsible for the preparation of the financial statements
to achieve fair presentation in accordance with Accounting Standards for Business
Enterprises, and for the design, implementation and maintenance of such internal control
as management determine is necessary to enable the preparation of the financial statements
that are free from material misstatement, whether due to fraud or error.
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Joincare Pharmaceutical Group Annual Report 2022
In preparing the financial statements, management is responsible for assessing the
Company'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 management either
intend to liquidate the Company or to cease operations, or have no realistic alternative but
to do so.
Those charged with governance are responsible for overseeing the Company's financial
reporting process.
VI. Auditor'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 auditing standards will
always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are 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
these financial statements.
As part of an audit in accordance with 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 financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient 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 audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by 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 Company's
ability to continue as a going concern. If we conclude that a material uncertainty exists, the
auditing standards require us to draw attention to users of the financial statements 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 report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, 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 Company to express an opinion on the financial
153
Joincare Pharmaceutical Group Annual Report 2022
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Grant Thornton（Special General Certified Public Accountants Wang Yuan
Partnership） (The partner in charge of the auditing service project)
Certified Public Accountants Wang Qilai
Beijing, China 7 April 2023
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Joincare Pharmaceutical Group Annual Report 2022
II Financial statements
Consolidated Balance Sheet
December 31, 2022
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
Item Note December 31, 2022 December 31, 2021
Current assets:
Cash and bank balances V.1 14,808,488,110.96 11,729,230,390.98
Financial assets held for trading V.2 109,015,664.98 184,638,344.31
Notes receivable V.3 1,959,985,016.85 1,977,286,022.02
Accounts receivable V.4 3,103,758,850.15 2,853,655,551.54
Receivables financing
Prepayments V.5 364,265,142.57 369,232,546.29
Other receivables V.6 52,535,740.14 88,053,825.12
In which: Interests receivable 365,873.64
Dividends receivable
Inventories V.7 2,561,869,999.57 2,078,944,387.68
Contract assets
Assets held-for-sale
Non-current assets due within one year V.8 54,048,611.11 317,381.23
Other current assets V.9 163,539,900.32 83,986,214.37
Total current assets 23,177,507,036.65 19,365,344,663.54
Non-current assets:
Debt investment
Other debt investment
Long-term receivables V.10 266,904.13
Long-term equity investment V.11 1,419,882,594.59 1,419,349,454.84
Other equity instrument investment V.12 1,193,958,879.05 1,408,882,377.42
Other non-current financial assets
Investment properties V.13 6,191,475.43 6,191,475.43
Fixed assets V.14 5,265,200,110.91 4,839,005,169.81
Construction in progress V.15 811,300,068.96 742,998,743.75
Productive biological assets
Oil and gas assets
Right-of-use assets V.16 41,843,133.97 46,774,759.69
Intangible assets V.17 802,115,125.75 456,782,094.80
Development cost V.18 428,284,884.17 786,993,435.71
Goodwill V.19 614,468,698.73 614,468,698.73
Long-term prepaid expenses V.20 277,867,716.95 200,715,740.93
Deferred tax assets V.21 533,861,743.26 552,542,866.71
Other non-current assets V.22 1,156,772,182.99 663,584,003.80
Total non-current assets 12,551,746,614.76 11,738,555,725.75
Total assets 35,729,253,651.41 31,103,900,389.29
Current liabilities:
Short-term loans V.23 2,126,050,615.06 2,518,484,835.09
Financial liabilities held for trading V.24 755,634.43 143,302.24
Notes payable V.25 1,635,906,989.22 1,582,386,767.93
Accounts payable V.26 943,905,580.91 871,553,210.51
Receipts in advance
Contract liabilities V.27 292,977,730.74 234,140,702.29
Employee benefits payable V.28 573,010,571.46 475,430,823.20
Taxes payable V.29 337,702,273.73 270,618,183.41
Other payables V.30 3,680,334,360.88 3,292,407,989.79
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Joincare Pharmaceutical Group Annual Report 2022
In which: Interests payable
Dividends payable 12,252,074.84 6,951,984.46
Liabilities held-for-sale
Non-current liabilities due within one year V.31 63,077,260.98 91,576,066.33
Other current liabilities V.32 101,276,714.35 15,626,224.29
Total current liabilities 9,754,997,731.76 9,352,368,105.08
Non-current liabilities:
Long-term loans V.33 3,230,844,042.88 826,780,252.78
Bonds payable
Lease liabilities V.34 23,482,486.07 25,071,794.32
Long-term payables
Long-term payroll payable
Estimated liabilities
Deferred income V.35 384,537,267.55 433,543,352.40
Deferred tax liabilities V.21 231,164,425.48 208,525,905.39
Other non-current liabilities V.36 84,000,000.00 78,000,000.00
Total non-current liabilities 3,954,028,221.98 1,571,921,304.89
Total liabilities 13,709,025,953.74 10,924,289,409.97
Owner's equity (or shareholder's equity):
Share capital V.37 1,929,189,374.00 1,907,727,908.00
Other equity instruments
In which: Preferred shares
Perpetual debts
Capital reserve V.38 2,343,693,215.99 2,265,357,311.92
Less: Treasury shares V.39 347,176,561.29 222,644,454.50
Other comprehensive income V.40 4,704,473.53 5,387,545.97
Special reserve
Surplus reserve V.41 734,766,581.50 640,821,179.08
Undistributed profits V.42 8,456,643,326.82 7,223,644,166.22
Total shareholders' equity attributable to the parent 13,121,820,410.55 11,820,293,656.69
Minority shareholder's equity 8,898,407,287.12 8,359,317,322.63
Total owner's equity (or shareholder's equity) 22,020,227,697.67 20,179,610,979.32
Total liabilities and owner's equity (or
35,729,253,651.41 31,103,900,389.29
shareholder's equity)
Person-in-charge of the Company: Person-in-charge of the Company’s Person-in-charge of the accounting
Zhu Baoguo accounting work: Qiu Qingfeng department: Qiu Qingfeng
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Joincare Pharmaceutical Group Annual Report 2022
Balance Sheet of the Parent Company
December 31, 2022
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
Item Note December 31, 2022 December 31, 2021
Current assets:
Cash and bank balances 3,148,933,185.29 1,370,906,734.13
Financial assets held for trading
Notes receivable 249,617,024.89 374,296,302.21
Accounts receivable 291,630,857.74 535,543,070.24
Receivable financing
Prepayments 542,966,676.99 201,605,530.55
Other receivables 785,307,024.78 1,136,237,811.25
In which: Interest receivable
Dividends receivable 544,999,500.00 814,041,000.00
Inventories 63,656,837.97
Contract assets
Assets held-for-sale
Non-current assets due within one year 54,048,611.11
Other current assets 9,379,100.23
Total current assets 5,136,160,218.77 3,627,968,548.61
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investment 3,524,184,512.63 3,530,939,152.29
Other equity instrument investment 141,562,064.27 372,609,966.35
Other non-current financial assets
Investment properties 6,191,475.43 6,191,475.43
Fixed assets 46,410,672.12 45,139,232.27
Construction in progress 15,330,867.65 7,890,737.14
Productive biological assets
Oil and gas assets
Right-of-use assets 7,570,096.21 12,470,703.77
Intangible assets 20,154,211.97 15,316,963.24
Development cost 92,797,615.87 21,304,063.68
Goodwill
Long-term prepaid expenses 552,795.74 900,737.50
Deferred tax assets 88,792,276.83 134,711,371.96
Other non-current assets 815,024,705.98 54,866,150.94
Total non-current assets 4,758,571,294.70 4,202,340,554.57
Total assets 9,894,731,513.47 7,830,309,103.18
Current liabilities:
Short-term loans 100,091,666.67 450,436,811.38
Financial liabilities held for trading
Notes payable 924,199,480.81 358,526,972.01
Accounts payable 257,832,649.19 461,763,867.32
Receipts in advance
Contract liabilities 53,648,681.36 31,637,971.91
Employee benefits payable 139,895,738.09 95,624,280.17
Taxes payable 10,549,309.54 17,190,533.60
Other payables 1,303,649,356.48 810,207,330.35
157
Joincare Pharmaceutical Group Annual Report 2022
In which: Interests payable
Dividends payable
Liabilities held-for-sale
Non-current liabilities due within one
47,152,440.47 44,954,632.42
year
Other current liabilities 3,007,795.91 2,140,860.88
Total current liabilities 2,840,027,118.52 2,272,483,260.04
Non-current liabilities:
Long-term loans 1,154,000,000.00 160,000,000.00
Bonds payable
Lease liabilities 3,729,020.22 7,683,561.03
Long-term payables
Long-term payroll payable
Estimated liabilities
Deferred income 20,534,000.00 40,796,000.00
Deferred tax liabilities 997,675.94 29,371,338.01
Other non-current liabilities
Total non-current liabilities 1,179,260,696.16 237,850,899.04
Total liabilities 4,019,287,814.68 2,510,334,159.08
Owner's equity (or shareholder's equity):
Paid-in capital 1,929,189,374.00 1,907,727,908.00
Other equity instruments
In which: Preferred shares
Perpetual debts
Capital reserve 1,678,414,507.96 1,605,482,128.64
Less: Treasury shares 347,176,561.29 222,644,454.50
Other comprehensive income 726,576.72 77,015,953.08
Special reserve
Surplus reserve 646,164,633.12 552,219,230.70
Undistributed profits 1,968,125,168.28 1,400,174,178.18
Total owner's equity (or shareholder's
5,875,443,698.79 5,319,974,944.10
equity)
Total liabilities and owner's equity
9,894,731,513.47 7,830,309,103.18
(or shareholder's equity)
Person-in-charge of the Company: Person-in-charge of the Company’s Person-in-charge of the accounting
Zhu Baoguo accounting work: Qiu Qingfeng department: Qiu Qingfeng
158
Joincare Pharmaceutical Group Annual Report 2022
Consolidated Income Statement
From January to December, 2022
Unit: Yuan Currency: RMB
Item Note 2022 2021
I. Total revenues V.43 17,142,753,068.82 15,903,688,266.59
In which: Operating revenues 17,142,753,068.82 15,903,688,266.59
II. Total operating costs 13,784,938,368.95 13,169,412,648.95
In which: Operating costs V.43 6,252,265,308.40 5,716,293,887.58
Operating tax and surcharges V.44 199,746,357.56 182,816,650.02
Selling expenses V.45 4,950,802,456.16 5,026,812,145.41
Administrative expenses V.46 992,483,591.51 939,253,444.33
R&D expenses V.47 1,742,088,079.94 1,397,131,273.33
Financial expenses V.48 -352,447,424.62 -92,894,751.72
In which: Interest expenses 139,016,104.44 90,278,042.69
Interest income 395,476,309.66 191,964,051.82
Add: Other income V.49 289,868,006.44 247,346,934.96
Income from investments (loss is
V.50 55,973,114.29 71,881,264.65
indicated by “-”)
In which: Income from investments
70,577,657.04 10,281,021.59
in associates and joint ventures
Gains from derecognition of
financial assets at amortized cost
Gains from net exposure hedges
(loss is indicated by “-”)
Gains from changes in fair values
V.51 -76,262,989.83 -23,506,126.09
(loss is indicated by “-”)
Losses of credit impairment (loss is
V.52 -4,123,743.37 -8,024,112.20
indicated by “-”)
Impairment loss of assets (loss is
V.53 -142,627,936.44 -62,950,978.72
indicated by “-”)
Gains from disposal of assets (loss
V.54 -705,357.30 24,044,186.55
is indicated by “-”)
III. Operating profit (loss is indicated by
3,479,935,793.66 2,983,066,786.79
“-”)
Add: Non-operating income V.55 8,229,847.57 8,641,830.86
Less: Non-operating expenses V.56 32,060,686.06 39,379,273.69
IV. Total profit (loss is indicated by “-”) 3,456,104,955.17 2,952,329,343.96
Less: Income tax expenses V.57 562,008,858.69 339,480,305.29
V. Net profit (loss is indicated by “-”) 2,894,096,096.48 2,612,849,038.67
(I) Classified by business continuity
1. Net profit from ongoing operation (loss
2,894,096,096.48 2,612,849,038.67
is indicated by “-”)
2. Net profit from discontinuing operation
(loss is indicated by “-”)
(II) Classified by ownership
1.Net profit attributable to shareholders of
the parent company (loss is indicated by 1,502,595,840.48 1,328,499,432.05
“-”)
2.Profit and loss of minority shareholders
1,391,500,256.00 1,284,349,606.62
(loss is indicated by “-”)
VI. Other comprehensive income, net of tax 74,606,735.39 -177,686,201.25
159
Joincare Pharmaceutical Group Annual Report 2022
(I) Other comprehensive income
attributable to owners of the parent -683,072.44 -110,913,013.31
company, net of tax
1. Other comprehensive income that cannot
-85,577,350.31 -78,059,481.21
be reclassified into profit or loss
(1) Changes from remeasurement of
defined benefit plans
(2) Other comprehensive income that
cannot be reclassified into profit or loss 2,116,352.61 6,658,847.65
under the equity method
(3) Changes in fair value of investments in
-87,693,702.91 -84,718,328.85
other equity instruments
(4) Changes in fair value of the enterprise's
own credit risks
2. Other comprehensive income that will be
84,894,277.87 -32,853,532.10
reclassified into profit or loss
(1) Other comprehensive income that can
be reclassified into profit or loss under the 236,421.59 -13,599.80
equity method
(2) Changes in fair value of other debt
investments
(3) Amount of financial assets reclassified
into other comprehensive income
(4) Provision for credit impairment of other
debt investments
(5) Reserve for cash flow hedges
(6) Exchange differences on translation of
financial statements denominated in foreign 84,657,856.28 -32,839,932.30
currencies
(7) Others
(II) Other comprehensive income
attributable to minority shareholders, net of 75,289,807.82 -66,773,187.94
tax
VII. Total comprehensive income 2,968,702,831.87 2,435,162,837.42
(I) Total comprehensive income attributable
1,501,912,768.04 1,217,586,418.74
to owners of the parent company
(II) Total comprehensive income
1,466,790,063.82 1,217,576,418.68
attributable to minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share (RMB/share) 0.7933 0.6864
(II) Diluted earnings per share (RMB/share) 0.7921 0.6858
Person-in-charge of the Company: Person-in-charge of the Company’s Person-in-charge of the accounting
Zhu Baoguo accounting work: Qiu Qingfeng department: Qiu Qingfeng
160
Joincare Pharmaceutical Group Annual Report 2022
Income Statement of the Parent Company
From January to December, 2022
Unit: Yuan Currency: RMB
Item Note 2022 2021
I. Operating revenues 2,373,887,564.78 2,021,173,825.62
Less: Operating costs 1,612,899,011.80 1,356,825,036.11
Operating tax and surcharges 14,203,470.53 12,392,762.31
Selling expenses 645,474,076.69 509,217,536.91
Administrative expenses 195,475,435.39 152,344,869.22
R&D expenses 66,705,404.14 99,273,556.14
Financial expenses -38,112,993.67 -18,244,358.04
In which: Interest expenses 25,257,639.51 4,032,165.84
Interest income 70,313,743.55 22,710,793.68
Add: Other income 23,934,298.39 1,551,111.38
Income from investments (loss is indicated by “-”) 991,369,051.76 1,293,747,303.58
In which: Income from investments in associates and joint
1,326,243.55 -2,005,822.14
ventures
Gains from derecognition of financial 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 “-”) 1,856,898.77 -203,993.20
Impairment loss of assets (loss is indicated by “-”) -154,249.81 -41,007.68
Gains from disposal of assets (loss is indicated by “-”)
II. Operating profit (loss is indicated by “-”) 894,249,159.01 1,204,417,837.05
Add: Non-operating income 232,093.51 75,665.33
Less: Non-operating expenses 1,660,096.56 13,762,938.68
III. Total profit (loss is indicated by “-”) 892,821,155.96 1,190,730,563.70
Less: Income tax expenses 43,089,198.01 -58,066,575.23
IV. Net profit (loss is indicated by “-”) 849,731,957.95 1,248,797,138.93
(1) Net profit from ongoing operation (loss is indicated by “-”) 849,731,957.95 1,248,797,138.93
(II) Net profit from discontinuing operation (loss is indicated
by “-”)
V. Other comprehensive income, net of tax -76,289,376.36 -33,565,798.21
(I) Other comprehensive income not to be reclassified into
-76,289,376.36 -33,565,798.21
profit and loss
1. Changes from remeasurement of defined benefit plans
2. Other comprehensive income that cannot be reclassified into
profit or loss under the equity method
3. Changes in fair value of investments in other equity
-76,289,376.36 -33,565,798.21
instruments
4. Changes in fair value of the enterprise's own credit risks
(II). Other comprehensive income that will be reclassified into
profit and loss
1. Other comprehensive income that can be reclassified into
profit or loss under the equity method
2. Changes in fair value of other debt investments
(3) Amount of financial assets reclassified into other
comprehensive income
(4) Provision for credit impairment of other debt investments
(5) Reserve for cash flow hedges
(6) Exchange differences on translation of financial statements
denominated in foreign currencies
161
Joincare Pharmaceutical Group Annual Report 2022
(7) Others
VI. Total comprehensive income 773,442,581.59 1,215,231,340.72
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 Person-in-charge of the accounting
Zhu Baoguo accounting work: Qiu Qingfeng department: Qiu Qingfeng
162
Joincare Pharmaceutical Group Annual Report 2022
Consolidated Cash Flow Statement
From January to December, 2022
Unit: Yuan Currency: RMB
Item Note 2022 2021
I. Cash flow from operating activities:
Cash received from sales of goods and rendering of services 18,615,546,255.83 16,302,075,867.93
Tax refunds received 247,896,245.67 142,987,224.70
Other cash received related to operating activities V.58 683,645,734.39 545,037,436.64
Subtotal of cash inflow from operating activities 19,547,088,235.89 16,990,100,529.27
Cash paid for goods and services 5,728,697,037.48 4,536,979,552.07
Cash paid to and on behalf of employees 2,260,612,483.52 1,950,726,146.40
Payments of all types of taxes 1,668,389,310.43 1,653,421,224.28
Other cash paid related to operating activities V.58 5,911,684,265.17 6,285,884,561.28
Subtotal of cash outflow in operating activities 15,569,383,096.60 14,427,011,484.03
Net cash flow from operating activities 3,977,705,139.29 2,563,089,045.24
II. Cash flow from investing activities:
Cash received from disposal of investment 270,997,751.54 155,208,882.44
Cash received from returns on investments 144,358,825.55 114,833,282.84
Net cash received from disposal of fixed assets, intangible
3,096,825.59 9,404,128.73
assets and other long-term assets
Net cash received from disposal of subsidiaries and other
3,311,220.53
business units
Other cash received related to investing activities V.58 13,563,902.59 113,574,087.21
Subtotal of cash inflow from investing activities 432,017,305.27 396,331,601.75
Cash paid for purchase and construction of fixed assets,
1,147,832,255.23 1,521,419,292.51
intangible assets and other long-term assets
Cash paid for investment 416,183,775.89 786,000,000.00
Net cash paid for acquisition of subsidiaries and other
business units
Other cash paid related to investing activities V.58 1,120,168,462.77 53,070,040.41
Subtotal of cash outflow in investing activities 2,684,184,493.89 2,360,489,332.92
Net cash flow from investing activities -2,252,167,188.62 -1,964,157,731.17
III. Cash flow from financing activities:
Cash received from capital contribution 746,673,937.95 609,358,382.32
In which: Cash received from investment by minority
45,595,924.92 526,782,825.73
interests of subsidiaries
Cash received from borrowings 5,339,517,086.47 3,534,880,943.19
Other cash received related to financing activities V.58 381,066,270.61 37,852,177.42
Subtotal of cash inflow from financing activities 6,467,257,295.03 4,182,091,502.93
Cash repayments of amounts borrowed 3,718,797,777.63 2,593,581,286.53
Cash payments for interest expenses and distribution of
1,350,994,668.54 1,271,374,383.55
dividends or profits
In which: Dividend paid to minority interests of subsidiaries 961,951,199.52 888,900,577.12
Other cash payments related to financing activities V.58 831,342,189.06 1,292,040,186.29
Subtotal of cash outflow in financing activities 5,901,134,635.23 5,156,995,856.37
Net cash flow from financing activities 566,122,659.80 -974,904,353.44
IV. Effect of foreign exchange rate changes on cash 189,286,934.75 -49,290,130.94
V. Net increase in cash and cash equivalents 2,480,947,545.22 -425,263,170.31
Add: Opening balance of cash and cash equivalents 11,697,518,141.18 12,122,781,311.49
VI. Closing balance of cash and cash equivalents 14,178,465,686.40 11,697,518,141.18
Person-in-charge of the Company: Person-in-charge of the Company’s Person-in-charge of the accounting
Zhu Baoguo accounting work: Qiu Qingfeng department: Qiu Qingfeng
163
Joincare Pharmaceutical Group Annual Report 2022
Cash Flow Statement of Parent Company
From January to December, 2022
Unit: Yuan Currency: RMB
Item Note 2022 2021
I. Cash flow from operating activities:
Cash received from sales of goods and
3,146,093,806.02 2,029,373,201.42
rendering of services
Tax refunds 82,831.63
Other cash received related to operating
2,960,613,006.52 606,516,829.33
activities
Subtotal of cash inflow from operating
6,106,789,644.17 2,635,890,030.75
activities
Cash paid for goods and services 1,901,562,593.41 983,814,721.63
Cash paid to and on behalf of employees 246,881,656.93 181,261,857.67
Payments of all types of taxes 103,904,304.93 107,046,894.42
Other cash paid related to operating
3,109,052,257.96 1,062,779,580.04
activities
Subtotal of cash outflow in operating
5,361,400,813.23 2,334,903,053.76
activities
Net cash flow from operating activities 745,388,830.94 300,986,976.99
II. Cash flow from investing activities:
Cash received from disposal of
270,997,751.54 68,268,656.05
investment
Cash received from returns on
1,276,079,344.80 632,000,814.98
investments
Net cash received from disposal of fixed
assets, intangible assets and other long- 21,000.00 81,400.00
term assets
Net cash received from disposal of
subsidiaries and other business units
Other cash received related to investing
158,470.77 101,013,650.67
activities
Subtotal of cash inflow from investing
1,547,256,567.11 801,364,521.70
activities
Cash paid for purchase and construction
of fixed assets, intangible assets and other 11,869,023.45 8,127,874.33
long-term assets
Cash paid for investment 10,000,000.00 319,037,191.00
Net cash paid for acquisition of
subsidiaries and other business units
Other cash paid related to investing
1,084,392,104.38 50,000,000.00
activities
Subtotal of cash outflow in investing
1,106,261,127.83 377,165,065.33
activities
Net cash flow from investing activities 440,995,439.28 424,199,456.37
III. Cash flow from financing activities:
Cash received from capital contribution 701,078,013.03 82,575,556.59
Cash received from borrowings 1,500,000,000.00 650,000,000.00
Other cash received related to financing
36,583,025.57
activities
Subtotal of cash inflow from financing
2,201,078,013.03 769,158,582.16
activities
Cash repayments of amounts borrowed 854,000,000.00 500,000,000.00
164
Joincare Pharmaceutical Group Annual Report 2022
Cash payments for interest expenses and
299,984,479.95 292,289,892.43
distribution of dividends or profits
Other cash payments related to financing
740,517,545.44 701,265,930.75
activities
Subtotal of cash outflow in financing
1,894,502,025.39 1,493,555,823.18
activities
Net cash flow from financing activities 306,575,987.64 -724,397,241.02
IV. Effect of foreign exchange rate
-5,804,971.77 296,539.18
changes on cash
V. Net increase in cash and cash
1,487,155,286.09 1,085,731.52
equivalents
Add: Opening balance of cash and cash
1,370,906,734.13 1,369,821,002.61
equivalents
VI. Closing balance of cash and cash
2,858,062,020.22 1,370,906,734.13
equivalents
Person-in-charge of the Company: Person-in-charge of the Company’s Person-in-charge of the accounting
Zhu Baoguo accounting work: Qiu Qingfeng department: Qiu Qingfeng
165
Joincare Pharmaceutical Group Annual Report 2022
Consolidated Statement of Changes in Owner's Equity
From January to December, 2022
Unit: Yuan Currency: RMB
2022
Owner's equity attributable to the parent company
Item Minority Total owner's
Other equity instruments Other General shareholder's equity equity
Less: Treasury Special
Paid-up capital Capital reserve comprehensive Surplus reserve risk Undistributed profits Subtotal
Preferred Perpetual shares reserve
Others income provision
share debts
I. Balance at the
end of previous 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
year
Add: Change of
accounting policies
Correction to errors
of the previous
period
Business
combination
involving
enterprises under
common control
Others
II. Balance in
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
beginning of year
III. Increase and
decrease of the
21,461,466.00 78,335,904.07 124,532,106.79 -683,072.44 93,945,402.42 1,232,999,160.60 1,301,526,753.86 539,089,964.49 1,840,616,718.35
current year (enter
“-” for decrease)
(I) Total
comprehensive -683,072.44 1,502,595,840.48 1,501,912,768.04 1,466,790,063.82 2,968,702,831.87
income
(II). Capital
contribution or
21,461,466.00 72,932,379.32 124,532,106.79 -30,138,261.47 -9,149,286.66 -39,287,548.13
reduction from
shareholders
1. Capital
contribution from 72,421,134.00 612,201,980.48 724,513,822.62 -39,890,708.14 22,487,013.47 -17,403,694.67
shareholders
2. Capitals invested
by other equity
instrument holders
3. Amount of
share-based
9,752,446.67 9,752,446.67 9,752,446.67
payment included
in owner's equity
4. Others -50,959,668.00 -549,022,047.83 -599,981,715.83 -31,636,300.13 -31,636,300.13
166
Joincare Pharmaceutical Group Annual Report 2022
(III). Profit
84,973,195.80 -362,530,827.45 -277,557,631.65 -967,251,289.90 -1,244,808,921.55
distribution
1. Accrual of
84,973,195.80 -84,973,195.80
surplus reserve
2. Accrual of
general risk
provision
3. Amount
distributed to
-277,557,631.65 -277,557,631.65 -967,251,289.90 -1,244,808,921.55
owners (or
shareholders)
4. Others
(IV) Internal
carrying forward of 8,972,206.62 92,934,147.57 101,906,354.19 15,012,358.44 116,918,712.63
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 defined
benefit plan
5. Retained
earnings carried
over from other 8,972,206.62 92,934,147.57 101,906,354.19 15,012,358.44 116,918,712.63
comprehensive
income
6. Others
(V) . Special
reserve
1. Accrual of the
current year
2. Amount utilized
in the current
period
(VI) . Others 5,403,524.75 5,403,524.75 33,688,118.79 39,091,643.54
IV. Balance at end
1,929,189,374.00 2,343,693,215.99 347,176,561.29 4,704,473.53 734,766,581.50 8,456,643,326.82 13,121,820,410.55 8,898,407,287.12 22,020,227,697.67
of year
167
Joincare Pharmaceutical Group Annual Report 2022
2021
Owner's equity attributable to the parent company
Item Other equity instruments Other General Minority
Less: Treasury Special Undistributed Total owner's equity
Paid-up capital Preferred Perpetual Capital reserve comprehensive Surplus reserve risk Subtotal shareholder's equity
Others shares reserve profits
share debts income provision
I. Balance at the
end of previous 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
year
Add: Change of
accounting policies
Correction to errors
of the previous
period
Business
combination
involving
enterprises under
common control
Others
II. Balance in
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
beginning of year
III. Increase and
decrease of the
-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
current year (enter
“-” for decrease)
(I). Total
comprehensive -110,913,013.31 1,328,499,432.05 1,217,586,418.74 1,217,576,418.68 2,435,162,837.42
income
(II). Capital
contribution or
-45,052,856.00 -570,478,635.27 -30,992,700.00 -584,538,791.27 -21,931,055.41 -606,469,846.68
reduction from
shareholders
1. Capital
contribution from 10,082,440.00 72,493,116.59 699,900,526.87 -617,324,970.28 437,967,405.33 -179,357,564.95
shareholders
2. Capitals invested
by other equity
instrument holders
3. Amount of share-
based payment
1,793,479.01 1,793,479.01 1,793,479.01
included in 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). Profit
124,879,713.89 -413,555,101.94 -288,675,388.05 -887,433,971.08 -1,176,109,359.13
distribution
1. Accrual of
124,879,713.89 -124,879,713.89
surplus reserve
168
Joincare Pharmaceutical Group Annual Report 2022
2. Accrual of
general risk
provision
3. Amount
distributed to
-288,675,388.05 -288,675,388.05 -887,433,971.08 -1,176,109,359.13
owners (or
shareholders)
4. Others
(IV) . Internal
carrying forward of 77,248,253.85 77,248,253.85 94,678,535.62 171,926,789.47
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 defined
benefit 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. Balance at end
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
of year
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
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Statement of Changes in Owner's Equity of the Parent Company
From January to December, 2022
Unit: Yuan Currency: RMB
2022
Other equity instruments Other
Item Less: Treasury Special Undistributed Total owner's
Paid-up capital Preferre Perpetual Capital reserve comprehensive Surplus reserve
Others shares reserve profits equity
d share debts income
I. Balance at the end of previous year 1,907,727,908.00 1,605,482,128.64 222,644,454.50 77,015,953.08 552,219,230.70 1,400,174,178.18 5,319,974,944.10
Add: Change of accounting policies
Correction to errors of the previous period
Others
II. Balance in beginning of year 1,907,727,908.00 1,605,482,128.64 222,644,454.50 77,015,953.080 552,219,230.70 1,400,174,178.18 5,319,974,944.10
III. Increase and decrease of the current year
21,461,466.00 72,932,379.32 124,532,106.79 -76,289,376.362 93,945,402.42 567,950,990.10 555,468,754.69
(enter “-” for decrease)
(I). Total comprehensive income -76,289,376.362 849,731,957.95 773,442,581.59
(II) Capital contribution or reduction from
21,461,466.00 72,932,379.32 124,532,106.79 -30,138,261.47
shareholders
1. Capital contribution from shareholders 72,421,134.00 612,201,980.48 724,513,822.62 -39,890,708.14
2. Capitals invested by other equity instrument
holders
3. Amount of share-based payment included in
9,752,446.67 9,752,446.67
owner's equity
4. Others -50,959,668.00 -549,022,047.83 -599,981,715.83
(III). Profit distribution 84,973,195.80 -362,530,827.45 -277,557,631.65
1. Accrual of surplus reserve 84,973,195.80 -84,973,195.80
2. Amount distributed to owners (or shareholders) -277,557,631.65 -277,557,631.65
3. Others
(IV) . Internal carrying forward of owner's
8,972,206.62 80,749,859.60 89,722,066.22
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 defined benefit plan
5. Retained earnings carried over from other
8,972,206.62 80,749,859.60 89,722,066.22
comprehensive income
6. Others
(V) . Special reserve
1. Accrual of the current year
2. Amount utilized in the current period
(VI) . Others
IV. Balance at end of year 1,929,189,374.00 1,678,414,507.96 347,176,561.29 726,576.72 646,164,633.12 1,968,125,168.28 5,875,443,698.79
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2021
Other equity instruments Other
Item Less: Treasury Special Undistributed
Paid-up capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Total owner's equity
Others shares reserve profits
share debts income
I. Balance at the end of previous 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
-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
(enter “-” for decrease)
(I). Total comprehensive income -33,565,798.21 1,248,797,138.93 1,215,231,340.72
(II). Capital contribution or reduction from
-45,052,856.00 -570,478,635.27 -30,992,700.00 -584,538,791.27
shareholders
1. Capital contribution from shareholders 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
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
(III). Profit 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
-288,675,388.05 -288,675,388.05
shareholders)
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 defined benefit 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. Balance at end of year 1,907,727,908.00 1,605,482,128.64 222,644,454.50 77,015,953.08 552,219,230.70 1,400,174,178.18 5,319,974,944.10
Person-in-charge of the Company: Zhu Baoguo Person-in-charge of the Company’s accounting work: Person-in-charge of the accounting department:
Qiu Qingfeng Qiu Qingfeng
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Joincare Pharmaceutical Group Industry Co., Ltd
Notes to the financial statements
（All amounts in RMB Yuan unless otherwise stated）
I. Company Profile
1. Company Overview
The Company is formerly known as Shenzhen Aimier Food Co., Ltd. (深圳爱迷尔食品有限公司), was a
Sino-foreign joint venture officially established on 18 December 1992 with the approval from Shenzhen
Administration for Industry and Commerce.
On 24 November 1999, the Company was reorganized as a joint stock limited company.
On 6 February 2001, the Company was approved by the China Securities Regulatory Commission to issue
domestically listed shares (A shares) to the public. On 8 June 2001, shares of the Company were listed and
traded on Shanghai Stock Exchange.
As of 31 December 2022, the total share capital of the Company was RMB1,929,189,374 for a total number
of shares of 1,929,189,374 shares. The controlling shareholder of the Company is Shenzhen Baiyeyuan
Investment Co., Ltd. (深圳市百业源投资有限公司), and the ultimate controlling party is Zhu Baoguo (朱
保国).
The Company is engaged in the pharmaceutical industry.
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.
2. Scope of consolidated financial statements
The information of subsidiaries included in the scope of consolidation for the year ended 31 December 2022
refer to Note VII “Equity in other entities” and the information of the changes in scope of consolidation
during the period refer to Note VI “Changes in scope of consolidation”.
II. Basis of Preparation for the Financial Statements
The financial 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 Offering Securities to the Public No. 15 – General Provisions on Financial Reporting (2014
Revision) issued by the China Securities Regulatory Commission.
The financial statements have been prepared on the going-concern basis.
The Company's accounting is measured on an accrual basis. Except for certain financial instruments, the
financial 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
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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 financial statements comply with the Accounting Standards for Business Enterprises, which gave a true
and complete view of the consolidated and the Company's financial positions as at 31 December 2022, and
the consolidated and the Company’s operating results and the consolidated and the Company’s cash flows
and other relevant information for the year ended 31 December 2022.
2. Accounting period
The fiscal year of the Company is from 1 January to 31 December in each calendar year.
3. Operating cycle
The Company’s operating cycle is 12 months.
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (“RMB”). Overseas
subsidiaries of 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 financial statements in RMB.
5. Accounting treatment for business combinations involving enterprises under common control and business
combinations involving enterprises not under common control
(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. 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 financial statements of the ultimate
controlling party on the date of combination. The difference 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. 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 profit or loss of the period respectively.
(2) Business combinations involving enterprises not under common control
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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 difference is recognised as goodwill and is subsequently measured at cost less accumulated
impairment provisions. Where the combination cost is less than the fair value of the acquiree's identifiable
net assets in the business combination, the difference shall be included in profit or loss for the period after
review.
Business combination involving enterprises not under common control and achieved in a number of
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 retained earnings 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
(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).
(2) Method for preparation of the consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and its
subsidiaries, 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 offset.
A subsidiary or a business acquired through a business combination involving entities under common control
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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 flow 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 flow statement from the acquisition date
to the end of the reporting date.
The shareholders' equity of the subsidiaries that are not attributable to the Company shall be presented 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
sufficient, any excess will be adjusted to retained earnings.
(4) Treatment of loss of control of subsidiaries
Where the Company loses its control over the original subsidiary due to the disposal of some 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 calculated on an ongoing 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.
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
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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 profit or loss for the current period when the control
is lost.
② In case the transactions are not “a basket of transactions”, such difference is accounted into the capital
reserve (or share premium) as equity, and shall not be carried forward to the profit or loss for the current
period when the control is lost.
7. Classification of joint arrangement and accounting treatment for joint operation
A joint arrangement is an arrangement jointly controlled by two or more parties. The Company's joint
arrangement is classified into the joint operation and the joint venture.
(1) Joint operation
A joint operation is a joint arrangement whereby the Company have rights and obligations to the 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. 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 insignificant
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risk of change in value.
9. Foreign currency transactions and translation of financial statements in foreign currency
(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 differences arising from the differences 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 profit 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
differences between the amounts in functional currency upon translation and in original functional currency
are recognised in profit or loss for the current period.
(2) Translation of financial statements in foreign currency
At the balance sheet date, when translating the foreign currency financial statements of overseas subsidiaries,
the assets and liabilities in the balance sheet are translated at the spot exchange rate at the balance sheet date;
all items except for “Retained earnings” of the shareholders' equity are translated at the spot exchange rate
on the transaction date.
The revenue and expenses in profit or loss are translated at the spot exchange rate on the transaction date.
All items in the statement of cash flows are translated at the spot exchange rate on the transaction date. The
effect 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 flow 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
Financial instruments are contracts creating financial assets of a party and financial liabilities or equity
instruments of other parties.
(1) Recognition and Derecognition of financial instruments
A financial asset or financial liability is recognised when the Company becomes one of the parties under a
financial instrument contract.
The financial assets will be derecognised if any of the following conditions is satisfied:
① The contractual right to receive the cash flow of the financial assets is terminated;
② The financial assets have been transferred and the transferred financial asset satisfies the following
conditions of derecognition.
If the current obligation of a financial liability (or a part thereof) has been discharged, the financial liability
(or that part of the financial liability) will be derecognised. When the Company (as the debtor) and the lender
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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 financial liability shall be recognised at
the same time.
The regular transactions of the financial assets are recognised and derecognised at the transaction date.
(2) Classification and measurement of financial assets
The Company classifies financial assets into three categories: financial assets at amortised cost; financial
assets at fair value through other comprehensive income; and financial assets at fair value through profit or
loss based on the business model for managing financial assets and their contractual cash flow characteristics
upon initial recognition.
Financial assets at amortised cost
The Company shall classify financial assets that meet the following conditions and are not designated as
financial assets at fair value through profit or loss for the current period as financial assets measured at
amortised cost:
The Company's business model for managing the financial assets is to collect contractual cash flow;
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
The Company's business model for managing the financial assets is both to collect contractual cash
flows and to sell the financial assets;
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 subsequently measured at fair value. Interest, impairment
losses or gains and exchange losses and gains calculated using the effective interest method are recognised
in profit or loss for the current period, while other gains or losses are recognised in other comprehensive
income. The cumulative profit or loss previously included in other comprehensive income will be transferred
to the profit or loss for the current period upon derecognition of the financial assets.
Financial assets at fair value through profit 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
significantly 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 financial
assets at fair value through profit or loss for the current period.
After initial recognition, these financial assets are subsequently measured at fair value, and the profits or
losses (including interest and dividend income) generated from which are recognised in profit or loss for the
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current period, unless the financial assets are part of the hedging relationship.
However, with respect to non-trading equity instrument investments, the Company may irrevocably designate
them as financial 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
definition 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.
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 flow of financial assets managed
by the Company is to collect contract cash flow, sell financial assets or both of them. Based on objective facts
and the specific business objectives of financial assets management decided by key managers, the Company
determines the business model of financial assets management.
The Company evaluates the characteristics of the contract cash flow of financial 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 specific period, and other basic borrowing risks,
costs and profits. 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 flow in financial asset contracts to determine whether
they meet the requirements of the above contract cash flow's characteristics.
Only when the Company changes its business model of managing financial assets, all the financial assets
affected shall be reclassified on the first day of the first reporting period after the business model changes,
otherwise, financial assets shall not be reclassified after initial confirmation.
Financial assets are measured at fair value on initial recognition. The relevant transaction cost of financial
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) Classification and measurement of financial liabilities
On initial recognition, the Company's financial liabilities are classified into financial liabilities at fair value
through profit or loss and financial liabilities at amortised cost. For financial liabilities not classified as
financial liabilities at fair value through profit or loss, the relevant transaction costs are included in the
initially recognised amount.
Financial liabilities at fair value through profit 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 profit 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 profit or loss for the current
period.
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Distinction between financial liabilities and equity instruments
The financial liability is the liability that meets one of following criteria:
① Contractual obligation to deliver cash or other financial instruments to another entity.
② Under potential adverse condition, contractual obligation to exchange financial assets or financial
liabilities with other parties.
③ A contract that will or may be settled in the entity's own equity instruments and is a non-derivative for
which the entity is or may be obliged to deliver a variable number of the entity's own equity instruments.
④ A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another
financial asset for a fixed number of the entity's own equity instruments.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities.
If the Company cannot unconditionally avoid fulfilling a contractual obligation by delivering cash or other
financial assets, the contractual obligation meets the definition of financial liability.
If a financial instrument must or are able to be settled by the Company's own equity instrument, the Company
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 financial liability; if the latter, the tool is the equity instrument of the
Company.
(4) Derivative financial instruments and embedded derivatives
The Company's derivative financial instruments include forward foreign exchange contracts, and are initially
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 profit or loss arising from changes of fair value and not
compliance with the accounting provision of hedge shall be recognised as profit 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 financial asset, and the hybrid instrument is not measured at fair value and
its changes are included in the profit 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 financial assets or financial liabilities measured at fair value and whose movements are included in the
profit and loss of the current period.
(5) Fair value of the financial instrument
The methods for determining the fair value of the financial assets or financial liabilities are set out in Note
III.11.
(6) Impairment of financial assets
The following items are subject to impairment accounting and recognition of loss allowances based on
expected credit losses:
A. Financial assets measured at amortised cost;
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B. Receivables and debt investments that are measured at fair value through other comprehensive income;
C. Contract assets as defined in the Accounting Standard for Business Enterprises No. 14 – Revenue;
D. Lease receivables;
E. Financial guarantee contracts, except for those carried at fair value through profit or loss, those which the
transfer of financial assets does not satisfy the derecognition condition or those formed as a result of
continued involvement of the transferred financial assets.
Measurement of expected credit loss (ECLs)
The ECL is a weighted average of credit losses on financial instruments weighted at the risk of default. Credit
loss is the difference between all receivable contractual cash flows according to the contract and all cash
flows expected to be received by the Company discounted to present value at the original effective 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.
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 financial
instrument. Future 12-month ECLs are the portion of ECL that results from default events on a financial
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 financial instruments classified in Stage 3, the Company would measure the
interest income by the amortised cost (that is, book balance less impairment allowance) and the effective
interest rate.
For notes receivable, trade receivables and contract assets, regardless whether it has significant financing
components 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 financial asset cannot be estimated at a reasonable cost, the
Company classifies 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. Notes receivable
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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 classified 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
The Company's long-term receivables include finance lease receivables and equity transfer receivables.
The Company classifies finance lease receivables and equity transfer receivables into certain portfolios based
on credit risk characteristics, and measures expected credit losses on portfolios basis to determine portfolios
by the following basis:
A. Finance lease receivables
Portfolio of finance lease receivables: other 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
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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 significant 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 financial instruments have increased
significantly 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 effort. The information considered by the Company includes:
Failure to make payments of principal or interest on debtors' contractually due dates;
An actual or expected significant deterioration in a financial instrument's external or internal credit
rating (if any);
An actual or expected significant deterioration in the operating results of debtors;
Existing or forecast changes in the technological, market, economic or legal environment that have
significant adverse effect on the debtors' abilities to repay to the Company.
Depending on the nature of the financial instruments, the Company assesses whether credit risks have
significantly increased on either an individual financial instrument basis or a collective financial 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 financial instrument has increased significantly if it is more
than 30 days past due.
Credit-impaired financial 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 financial 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:
Significant financial difficulty of the issuer or debtor;
A breach of contract by debtor, such as a default or delinquency in interest or principal payments;
For economic or contractual reasons relating to the borrower's financial difficulty, the Company having
granted to the borrower a concession that would not otherwise consider;
It is probable that the borrower will enter bankruptcy or other financial reorganization;
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The disappearance of an active market for that financial asset because of financial difficulties.
Presentation of allowance for ECL
The Company re-measures the ECLs on each balance sheet date to reflect changes in the financial
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 profit or loss. For financial assets measured at
amortised cost, the loss provision is offset 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 financial assets.
Write-off
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-off 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-off. However, financial assets that are written
off 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 off are recognised as a reversal of impairment
in profit or loss in the period in which the recovery occurs.
(7) Transfer of financial assets
Transfer of financial assets refers to the transfer or delivery of financial assets to the other party (the transferee)
other than the issuer of financial assets.
The Company derecognises a financial asset only if it transfers substantially all the risks and rewards of
ownership of the financial asset to the transferee; the Company should not derecognise a financial asset if it
retains substantially all the risks and rewards of ownership of the financial asset.
The Company neither transfers nor retains substantially all the risks and rewards of ownership, 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 financial asset
and recognise an associated liability is recognised.
(8) Offsetting financial assets and financial liabilities
When the Company has the legal right to offset recognised financial assets and financial liabilities, and the
legal right can be executed at present, and the Company has a plan to settle the financial assets and financial
liabilities at the same time or at net amount, the financial assets and financial liabilities can be presented on
the balance sheet after offsetting. Except for the above circumstances, financial assets and financial liabilities
cannot be offset and shall be presented separately on the balance sheet.
11. Fair value measurement
The fair value is defined as the price that would be received to sell an asset or paid to transfer a 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-financial 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 benefit, or the capacity to sell
assets to other market participants who can put the assets into optimal use and generate economic benefit.
The Company implements the valuation technique suitable for the current condition and supported by enough
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 financial 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 financial statements to make sure whether conversion occurs between fair value hierarchies.
12. Inventories
(1) Classification of inventories
The Company's inventories include raw materials, packaging materials, finished goods, work-in-progress,
low-value consumables, subcontracting materials, inventory goods, expendable biological assets and goods
in transit.
(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) Method in the determination and the basis of provision for diminution in net realisable value of inventories
On the balance sheet date, the inventories are calculated at the lower of cost and the net realisable value.
When 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 difficult 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 and packaging materials
Low-value consumables and packaging materials of the Company are amortised in full when used.
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13. Held for sale and discontinued operations
(1) Category and measurement of non-current assets or the disposal group held for sale
Non-current assets and disposal groups are classified as held for sale if the Company recovers its book value
mainly 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 classified as held for sale in the consolidated financial statements.
The difference between carrying amount of non-current assets or disposal groups classified as held for sale
and the 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 noncurrent asset which is applicable to the measurement requirements of
Held-For-Sale Standards after the non-current asset is classified into held-for-sale category. The reversed
amount is credited to current profit or loss. The carrying value of goodwill which has been offset cannot be
reversed.
No depreciation or amortisation is provided for the non-current assets in the held-for-sale and the assets in
the 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 ceased.
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 classified 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 classified by the Company into the held-for-sale type and can be identified
separately:
① The component represents an independent principal business or a separate principal business place.
② The component is a part of the related plan for the contemplated disposal of an independent principal
business or a separate principal business place.
③ The component is a subsidiary acquired exclusively for the purpose of resale.
(3) Presentation
The Company presents the non-current assets held for sale and the assets in the disposal group held for sale
under “assets classified as held for sale”, and the liabilities in the disposal group held for sale under “liabilities
classified as held for sale” in the balance sheet.
The Company presents the profit and loss for continuing operation and profit and loss for 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 profit and loss (such
as impairment loss and reversal amount) and disposal profit and loss of the discontinued operation will be
presented as the profit and loss of the discontinued operation.
The disposal group proposed for retirement rather than sale and meeting the condition about the relevant
component in the definition of the discontinued operation will be presented as discontinued operation from
the date of retirement.
For the discontinued operation reported in the current period, the information formerly presented as profit
and loss of continuing operation will be presented as the profit 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
profit and loss of discontinued operation will be presented as the profit and loss of continuing operation for
the comparable accounting period in the financial statement of the current period.
14. Long-term equity investment
The long-term equity investment includes the equity investment in the subsidiary, joint ventures and
associates. The investee over which the Company has significant influence is the associates of the Company.
(1) Determination of initial investment cost
The long-term equity investment resulting from corporate merger: For the long-term equity investment
resulting 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 financial statement of the final
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 profit or loss
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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 profit in the consideration that has been declared but not released, the
cash dividend or profit declared and distributed by the investee is recognised as the investment income and
recorded into the profit and loss for the current period.
For the long-term equity investment accounted for using equity method, the investment cost of the long-term
equity investment shall not be adjusted if the initial investment cost of the long-term 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 profit 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 profit 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 profit 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 to the accounting policy and accounting period of the Company
on the basis of fair value of all identifiable assets of the investee on acquisition.
If the Company is able to exert significant influence or implement joint control (which does not constitute
control) 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 profit 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 profit or loss for current period.
If an entity loses control over investees due to the elimination of parts of the equity investment, the surplus
owners' 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 profit 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 significant influence 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 profit and loss; then, according to the new shareholding ratio, the
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equity method is used to adjust the investment.
The Company recognises the unrealised profit or loss of intra-transaction between the joint ventures or
associates that belongs to itself according to the proportion of the shares and recognises the investment
income or loss after offset. However, the loss arising from the unrealised intra-transaction between the
Company and investees, which belongs to the impairment loss of assets transferred, cannot be offset.
(3) Basis of determining common control and significant influence on the investee
Joint control is the contractually agreed sharing of control over an arrangement under which the decisions
relating to 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 significant influence
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 influence 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 significant influence on the investee unless there is clear evidence that it can participate in the
production and operation decisions of the investee and have significant influence 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 classified as assets held for sale.
The surplus equity investments that are not classified as assets held for sale shall be accounted for using
equity method.
The equity investment to joint ventures or associates already classified as held for sale no longer meets the
conditions of assets held for sale shall be adjusted retroactively using equity method from the date of being
classified as assets held for sale.
(5) Impairment test and impairment provision
Refer to note III. 22 for investment to subsidiaries, associates and joint ventures and the 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 already been leased out, etc.
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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 fixed 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 profit and loss for the
current period.
16. Fixed asset
(1) Conditions for recognition of fixed assets
The Company's fixed assets represent the tangible assets held by the Company using in the production of
goods, rendering of services, rent and for operation and administrative purposes with useful life over one
year.
The fixed asset can be recognised only when the economic benefit related to the fixed asset is probable to
flow into the company and the cost of the fixed asset can be reliably measured.
The Company's fixed assets are initially measured at the actual cost at the time of acquisition.
(2) Method of depreciation
The Company adopts the straight-line method to provision for depreciation. Depreciation of fixed assets
begins when they reach the status of intended use, and ceases to be depreciated when they are derecognized
or classified as non-current assets held for sale. Without taking into account the provision for impairment,
the Company determines the annual depreciation rates of various types of fixed assets according to the type
of fixed assets, estimated useful life and estimated residual value as follows:
Category Useful years (year) Annual depreciation Residual rate %
Properties and Buildings 20 4.5%-4.75% 5%-10%
Machine and equipment 10 9%-9.5% 5%-10%
Transportation equipment 5 18%-19% 5%-10%
Electric equipment and others 5-10 18%-19% 5%-10%
Where, for the fixed assets for which depreciation provision is made, to determine the depreciation rate, the
accumulated amount of the fixed asset depreciation provision that has been made shall be deducted.
(3) Refer to note III. 22 for the impairment testing and the impairment provision of fixed assets.
(4) Recognition basis, valuation and depreciation method of financial leased fixed assets
When the Company's leased fixed assets meet one or more of the following criteria, it is recognized as finance
leased 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.
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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.
⑤The leased assets are of special nature, and only our company can use them if they don't undergo major
transformation.
For fixed assets leased by finance leases, the lower of the fair value of the leased assets on the lease start date
and 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 financing costs shall be amortized by the effective
interest method during each period of the lease term.
The fixed assets acquired by finance lease adopt the same policy as self-owned fixed assets to calculate the
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 on 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, depreciation is accrued in the shorter of the lease period and the useful life of the leased asset.
(5) The Company reviews the useful life and estimated net residual value of fixed asset and the depreciation method
applied annually at each of the period end.
The useful lives of fixed asset are adjusted if their expected useful lives are different from the original
estimates; the estimated net residual values are adjusted if they are different from the original estimates.
(6) Overhaul costs
The overhaul costs occurred in regular inspection of 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
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 fixed assets ready for their intended use.
Construction in progress is transferred to fixed assets when the assets are ready for their intended use.
For provision for impairment of construction in progress, refer to note III. 22.
In the balance sheet, the ending balance of construction materials is presented under “construction in
progress”.
18. Borrowing costs
(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 profit or loss when incurred. Capitalisation of such borrowing costs can
commence only when all of the following conditions are satisfied:
① Expenditures for the asset incurred, capital expenditure includes the expenditure in the form of cash
payment, transfer of non-cash assets or the interest bearing liabilities for the purpose of acquiring or
constructing assets eligible for capitalisation;
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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 profit 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 effective interest rate of general borrowings, to the weighted average of the
excess amount of cumulative expenditures on the asset over the amount of specific borrowings.
During the capitalisation period, exchange differences on foreign currency special borrowings shall be
capitalised; exchange differences on foreign currency special borrowings shall be recognised as current
profits or losses.
19. Biological assets
(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 benefits or service potential concerning this biological asset are likely to flow into the
enterprise;
③ The cost of this biological asset can be measured reliably.
(2) Classification of biological assets
The Company’s biological assets are consumable biological assets which include traditional Chinese medical
herbal 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 profits or loss.
The cost of a consumable biological asset shall, at the time of harvest or sale, be carried over at its book value
by the weighted average method.
(3) Impairment of biological assets
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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 affecting 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
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by
the Company. An intangible asset is recognised only when all of the following conditions are satisfied: It is
probable that the economic benefits associated with the intangible assets will flow to the enterprise; The cost
of the intangible asset can be reliably measured. Intangible assets are initially measured 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 reflects the expected
realisation of economic benefits associated with the asset, and if the expected realisation cannot be reliably
determined, it is amortised using the straight-line method. Intangible assets with indefinite useful life is not
amortised.
Amortisation of intangible assets with finite useful life is as follows:
Category Expected useful life Amortization method Note
Land use rights 30-50 years Straight-line
Patent and technical know-how 1-10 years Straight-line
Software 2-10 years Straight-line
Trademark rights 5 years Straight-line
Others 10 years Straight-line
The useful life for an intangible asset with a finite 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 benefits to the
Company at the end of a period, the carrying amount in which should be reversed to profit or loss for the
current period.
Please refer to note III. 22 for the provision of impairment of intangible assets.
21. Research and development expenditures
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 profit or loss for the current period when incurred.
Expenditures on the development phase will be capitalised only when all of the following conditions are
satisfied: it 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
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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 profit 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.
Capitalised expenditures on the development phase are shown as development expenditures on the balance
sheet and reclassified as intangible assets on the date the project meets the intended purpose.
Capitalisation conditions for specific research and development projects are as follows:
① For research and development projects that are not required to obtain clinical approvals, the 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 profit 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 reclassified as intangible assets after the obtaining of
production approvals.
② For research and development projects that require clinical approval, the period from the beginning of
research and development to the obtaining of clinical approval is treated as the research phase, and all
expenditures 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 reclassified 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.
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 profit or loss for the current period.
⑤ Where it is impossible to differentiate the expenditures on the research phase and the expenditures on
the development phase, all the research and development expenditures are recognised in profit or loss for the
current period.
Please refer to note III.22 for the impairment testing methodology and impairment provision for intangible
assets.
22. Impairment of assets
The impairment of subsidiaries, associates and joint ventures in the long-term equity investments, investment
properties subsequently measured at cost, fixed assets, construction in progress, right-of-use assets,
intangible assets, etc. (Excluding inventories, 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 indefinite 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
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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
identification of the asset group is based on whether the cash flow generated from the asset group is
independent of the major cash inflows from other assets or asset groups.
When the asset or asset group’s recoverable amount is lower than its carrying amount, the Company reduces
its carrying amount to its recoverable amount, the reduced amount is included in profit or loss, while the
provision for impairment of assets is recognised.
In terms of impairment test of the goodwill, the carrying amount of the goodwill, arising from 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 benefit 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
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 profit or loss.
24. Employee compensation
(1) The scope of employee compensation
Employee compensation are all forms of remuneration and compensation given by the Company in exchange
for 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 beneficiaries.
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
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 profit or loss for the current period or related asset
costs.
(3) Post-employment benefits
Post-employment benefit plans mainly includes defined contribution plans. Defined contribution plans are
post-employment benefit plans under which an enterprise pays fixed contributions into a separate fund and
will have no future obligations to pay the contributions. Defined contribution plans include the basic pension
insurance, unemployment insurance, etc.
The Company shall recognise, in the accounting period in which an employee provides service, the
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contribution payable to a defined contribution plan as a liability, with a corresponding charge to the profit or
loss for the current period or the cost of a relevant asset.
(4) Termination benefits
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 offer of termination benefits 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
benefits.
For the implementation of the internal retirement plan for employees, the economic compensation before the
official 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 benefits.
(5) Other long-term employee benefits
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
defined benefit plans, except that the “change in remeasurement of the net liability or net assets of the defined
benefit plans” in the cost of the related employee compensation shall be included in profit or loss for the
current period or related asset costs.
25. Provision for liabilities
An obligation related to a contingency is recognised as a provision when all of the following conditions are
satisfied:
(1) The obligation is a present obligation of the Company;
(2) It is probable that an outflow of economic benefits will be required to settle the obligation;
(3) The amount of the obligation can be measured reliably.
Provisions are initially measured at the best estimate of the payment to settle the associated obligations and
consider the relevant risk, uncertainty and time value of money. If the impact of time value of money is
significant, the best estimate is determined as its present value of future cash outflow. The Company reviews
the carrying amount of provisions at the balance sheet date and adjusts the carrying amount to reflect the best
estimate.
If the expenses for clearing of provisions is fully or partially compensated by a third party, and the
compensated 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
(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
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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 fulfilment 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 effect 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 fulfilment 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 profit and loss for the current period.
(2) Accounting treatment for amendment and termination of share-based payments
When the Company modifies the share-based payment plan, and if such modification increases the fair value
of the 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 modification 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 fulfil 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
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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 financial 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
(1) Classification of financial liabilities and equity instruments
The Company classifies the financial instrument or its components as financial assets, financial liabilities or
equity instruments at the initial recognition based on the contract terms of the issued financial instrument and
the economic substance it reflects, instead of only in legal form, and combine the definition of financial assets,
financial liabilities and equity instruments.
(2) Accounting treatment of preferred shares, perpetual bonds and other financial instruments
The financial instruments issued by the Company are initially recognised and measured in accordance with
the financial instrument standards; thereafter, interest or dividends are accrued or distributed on each balance
sheet date and processed in accordance with relevant specific accounting standards for enterprises. That is,
on the basis of the classification of the financial 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 profit 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 classified as equity instruments, are deducted from equity.
28. Revenue
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 effective date of the contract, the
Company allocates the transaction price to each performance obligation based on the percentage of respective
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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 fulfilled, the Company satisfies a performance obligation over time;
otherwise, it satisfies a performance obligation at a point in time:
① When the customer simultaneously receives and consumes the benefits provided by the 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.
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
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to custom declaration upon making declaration for goods and completing the export procedures.
29. Contract costs
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 fulfil a contract only if those costs
meet all of the following criteria:
① The costs relate directly to an existing contract or to a specifically identifiable anticipated contract,
including direct labour, direct materials, allocations of overheads (or similar costs), costs that 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 profit or loss
for the current period.
The Company recognises an impairment loss in profit or loss to the extent that the carrying amount of an
asset related 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.
30. Government grants
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.
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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 classified as government grant related to
income.
The government grant related to assets is recognised as deferred income and would be transferred to profit
or loss 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 profit 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.
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 profit or loss for the current
period.
31. Deferred tax assets and deferred tax liabilities
(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 profit 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.
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 differences.
The deductible temporary differences 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
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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 differences, to the extent that it is probable that taxable income will be available
against which the deductible temporary differences.
The Company recognises a deferred tax asset for the carry-forward of deductible losses and tax credits to
subsequent periods, to the extent that it is probable that future taxable profits 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 sufficient taxable profits will be available.
(3) Tax expenses
The tax expenses comprise current tax and deferred tax.
The rest current tax and deferred tax expenses or revenue should be included into current gains and losses
expect 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) Offset of tax
The current tax assets and liabilities of the Company should be listed by the written-off net amount which
intend to execute 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-off 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 different taxpaying bodies but during each period which there
is significant 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
(1) Identification of leases
At the inception of a contract, the Company, as a lessee or lessor, assesses if the customer in a contract has
the right to obtain substantially all the economic benefits from use of the identified assets and the right to
direct the use of the identified assets in the period of use. The Company would identify that a contract is a
lease, or contains a lease if a party of the contract transfers the right to control the use of one or more identified
assets for a period of time in exchange for consideration.
(2) The Company as the lessee
At the inception of a lease, the Company recognises all its leases as the right-of-use assets and lease liabilities,
except for the short-term leases and the leases of low-value assets which are treated with a simplified
approach.
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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 fixed payments, less any lease incentives (if there
is a lease incentive); variable lease payment that are based on an index or a rate; the 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 profit or loss for the current period. Variable lease payments not included in the
measurement of lease liabilities are charged to profit 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 profit 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 specific conditions of each lease.
The Company recognised the lease payments for the leases of low-value assets in the relevant asset cost or
the profit 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 finance lease, and leases other than finance 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 profit
or loss as incurred.
The termination of recognition and impairment of financial 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”.
Operating leases
For the rental of operating leases, the Company recognises it in the profit or loss for the current period on a
straight- line basis over each period of the lease term. The initial direct cost incurred in connection with an
operating lease shall be capitalised and amortised on the same basis for recognition of rental income during
the lease term, and shall be included in instalments 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 profit and loss for the current period when they actually occur.
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33. Right-of-use assets
(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 sufficient to be offset, the
excess amount shall be recognised to offset surplus reserve and undistributed profit.
35. Restricted shares
If the Company grants the restricted shares to incentive participants under the Share Options Incentive
Scheme, the incentive participants subscribe for the shares first. If the unlocking conditions stipulated in the
Share 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.
36. Significant accounting judgements and estimates
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:
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(1) Classification of financial assets
Significant judgements involved in determining the classification of financial assets include analysis of
business mode and characteristics of the contractual cash flows.
Factors considered by the Company in determining the business model of financial assets management for a
group of financial 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 reflect 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 non-current assets other than financial assets (other than goodwill)
The Company determines at the balance sheet date whether there are signs of possible impairment of non-
current assets other than financial assets. For intangible assets that have not yet reached usable condition, in
addition to the annual impairment test, when there are signs of impairment, the impairment test is also carried
out. Other non-current assets, other than financial assets, are tested for impairment when there are indications
that their carrying amount is not recoverable. An impairment occurs when the carrying amount of an asset or
group of assets is higher than the recoverable amount, which is the present value of the fair value net of
disposal costs and projected future cash flows. The net amount of fair value less disposal costs, is determined
by referencing to the agreed sale price or observable market value of a similar asset in an arm's length
transaction, less incremental costs directly attributable to the disposal of that asset. When projecting the
present value of future cash flows, management must estimate the projected future cash flows of the asset or
group of assets and select an appropriate discount rate to determine the present value of future cash flows.
(4) Impairment of goodwill
The Company evaluates whether goodwill is impaired at least once a year. This requires an estimate 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 flows generated from the asset groups and also to choose an appropriate
discount rate in order to calculate the present value of the future cash flows.
(5) Development costs
Determining the amounts to be capitalised requires the management to make assumptions regarding the
expected future cash flows generated from the relevant assets, discount rates to be applied and the expected
period of benefits.
(6) Deferred tax assets
The deferred income tax assets will be recognised for all unused tax losses to the extent that it is probable
that there will be sufficient taxable profits against which the loss is utilised. This requires the management to
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exert numerous judgments to estimate the timing and amount of the future taxable profits so as to determine
the amount of deferred income tax assets to be recognised with reference to the tax planning strategy.
(7) 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 significant 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 significant impacts on the operating income, operating costs, and profit
or loss of the current or subsequent periods.
(8) Determination of the fair value of unlisted equity investment
The fair value of unlisted equity investments represents the expected future cash flows discounted at the
prevailing discount rate of items with similar terms and risk characteristics. It requires the Company to
estimate the expected future cash flows and discount rates, and therefore there is uncertainty. Under limited
circumstances, if the information used to determine the fair value is insufficient, 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 significant accounting policies
① Interpretation No. 15 of Accounting Standards for Business Enterprises
The Ministry of Finance issued the Interpretation No. 15 of Accounting Standards for Business Enterprises
(Cai Kuai [2021] No. 35, hereinafter referred to as “Interpretation No. 15”) in December 2021.
Interpretation No. 15 stipulates that when the Company sells the products or by-products produced before
the fixed assets reach the status of intended use or during the research and development process (hereinafter
collectively referred to as “revenue in trial operation”), in accordance with the “Accounting Standards for
Business Enterprises No. 14 - Revenue", "Accounting Standards for Business Enterprises No. 1 - Inventories"
and other regulations, the revenue and costs relevant to the trial operation shall be accounted for separately
and included in the profit or loss for the current period, rather than the net amount of sale revenue after
offsetting relevant costs of the trial operation sales write-off against the cost of fixed assets or research and
development expenditures. When the relevant products or by-products produced by the trial operation are
sold externally, those that meet the requirements of the "Accounting Standards for Business Enterprises No.
1 - Inventory" should be recognized as inventories, and those that meet the relevant asset recognition
conditions in other relevant Accounting Standards for Business Enterprises should be recognized as related
assets.
The Company implemented Interpretation No. 15 “Accounting treatment for the sale of products or by-
products produced by the enterprise before the fixed assets reach the intended usable state or during the
research and development process” from 1 January 2022.
Interpretation No. 15 stipulates that in onerous contracts, "costs that will inevitably occur in performing
contractual obligations" should reflect the minimum net cost of exiting the contract, i.e. the lower of the cost
of performing the contract and the compensation or penalty for failure to perform the contract. The cost for
the Company to perform the contract includes the incremental cost of performing the contract and the
apportioned amount of other costs directly related to the performance of the contract, of which the
incremental cost of fulfilling the contract includes direct labor, direct materials, etc.; the apportioned amount
of other costs directly related to the performance of the contract includes the apportioned amount of the
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Joincare Pharmaceutical Group Annual Report 2022
depreciation expense of the fixed assets used to perform the contract.
The Company implemented Interpretation No. 15 “Judgment on Onerous Contracts” from 1 January 2022.
The adoption of Interpretation No. 15 did not have any significant impact on the financial position and
operating results of the Company.
② Interpretation No. 16 of Accounting Standards for Business Enterprises
The Ministry of Finance issued the Interpretation No. 16 of Accounting Standards for Business Enterprises
(Cai Kuai [2022] No. 31, hereinafter referred to as “Interpretation No. 16”) in November 2022.
Interpretation No. 16 stipulates that for financial instruments such as perpetual bonds classified as equity
instruments, the Company shall recognize the income tax impact related to dividends when confirming
dividends payable. For the distributed profit comes from the transaction or event that generated profit or loss
in the past, the income tax effect of the dividend should be included in the profit or loss for the current period;
For the profit distributed from the transactions or event previously recognized in the owner’s equity, the
income tax effect of the dividend should be included in the owner’s equity item.
Interpretation No. 16 stipulates that if the Company modifies the terms and conditions of a cash-settled share-
based payment agreement to make it an equity-settled share-based payment, on the date of modification, the
Company shall measure the equity-settled share-based payment according to the fair value of the equity
instrument granted on the day, include the services obtained in the capital reserve, and at the same time
derecognize the liabilities of the cash-settled share-based payment recognized on the date of modification,
the difference between the two is included in the profit or loss for the current period. If the vesting period is
extended or shortened due to the revision, the Company shall perform the above accounting treatment
according to the revised vesting period (without considering the relevant accounting treatment provisions of
adverse revisions).
The adoption of Interpretation No. 16 did not have any significant impact on the financial position and
operating results of the Company.
(2) Changes in significant accounting estimates
None.
IV. Taxation
1. Major taxes and their tax rates
Tax category Tax basis Statutory tax rate %
Value-added tax Taxable revenue 3, 6, 13
Urban maintenance and construction tax Turnover tax paid 1, 5, 7
Education surcharge Turnover tax paid 3
Local education surcharge Turnover tax paid Note 1
Enterprise income tax Taxable profit Note 2
Note 1. The Company and its subsidiaries that are incorporated in Shenzhen and Zhuhai shall pay local
education surcharges that are charged as 2% of the turnover tax payable. Other subsidiaries shall pay local
education surcharges according to the tax rate as specified at their places of incorporation on the basis of
turnover tax payable.
Note 2. Enterprise income tax rate implementation is as follows:
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Entity Income tax rate %
Hong Kong Health Pharmaceutical Industry Company Limited (香港健康药业有限公
司), Livzon Pharmaceutical Biotechnology Co., Ltd. (丽珠医药生物科技有限公司),
16.5
Lian (Hong Kong) Co., Ltd. (丽安香港有限公司), Livzon Biologics Hong Kong
Limited (丽珠生物科技香港有限公司)
0 or 12 (Tax rate is 12%
where the taxable income is
MOP600,000 or more; for
Companhia de Macau Carason Limitada (澳门嘉安信有限公司), Li Zhu (Macau)
those with taxable income
Limitada (丽珠(澳门) 有限公司) less than MOP600,000, they
are exempted from income
taxes.)
The Company and Shenzhen Taitai Pharmaceutical Industry Co., Ltd. (深圳太太药业
有限公司), Shenzhen Haibin Pharmaceutical Co., Ltd. (深圳市海滨制药有限公司),
Xinxiang Haibin Pharmaceutical Co., Ltd. (新乡海滨药业有限公司), Jiaozuo
Joincare Bio Technological Co., Ltd. (焦作健康元生物制品有限公司), Shanghai
Frontier Health Pharmaceutical Technology Co., Ltd. (上海方予健康医药科技有限
公司), Guangzhou Joincare Respiratory Medicine Engineering Technology Co., Ltd.
(广州健康元呼吸药物工程技术有限公司), Joincare Haibin Pharmaceutical Co., Ltd.
(健康元海滨药业有限公司);Livzon Group and subsidiaries of Livzon Group, Livzon
Group Limin Pharmaceutical Manufacturing Factory (丽珠集团利民制药厂) . Livzon
Group Livzon Pharmaceutical Manufacturing Factory (丽珠集团丽珠制药厂) .
Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd. (珠海保税区丽
15
珠合成制药有限公司), Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd. (上
海丽珠制药有限公司), Livzon Group Xinbeijiang Pharmaceutical Manufacturing
Inc. (丽珠集团新北江制药股份有限公司). Sichuan Guangda Pharmaceutical
Manufacturing Co., Ltd. (四川光大制药有限公司), Zhuhai Livzon Diagnostics Inc.
(珠海丽珠试剂股份有限公司), Livzon Group Fuzhou Fuxing Pharmaceutical Co.,
Ltd. (丽珠集团福州福兴医药有限公司), Shanghai Livzon Biotechnology Co., Ltd.
(上海丽珠生物科技有限公司), Livzon Group (Ningxia) Pharmaceutical
Manufacturing Co., Ltd. (丽珠集团(宁夏) 制药有限公司), Livzon MABPharm Inc.
(珠海市丽珠单抗生物技术有限公司), Zhuhai Lihe Medical Diagnostic Products
Co., Ltd. (珠海丽禾医疗诊断产品有限公司), Zhuhai Livzon Chinese Medicine
Modern Technology Co., Ltd. (珠海市丽珠中药现代化科技有限公司)
Livzon MAB Pharm (US) Inc. (丽珠单抗生物技术(美国) 有限公司) 21
17 or 24 (registered capital of
less than MYR 2.5 million,
the tax rate is 17% on the
first profit less than MYR
LIVZON BIOLOGICS (MALAYSIA) SDN. BHD. 600,000; the registered
capital exceeds MYR 2.5
million or the profit exceeds
MYR 600,000, the tax rate is
24%)
Health Investment Holdings Ltd, Joincare Pharmaceutical Group
Industry Co.,Ltd., Livzon International Ventures, Livzon International Ventures I, 0 (Note1)
Livzon International Ventures II
Other subsidiaries 25
Note 1. Companies registered in the British Virgin Islands and the Cayman Islands are not subject to
enterprise income tax.
2. Tax incentives and approval documents
(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,
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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 enjoys the preferential income tax policy for high-tech enterprises for the 3 years from 2022;
The Company's subsidiaries, Shenzhen Taitai Pharmaceutical Co., Ltd. (深圳太太药业有限公司), Shenzhen
Haibin Pharmaceutical Co., Ltd (深圳市海滨制药有限公司), Xinxiang Haibin Pharmaceutical Co., Ltd. (新
乡海滨药业有限公司) and Shanghai Frontier Health Medicine Technology Co., Ltd. (上海方予健康医药
科技有限公司) are entitled to enjoy preferential income tax policies applicable to high and new technology
enterprises for 3 years with effective from 2020. Joincare Haibin Pharmaceutical Co., Ltd. (健康元海滨药
业有限公司) entitled to enjoy preferential income tax policies applicable to high and new technology
enterprises for 3 years with effective from 2020. Jiaozuo Joincare Bio Technological Co., Ltd. (焦作健康元
生物制品有限公司), Guangzhou Joincare Respiratory Drug Engineering Technology Co., Ltd. (广州健康
元呼吸药物工程技术有限公司) have re-applied for high-tech enterprise certification in this period. Livzon
Group and its subsidiaries— Livzon Group Limin Pharmaceutical Manufacturing Factory (丽珠集团利民
制药厂), Livzon Group Livzon Pharmaceutical Factory (丽珠集团丽珠制药厂), Zhuhai FTZ Livzon
Hecheng Pharmaceutical Manufacturing Co., Ltd. (珠海保税区丽珠合成制药有限公司), Shanghai Livzon
Pharmaceutical Manufacturing Co., Ltd. ( 上 海 丽 珠 制 药 有 限 公 司 ), Livzon Group Fuzhou Fuxing
Pharmaceutical Co., Ltd. (丽珠集团福州福兴医药有限公司 ) and Sichuan Guangda Pharmaceutical
Manufacturing Co., Ltd. (四川光大制药有限公司) are entitled to enjoy preferential income tax policies
applicable to high and new technology enterprises for 3 years with effective from 2020. Livzon Group
Xinbeijiang Pharmaceutical Manufacturing Inc. (丽珠集团新北江制药股份有限公司), Zhuhai Livzon
Diagnostics Inc. (珠海丽珠试剂股份有限公司) and Livzon MABPharm Inc. (珠海市丽珠单抗生物技术
有限公司) have re-applied for high-tech enterprise certification in this period, and has been announced to be
identified as a high-tech enterprise. Shanghai Livzon Biotechnology Co., Ltd. (上海丽珠生物科技有限公
司) are entitled to preferential income tax policies applicable to high and new technology enterprises for 3
years with effective from 2021. Livzon Group (Ningxia) Pharmaceutical Manufacturing Co., Ltd. (丽珠集
团(宁夏) 制药有限公司) was approved to enjoy the enterprise taxation preference of the Encouraged
Industries in Western China. The above companies were subject to enterprise income tax rate of 15% for the
period.
In accordance with Article 27 of the Enterprise Income Tax Law of the People's Republic of China 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. (大同丽珠芪源药材有限公司) and Longxi Livzon Shenyuan Medicine
Co., Ltd. (陇西丽珠参源药材有限公司) are exempted from enterprise income tax.
According to the "Notice of the Ministry of Finance and the State Administration of Taxation on the
Preferential Policies for Enterprise Income Tax in the Hengqin Guangdong-Macao Deep Cooperation Zone"
(Cai Shui [2022] No. 19), enterprise income tax is levied at a reduced rate of 15% for qualified industrial
enterprises located in the Hengqin Guangdong-Macao Deep Cooperation Zone. The Livzon Grou’s
subsidiaries, Zhuhai Lihe Medical Diagnostic Products Co., Ltd. (珠海丽禾医疗诊断产品有限公司) and
Zhuhai Livzon Chinese Medicine Modern Technology Co., Ltd. (珠海市丽珠中药现代化科技有限公司)
meet the relevant conditions and are subjected to 15% enterprise income tax rate for the current period.
According to the preferential tax policies for small low-profit enterprises, the portion of annual taxable
income of a small low profit 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 5%.
V. Notes to the items of consolidated financial statements
1. Cash and bank balances
209
Joincare Pharmaceutical Group Annual Report 2022
Item 2022.12.31 2021.12.31
Cash on hand 231,883.95 225,179.98
Cash at bank 14,792,867,005.08 11,554,754,721.43
Other monetary funds 15,389,221.93 174,250,489.57
Total 14,808,488,110.96 11,729,230,390.98
Including: Total amount of money deposited
1,491,900,539.35 1,309,853,620.27
abroad
① Other monetary funds are mainly deposits for investments, deposits under guarantee of letter of guarantee,
issuing letters of credit and foreign exchange forward contracts, etc.
② Restricted funds relating to issuing letters of credit, bank acceptance bills and foreign exchange forward
contracts, etc. in other monetary funds were deducted from cash and cash equivalents in the cash flow
statement. Apart from these restricted funds, there is no other charge, pledge or lock up on the cash at bank
balance 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 2022.12.31 2021.12.31
Deposits for letter of credit 444,032.37 1,788,607.74
Deposits for bank acceptance bills 947,255.39 6,004,457.37
Deposits for other business 1,120.00 3,949,531.92
Total 1,392,407.76 11,742,597.03
2. Financial assets held for trading
(1) Classification
Item 2022.12.31 2021.12.31
Financial assets held for trading 109,015,664.98 184,638,344.31
Including: Debt instruments investment 934,289.94 940,162.94
Equity instruments investment 102,648,863.47 176,321,853.05
Derivative financial assets 5,432,511.57 7,376,328.32
Total 109,015,664.98 184,638,344.31
① The Company's investments in equity instruments and debt instruments for financial assets held for
trading at period end were listed for trading on Shenzhen Stock Exchange, Hong Kong Stock Exchange and
NASQAQ. 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 financial assets as at the balance sheet
date.
(2) No restrictive financial asset measured at fair value through profit or loss was included in the closing balance.
(3) No hedging instruments in the closing balance and no hedging transactions have occurred during the period.
3. Notes receivable
210
Joincare Pharmaceutical Group Annual Report 2022
2022.12.31 2021.12.31
Category Provision Provision
Book balance for bad Carrying amount Book balance for bad Carrying amount
debts debts
Bank
acceptance 1,959,985,016.85 0.00 1,959,985,016.85 1,977,767,022.02 481,000.00 1,977,286,022.02
bills
(1) Notes receivable pledged at year end
Category Amount pledged at year end
Bank acceptance bills 469,659,266.19
As at 31 December 2022, bank acceptance bills with carrying amount of RMB469,659,266.19 (31 December
2021: RMB870,153,979.75) have been used as pledge for opening of bills.
(2) Bills endorsed or discounted to other parties but not yet expired at balance sheet date
Amount derecognized at Amount not derecognized at year
Category
year end end
Bank acceptance bills not yet mature but
542,620,475.62 0.00
already endorsed
Bank acceptance bills not yet mature but
422,899,944.56 0.00
already discounted
Total 965,520,420.18 0.00
In the current period, the Company discounted bank acceptance bills of RMB1,089,259,970 (previous year:
RMB76,908,320). Since the major risks and rewards such as interest rate risk related to these bank acceptance
bills have been transferred to the bank, the Company derecognizes the discounted unexpired bank acceptance
bills. Factoring expenses incurred was RMB6,363,470 (previous year: RMB506,780).
(3) There was no bills transferred into account receivables for non-performance by the issuer at balance sheet date
of the period
(4) Disclosure by method of provision for bad debts
2022.12.31 2021.12.31
Category Book balance Provision for bad debts Book balance Provision for bad debts
Expected Carrying value Expected Carrying value
Ratio
Amount Amount credit loss Amount Ratio (%) Amount credit loss
(%)
rate (%) rate (%)
Provision
for bad
debts on 0.00 0.00 0.00 0.00 0.00 481,000.00 0.02 481,000.00 100.00 0.00
individual
item
Including:
Bank
acceptance 0.00 0.00 0.00 0.00 0.00 481,000.00 0.02 481,000.00 100.00 0.00
bills
Provision
for bad
debts on 1,959,985,016.85 100.00 0.00 0.00 1,959,985,016.85 1,977,286,022.02 99.98 0.00 0.00 1,977,286,022.02
portfolio
basis
Including:
Bank
acceptance 1,959,985,016.85 100.00 0.00 0.00 1,959,985,016.85 1,977,286,022.02 99.98 0.00 0.00 1,977,286,022.02
bills
Total 1,959,985,016.85 100.00 0.00 0.00 1,959,985,016.85 1,977,767,022.02 100.00 481,000.00 0.02 1,977,286,022.02
(5) Provision for bad debts on individual item:
211
Joincare Pharmaceutical Group Annual Report 2022
2022.12.31 2021.12.31
Name Provision Expected Provision Expected
Book Reason of Book Reason of
for bad credit loss for bad credit loss
balance provision balance provision
debts rate (%) debts rate (%)
Henan
Jiuzhoutong Expected to be
0.00 0.00 0.00 431,000.00 431,000.00 100.00
Pharmaceutical uncollectible
Co., Ltd.
Expected to be
Other customers 0.00 0.00 0.00 50,000.00 50,000.00 100.00
uncollectible
Total 0.00 0.00 0.00 481,000.00 481,000.00 100.00
(6) Accrual, recovery or reversal of bad debt provision during the year
Item Amount of provision for bad debts
Beginning balance 481,000.00
Provision for the year 0.00
Recovered or reversal in the
0.00
year
Write-off in the year 481,000.00
Closing balance 0.00
(7) Actual write-off of notes receivable during the year
Item Written-off amount
Actual write-off of notes receivable 481,000.00
4. Accounts receivable
(1) Disclosure by ageing
Ageing 2022.12.31 2021.12.31
Within one year 3,120,189,972.55 2,872,710,981.81
1 to 2 years (inclusive of 2 years) 23,444,432.08 18,541,236.06
2 to 3 years (inclusive of 3 years) 3,734,160.84 12,869,985.75
3 to 4 years (inclusive of 4 years) 12,774,996.94 7,835,031.26
4 to 5 years (inclusive of 5 years) 2,294,804.48 1,332,259.38
Over 5 years 13,796,669.97 12,807,886.92
Subtotal 3,176,235,036.86 2,926,097,381.18
Less: Provision for bad debts 72,476,186.71 72,441,829.64
Total 3,103,758,850.15 2,853,655,551.54
According to the credit policy of the Company, the Company usually grants a credit period ranging from 30
to 90 days to its customers.
(2) Disclosure by method of provision for bad debts
2022.12.31 2021.12.31
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Expected
Expected Carrying value Carrying value
Ratio Ratio credit
Amount Amount credit loss Amount Amount
(%) (%) loss rate
rate (%)
(%)
Provision for
10,454,599.67 0.33 6,257,914.47 59.86 4,196,685.20 9,709,854.02 0.33 5,513,168.82 56.78 4,196,685.20
bad debts on
212
Joincare Pharmaceutical Group Annual Report 2022
individual
item
Including:
Receivables
from domestic 10,454,599.67 0.33 6,257,914.47 59.86 4,196,685.20 9,709,854.02 0.33 5,513,168.82 56.78 4,196,685.20
customers
Receivables
from overseas 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
customers
Provision for
bad debts on 3,165,780,437.19 99.67 66,218,272.24 2.09 3,099,562,164.95 2,916,387,527.16 99.67 66,928,660.82 2.29 2,849,458,866.34
portfolio basis
Including:
Receivables
from domestic 2,659,276,844.47 83.72 60,180,304.43 2.26 2,599,096,540.04 2,333,938,533.50 79.76 58,705,544.56 2.52 2,275,232,988.94
customers
Receivables
from overseas 506,503,592.72 15.95 6,037,967.81 1.19 500,465,624.91 582,448,993.66 19.91 8,223,116.26 1.41 574,225,877.40
customers
Total 3,176,235,036.86 100.00 72,476,186.71 2.28 3,103,758,850.15 2,926,097,381.18 100.00 72,441,829.64 2.48 2,853,655,551.54
Provision for bad debts on individual item:
Closing balance
Name Provision for Expected credit
Book balance Reason of provision
bad debts loss rate (%)
Full amount is unlikely to be
Purchase of goods 10,454,599.67 6,257,914.47 59.86
recovered
Provision for bad debts on portfolio basis:
Provision for bad debts on portfolio basis: Receivables from domestic customers
2022.12.31 2021.12.31
Ageing Expected
Accounts Provision for Accounts Provision for Expected credit
credit loss
receivable bad debts receivable bad debts loss rate (%)
rate (%)
Within one year 2,618,111,979.83 35,631,686.09 1.36 2,290,261,988.15 32,953,674.70 1.44
1 to 2 years (inclusive
18,418,832.08 3,486,917.81 18.93 18,541,236.06 2,450,973.15 13.22
of 2 years)
2 to 3 years (inclusive
3,589,415.19 2,144,629.72 59.75 4,476,615.34 2,960,042.15 66.12
of 3 years)
3 to 4 years (inclusive
4,381,626.53 4,171,620.14 95.21 7,550,258.06 7,277,583.42 96.39
of 4 years)
4 to 5 years (inclusive
1,667,403.89 1,637,863.72 98.23 1,271,992.78 1,226,828.03 96.45
of 5 years)
Over 5 years 13,107,586.95 13,107,586.95 100.00 11,836,443.11 11,836,443.11 100.00
Total 2,659,276,844.47 60,180,304.43 2.26 2,333,938,533.50 58,705,544.56 2.52
Provision for bad debts on portfolio basis: Receivables from overseas customers
2022.12.31 2021.12.31
Ageing Expected
Accounts Provision for Expected credit Accounts Provision for bad
credit loss
receivable bad debts loss rate (%) receivable debts
rate (%)
Within one year 506,503,592.72 6,037,967.81 1.19 582,448,993.66 8,223,116.26 1.41
Total 506,503,592.72 6,037,967.81 1.19 582,448,993.66 8,223,116.26 1.41
(3) Accrual, recovery or reversal of bad debt provision during the year
Item Amount of provision for bad debts
Beginning balance 72,441,829.64
213
Joincare Pharmaceutical Group Annual Report 2022
Provision for the year 2,978,050.82
Recovered or reversal in the year 0.00
Write-off in the year 2,971,670.00
Others 27,976.25
Closing balance 72,476,186.71
At 31 December 2022 and 31 December 2021, the Company had no overdue but not impaired accounts
receivable.
(4) Accounts receivable written-off during the year
Item Written-off amount
Actual written-off of accounts receivable 2,971,670.00
(5) Accounts receivable due from the top five debtors
As of 31 December 2022, the total amount of the top five debtors in closing balance is RMB380,564,636.45,
accounting for 11.98% of the total amount of closing balance of accounts receivable, and the corresponding
closing balance of provision for bad debts is total RMB3,048,053.17.
(6) There were no accounts receivable derecognized due to the transfer of financial assets in each reporting period.
(7) There were no assets or liabilities formed by the continuing involvement of transferred accounts receivables
in each reporting period.
5. Prepayments
(1) Prepayments by ageing
2022.12.31 2021.12.31
Ageing
Amount Ratio % Amount Ratio %
Within one year 343,457,382.98 94.29 354,340,559.20 95.97
1 to 2 years 16,867,695.41 4.63 8,031,100.50 2.17
2 to 3 years 948,519.54 0.26 6,323,201.42 1.71
Over 3 years 2,991,544.64 0.82 537,685.17 0.15
Total 364,265,142.57 100.00 369,232,546.29 100.00
(2) Prepayments due from the top five debtors:
As of 31 December 2022, the total amount of the top five prepayments in closing balance is
RMB127,433,641.24, accounting for 34.98% of the total amount of closing balance of prepayments.
6. Other receivables
Item 2022.12.31 2021.12.31
Interest receivable 0.00 365,873.64
Other receivables 52,535,740.14 87,687,951.48
Total 52,535,740.14 88,053,825.12
(1) Other receivables
① by ageing
214
Joincare Pharmaceutical Group Annual Report 2022
Ageing 2022.12.31 2021.12.31
Within one year 46,704,835.62 53,953,012.32
1 to 2 years 6,086,106.11 33,803,432.35
2 to 3 years 2,206,852.09 1,821,553.83
3 to 4 years 1,821,553.83 2,532,015.23
4 to 5 years 1,816,535.04 807,025.60
Over 5 years 32,171,819.98 50,248,098.81
Subtotal 90,807,702.67 143,165,138.14
Less: Provision for bad debts 38,271,962.53 55,477,186.66
Total 52,535,740.14 87,687,951.48
② Disclosure by nature
2022.12.31 2021.12.31
Item Provision for Carrying Provision for Carrying
Book balance Book balance
bad debts amount bad debts amount
Security
deposits, 11,003,281.04 2,897,272.69 8,106,008.35
12,668,692.36 3,613,600.49 9,055,091.87
deposits and
rental fees
Reserved fund 17,870,245.40 2,259,346.33 15,610,899.07
25,494,468.62 2,952,756.24 22,541,712.38
and advances
Related party 20,328,583.96 19,068,538.71 1,260,045.25
1,097,855.07 477,066.07 620,789.00
balances
External
entities 13,226,352.58 11,966,700.69 1,259,651.89 22,417,100.76 11,924,828.60 10,492,272.16
balances
Tax refund on 17,708,111.60 198,927.69 17,509,183.91
16,539,609.68 290,344.77 16,249,264.91
exports
Treasury
bonds and 17,968,386.04 17,968,386.04 0.00
17,968,386.04 17,968,386.04 0.00
security
deposits
Capital 24,078,925.22 0.00 24,078,925.22
0.00 0.00 0.00
reduction
Amounts of
exercised 0.00 0.00 0.00 8,463,240.98 0.00 8,463,240.98
options
Others 3,812,338.32 1,003,108.23 2,809,230.09 3,327,263.14 1,159,886.60 2,167,376.54
Total 90,807,702.67 38,271,962.53 52,535,740.14 143,165,138.14 55,477,186.66 87,687,951.48
③Information of provision for bad debts
At 31 December 2022, there is no provision for bad debts on those in first stage.
At year end, provision for bad debts on those in second stage:
Expected credit
Provision for bad Carrying
Category Book balance loss rate for the Reason
debts amount
lifetime(%)
Provision for bad debts on
0.00 0.00 0.00 0.00 --
individual item
Provision for bad debts on
62,329,598.16 15.71 9,793,858.02 52,535,740.14
portfolio basis
Export tax refund receivable 16,539,609.68 1.76 290,344.77 16,249,264.91
Security deposits, deposits 12,668,692.36 28.52 3,613,600.49 9,055,091.87
215
Joincare Pharmaceutical Group Annual Report 2022
and rental receivable
Other receivables 33,121,296.12 17.78 5,889,912.76 27,231,383.36
Total 62,329,598.16 15.71 9,793,858.02 52,535,740.14
At year end, provision for bad debts on those in third stage:
Expected credit
Provision for Carrying
Category Book balance loss rate for the Reason
bad debts amount
lifetime(%)
Provision for bad debts on
28,478,104.51 100.00 28,478,104.51 0.00
individual item
Not expected to
Other receivables 28,478,104.51 100.00 28,478,104.51 0.00
be recoverable
Provision for bad debts on
0.00 0.00 0.00 0.00 --
portfolio basis
Total 28,478,104.51 100.00 28,478,104.51 0.00
As of 31 December 2021, information of provision for bad debts:
As of 31 December 2021, Provision for bad debts on those in first stage:
Expected
credit loss rate Provision for Carrying
Category Book balance Reason
in the next 12 bad debts amount
months (%)
Provision for bad debts on 32,542,166.20 0.00 0.00 32,542,166.20
individual item
Amounts of exercised options 8,463,240.98 0.00 0.00 8,463,240.98 Expected to be
recovered
Capital reduction 24,078,925.22 0.00 0.00 24,078,925.22 Expected to be
recovered
Provision for bad debts on 0.00 0.00 0.00 0.00 --
portfolio basis
Total 32,542,166.20 0.00 0.00 32,542,166.20
As of 31 December 2021, Provision for bad debts on those in second stage:
Expected credit
Provision for bad Carrying
Category Book balance loss rate for the Reason
debts amount
lifetime(%)
Provision for bad debts on
0.00 0.00 0.00 0.00 --
individual item
Provision for bad debts on
63,594,020.80 13.28 8,448,235.52 55,145,785.28
portfolio basis
Export tax refund receivable 17,708,111.60 1.12 198,927.69 17,509,183.91
Security deposits, deposits
11,003,281.04 26.33 2,897,272.69 8,106,008.35
and rental 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
As of 31 December 2021, Provision for bad debts on those in third stage:
Expected credit
Provision for Carrying
Category Book balance loss rate for the Reason
bad debts amount
lifetime(%)
Provision for bad debts on
47,028,951.14 100.00 47,028,951.14 0.00
individual item
Not expected to
Other receivables 47,028,951.14 100.00 47,028,951.14 0.00
be recoverable
216
Joincare Pharmaceutical Group Annual Report 2022
Provision for bad debts on
0.00 0.00 0.00 0.00 --
portfolio basis
Total 47,028,951.14 100.00 47,028,951.14 0.00
④Accrual, recovery or reversal of bad debt provision during the year
First stage Second stage Third stage
Expected credit
Provision for bad debts Expected credit Expected credit loss loss for lifetime Total
loss within next for lifetime (no credit (credit
12 months impairment occurred) impairment has
occurred)
Beginning balance 0.00 8,448,235.52 47,028,951.14 55,477,186.66
Movement of beginning
balance during the period
--transfer to second stage 0.00 0.00 0.00 0.00
--transfer to third stage 0.00 -42,585.00 42,585.00 0.00
--Reverse to second stage 0.00 0.00 0.00 0.00
--Reverse to first stage 0.00 0.00 0.00 0.00
Provision for the year 0.00 1,304,163.32 0.00 1,304,163.32
Reversal in the year 0.00 0.00 -158,470.77 -158,470.77
Transfer in the year 0.00 0.00 0.00 0.00
Write-off in the year 0.00 138,045.77 18,434,960.86 18,573,006.63
Other movement 0.00 222,089.95 0.00 222,089.95
Closing balance 0.00 9,793,858.02 28,478,104.51 38,271,962.53
⑤Actual written-off of other receivables in the year
Item Written-off amount
Actual written-off of other receivables 18,573,006.63
⑥Other receivables due from the top five debtors
Other Provision for
Proportion to
receivables bad debts
Name of entity Nature Ageing total other
Closing Closing
receivables (%)
balance balance
Treasury
Hua Xia Securities Co., Ltd. bonds and
17,968,386.04 Over 5 years 19.79 17,968,386.04
(华夏证券股份有限公司) security
deposits
Export tax Within one
Tax refund on exports 16,539,609.68 18.21 290,344.77
rebate year
Guangzhou Yinhe Sunshine
Biological Products Co., Ltd.
(广州银河阳光生物制品有限 Loan 5,000,000.00 Over 5 years 5.51 5,000,000.00
公司)
People's Republic of China
Wanchai Customs (中华人民共 Security Within one
1,271,801.36 1.40 12,718.01
deposits year
和国湾仔海关)
Suzhou Sino Promise Import &
Export Co., Ltd. (苏州中诺进 Security
1,200,000.00 1-2 years 1.32 60,000.00
deposits
出口有限公司)
Total 41,979,797.08 46.23 23,331,448.82
217
Joincare Pharmaceutical Group Annual Report 2022
⑦ There were no other receivables derecognised due to the transfer of financial assets in each reporting
period.
⑧ There were no assets or liabilities formed by the continuing involvement of transferred other receivables
in the period.
7. Inventories
(1) Inventories by category
2022.12.31 2021.12.31
Item
Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
decline in value decline in value
Raw materials 642,893,858.16 37,543,320.41 605,350,537.75 553,234,567.88 16,068,254.74 537,166,313.14
Packaging materials 137,488,629.87 11,191,692.58 126,296,937.29 125,197,237.91 7,099,883.19 118,097,354.72
Goods in process
and Proprietary 649,362,917.78 65,482,989.52 583,879,928.26 538,151,968.97 2,891,675.04 535,260,293.93
semi-finished goods
Low-value
80,473,347.95 495,743.41 79,977,604.54 61,806,078.47 217,760.90 61,588,317.57
consumables
Finished goods and
1,138,363,946.23 22,354,857.60 1,116,009,088.63 834,035,538.26 30,182,179.43 803,853,358.83
stock goods
Sub-contracting
2,318,531.50 0.00 2,318,531.50 2,251,074.26 0.00 2,251,074.26
materials
Consumptive
13,692,837.04 0.00 13,692,837.04 12,342,303.96 0.00 12,342,303.96
biological assets
Goods in transit 34,344,534.56 0.00 34,344,534.56 8,385,371.27 0.00 8,385,371.27
Total 2,698,938,603.09 137,068,603.52 2,561,869,999.57 2,135,404,140.98 56,459,753.30 2,078,944,387.68
(2) Provision for decline in value of inventories
Increase Decrease
Item 2021.12.31 2022.12.31
Reversal or
Provision Others Others
written-off
Raw materials 16,068,254.74 23,631,216.36 0.00 2,156,150.69 0.00 37,543,320.41
Packaging materials 7,099,883.19 8,764,054.20 0.00 4,672,244.81 0.00 11,191,692.58
Goods in process and
Proprietary semi-finished 2,891,675.04 63,112,373.68 0.00 521,059.20 0.00 65,482,989.52
goods
Low-value consumables 217,760.90 289,387.02 0.00 11,404.51 0.00 495,743.41
Finished goods and stock
30,182,179.43 24,913,820.98 0.00 32,741,142.81 0.00 22,354,857.60
goods
Total 56,459,753.30 120,710,852.24 0.00 40,102,002.02 0.00 137,068,603.52
Provision for decline in value of inventories (Continued)
Reason for reversal or written-off of
Basis in determination of net recoverable provision for decline in value of inventories/
Item
amount/residual value and cost to be incurred Provision for impairment of contract
performance cost
The estimated selling price less the estimated costs of
Raw materials Processing, sale of finished goods and discard
completion, selling expenses and related taxes
The estimated selling price less the estimated costs of
Packaging materials Processing, sale of finished goods and discard
completion, selling expenses and related taxes
Goods in process and The estimated selling price less the estimated costs of
Processing of finished goods and discard
Proprietary semi-finished goods completion, selling expenses and related taxes
Low-value consumables The estimated selling price less the related taxes Used or discard
The estimated selling price less the estimated selling
Finished goods and stock goods Sale and discard
expenses and related taxes
(3) There was no capitalization of borrowing costs in the balance of inventories at the end of the period.
8. Non-current assets due within one year
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Joincare Pharmaceutical Group Annual Report 2022
Item 2022.12.31 2021.12.31
Long-term receivables due within one year 0.00 317,381.23
Fixed deposits due within 1 year 54,048,611.11 0.00
Total 54,048,611.11 317,381.23
9. Other current assets
Item 2022.12.31 2021.12.31
Input VAT pending deduction /Input tax
35,679,462.66 53,179,328.86
pending for verification
Prepaid income tax 17,665,709.39 30,667,849.83
Cash management 92,815,738.44 0.00
Return cost receivable 12,043,428.52 0.00
Others 5,335,561.31 139,035.68
Total 163,539,900.32 83,986,214.37
10. Long-term receivables
(1) Long-term receivables by nature
2022.12.31 2021.12.31
Range of
Item Provision Provision discount
Book Carrying Carrying
for bad Book balance for bad rate
balance amount amount
debts debts
Financing lease
0.00 0.00 0.00 584,285.36 0.00 584,285.36 4.75%
payments
Less: Long-term
receivables due 0.00 0.00 0.00 317,381.23 0.00 317,381.23
within one year
Total 0.00 0.00 0.00 266,904.13 0.00 266,904.13
(2) There was no situation of overdue of long-term receivables in the period.
(3) There was no long-term receivables derecognized due to the transfer of financial assets in the period.
(4) There was no assets or liabilities formed by the continuing involvement of transferred long-term receivables in
the period.
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Joincare Pharmaceutical Group Annual Report 2022
11. Long-term equity investment
Movement in the year
Closing balance of
Investee 2021.12.31 Announced 2022.12.31 provision for
Investment gain or Provision
Additions in Decrease in Adjustment in other Changes of other distribution of impairment
loss under equity for Others
investment investment comprehensive income equity cash dividend or
method impairment
profit
①Subsidiaries
Zhongshan Renhe Health Products
Co., Ltd. (中山市仁和保健品有限 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
公司)
Guangzhou Hiyeah Industry Co.,
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
Ltd. (广州市喜悦实业有限公司)
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
②Associates
Livzon Medical Electronic
Equipment (Plant) Co., Ltd. (丽珠
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
集团丽珠医用电子设备有限公
司)
Guangdong Blue Treasure
Pharmaceutical Co. Ltd. (广东蓝 78,029,592.18 0.00 0.00 15,055,174.10 0.00 0.00 0.00 0.00 0.00 93,084,766.28 0.00
宝制药有限公司)
Shenzhen City Youbao
Technology Co., Ltd. (深圳市有 1,222,398.89 0.00 0.00 274,196.51 0.00 0.00 0.00 0.00 0.00 1,496,595.40 0.00
宝科技有限公司)
AbCyte Therapeutics Inc. 15,154,709.96 0.00 0.00 -1,387,449.90 0.00 0.00 0.00 0.00 0.00 13,767,260.06 0.00
L&L Biopharma, Co. Ltd. (上海健
14,886,838.46 0.00 0.00 -983,161.97 0.00 0.00 0.00 0.00 0.00 13,903,676.49 0.00
信生物医药科技有限公司)
Zhuhai Sanmed Biotech Inc. (珠海
83,155,557.16 0.00 0.00 -22,889,193.47 527,718.52 497,687.40 0.00 0.00 0.00 61,291,769.61 0.00
圣美生物诊断技术有限公司)
Aetio Biotheraphy, Inc. 16,028,488.48 0.00 0.00 5,826.20 0.00 0.00 0.00 0.00 0.00 16,034,314.68 0.00
Jiangsu Atom Bioscience and
Pharmaceutical Co., Ltd. (江苏新 67,908,607.98 30,000,000.00 0.00 -5,105,198.56 0.00 0.00 0.00 0.00 0.00 92,803,409.42 0.00
元素医药科技有限公司)
Tianjin Tongrentang Group Co.,
Ltd. (天津同仁堂集团股份有限 751,549,763.92 0.00 0.00 82,286,589.62 4,723,927.54 0.00 111,980,000.00 0.00 0.00 726,580,281.08 0.00
公司)
Infinite Intelligence
Pharmaceutical Co. Ltd. (北京英 19,937,909.64 0.00 0.00 -1,080,182.56 0.00 0.00 0.00 0.00 0.00 18,857,727.08 0.00
飞智药科技有限公司)
Shenzhen Kangti Biomedical
Technology Co., Ltd. (深圳康体生 0.00 6,000,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6,000,000.00 0.00
物医药科技有限公司)(Note 1)
Jiaozuo Jinguan Jiahua Electric
Power Co., Ltd. (焦作金冠嘉华电 284,619,909.01 0.00 0.00 918,586.51 0.00 0.00 0.00 0.00 0.00 285,538,495.52 0.00
力有限公司)
220
Joincare Pharmaceutical Group Annual Report 2022
Movement in the year
Closing balance of
Investee 2021.12.31 Announced 2022.12.31 provision for
Investment gain or Provision
Additions in Decrease in Adjustment in other Changes of other distribution of impairment
loss under equity for Others
investment investment comprehensive income equity cash dividend or
method impairment
profit
Ningbo Ningrong Biomedical Co.,
Ltd. (宁波宁融生物医药有限公 27,464,098.71 0.00 0.00 -284,889.20 0.00 0.00 0.00 0.00 0.00 27,179,209.51 0.00
司)
Feellife Health Inc. (深圳来福士
12,734,373.22 0.00 0.00 2,569,122.52 0.00 0.00 0.00 0.00 0.00 15,303,495.74 0.00
雾化医学有限公司)
Novastage Pharmaceuticals
(Shenzhen) , Ltd. (新领医药技术 18,080,883.21 0.00 18,080,883.21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(深圳) 有限公司)
Jiangsu Baining Yingchuang
Medical Technology Co., Ltd. (江 28,576,324.02 0.00 0.00 156,057.09 0.00 0.00 0.00 0.00 0.00 28,732,381.11 0.00
苏百宁盈创医疗科技有限公司)
Shanghai Sheo Pharmaceutical
Technology Co., Ltd. (上海偕怡 0.00 17,000,000.00 0.00 2,309,212.61 0.00 0.00 0.00 0.00 0.00 19,309,212.61 0.00
医药科技有限公司)(Note 2)
Subtotal 1,420,549,454.84 53,000,000.00 18,080,883.21 71,844,689.50 5,251,646.06 497,687.40 111,980,000.00 0.00 0.00 1,421,082,594.59 1,200,000.00
Total 1,428,837,171.64 53,000,000.00 18,080,883.21 71,844,689.50 5,251,646.06 497,687.40 111,980,000.00 0.00 0.00 1,429,370,311.39 9,487,716.80
Note 1: On 30 September 2022, the Company's subsidiary, 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) ("Equity Investment Company") and Shenzhen Kangti
Biomedical Technology Co., Ltd. (深圳康体生物医药科技有限公司) (“Kangti Biomedical”) signed a shareholder agreement. Equity Investment Company invested RMB10 million to hold a 3.1746% shareholding in Kangti
Biomedical (including the first phase of investment of RMB6 million). According to the shareholder agreement and the articles of association, Equity Investment Company appointed a director to Kangti Biomedical. Since Equity
Investment Company is able to exercise significant influence over Kangti Biomedical, the investment in Kangti Biomedical is accounted for as a long-term equity investment.
Note 2: On April 22, 2022, Shanghai Frontier Health Pharmaceutical Technology Co., Ltd. (上海方予健康医药科技有限公司) ("Shanghai Frontier") ,a subsidiary of the Company, acquired 20% of the equity of Shanghai Sheo
Pharmaceutical Technology Co., Ltd. (上海偕怡医药科技有限公司) (“Shanghai Sheo”) from the original shareholders for RMB7 million; On October 28, 2022, the Company signed a capital increase agreement with Shanghai Sheo,
investing RMB10 million to hold 10% of the equity of Shanghai Sheo. After the company's investment, the stake of the Shanghai Frontier will be reduced to 17.999%.
221
Joincare Pharmaceutical Group Annual Report 2022
12. Other equity instruments investment
Reason for
Item 2022.12.31 2021.12.31
designation
China Galaxy Securities Co., Ltd. (中国银河证券
0.00 212,384,666.97 Non-trading
股份有限公司)
Shanghai Yunfeng Xinchuang Equity Investment
67,935,704.36 94,040,236.88 Non-trading
Center (上海云锋新创股权投资中心)
Shanghai JingYi Investment Center (上海经颐投
73,616,359.91 66,175,062.50 Non-trading
资中心)
Qianhai Equity Investment Fund (前海股权投资
243,378,742.17 264,930,500.00 Non-trading
基金)
Apricot Forest, Inc (杏树林) 120,788,500.00 137,711,800.01 Non-trading
PANTHEON D ,L.P. 5,954,301.20 3,715,566.69 Non-trading
Zhuhai China Resources Bank Co., Ltd. (珠海华
158,400,000.00 164,395,200.00 Non-trading
润银行股份有限公司)
GLOBAL HEALTH SCIENCE 271,980,388.15 235,133,216.46 Non-trading
Nextech V Oncology S.C.S., SICAV-SIF 23,996,121.32 30,667,263.04 Non-trading
Yizun Biopharmaceutics (Shanghai) Co., Ltd. (羿
30,513,209.27 59,999,953.41 Non-trading
尊生物医药(上海) 有限公司)
ELICIO THERAPEUTICS, INC. 34,823,014.36 31,878,510.16 Non-trading
CARIAMA THER APEUTICS INC. 34,821,295.50 31,876,936.63 Non-trading
Beijing Luzhu Biotechnology Co., Ltd. (北京绿竹
53,654,738.60 41,944,015.67 Non-trading
生物技术股份有限公司)
Shanghai Keentai Biotechnology Co., Ltd. (上海
12,000,000.00 12,000,000.00 Non-trading
科恩泰生物医药科技有限公司)
Others 62,096,504.21 22,029,449.00 Non-trading
Total 1,193,958,879.05 1,408,882,377.42
Continued:
Amount
transferred from
Dividend income
Cumulative other Reason of
Item recognised in the Cumulative gain
loss comprehensive transfer
year
income to retained
earnings
China Galaxy Securities Co., Ltd.
0.00 0.00 0.00 94,089,666.09 Disposal
(中国银河证券股份有限公司)
Shanghai Yunfeng Xinchuang
Equity Investment Center (上海云 0.00 0.00 0.00 -4,367,599.87 Disposal-
锋新创股权投资中心)
Shanghai JingYi Investment
512,350.35 0.00 0.00 0.00 --
Center (上海经颐投资中心)
Qianhai Equity Investment Fund
13,160,623.21 0.00 0.00 0.00 --
(前海股权投资基金)
Apricot Forest, Inc (杏树林) 0.00 0.00 0.00 0.00 --
PANTHEON D ,L.P. 0.00 0.00 0.00 0.00 --
Zhuhai China Resources Bank
Co., Ltd. (珠海华润银行股份有 0.00 0.00 0.00 0.00 --
限公司)
GLOBAL HEALTH SCIENCE 3,956,817.66 0.00 0.00 0.00 --
Nextech V Oncology S.C.S., 1,053,846.01 0.00 0.00 0.00 --
SICAV-SIF
222
Joincare Pharmaceutical Group Annual Report 2022
Amount
transferred from
Dividend income
Cumulative other Reason of
Item recognised in the Cumulative gain
loss comprehensive transfer
year
income to retained
earnings
Yizun Biopharmaceutics
(Shanghai) Co., Ltd. (羿尊生物医 0.00 0.00 0.00 0.00 --
药(上海) 有限公司)
ELICIO THERAPEUTICS, INC. 0.00 0.00 0.00 0.00 --
CARIAMA THER APEUTICS 0.00 0.00 0.00 0.00 --
INC.
Beijing Luzhu Biotechnology Co.,
Ltd. (北京绿竹生物技术股份有 0.00 0.00 0.00 0.00 --
限公司)
Shanghai Keentai Biotechnology
Co., Ltd. (上海科恩泰生物医药 0.00 0.00 0.00 0.00 --
科技有限公司)
Others 30,000.00 0.00 0.00 0.00 --
Total 18,713,637.23 0.00 0.00 89,722,066.22 --
13. Investment properties
Housing and
Item Total
buildings
I. Book value
1. Beginning balance 61,914,754.28 61,914,754.28
2.Increase 0.00 0.00
3.Decrease 0.00 0.00
4.Closing balance 61,914,754.28 61,914,754.28
II. Accumulated depreciation and amortisation
1.Beginning balance 55,723,278.85 55,723,278.85
2.Increase 0.00 0.00
(1) Amortisation for the year 0.00 0.00
3.Decrease 0.00 0.00
(1) Disposal 0.00 0.00
4. Closing balance 55,723,278.85 55,723,278.85
III. Provision for impairment 0.00 0.00
1.Beginning balance 0.00 0.00
2.Increase 0.00 0.00
(1) Provision 0.00 0.00
3. Decrease 0.00 0.00
(1) Disposal 0.00 0.00
4.Closing balance 0.00 0.00
IV. Carrying amount
1.Carrying value at year end 6,191,475.43 6,191,475.43
2.Carrying value at beginning of year 6,191,475.43 6,191,475.43
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Joincare Pharmaceutical Group Annual Report 2022
14. Fixed assets
Item 2022.12.31 2021.12.31
Fixed assets 5,265,200,110.91 4,839,005,169.81
Fixed assets for disposal 0.00 0.00
Total 5,265,200,110.91 4,839,005,169.81
(1) Fixed assets
①Details of fixed assets
Electronic
Housing and Machinery and
Item Motor vehicles equipment and Total
buildings equipment
others
I. Book value:
1.Beginning balance 3,976,199,210.91 5,119,816,758.02 108,015,330.21 783,366,162.98 9,987,397,462.12
2.Increase 342,127,376.83 628,876,021.14 6,461,652.11 97,012,190.24 1,074,477,240.32
(1) Purchase 65,441,049.18 147,389,281.70 5,280,741.59 58,931,934.55 277,043,007.02
(2) Transfer from
276,686,327.65 481,486,739.44 0.00 15,719,395.68 773,892,462.77
construction in progress
(3) Others 0.00 0.00 1,180,910.52 22,360,860.01 23,541,770.53
3.Decrease 13,272,568.72 111,148,294.43 8,185,405.44 23,825,880.16 156,432,148.75
(1) Disposal or scrap 13,272,568.72 111,148,294.43 8,185,405.44 23,825,880.16 156,432,148.75
4.Closing balance 4,305,054,019.02 5,637,544,484.73 106,291,576.88 856,552,473.06 10,905,442,553.69
II. Accumulated
- - - - -
depreciation
1.Beginning balance 1,633,263,266.38 2,850,461,052.50 76,499,140.97 478,176,262.36 5,038,399,722.21
2.Increase 181,477,081.95 346,324,779.03 10,462,940.46 81,920,529.52 620,185,330.96
(1) Provision 181,477,081.95 346,324,779.03 9,296,030.33 81,920,529.52 619,018,420.83
(2) Other increase 0.00 0.00 1,166,910.13 0.00 1,166,910.13
3.Decrease 7,852,119.16 86,818,439.43 4,791,950.88 21,842,549.49 121,305,058.96
(1) Disposal or scrap 7,852,119.16 86,818,439.43 4,791,950.88 21,842,549.49 121,305,058.96
4.Closing balance 1,806,888,229.17 3,109,967,392.10 82,170,130.55 538,254,242.39 5,537,279,994.21
III. Provision for
- - - - -
impairment
1.Beginning balance 26,564,784.45 64,186,228.26 41,578.65 19,199,978.74 109,992,570.10
2.Increase 0.00 161,670.35 0.00 24,878.03 186,548.38
(1) Provision 0.00 161,670.35 0.00 24,878.03 186,548.38
3.Decrease 90,292.62 6,798,397.52 41,578.65 286,401.12 7,216,669.91
(1) Disposal or scrap 90,292.62 6,798,397.52 41,578.65 286,401.12 7,216,669.91
4.Closing balance 26,474,491.83 57,549,501.09 0.00 18,938,455.65 102,962,448.57
IV. Carrying amount - - - - -
1. Carrying value at
2,471,691,298.02 2,470,027,591.54 24,121,446.33 299,359,775.02 5,265,200,110.91
period end
2. Carrying value at
2,316,371,160.08 2,205,169,477.26 31,474,610.59 285,989,921.88 4,839,005,169.81
beginning of year
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Joincare Pharmaceutical Group Annual Report 2022
②Fixed assets with temporary idle
Accumulated Provision for
Item Book value Carrying amount Note
depreciation impairment
Housing and buildings 23,926,279.99 14,490,518.30 5,155,770.80 4,279,990.89
Machinery and
169,656,887.40 117,171,435.61 35,728,561.41 16,756,890.38
equipment
Electronic equipment
3,119,826.93 2,533,159.51 180,534.90 406,132.52
and others
Total 196,702,994.32 134,195,113.42 41,064,867.11 21,443,013.79
③Fixed assets held under finance leases
Item Carrying amount
Housing and buildings 1,753,301.29
④Fixed assets without property certificate
Item Carrying amount Reasons for pending title certificate
Housing and buildings 182,318,779.85 Application in progress
15. Construction in progress
Item 2022.12.31 2021.12.31
Construction in progress 810,835,273.97 742,533,534.23
Construction materials 464,794.99 465,209.52
Total 811,300,068.96 742,998,743.75
① Information of construction in progress
2022.12.31 2021.12.31
Item
Provision for Provision for
Book balance Net book value Book balance Net book value
impairment impairment
Haibin Pharma Pingshang New
133,771,969.05 11,068,266.54 122,703,702.51 144,364,877.42 0.00 144,364,877.42
Factory (深圳海滨坪山新厂)
Guangda New Factory Project 360,963,893.27 0.00 360,963,893.27 179,745,064.48 0.00 179,745,064.48
Fuxing Company Phase I & II
Projects and others (福兴公司I. 38,842,449.73 0.00 38,842,449.73 36,580,114.83 0.00 36,580,114.83
二期项目及其他)
Project of Shijiao New Factory
12,409,895.73 0.00 12,409,895.73 61,845,397.73 0.00 61,845,397.73
(石角新厂项目)
Transformation Project of
Pharmaceutical Factory 70,972,186.23 0.00 70,972,186.23 19,579,452.17 0.00 19,579,452.17
Workshop (药厂车间建设项目)
Construction Project for
Microsphere Workshop
(including Gose) of Livzon
Group Livzon Pharmaceutical 39,976,590.91 0.00 39,976,590.91 15,616,651.12 0.00 15,616,651.12
Factory (丽珠制药厂) 微球车间
(含戈舍) 建设项目)
P06 Construction Project of
Livzon Group Livzon
180,053.79 0.00 180,053.79 83,020,966.01 0.00 83,020,966.01
Pharmaceutical Factory (丽珠制
药厂) P06建设项目)
Project of lyophilized powder
injection workshop (冻干粉针车 1,157,559.47 0.00 1,157,559.47 70,673,332.62 0.00 70,673,332.62
间项目)
P09 Construction Project of
0.00 0.00 0.00 54,924,595.61 0.00 54,924,595.61
Livzon Group Livzon
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Joincare Pharmaceutical Group Annual Report 2022
2022.12.31 2021.12.31
Item
Provision for Provision for
Book balance Net book value Book balance Net book value
impairment impairment
Pharmaceutical Factory (丽珠制
药厂) P09建设项目)
P04/P05 Construction Project of
Livzon Group Livzon
1,560,960.52 0.00 1,560,960.52 257,441.66 0.00 257,441.66
Pharmaceutical Factory (丽珠制
药厂) P04/P05建设项目)
Shanghai Livzon-Microsphere
Phase II Technical
34,677,843.69 0.00 34,677,843.69 10,123,776.54 0.00 10,123,776.54
Transformation Project (上海丽
珠-微球二期技改项目)
Others 127,559,478.58 169,340.46 127,390,138.12 65,971,204.50 169,340.46 65,801,864.04
Total 822,072,880.97 11,237,607.00 810,835,273.97 742,702,874.69 169,340.46 742,533,534.23
②Changes in significant construction in progress
Including: Interest
Cumulativ
interest capitalisati
Transfer to fixed e amount
Name of Project 2021.12.31 Increase Other decrease capitalise on rate for 2022.12.31
assets of interest
d in the the year
capitalised
year (%)
Haibin Pharma
Pingshang New Factory 144,364,877.42 218,228,529.86 164,393,809.16 64,427,629.07 0.00 0.00 0.00 133,771,969.05
(深圳海滨坪山新厂)
Guangda New Factory
179,745,064.48 181,218,828.79 0.00 0.00 0.00 0.00 0.00 360,963,893.27
Project (光大新厂项目)
Fuxing Company Phase
I & II Projects and
36,580,114.83 77,051,711.32 74,789,376.42 0.00 0.00 0.00 0.00 38,842,449.73
others (福兴公司一、
二期项目及其他)
Project of Shijiao New
Factory (石角新厂项 61,845,397.73 30,318,359.71 79,753,861.71 0.00 0.00 0.00 0.00 12,409,895.73
目)
Transformation Project
of Pharmaceutical
Factory Workshop (药 19,579,452.17 70,984,195.20 19,591,461.14 0.00 0.00 0.00 0.00 70,972,186.23
厂车间建设项目)
Construction Project for
Microsphere Workshop
(including Gose) of
Livzon Group Livzon
Pharmaceutical Factory 15,616,651.12 29,308,744.91 4,948,805.12 0.00 0.00 0.00 0.00 39,976,590.91
(丽珠集团丽珠制药厂
微球车间(含戈舍) 建
设项目)
P06 Construction
Project of Livzon Group
Livzon Pharmaceutical 83,020,966.01 7,323,839.40 90,164,751.62 0.00 0.00 0.00 0.00 180,053.79
Factory (丽珠集团丽珠
制药厂 P06 建设项目)
Project of lyophilized
powder injection
70,673,332.62 49,803,364.24 119,319,137.39 0.00 0.00 0.00 0.00 1,157,559.47
workshop 冻干粉针车
间项目)
P09 Construction
Project of Livzon Group
Livzon Pharmaceutical 54,924,595.61 99,318,116.09 154,242,711.70 0.00 0.00 0.00 0.00 0.00
Factory (丽珠集团丽珠
制药厂 P09 建设项目)
P04/P05 Construction
Project of Livzon Group
Livzon Pharmaceutical
Factory (丽珠集团丽珠 257,441.66 1,303,518.86 0.00 0.00 0.00 0.00 0.00 1,560,960.52
制药厂 P04/P05 建设项
目)
Technology
transformation project
10,123,776.54 24,554,067.15 0.00 0.00 0.00 0.00 0.00 34,677,843.69
for Microsphere Phase
II of Shanghai Livzon
226
Joincare Pharmaceutical Group Annual Report 2022
Including: Interest
Cumulativ
interest capitalisati
Transfer to fixed e amount
Name of Project 2021.12.31 Increase Other decrease capitalise on rate for 2022.12.31
assets of interest
d in the the year
capitalised
year (%)
(上海丽珠微球二期技
改项目)
Others 65,971,204.50 151,152,406.67 66,688,548.51 22,875,584.08 0.00 0.00 0.00 127,559,478.58
Total 742,702,874.69 940,565,682.20 773,892,462.77 87,303,213.15 0.00 0.00 0.00 822,072,880.97
Changes in significant construction in progress (Continued) :
Proportion of
Name of Project Budget cumulative input Progress % Source of fund
to budget %
Haibin Pharma Pingshang New Completion of Self-funding and funds
1,037,000,000.00 78.1 some projects raised
Factory (深圳海滨坪山新厂)
Guangda New Factory Project (光大
646,000,000.00 55.88 Under construction Self-funding
新厂项目)
Fuxing Company Phase I & II Projects
Completion of
and others (福兴公司一、二期项目 378,090,800.00 87.45 Self-funding
some projects
及其他)
Project of Shijiao New Factory (石角 Completion of Self-funding and funds
377,005,000.00 89.92
新厂项目) some projects raised
Transformation Project of
Completion of
Pharmaceutical Factory Workshop (药 306,558,388.48 61.17 Self-funding
some projects
厂车间建设项目)
Construction Project for Microsphere
Workshop (including Gose) of Livzon
Group Livzon Pharmaceutical Factory 262,445,000.00 Completion of Self-funding and funds
65.12 some projects raised
(丽珠集团丽珠制药厂微球车间(含
戈舍) 建设项目)
P06 Construction Project of Livzon
Group Livzon Pharmaceutical Factory Completion of
117,710,000.00 95.02 Self-funding
(丽珠集团丽珠制药厂 P06 建设项 some projects
目)
Project of lyophilized powder
Completion of Self-funding and funds
injection workshop (冻干粉针车间项 143,500,000.00 95.11 some projects raised
目)
P09 Construction Project of Livzon
Group Livzon Pharmaceutical Factory 296,580,000.00 100.00 Completed Self-funding
(丽珠丽珠制药厂 P09 建设项目)
P04/P05 Construction Project of
Livzon Group Livzon Pharmaceutical
Factory (丽珠集团丽珠制药厂 126,880,000.00 1.23 Under construction Self-funding
P04/P05 建设项目)
Technology transformation project for
Microsphere Phase II of Shanghai
Livzon (上海丽珠微球二期技改项 40,500,000.00 85.62 Under construction Self-funding
目)
Others -- -- -- Self-funding
Total 3,732,269,188.48 -- -- --
Other decrease is mainly transferred to long-term deferred expenses.
16. Right-of-use assets
Item Housing and buildings Total
I. Book value:
227
Joincare Pharmaceutical Group Annual Report 2022
Item Housing and buildings Total
1.Beginning balance 69,960,518.27 69,960,518.27
2.Increase 29,002,437.68 29,002,437.68
(1) Leasing 29,002,437.68 29,002,437.68
3.Decrease 20,627,100.42 20,627,100.42
4. Closing balance 78,335,855.53 78,335,855.53
II. Accumulated depreciation
1.Beginning balance 23,185,758.58 23,185,758.58
2.Increase 32,367,074.98 32,367,074.98
(1) Provision 32,367,074.98 32,367,074.98
3.Decrease 19,060,112.00 19,060,112.00
4.Closing balance 36,492,721.56 36,492,721.56
III. Provision for impairment
1.Beginning balance 0.00 0.00
2.Increase 0.00 0.00
3.Decrease 0.00 0.00
4.Closing balance 0.00 0.00
IV. Carrying amount
1.Carrying value at year
41,843,133.97 41,843,133.97
end
2.Carrying value at
46,774,759.69 46,774,759.69
beginning of year
As of 31 December 2022, the Company recognised lease expenses related to short-term leases and the leases
of low value assets of RMB239,280.
17. Intangible assets
(1) Details of intangible assets
Patent and Trademark
Item Land use rights Software Others Total
technical know-how rights
I. Book value
1.Beginning balance 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
2.Increase 28,488,823.32 496,141,693.87 14,020,493.45 0.00 0.00 538,651,010.64
(1) Purchase 28,488,823.32 1,100,000.00 14,020,493.45 0.00 0.00 43,609,316.77
(2) Internal R&D 0.00 495,041,693.87 0.00 0.00 0.00 495,041,693.87
3.Decrease 0.00 0.00 0.00 0.00 0.00 0.00
Disposal 0.00 0.00 0.00 0.00 0.00 0.00
4.Closing balance 442,251,561.19 1,015,955,570.54 93,252,884.14 62,769,716.98 10,985,294.53 1,625,215,027.38
II. Accumulated
amortisation
1.Beginning balance 122,997,170.29 369,635,517.03 56,287,892.35 62,765,196.55 5,584,191.37 617,269,967.59
2.Increase 9,122,311.45 172,774,379.26 7,114,468.80 471.72 1,098,529.45 190,110,160.68
Provision 9,122,311.45 172,774,379.26 7,114,468.80 471.72 1,098,529.45 190,110,160.68
3.Decrease 0.00 0.00 0.00 0.00 0.00 0.00
228
Joincare Pharmaceutical Group Annual Report 2022
Patent and Trademark
Item Land use rights Software Others Total
technical know-how rights
Disposal 0.00 0.00 0.00 0.00 0.00 0.00
4.Closing balance 132,119,481.74 542,409,896.29 63,402,361.15 62,765,668.27 6,682,720.82 807,380,128.27
III. Provision for
impairment
1.Beginning balance 981,826.94 11,530,127.41 0.00 0.00 0.00 12,511,954.35
2.Increase 0.00 3,207,819.01 0.00 0.00 0.00 3,207,819.01
Provision 0.00 3,207,819.01 0.00 0.00 0.00 3,207,819.01
3.Decrease 0.00 0.00 0.00 0.00 0.00 0.00
4.Closing balance 981,826.94 14,737,946.42 0.00 0.00 0.00 15,719,773.36
IV. Carrying amount
1.Carrying value at
309,150,252.51 458,807,727.83 29,850,522.99 4,048.71 4,302,573.71 802,115,125.75
year end
2.Carrying value at
289,783,740.64 138,648,232.23 22,944,498.34 4,520.43 5,401,103.16 456,782,094.80
beginning of year
As of 31 December 2022, intangible assets formed through internal research and development of the
company account for 39.03% of the balance of intangible assets.
At the balance sheet date, the Company engaged an appraiser to test the impairment of biopharmaceutical
technologies of the current period carry-over intangible assets, using the biotechnology-related asset group
to estimate the present value of future cash flows in anticipation of the recoverable amount of input costs.
The asset group was tested as not impaired.
The projected future cash flows of the asset group are determined on the basis of the financial budget for the
next five years established by management, and the cash flow for the years beyond which the five-year
financial budget is zero.
The main assumptions of discounted future cash flows in the impairment test are as follows:
The calculation of the projected present future cash flow value of the asset group related to this biotechnology
uses a gross margin of 84.50%-91.50% and an operating income growth rate of -93%~71%, and a discount
cash flow rate of 15.00% as key assumptions. Management determines these assumptions based on historical
conditions prior to the budget period and projections of market developments.
(2) Intangible assets pending for certificates of ownership
Item Carrying amount Reasons for pending title certificate
Land use rights 4,012,089.17 Application in progress
(3) Intangible assets
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
18. Development costs
Increase Decrease
Item 2021.12.31 Internal Recognized as Recognised in 2022.12.31
Other
development intangible profit or loss in
increase
costs assets the year
Chemical
179,411,666.34 99,354,717.46 0.00 75,078,369.10 66,830,198.83 136,857,815.87
pharmaceuticals
Biologics 527,275,067.73 92,785,310.25 0.00 381,832,741.41 0.00 238,227,636.57
229
Joincare Pharmaceutical Group Annual Report 2022
APIs and others 80,306,701.64 11,023,313.45 0.00 38,130,583.36 0.00 53,199,431.73
Total 786,993,435.71 203,163,341.16 0.00 495,041,693.87 66,830,198.83 428,284,884.17
Continued:
Time for commencement Progress of research and
Item Specific basis of capitalisation
of capitalisation development at year end
Chemical
Clinical trial Obtain approval for clinical trial Clinical stage
pharmaceuticals
Biologics Clinical trial Obtain approval for clinical trial Clinical stage
APIs and others Pilot stage Pilot related information Post-pilot stage
19. Goodwill
(1) Book value of goodwill
Increase Decrease
Name of investee or matter from which goodwill
2021.12.31 Formation by 2022.12.31
arose Disp
business Others Others
osal
combination
Shanghai Livzon Pharmaceutical Manufacturing
2,045,990.12 0.00 0.00 0.00 0.00 2,045,990.12
Co., Ltd. (上海丽珠制药有限公司)
Zhuhai FTZ Livzon Hecheng Pharmaceutical
Manufacturing Co., Ltd. (珠海保税区丽珠合成制 3,492,752.58 0.00 0.00 0.00 0.00 3,492,752.58
药有限公司)
Sichuan Guangda Pharmaceutical Manufacturing
13,863,330.24 0.00 0.00 0.00 0.00 13,863,330.24
Co., Ltd. (四川光大制药有限公司)
Livzon Group Xinbeijiang Pharmaceutical
Manufacturing Inc. (丽珠集团新北江制药股份有 7,271,307.03 0.00 0.00 0.00 0.00 7,271,307.03
限公司)
Livzon Group Fuzhou Fuxing Pharmaceutical Co.,
46,926,155.25 0.00 0.00 0.00 0.00 46,926,155.25
Ltd. (丽珠集团福州福兴医药有限公司)
Livzon Group Livzon Pharmaceutical Factory (丽珠
47,912,269.66 0.00 0.00 0.00 0.00 47,912,269.66
制药厂)
Livzon Group 395,306,126.41 0.00 0.00 0.00 0.00 395,306,126.41
Shenzhen Haibin Pharmaceutical Co., Ltd. (深圳市
91,878,068.72 0.00 0.00 0.00 0.00 91,878,068.72
海滨制药有限公司)
Joincare Daily-Use & Health Care Co., Ltd. (健康
1,610,047.91 0.00 0.00 0.00 0.00 1,610,047.91
元日用保健品有限公司)
Shenzhen Taitai Pharmaceutical Co., Ltd. (深圳太
635,417.23 0.00 0.00 0.00 0.00 635,417.23
太药业有限公司)
Health Pharmaceuticals (China) Limited (健康药业
23,516,552.65 0.00 0.00 0.00 0.00 23,516,552.65
(中国) 有限公司)
Shenzhen Hiyeah Industry Co., Ltd (深圳市喜悦实
6,000,000.00 0.00 0.00 0.00 0.00 6,000,000.00
业有限公司)
Jiaozuo Joincare Bio Technological Co., Ltd. (焦作
92,035.87 0.00 0.00 0.00 0.00 92,035.87
健康元生物制品有限公司)
Total 640,550,053.67 0.00 0.00 0.00 0.00 640,550,053.67
(2) Provision for impairment of goodwill
Increase Decrease
Name of investee or matter from which goodwill
2021.12.31 2022.12.31
arose Dispos
Provision Others Others
al
Livzon Group Xinbeijiang Pharmaceutical
Manufacturing Inc. (丽珠集团新北江制药股份有限 7,271,307.03 0.00 0.00 0.00 0.00 7,271,307.03
公司)
Livzon Group Fuzhou Fuxing Pharmaceutical Co.,
11,200,000.00 0.00 0.00 0.00 0.00 11,200,000.00
Ltd. (丽珠集团福州福兴医药有限公司)
Shenzhen Hiyeah Industry Co., Ltd (深圳市喜悦实
6,000,000.00 0.00 0.00 0.00 0.00 6,000,000.00
业有限公司)
Joincare Daily-Use & Health Care Co., Ltd. (健康元
1,610,047.91 0.00 0.00 0.00 0.00 1,610,047.91
日用保健品有限公司)
Total 26,081,354.94 0.00 0.00 0.00 0.00 26,081,354.94
230
Joincare Pharmaceutical Group Annual Report 2022
Goodwill of the Company arose from its business combination involving enterprises not under common
control in previous years.
On the balance sheet date, the Company conducts an impairment test on goodwill. When estimating the
recoverable amount of input costs, it uses a assets group related to goodwill to estimate the present value of
future cash flows.
The estimated future cash flow of asset groups is calculated according to the five-year financial budget plan
made by the management, the cash flows in the years beyond the five-year budget plan remain stable.
Key assumptions of discounted future cash flow for goodwill impairment test are as follows:
For the calculation of estimated present value of future cash flow of the asset groups related to goodwill of
Livzon Group, key assumptions are a gross margin of 63.27%-63.46% and a business revenue growth rate
of 0-9.08% as well as a cash flow discount rate of 12.21%. 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. (深圳市海滨制药有限公司), key assumptions are a gross margin
of 38.91%-40.11% and a business revenue growth rate of -9.19~2.79% 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.
The calculation of the estimated future present value of the goodwill-related asset portfolio of Livzon Group
Livzon Pharmaceutical Manufacturing Factory uses a gross profit margin of 82.19%-83.33% and an
operating income growth rate of 0~7.83%, and a discount cash flow rate of 14.72% as key assumptions.
Management determines these assumptions based on historical conditions prior to the budget period and
projections of market developments.
The calculation of the expected future present value of goodwill-related asset portfolio of Livzon Group
Fuzhou Fuxing Pharmaceutical Co., Ltd. uses a gross profit margin of 63.43%-64.44% and an operating
income growth rate of 0~11.80%, and a discount cash flow rate of 15.04% as key assumptions. Management
determines these assumptions based on historical conditions prior to the budget period and projections of
market developments.
As tested, the management of the Company expects that no impairment provision is needed during the
period.
20. Long-term deferred expenses
Decrease
Item 2021.12.31 Increase Other 2022.12.31
Amortization
decrease
Renovation costs of
26,940,700.02 9,114,501.74 3,437,654.72 212,648.78 32,404,898.26
offices
Renovation costs of
138,705,258.94 70,216,911.41 31,651,658.96 0.00 177,270,511.39
plants
Certification costs of
311,654.79 0.00 120,640.56 0.00 191,014.23
GMP project
Others 34,758,127.18 56,097,158.72 22,844,892.83 9,100.00 68,001,293.07
Total 200,715,740.93 135,428,571.87 58,054,847.07 221,748.78 277,867,716.95
21. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets and deferred tax liabilities before offsetting
231
Joincare Pharmaceutical Group Annual Report 2022
2022.12.31 2021.12.31
Item Deductible or Deductible or Deferred tax
Deferred tax
taxable timing taxable timing assets or
assets or liabilities
differences differences liabilities
Deferred tax assets:
Provision for impairment of assets 336,502,793.26 51,790,732.85 323,372,877.26 54,704,601.96
Deductible difference arising from
965,912,234.46 145,014,131.32 945,774,497.50 166,481,490.01
accrued expenses
Deductible difference arising from tax
399,128,528.63 61,021,514.54 497,850,865.29 84,167,365.69
loss
Deferred income 329,970,021.95 49,511,503.29 375,321,674.10 60,145,851.14
Unrealised gains from intra-company
694,726,037.62 104,182,311.29 560,934,298.63 84,185,529.66
transactions
Changes in fair value of other equity
146,540,719.40 36,635,179.85 146,653,568.40 36,663,392.10
instruments
Deductible difference arising from
107,474,309.53 16,149,104.44 77,872,943.63 11,933,224.52
share incentive expenses
Changes in fair value of financial
7,298,819.37 1,234,418.76 6,918,505.67 1,158,336.82
assets held for trading
Other deductible temporary difference 455,485,646.11 68,322,846.92 282,821,670.90 53,103,074.81
Total 3,443,039,110.33 533,861,743.26 3,217,520,901.38 552,542,866.71
Deferred tax liabilities:
Changes in fair value of financial
20,269,315.67 3,216,065.39 19,970,547.94 3,215,329.05
assets held for trading
Accelerated depreciation of fixed
1,094,571,545.41 167,757,444.03 752,180,706.08 114,114,492.09
assets
Changes in fair value of other equity
242,925,303.81 39,399,916.06 359,110,036.65 70,405,084.25
instruments
Unrealised gains from intra-company
105,940,000.00 20,791,000.00 105,940,000.00 20,791,000.00
transactions
Total 1,463,706,164.89 231,164,425.48 1,237,201,290.67 208,525,905.39
(2) Deductible temporary differences and deductible tax losses of unrecognized deferred tax assets
Item 2022.12.31 2021.12.31
Deductible temporary differences 239,109,485.46 175,707,417.84
Deductible tax loss 2,804,958,759.64 1,365,909,940.62
Total 3,044,068,245.10 1,541,617,358.46
(3) Expiry of deductible tax losses in subsequent period
Year 2022.12.31 2021.12.31 Note
2022 0.00 129,386,282.40
2023 182,300,762.40 182,300,761.96
2024 385,139,111.62 385,138,859.92
2025 253,044,280.36 254,360,863.53
2026 390,203,263.39 389,994,598.37
2027 1,485,158,186.92 0.00
Non-expiry 109,113,154.95 24,728,574.44
Total 2,804,958,759.64 1,365,909,940.62
22. Other non-current assets
232
Joincare Pharmaceutical Group Annual Report 2022
Item 2022.12.31 2021.12.31
Term deposit and interests 812,562,286.58 52,127,500.00
VAT carry forward 3,338,552.19 56,384,552.60
Prepayment for acquisition of project
340,456,344.22 491,703,933.59
and equipment
Prepayment for acquisition of technical
415,000.00 63,368,017.61
know-how
Total 1,156,772,182.99 663,584,003.80
23. Short-term loans
(1) Short-term loans by category
Item 2022.12.31 2021.12.31
Unsecured loans 2,089,585,755.20 1,666,838,964.15
Guaranteed loans 36,464,859.86 851,645,870.94
Total 2,126,050,615.06 2,518,484,835.09
(2) The Company has no overdue short-term loans.
24. Financial liabilities held for trading
Item 2022.12.31 2021.12.31
Financial liabilities held for trading 755,634.43 143,302.24
Including:
Derivative financial liabilities 755,634.43 143,302.24
Total 755,634.43 143,302.24
Derivative financial liabilities represent foreign currency forward contracts. The loss from unexpired onerous
contracts measured at fair value on balance sheet date was recognised as financial liabilities held for trading.
25. Notes payable
Category 2022.12.31 2021.12.31
Bank acceptance bills 1,635,906,989.22 1,582,386,767.93
The Company has no overdue notes payable.
26. Accounts payable
Item 2022.12.31 2021.12.31
Within one year 815,158,453.21 809,539,858.35
Over 1 year 128,747,127.70 62,013,352.16
Total 943,905,580.91 871,553,210.51
No significant accounts payable aging over 1 year at the end of the period.
27. Contract liabilities
Item 2022.12.31 2021.12.31
Within one year 260,935,024.18 208,025,612.34
233
Joincare Pharmaceutical Group Annual Report 2022
Over 1 year 32,042,706.56 26,115,089.95
Total 292,977,730.74 234,140,702.29
No significant contract liabilities with ageing for more than 1 year at the end of the period. The amount of
contract liabilities at beginning of the period recognised as revenue during the period is RMB188,045,099.86.
28. Employee benefits payables
Item 2021.12.31 Increase Decrease 2022.12.31
Short-term employee benefits 473,806,357.40 2,179,864,994.17 2,082,528,146.47 571,143,205.10
Post-employment benefits -
341,723.80 146,280,117.93 146,037,217.37 584,624.36
Defined contribution plans
Termination benefits 1,282,742.00 1,880,944.59 1,880,944.59 1,282,742.00
Total 475,430,823.20 2,328,026,056.69 2,230,446,308.43 573,010,571.46
(1) Short-term employee benefits
Item 2021.12.31 Increase Decrease 2022.12.31
Salaries, bonus and allowances 325,123,978.13 1,788,026,844.16 1,738,082,893.10 375,067,929.19
Staff welfare 5,352,134.66 79,667,401.75 79,225,055.24 5,794,481.17
Social insurances 569,488.75 59,195,181.10 58,520,239.41 1,244,430.44
Including: 1. Medical insurance 467,562.91 54,244,259.70 53,558,791.79 1,153,030.82
2. Work injury insurance 62,711.37 3,046,821.43 3,058,209.96 51,322.84
3. Maternity insurance 39,214.47 1,904,099.97 1,903,237.66 40,076.78
Housing fund 1,493,719.88 60,105,695.76 59,375,841.16 2,223,574.48
Union funds and staff education 541,564.60 6,475,988.92 6,598,647.56 418,905.96
Stock Ownership Plan Special
140,725,471.38 186,393,882.48 140,725,470.00 186,393,883.86
Fund
Total 473,806,357.40 2,179,864,994.17 2,082,528,146.47 571,143,205.10
(2) Defined contribution plans
Item 2021.12.31 Increase Decrease 2022.12.31
Post-employment benefits 341,723.80 146,280,117.93 146,037,217.37 584,624.36
Including: 1. Basic pension
303,582.07 142,280,070.58 142,038,057.53 545,595.12
insurance
2. Unemployment insurance 38,141.73 4,000,047.35 3,999,159.84 39,029.24
Total 341,723.80 146,280,117.93 146,037,217.37 584,624.36
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 profit or loss for the current period or the cost of relevant assets when it occurs.
29. Taxes payable
Taxation 2022.12.31 2021.12.31
Value-added tax 166,151,353.61 91,860,518.74
234
Joincare Pharmaceutical Group Annual Report 2022
Taxation 2022.12.31 2021.12.31
Urban maintenance and construction tax 14,374,197.97 10,047,715.71
Enterprise income tax 124,039,899.44 145,106,168.70
Property tax 7,992,927.81 2,178,644.31
Land use tax 2,847,286.45 1,716,626.70
Individual income Tax 7,524,584.67 9,991,974.56
Stamp duty 2,904,260.39 676,792.62
Education surcharge 9,613,697.69 6,594,414.24
Others 2,254,065.70 2,445,327.83
Total 337,702,273.73 270,618,183.41
30. Other payables
Item 2022.12.31 2021.12.31
Dividends payable 12,252,074.84 6,951,984.46
Other payables 3,668,082,286.04 3,285,456,005.33
Total 3,680,334,360.88 3,292,407,989.79
(1) Dividends payable
Item 2022.12.31 2021.12.31
Common shares dividend 20,174.46 20,174.46
Qingyuan Xinbeijiang Enterprise (Group) Co., Ltd. 1,200,710.00 1,200,710.00
Other legal persons and individual shareholder of
6,682,964.50 3,311,300.00
subsidiaries
Internal staff shareholders of subsidiaries 4,348,225.88 2,419,800.00
Total 12,252,074.84 6,951,984.46
(2) Other payables
Item 2022.12.31 2021.12.31
Office expenses 69,513,003.38 66,603,733.56
Security deposits 89,750,329.22 85,316,947.15
Business promotion expenses 1,722,993,407.82 1,385,121,675.36
Technology transfer fee 10,000,000.00 10,000,000.00
Accrued expenses 1,714,076,189.32 1,696,272,218.54
Others 61,749,356.30 42,141,430.72
Total 3,668,082,286.04 3,285,456,005.33
The obligations of repurchasing restricted shares held by the directors, the senior management and their
spouses amounted RMB0.00 at period end.
Including, details of accrued expenses are as follow:
Reason of
Item 2022.12.31 2021.12.31 outstanding at year
end
235
Joincare Pharmaceutical Group Annual Report 2022
Utility bill 28,378,759.70 23,611,733.95 Unpaid
Research expenses 61,153,064.06 122,637,625.45 Unpaid
Business development and
1,517,084,251.92 1,459,695,485.76 Unpaid
promotion expenses
Audit and information
4,775,560.70 4,893,299.88 Unpaid
disclosure expenses
Others 102,684,552.94 85,434,073.50 Unpaid
Total 1,714,076,189.32 1,696,272,218.54
31. Non-current liabilities due within one year
Item 2022.12.31 2021.12.31
Lease liabilities due within one year 19,415,779.34 21,295,233.00
Long-term loans and interest due within one year 43,661,481.64 70,280,833.33
Total 63,077,260.98 91,576,066.33
32. Other current liabilities
Item 2022.12.31 2021.12.31
Output VAT pending for transfer 17,734,822.42 15,626,224.29
Payables for goods return 83,440,368.95 0.00
Others 101,522.98 0.00
Total 101,276,714.35 15,626,224.29
33. Long term loans
Range of Range of
Item 2022.12.31 2021.12.31
interest rate interest rate
Unsecured loans 1,475,974,398.32 2.45%-3.20% 897,061,086.11 3.45%-3.70%
Guaranteed loans 1,798,531,126.20 2.70%-3.60% 0.00
Subtotal 3,274,505,524.52 897,061,086.11
Less: Long-term loans due within one
43,661,481.64 70,280,833.33
year
Total 3,230,844,042.88 826,780,252.78
34. Lease liabilities
Item 2022.12.31 2021.12.31
Lease payments payable 42,898,265.42 46,367,027.32
Less: Lease liabilities due within one year 19,415,779.35 21,295,233.00
Total 23,482,486.07 25,071,794.32
Interest expenses accrued on lease liabilities within 2022 was RMB3.54 million, which was recorded in
financial expenses-Interest expense.
35. Deferred income
Reason of
Item 2021.12.31 Increase Decrease 2022.12.31
formation
Government grants 433,543,352.40 91,591,736.00 140,597,820.85 384,537,267.55
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Joincare Pharmaceutical Group Annual Report 2022
Government grants recorded as deferred income refer to Note 62. Government grants.
36. Other non-current liabilities
Item 2022.12.31 2021.12.31
The overall relocation and expansion project of
84,000,000.00 78,000,000.00
Sichuan Guangda Pharmaceutical Manufacturing
37. Share capital
In year 2022
Movement in the year (+ or -)
Item 2021.12.31 2022.12.31
Issue of new Conversion from
Others Subtotal
shares capital reserve
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
0 0 0 0 0 0
restrictions in aggregate
II. Tradable shares
0 0
1. Ordinary shares denominated in
1,907,727,908 72,421,134 0 -50,959,668 21,461,466 1,929,189,374
RMB
2. Domestically listed foreign shares 0 0 0 0 0 0
Tradable shares in aggregate 1,907,727,908 72,421,134 0 -50,959,668 21,461,466 1,929,189,374
III. Total number of shares 1,907,727,908 72,421,134 0 -50,959,668 21,461,466 1,929,189,374
The increase in the year: 1. The company issued 6,382,500 GDRs on the Swiss Stock Exchange, representing
63,825,000 A shares; 2. An increase of 8,596,134 shares due to the exercise of stock options
The reduction of share capital in this period is cancellation of repurchased shares.
In year 2021
Movement in the year (+ or -)
Item 2020.12.31 Conversion 2021.12.31
Issue of new
from capital Others Subtotal
shares
reserve
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
0 0 0 0 0 0
restrictions in aggregate
II. Tradable shares
1. Ordinary shares denominated in
1,952,780,764 10,082,440 0 -55,135,296 -45,052,856 1,907,727,908
RMB
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
III. Total number of shares 1,952,780,764 10,082,440 0 -55,135,296 -45,052,856 1,907,727,908
The increase in share capital in this period was due to issue of new shares and the decrease in share capital
in this period was due to cancellation of repurchased shares.
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Joincare Pharmaceutical Group Annual Report 2022
38. Capital reserve
In year 2022
Item 2021.12.31 Increase Decrease 2022.12.31
Capital premium 2,152,860,227.84 642,189,404.23 573,367,347.30 2,221,682,284.77
Other capital reserve 112,497,084.08 30,762,735.61 21,248,888.47 122,010,931.22
Total 2,265,357,311.92 672,952,139.84 594,616,235.77 2,343,693,215.99
The increase in capital premium was due to: 1. The Company's stock options were exercised for 8,596,134
shares, increasing the capital premium by RMB62,519,504.79, and correspondingly accrued share incentive
expenses of RMB4,975,185 which were transferred from other capital reserve to capital premium. 2. The
exercise of share options of the Company’s subsidiary, Livzon Group, increasing the capital premium of
RMB14,645,670.47 according to shareholding held by the Company, and correspondingly accrued share
incentive expenses of RMB9,019,288.61 which were transferred from other capital reserve to capital
premium. 3. After the stock options are exercised, the difference between the tax deductible expenses
according to tax regulations and the accrued expenses reduces the income tax payable by RMB1,347,279.67,
which increased the share premium accordingly. 4. The Company issues GDRs on the Swiss Stock Exchange,
increasing the capital reserve by RMB549,682,475.69.
The decrease in capital premium was due to: The Company and its subsidiary, Livzon Group, cancelled the
repurchased shares, the capital premium is reduced by RMB573,367,347.30.
The increase in other capital reserve was due to: 1. The Company and its subsidiary, Livzon Group, accrued
share incentive expenses RMB24,733,974.70. 2. The Company’s subsidiary, Livzon Group, made non-
proportional capital contribution to an investee under equity accounting method that led to change in
shareholding ratio and other equity, the capital reserve is increased by RMB6,028,760.91.
The decrease in other capital reserve was due to: 1. The exercise of share incentive by the Company’s
subsidiary, Livzon Group, caused the changes in the shareholding held by the Company and led to the change
in other equity, the capital reserve is decreased by RMB7,254,414.86. 2. Transfer of share incentive expenses
to capital premium of RMB13,994,473.61.
In year 2021
Item 2020.12.31 Increase Decrease 2021.12.31
Capital 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
Reasons for increase in capital premium: 1) 10,082,440 shares of the Company's stock options were exercised,
increasing the capital premium by RMB72,493,116.59, and the corresponding accrued share incentive fee of
RMB1,457,178.93 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 RMB88,109,304.98, and the corresponding accrued
equity incentive expenses of RMB3,083,866.59 are transferred from other capital reserves to the share capital
premium; 3) After the exercise of stock options, the difference between the tax deductible expenses and the
previous accrued expenses resulted in a reduction of income tax payable by RMB13,609,184.27, and the
share capital premium was increased accordingly; 4) Since the overseas financing of the subsidiary Livzon
is transferred into the Mainland China and thus the reduction of capital of the subsidiaries are not in the same
proportion, the difference between the share of net assets of the subsidiaries owned by the Company before
and after the reduction of capital caused the increase in capital premium by RMB190,362,971.53.
The decrease in share capital premium of RMB747,275,331.40 for the period was due to the cancellation of
shares repurchased by the Company and the subsidiary Livzon Group.
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Joincare Pharmaceutical Group Annual Report 2022
Reasons for increase in other capital reserves: 1) Share incentive expenses accrued by the Company and the
subsidiary Livzon Group was RMB11,652,295.42; 2) The subsidiary Livzon Group's equity method
accounting investment increased capital in different proportions, resulting in changes in the shareholding
ratio held by the Company and changes in other equity instrument investment, so this caused the capital
reserve increased by RMB35,846,098.47. 3) The exercise of the stock options of the incentive plan and
repurchase of shares of the subsidiary Livzon Group lead to changes in the Company's shareholding ratio
and changes in other equity instrument investment, so this caused the capital reserve decreased by
RMB55,295,829.27; 4) As the Company disposed of subsidiaries, the capital reserve of RMB11,975,168.51
transferred to profit or loss for this period.
Other capital reserves decreased as the equity incentive expenses of RMB4,541,045.52 was transferred to
the capital premium.
39. Treasury shares
In year 2022
Item 2021.12.31 Increase Decrease 2022.12.31
Repurchase of shares due to Share
Ownership Scheme and Share Options 222,644,454.50 0.00 0.00 222,644,454.50
Incentive Scheme
Repurchase of shares to be cancelled 0.00 724,513,822.62 599,981,715.83 124,532,106.79
Total 222,644,454.50 724,513,822.62 599,981,715.83 347,176,561.29
The increase in treasury shares in the period is the total amount of funds used by the Company to repurchase
61,916,903 shares of the Company through centralized bidding transactions.
The reduction of treasury shares in this period is: Cancellation of repurchased shares.
In year 2021
Item 2020.12.31 Increase Decrease 2021.12.31
Repurchase of shares due to Share
Ownership Scheme and Share Options 253,637,154.50 0.00 30,992,700.00 222,644,454.50
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
The decrease was due to the transfer to the stock ownership plan account for the current employee stock
ownership plan and shares incentive.
The change of repurchase of shares to be cancelled: The increase in treasury shares in this period is the total
amount of funds used by the Company to repurchase 55,135,296 shares of the Company through centralized
bidding transactions. The decrease in treasury shares was the cancellation of repurchase shares.
40. Other comprehensive income
In year 2022
Current year
Less:
2021.12.31 transferred to Amount Amount 2022.12.31
Item profit or loss attributable attributable
(1) Amount before Less: Income (3) =(1) +(2)
in current to parent to minority
tax tax expenses
year or company interests after
retained after tax(2) tax
earnings
I. Other comprehensive
income not reclassified into 102,556,982.18 37,438,265.00 89,722,066.22 -1,303,488.43 -85,577,350.31 34,597,037.52 16,979,631.87
profit or loss subsequently
1.Other comprehensive income
not reclassified to profit or loss 6,658,847.65 4,723,927.54 0.00 0.00 2,116,352.61 2,607,574.93 8,775,200.25
under equity method
239
Joincare Pharmaceutical Group Annual Report 2022
2.Changes in fair value of
other equity instrument 95,898,134.53 32,714,337.46 89,722,066.22 -1,303,488.43 -87,693,702.91 31,989,462.58 8,204,431.61
investments
II. Other comprehensive
income that will be
-97,169,436.20 125,587,048.18 0.00 0.00 84,894,277.87 40,692,770.31 -12,275,158.33
reclassified into profit or loss
subsequently
1.Other comprehensive
income that will be transferred
37,989.91 527,718.52 0.00 0.00 236,421.59 291,296.93 274,411.50
to profit or loss under equity
method
2.Translation difference of
foreign currency financial -97,207,426.12 125,059,329.66 0.00 0.00 84,657,856.28 40,401,473.38 -12,549,569.84
statements
Total other comprehensive
5,387,545.97 163,025,313.18 89,722,066.22 -1,303,488.43 -683,072.44 75,289,807.82 4,704,473.53
income
In year 2021
Current year
Less:
2020.12.31 transferred to Amount Amount 2021.12.31
Item profit or loss attributable to attributable to
(1) Amount Less: Income (3) =(1) +(2)
in current parent minority
before tax tax expenses
year or company after interests after
retained tax(2) tax
earnings
I. Other comprehensive
income not reclassified into 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
profit or loss subsequently
1.Other comprehensive income
not reclassified to profit or loss 0.00 14,820,196.44 0.00 0.00 6,658,847.65 8,161,348.794 6,658,847.65
under equity method
2.Changes in fair value of other
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 instrument investments
II. Other comprehensive
income that will 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
reclassified into profit or loss
subsequently
1.Other comprehensive
income that will be transferred
51,589.71 -30,268.270 0.00 0.00 -13,599.80 -16,668.468 37,989.91
to profit or loss under equity
method
2.Translation difference of
- -
foreign currency financial -64,367,493.82 0.00 0.00 -32,839,932.30 -97,207,426.12
46,915,124.650 14,075,192.346
statements
Total other comprehensive - -
116,300,559.28 -3,562,641.71 171,926,789.47 2,196,770.08 5,387,545.97
income 110,913,013.31 66,773,187.941
41. Surplus reserve
In year 2022
Item 2021.12.31 Increase Decrease 2022.12.31
Statutory surplus
599,506,581.71 93,945,402.42 0.00 693,451,984.13
reserve
Discretionary surplus
40,210,642.44 0.00 0.00 40,210,642.44
reserve
Reserve funds 1,103,954.93 0.00 0.00 1,103,954.93
Total 640,821,179.08 93,945,402.42 0.00 734,766,581.50
In year 2021
Item 2020.12.31 Increase Decrease 2021.12.31
Statutory surplus
474,626,867.82 124,879,713.89 0.00 599,506,581.71
reserve
Discretionary surplus
40,210,642.44 0.00 0.00 40,210,642.44
reserve
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. Undistributed profits
240
Joincare Pharmaceutical Group Annual Report 2022
(1) Movement of undistributed profits
2022 2021 Appropriat
Item
ion ratio
Retained earnings in previous period before
7,223,644,166.22 6,231,451,582.26 --
adjustments
Adjustments to opening balance of retained earnings
0.00 0.00 --
(increase +, decrease -)
Opening balance of retained earnings after adjustments 7,223,644,166.22 6,231,451,582.26
Add: Net profit attributable to parent company for the
1,502,595,840.48 1,328,499,432.05 --
current year
Gains from disposal of other equity instruments
101,906,354.19 77,248,253.85 --
investment
Less: Appropriation of statutory surplus reserve 93,945,402.42 124,879,713.89 10%
Appropriation of discretionary surplus reserve 0.00 0.00
Appropriation for dividends to ordinary shares 277,557,631.65 288,675,388.05
Dividend to ordinary shares converted to share
0.00 0.00
capital
Closing balance of undistributed profits 8,456,643,326.82 7,223,644,166.22
(2) Profit distributions
Unit: RMB
Item 2022 2021
Dividends:
2021 year-end dividend (Note 2) 277,557,631.65 0.00
2020 year-end dividend (Note 3) -- 288,675,388.05
Dividends proposed after the balance sheet date:
2022 year-end dividend (Note 1) 0.00 0.00
2021 year-end dividend (Note 2) 277,557,631.65
Note 1: On 27 April 2023, the twenty-third meeting of the eighth board of directors of the Company passed
the 2022 annual profit distribution plan. A cash dividend of RMB1.80 (tax inclusive) for every 10 shares
would be distributed to all shareholders based on the Company's total share capital, deducted by the
repurchased shares held in the Company's special securities account, on the equity registration date
determined by the implementation of the Company's 2022 annual profit distribution plan. The remaining
undistributed profits are carried forward for distribution in future years.
Note 2: On 29 March 2022, the ninth meeting of the eighth board of directors of the Company passed the
2021 annual profit distribution plan. A cash dividend of RMB1.50 (tax inclusive) for every 10 shares would
be distributed to all shareholders based on the Company's total share capital, deducted by the repurchased
shares held in the Company's special securities account, on the equity registration date determined by the
implementation of the Company's 2021 annual profit distribution plan. The remaining undistributed profits
are carried forward for distribution in future years.
Note 3: According to the "Profit Distribution Plan for 2020 of the Company" approved by the Company's
2020 Annual General Meeting of Shareholders on 21 May 2021, the Company distributed cash dividends to
all shareholders, RMB0.15 per share, based on the 1,924,502,587 shares, which was calculated by the
1,958,593,217 issued shares registered in China Securities Depository and Clearing Corporation Limited
(Shenzhen Branch) on 24 June 2020 with deduction of 34,090,630 repurchased shares held in repurchased
account, the total amount was RMB288,675,388.05.
43. Operating income and operating cost
241
Joincare Pharmaceutical Group Annual Report 2022
(1) Operating income and operating cost
2022 2021
Item
Revenue Cost Revenue Cost
Primary operations 17,012,733,738.86 6,160,330,584.19 15,746,624,848.53 5,604,702,296.12
Other operations 130,019,329.96 91,934,724.21 157,063,418.06 111,591,591.46
Total 17,142,753,068.82 6,252,265,308.40 15,903,688,266.59 5,716,293,887.58
(2) Primary Disaggregate information of operating income
① Segregation by products
2022 2021
Item
Revenue Cost Revenue Cost
chemical active
pharmaceutical
ingredients (APIs) and 5,229,641,907.04 3,409,781,896.55 4,690,255,375.73 3,184,889,165.53
intermediates (化学原
料药及中间体)
Chemical
pharmaceuticals (化学 9,226,385,569.43 1,813,969,087.68 8,876,919,296.64 1,753,573,833.73
药物)
Traditional Chinese
1,296,583,761.24 427,894,665.07 1,109,344,037.45 295,328,306.33
medicine (中药制剂)
Biological products (生
408,488,131.90 106,811,638.64 225,756,503.31 15,987,958.28
物制品)
Health care products
121,235,545.22 46,223,021.02 115,164,422.30 33,652,500.02
(保健食品)
Diagnostic reagents and
equipment (诊断试剂及 723,535,115.00 352,636,503.06 723,917,736.81 319,168,131.72
设备)
Others 102,352.31 263,529.90 254,849.67 328,336.21
Subtotal of
17,005,972,382.14 6,157,580,341.92 15,741,612,221.92 5,602,928,231.82
pharmaceutical industry
Service industry 6,761,356.72 2,750,242.27 5,012,626.61 1,774,064.30
Total 17,012,733,738.86 6,160,330,584.19 15,746,624,848.53 5,604,702,296.12
② Segregation by operating location
2022 2021
Item
Revenue Cost Revenue Cost
Domestic 14,170,771,017.92 4,326,229,111.25 13,175,044,906.28 3,837,751,076.40
Overseas 2,841,962,720.94 1,834,101,472.94 2,571,579,942.25 1,766,951,219.72
Total 17,012,733,738.86 6,160,330,584.19 15,746,624,848.53 5,604,702,296.12
③ Segregation by timing of revenue recognition
2022 2021
Item
Revenue Cost Revenue Cost
Commodities
(Recognized at a point 17,012,733,738.86 6,160,330,584.19 15,746,624,848.53 5,604,702,296.12
in time)
242
Joincare Pharmaceutical Group Annual Report 2022
④ Information of top five customers of business revenue
Total operating revenue from top five Proportion to primary operating income in
Period
customers the period (%)
2022 1,524,490,064.48 8.96
2021 1,372,032,796.69 8.71
⑤ Segregation by other operations
2022 2021
Item
Revenue Cost Revenue Cost
Sale of raw materials 47,190,775.25 31,174,586.16 50,440,716.79 40,772,550.07
Processing fee 5,995,904.44 2,546,785.48 6,794,908.37 1,660,944.94
Rental fees 10,731,614.42 405,023.12 9,381,937.42 112,497.34
Power fee 11,028,103.39 10,220,631.76 11,855,332.16 11,464,416.78
Others 55,072,932.46 47,587,697.69 78,590,523.32 57,581,182.33
Total 130,019,329.96 91,934,724.21 157,063,418.06 111,591,591.46
44. Taxes and surcharges
Item 2022 2021
Urban construction tax 86,745,317.20 78,915,243.23
Education surcharge 64,105,649.70 57,919,345.89
Land use tax 10,656,172.45 9,853,262.81
Property tax 24,496,501.64 22,448,547.60
Stamp duty and others 13,742,716.57 13,680,250.49
Total 199,746,357.56 182,816,650.02
Note: The bases of calculations for major taxes and surcharges are set out in Note IV. Taxation.
45. Selling expenses
Item 2022 2021
Marketing and promotional expenses 4,372,087,623.70 4,477,764,584.15
Staff salaries 456,875,210.86 397,170,070.40
Entertainment and travel expenses 50,363,363.02 65,297,664.11
Conference fees 13,696,783.94 23,554,731.43
Others 57,779,474.64 63,025,095.32
Total 4,950,802,456.16 5,026,812,145.41
46. Administrative expenses
Item 2022 2021
Staff salaries 570,458,570.31 458,139,486.90
Depreciation and amortisation 113,223,517.86 118,237,699.36
Loss on suspension of operations 0.00 67,730,993.25
243
Joincare Pharmaceutical Group Annual Report 2022
Share incentive expenses 56,241,342.12 27,642,491.39
Advisory, consultancy and information
disclosure fees 22,074,505.08 28,176,640.22
Quality project expenses 29,400,960.89 46,075,518.11
Office, entertainment and travelling
expenses 59,419,007.80 60,231,705.78
Repair of utilities, transportation and
miscellaneous expenses 32,266,815.31 41,571,843.51
Recruitment and staff training expenses 10,962,130.33 10,648,299.29
Others 98,436,741.81 80,798,766.52
Total 992,483,591.51 939,253,444.33
47. Research and development expenses
Item 2022 2021
Material costs 290,480,597.96 289,853,404.42
Staff salaries 429,267,039.97 399,459,964.18
Share incentive expenses 835,636.96 6,884,591.21
Testing fees 597,331,039.56 434,694,547.02
Depreciation and amortisation 274,454,884.02 130,493,088.54
Acquired Technology 0.00 7,318,927.47
Others 149,718,881.47 128,426,750.49
Total 1,742,088,079.94 1,397,131,273.33
48. Financial expenses
Item 2022 2021
Interest expense 139,016,104.44 90,278,042.69
Less: Interest income 395,476,309.66 191,964,051.82
Exchange gain or loss -104,462,941.41 2,737,152.59
Bank charges and others 8,475,722.01 6,054,104.82
Total -352,447,424.62 -92,894,751.72
49. Other income
Related to assets/
Item 2022 2021
Related to income
Government grants 132,272,375.37 59,110,913.13 Related to assets
Government grants 154,570,556.96 186,224,227.56 Related to income
Handling fees for tax withholding 3,025,074.11 2,011,794.27
Total 289,868,006.44 247,346,934.96
For specific information on government grants, please refer to Note V. 62. Government grants for details.
50. Investment income
Item 2022 2021
Long-term equity investments income under equity method 70,577,657.04 10,281,021.59
244
Joincare Pharmaceutical Group Annual Report 2022
Investment income from disposal of long-term equity investments 4,242,404.46 -9,552,139.31
Investment income from financial assets held for trading during the 2,421,216.08
306,526.30
holding period
Dividend income from other equity instrument investments 18,713,637.23 37,114,395.95
Investment income from disposal of financial assets held for 31,616,770.34
-37,867,110.74
trading
Total 55,973,114.29 71,881,264.65
51. Gains from changes in fair value
Source of gains from changes in fair value 2022 2021
Financial assets held for trading -75,650,657.64 -23,363,035.92
Including: Debt instruments investment -5,873.00 30,410.89
Equity instruments investment -73,700,967.89 -17,702,179.18
Derivative financial assets -1,943,816.75 -5,691,267.63
Financial liabilities held for trading -612,332.19 -143,090.17
Including: Derivative financial liabilities -612,332.19 -143,090.17
Total -76,262,989.83 -23,506,126.09
52. Credit impairment loss (“-” for loss)
Item 2022 2021
Bad debts of accounts receivable -2,978,050.82 -9,189,454.14
Bad debts of other receivables -1,145,692.55 1,165,341.94
Total -4,123,743.37 -8,024,112.20
53. Assets impairment loss (“-” for loss)
Item 2022 2021
Decline in value of inventories -120,646,933.39 -61,759,256.42
Impairment loss of fixed assets -186,548.38 -1,191,722.30
Impairment loss of intangible assets -3,207,819.01 0.00
Impairment loss of construction in progress -11,068,266.54 0.00
Impairment loss of development costs -7,518,369.12 0.00
Total -142,627,936.44 -62,950,978.72
54. Gains from disposal of assets
Item 2022 2021
Gain from disposal of fixed assets (“-” for Loss) -705,357.30 6,780,989.95
Gain from disposal of intangible assets (“-” for Loss) 0.00 17,263,196.60
Total -705,357.30 24,044,186.55
55. Non-operating income
245
Joincare Pharmaceutical Group Annual Report 2022
Amount included in
Item 2022 2021 non-recurring gains and
losses
Gains on destruction or retirement of non-
520,860.40 631,652.20 520,860.40
current assets
Income from scraps 2,478,956.98 3,106,514.85 2,478,956.98
Compensation income 542,762.41 890,504.89 542,762.41
Waiver of payables 2,671,703.10 891,816.68 2,671,703.10
Others 2,015,564.68 3,121,342.24 2,015,564.68
Total 8,229,847.57 8,641,830.86 8,229,847.57
56. Non-operating expenses
Amount included in non-
Item 2022 2021 recurring gains and
losses
Donation expenses 12,116,987.32 29,101,247.20 12,116,987.32
Loss on retirement of non-current assets 17,045,450.21 7,057,428.39 17,045,450.21
Others 2,898,248.53 3,220,598.10 2,898,248.53
Total 32,060,686.06 39,379,273.69 32,060,686.06
57. Income tax expenses
(1) Details of income tax expenses
Item 2022 2021
Current income tax 489,730,614.81 375,813,164.01
Deferred income tax 72,278,243.88 -36,332,858.72
Total 562,008,858.69 339,480,305.29
(2) Reconciliation between income tax expenses and accounting profits:
Item 2022 2021
Profit before tax 3,456,104,955.17 2,952,329,343.96
Income tax expenses calculated at legal/applicable tax rate 864,026,238.79 738,082,335.99
Effect of different tax rates applicable to subsidiaries 7,219,165.25 -157,284.13
Effect of tax reduction and exemption -608,357,224.56 -461,501,254.72
Effect of non-deductible costs, expenses and losses -1,338,352.12 11,222,334.85
Effect of deductible tax losses for which no deferred tax assets
-1,400,449.92 -1,262,016.75
were recognised in prior periods
Effect of deductible tax losses or deductible temporary differences
for which no deferred tax asset was recognised in the current 237,204,163.65 91,064,540.85
period
Others 64,655,317.60 -37,968,350.80
Income tax expenses 562,008,858.69 339,480,305.29
58. Notes to cash flows statement
(1) Other cash received relating to operating activities
Item 2022 2021
246
Joincare Pharmaceutical Group Annual Report 2022
Government grants 239,196,300.96 231,492,540.63
Interest income 324,250,238.72 177,822,721.68
Recovery of employee loans 7,299,222.31 8,237,323.25
Security deposits 67,623,532.89 75,737,734.89
Compensation received 1,175,630.74 83,043.02
Current accounts and others 44,100,808.77 51,664,073.17
Total 683,645,734.39 545,037,436.64
(2) Other cash paid relating to operating activities
Item 2022 2021
Office Expenses 97,503,048.97 98,749,129.18
Travel expenses 30,372,654.60 69,905,127.66
Business entertainment expenses 69,811,587.72 84,266,002.56
Freight expenses 50,691,409.60 107,473,996.66
advertising fee 630,941.00 3,789,481.18
Conference fees 17,972,567.21 34,011,851.22
Agency and consulting services fees 35,039,742.74 43,892,772.99
R&D expenses 808,023,085.72 756,535,241.25
Bank charges 7,927,848.89 5,874,566.03
Petty cash 510,948.05 1,008,235.84
Business promotion expenses 4,634,065,689.94 4,832,518,720.60
Letter of credit and bank acceptance deposit 1,676,708.15 33,459,360.54
Other expenses paid and current accounts 157,458,032.58 214,400,075.57
Total 5,911,684,265.17 6,285,884,561.28
(3) Other cash received relating to investing activities
Item 2022 2021
Structured Deposits and Term Deposits 0.00 100,000,000.00
Security deposits 7,405,431.82 12,557,736.54
Compensation for demolition 6,000,000.00 0.00
Withdrawal of Treasury bonds and margin 158,470.77 1,013,650.67
Others 0.00 2,700.00
Total 13,563,902.59 113,574,087.21
(4) Other cash paid relating to investing activities
Item 2022 2021
Fixed deposits 1,084,392,104.38 50,000,000.00
Security deposits 5,755,128.00 235,000.00
Foreign exchange forward contract losses 30,021,080.39 2,831,260.72
Others 150.00 3,779.69
Total 1,120,168,462.77 53,070,040.41
247
Joincare Pharmaceutical Group Annual Report 2022
(5) Other cash received relating to financing activities
Item 2022 2021
Equity Transfer fee paid to Guosen Securities Employee 0.00 30,992,700.00
Stock Ownership Plan Account
Collection and advance payment of individual income 6,859,477.42
347,182.11
tax
Discount of acceptance bills 380,719,088.50 0.00
Total 381,066,270.61 37,852,177.42
(6) Other cash paid relating to financing activities
Item 2022 2021
Repurchase of shares 780,551,259.85 938,084,088.14
Capital reduction in minority interests in subsidiary 0.00 324,225,000.00
Rental payments 32,925,995.59 27,862,261.10
Collection and advance payment of individual income
1,237,210.80 1,716,145.57
tax
Dividend handling fee 0.00 152,691.48
GDRs issuance fees 16,003,722.82 0.00
Others 624,000.00 0.00
Total 831,342,189.06 1,292,040,186.29
59. Supplement to cash flow statement
(1) Supplement to cash flow statement
Supplement information 2022 2021
1. Reconciliation of net profit to cash flow from operating
activities:
Net profit 2,894,096,096.48 2,612,849,038.67
Add: Assets impairment loss 142,627,936.44 62,950,978.72
Credit impairment loss 4,123,743.37 8,024,112.20
Depreciation of fixed assets 615,224,869.47 540,627,410.92
Amortisation of right-of-use assets 32,367,074.98 26,000,791.57
Amortization of intangible assets 190,110,160.68 53,826,067.53
Long-term prepaid expenses amortization 58,054,847.07 43,989,121.05
Losses on disposal of fixed assets, intangible assets and other long- -24,044,186.55
705,357.30
term assets (Gain as in “-”)
Loss on retirement of fixed assets (Gain as in “-”) 16,524,589.81 6,425,776.19
Losses on changes in fair value (Gain as in “-”) 76,262,989.83 23,506,126.09
Financial expenses (Gain as in “-”) 28,611,954.30 100,946,504.76
Investment losses (Gain as in “-”) -55,973,114.29 -71,881,264.65
Decrease in deferred tax assets (Increase as in “-”) 18,519,526.08 -75,082,337.68
Increase in deferred tax liabilities (Decrease as in “-”) 53,643,688.28 28,755,973.72
248
Joincare Pharmaceutical Group Annual Report 2022
Supplement information 2022 2021
Decrease in inventories (Increase as in “-”) -604,732,283.55 -306,334,662.14
Decrease in operating receivables (Increase as in “-”) 2,380,941,083.00 -1,593,686,129.41
Increase in operating payables (Decrease as in “-”) -1,924,536,232.01 1,036,581,635.58
Others 51,132,852.05 89,634,088.67
Net cash flows from operating activities 3,977,705,139.29 2,563,089,045.24
2. Significant investment or finance activities not involving cash:
Conversion of debt into capital 0.00 0.00
Convertible bonds mature within one year 0.00 0.00
Fixed assets acquired under finance leases 0.00 0.00
3. Net increase / (decrease) in cash and cash equivalents:
Cash and bank balance as at end of year 14,178,465,686.40 11,697,518,141.18
Less: cash and bank balance at beginning of year 11,697,518,141.18 12,122,781,311.49
Add: cash equivalents at end of year 0.00 0.00
Less: cash equivalents at beginning of year 0.00 0.00
Net increase in cash and cash equivalents 2,480,947,545.22 -425,263,170.31
(2) Net cash paid for acquisition of subsidiaries during the year
None.
(3) Net cash received from disposal of subsidiaries during the year
None.
(4) Details of cash and cash equivalents
Item 2022 2021
I. Cash 14,178,465,686.40 11,697,518,141.18
Including: Cash on hand 231,883.95 225,179.98
Cash at bank readily available for payment 14,164,236,988.28 11,554,754,721.43
Other monetary fund readily available for payment 13,996,814.17 142,538,239.77
II. Cash equivalents 0.00 0.00
Including: bonds investment mature within 3 months 0.00 0.00
III. Cash and cash equivalents as at closing balance 14,178,465,686.40 11,697,518,141.18
Cash and cash equivalents do not include any cash and cash equivalents that are restricted in use.
60. Ownership or using rights of assets subject to restriction
Carrying value at
Item Reason of restriction
year end
Security deposits of letters of credit, bank acceptance bills
Other monetary funds 1,392,407.76
and forward settlement
Notes receivable 469,659,266.19 Bills pool business, pledge notes receivable
Total 471,051,673.95
61. Items in foreign currencies
249
Joincare Pharmaceutical Group Annual Report 2022
Balance in foreign currency Equivalent RMB balance at year
Item Conversion rate
at year end end
Cash and bank balances
Including: HKD 771,333,142.89 0.89327 689,008,756.54
Euro 94,684.76 7.4229 702,835.51
USD 257,758,337.95 6.9646 1,795,183,720.46
MOP 4,921,985.97 0.8681 4,272,776.02
JPY 344,798,878.00 0.052358 18,052,979.65
GBP 1,940.10 8.3941 16,285.40
Accounts receivable
Including: USD 71,530,369.45 6.9646 498,180,411.07
MOP 1,264,788.45 0.8681 1,097,962.85
Other receivables
Including: USD 21.21 6.9646 147.72
HKD 3,189,409.63 0.89327 2,849,003.94
MOP 581,188.00 0.8681 504,529.30
Other current assets
Including: USD 13,326,786.67 6.9646 92,815,738.44
Short-term loans
Including: USD 1,933,328.53 6.9646 13,464,859.86
Accounts payable
Including: USD 512,475.01 6.9646 3,569,183.45
Euro 5,665.41 7.4229 42,053.77
JPY 279,370,752.84 0.052358 14,627,293.88
Swiss Franc 18,810.00 7.5432 141,887.59
Other payables
Including: HKD 2,892,127.05 0.89327 2,583,450.33
USD 4,015,670.14 6.9646 27,967,536.26
62. Government grants
(1) Government grants recorded as deferred income and measured at gross amount method subsequently
Item Related to
Additions in the Transfer to profit Other presented in assets/
Projects with grants Category Beginning balance Closing balance
year or loss movement income Related to
statement income
Laboratory project of
respiratory system inhalation
preparation engineering Financial Related to
3,501,550.00 0.00 1,616,100.00 0.00 1,885,450.00 Other income
allocation 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 (碳青霉 Financial Related to
3,625,000.00 0.00 0.00 0.00 3,625,000.00 Other income
allocation assets
烯类系列产品循环化生产基
地建设)
250
Joincare Pharmaceutical Group Annual Report 2022
Item Related to
Additions in the Transfer to profit Other presented in assets/
Projects with grants Category Beginning balance Closing balance
year or loss movement income Related to
statement income
Construction of an integrated
production line for fully
automatic blister-type dry
powder inhalant micro-filling Financial Related to
927,666.66 0.00 242,000.04 0.00 685,666.62 Other income
and winding (全自动泡罩型 allocation assets
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 Financial Related to
150,000.00 0.00 150,000.00 0.00 0.00 Other income
Hanfang transfer (国家重大 allocation assets
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 Financial Related to
inhalation preparations (新型 365,700.00 0.00 365,700.00 0.00 0.00 Other income
allocation assets
吸入制剂规模化发展共性关
键技术研究)
2021 Shenzhen Sponge City
Construction Fund
Award*Shenzhen Water Financial Related to
Affairs Bureau (2021 年度深 0.00 895,232.00 134,284.80 0.00 760,947.20 Other income
allocation assets
圳市海绵城市建设资金奖励
*深圳市水务局)
Large-scale development
subsidy for new inhalation Financial Related to
2,262,600.00 0.00 582,600.00 0.00 1,680,000.00 Other income
preparations (新型吸入制剂 allocation assets
规模化发展补助)
Project Subsidy of Marine
mollusk kinetic protein (海洋 Financial Related to
23,840,000.00 0.00 19,562,000.00 0.00 4,278,000.00 Other income
软体动物动能蛋白项目补 allocation assets
助)
New inhalation drug
formulation creation project Financial Related to
67,248,400.00 6,349,500.00 52,689,525.12 0.00 20,908,374.88 Other income
(新型吸入给药制剂创制项 allocation assets
目)
Zhimu total sapogenin project Financial Related to
8,900,000.00 0.00 0.00 0.00 8,900,000.00 Other income
(知母总皂甙元项目) allocation assets
Glucocorticoid inhalation
Financial Related to
suspension project (糖皮质混 3,600,000.00 3,600,000.00 0.00 0.00 7,200,000.00 Other income
allocation assets
悬液项目)
Government funding for small
molecule peptide project (政 Financial Related to
319,999.80 0.00 80,000.04 0.00 239,999.76 Other income
allocation assets
拨款用于小分子肽项目)
Leulu total sterone project (漏 Financial Related to
2,500,000.00 0.00 0.00 0.00 2,500,000.00 Other income
芦总甾酮项目) allocation assets
R&D of active substances
with bone and joint repair and
health care functions(具有 Financial Related to
957,649.92 0.00 119,706.24 0.00 837,943.68 Other income
allocation assets
(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 Financial Related to
2,508,333.33 0.00 350,000.04 0.00 2,158,333.29 Other income
allocation assets
(布地奈德雾化吸入溶液关
键技术研发)
Return of land holding tax (土 Financial Related to
3,567,661.42 0.00 107,029.80 0.00 3,460,631.62 Other income
地使用税返还) allocation assets
Subsidies for the development
of pharmaceutical APIs Financial Related to
40,741,354.94 0.00 1,219,192.68 0.00 39,522,162.26 Other income
industry (医药原料药行业发 allocation assets
展支持资金补助)
Innovation coupon (Jingjin
Financial Related to
filter press equipment) (创新 233,332.79 0.00 80,000.04 0.00 153,332.75 Other income
allocation assets
券(景津压滤设备) )
Xinxiang High-tech Project
Financial Related to
Fund Support (新乡高新技术 1,861,111.08 0.00 56,397.36 0.00 1,804,713.72 Other income
allocation assets
项目资金扶持)
251
Joincare Pharmaceutical Group Annual Report 2022
Item Related to
Additions in the Transfer to profit Other presented in assets/
Projects with grants Category Beginning balance Closing balance
year or loss movement income Related to
statement income
Research on Common Co-
construction Technology of
Pharmaceutical Inhalation
Preparations (开发区财政局 Financial Related to
2,800,000.00 2,000,000.00 0.00 0.00 4,800,000.00 Other income
allocation assets
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 Financial Related to
1,500,000.00 50,000.00 0.00 0.00 1,550,000.00 Other income
funding (呼吸系统药物研发 allocation assets
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 Financial Related to
500,000.00 0.00 0.00 0.00 500,000.00 Other income
projects (科技助力经济重点 allocation assets
专项)
City Service Development Financial Related to
800,000.00 0.00 0.00 0.00 800,000.00 Other income
Special (市服务发展专项) allocation assets
Financial Related to
Patent funding (专利资助) 200,000.00 0.00 0.00 0.00 200,000.00 Other income
allocation assets
2020 Shanghai Professional
Technology Platform
Capacity Enhancement Financial Related to
Project (2020 年度上海市专 1,000,000.00 0.00 0.00 0.00 1,000,000.00 Other income
allocation assets
业技术平台能力提升项目立
项)
High-growth small and micro
Financial Related to
innovation enterprises (高成 400,000.00 0.00 0.00 0.00 400,000.00 Other income
allocation assets
长小微科创企业)
Technology giant (科技小巨 Financial Related to
0.00 1,200,000.00 0.00 0.00 1,200,000.00 Other income
人) allocation assets
First application for corporate
postdoctoral project research Financial Related to
funding (首次申请企业博士 0.00 120,000.00 0.00 0.00 120,000.00 Other income
allocation assets
后项目研究资助)
Research and development
subsidy for ω-3-Fish Oil
Medium and Long Chain Fat Financial Related to
Emulsion Injection (ω-3 鱼油 350,000.00 0.00 350,000.00 0.00 0.00 Other income
allocation assets
中/长链脂肪乳注射液研究
开发补助)
Atmospheric environmental
quality improvement subsidy
funds (Atmospheric Financial Related to
environmental quality 0.00 161,504.00 3,588.98 0.00 157,915.02 Other income
allocation assets
improvement subsidy (大气
环境质量提升补贴)资金)
R&D and industrialization of
innovative Ilaprazole Series Financial Related to
16,078,166.25 0.00 4,910,000.04 0.00 11,168,166.21 Other income
(艾普拉唑系列创新药物研 allocation assets
发及产业化)
Research and development
funds for new drug for Class I
Treatment of Necrosis Factor
in Human Tumour from Financial Related to
8,000,000.00 0.00 5,924,000.00 2,076,000.00 0.00 Other income
Human Source (I 类治疗用人 allocation income
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 Financial Related to
16,700,000.00 0.00 0.00 0.00 16,700,000.00 Other income
microspheres) (2014 年战略 allocation assets
性新兴产业 (缓释微球) )
Fund for industrialization of
prolonged-action microsphere Financial Related to
12,550,000.00 0.00 0.00 0.00 12,550,000.00 Other income
preparation (长效微球制剂的 allocation assets
产业化款项)
Construction project for Financial Related to
20,719,505.48 0.00 2,405,309.88 0.00 18,314,195.60 Other income
industrialization of allocation assets
252
Joincare Pharmaceutical Group Annual Report 2022
Item Related to
Additions in the Transfer to profit Other presented in assets/
Projects with grants Category Beginning balance Closing balance
year or loss movement income Related to
statement income
prolonged-action microsphere
preparation (phase I) (长效微
球制剂产业化建设项目 (一
期工程) )
Project subsidy from the
Ministry of Industry and Financial Related to
2,400,000.00 0.00 0.00 0.00 2,400,000.00 Other income
Information Technology (工 allocation assets
业和信息化部项目补助款)
Project subsidy from the
Ministry of Industry and Financial Related to
1,366,750.00 0.00 231,000.00 0.00 1,135,750.00 Other income
Information Technology (工 allocation assets
业和信息化部项目补助款)
Construction of Drug
Conformity Evaluation
Research Center Platform (药 Financial Related to
1,040,000.14 0.00 159,999.96 0.00 880,000.18 Other income
allocation assets
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 (注射用 Financial Related to
40,045,946.93 0.00 10,560,089.28 0.00 29,485,857.65 Other income
allocation assets
鼠神经生长因子研发及产业
化)
Demonstration project on the
application of solar
photovoltaic architecture (太 Financial Related to
2,455,499.43 0.00 1,102,000.08 0.00 1,353,499.35 Other income
allocation assets
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
by Provincial Finance Financial Related to
2,703,484.56 0.00 403,699.30 0.00 2,299,785.26 Other income
Departments (省财政支持技 allocation assets
改招标项目补助金 PVC 软
袋)
Technical transformation
project of Shenqi Fuzheng
Injection with flexible bag (软 Financial Related to
15,676,470.62 0.00 3,823,529.40 0.00 11,852,941.22 Other income
allocation assets
袋(参芪扶正注射液) 技改项
目)
Provision for technology
transformation funds and Financial Related to
5,459,555.72 0.00 1,129,563.36 0.00 4,329,992.36 Other income
subsequent grants (技术改造 allocation assets
资金拨款及事后补奖)
Provision for technology
transformation funds and Financial Related to
7,359,670.81 0.00 1,783,368.48 0.00 5,576,302.33 Other income
subsequent grants (技术改造 allocation assets
资金拨款及事后补奖)
Electricity distribution
transformer performance
enhancement for energy-
saving and emission reduction Financial Related to
projects (Energy-saving and 380,000.00 0.00 48,000.00 0.00 332,000.00 Other income
allocation 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 Financial Related to
1,534,833.44 234,000.00 57,999.84 0.00 1,710,833.60 Other income
preparation (化药液体制剂研 allocation assets
发与产业化团队)
Innovation capacity building
of technology center
(antibody laboratory) (技术中 Financial Related to
4,802,478.80 0.00 514,338.20 0.00 4,288,140.60 Other income
allocation assets
心创新能力建设 (抗体药物
实验室) )
Innovation capacity building
of technology center
(antibody laboratory) (技术中 Financial Related to
166,439.46 0.00 6,747.52 0.00 159,691.94 Other income
allocation income
心创新能力建设 (抗体药物
实验室) )
253
Joincare Pharmaceutical Group Annual Report 2022
Item Related to
Additions in the Transfer to profit Other presented in assets/
Projects with grants Category Beginning balance Closing balance
year or loss movement income Related to
statement income
Achievement transfer of
blood screening (BCI) nucleic
acid detection testing (血液筛 Financial Related to
3,961,282.44 0.00 631,622.73 0.00 3,329,659.71 Other income
allocation assets
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) Financial Related to
464,285.80 0.00 107,142.84 0.00 357,142.96 Other income
(α-葡萄糖苷酶抑制剂类原料 allocation assets
药阿卡波糖生产车间工艺升
级技术改造项目)
R&D and industrialization of
Financial Related to
Statins (降血脂他汀类药物 30,000.48 0.00 30,000.48 0.00 0.00 Other income
allocation assets
的研发与产业化)
Scientific technology award
and subsidy for technological Financial Related to
28,566.20 0.00 28,566.20 0.00 0.00 Other income
innovative project (科学技术 allocation assets
奖及科技创新项目资助)
Scientific technology award
and subsidy for technological Financial Related to
2,200,000.00 0.00 0.00 0.00 2,200,000.00 Other income
innovative project (科学技术 allocation income
奖及科技创新项目资助)
Zhuhai industrial enterprise
“cloud and platform” service
coupons supporting funds (珠 Financial Related to
89,431.86 0.00 25,540.86 0.00 63,891.00 Other income
allocation income
海市工业企业 “云上平台”
服务券支持资金)
Commissioner workstation Financial Related to
85,000.00 0.00 60,000.00 0.00 25,000.00 Other income
(特派员工作站) allocation assets
Industrial revitalisation
Financial Related to
supporting funds (产业振兴 2,445,500.01 0.00 1,158,000.00 0.00 1,287,500.01 Other income
allocation assets
扶持资金)
Phase IV clinical study of
innovative drug Ilaprazole (创 Financial Related to
8,210,800.00 0.00 8,210,800.00 0.00 0.00 Other income
新药物艾普拉唑 IV 期临床 allocation assets
研究)
Government grant for
Financial Related to
industrial transformation (工 308,333.75 0.00 199,999.92 0.00 108,333.83 Other income
allocation assets
业转型政府扶持资金)
New industrialization
Financial Related to
development grant (新型工业 3,584,066.38 1,801,800.00 350,000.04 0.00 5,035,866.34 Other income
allocation assets
化发展奖金)
Policy fund for leading
industrial enterprises loan Financial Related to
366,666.57 0.00 200,000.04 0.00 166,666.53 Other income
Interests (工业龙头企业贷款 allocation assets
贴息政策资金)
Supporting funds for five
advantageous industrial
clusters and one high-tech Financial Related to
300,000.20 0.00 99,999.96 0.00 200,000.24 Other income
allocation assets
industry (五优一新扶持资
金)
Capital project for innovation
and entrepreneurship team Financial Related to
12,500,000.00 0.00 750,000.00 0.00 11,750,000.00 Other income
funding program (创新创业 allocation assets
团队资助计划资金项目)
2020 Zhuhai City Innovation
and Entrepreneurship Team
(Nanocrystalline) (2020 年度 Financial Related to
1,500,000.00 3,500,000.00 0.00 0.00 5,000,000.00 Other income
allocation assets
珠海市创新创业团队 (纳米
晶) )
Fund for R&D and
industrialization of innovative
Ilaprazole series (艾普拉唑系 Financial Related to
5,600,000.00 0.00 5,600,000.00 0.00 0.00 Other income
allocation assets
列创新药物研发及产业化) )
项目资金)
Key projects of industrial core
and key technologies of Financial Related to
3,000,000.00 0.00 0.00 0.00 3,000,000.00 Other income
allocation assets
Zhuhai (Ryanodex) (珠海市
254
Joincare Pharmaceutical Group Annual Report 2022
Item Related to
Additions in the Transfer to profit Other presented in assets/
Projects with grants Category Beginning balance Closing balance
year or loss movement income Related to
statement income
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 (数据 Financial Related to
3,650,000.00 0.00 730,000.00 0.00 2,920,000.00 Other income
allocation assets
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 Financial Related to
batch) (珠海市产业核心和关 2,000,000.00 0.00 0.00 0.00 2,000,000.00 Other income
allocation assets
键技术攻关方向项目资金
(第二批) )
Innovative drug of Ilaprazole
Financial Related to
sodium for injection (创新药 2,400,000.00 0.00 120,000.00 0.00 2,280,000.00 Other income
allocation assets
注射用艾普拉唑钠针剂)
Technological transformation
projects of new Cefuroxime Financial Related to
1,533,100.00 0.00 0.00 0.00 1,533,100.00 Other income
(新型头孢粉针剂技术改造 allocation assets
项目)
Advanced Pharmaceutical
Manufacturing Internet Financial Related to
675,000.00 0.00 90,000.00 0.00 585,000.00 Other income
Benchmarking Project (先进 allocation assets
药品制造互联网标杆项目)
Cleaner Production Audit Financial Related to
180,000.08 0.00 9,999.96 0.00 170,000.12 Other income
Project (清洁生产审核项目) allocation assets
Financial Related to
Green factory (绿色工厂) 1,131,666.71 0.00 129,999.96 0.00 1,001,666.75 Other income
allocation assets
HCG PROJECT
CONSTRUCTION (HCG 项 Financial Related to
3,387,835.84 0.00 395,649.96 0.00 2,992,185.88 Other income
allocation assets
目建设)
Sewage treatment system
upgrade project (污水处理系 Financial Related to
64,239.92 0.00 8,030.04 0.00 56,209.88 Other income
allocation assets
统升级改造项目)
R&D and industrialization of
Recombinant Human
Chorionic Gonadotropin for Financial Related to
1,137,500.00 0.00 150,000.00 0.00 987,500.00 Other income
Injection (注射用重组人绒促 allocation assets
性素研发及产业化)
Development and
Industrialization of
Cyclosporin Self-emulsifying
Soft Capsules with High Financial Related to
0.00 800,000.00 14,000.00 0.00 786,000.00 Other income
Technology Barriers (高技术 allocation assets
屛障的环孢素自乳化软胶囊
制剂的开发及产业化研究)
Guangdong Provincial Key
Laboratory of Characteristic
Drug R&D Enterprises (广东 Financial Related to
0.00 1,000,000.00 58,333.31 0.00 941,666.69 Other income
allocation assets
省特色药物研发企业重点实
验室)
Subsidies for online
monitoring equipment and
installations of coalfired Financial Related to
82,500.00 0.00 22,500.00 0.00 60,000.00 Other income
allocation assets
boilers (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 Financial Related to
diagnostics (集成一体化分子 181,632.12 0.00 127,715.81 0.00 53,916.31 Other income
allocation assets
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
technological innovation in Financial Related to
600,000.00 0.00 0.00 0.00 600,000.00 Other income
2019 (2019 年度第一批科技 allocation assets
创新专项资金立项配套资
助)
255
Joincare Pharmaceutical Group Annual Report 2022
Item Related to
Additions in the Transfer to profit Other presented in assets/
Projects with grants Category Beginning balance Closing balance
year or loss movement income Related to
statement income
Provincial industrial
innovation (provincial
enterprise technology center) Financial Related to
project in 2019 (2019 年度省 1,046,533.33 0.00 967,303.60 0.00 79,229.73 Other income
allocation assets
产业创新 (省级企业技术中
心) 项目)
China Postdoctoral Science
Foundation subsidy funds (中 Financial Related to
80,000.00 0.00 6,283.19 73,716.81 0.00 Other income
国博士后科学基金会资助经 allocation income
费)
Pre-appropriation of special
grants for industrialization of
diagnostic reagents for Financial Related to
COVID-19 (新型冠状病毒检 4,116,415.65 0.00 26,694.08 0.00 4,089,721.57 Other income
allocation assets
测试剂产业化项目补助金预
拨)
Xiangzhou District equipment
purchase subsidy supporting
funds (Special funds for
epidemic prevention and Financial Related to
11,467.25 0.00 2,317.04 0.00 9,150.21 Other income
control) (香洲区采购设备补 allocation assets
贴扶持资金 (疫情防控专项
资金)
Zhuhai innovation and
enterprising team and high-
level talent enterprising Financial Related to
project Phase I funds (珠海市 12,000,000.00 0.00 0.00 0.00 12,000,000.00 Other income
allocation assets
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 Financial Related to
20,000,000.00 30,000,000.00 0.00 0.00 50,000,000.00 Other income
allocation assets
(整体搬迁调迁扩建项目)
Environmental protection
bureau RTO project special Financial Related to
179,999.96 0.00 20,000.04 0.00 159,999.92 Other income
funds (环保局 RTO 项目资 allocation assets
金)
Structure-efficiency
optimization of marine
microorganisms and Financial Related to
evaluation of antitumor 312,366.27 0.00 213,157.10 0.00 99,209.17 Other income
allocation income
activity (海洋微生物构效优
化与抗肿瘤活性评价)
R&D and demonstration of
key technologies for the
development and utilization
of swim bladder (golden
oyster) marine traditional Financial Related to
0.00 750,000.00 0.00 0.00 750,000.00 Other income
Chinese medicine resources allocation income
(鱼鳔(黄金鮸) 海洋中药资
源开发与利用关键技术研发
与示范)
2022 Special funds for the
reconstruction of the
industrial base and the high-
quality development of the
manufacturing industry from Financial Related to
0.00 32,740,000.00 4,774,583.31 0.00 27,965,416.69 Other income
the central finance (2022 年 allocation assets
中央财政产业基础再造和制
造业高质量发展专项资金)
示范)
National Science and
Technology Major Special
Project Subsidy Fund Financial Related to
0.00 4,744,900.00 2,362,093.09 0.00 2,382,806.91 Other income
LZM009 (国家科技重大专 allocation assets
项项目后补助资金
LZM009)
Xiangzhou District actively
responds to the impact of the
Financial Related to
epidemic and maintains 0.00 1,644,800.00 0.00 0.00 1,644,800.00 Other income
allocation income
stability, innovation drives
technology industry project
256
Joincare Pharmaceutical Group Annual Report 2022
Item Related to
Additions in the Transfer to profit Other presented in assets/
Projects with grants Category Beginning balance Closing balance
year or loss movement income Related to
statement income
(香洲区积极应对和疫情影
响保稳创新驱动科技工业分
项)
Total 433,543,352.40 91,591,736.00 138,448,104.04 2,149,716.81 384,537,267.55
(2) Government grants recognized in income for the year by gross method
Amount
Amount recognised Presented in Related to
recognised in
Projects with grants Category in profit or loss in income assets/ Related
profit or loss in
prior year statement to income
the year
Financial Related to
Social security subsidy (社保补助) 72,684.89 226,308.66 Other income
allocation income
Financial Related to
Patent grant (专利补助) 300,000.00 2,500.00 Other income
allocation income
Financial Related to
Job stabilization subsidy (稳岗补贴) 122,853.35 1,075,941.53 Other income
allocation income
Financial Related to
Electricity subsidy (用电补助) 1,245,193.22 570,533.30 Other income
allocation income
Financial Related to
Maternity benefits (生育津贴) 298,510.00 404,108.83 Other income
allocation income
Financial Related to
Export credit insurance subsidy (出口信保补贴) 364,900.00 1,126,400.00 Other income
allocation income
New inhalation drug formulation creation project (新型 Financial
0.00 53,637,825.12 Other income Related to assets
吸入给药制剂创制项目) allocation
Budesonide project acceptance transferred to other Financial
1,991,666.67 350,000.04 Other income Related to assets
income (布地奈德项目验收转其他收益) allocation
Financial Related to
Enterprise R&D investment plan (企业研发投入计划) 2,000,000.00 0.00 Other income
allocation income
Financial Related to
Job training subsidy (适岗培训补贴 ) 236,835.00 0.00 Other income
allocation income
Construction of an integrated production line for fully
automatic blister-type dry powder inhalant micro-filling Financial
1,492,333.34 0.00 Other income Related to assets
and winding (全自动泡罩型干粉吸入剂微量灌封与卷 allocation
绕一体化生产线建设)
Study on the technology of antifungal drug caspofungin Financial
1,500,000.00 0.00 Other income Related to assets
(抗真菌药卡泊芬净工艺研究) allocation
Laboratory project of respiratory system inhalation
preparation engineering laboratory project (呼吸系统吸 Financial
1,346,750.00 0.00 Other income Related to assets
allocation
入制剂工程实验室项目)
Laboratory project of respiratory system inhalation
preparation engineering laboratory project (呼吸系统吸 Financial
0.00 1,616,100.00 Other income Related to assets
allocation
入制剂工程实验室项目)
The 9th batch of job training subsidies for enterprises in
Financial Related to
Yantian District in 2020 (2020 年盐田区企业适岗培训 2,880,000.00 0.00 Other income
allocation income
补贴第 9 批次)
The first batch of funding support for the development of
Financial Related to
science and technology industries in 2021 (2021 年第一 3,000,000.00 0.00 Other income
allocation income
批科技类产业发展资金扶持资助)
2015 Pilot Project of United Development of Emerging
Strategic Industrial Regions in Guangdong Province Financial
9,500,002.00 0.00 Other income Related to assets
(2015 年广东省战略性新兴产业区域集聚发展试点项 allocation
目)
Funds allocated by the Ministry of Finance (财政局拨付 Financial
1,219,192.66 1,219,192.68 Other income Related to assets
补助资金) allocation
Special funds for corporate R&D financial subsidies in Financial Related to
720,000.00 0.00 Other income
2020 (2020 年企业研发财政补助专项资金) allocation income
The third batch of biopharmaceutical industry leader (第 Financial Related to
500,000.00 0.00 Other income
三批次生物医药产业领航) allocation income
Compensation for temporary land occupation at
Financial Related to
Songping Station of Metro Line 13 (地铁 13 号线松坪 0.00 361,614.00 Other income
allocation income
站临时占地补偿款)
Financial Related to
Quarterly property tax relief (减免一个季度房产税) 0.00 583,508.46 Other income
allocation income
Amortization of Deferred Earnings*Marine Projects (摊 Financial
0.00 19,562,000.00 Other income Related to assets
销递延收益*海洋项目) allocation
Quality brand double promotion support plan (质量品牌 Financial Related to
400,000.00 0.00 Other income
双提升扶持计划) allocation income
257
Joincare Pharmaceutical Group Annual Report 2022
The first batch of funding for the 2020 Enterprise
Financial Related to
Research and Development Funding Program (2020 年企 871,000.00 0.00 Other income
allocation income
业研究开发资助计划第一批资助)
Deferred income 摊销*国家重大专项项目注射脂质研 Financial
0.00 500,000.00 Other income Related to assets
究经费(已验收) allocation
Industrial value-added growth rate projects (工业增加值 Financial Related to
0.00 1,145,100.00 Other income
增速达标项目) allocation income
2021 Annual Industrial Added Value Growth Standard Financial Related to
0.00 946,624.88 Other income
Award (2021 年度工业增加值增速达标奖励) allocation income
2022 Industrial Enterprise Expansion and Efficiency
Support Program Funding (2022 年工业企业扩产增效 Financial Related to
0.00 1,650,000.00 Other income
allocation income
扶持计划资助)
2022 High-tech Enterprise Cultivation Funding First
Batch of Grants Shenzhen Science and Technology Financial Related to
0.00 500,000.00 Other income
Innovation No. 202225 (2022 年高新技术企业培育资 allocation income
助第一批拨款深科技创新 202225 号)
2022 Industrial "Carbon Peak" Pilot Demonstration
Financial Related to
Project Funding Fund (2022 年工业“碳达峰”工作试点 0.00 500,000.00 Other income
allocation income
示范项目资助款)
Freeze-dried raw material production line project funding Financial Related to
0.00 2,045,300.00 Other income
(冻干原料生产线项目资助经费) allocation income
Funds for Encouraging Industrial Enterprises to Expand
Financial Related to
Production and Increase Efficiency (鼓励工业企业扩产 0.00 620,000.00 Other income
allocation income
增效项目经费)
Preclinical study of targeted anti-tumor innovative drug Financial Related to
500,000.00 0.00 Other income
JK00265 (靶向抗肿瘤创新药物 JK00265 临床前研究) allocation income
Science and Technology Development Fund for
Financial Related to
Enterprise R&D Institutions in Pudong New District (浦 800,000.00 0.00 Other income
allocation income
东新区科技发展基金企业研发机构专项)
Special subsidy for research and development expenses Financial Related to
550,000.00 100,000.00 Other income
of gazelle enterprises (瞪羚企业研发费专项补助) allocation income
2022 The central government guides local science and
technology development funds (2022 年中央引导地方 Financial Related to
0.00 400,000.00 Other income
allocation income
科技发展资金 40 万)
Funds to support business development (扶持企业发展 Financial Related to
0.00 3,543,000.00 Other income
资金) allocation income
Grant Funding for Science and Technology Projects (科 Financial Related to
0.00 1,500,000.00 Other income
技项目补助资金) allocation income
Financial Related to
Government grants 0.00 1,400,000.00 Other income
allocation income
2022 High-tech Cultivation Fund (22 年高新培育资助 Financial Related to
0.00 500,000.00 Other income
款) allocation income
2022 Shenzhen High-tech Zone Special Fund Municipal Financial Related to
0.00 750,000.00 Other income
Funding (2022 年度深圳高新区专项资金市级资助款) allocation income
In the first half of 2022, subsidies for industrial
assistance projects to help enterprises bail out (2022 年上 Financial Related to
0.00 383,300.00 Other income
allocation income
半年工业助企纾困项目补助)
High-tech Zone Finance Bureau’s 2021 special funds for
enterprise R&D financial subsidies (高新区财政局 2021 Financial Related to
0.00 320,000.00 Other income
allocation income
年企业研发财政补助专项资金) )
High-tech Zone Finance Bureau 2022 Central Air
Financial Related to
Pollution Prevention and Control Fund (高新区财政局 0.00 750,000.00 Other income
allocation income
2022 年中央大气污染防治资金)
The second batch of funding plans for technological
Financial Related to
transformation investment projects in 2021 (2021 年技术 1,710,000.00 0.00 Other income
allocation income
改造投资项目第二批资助计划)
2022 Shenzhen High-tech Zone Development Special
Plan Science and Technology Enterprise Cultivation Financial Related to
0.00 500,000.00 Other income
Project Subsidy (2022 年度深圳高新区发展专项计划 allocation income
科技企业培育项目补助-深圳市坪山区科技创新局)
Financial Related to
One-time job training subsidy (一次性留工培训补助) 0.00 311,875.00 Other income
allocation income
Government Subsidy of Special Fund for Scientific and
Technological Innovation-Shenzhen Pingshan District Financial Related to
1,085,794.00 0.00 Other income
Science and Technology Innovation Bureau (科技创新 allocation income
专项资金政府补助-深圳市坪山区科技创新局)
Financial Related to
Export credit insurance subsidy (出口信保补贴) 1,991,489.70 2,087,098.80 Other income
allocation income
Financial Related to
R&D subsidy (研究开发费补助)) 6,267,222.00 1,200,440.00 Other income
allocation income
Research and development funds for new drug for Class I Financial Related to
0.00 5,924,000.00 Other income
Treatment of Necrosis Factor in Human Tumour from allocation income
258
Joincare Pharmaceutical Group Annual Report 2022
Human Source (I 类治疗用人源化抗人肿瘤坏死因子 α
单克隆抗体新药的研制资金)
Government Subsidy for Long-acting Microspheres
Financial
Major New Drug Creation (长效微球重大新药创制政 4,784,320.37 3,155,309.88 Other income Related to assets
allocation
府补助)
R&D and industrialization of innovative Ilaprazole Series Financial
4,910,000.04 18,720,800.04 Other income Related to assets
(艾普拉唑系列创新药物研发及产业化) allocation
R&D and industrialization of innovative Ilaprazole Series Financial Related to
560,000.00 0.00 Other income
(艾普拉唑系列创新药物研发及产业化) allocation income
Financial
HCG PROJECT CONSTRUCTION (HCG 项目建设) 395,649.97 395,649.96 Other income Related to assets
allocation
Fiscal Subsidy and Operating Subsidy (财政补贴及经营 Financial Related to
119,047,484.00 59,063,950.86 Other income
运营补贴) allocation income
R&D and Commercialisation of Mouse Nerve Growth
Factor for Injection (注射用鼠神经生长因子研发及产 Financial
10,560,089.27 10,560,089.28 Other income Related to assets
allocation
业化)
Provincial Science and Technology Innovation Strategy Financial
473,166.56 57,999.84 Other income Related to assets
Special Fund (省科技创新战略专项资金) allocation
Import discount and supporting funds (进口贴息及配套 Financial Related to
0.00 500,000.00 Other income
资金) allocation income
Promoting Imports of Foreign Trade Development Financial Related to
50,352.00 1,809,479.00 Other income
Special Fund (外贸经济发展专项资金) allocation income
Subsidy for the Tender of Technology Upgrade Project
for PVC Soft Bag Supported by Provincial Finance Financial
408,365.76 403,699.30 Other income Related to assets
Departments (省财政支持技改招标项目补助金 PVC allocation
软袋)
Technical transformation project of Shenqi Fuzheng
Financial
Injection with flexible bag (软袋(参芪扶正注射液) 技 3,823,529.40 3,823,529.40 Other income Related to assets
allocation
改项目)
Demonstration project on the application of solar
Financial
photovoltaic architecture (太阳能光电建筑应用示范项 1,102,000.08 1,102,000.08 Other income Related to assets
allocation
目)
Financial Related to
Electricity Incentive Funds (用电奖励资金) 364,257.43 20,000.00 Other income
allocation income
Subsidies for high and new technology enterprises and
high and new technology products (高新技术企业及高 Financial Related to
1,071,346.00 250,000.00 Other income
allocation income
新技术产品项目补贴)
Grants to high-growth technology companies from
Dazhangjiang project A04 (大张江项目 A04 对高增长 Financial Related to
1,500,000.00 1,500,000.00 Other income
allocation income
技术企业资助款)
Provision for technology transformation funds and Financial Related to
1,576,000.00 2,300,000.00 Other income
subsequent grants (技术改造资金拨款及事后补奖) allocation income
Provision for technology transformation funds and Financial
4,131,600.00 2,543,679.56 Other income Related to assets
subsequent grants (技术改造资金拨款及事后补奖) allocation
Technology transformation of recycling system of Financial
397,818.48 397,818.48 Other income Related to assets
Acarbose project (阿卡波糖糖回收系统技术改造项目) allocation
Special Fund and Encouraging funds for Energy Saving Financial Related to
352,000.00 289,500.00 Other income
and Emission Reduction (节能减排专项资金及奖励金) allocation income
Scientific technology award and subsidy for
Financial Related to
technological innovative project (科学技术奖及科技创 7,352,000.00 2,663,400.00 Other income
allocation income
新项目资助)
Patent (Intellectual Property) Support Fund (专利（知识 Financial Related to
849,370.00 548,500.00 Other income
产权）资助资金) allocation income
Reward Fund for Industry Growth and Production Financial Related to
5,050,000.00 667,700.00 Other income
Expansion (工业保值增长及增产奖励) allocation income
New industrialization development funds (新型工业化 Financial
350,000.04 350,000.04 Other income Related to assets
发展资金) allocation
Industrial revitalisation supporting funds (产业振兴扶持 Financial
1,158,000.00 1,158,000.00 Other income Related to assets
资金) allocation
Financial Related to
Industrial supporting funds (产业扶持资金) 13,000.00 944,100.00 Other income
allocation income
Employment Assurance and Re-employment and
Attraction to Graduates of Tertiary Academic Institutions Financial Related to
5,024,018.69 5,949,048.90 Other income
Subsidy (企业稳岗及再就业和吸纳高校毕业生补贴 allocation income
款)
New Scientific Research Institution Subsidy (新型科研 Financial
2,000,000.00 0.00 Other income Related to assets
机构补助资金) allocation
Enterprise Technology Center Innovation Capacity
Financial
Development (Antibody Laboratory) (企业技术中心创 445,755.36 514,338.20 Other income Related to assets
allocation
新能力建设 (抗体药物试验室) )
259
Joincare Pharmaceutical Group Annual Report 2022
Supporting subsidy for “Talents Plan” and subsidy for
Financial Related to
talents introduction and cultivation ( “人才计划”配套补 646,759.03 583,774.23 Other income
allocation income
贴及引才育才补贴)
Integrating Informatization and Industrialization Rewards Financial Related to
0.00 500,000.00 Other income
(两化融合奖励) allocation income
Incentive funds for expansion of export scale (扩大出口 Financial Related to
519,700.00 456,300.00 Other income
规模奖励基金) allocation income
Special funds for key leading enterprises in the 13th
Financial Related to
Five-Year Plan (2019) (十三五重点领军企业专项资金 0.00 14,133,300.00 Other income
allocation income
(2019 年)
Financial Related to
Subsidies for work-based training (以工代训补贴) 848,400.00 395,000.00 Other income
allocation income
Financial Related to
Subsidies for insurance fees (保险费用补贴) 200,000.00 609,243.30 Other income
allocation income
Special Funds for Promoting High-quality Economic Financial
357,200.00 5,741,886.91 Other income Related to assets
Development (促进经济高质量发展专项资金) allocation
Special Funds for Promoting High-quality Economic Financial Related to
3,540,020.00 11,578,756.00 Other income
Development (促进经济高质量发展专项资金) allocation income
Funds for joint R&D and industrialization of integrated
platform for molecular diagnostics (集成一体化分子诊 Financial
1,368,367.87 127,715.81 Other income Related to assets
allocation
断平台的合作研发及产业化)
Funds for industrial volatile organic pollution control Financial Related to
628,000.00 0.00 Other income
projects (工业挥发性有机污染治理项目资金) allocation income
Achievement transfer of blood screening BCI nucleic
Financial
acid detection testing (血液筛查 BCI 核酸检测试剂成 2,038,717.57 631,622.73 Other income Related to assets
allocation
果转化)
COVID-19 emergency technology special emergency
Financial
fund and special grants for industrialization (新冠应急科 1,084,784.35 26,694.08 Other income Related to assets
allocation
技攻关专项款及产业化项目补助金)
Financial Related to
“Specialized and new” subsidy ( “专精特新”补贴) 175,000.00 1,200,000.00 Other income
allocation income
Hengqin Guangdong-Macao Deep Cooperation Zone
Financial Related to
Factory Rental Subsidy (横琴粤澳深度合作区厂房租金 0.00 690,024.00 Other income
allocation income
补贴)
Zhuhai Investment Promotion Award (珠海市招商引资 Financial Related to
0.00 600,000.00 Other income
奖) allocation income
National Science and Technology Major Special Project
Financial
Subsidy Fund LZM009 (国家科技重大专项项目后补助 0.00 2,362,093.09 Other income Related to assets
allocation
资金 LZM009)
Data-driven industrial chain collaboration platform
demonstration project (数据驱动的产业链协同平台示 Financial
0.00 730,000.00 Other income Related to assets
allocation
范项目)
Several Measures for Payment Enterprises to Overcome
Difficulties in Response to the Novel Coronavirus
Pneumonia Epidemic-Financial Support Project Funds Financial Related to
6,093,000.00 381,000.00 Other income
allocation 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)
Project funds for promoting the development of the
biomedical industry (促进生物医药产业发展用途项目 Financial Related to
0.00 7,665,180.00 Other income
allocation income
资金)
Application of artificial intelligence in triptorelin long-
Financial Related to
acting microsphere preparation (人工智能在曲普瑞林长 0.00 800,000.00 Other income
allocation income
效微球制剂中的应用)
Financial
Others 2,271,603.34 2,584,330.85 Other income Related to assets
allocation
Financial Related to
Others 4,847,038.25 7,044,647.21 Other income
allocation income
Financial
Total 245,335,140.69 286,842,932.33
allocation
(3) Government grants using the net amount method to offset related costs
None.
(4) Return of government grants
Item Amount Reason
Research and development funds for new drug for Class I
Treatment of Necrosis Factor in Human Tumour from Return the remaining funds
2,076,000.00
Human Source (I 类治疗用人源化抗人肿瘤坏死因子 α 单 after the project is completed
克隆抗体新药研制资金)
260
Joincare Pharmaceutical Group Annual Report 2022
China Postdoctoral Science Foundation subsidy funds (中国
73,716.81 Balance returned
博士后科学基金会资助经费)
VI. Changes in the scope of consolidation
1. Disposal of subsidiaries
None.
2. Set-up of subsidiaries
The Company’s subsidiary, Jiaozuo Joincare Bio Technological Co., Ltd. (焦作健康元生物制品有限公司)
together with Fenghuolun (Shanghai) Biotechnology Co., Ltd. (风火轮(上海) 生物科技有限公司) to
established Jiaozuo Jianfeng Biotechnology Co., Ltd. on 5 August 2022, with a registered capital of RMB50
million. Jiaozuo Joincare Bio Technological Co., Ltd. (焦作健康元生物制品有限公司) is holding 66.5%
shares.
3. Change to scope of consolidation in the subsidiary Livzon Group
The Company's subsidiary, Livzon Group's Subsidiaries Livzon Biotechnology Hong Kong Co., Ltd.
established LIVZON BIOLOGICS (MALAYSIA) SDN. BHD. on January 12, 2022, with registered capital
of Malaysia Ringgit 100, of which the Livzon Group's investment is Malaysia Ringgit 100 and accounts for
its registered capital of 100%.
VII. Equity in other entities
1. Interests in subsidiaries
(1) Group structure
Main Shareholding %
Type of Corporate Place of Business Acquisition
Name of subsidiary operating Registered capital
subsidiaries Category registration nature Indire method
location Direct
ct
Topsino Industries Limited Wholly-
Limited Set-up by
(天诚实业有限公司) owned Hong Kong Hong Kong Business HKD896,933,973.00 100
company investment
(Topsino) ) subsidiary
Shenzhen Taitai Genomics
Wholly-
Inc. Co., Ltd. (深圳太太基 Limited Set-up by
owned Shenzhen Shenzhen Industry RMB50,000,000.00 75 25
因工程有限公司)(Taitai subsidiary
company investment
Genomics) )
Shenzhen Taitai
Pharmaceutical Industry Wholly-
Limited Set-up by
Co., Ltd. (深圳太太药业 owned Shenzhen Shenzhen Industry RMB100,000,000.00 100
company investment
有限公司) (Taitai subsidiary
Pharmaceutical)
Health Investment Wholly-
Limited The British The British Set-up by
Holdings Ltd. (Health owned Investment USD50,000.00 100
company Virgin Islands Virgin Islands investment
Investment) subsidiary
Joincare Pharmaceutical Wholly-
Limited The British The British Set-up by
Group Industry owned Investment USD 50,000.00 100
company Virgin Islands Virgin Islands investment
Co.,Ltd.(BVI) * subsidiary
Joincare Pharmaceutical
Wholly-
Group Industry Limited Cayman Cayman Set-up by
owned Investment USD 50,000.00 100
Co.,Ltd.(CAYMAN company Islands Islands investment
subsidiary
ISLANDS)
Xinxiang Haibin Wholly-
Limited Henan Henan Set-up by
Pharmaceutical Co., owned Industry RMB170,000,000.00 100
company Xinxiang Xinxiang investment
Ltd.(Xinxiang Haibin) (新 subsidiary
261
Joincare Pharmaceutical Group Annual Report 2022
Main Shareholding %
Type of Corporate Place of Business Acquisition
Name of subsidiary operating Registered capital
subsidiaries Category registration nature Indire method
location Direct
ct
乡海滨药业有限公司(新
乡海滨) )
Shenzhen Fenglei Electric
Power Investment Co., Wholly-
Limited Set-up by
Ltd. (深圳市风雷电力投 owned Shenzhen Shenzhen Investment RMB100,000,000.00 100
company investment
资有限公司) (Fenglei subsidiary
Electric Power) )
Jiaozuo Joincare Bio
Technological Co., Ltd. Wholly-
Limited Set-up by
(焦作健康元生物制品有 owned Henan Jiaozuo Henan Jiaozuo Industry RMB500,000,000.00 75 25
company investment
限公司) (Jiaozuo subsidiary
Joincare) )
Shanghai Frontier Health
Pharmaceutical
Technology Co., Ltd. (上 Limited Set-up by
Subsidiaries Shanghai Shanghai Industry RMB50,000,000.00 65
海方予健康医药科技有 company investment
限公司)(Shanghai
Frontier)
Shenzhen Taitai Biological
Wholly-
Technology Co., Ltd (深圳 Limited Set-up by
owned Shenzhen Shenzhen Industry RMB5,000,000.00 100
太太生物科技有限公司) subsidiary
company investment
(Taitai Biological)
Guangzhou Joincare
Respiratory Medicine
Engineering Technology Limited Set-up by
Co., Ltd. (广州健康元呼 Subsidiaries Guangzhou Guangzhou Industry RMB10,000,000.00 26
company investment
吸药物工程技术有限公
司) (Joincare Respiratory )
Guangdong Taitai
Forenstic Test Institute (广 Wholly-
Other Set-up by
owned Shenzhen Shenzhen Business RMB0.00 100
东太太法医物证司法鉴 organization investment
subsidiary
定所(鉴定所) )
Joincare Haibin
Pharmaceutical Co., Ltd. Wholly-
Limited Set-up by
owned Shenzhen Shenzhen Industry RMB500,000,000.00 25 75
(健康元海滨药业有限公 company investment
subsidiary
司) (Joincare Haibin) )
Shenzhen Haibin Business
Pharmaceutical Co., Ltd. Wholly- combination
Limited
owned Shenzhen Shenzhen Industry RMB700,000,000.00 97.87 2.13 not under
(深圳市海滨制药有限公 company
subsidiary common
司) (Haibin Pharma) control
Joincare Daily-Use & Business
Health Care Co., Ltd. (健 Wholly- combination
Limited
owned Shenzhen Shenzhen Business RMB25,000,000.00 80 20 not under
康元日用保健品有限公 company
subsidiary common
司) (Joincare Daily-Use) control
Health Pharmaceuticals Business
Wholly- combination
(China) Limited (健康药 Limited
owned Zhuhai Zhuhai Industry HKD73,170,000.00 100 not under
业(中国) 有限公司) subsidiary
company
common
(Health China) control
Livzon Pharmaceutical Business
combination
Group Inc. (丽珠医药集团 Joint-stock
Subsidiaries Zhuhai Zhuhai Industry RMB935,552,687.00 23.66 21.11 not under
股份有限公司) (Livzon company
common
Group) * Note 1 & 2 control
Hong Kong Health Business
Pharmaceutical Industry Wholly- combination
Limited
owned Hong Kong Hong Kong Investment HKD10,000.00 100 not under
Company Limited (香港健 company
subsidiary common
康药业有限公司) control
262
Joincare Pharmaceutical Group Annual Report 2022
Main Shareholding %
Type of Corporate Place of Business Acquisition
Name of subsidiary operating Registered capital
subsidiaries Category registration nature Indire method
location Direct
ct
Business
Health Pharmaceutical Wholly- combination
Limited
Industry Company Limited owned Hong Kong Hong Kong Investment HKD10,000.00 100 not under
company
(健康药业有限公司) subsidiary common
control
Shenzhen Hiyeah Industry Business
Wholly- combination
Co., Ltd (深圳市喜悦实业 Limited
owned Shenzhen Shenzhen Business RMB178,000,000.00 97.58 2.42 not under
有限公司) (Shenzhen subsidiary
company
common
Hiyeah) ) control
Business
Guangzhou Hiyeah Wholly- combination
Limited
Industry Co., Ltd. (广州市 owned Guangzhou Guangzhou Industry RMB3,000,000.00 100 not under
company
喜悦实业有限公司) subsidiary common
control
Business
Zhongshan Renhe Health Wholly- combination
Limited
Products Co., Ltd. (中山市 owned Zhongshan Zhongshan Industry RMB500,000.00 100 not under
company
仁和保健品有限公司) subsidiary common
control
Business
Shenzhen Jiekang Health Wholly- combination
Limited
Care Co., Ltd. (深圳市捷 owned Shenzhen Shenzhen Industry RMB4,000,000.00 100 not under
company
康保健有限公司 ) subsidiary common
control
Joincare (Guangdong)
Special medicine Food Wholly-
Limited Set-up by
Co., Ltd. (健康元(广东) owned Shaoguan Shaoguan Industry RMB20,000,000.00 100
company investment
特医食品有限公司) subsidiary
(Joincare Special Food)
Henan Joincare Biology
Limited Set-up by
Medical Research Institute Subsidiaries Jiaozuo Jiaozuo Industry RMB100,000,000.0 70.13
company investment
Co., Ltd.* Note 3
Jiaozuo Jianfeng
Limited Set-up by
Biotechnology Co., Ltd. Subsidiaries Jiaozuo Jiaozuo Industry RMB50,000,000.0 66.5
company investment
*Note 4
*Note 1: Shanghai Frontier Health Pharmaceutical Technology Co., Ltd. (上海方予健康医药科技有限公司) and the Company's subsidiary Livzon
Group established Shanghai Liyu Biomedical Technology Co., Ltd. (上海丽予生物医药技术有限责任公司) on 30 March 2021. Livzon Group holds
55% of the shares and Shanghai Frontier Health Pharmaceutical Technology Co., Ltd holds 45%.
*Note 2: Zhuhai Livzon Biotechnology Co., Ltd. (珠海市丽珠生物医药科技有限公司) is a subsidiary within the scope of Livzon Group's consolidation.
It was originally 100% indirectly held by Livzon Group. In the current period, due to the restructuring of the shareholding structure of the subsidiary,
Livzon Group holds 51% of its shares, the Company holds 33.07% of the shares, YF Pharmab Limited holds 8.43% of the shares, and Hainan
Lishengjuyuan Investment Partnership (Limited Partnership) (海南丽生聚源投资合伙企业(有限合伙)) holds 7.50%.
*Note 3: Henan Joincare Biomedical Research Institute Co., Ltd. (河南省健康元生物医药研究院有限公司) is a joint venture established on 26 October
2020 by Jiaozuo Joincare Biological Products Co., Ltd. (焦作健康元生物制品有限公司), a subsidiary of the Company, and Livzon Group Xinbeijiang
Pharmaceutical Co., Ltd. (丽珠集团新北江制药股份有限公司), a subsidiary of the Company’s Livzon Group. Jiaozuo Joincare Biological Products
Co., Ltd. holds 51% of the shares. The investee completed its industrial and commercial registration on 26 October 2020.
*Note 4: Jiaozuo Jianfeng Biotechnology Co., Ltd. Is jointed established by the Company’s subsidiary, Jiaozuo Joincare Bio Technological Co., Ltd. (焦
作健康元生物制品有限公司) and Fenghuolun (Shanghai) Biotechnology Co., Ltd. (风火轮(上海) 生物科技有限公司) on 5 August 2022. Jiaozuo
Joincare Bio Technological Co., Ltd. (焦作健康元生物制品有限公司) holds 66.5% shares.
Subsidiaries not included in the scope of consolidation in the current period:
Name of subsidiary Registered capital Actual investment Interest held
Guangzhou Hiyeah Industry Co., Ltd. (广州
3,000,000.00 3,000,000.00 100%
市喜悦实业有限公司)
Zhongshan Renhe Health Products Co., Ltd. 500,000.00 500,000.00 100%
263
Joincare Pharmaceutical Group Annual Report 2022
(中山市仁和保健品有限公司)
Shenzhen Jiekang Health Care Co., Ltd. (深
4,000,000.00 4,000,000.00 100%
圳市捷康保健有限公司 )
Guangzhou Hiyeah Industry Co., Ltd. (广州市喜悦实业有限公司), Zhongshan Renhe Health Products Co.,
Ltd. (中山市仁和保健品有限公司) are wholly-owned subsidiaries of Shenzhen Hiyeah. They entered the
liquidation process in 2008, and has been out of business for many years, and completed the tax cancellation
procedures, so they were not included in the scope of the consolidated.
Shenzhen Jiekang Health Care Co., Ltd. (深圳市捷康保健有限公司) was wholly-owned subsidiary of
Shenzhen Hiyeah. It had entered the liquidation process in 2008, and has been out of business for many years,
and completed the tax cancellation procedures, and it was approved and cancelled by Shenzhen Market
Supervision and Administration Bureau on May 30, 2022.
(2) Significant non-wholly owned subsidiaries
Profit or loss Balance of minority
Name of Shareholding of Dividend paid to
attributable to minority interests at period
subsidiary minority interest minority interest
interest end
Livzon Group 55.2266% 1,053,970,833.13 670,811,289.90 7,663,254,428.90
(3) Principal financial information of significant non-wholly owned subsidiaries
Closing balance
Name of
subsidiary Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
Livzon
16,987,297,040.38 7,877,528,325.85 24,864,825,366.23 7,396,664,920.29 2,531,908,854.22 9,928,573,774.51
Group
Continued (1) :
Beginning balance
Name of
subsidiary Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
Livzon
14,673,096,594.67 7,698,818,996.15 22,371,915,590.82 6,925,068,067.24 1,135,822,729.96 8,060,890,797.20
Group
Continued (2) :
Current year Prior year
Name of
subsidia Total Cash flows from Total
ry Cash flows from
Operating income Net profit comprehensive operating Operating income Net profit comprehensive
operating activities
income activities income
Livzon
12,629,579,047.66 1,955,540,213.06 2,084,847,720.65 2,772,671,295.03 12,063,863,272.98 1,952,101,168.93 1,834,898,051.39 1,902,328,139.03
Group
(4) Changes in share of owners' equity in subsidiaries and still controls the subsidiaries
None.
264
Joincare Pharmaceutical Group Annual Report 2022
2. Interests in joint arrangement or associates
(1) Significant associates
Joint venture or associate Main Shareholding (%) Accounting
Place of Business
Name of other related operating treatment of
registration nature Direct Indirect
parties location investment
Associates
Jiaozuo Jinguan Jiahua
Electric Power Co., Ltd. Henan
Henan For electricity
Jiaozuo 0.00 49 Equity method
(焦作金冠嘉华电力有限 Jiaozuo City production
City
公司)
Tianjin Tongrentang
Pharmaceutical
Group Co., Ltd. (天津同 Tianjin Tianjin 0.00 40 Equity method
manufacturing
仁堂集团股份有限公司)
(2) Main financial information of significant associates
①Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. (焦作金冠嘉华电力有限公司)
Jiaozuo Jinguan Jiahua Electric Power Co., Ltd.
(焦作金冠嘉华电力有限公司)
Item
Closing balance/ Current Beginning balance/ Prior
year year
Current assets 1,034,890,763.04 900,929,930.10
Including: Cash and cash equivalents 193,286,823.41 151,817,021.98
Non-current assets 274,836,800.49 295,290,603.34
Total assets 1,309,727,563.53 1,196,220,533.44
Current liabilities 734,194,376.70 621,231,810.54
Non-current liabilities 12,419,097.25 13,660,568.14
Total liabilities 746,613,473.95 634,892,378.68
Net assets 563,114,089.58 561,328,154.76
Including: Minority interests 0.00 0.00
Owners’ equity attributable to parent
563,114,089.58 561,328,154.76
company
Net assets share calculated by shareholding 275,925,903.89 275,050,795.83
Adjustments
Including: Goodwill
Unrealized profit or loss in internal
transactions
Provision for impairment
Others 9,612,591.63 9,569,113.18
Carrying value of equity investment in
285,538,495.52 284,619,909.02
associates
Fair value of publicly quoted equity
investments
Continued:
265
Joincare Pharmaceutical Group Annual Report 2022
Jiaozuo Jinguan Jiahua Electric Power Co., Ltd.
(焦作金冠嘉华电力有限公司)
Item
Closing balance/ Current Beginning balance/ Prior
year year
Operating income 1,100,595,142.50 702,123,322.31
Financial expenses 16,069,876.59 14,968,954.50
Income tax expenses 15,013.60 -1,540,629.99
Net profit 1,785,934.82 -65,176,444.97
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income 1,785,934.82 -65,176,444.97
Net cash flows from operating activities 132,858,948.24 -135,982,225.15
Dividends received from joint ventures in the
current period
②Tianjin Tongrentang Group Co., Ltd. (天津同仁堂集团股份有限公司)
Tianjin Tongrentang Group Co., Ltd.
Item (天津同仁堂集团股份有限公司)
2022.12.31
Owners’ equity attributable to parent company 570,306,493.51
Net assets share calculated by shareholding 228,122,597.40
Adjustments
Including: Goodwill 498,457,683.68
Carrying value of equity investment in associates 726,580,281.08
Fair value of publicly quoted equity investments
Continued:
Tianjin Tongrentang Group Co., Ltd.
Item (天津同仁堂集团股份有限公司)
Current year
Operating income 1,086,062,042.02
Dividends received by the company from associates in the current
111,980,000.00
period
The Company calculates the share of assets of associate based on the shareholding for the amount attributable
to the parent company in the consolidated financial statements. The amounts in the consolidated financial
statements of associates take into account the fair value of identifiable net assets and liabilities of associates
at the time of acquisition and the impact of unified accounting policies. the above data is the preliminary
results announcement of Tianjin Tongrentang.
(3) Summary of financial information of other insignificant associates
Closing balance/ Beginning balance/
Item
Current year Prior year
Associates:
Total carrying amount of investment 407,763,817.99 1,134,729,545.83
The following amount are calculated on the basis of
shareholding ratio
Net profit -11,360,486.63 42,217,479.63
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Joincare Pharmaceutical Group Annual Report 2022
Other comprehensive income 527,718.52 14,789,928.17
Total comprehensive income -10,832,768.11 57,007,407.80
(4) Significant limitations on the ability of joint ventures or associates to transfer funds to the Company
None.
VIII. Risks Management of Financial Instruments
The major financial instruments of the Company include cash, bills receivable and accounts receivable, other
receivables, non-current assets due within one year, other current assets, financial assets held for trading,
other equity instrument investments, bills payable and accounts payable, other payables, short-term
borrowings, financial liabilities held for trading, non-current liabilities due within one year, long-term
borrowings and long-term payables. The details of these financial instruments are disclosed in the respective
notes. The financial risk of these financial instruments and financial 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 financial 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 As at 31 December 2022
Unit: RMB 1,000
Item HKD USD EUR JPY GBP MOP CHF
Financial assets in foreign
currency -
Cash and bank balances 689,008.76 1,795,183.72 702.84 18,052.98 16.29 4,272.78 0.00
Financial assets held for
87,193.75 0.00 0.00 0.00 0.00 0.00 0.00
trading
Accounts receivable 0.00 498,180.41 0.00 0.00 0.00 1,097.96 0.00
Other receivables 2,849.00 0.15 0.00 0.00 0.00 504.53 0.00
Other current assets 0.00 92,815.74 0.00 0.00 0.00 0.00 0.00
Other equity instruments
524,464.51 0.00 0.00 0.00 0.00 0.00 0.00
investment
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Joincare Pharmaceutical Group Annual Report 2022
Subtotal: 1,303,516.02 2,386,180.02 702.84 18,052.98 16.29 5,875.27 0.00
Financial liabilities in
0.00 0.00 0.00 0.00 0.00 0.00 0.00
foreign currency -
Short-term loans 0.00 13,464.86 0.00 0.00 0.00 0.00
Accounts payable 0.00 3,569.18 42.05 14,627.29 0.00 0.00 141.89
Other payables 2,583.45 27,967.54 0.00 0.00 0.00 0.00 0.00
Subtotal: 2,583.45 45,001.58 42.05 14,627.29 0.00 0.00 141.89
② As at 31 December 2021
Unit: RMB 1,000
Item HKD USD EUR JPY GBP MOP
Financial assets in foreign
currency -
Cash and bank balances 516,034.78 1,296,568.06 559.42 2,406.62 16.70 1,121.33
Financial assets held for
163,071.45 0.00 0.00 0.00 0.00 0.00
trading
Accounts receivable 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 instruments
480,531.75 0.00 0.00 0.00 0.00 0.00
investment
Subtotal: 1,162,350.71 1,875,630.14 5,052.60 2,406.62 16.70 4,407.41
Financial liabilities in
0.00 0.00 0.00 0.00 0.00 0.00
foreign currency -
Accounts payable 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
As at 31 December 2022, in respect of the Company’s financial 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 profit of approximately RMB182,597.36 (31 December 2021: approximately
RMB151,553,060).
(2) Interest rate risk
The Company’s exposures to interest rate risk are mainly arising from interest-bearing liabilities such as
bank borrowings. The interest rates are affected by the macro monetary policies of China, hence the Company
will face the risks arising from fluctuation of interest rates in the future.
The finance department of the head office of the Company continues to monitor the level of interest rate 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
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Joincare Pharmaceutical Group Annual Report 2022
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 11.98% (31 December 2021: 11.60%); among the other receivables of the Company, the other receivables
of the top five customers accounted for 46.23% (31 December 2021: 60.63%).
(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 flexible manner.
As at the date of the balance sheet, the contractual cash flows of financial assets and financial liabilities are
presented below by term of maturity:
① As at 31 December 2022
Over 5
Item Within a year 1-2 years 2-5 years Total
years
Financial assets:
Cash and bank balances 14,808,488,110.96 0.00 0.00 0.00 14,808,488,110.96
Financial assets held for
109,015,664.98 0.00 0.00 0.00 109,015,664.98
trading
Notes receivable 1,959,985,016.85 0.00 0.00 0.00 1,959,985,016.85
Accounts receivable 3,103,758,850.15 0.00 0.00 0.00 3,103,758,850.15
Other receivables 52,535,740.14 0.00 0.00 0.00 52,535,740.14
Other current assets 104,859,166.96 0.00 0.00 0.00 104,859,166.96
Subtotal: 20,138,642,550.04 0.00 0.00 0.00 20,138,642,550.04
Financial liabilities:
Short-term loans 2,126,050,615.06 0.00 0.00 0.00 2,126,050,615.06
Financial liabilities held
755,634.43 0.00 0.00 0.00 755,634.43
for trading
Notes payable 1,635,906,989.22 0.00 0.00 0.00 1,635,906,989.22
Accounts payable 943,905,580.91 0.00 0.00 0.00 943,905,580.91
Other payables 3,680,334,360.88 0.00 0.00 0.00 3,680,334,360.88
Other current liabilities 83,541,891.93 0.00 0.00 0.00 83,541,891.93
Non-current liabilities due
63,077,260.98 0.00 0.00 0.00 63,077,260.98
within one year
Lease liabilities 0.00 14,509,839.81 8,972,646.26 0.00 23,482,486.07
Long term loans 0.00 907,182,927.81 2,323,661,115.07 0.00 3,230,844,042.88
Subtotal: 8,533,572,333.41 921,692,767.62 2,332,633,761.33 0.00 11,787,898,862.36
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Joincare Pharmaceutical Group Annual Report 2022
② As at 31 December 2021
Item Within a year 1-2 years 2-5 years Over 5 years Total
Financial assets:
Cash and bank balances 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
Notes receivable 1,977,286,022.02 0.00 0.00 0.00 1,977,286,022.02
Accounts receivable 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 loans 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
Notes payable 1,582,386,767.93 0.00 0.00 0.00 1,582,386,767.93
Accounts payable 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 due
91,576,066.33 0.00 0.00 0.00 91,576,066.33
within one year
Lease liabilities 0.00 13,186,526.27 11,885,268.05 0.00 25,071,794.32
Long term loans 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
2. Capital management
The capital management policies are made to keep the continuous operation of the Company, to enhance the
return to shareholders, to benefit other stakeholders and to maintain the best capital structure to minimize the
cost of capital.
For the maintenance or adjustment of the capital structure, the Company might adjust financing method, the
amount 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 2022, the Company’s gearing ratio is 38.37% (31 December 2021: 35.12%).
3. Transfer of financial assets
(1) Financial assets which are transferred but have not been derecognised in their entirety
None.
(2) Financial assets which have been transferred and ceased to be recognised but still have involvement with the
transferor
As at 31 December 2022, the Company discounted a banker's acceptance bill to the bank of
RMB1,190,002,804.98 (previous period: RMB76,908,320.00). Since the principal risks and rewards, such as
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Joincare Pharmaceutical Group Annual Report 2022
interest rate risks associated with these bankers' acceptances, have been transferred to the banks, the Company
derecognizes discounted unmatured bankers' acceptance bills. According to the discount agreement, if the
banker's acceptance bill is not accepted when due, the bank has the right to require the Company to pay the
outstanding balance. As a result, the Company continued to engage in discounted bankers' acceptances, which
amounted to RMB422,899,944.56 (31 December 2021: RMB67,908,033.05) as at 31 December 2022.
As at 31 December 2022, the carrying value of the Company's unexpired bankers' acceptance bills endorsed
to suppliers for settlement of accounts payable was RMB542,620,475.62 (31 December 2021:
RMB186,290,992.91) and no outstanding commercial acceptance bills endorsed to suppliers for settlement of
accounts payable (31 December 2021: Nil). In accordance with the Negotiable Instruments Law, the holders
of the bills have a right of recourse against the Company if payment is refused by the bank of acceptance (the
“Continuing Involvement”). The maturity date is within 1 to 6 months as at 31 December 2022, in the opinion
of the Company, the Company has transferred substantially all risks and rewards. Accordingly, their full
carrying amounts and the corresponding 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 significant.
During the year ended 31 December 2022, 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 loss arising from the continuing
involvement in financial assets which had been derecognised. The endorsement was incurred evenly
throughout the period.
IX. Fair value
The level in which fair value measurement is categorised is determined by the level of the fair value hierarchy
of the lowest level input that is significant to the entire fair value measurement. The levels are defined as
follows:
Level 1 inputs: unadjusted quoted prices in active markets that are observable at the measurement date for
identical assets or liabilities.
Level 2 inputs: inputs other than Level 1 inputs that are either directly or indirectly observable for
underlying assets or liabilities.
Level 3 inputs: inputs that are unobservable for underlying assets or liabilities.
(1) Items and amounts measured at fair value
As at 31 December 2022, the assets and liabilities measured at fair value are listed as follows according to
the above three levels:
Level 1 fair Level 2 fair
Level 3 fair value
Item value value Total
measurement
measurement measurement
I. Recurring fair value measurement
(1) Financial assets held for trading 103,583,153.41 5,432,511.57 0.00 109,015,664.98
1.debt instruments investment 934,289.94 0.00 0.00 934,289.94
2.equity instruments investment 102,648,863.47 0.00 0.00 102,648,863.47
3.Derivative financial assets 0.00 5,432,511.57 0.00 5,432,511.57
(2) Other equity instruments investment 9,615,483.94 0.00 1,184,343,395.11 1,193,958,879.05
Total assets measured at fair value on a
113,198,637.35 5,432,511.57 1,184,343,395.11 1,302,974,544.03
recurring basis
(3) Financial liabilities held for trading
Derivative financial liabilities 0.00 755,634.43 0.00 755,634.43
Total liabilities measured at fair value on
0.00 755,634.43 0.00 755,634.43
a recurring basis
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Joincare Pharmaceutical Group Annual Report 2022
Level 1 fair Level 2 fair
Level 3 fair value
Item value value Total
measurement
measurement measurement
II. Non-recurring fair value measurement
Assets held-for-sale 0.00 0.00 0.00 0.00
Total assets measured at fair value on a
0.00 0.00 0.00 0.00
non-recurring basis
Total liabilities measured at fair value on
0.00 0.00 0.00 0.00
a non-recurring basis
During the year ended 31 December 2022, the Company’s investment LUNGLIFE AI, INC. was listed on
the London Stock Exchange, as a result, the fair value measurement of this investment in other equity
instruments transferred from level 3 to level 1; except for this investment in other equity instruments, tthere
were no transfers of the fair value measurements between level 1 and level 2 and no transfers into or out of
level 3.
For the items in level 1 fair value measurement which listed on the Shanghai Stock Exchange, Shenzhen
Stock Exchange, Hong Kong Stock Exchange or the United States, their fair value is determined based on
the closing price on the last trading day of the reporting period.
For the items in level 2 fair value measurement which uses valuation techniques and qualitative and
quantitative information of important parameters to determine the fair value. For derivative financial
instruments such as foreign exchange forward contracts, the fair value is determined based on the quoted
forward exchange rate corresponding to the expiring contract.
For the items in level 3 fair value measurement uses valuation techniques and qualitative and quantitative
information of important parameters to determine the fair value. For some other equity instruments held, the
fair value is based on the cost or the present value of the estimated future net cash flow as the best estimate.
(2) Relevant information of level 2 fair value measurement
Content Fair value as at 2022.12.31 Valuation techniques
Calculated and determined based on the quoted forward
Derivative financial assets 5,432,511.57
exchange rate corresponding to the expiring contract
Derivative financial Calculated and determined based on the quoted forward
755,634.43
liabilities exchange rate corresponding to the expiring contract
(3) Quantitative information of important unobservable input values used in level 3 of fair value measurement
Fair value as at
Content Valuation techniques
2022.12.31
Other equity instrument investments- (Shanghai Yunfeng Xinchuang
67,935,704.36 Net assets
Equity Investment Center (上海云锋新创股权投资中心)
Other equity instrument investments - Shanghai JingYi Investment
73,616,359.91 Net assets
Center (上海经颐投资中心) (L.P.)
Other equity instrument investments-Qianhai Equity Investment Fund
243,378,742.17 Net assets
(前海股权投资基金) (L.P.)
Other equity instrument investments -PANTHEOND,L.P. 5,954,301.20 Net assets
Other equity instrument investments –Apricot Forest, Inc 120,788,500.00 Income method
Other equity instrument investments –Zhuhai China Resources Bank
158,400,000.00 Market method
Co., Ltd. (珠海华润银行股份有限公司)
Other equity instrument investments - Yizun Biopharmaceutics
30,513,209.27 Market method
(Shanghai) Co., Ltd. (羿尊生物医药(上海) 有限公司) )
Other equity instrument investments - Zhuhai Medpha Biotechnology
32,099,443.70 Recent financing price
Co., Ltd. (珠海麦得发生物科技股份有限公司) ) )
Other equity instrument investments- Beijing Luzhu Biotechnology
53,654,738.60 Recent financing price
Co., Ltd. (北京绿竹生物技术股份有限公司)
Other equity instruments investment- Xiangrong (Shanghai)
19,613,667.00 Recent financing price
Biotechnology Co., Ltd. (享融(上海) 生物科技有限公司)
272
Joincare Pharmaceutical Group Annual Report 2022
Fair value as at
Content Valuation techniques
2022.12.31
Other equity instrument investments –GLOBAL HEALTH SCIENCE 271,980,388.15 Net assets
Other equity instrument investments –SCC VENTURE VI 2018-
257,909.57 Net assets
B,L.P.
Other equity instrument investments –Nextech V Oncology S.C.S.,
23,996,121.32 Net assets
SICAV-SIF
Other equity instrument investments -Others 82,154,309.86 Cost
X. Related party and related party transactions
1. Information of parent company
Shareholding ratio Voting right by
Name of parent Place of
Business nature Registered capital by parent company parent company
company registration
(%) (%)
Shenzhen Investment and
Baiyeyuan establishment of industry,
Investment Co., Shenzhen domestic commerce, and 80,000,000.00 45.53 45.53
Ltd. (深圳市百业 material supply and
源投资有限公司) marketing
The ultimate controller of the Company is Zhu Baoguo (朱保国).
(1) Registered capital of parent company and its changes
Name of parent company 2021.12.31 Increase Decrease 2022.12.31
Shenzhen Baiyeyuan Investment
Co., Ltd. (深圳市百业源投资有限 80,000,000.00 0.00 0.00 80,000,000.00
公司)
(2) Shares of the company held by the parent company and its changes
Name of other related
2021.12.31 Ratio Increase Decrease 2022.12.31 Ratio
parties
Shenzhen Baiyeyuan
Investment Co., Ltd.
895,653,653.00 46.95% 0.00 17,380,900.00 878,272,753.00 45.53%
(深圳市百业源投资有
限公司)
On 20 September 2022, Shenzhen Baiyeyuan Investment Co., Ltd. (深圳市百业源投资有限公司) lent
17,380,900 shares due to participating in the refinancing securities lending business, and the ownership of
this part of the equity has not been transferred in the current period.
2. Subsidiaries of the Company
Details of subsidiaries refer to Note VII. 1
3. Joint venture and associates of the Company
Details of significant joint ventures or associates refer to Notes V.11 and VII. 2.
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:
Name of joint ventures and associates Relationship with the Company
Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. (焦作金冠
Associates
嘉华电力有限公司)
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Joincare Pharmaceutical Group Annual Report 2022
Name of joint ventures and associates Relationship with the Company
Guangdong Blue Treasure Pharmaceutical Co. Ltd. (广东蓝
Associates
宝制药有限公司)
Novastage Pharmaceuticals (Shenzhen) , Ltd. (新领医药技
Associates
术(深圳) 有限公司)
Shenzhen City Youbao Technology Co., Ltd. (深圳市有宝科
Associates
技有限公司)
AbCyte Therapeutics Inc. Associates
L&L Biopharma, Co. Ltd. (上海健信生物医药科技有限公
Associates
司)
Zhuhai Sanmed Biotech Inc. (珠海圣美生物诊断技术有限
Associates
公司)
Aetio Biotherapy Inc Associates
Jiangsu Atom Bioscience and Pharmaceutical Co., Ltd. (江苏
Associates
新元素医药科技有限公司)
Tianjin Tongrentang Group Co., Ltd. (天津同仁堂集团股份
Associates
有限公司)
Infinite Intelligence Pharmaceutical Co. Ltd. (北京英飞智药
Associates
科技有限公司)
Shenzhen Kangti Biomedical Technology Co., Ltd. (深圳康
Associates
体生物医药科技有限公司)
Shanghai Sheo Pharmaceutical Technology Co., Ltd. (上海偕
Associates
怡医药科技有限公司)
Zhuhai Sanmed Gene Diagnostics Ltd. (珠海市圣美基因检
Entity controlled by an associate
测科技有限公司)
Zhuhai Hengqin Weisheng Precision Medicine Technology
Entity controlled by an associate
Co., Ltd. (珠海横琴维胜精准医学科技有限公司)
4. Other related parties of the Company
Name of other related parties Relationship with the Company
Shenzhen Taitelixing Investment Development Co., Ltd. (深圳
Subsidiaries of the company’s ultimate actual controller
泰特力兴投资发展有限公司)
Zhuozhou Jingnan Yongle Golf Club Co., Ltd. (涿州京南永乐
A company controlled by the Company’s parent company
高尔夫俱乐部有限公司)
Shenzhen Healthy Deer Information Technology Co., Ltd. (深
An associate of the Company’s parent company
圳市健康阿鹿信息科技有限公司)
Sichuan Healthy Deer Hospital Management Co., Ltd. and its A subsidiary of an associate of the Company’s parent
subsidiaries (四川健康阿鹿医院管理有限公司及其子公司) company
Zhuhai Medpha Biotechnology Co., Ltd. (珠海麦得发生物科 The supervisor of Livzon Group works as director for t
技股份有限公司) his entity
Zhuhai Xianghetai Investment Management Partnership
(Limited Partnership) (珠海祥和泰投资管理合伙企业(有限合 The executive of Livzon Group controls this entity
伙) )
Zhuhai Zhong Hui Yuan Investment Partnership (Limited
The director of Livzon Group controls this entity
Partnership) (珠海中汇源投资合伙企业(有限合伙)
Zhuhai Liying Investment Management Partnership (Limited
The director of Livzon Group controls this entity
Partnership) (珠海丽英投资管理合伙企业(有限合伙) )
Jiangsu One Winner Medical Technology Co., Ltd. (江苏一赢
The director of Livzon Group controls this entity
家医疗科技有限公司)
Zhuhai Pu Xiaoying Enterprise Management Co., Ltd. (Zhuhai
The close family member of the director of Livzon Group
Pu Xiaoying Enterprise Management Co., Ltd. (珠海市蒲小英
controls this entity
企业管理有限公司))
Directors, Supervisors and other senior management personnel Key management personnel
5. Related party transactions
(1) Purchase or sale with related parties
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Joincare Pharmaceutical Group Annual Report 2022
①Purchase of goods/receiving of services
Name of other related parties Nature of transaction Current year Prior year
Guangdong Blue Treasure Pharmaceutical Co. Ltd. (广东
Raw materials 2,917,946.91 2,786,053.10
蓝宝制药有限公司)
Zhuhai Sanmed Biotech Inc. (珠海圣美生物诊断技术有
Finished goods 0.00 28,558.55
限公司)
Sichuan Healthy Deer Hospital Management Co., Ltd. and
its subsidiaries (四川健康阿鹿医院管理有限公司及其 Finished goods,
0.00 887,872.67
Business promotion
子公司)
Jiangsu One Winner Medical Technology Co., Ltd. (江苏
Business promotion 3,160,667.40 408,427.00
一赢家医疗科技有限公司)
Zhuhai Sanmed Gene Diagnostics Ltd. (珠海市圣美基因
Testing 137,358.49 14,377.36
检测科技有限公司)
L&L Biopharma, Co. Ltd. (上海健信生物医药科技有限 Research and
0.00 943,396.20
公司) development
Shenzhen City Youbao Technology Co., Ltd. (深圳市有
Business promotion 2,083,948.00 1,062,850.00
宝科技有限公司)
Zhuozhou Jingnan Yongle Golf Club Co., Ltd. (涿州京南
Member services 0.00 84,037.00
永乐高尔夫俱乐部有限公司)
Infinite Intelligence Pharmaceutical Co. Ltd. (北京英飞智 Research and
339,805.83 148,514.85
药科技有限公司) development
Zhuhai Pu Xiaoying Enterprise Management Co., Ltd. (珠
Modern services 249,975.00 0.00
海市蒲小英企业管理有限公司)
Shanghai Sheo Pharmaceutical Technology Co., Ltd. (上 Research and
18,867,924.60 0.00
海偕怡医药科技有限公司) development
Feellife Health Inc. (深圳来福士雾化医学有限公司) Nebulizer 902,115.48 0.00
Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. (焦作金
Electricity, Steam 268,666,999.03 212,585,953.81
冠嘉华电力有限公司)
Total 297,326,740.74 218,950,040.54
②Sales of goods/rendering of services
Name of related parties Nature of transaction Current year Prior year
Guangdong Blue Treasure Pharmaceutical Co. Ltd. (广 Finished Products,
35,703,972.73 63,972,886.45
东蓝宝制药有限公司) Hydropower and Power
Zhuhai Sanmed Biotech Inc. (珠海圣美生物诊断技术 Finished Products,
Hydropower, Power and 1,435,666.13 577,453.14
有限公司) others
Sichuan Healthy Deer Hospital Management Co., Ltd.
and its subsidiaries (四川健康阿鹿医院管理有限公司 Finished Products 3,036,532.62 4,951,551.99
及其子公司)
Zhuhai Sanmed Gene Diagnostics Ltd. (珠海市圣美基 Finished Products,
Hydropower, Power and 592,356.49 667,998.89
因检测科技有限公司) others
Shanghai Sheo Pharmaceutical Technology Co., Ltd. Research and
3,960,000.00 0.00
(上海偕怡医药科技有限公司) development
Total 44,728,527.97 70,169,890.47
(2) Rental with related party
Type of assets Rental income in current Rental income in prior
Name of lessee
leased year year
Zhuhai Sanmed Biotech Inc. (珠海圣美生
Buildings 2,226,299.00 2,226,299.00
物诊断技术有限公司)
Zhuhai Sanmed Gene Diagnostics Ltd. (珠
Buildings 240,000.00 240,000.00
海市圣美基因检测科技有限公司)
275
Joincare Pharmaceutical Group Annual Report 2022
Type of assets Rental income in current Rental income in prior
Name of lessee
leased year year
Shenzhen Baiyeyuan Investment Co., Ltd.
Buildings 18,891.76 18,891.76
(深圳市百业源投资有限公司)
Novastage Pharmaceuticals (Shenzhen) , Buildings &
468,302.76 315,457.80
Ltd. (新领医药技术(深圳) 有限公司) Equipment
Shenzhen Taitelixing Investment
Development Co., Ltd. (深圳泰特力兴投 Buildings 18,720.00 18,720.00
资发展有限公司)
Shenzhen Healthy Deer Information
Technology Co., Ltd. (深圳市健康阿鹿信 Buildings 17,174.32 17,174.32
息科技有限公司)
Shenzhen City Youbao Technology Co.,
Buildings 17,174.32 17,174.32
Ltd. (深圳市有宝科技有限公司)
Total 3,006,562.16 2,853,717.20
(3) Guarantee with related parties
① In order to ensure the stable development of production and operation of Jinguan Electric Power, the
Company and its controlling subsidiary Jiaozuo Joincare jointly provided a revolving guarantee facility with
balance of no more 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 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 facility with balance of no more than RMB350 million (inclusive) for Jinguan Electric Power
(specific guarantors shall be specified 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 facility with
balance of no more than RMB350 million (inclusive) for Jinguan Electric Power (specific guarantors shall be
specified in the guarantee contracts) considered and approved at the 2017 General Meeting of the Company
was changed to the revolving guarantee facility with balance of no more than RMB450 million (inclusive) on
10 May 2019 due to the actual business needs of Jinguan Electric Power, with the guarantee period starting
from the date when the resolution was considered and approved to 31 December 2022. On 18 May 2022, the
"Proposal on the Company and its subsidiary Jiaozuo Joincare in Providing Loan Guarantee for Jinguan
Electric Power" was reviewed and approved by the Company's 2021 annual general meeting, the Company
and its subsidiary Jiaozuo Joincare jointly provided a guarantee for Jinguan Electric Power on its revolving
loans facility with a balance of not more than RMB450 million (including RMB450 million) (the specific
guarantor will be specified in each guarantee contract), and the term is from the date of approval of this
guarantee proposal at the Company’s annual general meeting to 31 December 2025.
As at 31 December 2022, the Company provided Jinguan Electric Power with guarantees for loans of
RMB378.40 million; of which RMB222 million in Shenzhen Branch of China Everbright Bank, RMB90
million in Shenzhen Branch of Zheshang Bank, RMB46.40 million in Shenzhen Branch of Nanyang
Commercial Bank and RMB20 million in Jiaozuo Branch of China CITIC Bank.
In order to ensure the safety of secured loans, Jinguan Electric Power provided counter guarantees for the
said guarantees provided by the Company and its subsidiary, Jiaozuo Joincare, based on its owned assets,
and undertook that it would unconditionally provide mutual guarantees for the Company or its controlling
subsidiary designated with total facility of no more than RMB450 million (inclusive) whenever the Company
deemed necessary.
② Another shareholder of Livzon MABPharm Inc. (珠海市丽珠单抗生物技术有限公司) – the Company
has issued a "Counter Guarantee Commitment", promising that it will share the joint and several guarantee
liability to the extent of 33.07% of the scope of guarantee responsibility in relation to the guarantee provided
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Joincare Pharmaceutical Group Annual Report 2022
to Livzon MABPharm Inc. (珠海市丽珠单抗生物技术有限公司), and the counter guarantee period will
expire on the date when the Company's guarantee responsibility expiry.
③ Zhuhai Zhong Hui Yuan Investment Partnership (Limited Partnership) (珠海中汇源投资合伙企业(有限
合伙), being another shareholder of Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc. (丽珠集
团新北江制药股份有限公司) has issued a "Counter Guarantee Commitment", promising that it will share
the joint and several guarantee liability to the extent of 8.44% of the scope of guarantee responsibility incurred
by Livzon Group in relation to the guarantee provided to Livzon MABPharm Inc. (珠海市丽珠单抗生物技
术有限公司), and the counter guarantee period will expire on the date when Livzon Group's guarantee
responsibility expiry.
(4) Asset transfer and debt restructuring between related parties
None.
(5) Remuneration of key management personnel
Unit: RMB ten thousand
For the year ended 31 December 2022
Director/
Wages and Social Housing Severance
Supervisor Bonus Others Total
allowances security fund pay
Allowance
Directors:
Zhu Baoguo
325.00 0.00 6.44 2.66 0.00 0.00 0.00 334.09
(朱保国)
Liu Guangxia
325.00 18.48 1.85 2.66 0.00 0.00 0.00 347.98
(刘广霞)
Yu Xiong (俞
0.00 260.00 0.00 0.00 100.00 0.00 0.00 360.00
雄)
Qiu Qingfeng
0.00 135.00 7.27 2.66 80.00 0.00 0.00 224.93
(邱庆丰)
Lin Nanqi (林
0.00 135.00 7.27 2.66 80.00 0.00 0.00 224.93
楠棋)
Cui Liguo (崔
11.54 0.00 0.00 0.00 0.00 0.00 0.00 11.54
利国)
Huo Jing (霍
11.54 0.00 0.00 0.00 0.00 0.00 0.00 11.54
静)
Qin Yezhi (覃
11.54 0.00 0.00 0.00 0.00 0.00 0.00 11.54
业志)
Peng Juan (彭
11.54 0.00 0.00 0.00 0.00 0.00 0.00 11.54
娟)
Supervisors:
Yu Xiaoyun (余
4.80 38.31 6.82 2.25 17.95 0.00 0.00 70.13
孝云)
Peng Jinhua (彭
4.80 0.00 0.00 0.00 0.00 0.00 0.00 4.80
金花)
Xing Zhiwei
2.97 64.00 6.82 2.09 93.00 0.00 0.00 168.88
(幸志伟)
Xie Youguo (谢
1.83 36.92 0.00 0.00 0.00 0.00 0.00 38.75
友国)
Other senior
management:
Zhao Fenguang
0.00 135.00 7.27 2.66 45.00 0.00 0.00 189.93
(赵凤光)
Total 710.57 822.71 43.75 17.61 415.95 0.00 0.00 2,010.58
277
Joincare Pharmaceutical Group Annual Report 2022
Note: Mr. Zhu Baoguo (朱保国) serves as the chairman of Livzon Group, a controlled subsidiary of the
Company; and Mr. Yu Xiong (俞雄) and Mr. Qiu Qingfeng (邱庆丰) serve as non-executive directors of
Livzon Group. Xie Youguo (谢友国) has resigned. The remuneration presented in above does not include
the portion paid by Livzon Group.
For the year ended 31 December 2021
Director/
Wages and Social Housing Severance
Supervisor Bonus Others Total
allowances security fund pay
Allowance
Directors:
Zhu Baoguo
330.94 0.00 6.22 2.40 0.00 0.00 0.00 339.56
(朱保国)
Liu Guangxia
330.94 17.91 8.01 2.40 0.00 0.00 0.00 359.27
(刘广霞)
Yu Xiong
0.00 240.00 0.00 0.00 95.00 0.00 0.00 335.00
(俞雄)
Qiu Qingfeng
0.00 135.00 6.22 2.40 30.00 0.00 0.00 173.62
(邱庆丰)
Lin Nanqi
0.00 135.00 6.22 2.40 30.00 0.00 0.00 173.62
(林楠棋)
Cui Liguo
10.00 0.00 0.00 0.00 0.00 0.00 0.00 10.00
(崔利国)
Huo Jing
10.00 0.00 0.00 0.00 0.00 0.00 0.00 10.00
(霍静)
Qin Yezhi
10.00 0.00 0.00 0.00 0.00 0.00 0.00 10.00
(覃业志)
Peng Juan
3.60 0.00 0.00 0.00 0.00 0.00 0.00 3.60
(彭娟)
Supervisors:
Yu Xiaoyun (余
4.00 38.16 6.01 2.18 17.95 0.00 0.00 68.29
孝云)
Peng Jinhua (彭
4.00 32.73 0.00 1.36 0.00 0.00 0.00 38.09
金花)
Xie Youguo
4.00 36.35 0.00 1.17 2.86 0.00 0.00 44.38
(谢友国)
Other senior
management:
Zhao Fenguang
0.00 135.00 6.22 2.40 25.00 0.00 0.00 168.62
(赵凤光)
Total 707.48 770.14 38.88 16.74 200.81 0.00 0.00 1,734.05
Note: Mr. Zhu Baoguo (朱保国) serves as the chairman of Livzon Group, a controlled subsidiary of the
Company; and Mr. Yu Xiong (俞雄) and Mr. Qiu Qingfeng (邱庆丰) serve as non-executive directors of
Livzon Group. The remuneration presented in above does not include the portion paid by Livzon Group.
(6) Other related party transactions
None.
6. Receivables and payables with related party
(1) Receivable from related parties
278
Joincare Pharmaceutical Group Annual Report 2022
2022.12.31 2021.12.31
Item Related party Provision
Provision for
Book balance Book balance for bad
bad debts
debts
Notes Guangdong Blue Treasure Pharmaceutical Co.
3,893,820.00 0.00 5,492,960.00 0.00
receivable Ltd. (广东蓝宝制药有限公司)
Accounts Guangdong Blue Treasure Pharmaceutical Co.
4,781,500.00 47,336.85 18,889,500.00 490,875.00
receivable Ltd. (广东蓝宝制药有限公司)
Accounts Zhuhai Sanmed Gene Diagnostics Ltd. (珠海
85,731.98 840.17 224,023.83 8,578.07
receivable 市圣美基因检测科技有限公司)
Sichuan Healthy Deer Hospital Management
Accounts
Co., Ltd. and its subsidiaries (四川健康阿鹿 497,828.30 103,325.48 337,395.02 48,933.97
receivable
医院管理有限公司及其子公司)
Zhuhai Sanmed Biotech Inc. (珠海圣美生物
Prepayments 211,200.00 0.00 211,200.00 0.00
诊断技术有限公司)
Shenzhen City Youbao Technology Co., Ltd.
Prepayments 188,100.00 0.00 154,500.00 0.00
(深圳市有宝科技有限公司)
Jiaozuo Jinguan Jiahua Electric Power Co.,
Prepayments 75,724,913.57 0.00 8,240,517.56
Ltd. (焦作金冠嘉华电力有限公司)
Other Zhongshan Renhe Health Products Co., Ltd.
469,895.78 469,895.78 469,895.78 469,895.78
receivables (中山市仁和保健品有限公司)
Other Shenzhen Jiekang Health Care Co., Ltd. (深圳 18,577,246.6
0.00 0.00 18,577,246.63
receivables 市捷康保健有限公司 ) 3
Shenzhen Healthy Deer Information
Other
Technology Co., Ltd. (深圳市健康阿鹿信息 4,680.00 74.38 4,680.00 74.38
receivables
科技有限公司)
Other Guangdong Blue Treasure Pharmaceutical Co.
607,484.29 6,925.32 1,271,496.55 21,233.99
receivables Ltd. (广东蓝宝制药有限公司)
Other Zhuhai Sanmed Gene Diagnostics Ltd. (珠海
15,795.00 170.59 5,265.00 87.93
receivables 市圣美基因检测科技有限公司)
(2) Payables to related party
Item Related party 2022.12.31 2021.12.31
Guangdong Blue Treasure Pharmaceutical Co. Ltd. (广东蓝
Notes payable 0.00 379,960.00
宝制药有限公司)
Sichuan Healthy Deer Hospital Management Co., Ltd. and its
Contract liabilities 12,011.72 0.00
subsidiaries (四川健康阿鹿医院管理有限公司及其子公司)
Sichuan Healthy Deer Hospital Management Co., Ltd. and its
Other payables 8,936.17 8,936.17
subsidiaries (四川健康阿鹿医院管理有限公司及其子公司)
XI. Share-based payments
1. Information about share-based payments
(1) The Company
Item Related content
Total amount of equity instruments granted during the year (shares) 49,450,000
Total amount of equity instruments exercised during the year (shares) 8,596,134
Total amount of equity instruments forfeited during the year (shares) 26,000
Range of exercise price and residual life of outstanding share options at the end of the
Note
year
Range of exercise price and residual life of outstanding other equity instruments at the end
—
of the year
Note: Share Option
279
Joincare Pharmaceutical Group Annual Report 2022
① On 29 August 2022, the Company held the third extraordinary general meeting of shareholders in 2022,
and reviewed and approved the "Proposal on the Company's 2022 Stock Option Incentive Plan (Draft) and its
Summary", Proposal on the Company's 2022 Stock Option Incentive Plan Implementation Appraisal
Management Measures" and "Proposal on Requesting the Company's Shareholders' Meeting to Authorize the
Board of Directors to Handle Matters Related to Shares Incentive". The Company held the 16th meeting of
the eighth board of directors on 5 September 2022, and reviewed and passed the "Proposal on First Time
Granting Stock Options to Incentive Participants". With 5 September 2022 as the grant date, 49.45 million
stock options were granted to 423 incentive participants at a price of RMB11.24 per share. The date of
completion and effective date of registration of stock options granted is 16 September 2022.
The exercise period of the options granted this time and the exercise time schedule for each period are shown
in the following table:
Vesting period Vesting date Vesting ratio
From the first trading day 12 months after the first grant date to the last
First vesting period 40%
trading day within 24 months from the first grant date
From the first trading day 24 months after the first grant date to the last
Second vesting period 30%
trading day within 36 months from the first grant date
From the first trading day 36 months after the first grant date to the last
Third vesting period 30%
trading day within 48 months from the first grant date
Company-level performance appraisal requirements: The stock options granted by this incentive plan are
subject to annual performance appraisal and vesting. To achieve the performance appraisal target as the vesting
condition for incentive participants, the annual performance appraisal targets for the first-time grant are shown
in the table below:
Vesting period Performance appraisal targets
Based on the net profit in 2021, the compound growth rate of net profit in 2022 shall not be
First vesting period
less than 15%;
Based on the net profit in 2021, the compound growth rate of net profit in 2023 shall not be
Second vesting period
less than 15%;
Based on the net profit in 2021, the compound growth rate of net profit in 2024 shall not be
Third vesting period
less than 15%.
The calculation of the above "net profit" and "net profit growth rate" indicators is based on the net profit
attributable to shareholders of listed company after deducting non-recurring gains and losses, and excluding
the impact of share-based payments in this incentive plan. If the Company fails to meet the above-mentioned
performance appraisal targets, all incentive participants whose stock options are exercisable in the year
corresponding to the appraisal shall not be exercised and shall be canceled by the Company.
② On 13 December 2018, the Company held the third extraordinary general meeting of shareholders in 2018,
and reviewed and approved the "Proposal on the Company's 2018 Stock Option Incentive Plan (Draft) and its
summary". The stock options granted for the first time was granted on 21 December 2018, with a grant price
of RMB8.21 per share, and would expire on 20 December 2022. The reserved stock options were granted on
23 September 2019, with a grant price of RMB10.47 per share, and would expire on 22 September 2022.
(2) The Company’s subsidiary, Livzon Group
Total amount of equity instruments granted during the year (shares) 17,973,500
Total amount of equity instruments exercised during the year (shares) 1,091,966
Total amount of equity instruments forfeited during the year (shares) 4,905,012
Range of exercise price and residual life of outstanding share options at the end of the year Note 1
Range of exercise price and residual life of outstanding other equity instruments at the end
Note 2
of the year
Note 1:Share Option
① On 14 October 2022, Livzon Group’s 2022 Second Extraordinary Shareholders’ Meeting, 2022 Second
280
Joincare Pharmaceutical Group Annual Report 2022
A-Share Class Shareholders’ Meeting and 2022 H-Share Class Shareholders’ Meeting reviewed and approved
the “Proposal on the Company's 2022 Stock Option Incentive Plan (Revised Draft) and Its Summary",
"Proposal on the company's 2022 Stock Option Incentive Plan Implementation Appraisal Management
Measures", "Proposal on submitting to the company's general meeting of shareholders to authorize the board
of directors to handle matters related to the 2022 stock options incentive plan". On 7 November 2022, the
39th meeting of the 10th Board of Directors of Livzon Group reviewed and approved the "Proposal on Matters
Related to the First Time Grant of the 2022 Stock Option Incentive Plan". With 7 November 2022 as the grant
date, 17,973,500 stock options were granted to 1,026 incentive participants at a price of RMB31.31 per A
share. The date of completion and effective date of registration of stock options granted is 23 November 2022.
The exercise period of the options granted this time and the exercise time schedule for each period are shown
in the following table:
Vesting period Vesting date Vesting ratio
First vesting period of From the first trading day 12 months after the completion of the first time
stock options granted grant registration to the last trading day within 24 months from the 40%
for the first time completion of the first time grant registration
Second vesting period From the first trading day 24 months after the completion of the first time
of stock options granted grant registration to the last trading day within 36 months from the 30%
for the first time completion of the first time grant registration
Third vesting period of From the first trading day 36 months after the completion of the first time
stock options granted grant registration to the last trading day within 48 months from the 30%
for the first time completion of the first time grant registration
Livzon Group performance appraisal requirements: The stock options granted by this incentive plan are
subject to annual performance appraisal and vesting during the 3 fiscal years of the vesting period. To achieve
the performance appraisal target as the vesting condition for incentive participants, the annual performance
appraisal targets for the first-time grant are shown in the table below:
Vesting period Performance appraisal targets
First vesting period of stock options Based on the net profit in 2021, the compound growth rate of net profit in 2022
granted for the first time shall not be less than 15%;
Second vesting period of stock options Based on the net profit in 2021, the compound growth rate of net profit in 2023
granted for the first time shall not be less than 15%;
Third vesting period of stock options Based on the net profit in 2021, the compound growth rate of net profit in 2024
granted for the first time shall not be less than 15%.
The calculation of the above "net profit" and "net profit compound growth rate" indicators is based on the net
profit attributable to shareholders of listed company after deducting non-recurring gains and losses, and
excluding the impact of share-based payments in this incentive plan. If the Company fails to meet the above-
mentioned performance appraisal targets, all incentive participants whose stock options are exercisable in the
year corresponding to the appraisal shall not be exercised and shall be canceled by the Company.
② On 5 September 2018, Livzon Group’s 2018 Third Extraordinary Shareholders’ Meeting, the 2018 Third
A-Share Class Shareholders’ Meeting and the 2018 H-Share Class Shareholders’ Meeting reviewed and
approved the “Proposal on the Company's 2018 Stock Option Incentive Plan (Revised Draft) and its
Summary”. The stock options granted for the first time was granted on 11 September 2018, with a grant price
of RMB47.01 per share, and would expire on 23 September 2022. The reserved stock options were granted
on 28 August 2019, with a grant price of RMB28.87 per A-share, and would expire on 26 October 2022.
Note 2: Other equity incentive
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'. According to “Assets evaluation report of all shareholders' equity value project of Zhuhai
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Joincare Pharmaceutical Group Annual Report 2022
Livzon Diagnostics Inc. (珠海丽珠试剂股份有限公司) involved in the proposed transfer of equity by Livzon
Pharmaceutical Group Co., Ltd.”. (Huaya Zhengxin Appraisal Report [2019] No. A02-0011), the valuation of
all shareholders’ equity 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 or employee stock ownership platform of Zhuhai Livzon Diagnostics Inc.
On 31 August 2021, the general meeting of Livzon Bio considered and approved the Equity Incentive 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 first 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 RMB16.24
million was amortized in the 6-month period ended 30 June 2022.
2. Equity-settled share-based payments
Method in determining the fair value of equity instruments at the date
Black-Scholes Model, market price
of grant
Basis in determining the quantity of exercisable equity instruments —
Reason for significant difference of estimation between current year
None
and prior year
Accumulated amount recorded in capital reserve for equity-settled
194,032,737.35
share-based payments
Total expenses recognized for equity-settled share-based payments in
57,076,979.08
the year
3. Information on cash-settled share-based payments
None.
XII. Commitments and contingencies
1. Significant commitments
282
Joincare Pharmaceutical Group Annual Report 2022
(1) Capital commitments
Capital commitments entered into but not recognized in the
Closing balance Beginning balance
financial statements
Commitments in relation to acquisition of long-term assets 455,161,816.72 582,336,168.87
Commitments in relation to external investment 12,000,000.00 8,000,000.00
Commitments in relation to research and development 0.00 309,313,880.64
expenditures
(2) Other commitments
None.
(3) Performance of previous commitments
The Company has duly performed the capital expenditure commitments and the operating lease commitments
and the other commitments as at 31 December 2022.
2. Contingencies
As at 31 December 2022, there was no other significant contingency required to be disclosed by the Company.
XIII. Event after balance sheet date
1. Profit distribution
On 7 April 2023, the twenty-third meeting of the eighth Board of Directors of the Company passed the 2022
profit distribution plan. Based on the Company's total share capital deducted by the repurchased shares held
in the Company's special securities account on the registration date determined by the implementation of the
Company's 2022 annual profit distribution plan, a cash bonus of RMB1.80 (tax included) for every 10 shares
will be distributed to all shareholders.
The above profit distribution plan needs to be submitted to the company's 2023 annual general meeting of
shareholders for consideration and approval.
As of 7 April 2023, the Company has no other events that needed to be disclosed after the balance sheet date.
XIV. Other significant events
1. 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 2022
Short-term leases 2,583,258.77
As of the balance sheet date, except for the above matters, the Company does not have other important matter
to be disclosed.
XV. Notes to the significant financial statements item of the Parent Company
1. Notes receivable
283
Joincare Pharmaceutical Group Annual Report 2022
2022.12.31 2021.12.31
Category Provision Provision
Carrying Carrying
Book balance for bad Book balance for bad
amount amount
debts debts
Bank
acceptance 249,617,024.89 0.00 249,617,024.89 374,296,302.21 0.00 374,296,302.21
bills
Commercial
acceptance 0.00 0.00 0.00 0.00 0.00 0.00
bills
Total 249,617,024.89 0.00 249,617,024.89 374,296,302.21 0.00 374,296,302.21
(1) Notes receivable pledged at year end
Category Amount pledged at year end
Bank acceptance bills 196,148,535.27
(2) Bills endorsed or discounted to other parties but not yet expired at balance sheet date
Amount derecognized at year Amount not derecognized at year
Category
end end
Bank acceptance bills not yet mature but
287,052,316.14 --
already endorsed
Bank acceptance bills not yet mature but
81,834,471.01 --
already discounted
Total 368,886,787.15
(3) There was no bills transferred into account receivables for non-performance by the issuer at balance sheet date
of the period.
(4) Disclosure by method of provision for bad debts
2022.12.31 2021.12.31
Provision for bad
Book balance Provision for bad debts Book balance
Category debts
Carrying Expecte Carrying
Expected value value
d credit
Amount Ratio (%) Amount credit loss Amount Ratio (%) Amount
loss rate
rate (%)
(%)
Provision for bad debts on
individual item
Provision for bad debts on
249,617,024.89 100.00 0.00 0.00 249,617,024.89 374,296,302.21 100.00 0.00 0.00 374,296,302.21
portfolio basis
Including:
Bank acceptance bills 249,617,024.89 100.00 0.00 0.00 249,617,024.89 374,296,302.21 100.00 0.00 0.00 374,296,302.21
Total 249,617,024.89 100.00 0.00 0.00 249,617,024.89 374,296,302.21 100.00 0.00 0.00 374,296,302.21
(5) There was no accrual, recovery or reversal of bad debt provision during the period
(6) There was no actual write-off of notes receivable in the period
2. Accounts receivable
(1) Disclosure by ageing
Ageing 2022.12.31 2021.12.31
Within one year 290,962,991.84 538,967,095.90
1 to 2 years (inclusive of 2 years) 2,684,445.48 1,410,787.21
2 to 3 years (inclusive of 3 years) 1,178,173.47 733,293.23
284
Joincare Pharmaceutical Group Annual Report 2022
Ageing 2022.12.31 2021.12.31
3 to 4 years (inclusive of 4 years) 641,804.42 388,712.49
4 to 5 years (inclusive of 5 years) 388,712.49 360,879.34
Over 5 years 7,754,530.87 7,723,623.65
Subtotal 303,610,658.57 549,584,391.82
Less: Provision for bad debts 11,979,800.83 14,041,321.58
Total 291,630,857.74 535,543,070.24
(2) Disclosure by method of provision for bad debts
2022.12.31 2021.12.31
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Carrying Carrying
Expected Expected
Ratio value Ratio value
Amount Amount credit loss Amount Amount credit loss
(%) (%)
rate (%) rate (%)
Provision for
bad debts on 771,300.68 0.25 771,300.68 100.00 0.00 771,300.68 0.14 771,300.68 100.00 0.00
individual item
Including:
Receivables
from domestic 771,300.68 0.25 771,300.68 100.00 0.00 771,300.68 0.14 771,300.68 100.00 0.00
customers
Receivables
from overseas 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
customers
Provision for
bad debts on 302,839,357.89 99.75 11,208,500.15 3.70 291,630,857.74 548,813,091.14 99.86 13,270,020.90 2.42 535,543,070.24
portfolio basis
Including:
Receivables
from domestic 302,839,357.89 99.75 11,208,500.15 3.70 291,630,857.74 548,813,091.14 99.86 13,270,020.90 2.42 535,543,070.24
customers
Receivables
from overseas 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
customers
Total 303,610,658.57 100 11,979,800.83 3.95 291,630,857.74 549,584,391.82 100 14,041,321.58 2.55 535,543,070.24
Provision for bad debts on individual item:
2022.12.31
Name Provision for bad Expected credit
Book balance Reason of provision
debts loss rate (%)
Not expected to be
Purchase of goods 771,300.68 771,300.68 100.00
recoverable
Total 771,300.68 771,300.68 100.00
Provision for bad debts on portfolio basis:
Provision for bad debts on portfolio basis：Receivables from domestic customers
2022.12.31 2021.12.31
Expected Expected
Accounts Provision for Accounts Provision for
credit loss credit loss
receivable bad debts receivable bad debts
rate (%) rate (%)
Within one year 290,962,991.84 2,721,949.54 0.94 538,967,095.90 5,259,670.96 0.98
1 to 2 years (inclusive
2,684,445.48 282,436.48 10.52 1,410,787.21 150,539.36 10.67
of 2 years)
285
Joincare Pharmaceutical Group Annual Report 2022
2 to 3 years (inclusive
1,178,173.47 378,821.59 32.15 733,293.23 239,987.97 32.73
of 3 years)
3 to 4 years (inclusive
641,804.42 474,608.03 73.95 103,939.29 81,969.65 78.86
of 2 years)
4 to 5 years (inclusive
103,939.29 82,681.12 79.55 300,612.74 240,490.19 80.00
of 3 years)
Over 5 years 7,268,003.39 7,268,003.39 100.00 7,297,362.77 7,297,362.77 100.00
Subtotal 302,839,357.89 11,208,500.15 3.70 548,813,091.14 13,270,020.90 2.42
(3) Accrual, recovery or reversal of bad debt provision during the period
Amount of provision for bad
debts
Beginning balance 14,041,321.58
Provision for the year -2,061,520.75
Recovered or reversal in the year 0.00
Write-off in the year 0.00
Closing balance 11,979,800.83
At 31 December 2022 and 31 December 2021, the Company had no overdue but not impaired accounts
receivable.
(4) No actual written-off of accounts receivable in this period.
(5) Accounts receivable due from the top five debtors
As of 31 December 2022, the total amount of the top five debtors in closing balance is RMB56,820,132.30,
accounting for 18.71% of the total amount of closing balance of accounts receivable, and the corresponding
closing balance of provision for bad debts is total RMB528,427.24.
(6) There were no accounts receivable derecognized due to the transfer of financial assets in each reporting period.
(7) There were no assets or liabilities formed by the continuing involvement of transferred accounts receivables in
each reporting period.
3. Other receivables
Item 2022.12.31 2021.12.31
Dividends receivable 544,999,500.00 814,041,000.00
Other receivables 240,307,524.78 322,196,811.25
Total 785,307,024.78 1,136,237,811.25
(1) Dividends receivable
Item 2022.12.31 2021.12.31
Topsino 524,999,500.00 749,999,500.00
Haibin Pharma 0.00 44,041,500.00
Fenglei Electric Power 20,000,000.00 20,000,000.00
Subtotal: 544,999,500.00 814,041,000.00
Less: Provision for bad debts 0.00 0.00
Total 544,999,500.00 814,041,000.00
(2) Other receivables
286
Joincare Pharmaceutical Group Annual Report 2022
① by ageing
Item 2022.12.31 2021.12.31
Within one year 239,838,488.56 321,955,080.06
1 to 2 years 590,397.78 149,812.10
2 to 3 years 149,812.10 206,676.00
3 to 4 years 206,676.00 126,228.36
4 to 5 years 126,228.36 20,000.00
Over 5 years 19,105,586.00 19,085,586.00
Subtotal 260,017,188.80 341,543,382.52
Less: Provision for bad debts 19,709,664.02 19,346,571.27
Total 240,307,524.78 322,196,811.25
② Disclosure by nature
2022.12.31 2021.12.31
Item
Provision for Provision for Carrying
Book balance Carrying amount Book balance
bad debts bad debts amount
Other receivables
of each company 238,041,400.41 0.00 238,041,400.41 294,833,504.86 0.00 294,833,504.86
within the scope of
combination
Capital reduction 0.00 0.00 0.00 24,078,925.22 0.00 24,078,925.22
Treasury bonds and 17,968,386.04 17,968,386.04 0.00 17,968,386.04 17,968,386.04 0.00
security deposits
External entities 1,384,240.83 1,253,731.83 130,509.00 3,763,793.73 1,220,062.29 2,543,731.44
balances
Security deposits 973,098.11 354,429.35 618,668.76 848,272.56 157,320.34 690,952.22
Others 1,650,063.41 133,116.80 1,516,946.61 50,500.11 802.60 49,697.51
Total 260,017,188.80 19,709,664.02 240,307,524.78 341,543,382.52 19,346,571.27 322,196,811.25
③Information of provision for bad debts
At year end, provision for bad debts on those in first stage:
Expected
credit loss rate Provision for Carrying
Category Book balance Reason
in the next 12 bad debts amount
months (%)
Provision for bad debts on
0.00 0.00 0.00 0.00
individual item
Capital reduction 0.00 0.00 0.00 0.00
Provision for bad debts on
238,041,400.41 0.00 0.00 238,041,400.41
portfolio basis
Other receivables of each
Expected to be
company within the scope of 238,041,400.41 0.00 0.00 238,041,400.41
recovered
combination
Total 238,041,400.41 0.00 0.00 238,041,400.41
At year end, provision for bad debts on those in second stage:
Expected credit
Provision for Carrying
Category Book balance loss rate for the Reason
bad debts amount
lifetime(%)
Provision for bad debts on individual
item
287
Joincare Pharmaceutical Group Annual Report 2022
Expected credit
Provision for Carrying
Category Book balance loss rate for the Reason
bad debts amount
lifetime(%)
Provision for bad debts on portfolio 4,007,402.35 43.45 1,741,277.98 2,266,124.37
basis
Security deposits, deposits and rental 973,098.11 36.42 354,429.35 618,668.76
receivable
Other receivables 3,034,304.24 45.71 1,386,848.63 1,647,455.61
Total 4,007,402.35 43.45 1,741,277.98 2,266,124.37
At year end, provision for bad debts on those in third stage:
Expected credit
Provision for Carrying
Category Book balance loss rate for the Reason
bad debts amount
lifetime(%)
Provision for bad debts on 17,968,386.04 100.00 17,968,386.04 0.00
individual item
Treasury bonds and security 17,968,386.04 100.00 17,968,386.04 0.00 Not expected to
deposits be recoverable
Provision for bad debts on 0.00 0.00 0.00 0.00 --
portfolio basis
Total 17,968,386.04 100.00 17,968,386.04 0.00
As of 31 December 2021, information of provision for bad debts:
As of 31 December 2021, Provision for bad debts on those in first stage:
Expected
credit loss rate Provision for Carrying
Category Book balance Reason
in the next 12 bad debts amount
months (%)
Provision for bad debts on
24,078,925.22 0.00 0.00 24,078,925.22
individual item
Expected to be
Capital reduction 24,078,925.22 0.00 0.00 24,078,925.22
recovered
Provision for bad debts on
294,833,504.86 0.00 0.00 294,833,504.86
portfolio basis
Other receivables of each
Expected to be
company within the scope of 294,833,504.86 0.00 0.00 294,833,504.86
recovered
combination
Total 318,912,430.08 0.00 0.00 318,912,430.08
As of 31 December 2021, provision for bad debts on those in second stage:
Expected credit loss
Provision for Carrying
Category Book balance rate for the Reason
bad debts amount
lifetime(%)
Provision for bad debts on
0.00 0.00 0.00 0.00
individual item
Provision for bad debts on
4,662,566.40 29.56 1,378,185.23 3,284,381.17
portfolio basis
Security deposits, deposits and
877,102.56 17.99 157,778.54 719,324.02
rental receivable
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 of 31 December 2021, provision for bad debts on those in third stage:
Expected credit
Provision for Carrying
Category Book balance loss rate for the Reason
bad debts amount
lifetime(%)
288
Joincare Pharmaceutical Group Annual Report 2022
Provision for bad debts on 17,968,386.04 100.00 17,968,386.04 0.00
individual item
Treasury bonds and security 17,968,386.04 100.00 17,968,386.04 0.00 Not expected to
deposits be recoverable
Provision for bad debts on 0.00 0.00 0.00 0.00 --
portfolio basis
Total 17,968,386.04 100.00 17,968,386.04 0.00
④ Accrual, recovery or reversal of bad debt provision during the period
First stage Second stage Third stage
Expected credit Expected credit
Provision for bad debts Expected credit loss for lifetime loss for lifetime Total
loss within next 12 (no credit (credit
months impairment impairment has
occurred) occurred)
Beginning balance 0.00 1,378,185.23 17,968,386.04 19,346,571.27
Movement of beginning balance
during the period
--transfer to second stage 0.00 0.00 0.00 0.00
--transfer to third stage 0.00 0.00 0.00 0.00
--Reverse to second stage 0.00 0.00 0.00 0.00
--Reverse to first stage 0.00 0.00 0.00 0.00
Provision for the year 0.00 363,092.75 0.00 363,092.75
Reversal in the year 0.00 0.00 -158,470.77 -158,470.77
Transfer in the year 0.00 0.00 0.00 0.00
Write-off in the year 0.00 0.00 -158,470.77 -158,470.77
Other movement 0.00 0.00 0.00 0.00
Closing balance 0.00 1,741,277.98 17,968,386.04 19,709,664.02
⑤ No actual written-off of other receivables in this period
⑥ Other receivables due from the top five debtors
Proportion to Closing
Closing balance of total other balance of
Name of entity Nature Ageing
other receivables receivables provision for
(%) bad debts
Shenzhen Fenglei Electric Other receivables
of each company
Power Investment Co., Ltd. (深 129,956,104.29 2-3 years 49.98 0.00
within the scope of
圳市风雷电力投资有限公司) combination
Joincare Haibin Pharmaceutical Other receivables
of each company Within one
Co., Ltd. (健康元海滨药业有 45,397,838.87 17.46 0.00
within the scope of year
限公司) combination
Hua Xia Securities Co., Ltd. (华 Treasury bonds and Over 5
17,968,386.04 6.91 17,968,386.04
夏证券股份有限公司) security deposits years
Joincare (Guangdong) Special Other receivables
medicine Food Co., Ltd. (健康 of each company Within 2
15,751,011.27 6.06 0.00
within the scope of years
元(广东) 特医食品有限公司) combination
Other receivables
Topsino Industries Limited (天 of each company
15,736,384.51 2-3 years 6.05 0.00
诚实业有限公司) within the scope of
combination
289
Joincare Pharmaceutical Group Annual Report 2022
Proportion to Closing
Closing balance of total other balance of
Name of entity Nature Ageing
other receivables receivables provision for
(%) bad debts
Total 224,809,724.98 86.46 17,968,386.04
⑦ There were no other receivables derecognised due to the transfer of financial assets in each reporting
period.
⑧ There were no assets or liabilities formed by the continuing involvement of transferred other receivables
in the period.
4. Long-term equity investment
2022.12.31 2021.12.31
Item Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Investment
in 3,453,138,312.11 7,010,047.91 3,446,128,264.20 3,453,138,312.11 7,010,047.91 3,446,128,264.20
subsidiaries
Investment
78,056,248.43 0.00 78,056,248.43 84,810,888.09 0.00 84,810,888.09
in associates
Total 3,531,194,560.54 7,010,047.91 3,524,184,512.63 3,537,949,200.20 7,010,047.91 3,530,939,152.29
(1) Investment in subsidiaries
Provision
Closing
for
balance of
Investee 2021.12.31 Increase Decrease 2022.12.31 impairment
provision for
in the year
impairment
Livzon Group 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-
24,116,498.56 0.00 0.00 24,116,498.56 0.00 1,610,047.91
Use
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
105,939,709.72 0.00 0.00 105,939,709.72 0.00 0.00
Pharmaceutical
Shenzhen
170,100,000.00 0.00 0.00 170,100,000.00 0.00 5,400,000.00
Hiyeah
Fenglei Electric
100,763,433.06 0.00 0.00 100,763,433.06 0.00 0.00
Power
Jiaozuo Joincare 375,000,000.00 0.00 0.00 375,000,000.00 0.00 0.00
Shanghai
32,500,000.00 0.00 0.00 32,500,000.00 0.00 0.00
Frontier
Taitai Biological 4,832,950.00 0.00 0.00 4,832,950.00 0.00 0.00
Joincare Haibin 100,000,000.00 0.00 0.00 100,000,000.00 0.00 0.00
Joincare Special
3,000,000.00 0.00 0.00 3,000,000.00 0.00 0.00
Food
Livzon Biologics 294,037,191.00 0.00 0.00 294,037,191.00 0.00 0.00
Total 3,453,138,312.11 0.00 0.00 3,453,138,312.11 0.00 7,010,047.91
290
Joincare Pharmaceutical Group Annual Report 2022
(2) Investment in associates and joint ventures
Movement in the year
Closing
Investment
Adjustment in Announced balance of
Investee 2021.12.31 income/loss Changes Provision 2022.12.31
Additions in Decrease in other distribution of provision for
recognized of other for Others
investment investment comprehensive cash dividend impairment
under the equity impairment
income or profit
equity method
Associates
Ningbo Ningrong Biomedical
Co., Ltd. (宁波宁融生物医药有 27,464,098.71 0.00 0.00 -284,889.20 0.00 0.00 0.00 0.00 0.00 27,179,209.51 0.00
限公司)
Feellife Health Inc. (深圳来福
10,689,582.15 0.00 0.00 1,712,742.07 0.00 0.00 0.00 0.00 0.00 12,402,324.22 0.00
士雾化医学有限公司)
Novastage Pharmaceuticals
(Shenzhen) , Ltd. (新领医药技 18,080,883.21 0.00 18,080,883.21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
术(深圳) 有限公司)
Jiangsu Baining Yingchuang
Medical Technology Co., Ltd.
28,576,324.02 0.00 0.00 156,057.09 0.00 0.00 0.00 0.00 0.00 28,732,381.11 0.00
(江苏百宁盈创医疗科技有限
公司)
Shanghai Sheo Pharmaceutical
Technology Co., Ltd. (上海偕怡 0.00 10,000,000.00 -257,666.41 0.00 0.00 0.00 0.00 0.00 9,742,333.59
医药科技有限公司)
Subtotal 84,810,888.09 10,000,000.00 18,080,883.21 1,326,243.55 0.00 0.00 0.00 0.00 0.00 78,056,248.43 0.00
291
Joincare Pharmaceutical Group Annual Report 2022
5. Operating income and operating cost
(1) Operating income and operating cost
2022 2021
Item
Revenue Cost Revenue Cost
Primary 1,997,946,818.28 1,345,944,915.00
2,318,838,433.60 1,570,518,398.66
operations
Other
55,049,131.18 42,380,613.14 23,227,007.34 10,880,121.11
operations
Total 2,373,887,564.78 1,612,899,011.80 2,021,173,825.62 1,356,825,036.11
(2) Primary Disaggregate information of operating income
① Segregation by products
2022 2021
Item
Revenue Cost Revenue Cost
Chemical
pharmaceuticals 2,156,627,002.13 1,467,215,984.98 1,844,258,573.30 1,249,873,341.86
(化学药物)
Traditional Chinese
medicine (中药制 42,843,606.38 24,726,803.46 38,481,963.54 22,519,595.22
剂)
Health care
products (保健食 119,285,823.66 78,384,343.41 115,187,552.33 73,483,571.30
品)
Others 82,001.43 191,266.81 18,729.10 68,406.62
Total 2,318,838,433.60 1,570,518,398.66 1,997,946,818.28 1,345,944,915.00
② Segregation by operating location
2022 2021
Item
Revenue Cost Revenue Cost
Domestic 2,318,555,876.08 1,570,367,026.33 1,997,946,818.28 1,345,944,915.00
Overseas 282,557.52 151,372.33 0.00 0.00
Total 2,318,838,433.60 1,570,518,398.66 1,997,946,818.28 1,345,944,915.00
③ Segregation by timing of revenue recognition
2022 2021
Item
Revenue Cost Revenue Cost
Commodities
(Recognized at a
2,318,838,433.60 1,570,518,398.66 1,997,946,818.28 1,345,944,915.00
point in time) a
point in time)
Total 2,318,838,433.60 1,570,518,398.66 1,997,946,818.28 1,345,944,915.00
(3) Disaggregate information of other operations
2022 2021
Item
Revenue Cost Revenue Cost
292
Joincare Pharmaceutical Group Annual Report 2022
Processing fees 4,837,029.47 4,329,387.37 1,403,169.59 1,712,962.53
Rental fees 9,861,266.50 1,445,184.13 13,104,696.50 1,989,089.05
Technical services 27,233,207.55 23,946,403.27 0.00 0.00
Others 13,117,627.66 12,659,638.37 8,719,141.25 7,178,069.53
Total 55,049,131.18 42,380,613.14 23,227,007.34 10,880,121.11
6. Investment income
Item 2022 2021
Gain from disposal of long-term equity investment 985,288,053.40 1,351,395,397.50
Investment income from long-term equity investments under equity -2,005,822.14
1,326,243.55
method
Investment income from disposal of long-term equity investments 4,242,404.46 -59,868,800.00
Dividend income from other equity instrument investments 512,350.35 4,175,569.86
Investment income from disposal of financial assets held for trading 0.00 50,958.36
Total 991,369,051.76 1,293,747,303.58
XVI. Supplement information
1. Statement of non-recurring profit or loss
Item 2022 2021
Gain or loss on disposal of non-current assets -705,357.30 14,492,047.24
Unauthorized approval, or no formal approval documents, or occasional tax
0.00 0.00
refunds, reductions and exemptions
Government grants that are included in the profit and loss(except for
government grants that are closely related to the company’s normal business
286,842,932.33 245,335,140.69
operations and that meet the national policy requirements and continue to enjoy
a certain amount or quantitative basis according to certain standards)
Capital occupation fees from non-financial enterprises 0.00 0.00
Gains resulting from the investment cost of the enterprise for the purpose of
acquisition of the subsidiaries, joint operation and joint ventures is lower than
0.00 0.00
the fair value of net identifiable assets of the investee as entitled at the time of
receipt of the investment
Profit or loss from exchange of non-monetary assets 0.00 0.00
Gain or loss from entrusting others to invest or manage assets 0.00 0.00
Provision for impairment of assets accrued due to force majeure factors, such
0.00 0.00
as natural disasters
Gain or loss arising from debt restructuring 0.00 0.00
Enterprise restructuring fees, such as the expenses for employees’ settlement
0.00 0.00
and the integration fees
Profit or loss exceeding the fair value and generated from the transaction of
0.00 0.00
which the transaction price is obviously unfair
Net profit or loss over the current period of the subsidiaries as a result of
business combination under common control from the beginning of the year to 0.00 0.00
the date of consolidation
Gain or loss arising from contingencies unrelated to the company’s normal
0.00 0.00
operation
Except for the efficient hedging related to the Company’s normal business,
profit or loss from changes in fair value as generated from financial assets and
financial liabilities held for trading and gains from investment as a result of the -109,887,696.11 8,110,644.25
disposal of financial assets and financial liabilities held for trading and debt
investments
Reversals of provision for impairment of accounts receivable with individual
158,470.77 1,013,650.67
impairment test
293
Joincare Pharmaceutical Group Annual Report 2022
Item 2022 2021
Profit or loss from entrusted loans 0.00 0.00
Gain or loss from fluctuation in fair value of investment property which is
0.00 0.00
measured at fair value
Impact of a one-time adjustment on current profit and loss according to the
0.00 0.00
requirements of tax and accounting, laws and regulations
Custody fees of entrusted operation 0.00 0.00
Other non-operating income and expenses other than the above -23,830,838.49 -30,737,442.83
Other gain or loss items met the definition of non-recurring item 0.00 0.00
Total amount of non-recurring items 152,577,511.20 238,214,040.02
Less: effects of income tax on non-recurring items 31,919,034.26 39,580,260.30
Less: Non-recurring items attributable to the minority shareholders (after tax) 37,113,548.72 95,131,719.24
Non-recurring items attributable to the shareholders of the Company 83,544,928.22 103,502,060.48
2. Rate of return on net assets and earnings per share
For the year ended 31 December 2022
Earnings per share
Weighted average
Profit in reporting period Basic earnings per Diluted earnings
return on equity (%)
share per share
Net profit attributable to the shareholders of the
12.23 0.7933 0.7921
Company
Net profit attributable to ordinary shareholders
of the Company after deducting non-recurring 11.55 0.7492 0.7481
gains and losses
For the year ended 31 December 2021
Earnings per share
Weighted average
Profit in reporting period
return on equity (%) Basic earnings per Diluted earnings
share per share
Net profit attributable to the shareholders of the
11.50 0.6864 0.6858
Company
Net profit attributable to ordinary shareholders
of the Company after deducting non-recurring 10.60 0.6329 0.6324
gains and losses
Joincare Pharmaceutical Group Industry Co., Ltd.
7 April 2023
294
