健康元:健康元药业集团股份有限公司2021年半年度报告（英文版）

IMPORTANT
NOTICE
I The Board of Directors (the "Board") the Supervisory Committee and the Directors Supervisors and senior management of the
Company hereby warrant the truthfulness accuracy and completeness of the contents of this interim report (the "Report") and
that there are no false representations misleading statements or material omissions contained in the Report and severally and
jointly accept responsibility.II All the Directors of the Company attended the board meeting.III The interim financial report of the Company is unaudited.IV Mr. Zhu Baoguo (朱保国 ) the person-in-charge of the Company and Mr. Qiu Qingfeng (邱庆丰 ) the person-in-charge of the
Company's accounting work and the person-in-charge of 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 during the Reporting
Period
Not applicable
VI Risk declaration for the forward-looking statements
√Applicable □N/A
The Report contains forward-looking statements which involve the future plans development strategies etc. of the Company
yet do not constitute substantive undertakings of the Company to investors. Investors should exercise caution prior to making
investment decisions.VII Whether there is non-operating use of funds by the controlling shareholder and their related parties ?
No
VIII Whether there is a violation of the prescribed decision-making procedures to provide external guarantees ?
No
IX Whether more than half of the 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 productions and operations of the Company
during the Reporting Period. The Company has described various risks related to productions and operations that the Company
may face and the corresponding response measures taken. Please refer to "Risks" in Chapter 3 "Management Discussion and
Analysis".XI Others
□Applicable √N/A
XII The Report is prepared in both Chinese and English. In case of any ambiguity in the understanding of the Chinese and English
texts the Chinese version shall prevail.1Table of
Contents
Financial Highlights .................................3
Chapter 1 Definitions ................................5
Chapter 2 Company Profile and Major Financial Indi....7
Chapter 3 Management Discussion and Analysis ........10
Chapter 4 Corporate Governance ......................31
Chapter 5 Environmental and Social Responsibility ...34
Chapter 6 Major Events ..............................57
Chapter 7 Changes in Equity and Shareholders ........67
Chapter 8 Informatoin on Preferred Shares ...........70
Chapter 9 Information on Bonds ......................71
Chapter 10 Financial Report .........................72
List of documents The Financial Statements signed and sealed by the person-in-charge of the Company the person-in-charge
available for of the Company's accounting work and the person-in-charge of the accounting department (the head of the
inspection accounting department)
The original copies of all documents and announcements of the Company which have been disclosed to the
public on the website designated by CSRC during the Reporting Period
2Financial
Highlights
Major Financial Indicators（RMB in 100 million）
78.35
Same Period
Last Year
64.76
Reporting Period
6.766.875.925.98
21.00%1.64%0.94%
Revenues Net profit Total profit Net profit after
attributable to extraordinary profit
shareholders of and loss attributable
the Company to shareholders of
the Company
EPS（RMB /Share） EPS-diluted（RMB /Share）
0.35140.3504
0.34830.3468
0.89%1.04%
Composition of Principal Businesses (RMB in 100 million)
5.02%
3.91
8.13% Chemical drug preparation products
6.33
0.80% APIs and Intermediates
0.62
Traditional Chinese drug
preparation products
Diagnostic reagents
Total Income 56.97% and equipment
Of Principal 44.34 Health Care products
29.02% Businesses
22.5977.84
3Income from Sales of Key Products During
the Reporting Period
(RMB in 10000) and YOY Change
Drug preparation products: Drug preparation products:
Inhalation psychiatry901911381
Budesonide Suspension New
for Inhalation Fluvoxamine Maleate 40.67%
Tablets3662
Levosalbutamol 8056
Hydrochloride Nebuliser 1743.09% PerospironeHydrochlorideTablets 77.21%
Solution2601
Compound Ipratropium
Bromide Solution for 134.45%
Inhalation
Drug preparation products: Drug preparation products:
Anti-infective traditional Chinese drug preparation4562129903
Meropenem Shenqi Fuzheng
for injection -1.15% 11.27%Injection1151022800
Voriconazole
for Injection 9.00% Anti-viral Granules -24.57%
Dru制g p剂re产par品ati：on抗 pr感odgonadotropic hormo染ucts:
nes APIs and intermediates
Leuprorelin
Acetate 81782
Microspheres
for 52.49% 7-ACA 53546
Injection (+D-7ACA) 12.93%30778
Urofollitropin 27187
for Injection 70.14% Meropenem
Trihydrate 14.37%20299
Drug preparation products: Phenylalanine 17.62%
Gastroenterology11753
153130 Daptomycin 90.40%
Ilaprazole
Series 130.64%9751
Vancomycin
Hydrochloride 15.07%15691
Livzon
Weisanlian 65.67% 7526
Mevastatin 142.34%12940
Livzon 6931
Dele 27.48% Acarbose -38.89%
Rabeprazole 9840
Sodium 5764
Enteric- -9.92% Lincomycin 48.96%
coated
Capsules
4Chapter 1
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
Baiyeyuan or the Controlling Refers to Shenzhen Baiyeyuan Investment Co. Ltd. * (深圳市百业源投资有限公司 )
Shareholder
Company or the Company Refers to Joincare Pharmaceutical Group Industry Co. Ltd. *
(健康元药业集团股份有限公司)
GMP Refers to Good Manufacturing Practice
GSP Refers to Good Supply Practice
BE Refers to Bioequivalence
Livzon Group Refers to Livzon Pharmaceutical Group Inc.* (丽珠医药集团股份有限公司 )
Haibin Pharma Refers to Shenzhen Haibin Pharmaceutical Co. Ltd.* (深圳市海滨制药有限公司 )
Xinxiang Haibin Refers to Xinxiang Haibin Pharmaceutical Co. Ltd. * (新乡海滨药业有限公司 )
Taitai Pharmaceutical Refers to Shenzhen Taitai Pharmaceutical Co. Ltd. * (深圳太太药业有限公司 )
Taitai Genomics Refers to Shenzhen Taitai Genomics Inc.Co.Ltd. * (深圳太太基因工程有限公司 )
Joincare Biopharmaceutical Refers to Henan Province Joincare Biopharmaceutical Research Institute Co. Ltd. *
Research Institute (河南省健康元生物医药研究院有限公司 )
Jiaozuo Joincare Refers to Jiaozuo Joincare Bio Technological Co. Ltd.(焦作健康元生物制品有限公司)
Joincare Daily-Use Refers to Joincare Daily-Use & Health Care Co. Ltd. * (健康元日用保健品有限公司 )
Topsino Refers to Topsino Industries Limited * (天诚实业有限公司 )
Fenglei Electric Power Refers to Shenzhen Fenglei Electric Power Investment Co. Ltd. *
(深圳市风雷电力投资有限公司)
Zhuhai Jiankangyuan Refers to Zhuhai Jiankangyuan Biology Medicine Co.Ltd. *
(珠海健康元生物医药有限公司)
Health Pharmaceutical Refers to Health Pharmaceutical (China) Co. Ltd. * (健康药业 (中国 )有限公司 )
Hiyeah Industry Refers to Shenzhen Hiyeah Industry Co. Ltd. * (深圳市喜悦实业有限公司 )
Shanghai Frontier Refers to Shanghai Frontier Health Pharmaceutical Technology Co. Ltd. *
(上海方予健康医药科技有限公司)
Joincare Special Medicine Refers to Joincare (Guangdong) Special Medicine Food Co. Ltd. *
Food (健康元 (广东 )特医食品有限公司 )
Joincare BVI Refers to Joincare Pharmaceutical Group Industry Co. Ltd
Livzon MAB Refers to Livzon MABPharm Inc. * (珠海市丽珠单抗生物技术有限公司 )
Livzon Diagnostics Refers to Zhuhai Livzon Diagnostics Inc. * (珠海丽珠试剂股份有限公司 )
Fuzhou Fuxing Refers to Livzon Group Fuzhou Fuxing Pharmaceutical Co. Ltd.*
(丽珠集团福州福兴医药有限公司)
Xinbeijiang Pharmaceutical Refers to Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc.*
(丽珠集团新北江制药股份有限公司)
Ningxia Pharmaceutical Refers to Livzon Group (Ningxia) Pharmaceutical Manufacturing Co. Ltd.*
(丽珠集团(宁夏)制药有限公司)
Gutian Fuxing Refers to Gutian Fuxing Pharmaceutical Co. Ltd. * (古田福兴医药有限公司 )
Livzon Hecheng Refers to Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co. Ltd. *
(珠海保税区丽珠合成制药有限公司)
Livzon Limin Refers to Livzon Group Limin Pharmaceutical Manufacturing Factory *
(丽珠集团利民制药厂)
Livzon Pharmaceutical Factory Refers to Livzon Group Livzon Pharmaceutical Factory * (丽珠集团丽珠制药厂 )
5Definitions of common terms
Shanghai Livzon Refers to Shanghai Livzon Pharmaceutical Manufacturing Co. Ltd. *
(上海丽珠制药有限公司)
Sichuan Guangda Refers to Sichuan Guangda Pharmaceutical Manufacturing Co. Ltd. *
(四川光大制药有限公司)
Jinguan Electric Power Refers to Jiaozuo Jinguan Jiahua Electric Power Co. Ltd. *
(焦作金冠嘉华电力有限公司)
Tianjin Tasly Refers to Tianjin Tasly Healthcare Industry Investment Partnership (Limited
Partnership)* (天津天士力健康产业投资合伙企业 (有限合伙 ))
Tianjin Tongrentang Refers to Tianjin Tongrentang Group Co. Ltd. * (天津同仁堂集团股份有限公司 )
Sanmed Biotech Refers to Zhuhai Sanmed Biotech Inc. * (珠海圣美生物诊断技术有限公司 )
Livzon Biologics or Livzon Refers to Livzon Biologics Limited
Cayman
Livzon International Refers to Livzon International Limited
YF Refers to YF Pharmab Limited
Kadi Biotechnology Refers to Zhuhai Kadi Medical Biotechnology Inc. * (珠海市卡迪生物医药有限公司 )
Lisheng Juyuan Refers to Hainan Lisheng Juyuan Investment Partnership (Limited Partnership) *
(海南丽生聚源投资合伙企业(有限合伙))
Livzon HK Refers to Livzon Biologics Hong Kong Limited * (丽珠生物科技香港有限公司 )
LivzonBio Refers to Zhuhai Livzon Biotechnology Co. Ltd.*
(珠海市丽珠生物医药科技有限公司)
COVID-19 Refers to a new coronavirus (SARS-CoV-2)
COVID-19 pandemic or Refers to the outbreak of the disease caused by a new coronavirus called SARS-CoV-2
pandemic
Ruihua Certified Public Refers to Ruihua Certified Public Accountants (Special General Partnership)
Accountants
Grant Thornton Refers to Grant Thornton (Special General Partnership)
Reporting Period Refers to From 1 January 2021 to 30 June 2021
End of the Reporting Period Refers to 30 June 2021
Currency or unit Refers to RMB unless otherwise specified
*For identification purpose only
6Chapter 2
Company Profile and Major Financial Indicators
I Company information
Chinese name of the Company 健康元药业集团股份有限公司
Abbreviation of the Chinese name 健康元
English name of the Company Joincare Pharmaceutical Group Industry Co. Ltd.Abbreviation of the English name Joincare
Legal representative of the Company Zhu Baoguo
II Contact persons and contact details
Board Secretary Representative of Securities Affairs
Name Zhao Fengguang (赵凤光 ) Zhou Xian (周鲜 )
Address Joincare Pharmaceutical Group Building No. 17 Joincare Pharmaceutical Group Building No. 17
Langshan Road North District Hi-tech Zone Langshan Road North District Hi-tech Zone
Nanshan District Shenzhen Nanshan District Shenzhen
Telephone 0755-86252656 0755-86252388 0755-86252656 0755-86252388
Fax 0755-86252165 0755-86252165
E-mail zhaofengguang@joincare.com zhouxian@joincare.com
III Introduction of changes in basic information on the Company
Registered address of the Joincare Pharmaceutical Group Building No. 17 Langshan Road North District Hi-tech Zone
Company Nanshan District Shenzhen
Historical changes of Registered at B5 Hengfeng Industrial City Hezhou Community Huangtian Village Xin'an
registered address of the Town Bao'an County on 18 December 1992
Company Changed its registered address to 4-5/F Dongpeng Building Shangmeilin Industrial Area
Futian District Shenzhen on 25 May 1994
Changed its registered address to 24/F Block B Fujian Building Caitian South Road Futian
District Shenzhen on 4 July 1995
Changed its registered address to 23/F Diwang Building Shun Hing Square No. 333 Shennan
East Road Shenzhen on 20 June 1997
Changed its registered address to Taitai Pharmaceutical Industrial Building the 5th Industrial
Area Nanshan District Shenzhen on 22 September 2000
Changed its registered address to 23/F Diwang Building Shun Hing Square No. 5002
Shennan East Road Luohu District Shenzhen on 4 June 2003
Changed its registered address to Joincare Pharmaceutical Group Building No. 17 Langshan
Road North District Hi-tech Zone Nanshan District Shenzhen on 29 January 2008
Changed its registered address to Joincare Pharmaceutical Group Building No. 17 Langshan
Road North District Hi-tech Zone Nanshan District Shenzhen on 27 November 2012
Office address of the Joincare Pharmaceutical Group Building No. 17 Langshan Road North District Hi-tech Zone
Company Nanshan District Shenzhen
Postal code of office 518057
address of the Company
Website of the Company http://www.joincare.com
E-mail joincare@joincare.com
Index for query of changes There was no change during the Reporting Period
during the Reporting Period
7IV Introduction of changes in information disclosure and places for inspection
Name of designated newspapers for information China Securities Journal Securities Times Securities Daily and
disclosure by the Company Shanghai Securities News
Website for publication of interim report http://www.sse.com.cn
Place for inspection of interim report of the Company Office address of the Company and Shanghai Stock Exchange
Index for query of changes during the Reporting Period There was no change during the Reporting Period
V Company stock profile
Class of stock Listed on Stock abbreviation Stock code Stock abbreviation prior to change
A Share Shanghai Stock Exchange 健康元 600380 太太药业、S健康元VI Other relevant information
□Applicable √N/A
VII Principal accounting data and financial indicators of the Company
(I) Principal accounting data
Unit: Yuan Currency: RMB
Principal Accounting Data Reporting Period Same Period Year-on-Year
(From January to June) Last Year Change (%)
Revenues 7835372274.66 6475702905.40 21.00
Net profit attributable to Shareholders of the listed company 687347494.53 676265223.83 1.64
Net profit attributable to Shareholders of the listed company 597892327.43 592320636.90 0.94
after deducting the extraordinary gain or loss
Net cash flow from operating activities 745787513.36 1248991736.51 -40.29
End of the End of the Change during
Reporting Period Previous Year the Period (%)
Net assets attributable to Shareholders of the listed company 11358911818.28 11096125890.51 2.37
Total assets 28588683586.62 28156977599.07 1.53
(II) Principal financial indicators
Principal financial indicators Reporting Period Same Period Year-on-Year
(From January to June) Last Year Change (%)
Basic earnings per share (RMB/share) 0.3514 0.3483 0.89
Diluted earnings per share (RMB/share) 0.3504 0.3468 1.04
Basic earnings per share after deducting the extraordinary 0.3057 0.3050 0.23
gain or loss (RMB/share)
Weighted average return on net assets (%) 6.04 6.34 Decreased by 0.3
percentage point
Weighted average return on net assets after deducting the 5.26 5.56 Decreased by 0.3
extraordinary gain or loss (%) percentage point
Description of principal accounting data and financial indicators of the Company
√Applicable □N/A
The net cash flow from operating activities was RMB746 million representing a year-on-year decrease of 40.29%. This was
mainly due to the expansion of the specialized sales force and the increase of the investment in R&D of biologics and the
platform of inhalation preparations during the Reporting Period.8Interim Report2021
VIII Differences in accounting data under domestic and foreign accounting standards
□Applicable √N/A
IX Items and amounts of extraordinary gains and losses
√Applicable □N/A
Unit: Yuan Currency: RMB
Items of Extraordinary Gains and Losses Amounts Notes (If applicable)
Gains and losses on disposal of non-current assets 20350801.14 Proceeds from disposal of fixed assets
Government grants included in profit and loss for the Period 129460997.27 Government grants included in profit
(except for government grants closely associated with normal and loss for the Period
corporate businesses entitled at fixed amount or fixed level
according to national policies and national unified standards)
Gains and losses on fair value changes derived from holding 55548948.55 Gains or losses arising from changes in
of financial assets held for trading derivative financial assets fair value of financial assets/liabilities
financial liabilities held for trading derivative financial held for trading and investment gains
liabilities and investment income generated on disposal of from holding and disposal of financial
financial assets held for trading derivative financial assets assets/liabilities held for trading
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
Other non-operating Revenues and non-operating -1398606.73 Other non-operating Revenues and
expenditures apart from the above items non-operating expenditures apart from
the above items
Effect of minority interests -88308756.71 The portion of the above items to which
minority shareholders are entitled
Income tax effect -26198216.42 Effect of the above items on income tax
Total 89455167.10
X Others
□Applicable √N/A
9Chapter 3
Management Discussion and Analysis
I Description of the industry in which the Company operates and principal 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 sale of pharmaceutical products and health care products.Pursuant to the Guidelines for the Industry Classification of Listed Companies (2012 Revision) issued by CSRC the Company
operates in the pharmaceutical manufacturing industry (C27).At present the business scope of the Company covers health care products chemical drug preparation products traditional
Chinese drug preparation products chemical active pharmaceutical ingredients (APIs) and intermediates diagnostic reagents
and equipment etc. The comprehensive product series and mix provide more market opportunities and larger development
space for the Company. Our business of health care products has been sustained since the Gompany was established and
our well-known brands such as "Taitai"(太 太 ) "Jingxin"(静 心 ) and "Eagle's"(鹰 牌 ) have extensive market influence.Chemical drug preparation products are the largest revenues generator of the Gompany among which prescription drugs such
as "Meropenem for Injection" "Ilaprazole Enteric-coated Tablet and Ilaprazole Sodium for Injection" "Leuprorelin Acetate
Microspheres for Injection" and "Urofollitropin for Injection" and OTC drugs such as "Bismuth Potassium Citrate Series
Products (Livzon Dele)" "Live Bifidobacterium Capsules" and "Dexamethasone Acetate Adhesive Tablets"(意 可 贴 ) rank
high in the market. As products such as "Compound Ipratropium Bromide Solution for Inhalation"(舒坦琳 ) "Levosalbutamol
Hydrochloride Nebuliser Solution"(丽 舒 同 ) and "Budesonide Suspension for Inhalation"(雾 舒 ) have been successively
approved for marketing Joincare's product lines of inhalation preparations have been gradually enriched laying a solid
foundation for achieving the strategic goal of becoming the "Leader of Inhalation Preparations in China". Chemical APIs and
intermediates include cephalosporin series statin series and carbapenem series. Traditional Chinese medicines include anti-
tumor medicine "Shenqi Fuzheng Injection" and cold medicine "Anti-viral Granules" . Diagnostic reagents include Diagnostic
Kit for IgM/IgG Antibody to Coronavirus (2019-nCoV) (Colloidal Gold) (新型冠状病毒 (2019-nCoV)IgM/IgG抗体检测试
剂盒 (胶体金法 )) Diagnostic Kit for IgM Antibody to Mycoplasma Pneumonia (Colloidal Gold) (肺炎支原体 IgM抗体检测
试剂盒 (胶体金法 )) and Diagnostic Kit for Antibody to Human Immunodeficiency Virus (ELISA) (人类免疫缺陷病毒抗体
检测试剂盒(酶联免疫法)).(II) Business model of the Company
1. Procurement model
In terms of procurement the Company pays strict attention to effectiveness quality and cost of procurement and has
established long-term and stable partnership with many suppliers. Active pharmaceutical ingredients supplementary materials
and packaging materials were purchased and stocked up by manufacturers according to production schedules. The Company
has developed strict quality standards and procurement management systems and required subordinate manufacturers to make
procurements in accordance with the GMP. Meanwhile the Company established long-term strategic partnerships with bulk
material suppliers and strengthened the management of supply quality and cost control based on strict quality standards. The
Company has established an internal evaluation system and files of market prices so as to promptly master market information
for procurement through comparisons of quality and price.2. Production model
In terms of production the Company adopts the principle of market demand-oriented approach paying attention to real market
demand. Specifically the Sales Department of the Company investigated market demands made sales plans and comprehensively
considered factors such as the product inventory quantity and capacity of production lines of the Company so as to determine
the monthly production quantities and 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.10Interim Report2021
The Company carried out production in strict accordance with the GMP. The Company and its affiliates have established a
sound quality management system and implemented the quality authorizer system. In terms of quality control the Company
established a strict and sound production quality assurance system and was geared to international standards and subject to
international certification while in compliance with national standards. The Company conducted annual GMP self-inspection
ISO9001 internal and external audits and was subject to various external audits. It actively pursued the internationally
advanced GMP management and implemented whole-process quality control over supplier selection audit incoming material
inspection production process product release from factory and market tracking with good system operation.3. Sales model
(1) Drug preparation products
End customers of drug preparation products of the Company are mainly hospitals clinics and retail pharmacies. In line
with the pharmaceutical industry practice and the sales model of most peers in the industry the Company has conducted
sales of drug preparation products through drug distribution enterprises. The Company carried out selection and centralized
management of qualified drug distribution enterprises (with Drug Supply Certificate GSP Certification etc.) according to
their distribution capability market familiarity financial strength credit record and operation scale. General sales process:
After end customers place purchase orders to distribution enterprises drug distribution enterprises will send those orders to the
Company according to their inventories distribution agreements and conditions; then the Group will deliver products to drug
distribution enterprises and do the revenues recognitions.
(2) APIs and intermediates
Our main target customers of APIs are large pharmaceutical manufacturers. The selling prices are determined based on a set of
comprehensive factors such as costs of production inventory levels industry rivalry and market conditions. The detailed process of
price determination are as follows: The sales and marketing department conduct weekly or bi-weekly meetings to analyze the current
market conditions and the trends and drivers of prices; the selling prices are determined based on a set of comprehensive factors
such as costs of production inventory levels industry rivalry and market conditions; the selling prices will be effective once are
reported by the managers of the sales department to our management team and got approvals.Specific sales methods of APIs include: 1) Domestic market: The Company directly signs product sales contracts with large
manufacturers to directly sell products to customers. Meanwhile the Company also sells products through distributors. 2)
Foreign market: The Company directly sells products in the foreign market and also sells products through distributors in
areas with high market and political risks. At present products of the Company are mainly exported to nearly 40 countries and
regions in Asia Europe North America and Africa.
(3) Diagnostic reagents and equipment
Diagnostic reagents and equipment sold by the Company both in-house manufactured and imported. Main end customers are
hospitals centers for disease control and prevention and health departments. The Company mainly sells those products in
combination with direct sales and sales through drug distribution enterprises.The Company has an experienced sales team responsible for the sales of diagnostic reagents and equipment and provision of
marketing support for some drug distribution enterprises. The Company carried out selection and centralized management of
qualified drug distribution enterprises (with Drug Supply Certificate GSP Certification etc.) according to their distribution
capability market familiarity financial strength credit record and operation scale.
(4) Health care products
The sales model of health care products is mainly distributor management model. Product promotion price control and
channel carding are managed and improved with the distributor distribution channel and terminal coverage capability. At
present the Company has set up 28 provincial branches and 129 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 102 first-level/primary distributors in total including 67 businesses in drug production
line and more than 35 businesses in food production line with more than 190000 subordinate secondary businesses and
terminal businesses in drug and food production lines. Products are well managed and promoted through the tiered marketing
channel. In addition to the traditional distribution management model the Company realizes common development through
coordinated marketing in E-commerce channel.11(III) Analysis of industry development
In 2021 domestic pandemic prevention and control has been shifted from a state of emergency to regular/normalized
management as the market has been basically restored to the level before the outbreak of COVID-19; services and the number
of outpatients and inpatients in medical and health institutions at different levels have basically restored to normal. However
as the pandemic continues to spread overseas and clusters of pandemic cases have occurred from time to time due to cases
resulting from virus carriers traveling from abroad the pandemic prevention and control situation has become severe and
complex the industry chain amid the pandemic has continued to flourish product demands in relevant industries increased
and overall performance of pharmaceutical manufacturing segment maintained a growth momentum. The pharmaceutical
industry is highly affected by changes in industry policies. With the constant introduction of a series of national policies
including consistency evaluation medical insurance premium control and volume-based procurement expansion the
pharmaceutical industry has been gradually transformed from high-speed development into high-quality development with
challenges and opportunities.Data of National Bureau of Statistics shows that in the first half of 2021 enterprises in the pharmaceutical manufacturing
industry above designated scale in China have realized Revenues of RMB1404.69 billion representing a year-on-year increase
of 28.0%; operating costs of RMB745.70 billion representing a year-on-year increase of 17.5%; total profits of RMB300.04
billion representing a year-on-year increase of 88.8% or an increase of 86.7 percentage points in growth rate as compared
with the same period of last year 21.9 percentage points higher than the overall level of domestic industrial enterprises above
designated scale in the same period.(IV) Industry status of the Company
Thanks to years of development the Company has become a comprehensive pharmaceutical enterprise covering multiple areas
including health care products chemical drug preparation products traditional Chinese drug preparation products chemical
APIs and intermediates as well as diagnostic reagents and equipment with a complete industrial chain. Chinese and western
drug preparations produced by the Company have secured a long-term position in national drug preparation market in which
drugs for alimentary tract anti-infective drugs and gonadorelin drugs are main competitive products of the Company. In the
future the Company will focus on innovative drugs and high-barrier complex preparations and constantly strengthen the
innovative research and development and business layout of respiratory psychiatrical and neurological and tumor-immune
products based on the original dominant field.During the Reporting Period the Company with solid strength in R&D and production and steady marketing presence ranked
Top 9 in "2020 Annual Ranking of Top 100 Chinese Chemical Drug Enterprises" under "2020 Annual Ranking of Top 100
Enterprises in Pharmaceutical Industry in China" of menet.com.cn.(V) Performance Drivers in the Reporting Period
In the first half of 2021 the COVID-19 pandemic was basically and effectively controlled in China and medical order
was gradually restored to normal. The Company actively implemented sales deployment strengthened market promotion
reinforced sales specialization and delicacy management and ensured steady growth of overall performance of the Company
during the Reporting Period.During the Reporting Period sales of main varieties in key specialist areas of the Company kept steady growth and
contribution of sales revenue of key preparation products to overall revenues was continuously improved. Meanwhile sales
of API segment realized steady growth after resources integration adjustment of product mix reinforcement of international
certification and other measures taken by the Company. Due to the pandemic control requirements in China certain impact
was brought on the sales of novel coronavirus antibody test reagents but other original principal businesses in the diagnostic
reagent segment achieved significant year-on-year growth.12Interim Report2021
II Analysis of core competitive strengths during the Reporting Period
√Applicable □N/A
1. Superior brand strength with diversified product mix
Founded more than 20 years ago we have been dedicated to the business of pharmaceutical and health care products built
a successful brand image and win wide recognition in the market with premium product quality and market service. Many
brands of series products under the Company and Livzon Group have made the Company widely recognized and gain brand
advantages. Products of the Company cover biologics prescription drug preparations APIs health care products OTC drugs
diagnostic reagents and equipment enabling the Company to establish an advantageous market position in a number of
therapeutic fields such as respiration anti-infection assisted reproduction gastroenterology psychiatry and tumor immunity.Moreover abundant product series and categories provide and will provide more market opportunities and larger development
space for the Company.2. R&D innovation strength
The Company has persisted in being driven by R&D innovation starting from the interests of patients and focusing on
the R&D of innovative drugs and high-barrier complex preparations. At present the Company has diversified and multi-
level R&D institutions and strong R&D capacity and international R&D concepts in chemicals traditional Chinese drug
preparation products biologics diagnostic reagents health care products and OTC drugs and has established a clear and
diverse R&D pipeline for products by focusing on areas of antimicrobial anti-tumor gonadorelin gastroenterology neurology
and respiration. By proactively introducing domestic and foreign experts and innovative talents constantly increasing R&D
investments developing overseas strategic alliances and focusing on inhalation administration antibody technology sustained
release microsphere liposomes microemulsion and construction of other technical platforms the Company has constantly
improved its R&D competitive strength in recent years.3. Corporate value added by innovation of marketing model
In the future the health industry in China will tend to combine the emerging Internet marketing with the traditional industry
via the Internet especially mobile Internet to improve sales conversion rate and enhance customer and consumer stickiness.Therefore the Company has in recent years constantly tried and promoted new marketing models based on the Internet and
combined traditional sales model with new Internet marketing so that the Company can directly establish long-term good
interactive relationship with final consumers deeply integrate consumer groups satisfy diversified consumer demands and
effectively enhance long-term value and value-added service for consumers. Meanwhile the Company has restructured
the industrial chain built an ecological closed-loop for digital health management realized real-time interaction between
consumers and brands through private traffic of new media dedicated to digital precision operation and injected new vitality
to the marketing model of the Company based on marketing strategy advantages accumulated for many years.4. Improved competitive strength through continuous marketing reform and innovation
Sales team of the Company has become more independent competitive and challenging thanks to continuous reform and
innovation of the marketing model and team and maintained good partnership with distributors at different levels through
active interaction for many years. Joincare has adopted the new marketing model of streamline administration and institute
decentralization to enhance independent sales and decision making abilities of contractual sellers optimized resource
allocation of personnel variety terminal and policy while arousing the enthusiasm and motivation of marketing personnel
expanded product promotion and coverage and achieved effective growth of Revenues.5. Talent strength
Joincare has persisted in the core value of "people-oriented high-quality innovative and practical and cooperative for sharing"
and laid emphasis on talent training. Over the years the Company has attracted a galaxy of core leading R&D talents and
experienced management teams based on an efficient operation and management model and salary training system and has
had a keen insight into the development trend and market demand of the pharmaceutical industry. At present the talent team
of the Company includes high-end pharmaceutical research personnel professionals familiar with pharmaceutical laws and
regulations and product production and high-end management talents experienced in the industry and management laying a
solid foundation for the sound sustainable and stable development of the Company.13III Discussion and analysis of business conditions
1. Main business conditions during the Reporting Period
During the Reporting Period the Company realized Revenues of RMB7835 million representing a year-on-year increase of
approximately 21.00%; a net profit attributable to shareholders of the listed company of RMB687 million representing a year-
on-year increase of approximately 1.64% and a net profit attributable to shareholders of the listed company after deducting
the extraordinary gains or loss of RMB598 million representing a year-on-year increase of approximately 0.94%. 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 44.76% equity interest in Livzon Group
(000513.SZ 01513.HK). During the Reporting Period Livzon Group (excluding Livzon MAB) realized a Revenues of
RMB6232 million representing a year-on-year increase of approximately 22.31% and a net profit attributable to shareholders
of the listed company of about RMB531 million.During the Reporting Period the sales income and year-on-year change of key drug preparation products of Livzon Group are
as follows: the sales income generated by key gonadotropic hormones products Leuprorelin Acetate Microspheres for Injection
(注 射 用 醋 酸 亮 丙 瑞 林 微 球 ) amounted to RMB817.82 million representing a year-on-year increase of 52.49% and the
sales income generated by Urofollitropin for Injection (注射用尿促卵泡素 ) amounted to RMB307.78 million representing
a year-on-year increase of 70.14%. The sales income generated by key gastroenterological product Ilaprazole series (艾 普 拉
唑 系 列 ) amounted to RMB1531.30 million representing a year-on-year increase of 130.64%; the sales income generated by
Rabeprazole Sodium Enteric-coated Capsules (雷贝拉唑钠肠溶胶囊 ) amounted to RMB98.40 million representing a year-
on-year decrease of 9.92%; the sales income generated by the Bismuth Potassium Citrate series (得 乐 系 列 ) amounted to
RMB129.40 million representing a year-on-year increase of 27.48%; the sales income generated by Livzon Weisanlian (丽
珠 维 三 联 ) amounted to RMB156.91 million representing a year-on-year increase of 65.67%. The sales income generated by
key psychiatric products Fluvoxamine Maleate Tablets (马来酸氟伏沙明片 ) and Perospirone Hydrochloride Tablets (盐酸
哌 罗 匹 隆 片 ) amounted to RMB113.81 million and RMB80.56 million respectively representing a year-on-year increase of
40.67% and 77.21% respectively. The sales income generated by the key anti-infection product Voriconazole for Injection (注
射用伏立康唑 ) amounted to RMB115.10 million representing a year-on-year increase of 9.00%. The sales income generated
by traditional Chinese drug preparation product Shenqi Fuzheng Injection (参 芪 扶 正 注 射 液 ) amounted to RMB299.03
million representing a year-on-year increase of 11.27%. The sales income generated by Anti-viral Granules (抗 病 毒 颗 粒 )
amounted to RMB228.00 million representing a year-on-year decrease of 24.57%.The income and year-on-year change of key APIs and intermediates of Livzon Group are as follows: the sales income
generated by Phenylalanine (苯 丙 氨 酸 ) amounted to RMB202.99 million representing a year-on-year increase of 17.62%;
the sales income generated by Acarbose (阿 卡 波 糖 ) amounted to RMB69.31 million representing a year-on-year decrease
of 38.89%; the sales income generated by Vancomycin Hydrochloride (盐 酸 万 古 霉 素 ) amounted to RMB97.51 million
representing a year-on-year increase of 15.07%; the sales income generated by Daptomycin (达 托 霉 素 ) amounted to
RMB117.53 million representing a year-on-year increase of 90.40%; the sales income generated by Lincomycin (林 可 霉 素 )
amounted to RMB57.64 million representing a year-on-year increase of 48.96%; the sales income generated by Milbemycin
Oxime (米 尔 贝 肟 ) amounted to RMB49.91 million representing a year-on-year increase of 6.53%; and the sales income
generated by Mevastatin (美伐他汀 ) amounted to RMB75.26 million representing a year-on-year increase of 142.34%.For business conditions of Livzon Group please refer to the 2021 Interim Report of Livzon Pharmaceutical Group Inc.
(2) Livzon MAB
As at the end of the Reporting Period the Company held 55.90% equity interest in Livzon MAB and had an effect on the net
profit of the Company attributable to shareholders of the listed company in Current Period of about RMB-134 million.During the Reporting Period Livzon MAB focused on promoting the clinical application clinical development and
industrialization of the Recombinant SARS-CoV-2 Fusion Protein Vaccine (重组新型冠状病毒融合蛋白疫苗 ) ("V-01")
project. As at the End of the Period Livzon MAB had completed the interim report of the clinical phase I/II study for V-01
14Interim Report2021
with phase I/II clinical results showing excellence in safety and immunogenicity of the vaccine and was preparing to start the
global multi-center phase III clinical study. The construction of the vaccine commercialization workshop has been completed
and put into use. Meanwhile 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 has
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 marketing which is the first generic drug in China; Recombinant Humanized
Anti-IL-6R Monoclonal Antibody for Injection (重 组 人 源 化 抗 人 IL-6R单 克 隆 抗 体 注 射 液 ) is currently undergoing
marketing application; the phase Ia dose ramp trial for psoriasis indication for Recombinant Anti-human IL-17A/F Humanized
Monoclonal Antibody Injection (重组抗人 IL-17A/F人源化单克隆抗体注射液 ) was completed and it entered the phase Ib/II
clinical trial phase and the preliminary clinical data showed that the efficacy was observed in patients with psoriasis upon low-
dose one administration; the IND declaration for Recombinant Human Follicle Stimulating Hormone for Injection (重组人促
卵泡激素注射液 ) was completed and clinical trials of other products are also ongoing.
(3) Joincare (excluding Livzon Group and Livzon MAB)
During the Reporting Period Joincare (excluding Livzon Group and Livzon MAB) realized an Revenues of RMB1746
million representing a year-on-year increase of approximately 11.23% and a net profit attributable to shareholders of the
listed company of RMB290 million representing a year-on-year increase of approximately 11.06%. Joincare realized a net
profit attributable to Shareholders of the listed company after deducting the extraordinary gain and loss of RMB265 million
representing a year-on-year increase of approximately 4.35%. Main fields and key products are as follows:
· Prescription drugs
During the Reporting Period Joincare (excluding Livzon Group and Livzon MAB) realized sales income of RMB632
million from prescription drug segment representing a year-on-year increase of approximately 29.67%. Among which the
sales income and year-on-year change of key products are as follows: The sales income generated by the key anti-infection
product Meropenem for injection (注射用美罗培南 ) amounted to RMB456.21 million representing a year-on-year decrease
of 1.15%. The additional sales income generated by the key respiratory product Budesonide Suspension for Inhalation (吸
入 用 布 地 奈 德 混 悬 液 ) amounted to RMB90.19 million. The sales income generated by Levosalbutamol Hydrochloride
Nebuliser Solution (盐酸左沙丁胺醇雾化吸入溶液 ) amounted to RMB36.62 million representing a year-on-year increase of
1743.09%. The sales income generated by Compound Ipratropium Bromide Solution for Inhalation (吸入用复方异丙托溴铵
溶液 ) amounted to RMB26.01 million representing a year-on-year increase of 134.45%.In the first half of 2021 the Company continued to accelerate construction of the national sales team in respiratory line
basically established a three-level fine marketing development system of regional manager provincial manager and
development manager actively took various measures to speed up the development of key products in hospitals: 1. Enhanced
the coverage and fulfillment rate of evaluation indicators; the development speed of respiratory variety was obviously
accelerated; more than 1100 hospitals above level II were developed in the first half of 2021; 2. Realized rapid coverage and
sales growth of the variety by taking the opportunity that Levosalbutamol Hydrochloride Nebuliser Solution entered national
negotiation; 3. Continued to drive construction of digital marketing platform and carry out brand communication in all aspects;
4. The three inhalation preparation varieties of Budesonide Suspension for Inhalation Ipratropium Bromide Solution for
Inhalation and Compound Ipratropium Bromide Solution for Inhalation were selected in the fifth round of centralized drug
procurement organized by the State which contributed to rapidly opening up the domestic sales market and improving market
share for inhalation preparation products of the Company.During the Reporting Period R&D of respiratory inhalation preparations of the Company went well. The following products
made phased progress: Terbutaline Sulphate Solution for Nebulization (硫酸特布他林雾化吸入溶液 ) has been applied for
production; Tobramycin Solution for Inhalation (class 2.4) (妥 布 霉 素 吸 入 溶 液 (2.4类 )) is undergoing the phase III clinical
trial; Formoterol Fumarate Solution for Inhalation (class 3 national encouraged generic varieties) (富马酸福莫特罗吸入溶液 (3
类 国家鼓励仿制品种 )) has completed interim analysis of phase III clinical trial; the interim analysis results of main research
endpoint have been judged to reach the preset excellent efficiency standards of the scheme by Independent Data Monitoring
Commission; Formoterol Fumarate Inhalation Aerosol (class 2.3) (富马酸福莫特罗吸入气雾剂 (2.3类 )) Mometasone Furoate
and Formoterol Fumarate Dihydrate Inhalation Aerosol (class 3) (莫米松福莫特罗吸入气雾剂 (3类 )) and Aclidinium Bromide
Powder for Inhalation (class 2.2) (阿地溴铵吸入粉雾剂 (2.2类 )) have received the notice of clinical trials.15· APIs and intermediates
During the Reporting Period Joincare (excluding Livzon Group and Livzon MAB) realized sales income of RMB927 million
from APIs and intermediates representing a year-on-year increase of approximately 1.57%. Among which the sales income
and year-on-year change of key products are as follows: The sales income generated by 7-ACA (including D-7ACA) amounted
to RMB535.46 million representing a year-on-year increase of 12.93%. The sales income generated by Meropenem Trihydrate
(美罗培南混粉 ) amounted to RMB271.87 million representing a year-on-year increase of 14.37%.During the Reporting Period in the API segment Joincare continued to strengthen safety and environmental protection
construction and drive lean production. Production and yield of key products were improved through further enhancement
of technical innovation of production process. Production costs were stable with a slight decline against the backdrop of
continued rise of bulk commodities prices and increased pressure from procurement cost of raw materials in the first half of
2021. In terms of marketing the price of key product 7-ACA was slightly declined compared with that in the second half of
2020 but the sales volume maintained relatively stable. Meropenem Trihydrate recorded a sharp increase of sales in Q2 of
2020 due to the spread of pandemic overseas. The Company continued to maintain a solid position in the market in the first
half of 2021 and the sales of Meropenem Trihydrate remained steady growth based on a higher base in the same period of
Previous Year with export share setting a new high.One of the key tasks of the Company this year is to strengthen R&D innovation of APIs. The Company established Joincare
Biopharmaceutical Research Institute last year to focus on green pharmaceutical intermediates enzymes used in the
pharmaceutical industry and biochemical APIs. At present construction of the Research Institute goes well. The Research
Institute has successfully hired 8 doctors and 14 masters on board successively established 6 R&D platforms of breeding
of industrial strains synthetic biology biocatalysis fermentation amplification product extraction and drug synthesis
according to demands of the technical and industrial chain and focused on technical problem solving in two research fields
of metabolic engineering modification of industrial microbial system and aided high-value natural product development
with IBT technology as well as drug and allogenic expression. In early 2021 Joincare Biopharmaceutical Research Institute
signed a Strategic Cooperation Agreement with Tencent Quantum Lab (腾讯量子实验室 ) to drive the application of quantum
computing + AI in research fields of microbial synthetic biology and relevant drugs.· Health care products and OTC drugs
During the Reporting Period Joincare (excluding Livzon Group and Livzon MAB) realized Revenues of RMB160 million
from health care product and OTC segment representing a year-on-year increase of approximately 0.38%.In the first half of 2021 affected by external factors including repeated outbreaks of COVID-19 and national health insurance
policies sales of health care products dropped due to the decline of customer volume in offline pharmacies in mainstream
channels of health care products of the Company especially in pharmacies and supermarkets of main output provinces and the
insufficient interactive marketing methods and strategies. Nevertheless the Company integrated key chain resources for deep
channel distribution and advanced OTC product sales through organizational structure reform of offline teams for steady growth.2. Business plans in the second half of 2021
In the second half of 2021 the major tasks in various business segments of the Company are set out as follows:
(1) R&D Center
In terms of innovative R&D the Company will continue to strengthen its target management and appraisal mechanism
improve R&D efficiency focus on and effectively accelerate R&D and clinical development progress of core varieties rapidly
drive product transformation and implementation strengthen innovation effort and actively use digital and intelligent new
technology and model to improve R&D innovation efficiency. The Company will gradually plan for transdermal patch nano
preparation and other high-barrier technology platforms while continuing to promote the original technology platform with
edges through various means including independent development external introduction and collaborative development to
further improve R&D layout. Meanwhile the Company will integrate its resources and fully utilize the edges of its own APIs
advantages to couple with the R&D of drug preparation products with the aim of forming an integrated industrial chain. In
addition the Company will continue to strengthen internal and external training and the introduction of senior R&D personnel
to promote the overall R&D level of the team and enhance the comprehensive R&D strength of the enterprise.16Interim Report2021
(2) Production Center
In terms of production the Company will continue to improve product safety environmental protection quality standards and
requirements systematically control quality and safety risks continue to increase input in production quality environmental
protection and other aspects improve management mechanism strengthen risk control and ensure safe drug production and
stable quality. The Company will improve product competitiveness through technical improvement refine management and
capture of the superior advantages of the products in costs. Meanwhile the Company will drive the construction project of
new factory and new production line as scheduled follow up and establish supporting systems prepare for marketing of new
variety make capacity plan for existing products and actively cope with the centralized drug procurement organized by the
State.
(3) Sales Center
The key work deployments in marketing of prescription drugs are as follows: 1. Continue to expand the terminal sales team
continuously attract excellent talents to join the sales team take brand building as the goal and improve the practical capability
and comprehensive quality of marketing teams across China; 2. Continue to strengthen integration of terminal resources focus
on establishing national benchmark areas benchmark hospitals and benchmark sales teams include key hospitals above level
II in appraisal system and comprehensively enhance the coverage and fulfillment rate of evaluation indicators; 3. Seize the
opportunity that three inhalation preparation products have been successfully selected in the centralized drug procurement
organized by the State be prepared in business production terminal and other links and quickly increase market share and
raise brand awareness in all aspects; 4. Continue to advance construction of digital marketing platform and support for terminal
market activities effectively combine online and offline methods and enhance in-depth brand recognition on the doctor side
and patient side; 5. Follow up in real time national medical reform related policies strengthen clinical and pharmacoeconomic
research of products after marketing and actively cope with medical insurance adjustment in 2021.In terms of marketing and promotion of APIs and intermediates the Company will further strengthen construction of sales
team segment market 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 rate and market conditions and promptly adjust sales strategies.In the second half of 2021 the Company will lay more emphases on development of online channels for marketing of health
care products continue to promote its brands on TikTok Zhihu Weibo Xiaohongshu and other communication channels stick
to the customer-centered principle in combination with online and offline channels carry out brand marketing activities at the
marketing node and raise brand reputation and product awareness and reputation. Meanwhile the Company will increase the
sales ratio in online channels through livestream marketing innovative traffic plan on E-commerce platform and increase of
investment on holidays and festivals. The Company will make in-depth channel distribution through organizational structure of
the offline team in OTC segment and focus on integrating diversified resources and boosting sales by resource empowerment.
(4) Functions and strategies
The key attainments of the Company in the functional areas are as follows: Firstly we continue to improve the organizational
structure and institutional settings to improve the management efficiency and adopt fully advanced lean management.Secondly we continue to drive corporate cultural construction strengthened cultivation of core values and enhance the
cohesion and centripetal force. Thirdly we continue to strengthen talent and system construction and to improve OKR and
KPI target management system under close cooperation and full support of departments so as to provide powerful service and
guarantee in R&D production and sales. Fourthly we actively give full play to resource advantages of internal and external
business cooperation make investment layout introduce innovative products and technologies and improve strategic layout of
the Company. Fifthly we actively fulfill corporate social responsibility endeavor to improve corporate governance level and
promote high-quality and sustainable development.Material changes in business conditions of the Company during the Reporting Period and matters occurred during the
Reporting Period that had and are expected to have significant impacts on business conditions of the Company
□Applicable √N/A
17IV Main business conditions during the Reporting Period
(I) Analysis of principal operating activities
1. Table for analysis of changes in related items of financial statements
Unit: Yuan Currency:RMB
Item Amount for Amount for Change (%)
the Period the Previous Period
Revenues 7835372274.66 6475702905.40 21.00
Operating cost 2743005734.93 2277555656.22 20.44
Selling expenses 2499949757.30 1803247662.75 38.64
Administrative expenses 397921091.17 401922830.97 -1.00
Finance expenses -41726762.77 -99413845.75 Not applicable
R&D expenses 622962388.41 372523241.72 67.23
Net cash flow from operating activities 745787513.36 1248991736.51 -40.29
Net cash flow from investing activities -1173747818.24 -154735758.55 Not applicable
Net cash flow from financing activities -1475233697.43 -3271004584.66 Not applicable
Reasons for changes in selling expenses: Mainly due to an increase in selling expenses in line with a prominent growth in the
sales revenue of prescription drugs as a result of the Company's increased marketing efforts for respiration gastroenterology
and psychiatry segments during the Period.Reasons for changes in finance expenses: Mainly due to an increase in interest expenses as a result of an increase in loans of
Livzon Group a controlling subsidiary of the Company during the Period and lower interest income than the Previous Period
as a result of a decrease in deposit interest rate.Reasons for changes in R&D expenses: Mainly due to an increase in R&D investment as a result of actively advancing the
R&D progress of project of innovative drug "Recombinant SARS-CoV-2 Fusion Protein Vaccine" and the expansion of the
scientific research team during the Period.Reason for changes in net cash flow from operating activities: Mainly due to an increase in the period expenses as a result of
strengthening sales Forceand increasing R&D investments in biologics and inhalation preparations during the Period.Reason for changes in net cash flow from investing activities: Mainly due to an increase in payments for purchase of long-term
assets and fequity investments during the Period.Reason for changes in net cash flow from financing activities: Mainly due to a decrease in loan repayment during the Period as
compared with the same period last year.18Interim Report2021
2. Analysis of Revenues and Costs
Principal businesses by industry product and region
Unit: Yuan Currency: RMB
Principal businesses by industry
By industry Revenues Operating cost Gross Year-on-year Year-on-year Year-on-year
profit change of change of change of gross
margin Revenues operating cost profit margin
(%)(%)(%)(%)
Industry and 7779231008.65 2701588799.86 65.27 20.70 19.57 Increased by 0.33
commerce percentage point
Service industry 4286158.71 1164851.15 72.82 158.76 122.03 Increased by 4.50
percentage points
Principal businesses by product
By product Revenues Operating cost Gross Year-on-year Year-on-year Year-on-year
profit change of change of change of gross
margin Revenues operating cost profit margin
(%)(%)(%)(%)
Chemical drug 4434234171.70 840614882.95 81.04 54.10 39.10 Increased by 2.04
preparation products percentage points
Chemical APIs and 2258879617.33 1517873006.34 32.80 16.17 21.65 Decreased by 3.03
intermediates percentage points
Traditional Chinese 633012054.83 168867289.58 73.32 -4.34 -3.35 Decreased by 0.28
drug preparation percentage point
products
Diagnostic reagents 390683579.78 156931989.53 59.83 -56.05 -24.94 Decreased by 16.65
and equipment percentage points
Health care products 62421585.01 17301631.46 72.28 -13.25 -25.23 Increased by 4.44
percentage points
Principal businesses by region
By region Revenues Operating cost Gross Year-on-year Year-on-year Year-on-year
profit change of change of change of gross
margin Revenues operating cost profit margin
(%)(%)(%)(%)
Domestic 6520552394.49 1840235327.71 71.78 31.86 27.11 Increased by 1.06
percentage points
Overseas 1262964772.87 862518323.30 31.71 -15.90 6.20 Decreased by 14.21
percentage points
Description of principal businesses by industry product and region
During the Reporting Period the Company's principal businesses generated Revenues of RMB7784 million representing
a year-on-year increase of RMB1337 million or 20.74%. In particular Revenues from chemical drug preparation products
increased by 54.10% year-on-year and Revenues from chemical APIs and intermediates increased by 16.17% year-on-year.Revenues from diagnostic reagents and equipment decreased by 56.05% year-on-year but increased by 21.96% year-on-year
excluding the impacts of COVID-19 detection reagent products.19The 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 accelerating the establishment for sales
in specialist arena steadily increasing sales volume of main product categories in key specialist arenas and contribution of
sales income of key drug preparation products to overall Revenues. Main gastroenterological product Ilaprazole (艾 普 拉
唑 ) series products main gonadotropic hormones varieties Triptorelin Acetate Microspheres for Injection (注 射 用 醋 酸 曲
普瑞林微球 ) and Urofollitropin for Injection (注射用尿促卵泡素 ) key psychiatric products Fluvoxamine Maleate Tablets
(马来酸氟伏沙明片 ) and Perospirone Hydrochloride Tablets (盐酸哌罗匹隆片 ) realized high growth year-on-year; main
respiratory products Budesonide Suspension for Inhalation (吸入用布地奈德混悬液 ) and Levosalbutamol Hydrochloride
Nebuliser Solution (盐酸左沙丁胺醇雾化吸入溶液 ) were gradually added with prominent overall growth. Meanwhile the
sales volume of the API segment also rose steadily through consolidating resources adjusting product mix and increasing
international certifications. Due to the effectiveness of pandemic control in China the sales of novel coronavirus antibody test
reagents went down but other original principal businesses in the diagnostic reagent segment achieved significant year-on-year
growth.3. Investment in R&D
(1) Table for investment in R&D
Unit: Yuan Currency: RMB
Expensed investment in R&D during the Period 622962388.41
Capitalized investment in R&D during the Period 74249510.16
Total investment in R&D 697211898.57
Total amount of investment in R&D as a percentage of Revenues (%) 8.90
(2) Description
During the Reporting Period total investment in R&D of the Company amounted to RMB697.21 million representing a year-
on-year growth of 51.31% accounting for 8.90% of total Revenues and 3.60% of total net assets. During the Reporting Period
the Company's investment in R&D was mainly used for R&D of new products and upgrading and reconstruction of project
technology. As biologics inhalation preparations and other projects entered the clinical stage investment in R&D increased
significantly.During the Reporting Period the general R&D efforts of the Company in different segments were as follows:
(1) Chemical drug preparation products
· High-barrier complex preparations: There were a total of 31 projects under research of which 14 projects are under clinical
trials/BE trails. The latest progresses for our key projects in our pipelines:
Inhalation preparations: Terbutaline Sulphate Solution for Nebulization (硫酸特布他林雾化吸入溶液 ) has applied for
production; Tobramycin Solution for Inhalation(妥布霉素吸入溶液 )is undergoing the phase III clinical trial; Formoterol
Fumarate Solution for Inhalation(富马酸福莫特罗吸入溶液 ) has completed interim analysis of phase III clinical trial;
Formoterol Fumarate Inhalation Aerosol(富马酸福莫特罗吸入气雾剂 ) Mometasone Furoate and Formoterol Fumarate
Dihydrate Inhalation Aerosol (莫米松福莫特罗吸入气雾剂 ) and Aclidinium Bromide Powder for Inhalation (阿地溴铵
吸入粉雾剂 ) have received the notice of clinical trials.Nasal spray: Mometasone Furoate Aqueous Nasal Spray (糠酸莫米松鼻喷雾剂 ) had been applied for production.Sustained release microspheres: The phase III clinical trial and the sorting of the production and registration application
materials for Triptorelin Acetate Microspheres for Injection (注射用醋酸曲普瑞林微球 ) have been completed pending
application for production; Aripiprazole Microspheres for Injection (注射用阿立哌唑微球 ) was in phase I clinical trial
and a single administration study has been completed and the multiple-dose clinical trials have been initiated; Leuprorelin
Acetate Microspheres for Injection (注 射 用 醋 酸 亮 丙 瑞 林 微 球 ) (3-month sustained release) has completed phase I
clinical trials and completed phase III clinical genetic filing; Octreotide Acetate Microspheres for Injection (注射用醋酸奥
曲肽微球 ) has started BE pre-test; Triptorelin Pamoate Microspheres for Injection (注射用双羟萘酸曲普瑞林微球 ) has
received the notice of clinical trials.20Interim Report2021
· Conventional preparations: There were a total of 33 projects under research one project obtained approval 3 projects had
applied for production and 4 projects started clinical/BE study. Among them Alogliptin Benzoate Tablets (苯 甲 酸 阿 格
列汀片 ) was approved for production; application for registration for Cetrorelix Acetate for Injection (注射用醋酸西曲
瑞 克 ) were made in China and the United States and the material supplementing work is about to complete in China and
the United States; Paclitaxel Micelles for Injection (注射用紫杉醇胶束 ) completed the phase I clinical trial; Lurasidone
Hydrochloride Tablets (盐 酸 鲁 拉 西 酮 片 ) was in the BE study; the non-clinical study of Tongyuankang TY-2136b
(LZ001) project was progressing smoothly.· Consistency evaluation: There were a total of 20 projects under research 2 projects obtained approvals and 7 projects
had applied for production. Of which Omeprazole Sodium for Injection (注射用奥美拉唑钠 ) and Fluvoxamine Maleate
Tablets (马 来 酸 氟 伏 沙 明 片 ) obtained approval; materials have been supplemented for Isosorbide Bononitrate Tablets
(单硝酸异山梨酯片 ) Cefodizime Sodium for Injection (注射用头孢地嗪钠 ) and Alanyl Glutamine Injection (丙氨酰
谷氨酰胺注射液 ); Clarithromycin Tablets (克拉霉素片 ) Valsartan Capsules (缬沙坦胶囊 ) and Cefuroxime Sodium
for Injection (注射用头孢呋辛钠 ) were under review; Bismuth Potassium Citrate Capsules (枸橼酸铋钾胶囊 ) was
preparing for clinical trial; Rabeprazole Sodium Enteric-coated Tablets (雷贝拉唑钠肠溶片 ) was in pilot scaling-up.
(2) Biologics
There were a total of 7 projects under research of which one project has been marketed one project was applying for
marketing 3 projects were in phase Ib/II clinical trials one project was in phase I clinical trial and one project was
applying for IND.Recombinant Human Choriogonadotropin alfa for Injection (注射用重组人绒促性素 ) has been approved for marketing;
Recombinant Humanized Anti-IL-6R Monoclonal Antibody for Injection (重组人源化抗人 IL-6R单克隆抗体注射液 )
was in the process of marketing application; Recombinant SARS-CoV-2 Fusion Protein Vaccine (重 组 新 型 冠 状 病 毒
融 合 蛋 白 疫 苗 ) has completed phase II clinical trials and a global multi-center phase III clinical study is about to start;
Recombinant Anti-human IL-17A/F Humanized Monoclonal Antibody Injection (重组抗人 IL-17A/F人源化单克隆抗体
注射液 ) has completed the phase Ia dose ramp for psoriasis indications and entered phase Ib/II clinical trials; 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 ) was undergoing
phase Ib/II clinical trials; Recombinant Tumor Enzyme Specific Interferon α-2b Fc Fusion (重组肿瘤酶特异性干扰素
α-2b Fc融合蛋白 ) was in the phase I clinical trial; Recombinant Human Follicle Stimulating Hormone for Injection (重
组人促卵泡激素注射液 ) has completed the IND application; and preclinical R&D of CAR-T project was in progress.
(3) APIs and intermediates
There were a total of 37 projects under research of which Dalbavancin (达 巴 万 星 ) has completed the verification and
batch production and Fluralaner (氟雷拉纳 ) planned to carry out the verification and batch production.
(4) Diagnostic reagents and equipment
There were a total of 37 projects under research of which 4 projects were in the clinical trial stage. In regard to the R&D
platform for diagnostic reagents two products including the Diagnostic Kit for IgM Antibody to Novel Coronavirus (2019-
nCov) (ELISA) (新型冠状病毒 (2019-nCoV)IgM抗体检测试剂盒 (酶联免疫法 ) completed domestic registration
(filing) the Diagnostic Kit for IgM Antibody to Mycoplasma Pneumonia (Chemiluminescence Method) (肺 炎 支 原 体
抗 体 IgM检 测 试 剂 盒 (化 学 发 光 法 )) entered clinical trials and the Diagnostic Kit for Human Immunoglobulin G4
(Chemiluminescence Method) (人免疫球蛋白G4检测试剂盒 (化学发光法 )) entered the R&D transformation stage. In
regard to the equipment R&D platform the Multi-channel Dry Method Immunofluorescence Analyzer (多通道干式荧光
免疫分析仪 ) completed registration in the PRC the R&D for second generation model of irradiator (辐照仪 ) entered the
model engineering testing stage and the molecular project pipetting (分子项目移液 ) completed platform building.4. Detailed description of material changes in the business types composition or sources of profit of the Company during the
Period
□Applicable √N/A
21(II) Description of material changes in profits arising from non-principal businesses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Amount As a Reason for occurrence Sustainability
percentage of
total profit
Investment income 46810627.37 2.73% Mainly due to changes in profit and loss from Yes
investments in associates and gains generated
upon expiration of forward foreign exchange
settlement contracts.Other income 131455378.87 7.68% Mainly due to the government subsidies Yes
received.Gains or losses arising 33316547.15 1.95% Mainly due to fluctuations in the market value No
from changes in fair value of subject securities investment held.Asset impairment cost -28878059.99 -1.69% Mainly due to impairment provisions for No
inventories.Non-operating Revenues 4641364.71 0.27% Mainly due to income on disposal of obsolete. No
Non-operating expenditure 6039971.44 0.35% Mainly due to donation payments and loss on No
scrapping of fixed assets.(III) Analysis of assets and liabilities
√Applicable □N/A
1. Analysis of assets and liabilities
Unit: Yuan Currency: RMB
Item Amount at end of Amount at Amount at end of Amount at end Change in Reason
the Period end of the Previous Period of Previous proportion
Period as a Period as a (%)
percentage of percentage of
total assets total assets
(%)(%)
Financial assets 241873785.15 0.85 28328748.72 0.10 753.81 Mainly due to the fact that the
held for trading subsidiary Livzon Group was allocated
shares as a result of the proposed
deregistration of SCC VENTURE VII
2018-C L.P.Bills receivable 1826155857.39 6.39 1343013818.54 4.77 35.97 Mainly due to an increase of
outstanding bank acceptance bills held
by the subsidiary of the Company
during the Reporting Period.Prepayments 442948794.11 1.55 209926040.57 0.75 111.00 Mainly due to an increase in
procurement amounts and costs
prepaid for materials during the
Period.Dividends 4175569.86 0.01 - - - Mainly due to payment of dividends
receivable by China Galaxy Securities Co. Ltd.during the Period.Non-current 8520000.00 0.03 19934376.07 0.07 -57.26 Mainly due to collection of long-term
assets due receivables due within 1 year during
within one year the Period.Long- 1344648650.68 4.70 628279599.73 2.23 114.02 Mainly due to an increase of
term equity investment by Livzon Group in Tianjin
investments Tongrentang during the Period.22Interim Report2021
(Cont.)
Item Amount at end of Amount at Amount at end of Amount at end Change in Reason
the Period end of the Previous Period of Previous proportion
Period as a Period as a (%)
percentage of percentage of
total assets total assets
(%)(%)
Financial 556069.84 - 212.07 - 262110.52 Mainly due to changes in fair value of
liabilities held forward foreign exchange contracts as
for trading a result of changes in exchange rates.Bills payable 1492064332.85 5.22 1087759353.31 3.86 37.17 Mainly due to an increase of payment
for bank acceptance bills during the
Period.Payroll payable 232028511.31 0.81 476521798.51 1.69 -51.31 Mainly due to the payment of year-
end bonus and special fund for stock
ownership plan withdrawn at the end
of previous year during the Period.Long-term 638453815.00 2.23 360324027.48 1.28 77.19 Mainly due to an increase in long-term
borrowings loans during the Period.Treasury shares 483148777.41 1.69 253637154.50 0.90 90.49 Mainly due to an increase in share
repurchase during the Period.Other 36239487.82 0.13 116300559.28 0.41 -68.84 Mainly due to the disposal of other
comprehensive equity instruments and translation
income differences of statements denominated
in foreign currency during the Period.2. Overseas assets
√Applicable □N/A
(1) Asset size
Of which overseas assets were 41.47 (Unit: RMB 100 million currency: RMB) accounting for 14.51% of total assets.
(2) Description of overseas assets
□Applicable √N/A
3. Major Restrictions on assets as at the end of the Reporting Period
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Carrying amount at the Reasons for restriction
End of the Period
Time deposit 100000000.00 Expected to be held-to-maturity
Other monetary funds 62807505.71 Deposits for L/C bank acceptance draft and forward settlement
Bills receivable 802531287.95 Bills pooling business pledged bills receivables
Total 965338793.66
4. Others
□Applicable √N/A
23(IV) Analysis of investment
1. Overall analysis of equity investments
√Applicable □N/A
During the Reporting Period the Company carried out strategic investments according to development plans and schedules as
follows:
(1) Major equity investments
√Applicable □N/A
1. Livzon Group acquired 40.00% equity interest in Tianjin Tongrentang
The Resolution on Acquisition of 40% Equity Interest in Tianjin Tongrentang Group Co. Ltd. by the Controlling
Subsidiary Livzon Group was considered and approved at the 43rd Meeting of the 7th Session of the Board on 22 March
2021 pursuant to which Livzon Group the controlling subsidiary of the Company was approved to enter into the Share
Transfer Agreement in Relation to Tianjin Tongrentang Group Co. Ltd. with Tianjin Tasly Healthcare Industry Investment
Partnership (Limited Partnership) * (天津天士力健康产业投资合伙企业 (有限合伙 )) ("Tianjin Tasly"). Accordingly
Livzon Group shall use its own funds of RMB724 million to acquire 44000000 shares of Tianjin Tongrentang Group Co.Ltd.* (天津同仁堂集团股份有限公司 ) ("Tianjin Tongrentang") held by Tianjin Tasly representing 40.00% of the total
number of shares of Tianjin Tongrentang.Tianjin Tongrentang is principally engaged in the R&D production and sales of Chinese patent medicines. Tianjin
Tongrentang has a stable operating performance with unique products and promising growth potential. On 9 March 2021
the Tianjin Securities Regulatory Bureau announced its acceptance of the application for counselling of the initial public
offering of its shares (and listing on the ChiNext Board of Shenzhen Stock Exchange). Upon completion of the Transaction
Livzon Group will not only have certain synergy with Tianjin Tongrentang in respect of the development of Chinese
medicine business but will also be able to realize the corresponding investment income through cash dividends or initial
public offering and listing of Tianjin Tongrentang. The Transaction is not expected to have a material impact on the current
and future financial position and operating results of the Company and Livzon Group. After completion of the Transaction
the financial statement of Tianjin Tongrentang will not be consolidated in the financial statements of the Company and
Livzon Group and will only be treated as an investment by the Company and Livzon Group.On 27 April 2021 Livzon Group obtained the "Confirmation Letter on Securities Transfer and Registration (证 券 过 户
登 记 确 认 书 )" from China Securities Depository and Clearing Corporation Limited and Livzon Group has completed
the transfer and registration procedures in relation to the Transaction. In addition during the share transfer period of the
Transaction Tianjin Tongrentang implemented the equity distribution for the year 2020 (distribution of cash dividends) and
pursuant to the Agreement Tianjin Tasly shall pay Livzon Group the full amount of the cash dividends received during the
share transfer period. On 27 April 2021 Livzon Group has received the aforesaid cash dividends which amounted to a total
of RMB40.04 million.Tianjin Tongrentang obtained the Notice on the Acceptance of Application Documents of Tianjin Tongrentang Group Co.Ltd. in Connection with the Listing of Shares from Initial Public Offering on the Chinext Board (Shen Zheng Shang Shen
[2021] No.265) on 28 June 2021 which states that the Shenzhen Stock Exchange has accepted the application documents of
Tianjin Tongrentang in connection with the listing of shares from initial public offering on the ChiNext Board. However it
remains uncertain whether such application would be approved by the Shenzhen Stock Exchange.Please refer to the relevant announcements disclosed by the Company on 23 March 2021 7 April 2021 28 April 2021 and
1 July 2021.24Interim Report2021
2. Overall relocation and expansion project of Sichuan Guangda
On 6 March 2019 Livzon Group the controlling subsidiary of the Company entered into the "Investment Agreement for theOverall Relocation and Expansion Project of Sichuan Guangda Pharmaceutical Manufacturing" (《四川光大制药整体搬迁调迁扩建项目投资协议书》) (the "Investment Agreement") and the Supplemental Agreement I with Sichuan Chengdu
Pengzhou Municipal People's Government (四川省成都市彭州市人民政府 ). Pursuant to the Investment Agreement Livzon
Group will inject capital of RMB646 million for investment in construction of the overall relocation and expansion project
(the "Project") of Sichuan Guangda a wholly-owned subsidiary of Livzon Group. Pursuant to the Supplemental Agreement I
Pengzhou Municipal People's Government has agreed to pay a compensation for demolition of RMB90 million and grant total
incentive of not more than RMB125.8 million for the construction of new plant to Livzon Group.As at 30 June 2021 the total investment of the Project amounted to RMB215.5972 million and the sum of subsidies
received from government authorities at various levels amounted to RMB98.55 million the civil construction works for the
fully automatic elevated warehouse together with the construction works for the main structure and masonry structure of the
medical depot were completed and the water extraction workshop the preparation building and the pretreatment workshop
commenced construction and the Project was smooth in progress.3. Investment in Beijing Infinite Intelligence Pharma Technology Co. Ltd.On 15 January 2021 Zhuhai Livzon Pharmaceutical Equity Investment Management Co. Ltd. * (珠海市丽珠医药股权
投资管理有限公司 ) a wholly-owned subsidiary of Livzon Group a controlling subsidiary of the Company entered into
the Capital Injection Agreement of Beijing Infinite Intelligence Pharma Technology Co. Ltd. with original shareholders
of Beijing Infinite Intelligence Pharma Technology Co. Ltd. * (北 京 英 飞 智 药 科 技 有 限 公 司 ) ("Infinite Intelligence
Pharma") pursuant to which Zhuhai Livzon Pharmaceutical Equity Investment Management Co. Ltd. contributed RMB20
million to subscribe for registered capital of RMB158730 of Infinite Intelligence Pharma. After the capital injection
Zhuhai Livzon Pharmaceutical Equity Investment Management Co. Ltd. held 11.7647% equity interest in Infinite
Intelligence Pharma. Infinite Intelligence Pharma is principally engaged in the artificial intelligence empowered drug
design.4. Investment in Haisong Precision Parts and Components (Taicang) Co. Ltd.In March 2021 Shanghai Frontier a controlling subsidiary of the Company entered into the Investment Agreement in
Relation to Haisong Precision Parts and Components (Taicang) Co. Ltd. with Haisong Precision Parts and Components
(Taicang) Co. Ltd. * (海嵩精密零部件 (太仓 )有限公司 ) ("Haisong Precision") pursuant to which Shanghai Frontier
subscribed for registered capital of RMB3.23 million of Haisong Precision accounting for 35% equity interest of Haisong
Precision. Haisong Precision is principally engaged in the production processing and sale of plastic products molds
and class I and II medical devices. The investment will strengthen the R&D strength of the Company in inhalation
administration system which conforms to the strategic development goal of the Company.5. Establishment of Shanghai Liyu Biopharmaceutical Technology Co. Ltd.In March 2021 Shanghai Frontier a controlling subsidiary of the Company entered into the Shareholder Agreement
with Livzon Group pursuant to which both parties jointly invested and established Shanghai Liyu Biopharmaceutical
Technology Co. Ltd. * (上海丽予生物医药技术有限责任公司 ) in cash at the registered capital RMB3 million of which
Shanghai Frontier and Livzon Group contributed RMB1.35 million and RMB1.65 million in proportion of 45% and 55%
of the registered capital respectively. Shanghai Liyu Biopharmaceutical Technology Co. Ltd. is principally engaged in
technological services technological development and related business within the scope of pharmaceutical technology.6. Establishment of Zhuhai Liye Biotechnology Co. Ltd.On 9 February 2021 Zhuhai Livzon Diagnostics Inc. * (珠海丽珠试剂股份有限公司 ) a subsidiary of Livzon Group a
controlling subsidiary of the Company established Zhuhai Liye Biotechnology Co. Ltd. * (珠海市丽业生物技术有限
公 司 ) at the registered capital of RMB50 million of which Zhuhai Livzon Diagnostics Inc. accounted for 100% of the
registered capital. Zhuhai Liye Biotechnology Co. Ltd. is principally engaged in R&D production and sales of medical
devices.
25(2) Major non-equity investment
□Applicable √N/A
(3) Financial assets measured at fair value
√Applicable □N/A
Item Level 1 Level 2 Level 3 Total
fair value fair value fair value
measurement measurement measurement
I. Recurring fair value measurement
(I) Financial assets held for trading
1. Debt instrument investments 926807.89 0.00 0.00 926807.89
2. Equity instrument investments 237166389.06 0.00 0.00 237166389.06
3. Derivative financial assets 0.00 3780588.20 0.00 3780588.20
(II) Other equity instrument investments 200427353.28 0.00 1175969840.91 1376397194.19
Total assets measured at fair value on a recurring basis 438520550.23 3780588.20 1175969840.91 1618270979.34
(III) Financial liabilities held for trading
Derivative financial liabilities 0.00 556069.84 0.00 556069.84
Total liabilities measured at fair value on a recurring basis 0.00 556069.84 0.00 556069.84
II. Non-recurring fair value measurement
Held-for-sale assets 0.00 0.00 0.00 0.00
Total assets measured at fair value on a non-recurring basis 0.00 0.00 0.00 0.00
Total liabilities measured at fair value on a non-recurring basis 0.00 0.00 0.00 0.00
(V) Disposal of material assets and equity
□Applicable √N/A
(VI) Analysis of major controlled and invested companies
√Applicable □N/A
Unit:10000 Yuan
Company Nature of Main product and service Registered Asset size Net assets Revenues Operating Net profit
business capital profit
Taitai Industry R&D production and operation of nutritional 10000 57656.46 23438.83 10180.62 2361.27 2105.35
Pharmaceutical health oral liquid health granules (excluding
Pop Can Tetra Pak and commodities managed
in accordance with existing export license)
Chinese patent medicines oral liquid tablets
capsules hormone tablets food enriched food
health food and effervescent tablets.Taitai Industry Wholesale and retail of skincare products 500 188.22 129.89 66.96 1.25 -16.05
Biotechnology cosmetics and other daily necessities; domestic
business material supply and marketing
industry R&D of health care products.Haibin Pharma Industry Powder injection (including penicillin) tablets 70000 198686.91 109656.83 70974.22 11271.68 9876.21
hard capsules APIs and sterile APIs. Import
and export businesses and domestic trade
(excluding commodities under exclusive rights
commodities under special government control
and monopolized commodities)
Xinxiang Industry Manufacturing and sale of pharmaceutical 10000 29967.72 21527.66 31339.17 4527.27 3907.02
Haibin products intermediates and other chemical
products
26Interim Report2021
(Cont.)
Company Nature of Main product and service Registered Asset size Net assets Revenues Operating Net profit
business capital profit
Health Industry Production and sale of self-produced HKD7317 12699.24 10170.44 1821.57 1177.31 768.31
Pharmaceutical Eagle's food health food traditional
Chinese medicine decoction pieces
and drug products
Shanghai Industry R&D of new pharmaceutical products 5000 17173.16 8536.26 3970.06 724.32 539.58
Frontier health care products medical devices
diagnostic reagents pharmaceutical
intermediates and provision of relevant
technical consulting technical service
and technical transfer
Hiyeah Commerce Investment in industry domestic 17800 717.40 660.65 155.58 -4.79 -4.79
Industry commerce material supply and
marketing industry and economic
information consulting
Joincare Daily- Commerce Wholesale of health care products 2500 3765.06 3758.73 - -0.08 -0.06
Use ginseng tea ginseng lozenges ginseng
capsules and stereotyped packaged
food (including health-care food)
Taitai Industry Screening of human disease-specific 5000 3627.67 3627.67 4.74 4.54 4.54
Genomics genes R&D production sale and
technical consulting service of genetic
engineering drugs and diagnostic
reagents wholesale of medical devices
and in vitro diagnostic reagents (except
for diagnostic reagents under special
management)
Appraisal Service Forensic evidence identification - 1061.15 985.10 132.49 -15.61 -15.69
institution industry
Zhuhai Industry Technical R&D and application of 6587 0.21 -949.79 - -0.12 -0.85
Jiankangyuan biomedical products
Fenglei Electric Investment Investment in power industry 10000 32665.50 17669.89 - 285.38 285.38
Power domestic commerce and material
supply and marketing industry
Hong Kong Investment Investment and trade HKD1 32863.31 602.51 292.04 173.07 158.32
Health
Jiaozuo Industry R&D production and sale of 50000 197053.96 145691.24 64606.86 12891.71 11205.38
Joincare pharmaceutic preparations chemical
APIs biological APIs pharmaceutical
intermediates and biological products.Topsino Commerce Investment and trade HKD89693 166928.29 153551.28 - 21313.39 21313.39
Health Investment According to law where it was USD5 2640.46 2640.46 - - -
Investment registered
Joincare Haibin Industry R&D production storage transport 50000 58475.43 37413.04 3231.85 735.38 628.39
and sale of chemical APIs (including
intermediates) and pharmaceutic
preparations Import and export
businesses and domestic trade
(excluding commodities under
exclusive rights commodities under
special government control and
monopolized commodities)
27(Cont.)
Company Nature of Main product and service Registered Asset size Net assets Revenues Operating Net profit
business capital profit
Joincare Industry R&D production and sale of formula 2000 1225.95 278.23 - -26.29 -20.79
Special food health-care food and food for
Medicine Food special medical use
Livzon Group Industry Drug R&D production manufacturing 93575 2105883.06 1345379.08 623553.10 137209.32 117978.14
and sale
Note:
1. The companies listed above are companies where the Company directly or indirectly held 100% equity interest except
for Livzon Group Zhuhai Jiankangyuan and Shanghai Frontier; financial data thereof are data of individual accounting
statements and that attributed to parent companies; as there are transactions between subsidiaries or between a subsidiary
and the Company data of individual accounting statements is not separately analyzed.2. For business conditions of Livzon Group please refer to the 2021 Interim Report of Livzon Pharmaceutical Group Inc.(VII) Structural body controlled by the Company
□Applicable √N/A
V Other matters for disclosure
(I) 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.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 so as to reach the strict standard of consistency evaluation and constantly improve its
core competitive strength. Meanwhile the Company is actively engaged in the access to Medical Insurance Catalogue
and centralized drug procurement. In the adjustment of 2020 National Medical Insurance Catalogue Levosalbutamol
Hydrochloride Nebuliser Solution the exclusive product of the Company was included in the 2020 National Medical
Insurance Catalogue and became the only domestic inhalation preparation included in "Negotiation Drugs within the
Agreement Period" of the new edition of Medical Insurance Catalogue. In the fifth round of centralized drug procurement
organized by the Joint Procurement Office in June 2021 Budesonide Suspension for Inhalation Compound Ipratropium
Bromide Solution for Inhalation Ipratropium Bromide Solution for Inhalation and Tinidazole Tablets were selected.2. Market Risks
With advancement of supply-side structural reform in the pharmaceutical manufacturing industry and the 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.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 strength and ensure that it can achieve sustainable and steady
development and improve its profitability by reinforcing marketing.28Interim Report2021
3. Risk of deline in the prices of products
Affected by reinforced drug regulation policy-based drug price reduction price cutting during bidding medical insurance
premium control and volume-based procurement 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 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.Meanwhile the Company will speed up the R&D and marketing of new products expand range of existing products in
segment markets spread risks of the Company improve sales and form new profit growth point by increasing product varieties
in the future.4. Risk of environmental protection
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 will carry out discharge after treatment and reaching standards in accordance with
environmental protection provisions actively accept supervision and inspection of environmental protection authorities and
try to reduce emission and increase expenditures in environmental protection by improving production process and promptly
updating environmental protection technology.5. 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
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.6. Risk of safe production
The Company is a comprehensive pharmaceutical manufacturing enterprise. During production it implements relevant
chemical synthesis process and uses a large number of acid and alkali and other chemical components which are 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.Response measures: The Company has always obeyed the safety work concept of "People Orientation" and the guideline
of "safety first precaution crucial and comprehensive treatment". It will strengthen the construction of safe production
infrastructure and ensure a sound environment for safe production of the Company through regular internal audit of safety and
environment systems and employee safety education and training.7. Risk of R&D for new drugs
New drug R&D is characterized by high investment needed 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
in 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.29Response measures: The Company will further improve the R&D and innovation systems introduce and develop high-end
talents proactively carry out cooperation and introduction of overseas innovative drugs 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 APIs and drug preparations to ensure the long-term sustainable development of the
Company.8. Risk of the normalization of COVID-19 pandemic
In early 2020 the outbreak of the COVID-19 pandemic brought certain impact on the production and operations of the
Company. As the demand for prescription drugs irrelevant to the pandemic dropped due to the decline of outpatients and
inpatients in medical institutions the sales of some products were lower than expected. In May 2021 after the outbreak of the
pandemic in Guangdong Province all parts of the province followed "fast strict and practical" requirements strengthened
personnel management and control decisi vely adjusted risk areas scientifically delineated the scope of management
and control and promoted hierarchical nucleic acid screening in accordance with the principle of zoning grading and
classification. During the period Guangdong Province implemented a very strict system that any personnel who intended to
leave the province by air railway highway and water transportation shall produce negative nucleic acid tests and Guangdong
personnel were guided not to leave the province unless necessary. As at 5 July 2021 all middle-risk areas for the pandemic in
Guangdong Province have been cleared and the whole province was under low risk.Response measures: The Company during the Reporting Period was under normal operation and the overall impact of the
COVID-19 pandemic on its business was relatively slight. The extent of its subsequent impact will depend on the prevention
and control of the pandemic on a global scale the time of continuation the prevention and control of the pandemic and the
responsive measures of enterprises. The Company will continue to pay attention to the development of the pandemic and any
possible impact on the financial conditions and operating results of the Company while adopting various measures at the
same time to mitigate the adverse effect of the pandemic on corporate operations to ensure that the production and operation
activities are performed in a steady and orderly manner.(II) Other matters for disclosure
□Applicable √N/A
30Chapter 4
Corporate Governance
I Introduction of General Meetings
Meeting sessions Date of meeting Query index of Disclosure date Meeting resolution
specified website
2021 First Extraordinary 25 February 2021 www.sse.com.cn 26 February 2021 Resolutions of the 2021 First
General Meeting Extraordinary General Meeting
2020 Annual General 21 May 2021 www.sse.com.cn 22 May 2021 Resolutions of the 2020 Annual
Meeting General Meeting
2021 Second Extraordinary 29 June 2021 www.sse.com.cn 30 June 2021 Resolutions of the 2021 Second
General Meeting Extraordinary General Meeting
Holders of Preferred Shares with Resumed Voting Rights Requesting to Hold Extraordinary General Meeting
□Applicable √N/A
Description of General Meetings
√Applicable □N/A
The Scheme in Relation to Repurchasing Shares of the Company by way of Centralized Price Bidding and the Resolution on
the General Meeting for Granting Mandate to Deal with Matters Related to the Repurchase were considered and approved at
the 2021 First Extraordinary General Meeting on 25 February 2021.13 resolutions were considered and approved at the 2020 Annual General Meeting on 21 May 2021 including the 2020 Annual
Work Report of the Supervisory Committee 2020 Annual Work Report of the Board of Directors 2020 Annual Final Account
Report 2020 Annual Profit Distribution Scheme 2020 Annual Report (Full Text and Abstract) of Joincare Pharmaceutical
Group Industry Co. Ltd.* (健康元药业集团股份有限公司 ) the Resolution in Relation to the Review of the Audit Report on
Internal Control of Joincare Pharmaceutical Group Industry Co. Ltd. Issued by Grant Thornton (Special General Partnership)
the Resolution in Relation to the Review of Special Audit Report on Summary Statements of Appropriation of Non-operating
Funds and Other Related Capital Transactions of Joincare Pharmaceutical Group Industry Co. Ltd. Issued by Grant Thornton
(Special General Partnership) the Resolution in Relation to Credit Financing for the Company and Providing Financing
Guarantee for Subsidiaries the Resolution in Relation to Retention of Grant Thornton (Special General Partnership) as 2021
Annual Audit Accounting Firm the Resolution in Relation to Extension of Certain Projects Invested with Proceeds the
Resolution in Relation to Change of Registered Capital of the Company the Resolution in Relation to Revision of Certain
Clauses of Articles of Association and the Resolution in Relation to Purchase of Liability Insurance for Directors Supervisors
and Senior Management of the Company.The Resolution in Relation to Revision of Certain Clauses of Rules of Procedure of the Supervisory Committee the Resolution
in Relation to Add Methods of Investments of Projects Invested with Proceeds the Resolution in Relation to Providing
Financing Guarantee for the Controlling Subsidiary Livzon MAB by the Controlling Subsidiary Livzon Group and the Counter
Guarantee for Livzon Group by the Company Resolution on the First Phase Ownership Scheme under Medium to Long-
term Business Partner Share Ownership Scheme of the Company (Draft) and its Summary and the Resolution on the General
Meeting for Granting Mandate to the Board to Deal with Matters Related to the First Phase Ownership Scheme under Medium
to Long-term Business Partner Share Ownership Scheme of the Company were considered and approved at the 2021 Second
Extraordinary General Meeting on 29 June 2021.II Changes in directors supervisors and senior management of the Company
□Applicable √N/A
Description of changes in directors supervisors and senior management of the Company
□Applicable √N/A
31III Profit distribution plan and plan for conversion of capital reserve into share capital
Profit distribution plan and plan for conversion of capital reserve into share capital proposed for the first six months of 2021
ended 30 June 2021
Distribution or conversion or not No
IV Equity incentive scheme employee share ownership scheme or other employee incentives
of the Company and their effect
(I) Matters related to equity incentive scheme have been disclosed in the Provisional Announcements without progress
or change in subsequent implementation
√Applicable □N/A
Overview Query index
The second exercise period under the first grant of the 2018 Share See the Announcement on 2021 Q1 Independent Exercise
Options Incentive Scheme of the Company started on 21 December Results of the 2018 Share Options Incentive Scheme of Joincare
2020 until 20 December 2021 by way of independent exercise. The Pharmaceutical Group Industry Co. Ltd. & Changes in Shares (Lin
first exercise period under the reserved grant of the 2018 Share 2021-044) disclosed by the Company on China Securities Journal
Options Incentive Scheme of the Company started on 23 September Securities Times Securities Daily Shanghai Securities News and the
2020 until 22 September 2021 by way of independent exercise. The website of Shanghai Stock Exchange (www.sse.com.cn) on 2 April
number of options exercised was 3848413 by way of independent 2021 for details.exercise from 1 January 2021 to 31 March 2021. As at 31 March
2021 the number of options cumulatively exercised and completing
share transfer registration under the first grant and reserved grant
of the 2018 Share Options Incentive Scheme of the Company was
18595839.The Resolution on the First Phase Ownership Scheme under See the Announcement on Resolutions of Joincare Pharmaceutical
Medium to Long-term Business Partner Share Ownership Scheme Group Industry Co. Ltd. at the Congress of Workers and Staff
of the Company (Draft) and its Summary and the Resolution on (Lin 2021-069) Announcement on Resolutions of Joincare
the General Meeting for Granting Mandate to the Board to Deal Pharmaceutical Group Industry Co. Ltd. at the 48th Meeting of
with Matters Related to the First Phase Ownership Scheme under the 7th Session of the Board (Lin 2021-068) Announcement on
Medium to Long-term Business Partner Share Ownership Scheme Resolutions of Joincare Pharmaceutical Group Industry Co. Ltd. at
of the Company were considered and approved at the Congress the 36th meeting of the 7th Session of the Supervisory Committee
of Workers and Staff the 48th Meeting of the 7th Session of the (Lin 2021-067) and the First Phase Ownership Scheme under
Board and the 36th meeting of the 7th Session of the Supervisory Medium to Long-term Business Partner Share Ownership Scheme
Committee on 10 June 2021. of Joincare Pharmaceutical Group Industry Co. Ltd. (Draft) and its
The said resolutions were considered and approved at the 2021 Summary disclosed by the Company on China Securities Journal
Second Extraordinary General Meeting on 29 June 2021. Securities Times Securities Daily Shanghai Securities News and the
website of Shanghai Stock Exchange (www.sse.com.cn) on 11 June
2021 for details.See the Announcement on Resolutions of Joincare Pharmaceutical
Group Industry Co. Ltd. at the Second Extraordinary General
Meeting (Lin 2021-081) and the First Phase Ownership Scheme
under Medium to Long-term Business Partner Share Ownership
Scheme of the Company (Draft) and its Summary disclosed on
China Securities Journal Securities Times Securities Daily
Shanghai Securities News and the website of Shanghai Stock
Exchange (www.sse.com.cn) on 30 June 2021 for details.32Interim Report2021
(Cont.)
Overview Query index
The Resolution on Adjusting the Exercise Price of the 2018 Share See the Announcement on Adjusting the Exercise Price of the
Options Incentive Scheme of the Company was considered and 2018 Share Options Incentive Scheme of the Company by Joincare
approved at the 49th Meeting of the 7th Session of the Board and at Pharmaceutical Group Industry Co. Ltd. (Lin 2021-080) disclosed
the 37th Meeting of the 7th Session of the Supervisory Committee on China Securities Journal Securities Times Securities Daily
on 25 June 2021. Due to profit distribution the exercise price under Shanghai Securities News and the website of Shanghai Stock
the first grant was adjusted to RMB7.74/share while that under the Exchange (www.sse.com.cn) on 26 June 2021 for details.reserved grant was adjusted to RMB10.16/share.The number of options exercised was 1964040 from 1 April See the Announcement on 2021 Q2 Independent Exercise
2021 to 30 June 2021. As at 30 June 2021 the number of options Results of the 2018 Share Options Incentive Scheme of Joincare
cumulatively exercised and completing share transfer registration Pharmaceutical Group Industry Co. Ltd. & Changes in Shares (Lin
under the first grant and reserved grant of the 2018 Share Options 2021-084) disclosed by the Company on China Securities Journal
Incentive Scheme of the Company was 20559879. Securities Times Securities Daily Shanghai Securities News and the
website of Shanghai Stock Exchange (www.sse.com.cn) on 2 July
2021 for details.(II) Incentives not disclosed in the Provisional Announcements or with subsequent progress
Equity incentives
□Applicable √N/A
Others
□Applicable √N/A
Employee share ownership scheme
□Applicable √N/A
Other incentive Program
□Applicable √N/A
33Chapter 5
Environmental and Social Responsibility
I Environmental information
(I) Environmental Issues of Companies and Their Major Subsidiaries Belonging to Key Pollutant Discharging Units as
Announced by the Environmental Protection Department
√Applicable □N/A
1. Pollution discharge information
√Applicable □N/A
i. Jiaozuo Joincare
Name of Name of major Mode of Number of Distribution Discharge Pollutant discharge Total Total amount Excessive
company or pollutants and discharge discharge of discharge concentration standards amount of of discharge discharge
subsidiary specific pollutants outlets outlets (mg/L) implemented discharge approved
(mg/L) (t/a) (t/a)
Jiaozuo Chemical oxygen Continuous 1 Master outlet 111.04 220 314.89 942.1 Nil
Joincare demand in sewage
Ammonia treatment 16.83 35 47.77 105.3 Nil
nitrogen workshop
ii. Taitai Pharmaceutical
Name of Name of major Mode of Number of Distribution Discharge Pollutant discharge Total Total amount Excessive
company or pollutants and discharge discharge of discharge concentration standards amount of of discharge discharge
subsidiary specific pollutants outlets outlets (mg/L) implemented discharge approved
(mg/L) (t/a) (t/a)
Taitai Chemical oxygen Intermittent 1 The southwest 27.02 345 0.103 / Nil
Pharmaceutical demand side of the
Biochemical factory 87.7 150 0.305 / Nil
oxygen demand
Suspended solids 6.5 250 0.024 / Nil
pH value 8 6-9 / / Nil
Sulfur dioxide Intermittent 1 Chimney on 1.12 50 0.0058 / Nil
Nitrogen oxide the roof of the 12.42 150 0.068 / Nil
Particulate matter boiler room 15.81 20 0.0352 / Nil
34Interim Report2021
iii. Haibin Pharma
Name of Name of major Mode of Number of Distribution Discharge Pollutant discharge Total Total amount Excessive
company or pollutants and discharge discharge of discharge concentration standards amount of of discharge discharge
subsidiary specific pollutants outlets outlets (mg/L) implemented discharge approved
(mg/L) (t/a) (t/a)
Haibin Pharma Chemical oxygen Continuous 1 Master outlet 59 500 1.6248 41.65 Nil
demand for sewage
Ammonia nitrogen 3.9 45 0.1075 3.7485 Nil
Particulate matter 1 Discharge 2.4 20 0.0122 / Nil
Sulfur dioxide outlet of 0 50 0 / Nil
Nitrogen oxide boiler exhaust 21 150 0.1962 / Nil
gas
Volatile organic 2 Discharge 3.2 100 0.1958 9.156 Nil
compounds outlet of
process
organic
exhaust gas
and tank farm
exhaust gas
iv. Xinxiang Haibin
Name of Name of major Mode of Number of Distribution Discharge Pollutant discharge Total Total amount Excessive
company or pollutants and discharge discharge of discharge concentration standards amount of of discharge discharge
subsidiary specific pollutants outlets outlets (mg/L) implemented discharge approved
(mg/L) (t/a) (t/a)
Xinxiang Chemical oxygen Continuous 1 Master outlet 77 220 4.351 14.81 Nil
Haibin demand in sewage
Ammonia nitrogen treatment 9 35 0.53 1.66 Nil
workshop
v. Fuzhou Fuxing
Name of Name of major Mode of Number of Distribution Discharge Pollutant discharge Total Total amount Excessive
company or pollutants and discharge discharge of discharge concentration standards amount of of discharge discharge
subsidiary specific pollutants outlets outlets (mg/L) implemented discharge approved
(mg/L) (t/a) (t/a)
Fuzhou Fuxing Chemical oxygen Intermittent 1 The northwest 18.005 100 8.75 124.5 Nil
demand side of the
Ammonia factory 0.206 15 0.1 18.7 Nil
nitrogen
Note: The discharge concentration represents the actual discharge concentration and the standards implemented represent
the standards for discharge to the environment by Jiangyin sewage plant (江阴污水处理厂 ) (i.e. COD≤100mg/L ammonia
nitrogen≤ 15mg/L) and the agreed standard for discharge of COD and ammonia nitrogen from the company to Jiangyin
sewage plant shall be≤500mg/L and≤60mg/L respectively. The data was obtained from Fuqing Environmental Protection
Bureau.35vi. Xinbeijiang Pharmaceutical
Name of Name of major Mode of Number of Distribution Discharge Pollutant discharge Total Total amount Excessive
company or pollutants and discharge discharge of discharge concentration standards amount of of discharge discharge
subsidiary specific pollutants outlets outlets (mg/L) implemented discharge approved
(mg/L) (t/a) (t/a)
Xinbeijiang Chemical oxygen Intermittent 1 Sewage 89.3 240 37.85 Nil Nil
Pharmaceutical demand treatment
Ammonia workshop 11.72 70 4.97 Nil Nil
nitrogen
Note: The discharge concentration represents the concentration of discharge into Qingyuan Henghe Sewage Treatment
Plant (清 远 横 荷 污 水 处 理 厂 ) while the standard adopted for discharge represents the standard stipulated in the pollutant
discharge license of the company i.e. COD≤240mg/L ammonia nitrogen≤70mg/L. The data was obtained from Qingyuan
Environmental Protection Bureau.vii. Livzon Hecheng
Name of Name of major Mode of discharge Number of Distribution Discharge Pollutant Total Total amount Excessive
company or pollutants and discharge of discharge concentration discharge amount of of discharge discharge
subsidiary specific pollutants outlets outlets (mg/L) standards discharge approved
implemented (t) (t/a)
(mg/L)
Livzon Chemical oxygen Indirect 1 Wastewater 83.75 192 7.7413 / Nil
Hecheng demand treatment
Ammonia station 4.59 40 0.218 / Nil
nitrogen (NH3-N)
Sulfur dioxide Organized continuous 3 Boiler room 5.33 50 0.09 / Nil
emission
Nitrogen oxide Organized continuous 3 Boiler room 53.68 150 0.91 / Nil
emission
Particulate matter Organized continuous 3 Boiler room 1.36 20 0.01 / Nil
emission
Hydrogen Organized continuous 7 Workshop 1.41 100 0.19 / Nil
chloride emission
Non-methane Organized continuous 7 Workshop 16.74 60 2.66 77.76 Nil
hydrocarbons emission
Non-methane Organized continuous 1 RTO 7.93 60 0.71 Nil
hydrocarbons emission
Nitrogen oxide Organized continuous 1 RTO 50 200 4.46 / Nil
emission
Sulfur dioxide Organized continuous 1 RTO 3 200 0.27 / Nil
emission
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).36Interim Report2021
viii. Gutian Fuxing
Name of Name of major Mode of Number of Distribution Discharge Pollutant discharge Total Total amount Excessive
company or pollutants and discharge discharge of discharge concentration standards amount of of discharge discharge
subsidiary specific pollutants outlets outlets (mg/L) implemented discharge approved
(mg/L) (t) (t/a)
Gutian Fuxing Chemical oxygen Continuous 1 The southeast 49.7075 120 6.289 108 Nil
demand side of the
Ammonia factory 14.099 35 1.764 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 Name of major Mode of Number of Distribution Discharge Pollutant discharge Total Total amount Excessive
company or pollutants and discharge discharge of discharge concentration standards amount of of discharge discharge
subsidiary specific pollutants outlets outlets (mg/L) implemented discharge approved
(mg/L) (t) (t/a)
Livzon Limin Chemical oxygen Intermittent 1 Wastewater 16.5 110 2.55 Nil Nil
demand treatment
Ammonia station 0.699 15 0.1075 Nil Nil
nitrogen
Note: The wastewater of Livzon Group Limin Pharmaceutical Manufacturing Factory (丽 珠 集 团 利 民 制 药 厂 ) was
discharged into Shaoguan Second Sewage Treatment Plant (韶关市第二污水处理厂 ) and the standard adopted for pollutant
discharge represented the standard stipulated in the pollutant discharge license of the company i.e. COD≤110mg/L ammonia
nitrogen≤15mg/L while the data detected by third party inspection firm was adopted as the discharge concentration.x. Livzon Pharmaceutical Factory
Name of Name of major Mode of Number of Distribution Discharge Pollutant discharge Total Total amount Excessive
company or pollutants and discharge discharge of discharge concentration standards amount of of discharge discharge
subsidiary specific pollutants outlets outlets (mg/m3) implemented discharge approved
(mg/m3) (t) (t/a)
Livzon Chemical oxygen Intermittent 1 Wastewater 13.17 120 1.05 Nil Nil
Pharmaceutical demand treatment
Factory station
Ammonia nitrogen Intermittent 1 Wastewater 0.52 20 0.04 Nil Nil
treatment
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 forPharmaceutical Industrial Water Pollutants from Mixing and Formulation Category (《混装制剂类制药工业水污染物排放标 准 》) (GB 21908-2008) Schedule 2 Water Pollutant Discharge Concentration Limits for Newly-Built Enterprises (表2新建企业水污染物排放浓度限值 ) of Discharge Standards for Biopharmaceutical Industrial Wastewater (《生物工程类制药工业水污染物排放标准》) (GB 21907-2008) or the level 1 of phase II standard of Guangdong Provincial Capping on Polluted
Effluents Discharge (《广东省水污染物排放限值》) (DB44/26–2001).37xi. Ningxia Pharmaceutical
Name of Name of major Mode of Number of Distribution of Discharge Pollutant Total Total amount Excessive
company or pollutants and discharge discharge discharge outlets concentration discharge amount of of discharge discharge
subsidiary specific pollutants outlets (mg/L) standards discharge approved
implemented (t) (t/a)
(mg/L)
Ningxia Chemical oxygen Continuous 1 Sewage treatment 106 200 60.45 Nil Nil
Pharmaceutical demand workshop on north
Ammonia nitrogen side of factory zone 0.6 25 0.332 Nil Nil
Sulfur dioxide Continuous 1 Boiler workshop on 53 200 12.72 156.816 Nil
Nitrogen oxide Continuous north side of factory 104 200 37.23 156.816 Nil
Particulate matter Continuous zone 19 30 5 23.522 Nil
Volatile organic Continuous 9 4 outlets for 14.5 100 11 79.535 Nil
compounds fermentation
3 outlets for refinery
and 2 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 the company adopted indirect discharge the local government of Ningxia cancelled the limitation
of total discharge of chemical oxygen demand and ammonia nitrogen of all indirect discharge enterprises and the total
amount index was directly allocated to sewage treatment plants in the pharmaceutical industrial park established by the
government after the renewal of the pollution discharge license.2. The emission concentration of boiler exhaust gas represents the self-monitoring average concentration throughout the year
the standard adopted for discharge was the standard stipulated in the pollutant discharge license of the company and the
amount of discharge was calculated by the amount indicated by online monitoring. The concentration of volatile organic
compounds (VOCs) represents the concentration of ultimate discharge to the environment (self-monitoring concentration)
the adopted standard was the standard limits stipulated in Schedule I of the Air Pollutant Discharge Standards for
Pharmaceutical Industry (《 制 药 工 业 大 气 污 染 物 排 放 标 准 》) (GB37823-2019) and the amount of discharge was
calculated by the amount of exhaust gas emissions and the discharge concentration recorded by the monitoring report.x. Jiaozuo Hecheng
Name of Name of major Mode of Number of Distribution Discharge Pollutant discharge Total Total amount Excessive
company or pollutants and discharge discharge of discharge concentration standards amount of of discharge discharge
subsidiary specific pollutants outlets outlets (mg/L) implemented discharge approved
(mg/L) (t) (t/a)
Jiaozuo Chemical oxygen Continuous 1 Master outlet 116.1 220 4.8 60.8 Nil
Hecheng demand in industrial
Ammonia nitrogen wastewater 4.1 35 0.17 8.8 Nil
workshop
Note: The discharge concentration and the total amount of discharge represent the concentration and total amount of ultimate
discharge into the downstream sewage treatment plant and the source is online monitoring data.38Interim Report2021
xi. Shanghai Livzon
Name of Name of major Mode of Number Distribution of Discharge Pollutant discharge Total Total amount Excessive
company or pollutants and discharge of discharge outlets concentration standards amount of of discharge discharge
subsidiary specific pollutants discharge (mg/L) implemented discharge approved
outlets (mg/L) (t) (t/a)
Shanghai COD Intermittent 1 Master outlet in 72 500 1.72 Nil Nil
Livzon Ammonia nitrogen the park 2.45 40 0.05 Nil Nil
Particulate matter Organized 2 No. 5 and 6 outlet 5.2 20 0.003 0.054 Nil
on the roof
VOCs 8 No.1 2 3 4 7 8 1.81 60 0.186 2.145 Nil
9 and 10 outlets
on the 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 Pharmaceutical Manufacturing Co. Ltd. (上海丽珠制药有限公司 ) was among other key
pollutant discharge units but not among the key pollutant discharge units of water environment and atmospheric environment.2. Construction and operation of pollution preventive facilities
√Applicable □N/A
Name of company Construction and operation of pollution preventive facilities
or subsidiary
Jiaozuo Joincare Exhaust gas: The treatment process of "water spray + acid spray + alkali spray + mist eliminator +
dry filter + adsorption concentrator + RCO" + "secondary alkali spray" was adopted for fermentation
exhaust gas. The treatment process of "bag type dust collector" was adopted for proportioning process
dust-laden exhaust gas. The treatment process of "secondary alkali spray" was adopted for exhaust gas
treatment facilities in wastewater treatment station. The treatment process of "alkali adsorption" was
adopted for process acid waste gas. The treatment process of "tertiary finned condenser + bag type
dust collector + secondary alkali spray + RTO" / "-20 ° condensation + activated carbon adsorption
device (including regenerating device) + RTO" / "adsorption device (including regenerating device)
+ secondary alkali spray + biological uptake + secondary alkali spray" / "secondary alkali spray +
biological uptake + secondary alkali spray" was adopted for process organic exhaust gas. 15 discharge
outlets were constructed. All of them enable stable and up-to-standard discharge through se lf-
monitoring.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 and flow. At present
wastewater treatment process sections can be stably operated. Moreover wastewater control factors can
be stably emitted in compliance with the required standard.Taitai No new facilities were set up. Facilities functioned properly.Pharmaceutical
Haibin Pharma Pollution preventive facilities functioned properly and ensured up-to-standard discharge.
39(Cont.)
Xinxiang Haibin Wastewater: The wastewater treatment system with daily processing capacity of 600 tonnes through A/
O process designed by East China University of Science and Technology started operation in April 2016
and functioned properly in the first half of 2021. A set of MVR concentration wastewater treatment plant
was added in April 2020 which has been functioning properly in the first half of 2021. From March
to June 2021 a set of lift aerator system and a set of magnetic levitation blower were added in the
biochemical system and they have been put into operation and functioning properly at present.Exhaust gas: The 40000m3/h regenerative oxidation exhaust gas treatment system designed by
Jiangsu Ruiding started operation on 2 November 2019 and is functioning properly at present. After
reconstruction of dry tail gas self-circulating process the activated carbon adsorption device for high
concentration waste gas designed by Beijing Rixin Daneng Technology Co. Ltd. has been functioning
properly in the first half of 2021 and solvent recovery amount was increased. After alkali spray and
water spray the exhaust gas from biochemical aerobic process of wastewater treatment was emitted in
compliance with the required standard. A set of tetrahydrofuran membrane recovery system was added
for high concentration exhaust gas treatment of six workshops which has been functioning properly in
the first half year 2021.Fuzhou Fuxing The Company strictly complies with the "Three-Simultaneous" system collects and treats "Three
Wastes (waste water exhaust gas and solid waste)" according to requirements and employs an advanced
sewage treatment process known as "regulating pool + hydrolysis acidification tank + SBR + air float".After the sewage has gone through the above treatment process all indicators are stable and satisfy the
discharge standard. After meeting the discharge standards the sewage is discharged to Jiangyin sewage
plant operated by Fujian Huadong Water Treatment Co. Ltd. (福建华东水务有限公司 ) via sewage
pipe network at the industrial park area for further treatment. A RTO waste gas treatment facility newly
constructed in 2020 can treat organic waste gas through high-temperature incineration which will be
emitted after meeting emission standards; three sets of waste gas treatment devices for fermentation
tank-receiving stations and environmental protection have been newly built so that the waste gas could
be discharged after meeting the standard through multi-stage of water spray treatment; the second plant
has newly constructed its waste gas treatment facility in which the waste gaswas treated through the
secondary chemical washing and activated carbon adsorption method and emitted after meeting the
emission standards. Two sets of QC waste gas treatment devices have been newly constructed in 2021
in which the waste gas was treated through water spray and activated carbon adsorption method and
emitted after meeting the emission standards.Xinbeijiang The "Three Wastes" were collected and treated effectively in strict compliance with the "Three
Pharmaceutical Simultaneous" system. The sewage treatment facilities with an investment amount of over RMB30
million have a designed processing capacity of 3000t/d and adopt the treatment process of "Pre-
treatment + Aerobic pool + Hydrolysis acidification tank + SBR + Catalytic oxidation + Air float". In
the first half of 2021 an aggregate amount of over RMB5 million was invested to the treatment and
improvement projects of sewage waste gas noise and solid waste storage sites in the factory including
more than 30 environmental protection improvement projects such as the power cooling tower noise
reduction project the installation of the boiler inlet muffler the enclosure of MVR fans the renovation
of sewage tank in workshop 1 of department III the replacement of the aeration pipes of the biological
filter of the sewage station and the renovation of the pretreatment waste gas of the sewage treatment
station so as to reduce the impact of factory noise on the surrounding area through controlling from
the source while eliminating the smell emission of workshops sewage and solid waste storage sites to
ensure the stable operation of sewage treatment system.40Interim Report2021
(Cont.)
Livzon Hecheng The "Three Wastes" were treated in a centralized and effective manner in strict compliance with the
"Three Simultaneous" system and the maintenance and management of pollution preventive facilities
were enhanced to ensure that emission of pollutants was stable and in compliance with the required
standard. The treatment process of "pre-treatment of drainage from the production process + hydrolytic
acidification + upflow anaerobic sludge blanket (UASB) + advanced oxidation + CASS process + air
float/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). In 2018 new investment in environmental
protection projects amounted to RMB4.48 million of which RMB3.20 million was invested in exhaust
gas RTO incineration treatment. Cover and sealing were added to the anaerobic tower CASS tower
and other facilities at the environmental protection center. In 2019 new investment of RMB450000
in additional air float device was made for water outflow from CASS to remove particulates total
phosphorus and color further reducing emission of pollutants. The hazardous wastes of the company
were properly disposed in compliance with regulations by qualified companies engaged according to
environmental assessment and acceptance inspection opinion. In 2020 RMB200000 was invested to
replace the integrated pool covers and reduce unorganized exhaust gas emission.Gutian Fuxing At the same time when the enterprise started production the "Three Wastes" were collected and treated
effectively in accordance with the requirements of the "Three Simultaneous" system of environmental
protection. This involves a designed sewage treatment capacity of 1200 t/d initial investment of more
than RMB3.00 million adoption of the advanced "A/O + SBR + nitrogen removal by denitrification +
Fenton decolorizing + air flotation" sewage treatment process 6000 m3 of effective reservoir capacity
of the treatment system and more than 20 sets of treatment equipment with 350 KW installed capacity.So far a further investment of nearly RMB1.00 million has been made successively 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 wastes of the company are entrusted to qualified companies for
compliant disposal according to the requirements of environmental impact assessment and acceptance
inspection opinions. In 2019 the company invested RMB340000 for upgrading the treatment facilities
of sewage and waste gases with adoption of "lye-spraying + UV photolysis + active carbon adsorption"
process. The environmental emission was far below the emission limits after such upgrade. In 2020
RMB1 million was invested in the collection and treatment of exhaust gases in the refinery workshops.In 2021 RMB600000 was invested to upgrade the environmentally friendly sludge pressing system to
reduce the moisture content of the sludge and the amount of sludge produced.Livzon Limin The "Three Simultaneous" system was strictly implemented by the company for the treatment of "Three
Wastes" by collecting and treating the "Three Wastes" effectively. The investment for sewage treatment
facilities was over RMB13 million with designed processing capacity of 1500t/d and adopted the
treatment process of "Pre-treatment + Hydrolysis acidification tank + Facultative tank + Aerobic pool
+ Secondary sedimentation" and the sewage after treatment was discharged through the municipal
pipeline network into Shaoguan Second Sewage Treatment Plant (韶关市第二污水处理厂 ). In respect
of exhaust gas treatment biomass boilers were all replaced by gas boilers. In respect of control of noise
pollution RMB100000 was invested to construct noise segregation wall to reduce noise pollution.Livzon The "Three Simultaneous" system was strictly implemented by the company for the treatment of "Three
Pharmaceutical Wastes" by collecting and treating the "Three Wastes" effectively. For wastewater: an investment of over
Factory RMB10 million was made for phase I and phase II sewage treatment station with designed processing
capacity of 1000t/d which adopted the CASS process for phase I and the AO 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 uses the boilers as backups
greatly reducing exhaust gas emissions. The waste gas of the sewage treatment stations is treated by a
combination of first-level spray towers UV photoion equipment and second-level spray towers.
41(Cont.)
Ningxia Through strict enforcement of the "Three Simultaneous" system the "Three Wastes" were collected
Pharmaceutical and treated effectively. The designed total processing capacity of sewage treatment was 7500m3/d
(including one plant with capacity of 5000m3/d and one plant with capacity of 2500m3/d) and the
actual total treatment amount was 3100m3/d. After the wastewater had reached the standard stipulated
in the pollutant discharge license it would be discharged through the sewage pipeline network in
the industrial park to Xin'an Company. The current treatment process for boiler flue gas adopted the
technical processes of "Furnace combustion blended with limestone powder + bag filter + water film
scrubber + alkali solution desulphurization + spray defogging". With effect from January 2018 thestandard of special emission limit under the Emission Standard for Boiler Atmospheric Pollutants (《 锅炉 大 气 污 染 物 排 放 标 准 》) (GB13271-2014) was implemented. In July 2019 the upgrading and
transformation work for boiler exhaust gas treatment facilities was completed which further stabilized
the treatment effects of particulate matter. In 2020 a cover was installed to the sewage tank of 201-2
workshop to centralize the collection of exhaust gases for treatment; one spare exhaust gas collection
fan was installed in the pre-aeration tank of the sewage workshop; exhaust gases from materials tanks
in 203-1 workshop were centralized for collection and treatment; the gas inlet pipes in 202 workshop
which are used for exhaust gas entering the boiler for combustion were replaced and 1000 trees were
newly planted for greening project; while one set of exhaust gas treatment facility was installed to both
102 and 103 fermentation workshops; the exhaust gas treatment facility in 101 fermentation workshop
was upgraded and transformed. In the first half of 2021 the installation and use of exhaust gas collection
and treatment facilities for hazardous waste stations were completed and doramectin fermentation
exhaust gas of 101 fermentation workshop was introduced into the specific exhaust gas treatment facility
for doramectin fermentation exhaust gas of 102 fermentation workshop and a primary sedimentation
tank was added to the sewage treatment station to lead out exhaust gas for treatment.Jiaozuo Hecheng The "Three Wastes" were collected and treated effectively in strict compliance with the "Three
Simultaneous" system. The designed sewage treatment capacity was 3000t/d the treatment process of
"hydrolytic acidification tank + anaerobic UASB + aerobic pool + materialized treatment" was adopted
the treated wastewater would be discharged through the municipal pipeline network into the sewage
treatment plant of Xiuwu Branch of Kangda Water Co. Ltd. (康达水务有限公司修武分公司 ). The
sewage treatment facilities were under normal operation with compliant discharge. For exhaust gas:
exhaust gases generated from technical process in the production zone would be collected and treated by
adopting two sets of processes of "water spray + active carbon and -20 ℃ condensation + water spray +
active carbon" and then discharged after reaching the required standard. For solid waste: hazardous solid
wastes would be stored in the hazardous waste station constructed in compliance with the requirements
of "Three Protections" (protection against leaks erosion and rain) according to the requirements underthe (Pilot) Guidelines for Standardized Management of Hazardous Waste in Henan Province (《河南省危险废物规范化管理工作指南 (试行 )) for hazardous wastes. The company entered into a hazardous
waste disposal agreement with Henan Zhonghuanxin Environmental Technology Co. Ltd. (河 南 中 环
信环保科技有限公司 ) for disposal of hazardous wastes on regular basis. Other general solid wastes
would be disposed of in compliance with the relevant requirements.Shanghai Livzon The company designed and built a sewage treatment station with a processing capacity of 200m3/d in
2018. The company's sewage was treated by such sewage treatment station and then entered the park's
sewage treatment station for secondary treatment and finally discharged into the municipal pipeline
network. The company had the hazardous waste station in compliance with the requirements of "Three
Preventions" to store hazardous waste and appointed a qualified company for compliant disposal.The company's main exhaust outlets were treated with activated carbon adsorption and filtration and
the activated carbon was replaced every half a year to ensure that the exhaust gas emission met the
standards.42Interim Report2021
3. Environmental impact assessment of construction projects and other environmental protection administrative licensing
√Applicable □N/A
Name of company Environmental impact assessment of construction projects and other environmental protection
or subsidiary administrative licensing
Jiaozuo Joincare In November 2005 7-ACA production line with annual production capacity of 1000 tonnes through
enzymatic process started construction in two phases; environmental protection inspection and
acceptance (Yu Huan Bao Yan [2009] No. 57) was passed in Phase I on 10 August 2009; environmental
protection inspection and acceptance (Yu Huan Ping Yan [2011] No. 44) was passed in Phase II
on 2 November 2011. Thymidine production line with annual production capacity of 600 tonnes
mycophenolic acid production line with annual production capacity of 300 tonnes declomycin
production line with annual production capacity of 200 tonnes and BO production line with annual
production capacity of 300 tonnes were put into construction in 2016 listed in Jiaozuo Municipal
Catalogue of Reconstructed and Improved Illegal Construction Projects subject to environmental impact
assessment and filed with the Ecological Environment Bureau of Jiaozuo City.The Approval of Environmental Impact Report on Comprehensive Recovery and Technical
Transformation and Upgrading Project of Waste Liquid for Jiaozuo Joincare Pharmaceutical Industry
Co. Ltd. (Jiao Huan Shen [2019] No. 13) was granted on 14 November 2019; the Approval of
Environmental Impact Report on 4-AA High-quality Project of Jiaozuo Joincare Pharmaceutical
Industry Co. Ltd. with Annual Production Capacity of 1000t through Enzymatic Process (annual
production capacity of 200 tonnes in phase I) (Jiao Huan Shen [2019] No. 14) was granted on 14
November 2019. Independent acceptance of comprehensive recovery upgrading and transformation
project of waste liquid was completed in June 2020. Independent acceptance of 4-AA project was
completed in October 2020; Approval of Environmental Impact Report on Technical Transformation
Project of Feed Additive Vitamin B2 with Annual Production Capacity of 700 Tonnes (Ma Huan Shen
[2020] No. 18) was granted in August 2020.Change and extension of pollutant discharge license were completed by Jiaozuo Joincare on 19
December 2020.Taitai There was no such project in the first half of 2021.Pharmaceutical
Haibin Pharma Approval of Environmental Impact Report (Shen Yan Huan Pi [2019] No. 80024) was granted on 21
November 2019.Xinxiang Haibin Approval of Environmental Impact Report on 20 Tonnes/Year Meropenem Pharmaceutical Intermediate
Project (Yu Huan Jian [2005] No. 84) Opinions on Environmental Protection Inspection and Acceptance
for 20 Tonnes/Year Meropenem Pharmaceutical Intermediate F9 Project (Yu Huan Bao Yan [2008]
No. 89) Approval of Environmental Impact Report on 100 Tonnes/Year Meropenem Pharmaceutical
Intermediate Expansion Project (Yu Huan Shen [2014] No. 564) Independent acceptance of Approval of
Environmental Impact Report on 100 Tonnes/Year Meropenem Pharmaceutical Intermediate Expansion
Project on 24 March 2019 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).
43(Cont.)
Fuzhou Fuxing The "Environmental Impact Report on Product Upgrading Project of Livzon Group Fuzhou FuxingPharmaceutical Co. Ltd. (《丽珠集团福州福兴医药有限公司产品升级改造项目环境影响报告书 》)" was approved on 7 March 2017; and environmental protection inspection and acceptance upon
completion of construction was passed on 25 November 2017. The "Environmental Impact Report
on the Expansion Project for Production of 20 Tonnes of Paromomycin 2 Tonnes of Telavancin 1.8
Tonnes of Pentostatin 3 Tonnes of Daptomycin 3 Tonnes of Teicoplanin 0.3 Million and 1 Billion ofKanamycin Monosulfate and 2 Tonnes of Milbemycin Oxime per Year (《 年 产 巴 龙 霉 素20吨、 特拉万星2吨、喷司他汀1.8吨、达托霉素3吨、替考拉宁3吨、单硫酸卡那霉素30万十亿、米尔贝肟2吨扩建项目环境影响报告书》)" of the company was approved on 24 July 2018; and the
phased inspection and acceptance was passed for production of 3 tonnes of Daptomycin and 2 tonnes
of Milbemycin Oxime on 12 October 2019. The "Environmental Impact Report on the Project forAnnual Production of 1000 Tonnes of Colistin Premix (《年产粘杆菌素预混剂1000吨项目环境影响报告表》)" of the company was approved on 27 November 2018; and the inspection and acceptance
was passed on 9 May 2019. The "Environmental Impact Report of Livzon Group Fuzhou Fuxing
Pharmaceutical Co. Ltd. on the Expansion Project for Annual Output of 10 tonnes of Pasiniazid 2
tonnes of Polymyxin 400Kg of Oritavancin 360 tonnes of Alumina 6 tonnes of Doramectin and 6
tonnes of Tobramycin" was approved on 10 June 2019 and had passed the phased (6-tonne tobramycin)
acceptance on 28 October 2020; the "Environmental Impact Report on the Phase II High-end Antibiotics
Project of Livzon Group Fuzhou Fuxing Pharmaceutical Co. Ltd." was approved on 18 March 2020
and had passed the phased (0.15-tonne rapamycin) acceptance on 31 October 2020. In the first half
of 2021 the preparation of the "Environmental Impact Report on the Phase III High-end Antibiotics
Project of Livzon Group Fuzhou Fuxing Pharmaceutical Co. Ltd." was in process. The company strictly
implements the "Three Simultaneous" system and takes environmental protection measures required
for environmental assessment with the environmental protection facilities under normal operation.Approval was granted for the application of a new national pollutant discharge license on 27 December
2017 and the renewal of the national pollutant discharge license was completed in December 2020. The
company has been discharging pollutants in strict compliance with the licensing and administrative
requirements.Xinbeijiang The "Environmental Impact Report on Current Status of Projects of Livzon Group XinbeijiangPharmaceutical Pharmaceutical Manufacturing Inc. (《丽珠集团新北江制药股份有限公司项目现状环境影响报 告 书 》)" was approved and filed on 6 December 2016; with strict enforcement of the "Three
Simultaneous" system and implementation of the environmental protection measures required under
the environmental impact assessment the environmental protection facilities have been functioning
properly. On 29 December 2017 approval was granted for the application of a new national pollutant
discharge license and the work for changing and renewing the pollutant discharge license was completed
in December 2020. The environment protection policies were strictly enforced.44Interim Report2021
(Cont.)
Livzon Hecheng Environmental Impact Assessment of Construction Projects and Other Environmental Protection
Administrative Licensing: The Environmental Impact Assessment Report on Current Status of the
Product Structure and Production Capacity Adjustment Project of Zhuhai FTZ Livzon HechengPharmaceutical 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. 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. After
being approved of the application for a new national pollutant discharge license on 8 December 2017
the company strictly followed the licensing requirements for pollutant emission and strictly complied
with the administrative requirements. The inspection and acceptance for clean production was approved
on 21 December 2018. The integrated treatment on VOCs passed the "one policy for one enterprise"
inspection and acceptance in November 2020. Change of pollutant discharge license was completed in
December 2019. In July 2020 the self-monitoring program for pollutant discharge licenses was revised
in accordance with the Technical Standards for Application and Issuance of Pollutant Discharge Licensefor the Pharmaceutical Industry–Active Pharmaceutical Ingredient Manufacturing (《排污许可证申请与核发技术规范 (制药工业 -原料药制造 )》) to strictly comply with the administrative requirements.Gutian Fuxing The company passed the environmental impact assessment on 30 June 1999 and the inspection and
acceptance upon completion of construction carried out by Environmental Protection Bureau of
Fujian Province on 5 June 2000. The company re-prepared its post-environmental impact assessment
report in 2019 and passed the inspection and acceptance carried out by experts on 11 June 2019.The company strictly enforced the "Three Simultaneous" system and implemented environmental
protection measures as required under environmental impact assessment with normal operation of the
environmental protection facilities. After passing the application for a new pollutant discharge license
from State authorities on 29 December 2017 the company strictly followed the licensing requirements
for emissions of pollutants and strictly complied with the administrative requirements. The procedure for
replacing the pollutant discharge license was completed in November 2020.Livzon Limin The Environmental Impact Report on the Technological Reform Project for the R&D Center of LivzonGroup 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 and the "Three Simultaneous" system was strictly
enforced to implement the environmental protection measures required under the environmental impact
assessment with normal operation of the environmental protection facilities. A new version of pollutant
discharge license was obtained on 10 December 2019. 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.Livzon The Environmental Impact Assessment Report on Expansion Project for Production Line of
Pharmaceutical Recombinant Human Chorionic Gonadotropin for Injection of Livzon Group Livzon Pharmaceutical
Factory Factory (丽珠集团丽珠制药厂注射用重组人绒促性素生产线扩建项目环境影响评价报告书 )
was approved in March 2018; the Environmental Impact Assessment Report on Expansion Project for
Sewage Treatment Stations of Livzon Group Livzon Pharmaceutical Factory (丽珠集团丽珠制药厂
污水处理站扩建项目环境影响评价报告表 ) was approved in April 2019; the Environmental Impact
Assessment Report on Expansion Project for Production Line of lyophilized Powder Injection of Livzon
Group Livzon Pharmaceutical Factory (丽珠集团丽珠制药厂冻干粉针剂生产线扩建项目环境影
响 评 价 报 告 表 ) was approved in November 2020 the Environmental Impact Assessment Report on
V01 Industrialization Project of Livzon Group Livzon Pharmaceutical Factory (丽 珠 集 团 丽 珠 制 药
厂V01产业化项目环境影响报告书 ) was approved in April 2021. The company will strictly enforce
the "Three-simultaneous" system to implement the environmental protection measures as required by
environmental assessment.
45(Cont.)
Ningxia The Environmental Impact Report on the Construction Project for Production of BiopharmaceuticalsPharmaceutical by Livzon Group Ningxia Fuxing Pharmaceutical Manufacturing Co. Ltd. (《 丽 珠 集 团 宁 夏 福 兴制药有限公司生物医药生产建设项目环境影响报告书》) was approved by the Environmental
Protection Department of the Autonomous Region on 5 July 2012 and the environmental protection
inspection for completion conducted by the Environmental Protection Department was passed on 8
May 2015. In April 2016 approval was obtained from Pingluo County for expansion and reconstruction
of the production line with annual production capacity of 120 tonnes for Coenzyme Q10 products
and completion inspection conducted by the Environmental Protection Bureau of Pingluo County was
passed in March 2017. The Environmental Impact Report on the Construction Project for Production
of Biopharmaceuticals by Livzon Group Ningxia Xinbeijiang Pharmaceutical Manufacturing Co. Ltd.(《丽珠集团宁夏新北江制药有限公司生物医药生产建设项目环境影响报告书》) was approved
on 5 July 2012 and the environmental protection inspection for completion was passed on 30 November
2015. In April 2016 approval was granted by the Environmental Protection Bureau of Pingluo County
for expansion and reconstruction of the production line with annual production capacity of 360 tonnes
of Hydrochloride Lincomycin (盐酸林可霉素 ) products and completion inspection conducted by the
Environmental Protection Bureau of Pingluo County was passed in March 2017. In December 2018
approval was granted by the Environmental Protection Bureau of Pingluo County for the construction
project of extraction workshop with annual production capacity of 210 tonnes of mycophenolic acid
and 3 tonnes of doramectin the environmental protection inspection for completion was passed in
May 2019. On 30 December 2019 approval in respect of the environmental impact assessment for the
construction of the project with additional annual production capacity of 160 tonnes of Mevastatin (美
伐 他 汀 ) and 120 tonnes of Lovastatin (洛 伐 他 汀 ) was granted by Ningxia Pingluo Industrial Park
Management Committee. The demolition and inspection and acceptance of a 20t/h circulating fluidized
bed coal-fired boiler of Livzon Group Ningxia Xinbeijiang Pharmaceutical Manufacturing Co. Ltd.(丽珠集团宁夏新北江制药有限公司 ) was completed. The expert review for the environmental
improvement project plan for 2019 of Livzon Group (Ningxia) Pharmaceutical Manufacturing Co. Ltd.(丽珠集团 (宁夏 )制药有限公司 ) and the inspection and acceptance for the implementation thereof
(including self-inspection and acceptance and inspection and acceptance by government authorities)
were also completed. In June 2020 the environmental impact approval of the construction of the
doramectin (多 拉 菌 素 ) production line technical transformation project approved by the Ningxia
Pingluo Industrial Park Management Committee (宁夏平罗工业园区管委会 ) was passed. In July
2020 the environmental protection and acceptance inspection work for the completed projects with an
annual additional output of 160 tonnes of Mevastatin (美 伐 他 汀 ) and 120 tonnes of Lovastatin (洛
伐 他 汀 ) was completed and the outsourcing of recycling for mother solution of Phenylalanine (苯
丙 氨 酸 ) was approved. In December 2020 the work for replacing the pollutant discharge license and
the inspection and acceptance for clean production were completed. 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. The
environmental protection inspection for completion of doramectin expansion project was completed in
March 2021 and the evaluation of project work upon optimized disposal of the company's solid waste
is being carried out currently. 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.Jiaozuo Hecheng The Environmental Impact Assessment Report on Current Status of Jiaozuo Livzon Hecheng
Pharmaceutical Manufacturing Co. Ltd. (《焦作丽珠合成制药有限公司现状环境影响评估报告》)
was approved and filed on 15 December 2016 the "Three Simultaneous" system was strictly enforced
the environmental protection measures as required by environmental assessment were implemented
and the environmental protection facilities were in normal operation. The application for the national
pollutant discharge license was completed in December 2020 the environmental protection policies
were strictly enforced and various management measures were implemented.46Interim Report2021
(Cont.)
Shanghai Livzon The company passed the environmental assessment review of the Leuprorelin Acetate Microspheres
for Injection Industrialization Project (《注射用醋酸亮丙瑞林微球产业化项目》) on 11 October
2010 and obtained the approval for the Environmental Impact Report on Supporting Engineering andLaboratory Projects of Shanghai Livzon Pharmaceutical Manufacturing Co. Ltd. (《上海丽珠制药有限公司配套工程及实验室项目环境影响报告》) on 10 January 2020. 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 July 2020 the on-site inspection of the national pollutant discharge license was completed and the
pollutant discharge license was obtained.4. Environmental emergency contingency plan
√Applicable □N/A
Name of company Environmental emergency contingency plan
or subsidiary
Jiaozuo Joincare Revision of the environmental emergency contingency plan of Jiaozuo Joincare was completed in early
April 2019 and was filed with the Ecological Environment Bureau of Jiaozuo City on 16 April 2019.Revision of the environmental emergency contingency plan for hazardous waste pollution accident of
Jiaozuo Joincare was completed in December 2020.Taitai Review filing was completed in July 2020.Pharmaceutical
Haibin Pharma Emergency plan was revised in December 2020 and filed on 24 December 2020.Xinxiang Haibin Environmental Emergency Contingency Plan of Xinxiiang Haibin Pharmaceutical Co. Ltd. was
filed with the Ecological Environment Bureau on 14 February 2019 with the file reference number
4107712019001.Fuzhou Fuxing Pursuant to relevant regulations and requirements the "Environmental Emergency Contingency Plan ofLivzon Group Fuzhou Fuxing Pharmaceutical Co. Ltd. (《丽珠集团福州福兴医药有限公司突发环境事件应急预案》)" was prepared based on the principles of "Focusing on Prevention Aiming at Self-
help Centralized Command Division of Responsibility" which was approved on 1 November 2019
with the file reference number 350181-2019-039-M.After environmental emergency incidents occur immediate quick effective and orderly emergency
rescue actions will be taken to control and prevent accidents and the spread of contamination protect
the surrounding environment effectively and ensure the personal life and property safety of all
employees the company and the nearby communities. In accordance with the contents and requirements
of such plan the company provides trainings and drills for its employees to get them well-prepared
for environmental emergency incidents so that rescue actions could be taken in a timely manner
and incidents could be controlled effectively in a short period of time in case of any environmental
emergency incidents. In June 2021 the RTO power failure emergency drill was conducted.Xinbeijiang Pursuant to relevant regulations and requirements the "Environmental Emergency Contingency Plan ofPharmaceutical Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc. (《丽珠集团新北江制药股份有限公司突发环境事件应急预案》)" was prepared based on the principles of "Focusing on Prevention On-
alert all the time; Management by Classification Response by Tiers; Cooperation among Departments
Responsibility by Levels; Scientific Prevention and Efficient Disposal" which has been verified filed
and issued. Identification of environmental factors and sources of hazards and drills for emergency were
conducted internally in the company on regular basis. The environmental emergency contingency drill
was conducted in June 2021 to improve the operability thereof enhance the performance level of the
emergency rescue staff responsiveness of the rescue team as well as coordination and collaboration of
different tasks.
47(Cont.)
Livzon Hecheng Pursuant to relevant provisions and requirements the Environmental Emergency Contingency Plan ofZhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co. Ltd. (《珠海保税区丽珠合成制药有限公司突发环境事件应急预案》) was prepared based on the principles of "Focus on Prevention
Aim at Self-rescue Centralized Command and Division of Responsibility (预 防 为 主、 自 救 为主、 统 一 指 挥、 分 工 负 责 )" which has been approved for filing and formally announced with filereference number 440462-2019-001-M. Trainings on emergency events and disposal measures were
held regularly for employees to enable implementation of safety measures in a timely fast effective
and orderly manner to control and prevent the worsening of condition and pollution when encountering
any occurrence of environmental emergency cases so as to alleviate or eliminate the consequences
effectively and resume orderly production as soon as possible.Gutian Fuxing Pursuant to relevant provisions and requirements the Environmental Emergency Contingency Plan of
Gutian Fuxing Pharmaceutical Co. Ltd. (《古田福兴医药有限公司突发环境事件应急预案》) was
prepared based on the principles of "Focus on Prevention Aim at Self-rescue Centralised Command
and Division of Responsibility (预防为主、自救为主、统一指挥、分工负责 )". The contingency planwas approved in May 2017 with the file reference number 352200-2017-005-L. The second amendment
of the contingency plan was made in June 2020 which passed expert review and completed filing with
the filing number 350922-2020-002-M.According to the plan after environmental emergency incidents occur immediate quick effective
and orderly emergency rescue actions will be taken to control and prevent accidents and the spread
of contamination protect the surrounding environment effectively and ensure the personal life and
property safety of all employees the company and the nearby communities. In accordance with the
contents and requirements of such plan the company provides trainings and drills for its employees to
get them well-prepared for environmental emergency incidents so that rescue actions could be taken
in a timely manner and incidents could be controlled effectively in a short period of time in case of any
environmental emergency incidents.Livzon Limin 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 ContingencyPlan of Livzon Group Limin Pharmaceutical Manufacturing Factory (《丽珠集团利民制药厂突发环境 事 件 应 急 预 案 》) 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
with the file reference number LZLMZY-03 and the filing number 440203-2021-009-L. According
to the contingency plan identification of environmental factors and sources of hazards and drills for
emergency were conducted internally in the company on regular basis to improve the operability of the
contingency plan enhance the performance level of the emergency rescue staff responsiveness of the
rescue team as well as coordination and collaboration of different tasks.Livzon Pursuant to relevant regulations and requirements the Environmental Emergency Contingency Plan of
Pharmaceutical Livzon Group Livzon Pharmaceutical Factory (《丽珠集团丽珠制药厂突发环境事件应急预案》)
Factory was prepared by the company in 2018 and has been approved for filing approval and announced with
the filing number 440404-2018-016-L. Pursuant to the requirements of the Environmental Emergency
Contingency Plan it should be amended every three years and the contingency plan is currently being
updated. The drills on the emergency contingency plan were conducted on a regular basis to enhance
emergency response capabilities of staff so as to alleviate or eliminate the consequences effectively.48Interim Report2021
(Cont.)
Ningxia Due to business merger the original Environmental Emergency Contingency Plan of Livzon Group
Pharmaceutical Ningxia Fuxing Pharmaceutical Manufacturing Co. Ltd. (丽珠集团宁夏福兴制药有限公司突发环境
事件应急预案 ) and Environmental Emergency Contingency Plan of Livzon Group Ningxia Xinbeijiang
Pharmaceutical Manufacturing Co. Ltd. (丽珠集团宁夏新北江制药有限公司突发环境事件应急
预 案 ) were revised and combined into 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 ) which was reviewed filed and issued in May 2019 (filing reference number: 640221-
2019-005-II). Identification of environmental factors and sources of hazards and drills for emergency
were conducted internally in the company on regular basis in order to improve the operability of the
contingency plan and enhance the performance level of the emergency rescue staff responsiveness
of the rescue team as well as coordination and collaboration of different tasks. Reamendment of the
Environmental Emergency Contingency Plan was started in May 2021 and the amended plan has passed
expert review currently.Jiaozuo Hecheng The Environmental Emergency Contingency Plan of Jiaozuo Livzon Hecheng Pharmaceutical
Manufacturing Co. Ltd. (《焦作丽珠合成制药有限公司突发环境事件应急预案》) was prepared
in accordance with the relevant provisions and requirements and based on the principles of "Focusing
on Prevention On-alert all the time; Management by Classification Response by Tiers Cooperation
among Departments Responsibility by Levels; Scientific Prevention and Efficient Disposal". The
contingency plan was approved for announcement and filing in April 2021 (filing reference number:
4108042018005L). The Hazardous Waste Environmental Pollution Emergency Contingency Plan ofJiaozuo Livzon Hecheng Pharmaceutical Manufacturing Co. Ltd. (《焦作丽珠合成制药有限公司危险废物环境污染事故应急预案》) was compiled and was approved for filing in January 2018.Identification of environmental factors and sources of hazards and drills for emergency were conducted
internally in the company on regular basis in order to improve the operability of the contingency plan
and enhance the performance level of the emergency rescue staff responsiveness of the rescue team
as well as coordination and collaboration of different tasks. 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 ofJiaozuo Livzon Hecheng Pharmaceutical Manufacturing Co. Ltd. (《焦作丽珠合成制药有限公司危险废物环境污染事故应急预案》) to enhance the environmental protection knowledge of staff.Shanghai Livzon In January 2019 the Environmental Emergency Contingency Plan of Shanghai Livzon Pharmaceutical
Manufacturing Co. Ltd. (《上海丽珠制药有限公司突发环境事件应急预案》) was filed by the
company with the filing number 02-310115-2019-027-L. The company conducts drills and reviews of
the plan every year to improve its emergency response capabilities through regular training on the plan.5. Environmental self-monitoring program
√Applicable □N/A
Name of company Environmental self-monitoring program
or subsidiary
Jiaozuo Joincare As required by the self-monitoring program for pollutant discharge licenses Jiaozuo Joincare developed
the 2021 Self-monitoring Program at the beginning of 2021 and carried out self-monitoring according to
the program. Up to now Jiaozuo Joincare has completed the self-monitoring for the six months ended 30
June 2021.Taitai Wastewater was monitored once a quarter; boiler exhaust gas and plant boundary noise were monitored
Pharmaceutical once a year; exhaust gases generated from technical process was monitored once half a year; online
monitoring facilities of wastewater and boiler exhaust gas were additionally installed and functioning
well.
49(Cont.)
Haibin Pharma A third party is entrusted to conduct regular monitoring strictly in compliance with the relevant national
laws and regulations and local requirements and ensure the accuracy validity and authenticity of the
monitoring data. Online wastewater monitoring equipment was installed and connected to environmental
monitoring stations at municipal and district levels in accordance with environmental monitoring
technical standards. Data was promptly uploaded on the national monitoring platform.Xinxiang Haibin Exhaust gas and wastewater were monitored quarterly by the third party in accordance with the new
version of pollutant discharge license.Fuzhou Fuxing According to the relevant requirements of the "Measures for Self-Monitoring and Information
Disclosure by Enterprises subject to In tensive 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 "Technical
Guidelines for Self-Monitoring by Pollution Discharge Enterprises in the Fermentation Pharmaceutical
Industry (HJ882-2017) (《排污单位自行监测技术指南发酵类制药工业 (HJ882-2017)》)" the
company has completed the establishment of the self-monitoring program based on its own situation
in a timely manner and made the program available to the public after being examined by and filed
with Fuqing Environment Protection Bureau and Fuzhou Environment Protection Bureau. The analysis
methods of the monitoring program comply with the national environmental monitoring technical
standards and methods; the 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 2021
the volatile organic matter leak detection and repair (LDAR) work was finished. Information publicity
website: http://wryfb.fjemc.org.cn
Xinbeijiang According to the relevant requirements of the "Measures for Self-Monitoring and Information
Pharmaceutical Disclosure by Enterprises subject to Intensive Monitoring and Control of the S tate (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 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.Information publicity website: http://www.gdqy.gov.cn/xxgk/zzjg/zfjg/qyssthjj/xxgk/qyzzgk/content/
post_1376870.html
Livzon Hecheng Through self-monitoring the requirements under the Technical Standards for Application and Issuance
of Pollutant Discharge License for the Pharmaceutical Industry- Active Pharmaceutical IngredientManufacturing (HJ858.1-2017) (《排污许可证申请与核发技术规范制药工业 -原料药制造 (HJ858.1-2017)》) were strictly implemented and the verification and calibration of monitoring analyzing devices
were carried out in strict compliance with relevant provisions. Automated monitoring equipment was
installed according to the requirements of technical standards for environmental detection while online
monitoring equipment for COD ammonia nitrogen and PH level and online monitoring equipment for
non-methane hydrocarbons were installed and connected with the national development platform as
required.50Interim Report2021
(Cont.)
Gutian Fuxing According to the relevant requirements of the "Measures for Self-Monitoring and Information
Disclosure by Enterprises subject to Intensive Monitoring and Control of the State (Trial
Implementation) (《国家重点监控企业自行监测及信息公开办法 (试行 )》)" the company has
completed the establishment of the self-monitoring program based on its own situation in a timely
manner and made the program available to the public after being examined by and filed with Ningde
environment protection authority and Gutian County protection authority. The analysis methods of
the monitoring program comply with the national environmental monitoring technical standards
and methods; the 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 2021 a
qualified third party was entrusted to complete volatile organic matter leak detection and repair (LDAR)
and obtain a report. Information publicity website: http://wryfb.fjemc.org.cn
Livzon Limin An entity with national qualification on inspection was engaged to conduct monitoring strictly in
compliance with the relevant national laws and regulations and standards. By considering its own
specific conditions the company appointed the inspection party to carry out water pollutant detection
monitoring every quarter and boiler exhaust gas monitoring every month each time the monitoring
would be conducted strictly in compliance with the relevant national requirements to ensure the
accuracy validity and authenticity of the monitoring data. The installation and commissioning of
online monitoring equipment for COD ammonia nitrogen was completed and began to run officially
in December 2020 and COD and ammonia nitrogen were monitored every 2 hours. Online data should
be completed and filed to the Shaoguan Environmental Protection Bureau on a timely basis and the
relevant data would be announced to the public after being reviewed by and filing with the Shaoguan
Environmental Protection Bureau.Livzon An entity with national qualification on inspection was engaged to conduct monitoring strictly in
Pharmaceutical compliance with the relevant national laws and regulations and standards. By considering its own
Factory specific conditions the company appointed the inspection party to carry out monitoring on sewage and
waste gas every month each time the monitoring would be conducted strictly in compliance with the
relevant national requirements to ensure the accuracy validity and authenticity of the monitoring data.The installation and commissioning of the online sewage monitoring equipment was completed and it
was put into use at the beginning of 2021.Ningxia The company formulated the self-monitoring program for 2021 which was reviewed by and filed
Pharmaceutical with the Ecological Environment Bureau of Shizuishan City. Monthly and quarterly monitoring was
carried out strictly in accordance with the requirements of the program which focused primarily on
organized exhaust gas emission exhaust gas emission from boiler waste water discharge underground
water soil plant boundary unorganized environmental air noise and recycled water TOC and volatile
organic matter leak detection and repair (LDAR) work was carried out. The monitoring results would
be announced to the public through the System of National Pollution Sources Monitoring Information
Management and Sharing Platform (《全国污染源监测信息管理与共享平台系统》) and the Systemof Self-monitoring Information Open Platform for Enterprises in Shizuishan (《 石嘴山市企业自行监 测 信 息 公 开 平 台 系 统 》). The automated monitoring equipment was connected to the network
of the competent environmental protection authority and passed the inspection conducted by the
competent environmental protection authority. The automated monitoring equipment was sound and
the monitoring information was accurate valid and authentic. In the first half of 2021 the RTO exhaust
VOCs online monitoring equipment was installed and put into use.
51(Cont.)
Jiaozuo Hecheng According to the relevant requirements of the Measures for Self-Monitoring and Information Disclosureby the Enterprises subject to Intensive Monitoring and Control of the State (Trial Implementation) (《国家重点监控企业自行监测及信息公开办法 (试行 )》) the company implemented and completed the
self-monitoring program based on its own situation in a timely manner and made the program available
to the public after being examined by and filed with relevant competent environmental protection
authorities. The analysis methods of the monitoring program comply with the national environmental
monitoring technical standards and methods; the monitoring and analysis instruments have been
examined and calibrated in strict compliance with the relevant national requirements; the automated
monitoring equipment has been installed in accordance with the requirement of environmental
assessment technical standards. In 2018 the online water quality monitoring equipment had passed the
inspection and acceptance conducted by the competent environmental protection authorities and the
connection between the online data and the municipal platform of Jiaozuo City was completed; the leak
detection and repair (LDAR) of volatile organic compounds had commenced in the first half of 2021
and the automated monitoring equipment was under normal operation and the data was accurate valid
and authentic.Shanghai Livzon In accordance with the General Rules for the Self-Monitoring Technical Guidelines for Pollutant
Discharge Units (《排污单位自行监测技术指南 总则》) (HJ 819-2017) and the relevant requirements
(including those on pollution discharge license) the company organized self-monitoring and information
disclosure of the pollutants it has discharged and formulated the Self-monitoring Program. In 2021 the
company monitors main exhaust gas outlets once a month common discharge outlets once half a year
noise once every quarter and sewage once a month. The monitoring items and frequency shall meet the
requirements of the pollutant discharge license.6. Administrative penalties imposed for environmental issues during the Reporting Period
□Applicable √N/A
7. Other environmental information to be disclosed
□Applicable √N/A
(II) Description of environmental protection conditions of companies except for key pollutant discharge units
√Applicable □ N/A
The remaining subsidiaries of the Company strictly and thoroughly implemented and obeyed the Environmental Protection
Law of the People's Republic of China Cleaner Production Law of the People's Republic of China and other environmental
protection and safe production laws and regulations constantly increased investment in environmental protection continuously
invested in energy conservation and consumption reduction projects actively promoted cleaner production improved
comprehensive utilization efficiency of resources and reduced and avoided pollutants so as to ensure sound mind and body of
employees and try to realize coordination of economic environmental and social benefits and sustainable development.1. Administrative penalties imposed for environmental issues
□ Applicable √N/A
2. Refer to other environmental information disclosed by key pollutant discharge units
□ Applicable √N/A
3. Reason for non-disclosure of other environmental information
□ Applicable √N/A
(III) Description of subsequent progress or change in the content of environmental information disclosed during the
Reporting Period
□ Applicable √N/A
52Interim Report2021
(IV) Relevant information contributing to ecological protection pollution prevention and control and fulfillment of
environmental responsibilities
√ Applicable □ N/A
Name of company Relevant information contributing to ecological protection pollution prevention and control and
or subsidiary fulfillment of environmental responsibilities
Jiaozuo Joincare External audit of energy system LDAR environmental protection inspection and acceptance of vitamin
B2 project and green development evaluation of the pharmaceutical industry in Henan Province were
completed; the result of being No. 2 in the ranking of enterprises in the pharmaceutical industry in
Henan Province was achieved; the verification of carbon emission and self-declaration of national green
enterprises were completed.Taitai Creation of environmental safety standardization management of hazardous waste standardization
Pharmaceutical cooperation with the Ecological Environment Department or its entrusted third-party evaluation agency
to carry out the safety evaluation and 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 Ecological Environment Department in the first half.Haibin Pharma Cover and sealing were added to CASS tank in the wastewater treatment station and closed waste gas
was collected and treated so as to effectively reduce odor spillover; certain consumables for waste gas
treatment were replaced so as to ensure treatment effect.Xinxiang Haibin Automatic construction was carried out; green development evaluation of the pharmaceutical industry
in Henan Province was completed; the result of being No. 4 in the pharmaceutical industry of Henan
Province was achieved; recycling pretreatment and reuse of waste gas membrane were completed.The Letter of Undertaking for Environmental Protection was submitted by the company to the
Administrative Department.Fuzhou Fuxing LDAR detection of hidden hazards in soil audit of energy system and verification of greenhouse gas
emission were completed.Xinbeijiang LDAR was completed; unorganized emission of VOCs was reduced; certification audit of energy
Pharmaceutical management system was completed; a series of waste gas and noise control and improvement measures
such as reconstruction of certain sewage tanks installation of noise segregation wall on the cooling
tower and installation of the inlet muffler on the boiler were taken to effectively reduce impacts of
waste gas emission and noise on the surrounding environment.Livzon Hecheng LDAR was completed; unorganized emission of organic gas was reduced; hazardous waste was
entrusted to qualified units for treatment with compliance treatment rate of 100%; online monitoring
equipment of waste gas was increased to conduct real-time monitoring of waste gas emissions. The self-
monitoring plan was completed and environmental responsibilities were fulfilled as required.Gutian Fuxing LDAR was completed; cover and sealing were added to sewage treatment regulating pool; waste gas
was collected and treated so as to avoid odor spillover; HV frame was replaced in the sewage treatment
workshop; water content of sludge was reduced; total volume of sludge was reduced; sludge generated
was entrusted to qualified units for treatment.Livzon Limin Solid preparations and steam equipment in high capacity workshop were renovated; steam usage was
reduced; locations of different drugs in the overhead cabin and TCM cabin were adjusted; storage
energy consumption of the two cabins was reduced; three idle water pumps of the factory were used;
post-treated waste water was used for watering flowers trees and grass in the factory in three lines.Livzon Installation and debugging of online monitoring equipment were completed; qualified third party was
Pharmaceutical entrusted to detect waste water and waste gas; compliant treatment of hazardous wastes was made; the
Factory risk of environmental pollution was reduced.Ningxia LDAR was completed; field check of "one policy for one enterprise" for corporate VOC governance
Pharmaceutical was carried out in cooperation with leaders and experts of the Municipal Environmental Protection
Department; installation of online monitoring equipment for RTO exhaust and VOCs was completed;
installation of treatment facilities for exhaust gas from hazardous waste stations primary sedimentation
tank at the sewage treatment station and 101 doramectin fermentation workshop was completed.
53(Cont.)
Jiaozuo Hecheng Automatic construction was carried out; LDAR was completed; green development evaluation
of the pharmaceutical industry in Henan Province was completed; the result of being No. 8 in the
pharmaceutical industry of Henan Province was achieved; treated waste gas was replaced to ensure the
treatment effect.Shanghai Livzon The Company discharged pollutants in strict compliance with standards set out in the pollution
discharge license obtained developed the annual self-monitoring program for pollution discharge at
the beginning of 2021 and implemented it and successfully passed the interim review of corporate
pollution discharge by the third party entrusted by government departments without violation of laws
and regulations. Meanwhile the Company further strengthened the daily monitoring of operation of
waste gas treatment facilities and waste water treatment stations and ensured the effective operation of
equipment and facilities.(V) Measures for carbon emission reduction and effect during the Reporting Period
√ Applicable □ N/A
Name of company Measures for carbon emission reduction and effect
or subsidiary
Jiaozuo Joincare The project for hot water from marsh gas was fully used for approval and tendering; it was expected
to save 17.5 tonnes of steam every day after the project was completed; the production process was
adjusted in coordination with the production workshop so as to emit organic waste gas in stable
concentration and reduce natural gas consumption; the natural gas rather than the diesel was used as
the heat source for cooking in the canteen of the company so as to reduce carbon content of unit heat
value and carbon emission. The fermentation exhaust gas treatment fan was changed to be subject
to frequency conversion control so as to reduce power consumption and the concept of energy
conservation and consumption reduction was publicized in the company; all employees were called on
to "save every drop of water and every kilowatt hour".Taitai Lighting facilities in the park were replaced with "energy-saving lamps" in response to the call of the
Pharmaceutical Municipal Government producing prominent energy-saving effect; the high-power motor in the factory
was replaced with the efficient energy-saving motor in accordance with energy-saving requirements of
the government and frequency conversion devices were installed to maximize energy conservation. The
efficient low-nitrogen boiler was replaced in response to the call of "Green Shenzhen"; employees were
organized to learn energy conservation knowledge so as to achieve energy conservation and emission
reduction in routine work by turning off lamps and machines timely.Haibin Pharma 400T/h cooling tower was replaced; the new cooling tower could save 33% of energy and reduce 10t
CO 2 e every year;
6 sets of high-power water pumps in the water pump room were replaced with more energy-saving
water pumps that could reduce 23t CO2e every year.Xinxiang Haibin The Company updated reciprocating vacuum pumps that were likely to leak gas to screw vacuum
pumps (30 sets) and liquid ring pumps which greatly reduced unorganized odor emission. Membrane
recycling treatment facilities were built for waste gas recycling with annual economic benefit of RMB3
million.Fuzhou Fuxing The Company introduced PV power generation to reduce power consumption. Energy-saving
renovation of high energy consumption pumps were carried out effectively reducing energy
consumption. The Company vigorously publicized energy conservation and consumption reduction and
called on employees to promptly turn off lamps air conditioners and computers in routine work.54Interim Report2021
(Cont.)
Xinbeijiang Certain cooling towers were renovated; fans of cooling towers were driven by hydrodynamic kinetic
Pharmaceutical energy rather than motors achieving the same cooling effect while reducing power consumption; 80m3
air compressor was renovated and added a heat exchanger so that boiler soft water was preheated
through running heat of air compressor and boiler inlet temperature was raised effectively reducing the
consumption of natural gas ; inner wall of MVR equipment was cleaned by a professional third party
making the evaporation rate of sugar water for MVR equipment increase by approximately 40% so as to
effectively reduce the run time of MVR equipment and greatly reduce power consumption.Livzon Hecheng Water cooling units were maintained and renovated so as to use energy in a more reasonable manner;
power consumption for production was saved through a more reasonable production scheduling of the
Production Department; the natural gas was used as the fuel for the canteen and boiler of the company.All employees in the factory were called on to save electricity by turning on lamps and air conditioners
after work and limit the minimum temperature of air conditioners; green travel was promoted;
employees were encouraged to take public transportation for business trip; commuting buses were
provided for employees.Gutian Fuxing 4 sets of air compressors and a set of water cooling unit were replaced to reduce power consumption; all
employees were called on to "save every drop of water and every kilowatt hour" by turning off lamps
and shutting down equipment after work.Livzon Limin The energy conservation and emission reduction system of the factory was modified and improved;
it was encouraged to turn off air conditioners 0.5h earlier every day in the office area; quantities and
operating parameters of compressor in QC air conditioning system were adjusted so as to reduce power
consumption; number of pneumatic valves at the water outlet of activated carbon for small-volume
injection workshop was increased so that the capacity of water purification machine was improved; the
water supply network in the living quarter was renovated; awareness of water and power conservation
of employees was enhanced so as to achieve energy conservation and emission reduction in routine life
and work.Livzon Incandescent light bulbs were replaced with LED lamps to reduce power consumption. PV inverter
Pharmaceutical cabinets and roof PV modules were renovated which improved PV power generation efficiency
Factory and could save about 600000 kilowatts per year. Outsourced steam was introduced to reduce boiler
combustion and save energy.Ningxia Phenylalanine concentration system was planned to be renovated pursuant to which the original triple
Pharmaceutical effect thickening system was replaced with MVR thickening system thus reducing energy consumption
by 50%. The boiler system was overhauled and maintained regularly so as to ensure efficient operation
of boiler body and desulfurization and dust removal facilities. Consumption of outsourced steam was
increased to reduce coal consumption.Jiaozuo Hecheng The production process was promptly adjusted in coordination with the workshop; activated carbon
in the activated carbon adsorption plant was replaced so as to try to emit organic waste gas in stable
concentration; steam condensate was changed for recycling so as to reduce carbon emission. Packaging
equipment of the company was changed to automatic packaging. Energy conservation and consumption
reduction were vigorously publicized in the company; all employees were called on to "save every drop
of water and every kilowatt hour".Shanghai Livzon The company further strengthened daily energy conservation management according to existing energy
conservation plan effectively enhanced energy conservation awareness of employees through inspection
and publicity and encouraged employees to develop the good habit of water and power conservation.Meanwhile the company improved more than 10% of peptide yield by optimizing peptide process so as
to reduce power consumption of unit product.55II Consolidation and expansion of achievements in poverty alleviation and rural revitalization
√ Applicable □ N/A
1. Industrial revitalization
The Company fully implements the spirit of the important instructions put forward by the CPC Central Committee and
the General Secretary. In accordance with the relevant requirements we establish the concept of "Astragalus Root (黄 芪 )
Industry" and adopt the model of "Company + Base" and "Company + Professional Cooperative" encouraging locals to
cultivate and process astragalus root and develop the astragalus root industry with reference to the local conditions to make it
a pillar industry for poverty relief in the long-term. The Company will explore the development of the featured astragalus root
industry to achieve poverty elimination and promote the construction of the "Chinese Medicine Ecological Base".During the Reporting Period Datong Livzon Qiyuan Medicine Co. Ltd. (大同丽珠芪源药材有限公司 ) ("Datong Livzon")
a subsidiary of the Company's controlling subsidiary Livzon Group has employed 30 local workers for the self-built base and
jointly constructed base which is expected to be increased to approximately 50 workers in the second half of 2021.2. Public welfare for chronic diseases
In order to respond positively to the call of national policy the Company and its controlling subsidiary Livzon Group have
launched the "Public Welfare against Chronic Diseases (慢病公益项目 )" program by combining their own industrial advantages.The program targets at hypertension hyperlipidemia cardiovascular and cerebrovascular diseases and drugs for treatment of
chronic diseases have been donated to remote areas including Pravastatin Capsules (普 伐 他 汀 钠 胶 囊 ) Amlodipine Besylate
Capsules (苯磺酸氨氯地平胶囊 ) Valsartan Capsules (缬沙坦胶囊 ) and Isosorbide Bononitrate Tablets (单硝酸异山梨酯
片 ) which could be worth millions of RMB. These drugs can really help families in remote areas make it convenient for patients
in the regions to take drugs nearby help the families with patients to alleviate medical pressures and provide timely assistance.Based on actual conditions the project regularly makes continuous drug donations to remote areas and helps the families with
patients in such regions.Since late 2018 onwards the Company and its controlling subsidiary Livzon Group carried out the "Public Welfare against
Chronic Diseases" program successively in the areas including Chaotian District of Guangyuan City in Sichuan Province
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 (山 西 ) Province Dongxiang
County and Tianzhu County in Gansu Province Xianghai national nature reserve in Jilin Province Chayu County in Tibet
Autonomous Region Macun District of Jiaozuo City in Henan Province and Huangshan District of Huangshan City in Anhui
Province in which some of the middle-aged and elderly patients with chronic diseases were also benefited as a result.As at 30 June 2021 there were a total of 13 agreements in relation to the Public Welfare Projects for Chronic Diseases among
which 12 were remote areas in need of help and 1 was natural reserve at state level and there were more than 5000 registered
people. In the second half of 2021 it is expected to donate drugs to areas including Hubei and Sichuan.3. Charitable projects for students
One of the education policies of the CPC and the state is to subsidize students in poverty to complete their studies which is vital
to talent training and social progress and is the common responsibility of the whole society. With the great support and help
of the National Medical Products Administration the Company has donated RMB900000 in total to poor college students in
Linquan County in three years since 2019 and shouldered its responsibility to the society. The student grant program is set by the
National Medical Products Administration for poor college students in Linquan County Fuyang City Anhui Province majoring in
pharmaceutical in colleges and universities. The grant standard is RMB5000 per undergraduate and RMB3000 per junior college
student for more than a hundred students. The program aims to improve the learning and living conditions of those students and
help them to better complete their studies so as to train more talents for the national pharmaceutical undertaking. The annual grant
of RMB300000 has been awarded. Up to now the grant of RMB900000 planned to be donated has been awarded.56Chapter 6
Major Events
I Fulfillment of undertakings
(I) Undertakings fulfilled during the Reporting Period or not yet fulfilled as at the end of the Reporting Period by the
parties to the undertakings such as the de facto controller shareholders related parties purchasers of the Company
and the Company
√ Applicable □ N/A
Commitment Commitment Subject Commitment Content Time and Whether Whether Specific Next plan
background Type time limit of there is commitment reasons should be
commitment a time is strictly for failure stated in case
limit for fulfilled in in timely of failure
fulfillment time fulfillment in timely
shall be given fulfillment
Commitment Settlement Baiyeyuan Shenzhen Baiyeyuan Investment Co. Ltd. a controlling shareholder of the Company 30 April 2001 No Yes - -
related to of horizontal undertook that it would not be directly or indirectly engaged in or cause subsidiaries long-term
initial public competition and branches under its control to be engaged in any business or activity constituting
offering horizontal competition with the Company after the founding of the Company including
but not limited to the research production and sales of any products that were the same
as or similar 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.Commitment Settlement Baiyeyuan Whereas the domestically listed foreign shares of Livzon Group a controlling 10 January No Yes - -
related to of horizontal de facto subsidiary of the Company would be listed on the Main Board of the Stock Exchange 2014 long-
initial public competition controllers of Hong Kong Limited in order to fully ensure smooth completion of the said event term
offering and persons and in compliance with relevant requirements of the Stock Exchange of Hong Kong
acting-in- Limited the controlling shareholders and de facto controller of the Company and
concert the Company entered into relevant undertakings with Livzon Group as follows: 1.and the The controlling shareholders de facto controller and persons acting-in-concert of the
Company Company the Company and its controlling subsidiaries except for Livzon Group did
not or would not be directly or indirectly engaged in any business that constituted
competitive relation or potential competitive relation with drug research development
production and sale businesses ("Restricted Businesses") of Livzon Group from time
to time. For the avoidance of doubt the scope of Restricted Businesses did not 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 controlling 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 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
controlling subsidiaries except for Livzon Group may accept the business opportunity
in accordance with the terms and conditions that were not superior to those offered to
Livzon Group;
57(Cont.)
Commitment Commitment Subject Commitment Content Time and Whether Whether Specific Next plan
background Type time limit of there is commitment reasons should be
commitment a time is strictly for failure stated in case
limit for fulfilled in in timely of failure
fulfillment time fulfillment in timely
shall be given fulfillment
3. If assets and businesses that directly or indirectly constituted competitive relation and
potential competitive relation with Restricted Businesses were intended to be transferred
sold leased licensed to use or otherwise transferred or allowed to use (these Sales
and Transfers) the controlling shareholders and de facto controllers of the Company
the Company and its controlling subsidiaries except for Livzon Group would provide
the right of first refusal for Livzon Group under the same condition. If Livzon Group
gave up the right of first refusal the controlling shareholders de facto controllers and
persons acting-in-concert of the Company the Company and its controlling subsidiaries
except for Livzon Group would carry out these Sales and Transfers to a third party in
accordance with main terms that were not superior to those offered to Livzon Group;
4. The controlling shareholders de facto controllers and persons acting-in-concert of
the Company the Company and its controlling subsidiaries except for Livzon Group
would not be engaged in or involved in any business that might damage the interests of
Livzon Group and other shareholders through the relation with shareholders of Livzon
Group or the identity of shareholders of Livzon Group; 5. The controlling shareholders
de facto controllers and persons acting-in-concert of the Company the Company and
its controlling subsidiaries except for Livzon Group would not or cause its contact
persons (except for Livzon Group) to directly or indirectly: (1) induce or attempt to
induce any director senior management or consultant of any member of Livzon Group
to terminate his/her employment with or to be an employee or consultant of Livzon
Group at any time (whichever is applicable) no matter if relevant acts of the person
were against the Employment Contract or Consultancy Agreement (if applicable); (2)
Within three years after any person terminated to be the director senior management or
consultant of any member of Livzon Group employ the person who had or might have
any confidentiality information or business secret in relation to Restricted Businesses
(except for the director senior management or consultant of the Company and/or its
controlling subsidiaries except for Livzon Group on the date of issuance of relevant letter
of undertaking); (3) Recruit or lobby any person carrying out business in any member of
Livzon Group accept orders or carry out business separately through any other person
or as any person firm or manager advisor consultant employee agent or shareholder
of any company (competitor of any member of Livzon Group) or lobby or persuade
the person making transaction with Livzon Group or negotiating with 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 controlling 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 controlling 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 Undertaking for
independent directors of Livzon Group; (3) They would allow Livzon Group to disclose
the decision on whether the controlling shareholders and de facto controllers of the
Company the Company and its controlling subsidiaries except for Livzon Group obeyed
and implemented the Letter of Undertaking reviewed by independent directors of Livzon
Group through the annual report or announcement;
58Interim Report2021
(Cont.)
Commitment Commitment Subject Commitment Content Time and Whether Whether Specific Next plan
background Type time limit of there is commitment reasons should be
commitment a time is strictly for failure stated in case
limit for fulfilled in in timely of failure
fulfillment time fulfillment in timely
shall be given fulfillment
(4) The controlling shareholders de facto controllers and persons acting-in-concert of
the Company the Company (and its controlling subsidiaries except for Livzon Group)
would provide Livzon Group with the Letter of 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
in relevant letter of undertaking from the date of issuance thereof by the Company (or
the Company's controlling subsidiaries except for Livzon Group or its contact persons).8. The said undertakings would terminate in case of the following circumstances
(whichever is earlier): (1) The controlling shareholders de facto controllers and persons
acting-in-concert of the Company the Company and any of its holding subsidiary
were not the controlling shareholders of Livzon Group any more; (2) Livzon Group
terminated the listing of its shares on the Hong Kong Stock Exchange and other overseas
stock exchanges (except that shares of Livzon Group stopped to be traded temporarily
for any reason).Commitment Others The Do not interfere in the operation and management activities of Livzon Group or From 8 March Yes Yes - -
related to Company encroach on the interests of Livzon Group 2016 to the date
seasoned and de of completion
offerings facto of remedial
controllers measures in
connection with
the non-public
offering of
Livzon Group
Commitment Others Baiyeyuan Pursuant to the Guiding Opinions on Matters Relating to the Dilution of Current Returns From 11 May Yes Yes - -
related to and the As a Result of Initial Public Offering Refinancing and Major Asset Restructuring 2017 to the date
seasoned de facto (Announcement of CSRC [2015] No. 31) the company shall undertake to adopt specific of completion
offerings controller remedial measures relating to dilution of current returns as a result of the company's initial of remedial
public offering refinancing of the listed company or major asset restructuring and shall measures in
fulfill such undertaking. Pursuant to relevant provisions of CSRC Zhu Baoguo the de connection
facto controller of Shenzhen Baiyeyuan Investment Co. Ltd. a controlling shareholder withrights issue
of the Company made the following undertakings in order to practically take remedial of Joincare
measures in relation to returns: 1. Do not intervene in the operation and management
activities or encroach on the interests of the company; 2. If CSRC issued other new
regulatory provisions on the remedial measures in relation to returns and the relevant
undertakings and the aforesaid undertakings did not conform to such provisions from
the date of issuance of the undertaking to the completion of IPO share allotment the
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 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.
59(Cont.)
Commitment Commitment Subject Commitment Content Time and Whether Whether Specific Next plan
background Type time limit of there is commitment reasons should be
commitment a time is strictly for failure stated in case
limit for fulfilled in in timely of failure
fulfillment time fulfillment in timely
shall be given fulfillment
Commitment Others The After the proceeds for issuance of allotment were in place the Company would use From the date Yes Yes - -
related to Company them according to contents disclosed in the announcement and carry out deposit in of proceeds
seasoned special account approval by specially-assigned person and special use of special funds for issuance
offerings in accordance with management measures for proceeds of the Company. The Board of of the Rights
the Company would regularly check the progress of projects invested with proceeds issue in place
issue a special report on deposit and use of proceeds engage an accounting firm during to the date of
the annual audit to issue an verification report on deposit and use of proceeds would completion of
be supervised by regulators and sponsors at any time and would not make major use of proceeds
investment asset purchase or similar financial investment though proceeds in disguise. for rights issue.Other Others The 1. While transferring tradable shares subject to selling restrictions held by the Company 17 December No Yes -
commitments Company in Livzon Group the Company shall strict obey relevant provisions of Guidelines of 2008 long-term
made to the Listed Companies on Transfer of Stock Shares Subject to Selling Restrictions ([2008]
medium No. 15); 2. If the Company had shares subject to selling restrictions held by it in Livzon
and small Group that were planned to be sold through the bid trading system of Shenzhen Stock
shareholders Exchange and reduced more than 5% shares within six months from the first share
of the reduction the Company would pass the Announcement on Sales disclosed by Livzon
Company Group within two trading days before the first share reduction.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 guarantee
□ Applicable √N/A
IV Audit of interim report
□ Applicable √N/A
V Information on changes and handling of matters related to non-standard audit opinions in
the annual report for the previous year
□ Applicable √N/A
VI Matters related to bankruptcy reorganization
□ Applicable √N/A
VII Material litigation and arbitration matters
□During the Reporting Period the Company had material litigation and arbitration matters.√During the Reporting Period the Company did not have any material litigation or arbitration matters.VIII Information on punishment and rectification of the listed company and its directors
supervisors senior management controlling shareholders and de facto controllers due to
violations of laws and regulations
□ Applicable √N/A
60Interim Report2021
IX Integrity of the Company and its controlling shareholders and de facto controllers during
the Reporting Period
□ Applicable √N/A
X Substantial connected transactions
(I) Connected transactions in the ordinary course of business
1. Matters that have been disclosed in the Provisional Announcements without progress or change in subsequent implementation
√ Applicable □ N/A
Overview Query index
Pursuant to the "Resolution on Connected Transactions in the See the Announcement on Resolutions Considered and
Ordinary Course of Business of the Controlling Subsidiaries Approved at the 44th Meeting of the 7th Session of the
of Jiaozuo Joincare and Jinguan Electric Power" considered Board of Joincare Pharmaceutical Group Industry Co.and approved at the 44th Meeting of the 7th Session of Ltd. (Lin 2021-033) and the Announcement of Joincare
the Board on 29 March 2021 Jiaozuo Joincare intended to Pharmaceutical Group Industry Co. Ltd. on the Connected
purchase no more than RMB200 million (inclusive) of steam Transactions in the Ordinary Course of Business of the
and power from Jinguan Electric Power in 2021 so as to Controlling Subsidiaries of Jiaozuo Joincare and Jinguan
satisfy the demands of Jiaozuo Joincare for steam and power Electric Power (Lin 2021-038) disclosed by the Company on
in the process of production and operation. The independent China Securities Journal Securities Times Securities Daily
directors of the Company gave prior approval opinions on the Shanghai Securities News and the website of Shanghai Stock
Resolution and gave opinions on the approval at the Board Exchange (www.sse.com.cn) on 31 March 2021 for details.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 RMB103613300.2. Matters that have been disclosed in the Provisional Announcements with progress or change in subsequent implementation
□ Applicable √N/A
3. Matters that have not been disclosed in the Provisional Announcements
□ Applicable √N/A
(II) Connected transactions relating to asset or share acquisition and sale
1. Matters that have been disclosed in the Provisional Announcements without progress or change in subsequent implementation
□ Applicable √N/A
2. Matters that have been disclosed in the Provisional Announcements with progress or change in subsequent implementation
□ Applicable √N/A
3. Matters that have not been disclosed in the Provisional Announcements
□ Applicable √N/A
4. In case of performance agreement information on performance realization during the Reporting Period shall be disclosed
□ Applicable √N/A
(III) Substantial connected transactions of joint outbound investment
1. Matters that have been disclosed in the Provisional Announcements without progress or change in subsequent implementation
□ Applicable √N/A
2. Matters that have been disclosed in the Provisional Announcements with progress or change in subsequent implementation
□ Applicable √N/A
3. Matters that have not been disclosed in the Provisional Announcements
□ Applicable √N/A
61(IV) Credits and debts with connected persons
1. Matters that have been disclosed in the Provisional Announcements without progress or change in subsequent implementation
□ Applicable √N/A
2. Matters that have been disclosed in the Provisional Announcements with progress or change in subsequent implementation
□Applicable √N/A
3. Matters that have not been disclosed in the Provisional Announcements
√ Applicable □N/A
Unit: Yuan Currency: RMB
Connected party Relationship Provision of funds for the listed company by
with Provision of funds for connected party connected party
connected Balance at Amount Balance at Balance at Amount Balance at
party the beginning occurred the end the beginning occurred the end
of the period of the period of the period of the period
Guangdong Blue Treasure Pharmaceutical Others 5092960.00 18941905.54 24034865.54 0.00 3148240.00 3148240.00
Co. Ltd. * (广东蓝宝制药有限公司 )
Shenzhen Jiekang Health Care Co. Ltd. * Others 18577246.63 0.00 18577246.63
(深圳市捷康保健有限公司)
Shenzhen City Youbao Technology Co. Others 0.00 478150.00 478150.00
Ltd. * (深圳市有宝科技有限公司 )
Sichuan Healthy Deer Hospital Others 153900.00 541193.60 695093.60
Management Co. Ltd. (四川健康阿鹿医
院管理有限公司 ) and its subsidiaries
Zhongshan Renhe Health Product Co. Ltd. Others 469895.78 0.00 469895.78
(中山市仁和保健品有限公司)
Zhuhai Liying Investment Management Others 1740994.29 100000.00 1840994.29
Partnership (Limited Partnership) (珠海丽
英投资管理合伙企业(有限合伙))
Zhuhai Sanmed Biotech Inc. * (珠海圣美 Others 15211200.00 -14840276.55 370923.45
生物诊断技术有限公司)
Zhuhai Sanmed Gene Diagnostics Ltd. * Others 49093.14 30969.96 80063.10
(珠海市圣美基因检测科技有限公司)
Zhuhai Zhong Hui Yuan Investment Others 10967767.26 -10967767.26 0.00 1466606.04 -1466606.04 0.00
Partnership (Limited Partnership) * (珠海
中汇源投资合伙企业(有限合伙))
Jiaozuo Jinguan Jiahua Electric Power Co. Associated 31681080.57 12124176.79 43805257.36
Ltd. * (焦作金冠嘉华电力有限公司 ) company
Total 52263057.10 -5715824.71 46547232.39 33147686.61 13805810.75 46953497.36
Reason for occurrence of credits and debts with connected During the Reporting Period the Company had normal operating fund transactions with connected
persons parties.Effect of credits and debts with connected persons on the The said credits and debts with connected persons are operating fund transactions; there was no non-
operating results and financial position of the Company operating use of funds of the Company by shareholders and connected parties
(V) Financial businesses among the Company related financial companies financial companies controlled by the
Company and connected parties
□ Applicable √N/A
(VI) Other substantial connected transactions
□ Applicable √N/A
(VII) Others
□ Applicable √N/A
62Interim Report2021
XI Material contracts and their enforcement
1. Custody contracting and leasing
□ Applicable √N/A
2. Major guarantees that have been performed and outstanding during the Reporting Period
√ Applicable □N/A
Unit:10000 Yuan Currency: RMB
External guarantees of the Company (excluding guarantees to its subsidiaries)
Guarantor Relationship Secured party Amount Date of Guarantee Guarantee Guarantee Performance Overdue Overdue Counter Related Connection
between the of guarantee Start date Maturity type completed or or not amount guarantee party relationship
Guarantor guarantee (date of date not of guarantee
and the listed signature of guarantee
company agreement)
Joincare Headquarters of Jinguan Electric 4800.00 23 February 23 February 23 February Joint liability No No 0 Yes Yes Associated
Group the Company Power 2021 2021 2022 guarantee company
Joincare Headquarters of Jinguan Electric 10000.00 3 March 3 March 25 February Joint liability No No 0 Yes Yes Associated
Group the Company Power 2021 2021 2022 guarantee company
Joincare Headquarters of Jinguan Electric 4000.00 13 July 2020 13 July 2020 13 July 2021 Joint liability No No 0 Yes Yes Associated
Group the Company Power guarantee company
Joincare Headquarters of Jinguan Electric 5000.00 20 July 2020 20 July 2020 20 July 2021 Joint liability No No 0 Yes Yes Associated
Group the Company Power guarantee company
Joincare Headquarters of Jinguan Electric 3200.00 17 17 17 Joint liability No No 0 Yes Yes Associated
Group the Company Power September September September guarantee company202020202021
Joincare Headquarters of Jinguan Electric 3000.00 12 October 12 October 12 October Joint liability No No 0 Yes Yes Associated
Group the Company Power 2020 2020 2021 guarantee company
Joincare Headquarters of Jinguan Electric 4000.00 15 October 15 October 15 October Joint liability No No 0 Yes Yes Associated
Group the Company Power 2020 2020 2021 guarantee company
Livzon Holding Sanmed 2900.00 24 December 1 January 6 May 2021 Joint liability Yes No 0 Yes Yes Associated
Group subsidiary Biotech 2020 2021 guarantee company
Total amount of guarantee occurred during the Reporting Period (excluding guarantees to subsidiaries) 17700.00
Total amount of guarantees occurred at the end of the Reporting Period (A) (excluding guarantees to 34000.00
subsidiaries)
Guarantees of the Company to its subsidiaries
Total amount of guarantees to its subsidiaries occurred during the Reporting Period 119385.55
Total amount of guarantees to its subsidiaries occurred at the end of the Reporting Period (B) 131446.77
Total amount of guarantees of the Company (including guarantees to its subsidiaries)
Total guaranteed amount (A+B) 165446.77
Total amount of guarantees occurred as a percentage of net assets of the Company (%) 8.53
Including:
Amount of guarantee provided to Shareholders de facto controllers and their related parties (C) 0
Amount of debt guarantee directly or indirectly provided to a guaranteed party with a gearing ratio 0
exceeding 70% (D)
Portion of total guaranteed amount exceeding 50% of net assets (E) 0
Total guaranteed amount of the above three items (C+D+E) 0
Statement on the contingent joint liability that might be assumed in connection with outstanding guarantee Not applicable
Statement on guarantees See X 5(4) Related party guarantees in the notes to financial statements for the said related
party guarantees in details
3. Other material contracts
□ Applicable √N/A
63XII Explanation of other significant events
√ Applicable □N/A
1. Use of proceeds
Pursuant to the Reply to the Approval of Share Allotment of Joincare Pharmaceutical Group Industry Co. Ltd. issued by
CSRC (Zheng Jian Xu Ke [2018] No. 1284) the Company allotted 365105066 shares to original shareholders. Total amount
of actual proceeds for the allotment was RMB1715993810.20; the deducted distribution expenses were RMB46253565.29;
the net amount of proceeds was RMB1669740244.91. As at 16 October 2018 the said proceeds were in place and validated
by the Capital Verification Report of Joincare Pharmaceutical Group Industry Co. Ltd. issued by Ruihua Certified Public
Accountants (Rui Hua Yan Zi [2018] No. 40060006).As at 30 June 2021 the use of proceeds was as follows:
Unit: 10000 Yuan
Project name Total amount Total amount Use of proceeds Balance of
of investment of proceeds as at 30 June proceeds as at 30
invested 2021 June 2021
Zhuhai Health Industry Base Construction Project 98066.84 76974.02 3386.29 73587.73
Haibin Pharma Pingshan Pharmaceutical 125471.35 90000.00 60103.83 29896.17
Industrialization Base Project
Total 223538.19 166974.02 63490.12 103483.90
Pursuant to the Resolution on the Temporary Replenishment of Working Capital with Idle Proceeds considered and approved
at the 37th Meeting of the 7th Session of the Board of the Company on 30 December 2020 it was agreed that the Company
temporarily replenished the working capital with no more than RMB900 million of idle proceeds from 1 January 2021 to 31
December 2021 so as to improve the use efficiency of proceeds and reduce financial expenses of the Company. Pursuant to the
Resolution on Cash Management with Idle Proceeds considered and approved it was agreed that the Company carried out cash
management with no more than RMB250 million of idle proceeds and purchased principal-guaranteed bank cash management
products with high security and good liquidity or deposit products with high revenues without prejudice to the implementation
of projects invested with proceeds and the use of proceeds. Duration of the said cash management was from 1 January 2021 to
31 December 2021; the funds may be used on revolving basis within the limit.As at the date of disclosure of the Report the Company repaid RMB40 million to the special account for proceeds in advance
on 9 February 2021; the balance for temporary replenishment of working capital was RMB860 million. The outstanding
balance for cash management with idle proceeds was RMB130 million.Pursuant to the Resolution on Extension of Certain Projects Invested with Proceeds considered and approved at the 44th
Meeting of the 7th Session of the Board of the Company on 29 March 2021 it was approved that the Company extended the
construction start time of Zhuhai Health Industry Base Construction Project to the second half of 2021; the specific start time
was up to the date of completion for construction of municipal supporting works on project construction site. The said matters
were required to be submitted to the General Meeting of the Company for consideration. See the Announcement of Joincare
Pharmaceutical Group Industry Co. Ltd. on Extension of Certain Projects Invested with Proceeds disclosed by the Company
on 31 March 2021 (Lin 2021-040) for details.Pursuant to the Resolution on Increase of Ways to Input Proceeds for Equity Investment Projects respectively considered
and approved at the 48th Meeting of the 7th Session of the Board and the 36th Meeting of the 7th Session of the Supervisory
Committee of the Company on 10 June 2021 it was approved that the Company input investment by "provision of interest-free
loans" to "Zhuhai Health Industry Base Construction Project" and "Haibin Pharma Pingshan Pharmaceutical Industrialization
Base Project". After adjustment ways to input proceeds to "Zhuhai Health Industry Base Construction Project" and "Haibin
Pharma Pingshan Pharmaceutical Industrialization Base Project" were to increase capital and provide interest-free loans in
which the amount of loans was limited to the net amount of proceeds not invested in equity investment projects as of the date
of loan. See the Announcement of Joincare Pharmaceutical Group Industry Co. Ltd. on Increase of Ways to Input Proceeds for
Equity Investment Projects disclosed by the Company on 11 June 2021 (Lin 2021-070) for details.64Interim Report2021
For details of deposit and actual use of proceeds for the six months ended on 30 June 2021 please refer to the Special Report
of Joincare Pharmaceutical Group Industry Co. Ltd. on Deposit and Actual Use of Proceeds for the Six Months Ended 30 June
2021 disclosed by the Company on 26 August 2021.2. Matters about share repurchase
Pursuant to the Resolution on Share Repurchase Scheme by Way of Centralized Price Bidding and other resolutions considered
and approved at the 41st Meeting of the 7th Session of the Board and the 2021 First Extraordinary General Meeting of the
Company on 9 February 2021 and 25 February 2021 it was approved that the Company repurchased company shares by
way of centralized price bidding with its own funds; the total amount of repurchase funds should be no less than RMB350
million (inclusive) and no more than RMB700 million (inclusive); the repurchase price should be no more than RMB20/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. See the Announcement of Joincare Pharmaceutical Group Industry Co. Ltd. on the
Share Repurchase Scheme by Way of Centralized Price Bidding (Lin 2021-016) and the Announcement on the Resolution of
the 2021 First Extraordinary General Meeting of Joincare Pharmaceutical Group Industry Co. Ltd. (Lin 2021-025) disclosed
by the Company on 10 February 2021 and 26 February 2021 for details. The Repurchase Report of Joincare Pharmaceutical
Group Industry Co. Ltd. on Share Repurchase by Way of Centralized Price Bidding (Lin 2021-027) was disclosed by the
Company on 5 March 2021.On 9 March 2021 the Company initially repurchased 680000 shares by way of centralized price bidding representing 0.03%
of total share capital of the Company. See the Announcement of Joincare Pharmaceutical Group Industry Co. Ltd. on Initial
Share Repurchase by Way of Centralized Price Bidding (Lin 2021-028) disclosed by the Company for details.As at 30 June 2021 the Company cumulatively repurchased 16199998 shares by way of centralized price bidding
representing 0.83% of total share capital of the Company (1958593217 shares); the maximum repurchase price was
RMB16.92/share; the minimum repurchase price was RMB11.73/share; the total amount paid was RMB229511600
(including commissions). See the Announcement of Joincare Pharmaceutical Group Industry Co. Ltd. on Progress in Share
Repurchase by Way of Centralized Price Bidding (Lin 2021-083) disclosed by the Company on 2 July 2021 for details.3. Non-public issuance of shares
Resolutions in Relation to the 2020 Non-public Issuance of Shares were considered and approved at the 29th Meeting of the
7th Session of the Board and the 24th Meeting of the 7th Session of the Supervisory Committee of the Company on 12 July
2020. No more than 169350000 shares (inclusive) were planned to be issued through non-public issuance; Hillhouse Capital
Management PTE. LTD. (Hillhouse Capital) planned to subscribe for all of those shares with no more than RMB2172760500
through "Hillhouse Capital Management PTE. LTD.-China Value Fund" under its management. The Company entered into
the Share Subscription Agreement Valid with Condit ions between Joincare Pharmaceutical Group Industry Co. Ltd. and
Hillhouse Capital Management PTE. LTD. and the Strategic Cooperation Agreement Valid with Conditions between Joincare
Pharmaceutical Group Industry Co. Ltd. and Hillhouse Capital Management PTE. LTD. with Hillhouse Capital. See the
Announcement of Joincare Pharmaceutical Group Industry Co. Ltd. on Attraction of Strategic Investors and Execution
of Strategic Cooperation Agreement (Lin 2020-089) and the Plan for 2020 Non-public Issuance of Shares of Joincare
Pharmaceutical Group Industry Co. Ltd. disclosed by the Company on 13 July 2020. The said resolutions on non-public
issuance of shares were approved at the 2020 Second Extraordinary General Meeting of the Company on 29 July 2020.Pursuant to the Resolution on Termination of Matters regarding 2020 Non-public Issuance of Shares and the Resolution
on Termination Agreement on Share Subscription Agreement and Strategic Cooperation Agreement Valid with Conditions
between the Company and Subscribers considered and approved at the 41st Meeting of the 7th Session of the Board and the
32nd Meeting of the 7th Session of the Supervisory Committee of the Company on 9 February 2021 it was approved that the
Company terminated the non-public issuance of shares. See the Announcement of Joincare Pharmaceutical Group Industry
Co. Ltd. on Termination of Matters regarding 2020 Non-public Issuance of Shares and the Termination Agreement on Share
Subscription Agreement Valid with Conditions and Strategic Cooperation Agreement Valid with Conditions (Lin 2021-015)
disclosed by the Company on 10 February 2021.654. Reorganization of LivzonBio
Pursuant to the Resolution on Reorganization of Shareholding Structures of LivzonBio and Other Subsidiaries was considered
and approved at the 36th Meeting of the 7th Session of the Board of the Company on 4 December 2020 the Company Livzon
Group and other trading parties agreed to reorganize shareholding structures of the subordinates of Livzon Cayman took
Zhuhai Livzon Biotechnology Co. Ltd. as the controlling platform company of the subordinates of Livzon Cayman at home
and abroad so as to optimize shareholding structures of the subordinates of Livzon Cayman for the purpose of financing
at home and abroad. Original multiple indirect shareholding structures were adjusted to direct shareholding by parties; the
Reorganization Framework Agreement was jointly signed. The said resolutions were considered and approved at the 2020
Fourth Extraordinary General Meeting on 21 December 2020. See the Announcement of Joincare Pharmaceutical Group
Industry Co. Ltd. on Reorganization of Shareholding Structures of the Controlling Subsidiary of Livzon Group (Lin 2020-159)
disclosed by the Company on 5 December 2020 for details.Pursuant to the Equity Transfer Agreement between the Company Livzon Group and Livzon HK on 11 January 2021 the
Company and Livzon Group agreed to respectively acquire 49% and 51% equity interest in LivzonBio from Livzon HK.Pursuant to the Capital Injection Agreement among the Company Livzon Group Lisheng Juyuan and LivzonBio on the
same day the Company Livzon Group and Lisheng Juyuan jointly injected capital to LivzonBio. The registered capital of
LivzonBio was increased from RMB250000000 to RMB666666667. The capital injection was completed with filing of
industrial and business change registration on 15 January 2021. After the change LivzonBio was respectively owned by the
Company Livzon Group and Lisheng Juyuan as to 44.10% 45.90% and 10.00% equity interest respectively.Pursuant to the Capital Injection Agreement among the Company Livzon Group Lisheng Juyuan YF Livzon HK Livzon
MAB Kadi and LivzonBio on 18 January 2021 Livzon Group and YF jointly injected capital to LivzonBio. The capital
injection was completed with filing of industrial and business change registration on 5 February 2021. After the change the
registered capital of LivzonBio was increased from RMB666666667 to RMB889023284. LivzonBio was owned by the
Company Livzon Group YF and Lisheng Juyuan as to 33.07% 51.00% 8.43% and 7.50% equity interest respectively.Pursuant to the Equity Transfer Agreement between LivzonBio and Livzon HK on 18 January 2021 Livzon HK agreed to
transfer and LivzonBio agreed to acquire 100% equity interest of Livzon MAB. The equity transfer was completed with filing
of industrial and business change registration on 3 February 2021. After the change Livzon MAB was directly owned by
LivzonBio as to 100.00% equity interest.On 27 January 2021 LivzonBio and Livzon Cayman entered into an equity transfer agreement pursuant to which Livzon
Cayman agreed to transfer and LivzonBio agreed to acquire 100% equity interest of Livzon HK. The equity transfer was
completed on 16 April 2021. After the change Livzon HK was directly owned by LivzonBio as to 100.00% equity interest.On 25 February 2021 each of Livzon International YF and Joincare BVI issued a repurchase letter to Livzon Cayman.Pursuant to which (1) each of Livzon International and YF agreed that Livzon Cayman could repurchase 24574830 ordinary
shares and 12500000 preferred A shares held by them respectively at a consideration of USD98299320 in RMB equivalent
(i.e. RMB637421940.54) and USD50000000 in RMB equivalent (i.e. RMB324225000) respectively; (2) each of Livzon
International and Joincare BVI agreed that Livzon Cayman could repurchase 50999999 ordinary shares and 49000000
ordinary shares held by them respectively at a consideration of RMB306038709 and RMB294037191 respectively. As at 26
February 2021 Livzon Cayman repurchased a total of 137074829 shares in issue and paid the corresponding consideration of
the share repurchases to Livzon International YF and Joincare BVI respectively. The above share repurchases were completed
and Livzon Cayman only preserved 1 issued ordinary share which was held by Livzon International. Livzon Cayman is
directly owned by Livzon International as to 100.00% equity interest and the relevant registration of Livzon Cayman will be
canceled.For specific information on the reorganization of the shareholding structures please refer to relevant announcements
respectively disclosed by the Company on 5 December 2020 12 January 2021 19 January 2021 28 January 2021 16 February
2021 and 13 May 2021 (Announcement No.: Lin 2020-159 Lin 2021-007 Lin 2021-009 Lin 2021-012 Lin 2021-023 and
Lin 2021-061).66Chapter 7
Changes in Equity and Shareholders
I Changes in equity
(I) Changes in shares
1. Changes in shares
Unit: shares
Before the current change Increase/decrease (+ -) due to the current change After the current change
Number Percentage Issuance Issuance Conversion Others Subtotal Number Percentage
(%) of new of bonus of capital (%)
shares shares reserve to
share capital
I. Shares subject to selling restrictions 0 0 0 0 0 0 0 0 0
1. Shares held by state government
2. Shares held by state-owned entities
3. Shares held by other domestic holders
Including: Shares held by domestic non-
state-owned entities
Shares held by domestic natural persons
4. Shares held by foreign holders
Including: Shares held by foreign entities
Shares held by foreign natural persons
II. Shares not subject to selling restrictions 1952780764 100 5812453 0 0 0 5812453 1958593217 100
1. Ordinary shares denominated in Renminbi 1952780764 100 5812453 0 0 0 5812453 1958593217 100
2. Domestically listed foreign shares
3. Overseas listed foreign shares
4. Others
III. Total number of shares 1952780764 100 5812453 0 0 0 5812453 1958593217 100
2. Description of changes in shares
√ Applicable □N/A
The number of exercisable options during the second exercise period of the first grant under the 2018 Share Options Incentive
Scheme of the Company was 8million and the exercise period was from 21 December 2020 to 20 December 2021. The number
of exercisable options during the first exercise period of the reserved grant under the 2018 Share Options Incentive Scheme
of the Company was 3.54million and the exercise period was from 23 September 2020 to 22 September 2021 by way of
independent exercise.During the Reporting Period the number of options cumulatively exercised and completing share transfer registration for the
first grant and reserved grant under the 2018 Share Options Incentive Scheme of the Company was 5812453.3. Impact of changes in shares on earnings per share net assets per share and other financial indicators from the Reporting Period
to the date of disclosure of the interim report (if any)
□ Applicable √N/A
4. Other information considered necessary by the Company or required by securities regulators to be disclosed
□ Applicable √N/A
(II) Changes in shares with selling restrictions
□ Applicable √N/A
67II Shareholders
(I) Total number of shareholders
Total number of ordinary shareholders at the end of the Reporting Period 118483
(II) Shareholdings of the Top 10 shareholders and the Top 10 shareholders of tradable shares (or shareholders without
selling restrictions) at the End of the Reporting Period
Unit: shares
Shareholdings of the Top 10 shareholders
Name of shareholder Change Number of Percentage I. Number Pledge mark or lock-up Nature of
(Full name) during the shares held (%) of shares Share Number shareholder
reporting at the end of held with status
period the Period selling
restrictions
Shenzhen Baiyeyuan Investment Co. Ltd. * 0 895653653 45.73 0 Pledge 80679725 Domestic non-
(深圳市百业源投资有限公司 ) state owned entity
Hong Kong Securities Clearing Company Limited -6078692 88136456 4.50 0 Unknown Unknown
Might Seasons Limited (鸿信行有限公司 ) 0 71859334 3.67 0 Unknown Foreign entity
108 portfolio of national social security fund -1181400 15660740 0.80 0 Unknown Unknown
16011 portfolio of basic endowment insurance fund -8908160 12119743 0.62 0 Unknown Unknown
Abu Dhabi Investment Bureau 11831421 11831421 0.60 0 Unknown Unknown
Bank of Ningbo Co. Ltd.- Fullgoal Equilibrium 10602579 10602579 0.54 0 Unknown Unknown
Strategy Hybrid Securities Investment Fund
Bank of China Limited- Fullgoal Cyclical Hybrid 5985181 9325391 0.48 0 Unknown Unknown
Securities Investment Fund
Bosera Funds Management Co. Ltd. - 419 portfolio -11266700 8732946 0.45 0 Unknown Unknown
of social security funds
He Zhong 2762424 7550024 0.39 0 Unknown Unknown
Shareholdings of the Top 10 shareholders without selling restrictions
Name of shareholder Number of tradable shares Class and number of shares
held with selling restrictions Class Number
Shenzhen Baiyeyuan Investment Co. Ltd. * (深圳市百业源投资 895653653 Ordinary shares denominated in Renminbi 895653653
有限公司)
Hong Kong Securities Clearing Company Limited 88136456 Ordinary shares denominated in Renminbi 88136456
Might Seasons Limited (鸿信行有限公司 ) 71859334 Ordinary shares denominated in Renminbi 71859334
108 portfolio of national social security fund 15660740 Ordinary shares denominated in Renminbi 15660740
16011 portfolio of basic endowment insurance fund 12119743 Ordinary shares denominated in Renminbi 12119743
Abu Dhabi Investment Bureau 11831421 Ordinary shares denominated in Renminbi 11831421
Bank of Ningbo Co. Ltd.- Fullgoal Equilibrium Strategy Hybrid 10602579 Ordinary shares denominated in Renminbi 10602579
Securities Investment Fund
Bank of China Limited- Fullgoal Cyclical Hybrid Securities 9325391 Ordinary shares denominated in Renminbi 9325391
Investment Fund
Bosera Funds Management Co. Ltd. - 419 portfolio of social 8732946 Ordinary shares denominated in Renminbi 8732946
security funds
He Zhong 7550024 Ordinary shares denominated in Renminbi 7550024
Notes on the special repurchase account among the top 10 As at the end of the Reporting Period the special repurchase account of the Company
shareholders (special securities repurchase account of Joincare Pharmaceutical Group Industry Co.Ltd.) owned 36090611 shares in total accounting for 1.84%.Description of the above shareholders involved in entrustment/ Not applicable
entrusted voting right and waiver of voting right
68Interim Report2021
(Cont.)
Description of connection or acting-in-concert relationship of the There was no connection or acting-in-concert relationship between Shenzhen Baiyeyuan
above shareholders Investment Co. Ltd. a controlling shareholder of the Company and other shareholders;
whether there is connection or acting-in-concert relationship among other shareholders
is unknown.Number of shares held by the Top 10 shareholders with selling restrictions and selling restrictions
□ Applicable √N/A
(III) Strategic investors or general legal persons who became Top 10 shareholders through placement of new shares
□ Applicable √N/A
III Information on directors supervisors and senior management
(I) Changes in shareholdings of current directors supervisors and senior management and those who resigned during
the Reporting Period
√Applicable □N/A
Unit: shares
Name Title Number of Number of Changes in Reason for changes
shares held at shares held at shareholdings
the beginning the end of the during the
of the Period Period reporting period
Qiu Qingfeng Director 357409 537409 180000 Equity incentive
Yu Xiong Senior management 430000 560000 130000 Equity incentive
Zhao Fengguang Senior management 407400 588000 180600 Equity incentive and purchase
from the secondary market
Description of other information
□ Applicable √N/A
(II) Equity incentive granted to directors supervisors and senior management during the Reporting Period
√Applicable □N/A
Unit: shares
Name Title Number of Number of Number of Number of Number of
share options share options exercisable share options share options
held at the granted during shares during exercised held at the end
beginning of the Reporting the Reporting during the of the Period
the Period Period Period Period
Qiu Qingfeng Director 360000 0 180000 180000 180000
Lin Nanqi Director 480000 0 240000 0 480000
Yu Xiong Senior management 370000 0 130000 130000 240000
Zhao Fengguang Senior management 360000 0 180000 180000 180000
Total / 1570000 0 730000 490000 1080000
(III) Others
□ Applicable √N/A
IV Changes in controlling shareholders or de facto controllers
□ Applicable √N/A
69Chapter 8
Informatoin on Preferred Shares
□ Applicable √N/A
70Chapter 9
Information on Bonds
I Enterprise bonds corporate bonds and non-financial enterprise debt financing
instruments
□ Applicable √N/A
II Information on convertible corporate bonds
□ Applicable √N/A
71Chapter 10
Financial Report
I. AUDIT REPORT
□Applicable √N/A
72Interim Report2021
II. FINANCIAL STATEMENTS
Consolidated Balance Sheet
30 June 2021
Prepared by: Joincare Pharmaceutical Group Industry Co. Ltd Unit: Yuan Currency: RMB
Item Notes 30 June 2021 31 December 2020
Current assets:
Monetary fund V.1 10355746941.18 12289098613.19
Financial assets held for trading V.2 241873785.15 28328748.72
Bills receivables V.3 1826155857.39 1343013818.54
Accounts receivables V.4 2876172105.89 2447406222.52
Receivables financing
Prepayments V.5 442948794.11 209926040.57
Other receivables V.6 196852291.71 177240162.81
Of which: Interest receivable
Dividends receivable 4175569.86
Inventories V.7 1875737841.76 1831509012.27
Contract assets
Held-for-sale assets
Non-current assets due within one year V.8 8520000.00 19934376.07
Other current assets V.9 67489769.20 58098049.20
Total current assets 17891497386.39 18404555043.89
Non-current assets:
Debt investments
Other debt investments
Long-term receivables V.10 584284.36 584284.36
Long-term equity investments V.11 1344648650.68 628279599.73
Other equity instrument investments V.12 1376397194.19 1576391663.13
Other non-current financial assets
Investment properties V.13 6191475.43 6191475.43
Fixed assets V.14 4557108992.58 4380285156.93
Construction in progress V.15 764840774.40 648478042.42
Productive biological assets
Oil and gas assets
Right-of-use assets V.16 15546293.89 18030132.69
Intangible assets V.17 487748514.94 468087916.05
Development expenditure V.18 421530539.58 399119603.78
Goodwill V.19 614468698.73 614468698.73
Long-term deferred expenses V.20 181986909.13 170049601.98
Deferred income tax V.21 449438441.29 468898469.23
Other non-current assets V.22 476695431.03 373557910.72
Total non-current assets 10697186200.23 9752422555.18
Total assets 28588683586.62 28156977599.07
73(Cont.)
Item Notes 30 June 2021 31 December 2020
Current liabilities:
Short-term loans V.23 1761919976.54 2110942804.06
Financial liabilities held for trading V.24 556069.84 212.07
Bills payables V.25 1492064332.85 1087759353.31
Accounts payables V.26 849511589.02 832632206.53
Receipts in advance
Contract liabilities V.27 103287242.65 133422354.03
Employee benefits payables V.28 232028511.31 476521798.51
Tax and surcharge payables V.29 272236320.62 298342182.44
Other payables V.30 3109066916.03 2847688065.59
Of which: Interest payable
Dividends payable 6997318.79 8418590.50
Held-for-sale liabilities
Non-current liabilities due within one year V.31 9015086.52 8539077.05
Other current liabilities V.32 4754676.57 6267034.79
Total current liabilities 7834440721.95 7802115088.38
Non-current liabilities:
Long-term loans V.33 638453815.00 360324027.48
Notes payables
Leasing liabilities V.34 6942949.47 9817780.04
Long-term payables
Long-term employee benefits payables
Provisions
Deferred gains V.35 468116990.48 467562770.49
Deferred income tax liabilities V.21 177467464.60 202259855.68
Other non-current liabilities V.36 78000000.00 78000000.00
Total non-current liabilities 1368981219.55 1117964433.69
Total liabilities 9203421941.50 8920079522.07
Owners' (or shareholders') equity
Paid-in capital (or share capital) V.37 1958593217.00 1952780764.00
Other equity instruments
Of which: Preferred shares
Perpetual bonds
Capital reserve V.38 2624121311.02 2533288674.28
Less: Treasury shares V.39 483148777.41 253637154.50
Other consolidated earnings V.40 36239487.82 116300559.28
Special reserve
Surplus reserve V.41 515941465.19 515941465.19
Undistributed profits V.42 6707165114.66 6231451582.26
Total owners' equity (or shareholders' equity) attributable 11358911818.28 11096125890.51
to equity holders of the parent company
Minority interests 8026349826.84 8140772186.49
Total owners' (or shareholders') equity 19385261645.12 19236898077.00
Total liabilities and owners' (or shareholders') equity 28588683586.62 28156977599.07
Person-in-charge of the Company: Person-in-charge of the Company's accounting work: Person-in-charge of the accounting department:
Zhu Baoguo Qiu Qingfeng Qiu Qingfeng
74Interim Report2021
Balance Sheet of the Parent Company
30 June 2021
Prepared by: Joincare Pharmaceutical Group Industry Co. Ltd Unit: Yuan Currency: RMB
Item Notes 30 June 2021 31 December 2020
Current assets:
Monetary fund 704324642.53 1469821002.61
Financial assets held for trading
Bills receivables 327812619.63 53571233.65
Accounts receivables 346083577.73 369494860.22
Receivables financing
Prepayments 280459658.35 319923532.69
Other receivables 430574581.71 376775704.09
Of which: Interest receivable
Dividends receivable 74175069.86 69999500.00
Inventories 272878.11 778363.53
Contract assets
Held-for-sale assets
Non-current assets due within one year 8520000.00 8520000.00
Other current assets
Total current assets 2098047958.06 2598884696.79
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 3591513410.70 3273776583.43
Other equity instrument investments 387625464.98 417364363.95
Other non-current financial assets
Investment properties 6191475.43 6191475.43
Fixed assets 44009132.26 45314938.23
Construction in progress 7092856.50 5681470.43
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets 15742771.96 16497572.49
Development expenditure 14770467.91 13616385.52
Goodwill
Long-term deferred expenses 1118400.05 1597393.42
Deferred income tax 75352863.46 65869331.55
Other non-current assets 943396.22
Total non-current assets 4143416843.25 3846852910.67
Total assets 6241464801.31 6445737607.46
75(Cont.)
Item Notes 30 June 2021 31 December 2020
Current liabilities:
Short-term loans 500000000.00
Financial liabilities held for trading
Bills payables
Accounts payables 365675212.28 310847849.81
Receipts in advance
Contract liabilities 7583963.05 8066344.20
Employee benefits payables 31054553.72 50357030.92
Tax and surcharge payables 30099767.06 20724808.94
Other payables 629917461.72 502707045.70
Of which: Interest payable
Dividends payable
Held-for-sale liabilities
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 1064330957.83 1392703079.57
Non-current liabilities:
Long-term loans
Notes payables
Leasing liabilities
Long-term payables
Long-term employee benefits payables
Provisions
Deferred gains 38996000.00 43134800.00
Deferred income tax liabilities 31033867.93 38280327.88
Other non-current liabilities
Total non-current liabilities 70029867.93 81415127.88
Total liabilities 1134360825.76 1474118207.45
Owners' (or shareholders')equity
Paid-in capital (or share capital) 1958593217.00 1952780764.00
Other equity instruments
Of which: Preferred shares
Perpetual bonds
Capital reserve 2216484659.68 2169622381.22
Less: Treasury shares 483148777.41 253637154.50
Other consolidated earnings 88277577.06 110581751.29
Special reserve
Surplus reserve 427339516.81 427339516.81
Undistributed profits 899557782.41 564932141.19
Total owners' (or shareholders') equity 5107103975.55 4971619400.01
Total liabilities and owners' (or shareholders') equity 6241464801.31 6445737607.46
Person-in-charge of the Company: Person-in-charge of the Company's accounting work: Person-in-charge of the accounting department:
Zhu Baoguo Qiu Qingfeng Qiu Qingfeng
76Interim Report2021
Consolidated Income Statement
January to June 2021
Prepared by: Joincare Pharmaceutical Group Industry Co. Ltd Unit: Yuan Currency: RMB
Item Notes First half of 2021 First half of 2020
I. Total operating income V.43 7835372274.66 6475702905.40
Of which: operating income V.43 7835372274.66 6475702905.40
II. Total operating costs 6312457301.60 4830804046.63
Of which: Operating costs V.43 2743005734.93 2277555656.22
Tax and surcharge V.44 90345092.56 74968500.72
Selling expenses V.45 2499949757.30 1803247662.75
Administrative expenses V.46 397921091.17 401922830.97
R&D expenses V.47 622962388.41 372523241.72
Finance expenses V.48 -41726762.77 -99413845.75
Of which: Interest expenses 38708820.91 13912163.40
Interest income 78035350.84 109006742.62
Add: Other income V.49 131455378.87 122510583.58
Investment income ("-" represents losses) V.50 46810627.37 124529795.87
Of which: Income from investments in associates and joint ventures 9750424.27 2918469.78
Derecognition of income from financial assets at amortised cost
("-" represents losses)
Gains from hedging net exposure ("-" represents losses)
Gains from changes in fair value ("-" represents losses) V.51 33316547.15 -4360777.51
Credit impairment loss ("-" represents losses) V.52 -9485295.67 -7768858.00
Asset impairment loss ("-" represents losses) V.53 -28878059.99 -13295346.42
Gains from disposal of assets ("-" represents losses) V.54 17927771.94 -75589.89
III. Operating profit ("-" represents losses) 1714061942.73 1866438666.40
Add: non-operating income V.55 4641364.71 2273559.65
Less: non-operating expenditure V.56 6039971.44 20964294.15
IV. Total profit ("-" represents net losses) 1712663336.00 1847747931.90
Less: income tax expenses V.57 244565734.30 258256989.92
V. Net profit ("-" represents net losses) 1468097601.70 1589490941.98
(I) Classified by continuing operations:
1.Net profit from continuing operations ("-" represents net losses) 1468097601.70 1589490941.98
2.Net profit from discontinued operations ("-" represents net losses)
(II) Classified by attribution to ownership:
1. Net profit attributable to shareholders of the parent company 687347494.53 676265223.83
("-" represents net losses)
2. Profit and loss attributable to minority interests 780750107.17 913225718.15
("-" represents net losses)
Ⅵ . Other comprehensive net income after taxation -161118765.76 -11239805.60
(I)Other comprehensive net income after taxation attributable to -80061071.46 -25560073.29
shareholders of the parent company
1. Other comprehensive income not to be reclassified into profit or loss -61841866.88 -29176546.92
(1)Changes in remeasurement of defined benefit plans
(2)Other comprehensive income not to be reclassified into profit or loss
under equity method
(3)Changes in fair value of other equity instruments -61841866.88 -29176546.92
(4)Changes in fair value of enterprise's own credit risk
77(Cont.)
Item Notes First half of 2021 First half of 2020
2. Other comprehensive income to be reclassified as profit or loss -18219204.58 3616473.63
(1)Other comprehensive income to be reclassified into profit or loss
under equity method
(2)Changes in fair value of other debt investments
(3)Financial assets reclassified into other comprehensive income
(4)Credit impairment provision for other debt investments
(5)Reserve for cash flow hedging
(6)Translation difference of financial statements denominated in -18219204.58 3616473.63
foreign currency
(7)Others
(II)Other comprehensive net income after taxation attributable to -81057694.30 14320267.68
minority interests
Ⅶ . Total comprehensive income 1306978835.94 1578251136.38
(I)Total comprehensive income attributable to shareholders of the 607286423.07 650705150.54
parent company
(II)Total comprehensive income attributable to minority interests 699692412.87 927545985.83
Ⅷ . Earnings per share:
(I)Basic earnings per share 0.3514 0.3483
(II)Diluted earnings per share 0.3504 0.3468
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
78Interim Report2021
Income Statement of the Parent Company
January to June 2021
Prepared by: Joincare Pharmaceutical Group Industry Co. Ltd Unit: Yuan Currency: RMB
Item Notes First half of 2021 First half of 2020
I. Total operating income 767872298.02 629432109.25
Less: Operating costs 461788716.17 408242029.19
Tax and surcharge 5768988.93 4599911.60
Selling expenses 197183327.14 131476367.63
Administrative expenses 47548122.82 51479113.16
R&D expenses 23202371.94 12343156.08
Finance expenses -7191444.75 -2848375.83
Of which: Interest expenses 1860476.04 6899489.12
Interest income 9132475.57 9815487.98
Add: Other income 559381.42 1038764.97
Investment income ("-" represents losses) 595277628.57 278073777.60
Of which: Income from investments in associates and joint ventures -1300363.73 -261761.49
Derecognition of income from financial assets at amortised cost
("-" represents losses)
Gains from hedging net exposure ("-" represents losses)
Gains from changes in fair value ("-" represents losses)
Credit impairment loss ("-" represents losses) -100938.45 282102.43
Asset impairment loss ("-" represents losses)
Gains from disposal of assets ("-" represents losses)
II. Operating profit ("-" represents losses) 635308287.31 303534552.42
Add: non-operating income 71272.57 1049151.90
Less: non-operating expenditure 483009.57 6710478.49
III. Total profit ("-" represents net losses) 634896550.31 297873225.83
Less: income tax expenses 11595521.04 -169335.76
IV.Net profit ("-" represents net losses) 623301029.27 298042561.59
(I)Net profit from continuing operations ("-" represents net losses) 623301029.27 298042561.59
(II)Net profit from discontinued operations ("-" represents net losses)
V. Other comprehensive net income after taxation -22304174.23 -37331034.14
(I)Other comprehensive income not to be reclassified into profit or loss -22304174.23 -37331034.14
1.Changes in remeasurement of defined benefit plans
2.Other comprehensive income not to be reclassified into profit or loss
under equity method
3.Changes in fair value of other equity instruments -22304174.23 -37331034.14
4.Changes in fair value of enterprise's own credit risk
(II) Other comprehensive income to be reclassified as profit or loss
1.Other comprehensive income to be reclassified into profit or loss
under equity method
2.Changes in fair value of other debt investments
3.Financial assets reclassified into other comprehensive income
4.Credit impairment provision for other debt investments
5.Reserve for cash flow hedging
6.Translation difference of financial statements denominated in foreign
currency
7.Others
79(Cont.)
Item Notes First half of 2021 First half of 2020
Ⅵ . Total comprehensive income 600996855.04 260711527.45
Ⅶ . Earnings per share:
(I)Basic earnings per share
(II)Diluted earnings per share
Person-in-charge of the Company: Person-in-charge of the Company's accounting work: Person-in-charge of the accounting department:
Zhu Baoguo Qiu Qingfeng Qiu Qingfeng
80Interim Report2021
Consolidated Cash Flow Statement
January to June 2021
Prepared by: Joincare Pharmaceutical Group Industry Co. Ltd Unit: Yuan Currency: RMB
Item Notes First half of 2021 First half of 2020
I. Cash flow from operating activities:
Cash received from sale of goods and services rendered 7419412296.34 6331324441.98
Refund of taxes and levies 61962005.91 56701031.66
Cash received relating to other operating activities V.58 284172439.10 315681506.38
Subtotal of cash inflow from operating activities 7765546741.35 6703706980.02
Cash paid for purchase of goods and services rendered 1884769945.39 1722526820.34
Cash paid to and on behalf of employees 1116771823.55 806548827.14
Payments for various taxes and levies 867755091.60 693448807.41
Cash paid relating to other operating activities V.58 3150462367.45 2232190788.62
Subtotal of cash outflow from operating activities 7019759227.99 5454715243.51
Net cash flow from operating activities 745787513.36 1248991736.51
II. Cash flow from investing activities:
Cash received from disposal of investments 86940226.39 154806462.01
Cash received on investment income 63907310.85 14470694.01
Net cash received from disposal of fixed assets intangible assets and other 2121444.19 1226158.20
long-term assets
Net cash received from disposal of subsidiaries and other operating units 3311220.53 5339063.95
Cash received relating to other investing activities V.58 13361577.34 20058016.38
Sub-total of cash inflow from investing activities 169641779.30 195900394.55
Cash payments for acquisition of fixed assets intangible assets and other 597823351.45 275765209.92
long-term assets
Cash payments for investments 744000000.00 71332998.74
Net cash paid for acquisition of subsidiaries and other operating units
Cash paid relating to other investing activities V.58 1566246.09 3537944.44
Sub-total of cash outflow from investing activities 1343389597.54 350636153.10
Net cash flow from investing activities -1173747818.24 -154735758.55
III. Cash flow from financing activities:
Cash received from absorption of investments 474991831.37 205684772.19
Of which: Cash received by subsidiaries from investments of minority 428234715.52 3000000.00
interests
Cash received from borrowings 1211215105.43 653579914.03
Cash received relating to other financing activities V.58 2809612.35 4933246.35
Sub-total of cash inflow from financing activities 1689016549.15 864197932.57
Cash paid on repayment of debts 1282584146.53 2953861030.60
Cash paid for distribution of dividends and profit or interest payments 1158748844.24 684326512.99
Of which: Dividends and profits paid to minority interests by subsidiaries 842390603.13 675004435.64
Cash paid relating to other financing activities V.58 722917255.81 497014973.64
Sub-total of cash outflow from financing activities 3164250246.58 4135202517.23
Net cash flow from financing activities -1475233697.43 -3271004584.66
IV. Effect of changes in foreign exchange rates on cash and cash equivalents -26647873.71 6669419.68
V. Net increase in cash and cash equivalents -1929841876.02 -2170079187.02
Add: Balance of cash and cash equivalents at the beginning of the period 12122781311.49 10940305225.81
VI. Cash and cash equivalents at the end of the period 10192939435.47 8770226038.79
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
81Cash Flow Statement of the Parent Company
January to June 2021
Prepared by: Joincare Pharmaceutical Group Industry Co. Ltd Unit: Yuan Currency: RMB
Item Notes First half of 2021 First half of 2020
I. Cash flow from operating activities:
Cash received from sale of goods and services rendered 689547745.88 648030930.02
Refund of taxes and levies
Cash received relating to other operating activities 253368418.30 614522896.56
Subtotal of cash inflow from operating activities 942916164.18 1262553826.58
Cash paid for purchase of goods and services rendered 411827084.87 433657472.95
Cash paid to and on behalf of employees 83143842.68 71300295.62
Payments for various taxes and levies 49857359.03 29807704.10
Cash paid relating to other operating activities 464776999.67 348084538.36
Subtotal of cash outflow from operating activities 1009605286.25 882850011.03
Net cash flow from operating activities -66689122.07 379703815.55
II. Cash flow from investing activities:
Cash received from disposal of investments 22298961.71
Cash received on investment income 592402254.45 274498761.01
Net cash received from disposal of fixed assets intangible assets and other 77600.00 11000.00
long-term assets
Net cash received from disposal of subsidiaries and other operating units
Cash received relating to other investing activities
Sub-total of cash inflow from investing activities 592479854.45 296808722.72
Cash payments for acquisition of fixed assets intangible assets and other 2023634.00 1082922.57
long-term assets
Cash payments for investments 319037191.00
Net cash paid for acquisition of subsidiaries and other operating units 3000000.00
Cash paid relating to other investing activities
Sub-total of cash outflow from investing activities 321060825.00 4082922.57
Net cash flow from investing activities 271419029.45 292725800.15
III. Cash flow from financing activities:
Cash received from absorption of investments 46757115.85 76509574.75
Cash received from borrowings 50000000.00
Cash received relating to other financing activities 1598029.40
Sub-total of cash inflow from financing activities 48355145.25 126509574.75
Cash paid on repayment of debts 500000000.00 1324150000.00
Cash paid for distribution of dividends and profit or interest payments 289069487.47 1820208.33
Cash paid relating to other financing activities 229511622.91 253575702.82
Sub-total of cash outflow from financing activities 1018581110.38 1579545911.15
Net cash flow from financing activities -970225965.13 -1453036336.40
IV. Effect of changes in foreign exchange rates on cash and cash equivalents -302.33 777.92
V. Net increase in cash and cash equivalents -765496360.08 -780605942.78
Add: Balance of cash and cash equivalents at the beginning of the period 1369821002.61 1461753241.58
VI. Cash and cash equivalents at the end of the period 604324642.53 681147298.80
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
82Interim Report2021
Consolidated Statement of Changes in Shareholders' Equity
January to June 2021
Prepared by: Joincare Pharmaceutical Group Industry Co. Ltd Unit: Yuan Currency: RMB
Item First half of 2021
Shareholders' equity attributable to shareholders of the parent company Minority Total owners'
Paid-in capital Other equity instruments Capital reserve Less: Treasury Other Special Surplus reserve General Undistributed Sub-total interests equity
(or share capital) Preferred Perpetual Others shares comprehensive reserve risk profit
shares bonds income provision
I. Balance as at the end of the previous year 1952780764.00 2533288674.28 253637154.50 116300559.28 515941465.19 6231451582.26 11096125890.51 8140772186.49 19236898077.00
Add: Adjustment for changes in accounting policies
Correction of accounting errors in prior period
Merger of enterprises under common control
Others
II. Balance at the beginning of the year 1952780764.00 2533288674.28 253637154.50 116300559.28 515941465.19 6231451582.26 11096125890.51 8140772186.49 19236898077.00
III. Increase/decrease during the period 5812453.00 90832636.74 229511622.91 -80061071.46 475713532.40 262785927.77 -114422359.65 148363568.12
("-" represents decreases)
(I) Total comprehensive income -80061071.46 687347494.53 607286423.07 699692412.87 1306978835.94
(II) Capital contributed and reduced by shareholders 5812453.00 42329998.05 229511622.91 -181369171.86 -96353455.66 -277722627.52
1．Ordinary shares contributed by shareholders 5812453.00 40944662.85 229511622.91 -182754507.06 -96353455.66 -279107962.72
2. Capital contributed by holders of other equity
instruments
3．Share-based equity-settled payments 1385335.20 1385335.20 1385335.20
4．Others
(III) Profit distribution -288675388.05 -288675388.05 -840923997.09 -1129599385.14
1．Transfer of surplus reserve
2．Provision to general risk reserve
3．Distribution to shareholders -288675388.05 -288675388.05 -840923997.09 -1129599385.14
4．Others
(IV) Internal transfer of shareholders' equity 77041425.92 77041425.92 94885363.55 171926789.47
1．Transfer of capital reserve to share capital
2．Transfer of surplus reserve to share capital
3．Compensate losses by surplus reserve
4．Changes in defined benefit plans transferred to
retained earnings
5．Other comprehensive income transferred to 77041425.92 77041425.92 94885363.55 171926789.47
retained earnings
6．Others
(V) Special reserve
1．Extraction during the period
2．Amount used during the period
(VI) Others 48502638.69 48502638.69 28277316.68 76779955.37
IV. Balance as at the end of the period 1958593217.00 2624121311.02 483148777.41 36239487.82 515941465.19 6707165114.66 11358911818.28 8026349826.84 19385261645.12
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
83Consolidated Statement of Changes in Shareholders' Equity(Cont.)
January to June 2021
Prepared by: Joincare Pharmaceutical Group Industry Co. Ltd Unit: Yuan Currency: RMB
Item First half of 2020
Shareholders' equity attributable to shareholders of the parent company Minority Total owners'
Paid-in capital Other equity instruments Capital reserve Less: Treasury Other Special Surplus reserve General Undistributed Sub-total interests equity
(or share capital) Preferred Perpetual Others shares comprehensive reserve risk profit
shares bonds income provision
I. Balance as at the end of the previous year 1938033338.00 2403657077.97 116945139.74 454015137.30 5443313968.30 10355964661.31 7028061589.45 17384026250.76
Add: Adjustment for changes in accounting policies
Correction of accounting errors in prior period
Merger of enterprises under common control
Others
II. Balance at the beginning of the year 1938033338.00 2403657077.97 116945139.74 454015137.30 5443313968.30 10355964661.31 7028061589.45 17384026250.76
III. Increase/decrease during the period 9504295.00 59625250.20 253637154.50 -25560073.29 1158648.04 378269533.01 169360498.46 326643163.15 496003661.62
("-" represents decreases)
(I) Total comprehensive income -25560073.29 676265223.83 650705150.54 927545985.83 1578251136.38
(II) Capital contributed and reduced by shareholders 9504295.00 76070412.67 253637154.50 -168062446.83 9666667.00 -158395779.83
1．Ordinary shares contributed by shareholders 9504295.00 67005279.75 253637154.50 -177127579.75 9666667.00 -167460912.75
2. Capital contributed by holders of other equity
instruments
3．Share-based equity-settled payments 9065132.92 9065132.92 9065132.92
4．Others
(III) Profit distribution -308423523.20 -308423523.20 -593243501.42 -901667024.62
1．Transfer of surplus reserve
2．Provision to general risk reserve
3．Distribution to shareholders -308423523.20 -308423523.20 -593243501.42 -901667024.62
4．Others
(IV) Internal transfer of shareholders' equity 1158648.04 10427832.38 11586480.42 11586480.42
1．Transfer of capital reserve to share capital
2．Transfer of surplus reserve to share capital
3．Compensate losses by surplus reserve
4．Changes in defined benefit plans transferred to
retained earnings
5．Other comprehensive income transferred to 1158648.04 10427832.38 11586480.42 11586480.42
retained earnings
6．Others
(V) Special reserve
1．Extraction during the period
2．Amount used during the period
(VI) Others -16445162.47 -16445162.47 -17325988.26 -33771150.73
IV. Balance as at the end of the period 1947537633.00 2463282328.17 253637154.50 91385066.45 455173785.34 5821583501.31 10525325159.77 7354704752.60 17880029912.37
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
84Interim Report2021
Statement of Changes in Owners Equity
of the Parent Company
January to June 2021
Prepared by: Joincare Pharmaceutical Group Industry Co. Ltd Unit: Yuan Currency: RMB
Item First half of 2021
Paid-in capital Other equity instruments Capital reserve Less: Treasury Other Special Surplus reserve Undistributed Total
(or share capital) Preferred Perpetual Others shares comprehensive reserve profit shareholders'
shares bonds income equity
I. Balance as at the end of the previous year 1952780764.00 2169622381.22 253637154.50 110581751.288 427339516.81 564932141.19 4971619400.01
Add: Adjustment for changes in accounting policies
Correction of accounting errors in prior period
Others
II. Balance at the beginning of the year 1952780764.00 2169622381.22 253637154.50 110581751.288 427339516.81 564932141.19 4971619400.01
III. Increase/decrease during the period 5812453.00 46862278.46 229511622.91 -22304174.227 334625641.22 135484575.54
("-"represents decreases)
(I) Total comprehensive income -22304174.227 623301029.27 600996855.04
(II) Capital contributed and reduced by shareholders 5812453.00 42329998.05 229511622.91 -181369171.86
1．Ordinary shares contributed by shareholders 5812453.00 40944662.85 229511622.91 -182754507.06
2. Capital contributed by holders of other equity
instruments
3．Share-based equity-settled payments 1385335.20 1385335.20
4．Others
(III) Profit distribution -288675388.05 -288675388.05
1．Transfer of surplus reserve
2．Distribution to shareholders -288675388.05 -288675388.05
3．others
(IV) Internal transfer of shareholders' equity
1．Transfer of capital reserve to share capital
2．Transfer of surplus reserve to share capital
3．Compensate losses by surplus reserve
4．Changes in defined benefit plans transferred to
retained earnings
5．Other comprehensive income transferred to
retained earnings
6．others
(V) Special reserve
1．Extraction during the period
2．Amount used during the period
(VI) Others 4532280.41 4532280.41
IV. Balance as at the end of the period 1958593217.00 2216484659.68 483148777.41 88277577.061 427339516.81 899557782.41 5107103975.55
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
85Statement of Changes in Owners Equity
of the Parent Company (Cont.)
January to June 2021
Prepared by: Joincare Pharmaceutical Group Industry Co. Ltd Unit: Yuan Currency: RMB
Item First half of 2020
Paid-in capital Other equity instruments Capital reserve Less: Treasury Other Special Surplus reserve Undistributed Total
(or share capital) Preferred Perpetual Others shares comprehensive reserve profit shareholders'
shares bonds income equity
I. Balance as at the end of the previous year 1938033338.00 2045946209.82 144971531.20 365413188.92 316018713.39 4810382981.33
Add: Adjustment for changes in accounting policies
Correction of accounting errors in prior period
Others
II. Balance at the beginning of the year 1938033338.00 2045946209.82 144971531.20 365413188.92 316018713.39 4810382981.33
III. Increase/decrease during the period 9504295.00 70971934.77 253637154.50 -37331034.14 1158648.04 46870.77 -209286440.06
("-"represents decreases)
(I) Total comprehensive income -37331034.14 298042561.59 260711527.45
(II) Capital contributed and reduced by shareholders 9504295.00 70971934.77 253637154.50 -173160924.73
1．Ordinary shares contributed by shareholders 9504295.00 67005279.75 253637154.50 -177127579.75
2. Capital contributed by holders of other equity
instruments
3．Share-based equity-settled payments 3966655.02 3966655.02
4．Others
(III) Profit distribution -308423523.20 -308423523.20
1．Transfer of surplus reserve
2．Distribution to shareholders -308423523.20 -308423523.20
3．others
(IV) Internal transfer of shareholders' equity 1158648.04 10427832.38 11586480.42
1．Transfer of capital reserve to share capital
2．Transfer of surplus reserve to share capital
3．Compensate losses by surplus reserve
4．Changes in defined benefit plans transferred to
retained earnings
5．Other comprehensive income transferred to 1158648.04 10427832.38 11586480.42
retained earnings
6．others
(V) Special reserve
1．Extraction during the period
2．Amount used during the period
(VI) Others
IV. Balance as at the end of the period 1947537633.00 2116918144.59 253637154.50 107640497.06 366571836.96 316065584.16 4601096541.27
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
86Interim Report2021
Joincare Pharmaceutical Group Industry Co. Ltd
Notes to the financial statements
(All amounts in RMB Yuan unless otherwise stated)
I. Company Profile
1. Overview
√Applicable □N/A
Shenzhen Aimier Food Co. Ltd. the predecessor of the Company was a Sino-foreign joint venture officially established on 18
December 1992 with the approval from Shenzhen Administration for Industry and Commerce. It was primarily engaged in the
production and sale of Taitai oral liquid.On 19 January 1994 the Company changed its name to "Shenzhen Taitai Health Food Co. Ltd. * (深圳太太保健食品有限公
司 )". On 4 July 1995 the Company changed its name to "Shenzhen Taitai Pharmaceutical Co. Ltd. * (深圳太太药业有限公
司)".The Company was wholly reorganized into a company limited by shares with 31 August 1999 as the base date of joint-stock
system reorganization pursuant to the resolution of the General Meeting and upon approval by Shenzhen Municipal People's
Government Document [1999] No. 197 on 16 September 1999 and 10 November 1999. The Company convened the Founding
Meeting on 12 November 1999 completed the changes of the industrial and commercial registration on 24 November 1999
renewed the business license with registration number of Qi He Yue Shen Zong Zi No. 103358A and changed its name to
"Shenzhen Taitai Pharmaceutical Co. Ltd. *(深圳太太药业股份有限公司 )". The Company set 1 September 1999 as the
effective date of the joint-stock system reorganization in accounting.On 6 February 2001 the Company was approved by CSRC to issue domestic shares (A shares) to the public according to the
Notice on the Approval of Public Offering by Shenzhen Taitai Pharmaceutical Co. Ltd. (Zheng Jian Fa Xing Zi [2001] No.21). On 8 June 2001 shares of the Company were listed and traded on Shanghai Stock Exchange.On 25 May 2001 the Company went through the registration formalities for industrial and commercial changes and renewed
the business license with registration number of 4403011066279.Pursuant to the resolution approved at the General Meeting on 21 May 2002 the Company issued 5 shares for every 10 shares
by way of conversion of capital reserve based on the share capital of the Company on 31 December 2001. The Company
renewed the business license with the registration number unchanged.On 4 June 2003 the Company changed its name to Shenzhen Health Pharmaceutical Industry Group Co. Ltd.* (深圳健康药
业集团股份有限公司 ). On 29 September 2003 the Company changed its name to Joincare Pharmaceutical Group Industry
Co. Ltd. * (健康元药业集团股份有限公司 ).Pursuant to the resolution approved at the General Meeting on 29 September 2003 the Company issued 5 shares for every
10 shares by way of conversion of capital reserve based on the share capital of the Company on 30 June 2003. The Company
renewed the business license with the registration number unchanged.On 2 December 2005 the Company was changed to a company limited by shares with foreign investment (with proportion of
foreign investment lower than 25%) and renewed the business license with the registration number changed to Qi He Yue Shen
Zong Zi No. 111262 upon approval by the Ministry of Commerce of the People's Republic of China.The Reform Scheme for Non-tradable Shares of the Company was approved at the General Meeting on 16 October 2006
and implemented on 23 November 2006. According to the Scheme shareholders of tradable shares may obtain 3.80 shares
of share consideration implemented by shareholders of non-tradable shares for every 10 tradable shares they held. After
the implementation of the Reform Scheme for Non-tradable Shares the number of shares held by shareholders and the
shareholding ratio of shareholders of the Company were changed but the total share capital assets liabilities owner's equities
net profits and other financial indicators of the Company were not changed.87Pursuant to the resolution approved at the General Meeting on 26 March 2008 the Company issued 8 shares for every 10
shares to all shareholders and distributed cash dividends of RMB1 (tax inclusive) based on 609930000 shares the total
share capital of the Company at the end of 2007. The Company renewed the business license with the registration number
unchanged.Pursuant to the resolution approved at the General Meeting on 31 March 2010 the Company issued 2 shares for every 10
shares by way of conversion of capital reserve based on the share capital of the Company on 31 December 2009. The Company
renewed the business license with the registration number unchanged.Pursuant to the resolution approved at the General Meeting on 15 February 2011 it was agreed that the Company repurchased
certain public shares by way of centralized price bidding in the trading system of Shanghai Stock Exchange provided that
the total amount of funds for repurchase was no more than RMB300 million and the share repurchase price was no more
than RMB12.00/share and canceled such shares in accordance with law with a repurchase period of 12 months from the
date when the resolution was approved. As at 30 November 2011 the Company repurchased 29252223 shares accounting
for approximately 2.220% of the total issued share capital. The maximum repurchase price was RMB11.33/share and the
minimum repurchase price was RMB7.07/share. The total amount paid was RMB299999708.87 (including stamp duty and
commission) reaching the cap of RMB300 million. The Company completed the Scheme for Repurchasing Certain Public
Shares and went through the formalities for cancellation of repurchased shares with the Shanghai Branch of China Securities
Depository and Clearing Corporation Limited. The post-repurchase share capital was 1288196577 shares.Pursuant to the resolution approved at the General Meeting on 20 April 2012 the Company issued 2 shares for every 10
shares by way of conversion of capital reserve based on the Company's share capital of 1288196577 shares. The share
capital after the conversion was 1545835892 shares. The Company renewed the business license with registration number of
440301501126176.In May 2015 the Company implemented the Equity Incentive Scheme and issued 38043400 restricted shares to 214 equity
incentive participants. The registered capital was changed to 1583879292 shares. The Company completed the changes of
securities registration with the Shanghai Branch of China Securities Depository and Clearing Corporation Limited in July
2015. Moreover the Company completed the changes of the industrial and commercial registration on 23 February 2016 with
unified social credit code of 91440300618874367T.On 21 December 2015 the Company granted the first batch of reserved restricted shares in the Equity Incentive Scheme in
May 2015 to 39 equity incentive participants and the actual number of exercised options was 3150000. The Company's total
share capital following the exercise changed to 1587029292 shares. In February 2016 the Company completed the changes
of securities registration with the Shanghai Branch of China Securities Depository and Clearing Corporation Limited.On 16 May 2016 the Company granted the second batch of reserved restricted shares in the Equity Incentive Scheme in May
2015 to 38 equity incentive participants and the actual number of exercised options was 1360000. The Company's total share
capital following the exercise changed to 1588389292 shares. On 25 July 2016 the Company completed the changes of
securities registration with the Shanghai Branch of China Securities Depository and Clearing Corporation Limited.Pursuant to "the Resolution on Repurchase and Cancellation of Restricted Shares Granted But Not Yet Unlocked Held by
Some Incentive Participants" considered and approved at the 20th Meeting of the 6th Session of the Board on 18 August 2016
1250000 shares were repurchased. After the repurchase the Company's total share capital changed to 1587139292 shares.On 18 November 2016 the Company completed the changes of securities registration with the Shanghai Branch of China
Securities Depository and Clearing Corporation Limited.Pursuant to the "Resolution on Repurchase and Cancellation of Restricted Shares Granted But Not Yet Unlocked Held by
Some Incentive Participants" considered and approved at the 27th Meeting of the 6th Session of the Board on 23 November
2016 1238000 shares were repurchased. After the repurchase the Company's total share capital changed to 1585901292
shares. On 25 January 2017 the Company completed the changes of securities registration with the Shanghai Branch of China
Securities Depository and Clearing Corporation Limited.88Interim Report2021
Pursuant to the "Resolution on Repurchase and Cancellation of Restricted Shares Granted But Not Yet Unlocked Held by
Some Incentive Participants" considered and approved at the 33rd Meeting of the 6th Session of the Board on 27 April 2017
12123020 shares were repurchased. After the repurchase the Company's total share capital changed to 1573778272 shares.On 19 July 2017 the Company completed the changes of securities registration with the Shanghai Branch of China Securities
Depository and Clearing Corporation Limited.Pursuant to the "Resolution on Repurchase and Cancellation of Restricted Shares Granted But Not Yet Unlocked Held by
Some Incentive Participants" considered and approved at the 46th Meeting of the 6th Session of the Board on 21 March 2018
850000 shares were repurchased. After the repurchase the Company's total share capital changed to 1572928272 shares.On 19 June 2018 the Company completed the changes of securities registration with the Shanghai Branch of China Securities
Depository and Clearing Corporation Limited.On 18 October 2018 pursuant to the resolutions of the 34th Meeting of the 6th Session of the Board on 11 May 2017 the 2016
Annual General Meeting on 8 June 2017 the 41st Meeting of the 6th Session of the Board on 16 November 2017 the 48th
Meeting of the 6th Session of the Board on 26 April 2018 and the 2017 Annual General Meeting on 22 May 2018 as approved
by China Securities Regulatory Commission (中国证券监督管理委员会 ) with "Approval in Relation to the Allotment of
Shares by Joincare Pharmaceutical Group Industry Co. Ltd. * (健康元药业集团股份有限公司 )" (Zheng Jian Xu Ke [2018]
No. 1284) on 17 August 2018 365105066 ordinary shares denominated in Renminbi (A Shares) of the Company were
issued to the original shareholders through allotment of shares with a nominal value of RMB1.00 each. After the issuance
the Company's total share capital changed to 1938033338 shares. This capital increase was validated and confirmed by the
Capital Verification Report (Ruihua Yan Zi [2018] No. 40060006) issued by Ruihua Certified Public Accountants.Pursuant to "the Resolution on 2018 Share Options Incentive Scheme (Draft) and its Summary" considered and approved at
the 2018 Third Extraordinary General Meeting on 13 December 2018 and the "Resolution in Relation to the Adjustment of
the Quantity to be Granted and the List of Incentive Participants of the Grant under 2018 Share Options Incentive Scheme"
considered and approved at the 7th Meeting of the 7th Session of the Board on 24 January 2019 21 December 2018 was set
as the date of grant on which 35.72 million share options were granted to 320 incentive participants at an exercise price of
RMB8.21 per share option. Pursuant to "the Resolution on the Grant of Share Options to Incentive Participants under the
Reserved Grant" considered and approved at the 16th Meeting of the 7th Session of the Board on 23 September 2019 and "the
Resolution in Relation to the Adjustment of the Quantity for the Reserved Grant and the List of Incentive Participants of the
Reserved Grant under 2018 Share Options Incentive Scheme" considered and approved at the 17th Meeting of the 7th Session
of the Board on 28 October 2019 23 September 2019 was set as the date of grant on which 8.97 million reserved share
options were granted to 186 incentive participants at an exercise price of RMB10.47 per share option.8887186 share options were exercised from January to March 2020 which was validated and confirmed by the Capital
Verification Report (Zhi Tong Yan Zi [2020] No. 442ZC0063) issued by Grant Thornton; 617109share options were exercised
from April to June 2020 which was validated and confirmed by the Capital Verification Report (Zhi Tong Yan Zi [2020]
No. 442ZC00200) issued by Grant Thornton; 3249839 share options were exercised from July to September 2020 which
was validated and confirmed by the Capital Verification Report (Zhi Tong Yan Zi [2020] No. 442ZC00368) issued by Grant
Thornton; and 1993292 share options were exercised from October to December 2020 which was validated and confirmed
by the Capital Verification Report (Zhi Tong Yan Zi [2021] No. 442C000002) issued by Grant Thornton. As at 31 December
2020 a total of 14747426 share options were exercised; and the Company's total share capital was increased to 1952780764
shares.3848413 share options were exercised from January to March 2021 which was validated and confirmed by the Capital
Verification Report (Zhi Tong Yan Zi [2021] No. 442C000151) issued by Grant Thornton (Special General Partnership);
and 1964040 share options were exercised from April to June 2021 which was validated and confirmed by the Capital
Verification Report (Zhi Tong Yan Zi [2021] No. 442C000453) issued by Grant Thornton (Special General Partnership). As
at 30 June 2021 a total of 5812453 share options were exercised and the Company's total share capital was increased to
1958593217 shares.89The controlling shareholder of the Company is Shenzhen Baiyeyuan Investment Co. Ltd. * (深圳市百业源投资有限公司 )
and the de facto controller is Zhu Baoguo.The Company is engaged in the integrated pharmaceutical industry.Approved business scope of the Company: R&D (excluding R&D of traditional Chinese medicines that have been listed as the
State protection resources and Chinese patent medicine with secret prescriptions) wholesale import and export and related
supporting businesses (not involving goods subject to State trading administration commodities subject to the administration
of quota or license or other special regulations shall apply for approval in accordance with relevant national provisions) of
drugs Chinese patent drugs chemical APIs chemical preparations antibiotic APIs and antibiotic preparations; R&D of food
health food and cosmetics; sale of prepackaged food (excluding frozen food) and special food (including health food and
formula food for special medical use) and R&D and sales of Class I and II medical devices.During the Reporting Period there was no change in the principal activities of the Company.The financial statements and notes to the financial statements of the Company were approved at the 53rd Meeting of the 7th
Session of the Board on 25 August 2021.2. Scope of consolidated financial statements
√Applicable □N/A
Please refer to Note VII "Equity in other entities" for names of subsidiaries included in the consolidation for the first six
months of 2021. Please refer to Note VI "Change to consolidation scope" for details of change to current consolidation scope
of the Company.II. Basis of Preparation for the Financial Statements
1. Basis of preparation
The Company's financial statements have been prepared on the going-concern basis.2. Continuing operation
√Applicable □N/A
The financial statements have been prepared in accordance with the Accounting Standards for 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 CSRC.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 these 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
Specific accounting policies and accounting estimate tips:
√Applicable □N/A
The Company determines the depreciation of fixed assets amortisation of intangible assets capitalisation condition of R&D
expenses and revenue recognition policies on the basis of its production and operation characteristics. Details of accounting
policies are set out in Note III.16Note III.20Note III.21 and Note III.28.90Interim Report2021
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 Company's financial position operating results cash flow and other relevant information.2. Accounting period
The accounting period of the Company is classified into an accounting year and an interim accounting period. An interim
accounting period refers to a reporting period shorter than a full fiscal year. The fiscal year of the Company is from 1 January
to 31 December in each calendar year.3. Business cycle
√Applicable □N/A
Business cycle of the Company consists of 12 months。
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi ("RMB"). Overseas subsidiaries of the
Company usually recognise HK dollar Macau dollar and US dollar as their functional currencies according to the primary
economic environment of which these subsidiaries operate. The Company prepares its financial statements in RMB.5. Accounting treatment for business combinations involving enterprises under common control and business
combinations involving enterprises not under common control
√Applicable □N/A
(1) Business combinations involving enterprises under common control
For the business combination involving entities under common control the assets acquired and liabilities assumed are
measured based on their carrying amounts in the consolidated financial statements of the ultimate controlling party as at
the combination date except the adjustment made due to different accounting policies. The difference between the carrying
amount of the consideration paid for the combination and the net assets acquired is adjusted against share premium in the
capital reserve with any excess adjusted against retained earnings.Business combination involving enterprises under common control and achieved in a number of transactions
In the separate financial statements the initial investment cost will be recognised at the carrying amount of the Company's
share in the combined party's net assets in the consolidated 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 except the
adjustment made due to different accounting policies. The difference between sum of the carrying amount of the investment
held and the carrying amount of the consideration paid for the combination and the carrying amount of the net assets acquired
is adjusted against share premium in the capital reserve with any excess adjusted against retained earnings. For long-term
equity investment held before the control over the combined party is obtained profit or loss other comprehensive income
and other changes to equity interest attributable to the owners recognised from the later of the acquisition of the original
equity interest and the date when the combing party and the combined party are placed under common control until the date
of combination shall be offset against retained profit at the beginning of the period of the comparative financial statements or
profit or loss of the period respectively.
(2) Business combinations involving enterprises not under common control
For the business combinations involving enterprises not under common control the combination cost shall be the 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.91Where 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
profit or loss for current period when accounted for using cost method.In the consolidated financial statements the combination cost is the sum of consideration paid on the acquisition date and fair
value of the acquiree's equity held prior to the acquisition date. The equity of the acquirees held before the acquisition date is
re-measured at the fair value of the equity on the acquisition date and the differences between the fair value and the carrying
amount are recognised in the income for the current period; in respect of any other comprehensive income attributable to
the equity interest in the acquiree held prior to the acquisition date and any changes of other shareholder's equity shall be
transferred to investment profit or loss for current period on the acquisition date except for the other comprehensive income
incurred due to the changes arising from remeasuring net assets or net liabilities of defined benefit plan attributable to the
acquiree.
(3) Transaction fees attribution during the combination
The intermediary and other relevant administrative expenses such as audit legal and valuation advisory for business
combinations are recognised in profit or loss when incurred. Transaction costs of equity or debt securities issued as the
considerations of business combination are included in the initial recognition amounts.6. Preparation of consolidated financial statements
√Applicable □N/A
(1) Scope of consolidation
The scope of consolidated financial statements is determined based on control. Control means the Company has exposures
or rights to variable returns from its involvement with the investee and the ability to affect those returns through power over
such investee. Subsidiaries are the entities controlled by the Company(including enterprises a dividable part of investees and
structured entities).
(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 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.92Interim Report2021
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 on-
going basis from the acquisition date based on the original shareholding proportion i s 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:
· such transactions are entered into simultaneously or upon the consideration of the mutual impacts;
· no complete commercial result will be realised without such transactions as a whole;
· the occurrence of one transaction depends on the occurrence of at least another transaction;
· 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 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
93several 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:
· 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.· 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
√Applicable □N/A
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. Standards for determination of cash and cash equivalents
Cash and cash equivalents of the Company include cash on hand bank deposit readily available for payment and those
investments held by the Company that are short-term (normally due in three months since the acquisition date) highly liquid
readily convertible into known amounts of cash and subject to an insignificant risk of change in value.9. Foreign currency transactions and translation of financial statements in foreign currency
√Applicable □N/A
(1) Foreign currency transactions
Foreign currency transactions incurred by the Company are translated to the functional currency at the spot 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
94Interim Report2021
At the balance sheet date when translating the foreign currency financial statements of overseas subsidiaries the assets
and liabilities in the balance sheet are translated at the spot exchange rate at the balance sheet date; all items except for
"undistributed profits" 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
√Applicable □N/A
Financial instruments are contracts creating financial assets of a party and financial liabilities or equity instruments of other
parties.
(1) Recognition and De-recognition of 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 de-recognised if any of the following conditions is satisfied:
· the contractual right to receive the cash flow of the financial assets is terminated;
· the financial assets has been transferred and the transferred financial asset satisfies the following conditions of de-
recognition.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 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:
A. The Company's business model for managing the financial assets is to collect contractual cash flow;
B. The terms of the financial asset contract stipulate that the cash flow generated on a specific date is only the 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
95or losses arising from financial assets which are measured at amortised cost and not part of any hedging relationship are
included in the profit and loss of the current period upon de-recognition amortisation using the effective interest method or
impairments recognition.Financial assets at fair value through other comprehensive income
The Company shall classify financial assets that meet the following conditions and are not designated as financial assets
measured at fair value through profit or loss for the current period as financial assets measured at fair value through other
comprehensive income:
A. The Company's business model for managing the financial assets is both to collect contractual cash flows and to sell the
financial assets;
B. The terms of the financial asset contract stipulate that the cash flow generated on a specific date is only the payment for
principal and interest accrued on the outstanding principal.After initial recognition these 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 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
96Interim Report2021
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.Distinction between financial liabilities and equity instruments
The financial liability is the liability that meets one of following criteria:
· Contractual obligation to deliver cash or other financial instruments to another entity.· Under potential adverse condition contractual obligation to exchange financial assets or financial liabilities with other
parties.· 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.· 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
97relation 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;
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
98Interim Report2021
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. Bills receivable
· Bills receivable portfolio 1: Bank acceptance bills
· Bills receivable portfolio 2: Commercial acceptance bills
B. Accounts receivables
· Accounts receivables portfolio 1: Amount due from domestic customers
· Accounts receivables portfolio 2: Amount due from overseas customers
· Accounts receivables portfolio 3: Receivables of consolidated companies
Contract assets
Contract assets portfolio: Sale of products
For bills receivable 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
99exposures of default and lifetime expected credit losses rate with reference to the historical credit loss experience current
situation and forecasts of future economic conditions.For other receivables and long-term receivables other than finance lease receivables and equity transfer receivables that
are classified as portfolio the Company measures expected credit losses based on the risk exposures of default and future
12-month or lifetime expected credit losses rate.Debt investments and other debt investments
For debt investments and other debt investments the Company measures expected credit losses based on the nature of
investments counterparties and various types of risk exposures and the risk exposures of default and future 12-month or
lifetime expected credit losses rate.Assessment of 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 a 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;
· 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.100Interim Report2021
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.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.101For 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
√Applicable □N/A
(1) Classification of inventories
The Company's inventories include raw materials packaging materials finished goods work-in-progress low-value
consumables subcontracting materials inventory goods and expendable biological assets.
(2) Method of costing
The method of costing of the Company's inventories: Cost of finished goods are measured at planned cost and material cost
differences are carried forward at the end of the period to adjust planned cost to actual cost; other inventories are measured
at actual cost on acquisition and raw materials received are accounted for by the weighted-average method; low-value
consumables and packaging materials are amortised in full upon the use.
(3) The underlying factors in the determination and the basis of provision for diminution in net realisable value of inventories
On the balance sheet date the inventories are calculated at the lower of cost and the net realisable value. When the net
realisable value is lower than the cost the provision for diminution in value of inventories is made on an item-by-item basis
at the excess of the cost of the inventory over its net realisable value. For large volume inventories with low unit price
the provision for diminution in the value of inventories is made by categories. Inventories that are related to a product line
manufactured and sold in the same region have the same or similar end use or purpose and are 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
Low-value consumables of the Company are amortised in full when used.13. Assets held for sale
√Applicable □N/A
(1) Category and measurement of non-current assets or the disposal group held for 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.102Interim Report2021
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 non-
current 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 stopped.When certain non-current asset or disposal group classified into the held-for-sale category no longer meets the classification
criteria for held-for-sale category the Company shall stop classifying it into the held-for-sale category and measure it
according to the lower of the following two amounts:
· 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;
· The recoverable amount.
(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:
· The component represents an independent principal business or a separate principal business place.· The component is a part of the related plan for the contemplated disposal of an independent principal business or a separate
principal business place.· 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.103The 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
√Applicable □N/A
The long-term equity investment includes the equity investment in the subsidiary joint ventures and associates. The investee
over which the Company has 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
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.104Interim Report2021
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 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.105(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
(1). Measured at cost
Investment properties are properties held to earn rental or capital appreciation or both. The investment properties of the
Company include land use rights that have already been leased out land use rights that are held for the purpose of sale after
capital appreciation buildings that have been already been leased out etc.Investment properties of the Company are measured initially at cost upon acquisition and subject to depreciation or
amortisation in the relevant periods according to the relevant provisions on 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
√Applicable □N/A
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
√Applicable □N/A
Category Depreciation methods Useful years (year) Annual depreciation Residual rate %
Properties and Buildings Equal annual instalment method 20 4.5%-4.75% 5%-10%
Machine and equipment Equal annual instalment method 10 9%-9.5% 5%-10%
Transportation Equipment Equal annual instalment method 5 18%-19% 5%-10%
Electric equipment and others Equal annual instalment method 5-10 18%-19% 5%-10%
Where for the fixed assets for which depreciation provision is made to determine the depreciation rate the accumulated
amount of the fixed asset depreciation provision that has been made shall be deducted.106Interim Report2021
(3). The impairment testing and the impairment provision of fixed assets
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
√Applicable □N/A
When the company's leased fixed assets meet one or more of the following criteria it is recognized as finance leased fixed
assets:
· At the expiration of the lease term the ownership of the leased assets is transferred to the company.· 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.· Even if the ownership of the asset is not transferred the lease term occupies most of the useful life of the leased asset.· 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.· The leased assets are of special nature and only our company can use them if they don't undergo major transformation.For fixed assets leased by finance leases the lower of the fair value of the leased assets on the lease start date and 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 within the useful life of the leased asset; if it cannot be reasonably determined that the
ownership of the leased asset will be obtained at the end of the lease term the leased asset is still usable during the lease term
Depreciation is accrued in the shorter of the two years.
(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.
(6). Overhaul costs
The overhaul costs occurred in regular inspection of f are recognised in the cost of property plant and equipment if there
is undoubted evidence to confirm that they meet the recognition criteria of fixed assets otherwise the overhaul costs are
recognised in profit or loss for the current period. Property plant and equipment are depreciated during the intervals of the
regular overhaul.17. Construction in progress
√Applicable □N/A
Construction in progress is measured at actual cost. Actual cost comprises necessary project expenditure incurred during
construction borrowing cost that are eligible for capitalisation and other necessary cost incurred to bring the 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".10718. Borrowing costs
√Applicable □N/A
(1) Recognition principle of capitalisation of borrowing costs
For borrowing costs that are directly attributable to the acquisition construction or production of a qualifying asset they shall be
capitalised and included in the cost of related assets; other borrowing costs are recognised as expenses and included in profit or
loss when incurred. Capitalisation of such borrowing costs can commence only when all of the following conditions are satisfied:
· 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;
· Borrowing costs incurred;
· 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
√Applicable □N/A
(1) Determination of biological assets
Biological assets refer to assets comprising living animals and plants. No biological asset shall be recognised unless it meets
the conditions as follows simultaneously:
· An enterprise possesses or controls the biological asset as a result of past transaction or event;
· The economic benefits or service potential concerning this biological asset are likely to flow into the enterprise;
· 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.108Interim Report2021
The cost of a consumable biological asset shall at the time of harvest or sale be carried over at its book value by the weighted
average method.
(3) Impairment of biological assets
If the net realisable value of the consumable biological assets is lower than their carrying amount provision of impairment loss
is made and recognised in the profit or loss for the current period as the excess of the carrying amount over the net realisable
value. If the factors 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
(1). Pricing methods useful lives and impairment tests
√Applicable □N/A
An intangible asset is an identifiable non-monetary asset without physical substance owned or 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
Land use rights The useful life specified in the land use right certificate
Patent and technical know-how Protection period or benefit period stipulated by relevant national laws and regulations
Trademark rights Ten years
Others Benefit period
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
√Applicable □N/A
Expenditures on an internal research and development project are classified into expenditures on the research phase and
expenditures on the development phase.Expenditures on the research phase shall be recognised in profit or loss for the current period when incurred.109Expenditures on the development phase will be capitalised only when all of the following conditions are satisfied: it is
technically feasible to complete the intangible asset so that it will be available for use or sale; the Company intends to complete
the intangible asset and use or sell it; it can be demonstrated how the intangible asset will generate economic benefits
including proving that the intangible assets or the products produced by it will have markets or the intangible assets for
internal use will be useful; there are adequate technical financial and other resources to complete the development and the
Company is able to use or sell the intangible assets; and expenditures on the development phase attributable to the intangible
assets can be reliably measured. The development expenditures that do not satisfy the above conditions shall be recognised in
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
throught 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:
· 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.· 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.· 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 · and · above.· 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.· 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
√Applicable □N/A
The impairment of subsidiaries associates and joint ventures in the long-term equity investments investment properties subsequently
measured at cost fixed assets construction in progress right-of-use assets intangible assets etc. (Excluding inventories
investment properties measured at fair value deferred income tax assets and financial assets) are determined as follows:
At the balance sheet date the Company determines whether there may be evidence of impairment if there is any the Company
will estimate the recoverable amount for impairment and then test for impairment. For goodwill arising from a business
combination intangible assets with 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 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.110Interim Report2021
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
√Applicable □N/A
The Company's long-term deferred expenses measured at cost actually incurred and evenly amortised on straight-line basis
over the expected beneficial period. For the long-term deferred expense items that cannot benefit in subsequent accounting
period their amortised value is recognised through 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
√Applicable □N/A
During the accounting period in which the employees render the related services wages bonuses social security contributions
(including medical insurance injury insurance maternity insurance etc.) and house funding are recognised as liability and
included in the profit or loss for the current period or related asset costs. If the liability cannot be wholly settled within twelve
months after the end of the annual reporting period in which the employees render the related service and have significant
financial impact the liability shall be measured as the discounted amounts.
(3). Post-employment benefits
√Applicable □N/A
Post-employment benefit plans mainly includes defined contribution plans and defined benefit plans. Defined contribution
plans include the basic pension insurance unemployment insurance etc. and the contributions to defined contribution plans
are recognised and included in profit or loss for the current period or related asset costs.
(4). Termination benefits
√Applicable □N/A
111The 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
√Applicable □N/A
When other long-term employee benefits provided to the employees by the Company are satisfied the conditions of a defined
contribution plan those benefits shall be accounted for in accordance with the relevant provisions of the above defined
contribution plans. When the benefits are satisfied the conditions of a defined benefit plan those benefits shall be accounted
for in accordance with the relevant provisions of the above 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. Provisions
√Applicable □N/A
An obligations related to a contingency is recognised as a provision when all of the following conditions are satisfied:
(1) The obligation is a present obligation of the Company;
(2) It is probable that an outflow of economic benefits will be required to settle the obligation;
(3) The amount of the obligation can be measured reliably.
Provisions are initially measured at the best estimate of the payment to settle the associated obligations and consider 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 Comapany 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
√Applicable □N/A
(1) Accounting treatment of share-based payment
Share-based payments are transactions in which equity instruments are granted or liabilities are assumed on the basis of equity
instruments in order to obtain services from employees or other parties. Share-based payment is classified into equity-settled
share-based payment and cash-settled share-based payment.· Equity-settled share-based payment
Equity-settled share-based payment is measured at the fair value of the equity instruments granted to employees. If vesting is
conditional upon completion of services in the pending period or fulfillment 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.112Interim Report2021
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.· 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 fulfillment 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 fulfill non-vesting
conditions but have not fulfilled during the pending period the Company will treat the granted equity instruments as cancelled.
(3) Accounting treatment for share-based payments involving the Company and the shareholders or the de facto controller of the
Company
For share-based payment transactions involving the Company and the shareholders or the de facto controller of the Company
the settlement enterprise and the enterprise receiving services (one under the Company while another external to the Company)
shall follow the requirements below to conduct accounting treatment in the Company's consolidated financial statements:
· 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.113· 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 between each enterprise 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 (as
compared with the above principles).27. Preferred shares perpetual bonds and other financial instruments
√Applicable □N/A
(1) Classification of financial liabilities and equity instruments
The Company classifies the financial instrument or its components as financial assets financial liabilities or 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. Income
√Applicable □N/A
The Company shall recognise revenue when the Company satisfies the performance obligation of the contract that is the
customer obtains control of relevant goods or services.When the contract contains two or more performance obligations on the effective date of the contract the Company allocates
the transaction price to each performance obligation based on the percentage of respective unit price of a good or service
guaranteed by each performance obligation and the revenue is measured according to the transaction price allocated to each
performance obligation.If one of the following conditions is fulfilled the Company satisfies a performance obligation over time; otherwise it satisfies a
performance obligation at a point in time:
· When the customer simultaneously receives and consumes the benefits provided by the Company when the Company
performs its obligations under the contract.· When the customer is able to control the commodity in progress in the course of performance by the Company under the
contract.· 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.114Interim Report2021
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:
· 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.· 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.· The Company has transferred the physical possession of goods to the customer which is when the customer obtains
physical possession of the goods.· 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.· When the customer has accepted the goods or services.· 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 to custom declaration upon making declaration for
goods and completing the export procedures.29. Contract costs
□N/A
Contract costs are either the incremental costs of obtaining a contract with a customer or the costs to fulfil a contract with a
customer.Incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customer that it
would not have incurred if the contract had not been obtained e.g. an incremental sales commission. The Company recognises
as an asset the incremental costs of obtaining a contract with a customer if it expects to recover those costs. Other costs of
obtaining a contract are expensed when incurred.If the costs to fulfil a contract with a customer are not within the scope of inventories or other accounting standards the
Company recognises an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:
· 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;
· 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;
115· 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:
· Remaining amount of consideration that the Company expects to receive in exchange for the goods or services to which
the asset relates;
· 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
√Applicable □N/A
A government grant shall be recognised only when the enterprise can comply with the conditions attaching to the grant and the
enterprise can receive the grant.If a government grant is in the form of a transfer of a monetary asset the item is measured at the amount received. If a
government grant is in the form of a transfer of a non-monetary asset the item is measured at fair value when fair value is not
reliably determinable the item is measured at a nominal amount of RMB1.Government grant related to assets represents the government grant received for acquisition and construction of long term
assets or forming long term assets in other ways. Except for these all are government grant related to income.Regarding to the government grant not clearly defined in the official documents and can form long term assets the part of
government grant which can be referred to the value of the assets is classified as government grant related to assets and the
remaining part is government grant related to income. For the government grant that is difficult to distinguish the entire
government grant is 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 and expenses.If the recognised government grants need to be refunded adjust the carrying amount of assets when the carrying amount of
assets is offset at the time of initial recognition; the balance of deferred income is offset against the carrying amount of the
balance of deferred income and the excess is recognised in the profit or loss for the current period. Other circumstances it is
directly recognised in the profit or loss for the current period.116Interim Report2021
31. Deferred tax assets and deferred tax liabilities
□N/A
(1) Current tax
At the balance sheet date for the current tax liabilities (or assets) arising from the current period and the previous period
should be measured by the tax of the estimated payable (returnable) amount which be calculated according to the regulations
of the tax law. The amount of the tax payable which is based by the calculation of the current tax expenses are according to the
result measured from the corresponding adjustment of the pre-tax accounting 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 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 comprises 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.117(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 executes
the net amount settlement as well as the assets acquiring and liabilities liquidation at the same time while owns the legal rights
of settling the net amount.The deferred tax assets and liabilities of the Company should be listed as written-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
√Applicable □N/A
(1) Identification of leases
At the inception of a contract the Company as a lessee or lessor assesses if the customer in a 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.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.118Interim Report2021
(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 installments in the
profit or loss for the current period. The variable lease payment which is obtained in connection with an operating lease and
not included in the lease receivables shall be included in the profit and loss for the current period when they actually occur.33. Right-of-use assets
√Applicable □N/A
(1) Recognition condition of right-of-use assets
The right-of-use assets of the Company are defined as the right of underlying assets in the lease term for the Company as a
lessee.Right-of-use assets are initially measured at cost as at the commencement date of the lease which consists of: the amount of
the initial measurement of the lease liability; any lease payments made at or before the commencement date of the lease less
any lease incentives received if any; initial direct expenses incurred by the Company as a lessee; costs to be incurred by the
Company as a lessee in dismantling and removing a leased asset restoring the site on which it is located or restoring the leased
assets to the condition required by the terms and conditions of the lease. The Company as a lessee recognises and measures the
costs of demolition and restoration according to "Accounting Standards for Business Enterprises No.13 – Contingencies" and
subsequently adjusts for any remeasurement of lease liability.
(2) Depreciation method of right-of-use assets
The Company calculates depreciation on a straight-line basis. Right-of-use assets in which the Company as a lessee is
reasonably certain to obtain ownership of the underlying leased assets at the end of the lease term are depreciated over the
remaining useful life. Otherwise right-of-use assets are depreciated over the shorter of the lease term and its remaining useful
life.
(3) For methods of impairment testing and provision for impairment for right-of-use assets please refer to note III. 22.
11934. 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
√Applicable □N/A
Significant accounting estimates and critical assumptions adopted by the Company are continually evaluated based on
historical experience and other factors including expectations of future events that are believed to be reasonable. The
significant accounting estimates and critical assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next accounting year are set out below:
(1) 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.120Interim Report2021
(3) Impairment of goodwill
The Company evaluates whether goodwill is impaired at least once a year. This requires an estimate of the value in use of the
asset groups to which the goodwill is allocated. In estimating the value in use the Company needs to estimate the future cash
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.
(4) Development expenditure
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.
(5) Deferred income tax assets
The deferred income tax assets will be recognised for all unused tax losses to the extent that it is probable that there will be
sufficient taxable profits against which the loss is utilised. This requires the management to exert numerous judgments to
estimate the timing and amount of the future taxable profits so as to determine the amount of deferred income tax assets to be
recognised with reference to the tax planning strategy.
(6) Revenue recognition
As stated in note III. 28 the Company makes the following significant accounting judgements and estimates in terms 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.
(7) Determination of the fair value of unlisted equity investment
The fair value of unlisted equity investments represents the expected future cash flows discounted at the prevailing discount
rate of items with similar terms and risk characteristics. It requires the Company to estimate the expected future cash 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
□Applicable √N/A
(2). Changes in significant accounting estimates
□Applicable √N/A
(3). Description of adjustments in opening balances of line items in financial statements of the current year due to first
implementation of new lease standard since 2021
□Applicable √N/A
(4). Description of retrospective adjustments in comparative data in prior periods due to first implementation of new lease standard
in 2021
□Applicable √N/A
121IV. Taxation
1. The main taxes and tax rates
√Applicable □N/A
Tax category Basis of taxation Statutory tax rate (%)
Value added tax Taxable income 3 6 13
Urban maintenance and construction tax Turnover tax to be paid 1 5 7
Education surcharges Turnover tax to be paid 3
Local education surcharge Turnover tax to be paid Note 1
Enterprise income tax Turnover tax to be paid Note 2
Note 1: The Company and its subsidiaries that are incorporated in Zhuhai shall pay local education surcharges that are charged
as 2% of the turnover tax to be paid. Other subsidiaries shall pay local education surcharges according to the tax rate as
specified at their places of incorporation on the basis of turnover tax to be paid.Note 2: Disclosure of taxpayers (if any) with different rates of enterprise income tax
√Applicable □N/A
Taxpayer Rate of enterprise income tax (%)
Hong Kong Health Pharmaceutical Industry Company Limited Livzon Pharmaceutical 16.5
Biotechnology Co. Limited Lian (Hong Kong) Co. Ltd. Livzon Biologics Hong Kong
Limited
Companhia de Macau Carason Limitada Li Zhu (Macau) Limitada (Note 1) 12
Shenzhen Taitai Pharmaceutical Co. Ltd Shenzhen Haibin Pharmaceutical Co. Ltd 15
Xinxiang Haibin Pharmaceutical Co. Ltd Jiaozuo Joincare Bio Technological Co.Ltd Shanghai Frontier Health Medicine Technology Co. Ltd Guangzhou Joincare
Respiratory Medicine Engineering Technology Co. Ltd Livzon Group Livzon Group
Limin Pharmaceutical Manufacturing Factory Livzon Group Livzon Pharmaceutical
Factory Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co. Ltd.Shanghai Livzon Pharmaceutical Manufacturing Co. Ltd. Livzon Group Xinbeijiang
Pharmaceutical Manufacturing Inc. Sichuan Guangda Pharmaceutical Manufacturing
Co. Ltd. Zhuhai Livzon Diagnostics Inc. Livzon Group Fuzhou Fuxing Pharmaceutical
Co. Ltd. Shanghai Livzon Biotechnology Co. Ltd. and Livzon Group (Ningxia)
Pharmaceutical Manufacturing Co. Ltd.Livzon MAB Pharm (US) Inc. 21
Health Investment Holdings Ltd JoincarePharmaceutical Group Industry Co.Ltd. 0
Livzon International Limited Livzon Biologics Limited Livzon International Ventures
Livzon International Ventures I Livzon International Ventures II. (Note 2)
Other subsidiaries 25
Note 1: Tax rate is 12% where the taxable income is MOP600000 or more; for those with taxable income less than
MOP600000 they are exempted from income taxes.Note 2: Companies registered in the British Virgin Islands and the Cayman Islands are not subject to enterprise income tax
122Interim Report2021
2. Tax incentives
√Applicable □N/A
(1) Preferential value added tax
In accordance with the Announcement on Value Added Tax on Biological Products Sold by Pharmaceutical Operation
Enterprises issued by the State Administration of Taxation (Announcement of State Administration of Taxation 2012 No. 20)
and the Notice of the Ministry of Finance the General Administration of Customs the State Administration of Taxation and
the State Drug Administration on the Value-Added Tax Policies for Anti-Cancer Drugs (Caishui [2018] No. 47) the biological
products sold by the Company are subject to value added tax at 3% by the simple approach.
(2) Preferential enterprise income tax
The Company's subsidiaries Shenzhen Taitai Phamaceutical Co. Ltd Shenzhen Haibin Phamaceutical Co. Ltd Xinxiang
Haibin Phamaceutical Co. Ltd and Shanghai Frontier Health Medicine Technology Co. Ltd are entitled to enjoy
preferential income tax policies applicable to high and new technology enterprises since 2020 for a valid period of three
years. Livzon Group and its subsidiaries Livzon Group Limin Pharmaceutical Manufacturing Factory Livzon Group
Livzon Pharmaceutical Factory Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co. Ltd. Shanghai Livzon
Pharmaceutical Manufacturing Co. Ltd. Livzon Group Fuzhou Fuxing Pharmaceutical Co. Ltd. and Sichuan Guangda
Pharmaceutical Manufacturing Co. Ltd. are entitled to enjoy preferential income tax policies applicable to high and new
technology enterprises since 2020 for a valid period of three years; Livzon Group Xinbeijiang Pharmaceutical Manufacturing
Inc. and Zhuhai Livzon Diagnostics Inc. are entitled to preferential income tax policies applicable to high and new technology
enterprises since 2019 for a valid period of three years; Shanghai Livzon Biotechnology Co. Ltd. has reapplied and recognised
as the high and new technology enterprises for the Period; Livzon Group (Ningxia) Pharmaceutical Manufacturing Co. Ltd.was approved to enjoy the enterprise taxation preference of the Encouraged Industries in Western China. Such companies were
subject to an enterprise income tax rate of 15% for the Period.In accordance with Article 27 of the Enterprise Income Tax Law of the People's Republic of China and Article 86 of the
Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China the business of
planting Chinese herbal medicines engaged by the subsidiaries of the Livzon Datong Livzon Qiyuan Medicine Co. Ltd. and
Longxi Livzon Shenyuan Medicine Co. Ltd. are exempted from enterprise income tax.3. Others
□Applicable √N/A
123V. Notes to the Components of the Consolidated Financial Statements
1. Monetary funds
Items 30 June 2021 31 December 2020
Amount in Translation Amount in Amount in Translation Amount in
foreign rate RMB foreign rate RMB
currency currency
Cash on hand: 653340.73 197923.25
RMB 605286.90 148845.40
HKD 30521.06 0.83208 25395.96 30521.06 0.84164 25687.74
USD 706.00 6.4601 4560.83 706.00 6.5249 4606.58
Euro 2063.67 7.6862 15861.79 2063.67 8.025 16560.95
GBP 250.00 8.941 2235.25 250.00 8.8903 2222.58
Bank deposits: 10180998574.47 12131569238.87
RMB 8761663322.25 10797711400.19
HKD 542888275.05 0.83208 451726475.90 397295268.64 0.84164 334379589.89
USD 149348410.22 6.4601 964805664.87 152908866.07 6.5249 997715060.07
Euro 100590.09 7.6862 773155.55 78241.56 8.025 627888.52
MOP 2492385.85 0.8084 2014844.72 1370869.68 0.8172 1120274.70
GBP 1690.10 8.941 15111.18 1690.10 8.8903 15025.50
Of bank
deposits: deposit
with financial
companies
Other monetary 174095025.98 157331451.07
funds:
RMB 64454311.78 67550057.63
HKD 26519036.70 0.83208 22065960.06 1617225.39 0.84164 1361121.58
USD 13556253.64 6.4601 87574754.14 13551207.20 6.5249 88420271.86
Total 10355746941.18 12289098613.19
Of which: total 1334237446.03 1147163147.28
overseas deposits
· 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.· Structured deposits time deposits in bank deposit and restricted funds relating to issuing letters of credit and foreign
exchange forward contracts etc. in other monetary funds were deducted from cash and cash equivalents in the cash flow
statement. Apart from these restricted funds there is no other charge pledge or lock up on the balance of cash at bank and on
hand that may limit its use is kept outside China and may have probable risks in its collection. Below are the details of the use
of restricted monetary funds:
Item 30 June 2021 31 December 2020
Time deposit 100000000.00 100000000.00
Letter of Credit Margin 9277563.34 6378736.56
Bank Acceptance Draft Margin 50597783.31 57075915.14
Other business margin 2932159.06 2862650.00
Total 162807505.71 166317301.70
124Interim Report2021
2. Financial assets held for trading
√Applicable □N/A
(1) Classification
Unit: Yuan Currency: RMB
Item Balance at theEnd Balance at theBeginning
of the Period of the Period
Financial asset measured at fair value through profit or loss 241873785.15 28328748.72
Of which:
Debt instrument investments 926807.89 909752.05
Equity instrument investments 237166389.06 14351400.72
Derivative financial assets 3780588.20 13067595.95
Total 241873785.15 28328748.72
Other descriptions:
√Applicable □N/A
· The company's investments in equity instruments and debt instruments for financial assets held for trading at the End of the
Period were listed for trading on Shenzhen Stock Exchange and Hong Kong Stock Exchange. The fair value was determined
based on the closing price on the last trading day in the Reporting Period.· 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 realised in the ending balance.
(3) No hedging instruments in the ending balance and no hedging transactions have occurred during the Period.
3. Bills receivable
√Applicable □N/A
Unit: Yuan Currency: RMB
Types of bills Balance at the End Balance at the Beginning
of the Period of the Period
Bank acceptance bills 1826636857.39 1343494818.54
Commercial acceptance bills 0.00 0.00
bad debts -481000.00 -481000.00
Total 1826155857.39 1343013818.54
(1). Pledged bills receivables at the End of the Period
√Applicable □N/A
Unit: Yuan Currency: RMB
Type Pledged amount atthe End ofthe Period
Bank acceptance bills 802531287.95
Total 802531287.95
As at 30 June 2021 bills with carrying amount of RMB 802531287.95(31 December 2020: RMB 365916598.01)were
pledged for bank acceptance bills.
(2). Endorsed or discounted bills receivables not yet mature as of the balance sheet date at the End of the Period
√Applicable □N/A
Unit: Yuan Currency: RMB
Type Derecognised amount at the Amount not derecognised at
End of the Period the End of the Period
Bank acceptance bills 312339291.89 0.00
Commercial acceptance bills 3953012.00 0.00
Total 316292303.89 0.00
125(3). Bills transferred into account receivables for non-performance by the issuer as at the End of the Period
√Applicable □N/A
(4). Classification by method of provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
Category Balance at the End of the Period Balance at the Beginning of the Period
Gross amount Provision for bad debt Carrying value Gross amount Provision for bad debt Carrying value
Amount Percentage Amount Expected Amount Percentage Amount Expected
(%) credit loss (%) credit loss
rate (%) rate (%)
Provision for bad debt 481000.00 0.03 481000.00 100.00 0.00 481000.00 0.04 481000.00 100.00 0.00
on an individual basis
Of which:
Commercial acceptance 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
bills
Bank acceptance bills 481000.00 0.03 481000.00 100.00 0.00 481000.00 0.04 481000.00 100.00 0.00
Provision for bad debt 1826155857.39 99.97 0.00 0.00 1826155857.39 1343013818.54 99.96 0.00 0.00 1343013818.54
on a collective basis
Of which:
Bank acceptance bills 1826155857.39 99.97 0.00 0.00 1826155857.39 1343013818.54 99.96 0.00 0.00 1343013818.54
Total 1826636857.39 100.00 481000.00 0.03 1826155857.39 1343494818.54 100.00 481000.00 0.04 1343013818.54
Provision for bad debt on an individual basis :
√Applicable □N/A
Unit: Yuan Currency: RMB
Name Balance at the End of the Period
Gross Provision for Expected credit Reason for provision made
amount bad debt loss rate (%)
Henan Jiuzhoutong Pharmaceutical Co. Ltd. 431000.00 431000.00 100.00 Not expected to be recoverable
Other customers 50000.00 50000.00 100.00 Not expected to be recoverable
Total 481000.00 481000.00 100.00 /
Descriptions of provision for bad debts made individually:
□Applicable √N/A
Provision for bad debt on a collective basis:
□Applicable √N/A
If the provision for bad debts is made in accordance with the general model of expected credit losses please refer to other
receivables disclosure:
□Applicable √N/A
(5). Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
Category Balance at the Beginning Changes for the current period Balance at the End
of the Period Provision Recovery or reversal Removal/write-off of the Period
Provision for bad debts 481000.00 0.00 0.00 0.00 481000.00
Total 481000.00 0.00 0.00 0.00 481000.00
Significant recovery or reversal of bad debt provision for the current period:
√N/A
126Interim Report2021
(6). Bills receivable actually written off for the current period
□Applicable √N/A
Other descriptions:
□Applicable √N/A
4. Account receivables
(1). Disclosed by aging analysis
√Applicable □N/A
Unit: Yuan Currency: RMB
Age Balance at the End of the Period
Subtotal within 1 year: 2895422892.04
1-2 years 16988771.15
2-3 years 17429541.43
3-4 years 2189285.28
4-5 years 4437021.59
Over 5 years 18379673.86
Provision for bad debt -78675079.46
Total 2876172105.89
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 category based on methods of provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
Category Balance at the End of the Period Balance at the Beginning of the Period
Gross amount Provision for bad debt Carrying value Gross amount Provision for bad debt Carrying value
Amount Percentage Amount Percentage Amount Percentage Amount Percentage
(%)(%)(%)(%)
Provision for bad debt 10425148.15 0.35 6228462.95 59.74 4196685.20 10426275.67 0.41 6229590.47 59.75 4196685.20
on an individual basis
Of which:
Due from domestic 10312742.41 0.35 6116057.21 59.31 4196685.20 10312742.41 0.41 6116057.21 59.31 4196685.20
customers
Due from overseas 112405.74 0.00 112405.74 100.00 0.00 113533.26 0.00 113533.26 100.00 0.00
customers
Provision for bad debt 2944422037.20 99.65 72446616.51 2.46 2871975420.69 2514820193.56 99.59 71610656.24 2.85 2443209537.32
on a collective basis
Of which:
Due from domestic 2355198925.15 79.71 64294005.61 2.73 2290904919.54 2028481823.13 80.33 64858199.12 3.20 1963623624.01
customers
Due from overseas 589223112.05 19.94 8152610.90 1.38 581070501.15 486338370.43 19.26 6752457.12 1.39 479585913.31
customers
Total 2954847185.35 100.00 78675079.46 2.66 2876172105.89 2525246469.23 100 77840246.71 3.08 2447406222.52
127Provision for bad debt on an individual basis:
√Applicable □N/A
Unit: Yuan Currency: RMB
Description Balance at the End of the Period
Gross amount Provision for bad debt Percentage (%) Reason for provision made
Payment for goods 10425148.15 6228462.95 59.74 Not expected to be recoverable
Total 10425148.15 6228462.95 59.74 /
Descriptions of provision for bad debts made individually:
□Applicable √N/A
Provision for bad debt on a collective basis:
√Applicable □N/A
Item: Due from domestic customers
Unit: Yuan Currency: RMB
Name Balance at the End of the Period
Account receivables Provision for bad debt Percentage (%)
Within 1 year: 2306199779.99 32929841.06 1.43
1-2 years(including 2 years) 16876365.41 2935739.06 17.40
2-3 years(including 3years) 8751510.33 5370907.19 61.37
3-4years(including 4 years) 2129018.68 1924077.14 90.37
4-5 years(including 5 years) 4437021.59 4328212.01 97.55
Over 5 years 16805229.15 16805229.15 100.00
Total 2355198925.15 64294005.61 2.73
Item: Due from overseas customers
Unit: Yuan Currency: RMB
Name Balance at the End of the Period
Account receivables Provision for bad debt Percentage (%)
Within 1 year: 589223112.05 8152610.90 1.38
1-2 years(including 2 years) 0.00 0.00 0.00
2-3 years(including 3years) 0.00 0.00 0.00
3-4years(including 4 years) 0.00 0.00 0.00
4-5 years(including 5 years) 0.00 0.00 0.00
Over 5 years 0.00 0.00 0.00
Total 589223112.05 8152610.90 1.38
Standards of provision for bad debts on a collective basis and descriptions thereof:
□Applicable √N/A
If the provision for bad debts is made in accordance with the general model of expected credit losses please refer to other
receivables disclosure:
□Applicable √N/A
128Interim Report2021
(3). Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
Category Balance at the Beginning Changes for the current period Balance at the End
of the Period Provision Recovery or Removal/write-off Other of the Period
reversal changes
Provision for 77840246.71 8839388.74 0.00 8002612.33 -1943.66 78675079.46
bad debts
Total 77840246.71 8839388.74 0.00 8002612.33 -1943.66 78675079.46
Significant recovery or reversal of bad debt provision for the current period:
□Applicable √N/A
(4). Actual write-off of account receivables for the Period
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Amount written-off
Accounts receivable actually written off 8002612.33
Significant accounts receivable that are written off:
□Applicable √N/A
Descriptions of write-off of accounts receivable:
□Applicable √N/A
(5). Aggregate amount of account receivables due from the top five parties at the End of the Period
√Applicable □N/A
The aggregate amount of account receivables due from the top five parties with the largest amounts at the End of the Period
was RMB 274692123.41 for the Period representing 9.30% of the total amount of account receivables at the End of the
Period and the corresponding total balance of provision for bad debt at the End of the Period was RMB3746740.12.
(6). Derecognised account receivables due to the transfer of financial assets.
□Applicable √N/A
(7). assets or liabilities formed by its continuous involvement of transferring account receivables
□Applicable √N/A
Other descriptions:
□Applicable √N/A
5. Prepayments
(1) Disclosure of prepayments by aging analysis
√Applicable □N/A
Unit: Yuan Currency: RMB
Age Balance at the End of the Period Balance at the Beginning of the Period
Amount Percentage (%) Amount Percentage (%)
Within 1 year 424818861.90 95.91 199646272.88 95.11
1-2 years 13934351.28 3.14 8545039.74 4.07
2-3 years 2564135.89 0.58 552633.55 0.26
Over 3 years 1631445.04 0.37 1182094.40 0.56
Total 442948794.11 100.00 209926040.57 100.00
129(2) Prepayments with five largest amounts by receivers of prepayments at the End of the Period
√Applicable □N/A
The aggregate amount of prepayments paid to the five largest receivers of prepayments at the End of the Period was
RMB119668144.90 for the Period representing 27.02% of the total balance of prepayments at the End of the Period.Other descriptions:
□Applicable √N/A
6. Other receivables
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of Balance at the Beginning of
the Period the Period
Dividends receivable 4175569.86 0.00
Other receivables 192676721.85 177240162.81
Total 196852291.71 177240162.81
Other descriptions:
□Applicable √N/A
Dividends receivable
√Applicable □N/A
Unit: Yuan Currency: RMB
Project (or invested unit) Balance at the End of Balance at the Beginning of
the Period the Period
China Galaxy Securities Co. Ltd. 4175569.86 0.00
Less: Provision for bad debt 0.00 0.00
Total 4175569.86 0.00
Other receivables
(1) Disclosure by aging analysis
√Applicable □N/A
Unit: Yuan Currency: RMB
Age Balance at the End of the Period
Subtotal within 1 year 182792141.27
1-2 years 11406190.12
2-3 years 1586123.34
3-4 years 1475455.77
4-5 years 851390.67
Over 5 years 52159124.92
Provision for bad debt -57593704.24
Total 192676721.85
130Interim Report2021
(2) Disclosure by nature of amounts
√Applicable □N/A
Unit: Yuan Currency: RMB
Nature Balance at the End Balance at the Beginning
of the Period of the Period
Deposits under guarantee deposits and lease expenses 11209277.48 10427225.66
Reserved fund and advances 25443781.06 22442315.38
Related party balances 27627492.36 34057672.41
External entities balances 22969810.24 20635951.11
Tax refund on exports 15694997.58 23764211.44
Treasury bonds and margin 18982036.71 18982036.71
Capital reduction 92347581.27 92347581.27
Amounts of exercised options 33338151.50 9169356.40
Others 2657297.89 2610860.99
Total 250270426.09 234437211.37
(3) Provision for bad debt
√Applicable □N/A
At the End of the Period the provision for bad debt in Step 1 was as follows:
Category Gross amount Expected credit Provision Carrying value Reason
loss rate over the for bad
next 12 months (%) debt
Provision for bad debt on an individual basis 125685732.77 0.00 0.00 125685732.77
Amounts of exercised options 33338151.50 0.00 0.00 33338151.50 Recoverable
Capital reduction 92347581.27 0.00 0.00 92347581.27 Recoverable
Provision for bad debt on a collective basis 0.00 0.00 0.00 0.00
Total 125685732.77 0.00 0.00 125685732.77
At the End of the Period the provision for bad debt in Step 2 was as follows:
Category Gross Expected credit Provision for Carrying Reason
amount loss rate over the bad debt value
lifetime (%)
Provision for bad debt on an individual basis 0.00 0.00 0.00 0.00
Provision for bad debt on a collective basis 76542091.51 12.48 9551102.43 66990989.08
Export tax refund receivable 15694997.58 1.00 156763.72 15538233.86
Deposits under guarantee deposits and lease 11209277.48 18.73 2099174.51 9110102.97
expenses receivable
Other receivables 49637816.45 14.70 7295164.20 42342652.25
Total 76542091.51 12.48 9551102.43 66990989.08
131At the End of the Period the provision for bad debt in Step 3 was as follows:
Category Gross Expected credit Provision for Carrying Reason
amount loss rate over the bad debt value
lifetime (%)
Provision for bad debt on an individual basis 48042601.81 100.00 48042601.81 0.00
Other receivables 48042601.81 100.00 48042601.81 0.00 Not expected
to be
recoverable
Provision for bad debt on a collective basis 0.00 0.00 0.00 0.00
Total 48042601.81 100.00 48042601.81 0.00
(4) Provision for bad debts made recovered or reversed during the Period
Unit: Yuan Currency: RMB
Provision for bad debt Step 1 Step 2 Step 3 Total
Expected credit Expected credit loss over Expected credit loss
loss over the next the lifetime (without over the lifetime (with
12 months impairment of credit) impairment of credit)
Balance at 1 January 2021 0.00 9154446.75 48042601.81 57197048.56
Movements of balance at 1
January 2021
– Transferred to Step 2 0.00 0.00 0.00 0.00
– Transferred to Step 3 0.00 -228412.36 228412.36 0.00
– Reversed to Step 2 0.00 0.00 0.00 0.00
– Reversed to Step 1 0.00 0.00 0.00 0.00
Provision made for the Period 0.00 645906.93 0.00 645906.93
Reversals during the Period 0.00 0.00 0.00 0.00
Settlement during the Period 0.00 0.00 0.00 0.00
Write-off during the Period 0.00 0.00 228412.36 228412.36
Other changes 0.00 -20838.89 0.00 -20838.89
Balance at 30 June 2021 0.00 9551102.43 48042601.81 57593704.24
Descriptions of the significant changes in the gross carrying amount of other receivables for which the changes in loss
allowance occur for the current period
□Applicable √N/A
Provision for bad debts in the current period and the basis for assessing whether the credit risk of financial instruments has
increased significantly:
□Applicable √N/A
(5) Other receivables actually written off during the Period
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Amount written off
Other receivables actually written off 228412.36
Significant other receivables that are written off:
□Applicable √N/A
Descriptions of write-off of other receivables:
□Applicable √N/A
132Interim Report2021
(6) Aggregate amount of other receivables due from the top five parties with the largest amounts at the End of the Period
√Applicable □N/A
Unit: Yuan Currency: RMB
Name of entity Nature of amount Balance of other Age Percentage in the Provision for bad
receivables at the total balance of debts at the end
End of the Period other receivables of the Period
at the End of the
Period (%)
Shanghai Yunfeng Xinchuang Capital reduction 92347581.27 1-2 years 36.90 0.00
Equity Investment Center
China Securities Depository Amount of 33338151.50 Within 1 year 13.32 0.00
and Clearing Corporation exercised options
Limited (Shenzhen Branch)
Hua Xia Securities Co. Ltd. Treasury bonds 18982036.71 Over 5 years 7.58 18982036.71
and margin
Shenzhen Jiekang Health Related party 18577246.63 Over 5 years 7.42 18577246.63
Care Co. Ltd. balances
Tax refunds on exports Export tax refund 15694997.58 Within 1 year 6.27 156763.72
Total / 178940013.69 / 71.50 37716047.06
(7) Other receivables due to the government grants
□Applicable √N/A
(8) Other receivables due to the transfer of financial assets
□Applicable √N/A
(9) Assets or liabilities formed by its continuous involvement of transferring other receivables:
□Applicable √N/A
Other descriptions
□Applicable √N/A
7. Inventories
(1). Classification of inventories
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Gross amount Provision for Carrying amount Gross amount Provision for Carrying amount
diminution diminution
in value in value
Raw materials 517400886.84 10195193.16 507205693.68 449307601.96 24992444.56 424315157.40
Packaging materials 90840605.79 1722821.23 89117784.56 68812746.78 7353583.54 61459163.24
Goods in process 322935374.35 1433894.92 321501479.43 372253640.56 2679118.64 369574521.92
and Proprietary
semi-finished goods
Low-value 63820174.86 375035.81 63445139.05 32476319.46 382146.01 32094173.45
consumables
Finished goods and 908847082.10 35277995.99 873569086.11 947677545.58 33908986.43 913768559.15
stock goods
Sub-contracting 245998.44 0.00 245998.44 1863102.15 0.00 1863102.15
materials
Consumable 11985042.19 0.00 11985042.19 11511335.81 0.00 11511335.81
biological assets
Goods in transit 8667618.30 0.00 8667618.30 16922999.15 0.00 16922999.15
Total 1924742782.87 49004941.11 1875737841.76 1900825291.45 69316279.18 1831509012.27
133(2). Provision for diminution in value of inventories and provision for diminution in value of contract performance costs
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the Increase during the Period Decrease during the Period Balance at the
Beginning Provision Other Reversed or Other End of the
of the Year written off Period
Raw materials 24992444.56 2610088.80 0.00 17407340.20 0.00 10195193.16
Packaging materials 7353583.54 1144995.29 0.00 6775757.60 0.00 1722821.23
Goods in process and Proprietary 2679118.64 81439.01 0.00 1326662.73 0.00 1433894.92
semi-finished goods
Low-value consumables 382146.01 265.50 0.00 7375.70 0.00 375035.81
Finished goods and stock goods 33908986.43 24950790.36 0.00 23581780.80 0.00 35277995.99
Total 69316279.18 28787578.96 0.00 49098917.03 0.00 49004941.11
Provision for diminution in value of inventories (Continued)
Item Basis for determination of net realisable value/ Reason for reversal or write off provision
remaining consideration and the cost to be incurred for diminution in value of inventories/
impairment provision for contract
performance cost during the Period
Raw materials The estimated selling price less the estimated costs Processing sale of finished goods and
of completion selling expenses and related taxes discard
Packaging materials The estimated selling price less the estimated costs Processing sale of finished goods and
of completion selling expenses and related taxes discard
Goods in process and The estimated selling price less the estimated costs Processing of finished goods and discard
Proprietary semi-finished of completion selling expenses and related taxes
goods
Low-value consumables The estimated selling price less the related taxes Discard
Finished goods and stock The estimated selling price less the estimated selling Sale and discard
goods expenses and related taxes
(3). Descriptions at the End of the Period of inventories including capitalised amount of borrowing costs
□Applicable √N/A
(4). Descriptions of amortisation of contract performance costs for the current period
□Applicable √N/A
Other descriptions:
□Applicable √N/A
134Interim Report2021
8. Non-current assets due within one year
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Long-term receivables due within one year 0.00 11414376.07
Interest receivable due within one year 8520000.00 8520000.00
Total 8520000.00 19934376.07
Significant debt investments and other debt investments at the end of the period:
□Applicable √N/A
9. Other current assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Input VAT pending deduction/attestation 52408619.81 49003571.19
Advance payment of income tax 13361276.70 9094478.01
Others 1719872.69 0.00
Total 67489769.20 58098049.20
10. Long-term receivables
(1) Descriptions of long-term receivables
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period Range of
Gross Provision Carrying Gross Provision Carrying discount
amount for value amount for value rate
bad debts bad debts
Receivables from equity 0.00 0.00 0.00 10967767.26 0.00 10967767.26 5.00%
transferred by installments
Finance lease payment 584284.36 0.00 584284.36 1030893.17 0.00 1030893.17 4.75%
Long-term receivables 0.00 0.00 0.00 -11414376.07 0.00 -11414376.07
due within one year
Total 584284.36 0.00 584284.36 584284.36 0.00 584284.36
(2) Provision for bad debts
√N/A
(3) Long-term receivables derecognised out of transfer of financial assets.
□Applicable √N/A
(4) Assets or liabilities formed by its continuous involvement of transferring long-term receivables.
□Applicable √N/A
Other descriptions:
□Applicable √N/A
13511. Long-term equity investments
√Applicable □N/A
Unit: Yuan Currency: RMB
Investee Balance at Change during the Period Balance at the Balance of
the Beginning additional Decreased Investment Adjustment Other Cash dividend Provision Others End of the Period provision for
of the Period investment investment profit and loss in other equity or profit for impairment at
under the comprehensive changes distribution impairment the End of the
equity method income declared Period
I. Subsidiaries
Zhongshan Renhe Health 6337823.35 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6337823.35 6337823.35
Products Co. Ltd.Guangzhou Hiyeah Industry 1949893.45 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1949893.45 1949893.45
Co. Ltd.Subtotal 8287716.80 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8287716.80 8287716.80
II. Associates
Livzon Medical Electronic 1200000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1200000.00 1200000.00
Equipment (Plant) Co. Ltd.Guangdong Blue Treasure 72271987.53 0.00 0.00 11187150.70 0.00 0.00 0.00 0.00 0.00 83459138.23 0.00
Pharmaceutical Co. Ltd.Shenzhen City Youbao 1080543.04 0.00 0.00 44123.07 0.00 0.00 0.00 0.00 0.00 1124666.11 0.00
Technology Co. Ltd.AbCyte Therapeutics Inc. 16183551.42 0.00 0.00 -367057.18 0.00 0.00 0.00 0.00 0.00 15816494.24 0.00
L&L Biopharma Co. Ltd. 14024119.09 0.00 0.00 -844668.34 0.00 2658626.68 0.00 0.00 0.00 15838077.43 0.00
Zhuhai Sanmed Biotech Inc.* 31649784.72 0.00 0.00 -14565455.09 0.00 0.00 0.00 0.00 0.00 17084329.63 0.00
Aetio Biotheraphy Inc. 17647744.60 0.00 0.00 -752701.47 0.00 0.00 0.00 0.00 0.00 16895043.13 0.00
Jiangsu Atom Bioscience and 70260600.00 0.00 0.00 -1025739.02 0.00 0.00 0.00 0.00 0.00 69234860.98 0.00
Pharmaceutical Co. Ltd.Tianjin Tongrentang Group 0.00 724000000.00 0.00 14751708.09 0.00 0.00 40040000.00 0.00 0.00 698711708.09 0.00
Co. Ltd.*
Infinite Intelligence 0.00 20000000.00 0.00 -260176.46 0.00 0.00 0.00 0.00 0.00 19739823.54 0.00
Pharmaceutical Co. Ltd.Jiaozuo Jinguan Jiahua 316556367.05 0.00 0.00 2853999.18 0.00 0.00 0.00 0.00 0.00 319410366.23 0.00
Electric Power Co. Ltd.Ningbo Ningrong Biomedical 28301318.36 0.00 0.00 -703515.76 0.00 0.00 0.00 0.00 0.00 27597802.60 0.00
Co. Ltd.Feellife Health Inc. 11964576.16 0.00 0.00 88813.56 0.00 0.00 0.00 0.00 0.00 12053389.72 0.00
Novastage Pharmaceuticals 19561050.64 0.00 0.00 -586430.17 0.00 0.00 0.00 0.00 0.00 18974620.47 0.00
(Shenzhen) Ltd.Jiangsu Baining Yingchuang 28777957.12 0.00 0.00 -69626.84 0.00 0.00 0.00 0.00 0.00 28708330.28 0.00
Medical Technology Co. Ltd.Subtotal 629479599.73 744000000.00 0.00 9750424.27 0.00 2658626.68 40040000.00 0.00 0.00 1345848650.68 1200000.00
Total 637767316.53 744000000.00 0.00 9750424.27 0.00 2658626.68 40040000.00 0.00 0.00 1354136367.48 9487716.80
136Interim Report2021
12. Other equity instrument investments
(1) Descriptions of other equity investment
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
China Galaxy Securities Co. Ltd. 200427353.28 237438086.13
Shanghai Yunfeng Xinchuang Equity Investment Center 120279650.08 112254757.06
Shanghai JingYi Investment Center 66908461.62 67661520.76
Qianhai Equity Investment Fund 280307004.00 253987145.00
Apricot Forest Inc 149384486.40 149384486.40
PANTHEON D L.P. 11445746.78 12680875.63
Zhuhai China Resources Bank Co. Ltd. 170772300.00 170772300.00
GLOBAL HEALTH SCIENCE 227873899.09 246837324.35
SCC VENTURE VI 2018-BL.P. 13566215.68 13823660.49
SCC VENTURE VII 2018-CL.P. 0.00 176752020.58
Nextech V Oncology S.C.S. SICAV-SIF 31350997.34 29583312.39
Yizun Biopharmaceutics (Shanghai) Co. Ltd. 30000000.00 30000000.00
ELICIO THERAPEUTICS INC. 32300513.52 32624491.32
CARIAMA THER APEUTICS INC. 32298919.16 32622880.98
Others 9481647.24 9968802.04
Total 1376397194.19 1576391663.13
(2) Descriptions of investments in non-trading equity instruments
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Dividend Cumulative Cumulative Amount Reason for the Reason
income gains losses transferred designation for transfer
recognised for from other as fair value
the Period comprehensive through other
income to comprehensive
retained earning income
China Galaxy Securities Co. Ltd. 4175569.86 4175569.86 0.00 0.00 non-trading
Shanghai Yunfeng Xinchuang Equity 0.00 0.00 0.00 0.00 non-trading
Investment Center
Shanghai JingYi Investment Center 0.00 0.00 0.00 0.00 non-trading
Qianhai Equity Investment Fund 0.00 0.00 0.00 0.00 non-trading
Apricot Forest Inc 0.00 0.00 0.00 0.00 non-trading
PANTHEON D L.P. 0.00 0.00 0.00 0.00 non-trading
Zhuhai China Resources Bank Co. Ltd. 0.00 0.00 0.00 0.00 non-trading
GLOBAL HEALTH SCIENCE 0.00 0.00 0.00 0.00 non-trading
SCC VENTURE VI 2018-BL.P. 0.00 0.00 0.00 0.00 non-trading
SCC VENTURE VII 2018-CL.P. 0.00 0.00 0.00 137631513.65 non-trading Corporate
lapsed and
investment
withdrawn
Nextech V Oncology S.C.S. SICAV-SIF 8153391.88 8153391.88 0.00 0.00 non-trading
Yizun Biopharmaceutics (Shanghai) Co. Ltd. 0.00 0.00 0.00 0.00 non-trading
ELICIO THERAPEUTICS INC. 0.00 0.00 0.00 0.00 non-trading
CARIAMA THER APEUTICS INC. 0.00 0.00 0.00 0.00 non-trading
Others 0.00 0.00 0.00 34295275.82 non-trading Disposal
Total 12328961.74 12328961.74 0.00 171926789.47
137Other descriptions:
□Applicable √N/A
13. Investment property
Measurementof investment properties
(1). Investment properties measured at cost
Unit: Yuan Currency: RMB
Item Plant and buildings Total
I. Original book value:
1. Balance at the Beginning of the Period 61914754.28 61914754.28
2. Additions for the Period 0.00 0.00
3. Decrease for the Period 0.00 0.00
4. Balance at the End of the Period 61914754.28 61914754.28
II. Accumulated depreciation and amortisation
1. Balance at the Beginning of the Period 55723278.85 55723278.85
2. Additions for the Period 0.00 0.00
(1) Provision or amortisation 0.00 0.00
3. Decrease for the Period 0.00 0.00
(1) Disposal 0.00 0.00
4. Balance at the End of the Period 55723278.85 55723278.85
III. Provisions for impairment
1. Balance at the Beginning of the Period 0.00 0.00
2. Additions for the Period 0.00 0.00
(1) Provision 0.00 0.00
3. Decrease for the Period 0.00 0.00
(1) Provision 0.00 0.00
4. Balance at the End of the Period 0.00 0.00
VI. Carrying Amount
1. Balance at the End of the Period 6191475.43 6191475.43
2. Balance at the Beginning of the Period 6191475.43 6191475.43
(2). Investment properties whose title certificate has not completed:
√N/A
Other descriptions:
□Applicable √N/A
14. Fixed assets
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Year
Fixed assets 4557108992.58 4380285156.93
Disposal of fixed assets 0.00 0.00
Total 4557108992.58 4380285156.93
138Interim Report2021
(1) Descriptions of fixed assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Plant and building Machinery and Motor vehicles Electronic devices Total
equipment and others
I. Original book value
1. Balance at the Beginning of the Period 3779641227.70 4557028218.73 104791052.69 662695275.18 9104155774.30
2. Additions for the Period 86892955.55 304779069.93 8785209.63 57874001.37 458331236.48
(1) Acquisition 17241688.20 115116955.94 8785209.63 53052933.92 194196787.69
(2) Construction in progress transferred 69651267.35 189662113.99 0.00 4821067.45 264134448.79
3. Decrease for the Period 971082.89 60727396.76 5901930.10 22764532.88 90364942.63
(1) Disposal or written-off 971082.89 60727396.76 5771765.65 22764532.88 90234778.18
(2) Others 0.00 0.00 130164.45 0.00 130164.45
4. Balance at the End of the Period 3865563100.36 4801079891.90 107674332.22 697804743.67 9472122068.15
II. Accumulated depreciation
1. Balance at the Beginning of the Period 1465544461.45 2615627521.50 73194504.98 450222233.89 4604588721.82
2. Additions for the Period 84053999.83 153579565.27 6944915.34 26159610.31 270738090.75
(1) Provision 84053999.83 153579565.27 6944915.34 26159610.31 270738090.75
3. Decrease for the Period 207216.02 51351321.44 5143410.98 17201218.22 73903166.66
(1) Disposal or written-off 207216.02 51351321.44 5075652.86 17201218.22 73835408.54
(2) Others 0.00 0.00 67758.12 0.00 67758.12
4. Balance at the End of the Period 1549391245.26 2717855765.33 74996009.34 459180625.98 4801423645.91
III. Impairment provision
1. Balance at the Beginning of the Period 26619980.48 73464504.43 77435.52 19119975.12 119281895.55
2. Additions for the Period 0.00 87535.69 0.00 2945.34 90481.03
(1) Provision 0.00 87535.69 0.00 2945.34 90481.03
3. Decrease for the Period 0.00 5606701.84 35856.87 140388.21 5782946.92
(1) Disposal or written-off 0.00 5606701.84 35856.87 140388.21 5782946.92
4. Balance at the End of the Period 26619980.48 67945338.28 41578.65 18982532.25 113589429.66
IV. Carrying amount
1. Carrying amount at the End of the Period 2289551874.62 2015278788.29 32636744.23 219641585.44 4557108992.58
2. Carrying amount at the Beginning of the Period 2287476785.77 1867936192.80 31519112.19 193353066.17 4380285156.93
The depreciation during the period was RMB270738090.75 (RMB253732625.92 during the previous period)
(2) Temporarily idled fixed assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Original Accumulated Provision for Carrying Note
book value depreciation impairment amount
Plant and building 31706009.07 15853917.64 5155770.80 10696320.63
Machinery and equipment 192257657.23 131025040.62 43098094.64 18134521.97
Electronic devices and others 1878354.77 1381524.23 157074.29 339756.25
Total 225842021.07 148260482.49 48410939.73 29170598.85
(3) Fixed assets leased in under financing leases
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Carrying Amount at the End of the Period
Plant and building 1821249.04
139(4) Fixed assets whose title certificate has not completed
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Carrying Amount Reason for pending for certificate of ownership
Plant and building 220297525.64 Being in progress
Other descriptions
□Applicable √N/A
15. Construction in progress
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Construction in progress 764334539.24 647937496.92
Construction supplies 506235.16 540545.50
Total 764840774.40 648478042.42
(1) Descriptions of construction in progress
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Gross amount Provision for carrying Gross amount Provision for carrying
impairment amount impairment amount
Shenzhen Haibin Pingshang New 204153587.00 0.00 204153587.00 229735516.02 0.00 229735516.02
Factory
Guangda New Factory Project 87929862.91 0.00 87929862.91 64845632.88 0.00 64845632.88
Fuxing Company Phase I & II Projects 59455887.45 0.00 59455887.45 95851873.91 0.00 95851873.91
and others
Project of Shijiao New Factory 201555415.17 0.00 201555415.17 154752745.97 0.00 154752745.97
Transformation Project of 26506202.62 0.00 26506202.62 16500619.41 0.00 16500619.41
Pharmaceutical Factory Workshop
Construction Project for Microsphere 9004024.25 0.00 9004024.25 7805534.78 0.00 7805534.78
Workshop (including Gose) of Livzon
Group Livzon Pharmaceutical Factory
P06 Construction Project of Livzon 68839698.64 0.00 68839698.64 1559405.27 0.00 1559405.27
Group Livzon Pharmaceutical Factory
Project of lyophilized powder injection 31220016.77 0.00 31220016.77 8495072.05 0.00 8495072.05
workshop
P09 Construction Project of Livzon 2962844.93 0.00 2962844.93 307744.41 0.00 307744.41
Group Livzon Pharmaceutical Factory
Others 72876339.96 169340.46 72706999.50 68252692.68 169340.46 68083352.22
Total 764503879.70 169340.46 764334539.24 648106837.38 169340.46 647937496.92
140Interim Report2021
(1) Changes in significant construction in progress during the period
√Applicable □N/A
Unit: Yuan Currency: RMB
Name of Project Balance Additions for Transferred Other Accumulated Of which: Interest Balance at the Budgeted Percentage of Construction Sources of
at the the Period to fixed asset deduction amount Interest capitalised End of the amount accumulated cost progress funds
Beginning of the capitalised rate for Period incurred over
of the Year interest for the the Period budgeted amount
capitalised Period (%) (%)
Shenzhen Haibin Pingshang New Factory 229735516.02 31854407.01 51023769.87 6412566.16 0.00 0.00 0.00 204153587.00 1037000000.00 53.16 Completion of Self-funding
some projects and funds raised
Guangda New Factory Project 64845632.88 23084230.03 0.00 0.00 0.00 0.00 0.00 87929862.91 646000000.00 13.61 Under Self-funding
construction
Fuxing Company Phase I & II Projects and 95851873.91 24869233.35 61265219.81 0.00 0.00 0.00 0.00 59455887.45 378090800.00 54.14 Completion of Self-funding
others some projects
Project of Shijiao New Factory 154752745.97 46802669.20 0.00 0.00 0.00 0.00 0.00 201555415.17 377005000.00 54.83 Completion of Self-funding
some projects and funds raised
Transformation Project of Pharmaceutical 16500619.41 20125321.77 10119738.56 0.00 0.00 0.00 0.00 26506202.62 259737830.00 35.49 Completion of Self-funding
Factory Workshop some projects
Construction Project for Microsphere 7805534.78 2749586.32 1551096.85 0.00 0.00 0.00 0.00 9004024.25 262445000.00 50.98 Completion of Self-funding
Workshop (including Gose) of Livzon some projects and funds raised
Group Livzon Pharmaceutical Factory
P06 Construction Project of Livzon Group 1559405.27 67280293.37 0.00 0.00 0.00 0.00 0.00 68839698.64 114000000.00 60.39 Under Self-funding
Livzon Pharmaceutical Factory construction
Project of lyophilized powder injection 8495072.05 22724944.72 0.00 0.00 0.00 0.00 0.00 31220016.77 143500000.00 21.76 Under Self-funding
workshop construction and funds raised
P09 Construction Project of Livzon Group 307744.41 113256299.33 110601198.81 0.00 0.00 0.00 0.00 2962844.93 296580000.00 38.29 Under Self-funding
Livzon Pharmaceutical Factory construction
Others 68252692.68 39712172.83 29573424.89 5515100.66 0.00 0.00 0.00 72876339.96 Self-funding
Total 648106837.38 392459157.93 264134448.79 11927666.82 0.00 0.00 0.00 764503879.70 3514358630.00
Other deduction mainly refers to transfer of long-term deferred expenses.14116. Right-of-use assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Plant and building Total
I. Original book value:
1. Balance at the Beginning of the Period 30316151.38 30316151.38
2. Addition during the Period 4489445.11 4489445.11
(1) Leasing 4489445.11 4489445.11
3. Decrease during the Period 0.00 0.00
4. Balance at the End of the Period 34805596.49 34805596.49
II. Accumulated depreciation
1. Balance at the Beginning of the Period 12286018.69 12286018.69
2. Addition during the Period 6973283.91 6973283.91
(1) Provision 6973283.91 6973283.91
3. Decrease during the Period 0.00 0.00
4. Balance at the End of the Period 19259302.60 19259302.60
III. Provision for impairment
1. Balance at the Beginning of the Period 0.00 0.00
2. Addition during the Period 0.00 0.00
3. Decrease during the Period 0.00 0.00
4. Balance at the End of the Period 0.00 0.00
IV. Carrying amount
1. Carrying amount at the End of the Period 15546293.89 15546293.89
2. Carrying amount at the Beginning of the Period 18030132.69 18030132.69
Other descriptions:
As of 30 June 2021 the Company recognised lease expenses related to short-term leases and the leases of low value assets of
RMB5.9050 million.142Interim Report2021
17. Intangible assets
(1). Descriptions of intangible assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Land use right Patent and Software Trademark Others Total
technical rights
know-how
I. Original book value
1. Balance at the Beginning of the Period 423486347.87 487561318.73 71984555.87 62765000.00 10985294.53 1056782517.00
2. Additions for the Period 0.00 54192604.06 3840321.64 0.00 0.00 58032925.70
(1) Acquisition 0.00 2354029.70 3840321.64 0.00 0.00 6194351.34
(2) Internal R&D 0.00 51838574.36 0.00 0.00 0.00 51838574.36
3. Decrease for the Period 9723610.00 6666667.00 70796.46 0.00 0.00 16461073.46
4. Balance at the End of the Period 413762737.87 535087255.79 75754081.05 62765000.00 10985294.53 1098354369.24
II. Accumulated amortisation
1. Balance at the Beginning of the Period 118722931.47 339090486.99 51098224.34 62765000.00 4506003.80 576182646.60
2. Additions for the Period 4355298.34 18624622.75 2977006.56 0.00 761378.28 26718305.93
(1) Provision 4355298.34 18624622.75 2977006.56 0.00 761378.28 26718305.93
3. Decrease for the Period 4285813.60 500000.04 21238.94 0.00 0.00 4807052.58
4. Balance at the End of the Period 118792416.21 357215109.70 54053991.96 62765000.00 5267382.08 598093899.95
III. Provision for impairment
1. Balance at the Beginning of the Period 981826.94 11530127.41 0.00 0.00 0.00 12511954.35
2. Additions for the Period 0.00 0.00 0.00 0.00 0.00 0.00
(1)Provision 0.00 0.00 0.00 0.00 0.00 0.00
3. Decrease for the Period 0.00 0.00 0.00 0.00 0.00 0.00
4. Balance at the End of the Period 981826.94 11530127.41 0.00 0.00 0.00 12511954.35
IV. Carrying amount
1. Carrying amount at the End of the Period 293988494.72 166342018.68 21700089.09 0.00 5717912.45 487748514.94
2. Carrying amount at the Beginning of the Period 303781589.46 136940704.33 20886331.53 0.00 6479290.73 468087916.05
The amortisation for the period was RMB 26718305.93 (RMB 14424153.41 for the previous period).The proportion of intangible assets created due to the internal R&D in the balance of intangible assets at the End of the Period
is 29.24%
(2). Intangible assets pending for certificates of ownership
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Carrying amount Reason for pending for certificate of ownership
Land use rights 4227092.83 Being in progress
Other descriptions
√Applicable □N/A
The land use rights represent the state-owned land use rights obtained by the Company in accordance with PRC laws in China
and the term of grant will be 50 years commencing from the date of obtaining the land use rights.14318. Development Expenditure
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the Increase for the Period Decrease for the Period Balance at
Beginning of Internal Other Recognised as Recognised in the End of
the Period development increases intangible assets profit and loss the Period
expenditure for current
period
Chemical drug 138564375.18 87105707.62 11414501.09 13032867.30 67705996.27 156345720.32
preparation
Biologics 213261084.53 0.00 29399825.85 38805707.06 0.00 203855203.32
APIs and others 47294144.07 19024232.61 0.00 0.00 4988760.74 61329615.94
Total 399119603.78 106129940.23 40814326.94 51838574.36 72694757.01 421530539.58
Other descriptions:
Item Time for commencement Specific basis of capitalisation Progress of research and development
of capitalisation as at the End of the Period
Chemical drug preparation Clinical trial Obtain approval for clinical trial Clinical stage
Biologics Clinical trial Obtain approval for clinical trial Clinical stage
APIs and others Pilot stage Pilot related information Post-pilot stage
19. Goodwill
(1). Original book value of goodwill
√Applicable □N/A
Unit: Yuan Currency: RMB
Name of investee or matter from which goodwill arose Balance at the Decrease for the Balance at
Beginning of Increase for the Period Period the End of
the Period Arose from Others Disposal Others the Period
business
combination
Shanghai Livzon Pharmaceutical Manufacturing Co. Ltd. 2045990.12 0.00 0.00 0.00 0.00 2045990.12
Zhuhai FTZ Livzon Hecheng Pharmaceutical 3492752.58 0.00 0.00 0.00 0.00 3492752.58
Manufacturing Co. Ltd.Sichuan Guangda Pharmaceutical Manufacturing Co. Ltd. 13863330.24 0.00 0.00 0.00 0.00 13863330.24
Livzon Group Xinbeijiang Pharmaceutical Manufacturing 7271307.03 0.00 0.00 0.00 0.00 7271307.03
Inc.Livzon Group Fuzhou Fuxing Pharmaceutical Co. Ltd. 46926155.25 0.00 0.00 0.00 0.00 46926155.25
Livzon Group Livzon Pharmaceutical Factory 47912269.66 0.00 0.00 0.00 0.00 47912269.66
Livzon Group 395306126.41 0.00 0.00 0.00 0.00 395306126.41
Shenzhen Haibin Pharmaceutical Co. Ltd. 91878068.72 0.00 0.00 0.00 0.00 91878068.72
Joincare Daily-Use & Health Care Co. Ltd. 1610047.91 0.00 0.00 0.00 0.00 1610047.91
Shenzhen Taitai Pharmaceutical Co. Ltd. 635417.23 0.00 0.00 0.00 0.00 635417.23
Health Pharmaceuticals (China) Limited 23516552.65 0.00 0.00 0.00 0.00 23516552.65
Shenzhen Hiyeah Industry Co. Ltd 6000000.00 0.00 0.00 0.00 0.00 6000000.00
Jiaozuo Joincare Bio Technological Co. Ltd. 92035.87 0.00 0.00 0.00 0.00 92035.87
Total 640550053.67 0.00 0.00 0.00 0.00 640550053.67
144Interim Report2021
(2). Provision for impairment of goodwill
√Applicable □N/A
Unit: Yuan Currency: RMB
Name of investee or the matter of Balance at the Increase for the Period Decrease for the Period Balance at the
goodwill arisen Beginning of Provision Others Disposal Others End of
the Period the Period
Livzon Group Xinbeijiang 7271307.03 0.00 0.00 0.00 0.00 7271307.03
Pharmaceutical Manufacturing Inc.Livzon Group Fuzhou Fuxing 11200000.00 0.00 0.00 0.00 0.00 11200000.00
Pharmaceutical Co. Ltd.Shenzhen Hiyeah Industry Co. Ltd 6000000.00 0.00 0.00 0.00 0.00 6000000.00
Joincare Daily-Use & Health Care 1610047.91 0.00 0.00 0.00 0.00 1610047.91
Co. Ltd.Total 26081354.94 0.00 0.00 0.00 0.00 26081354.94
(3). Relevant information regarding the asset portfolio and set of asset portfolios to which the goodwill belongs
√Applicable □N/A
Goodwill of the Company arose from its business combination involving enterprises not under common control in previous
years.
(4). Descriptions of the process of goodwill impairment testing key parameters (such as the growth rate of the forecast period the
growth rate of the stable period the profit rate the discount rate and the forecast period etc. when the present value of future
cash flows are expected if applicable) and the recognition method of the impairment losses on goodwill
√Applicable □N/A
On the balance sheet date the Company conducted impairment test on goodwill and adopted the asset groups related to
goodwill to estimate the present value of the future cash flow when estimating the recoverable amount of the investment cost.The estimated future cash flow of asset groups is calculated according to the five-year financial budget plan made by the
management the cash 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 62.47%~62.55% and a business revenue growth rate of 0~10.85% as well as a cash
flow discount rate of 14.08%. The management took into account historical conditions and predictions for future market
development in making the above assumptions.For the calculation of estimated present value of future cash flow of the asset groups related to goodwill of Shenzhen Haibin
Pharmaceutical Co. Ltd. key assumptions are a gross margin of 66.52%-69.40% and a business revenue growth rate of
0~10.85% as well as a cash flow discount rate of 14.13%. The management took into account historical conditions and
predictions for future market development in making the above assumptions.As tested the management of the Company expects that no impairment provision is needed during the Reporting Period.
(5). The impact of goodwill impairment test
□Applicable √N/A
Other descriptions:
□Applicable √N/A
14520. Long-term deferred expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the Increase for Amortisation Other Balance at the
Beginning of the the Period for the Period decrease End of the
Period Period
Renovation costs of offices 23058574.53 1789091.35 1191880.44 696.58 23655088.86
Renovation costs of plants 82549157.36 5756161.20 5935507.56 0.00 82369811.00
Plants reconstruction project 38063547.08 10728821.59 5849803.71 0.00 42942564.96
Certification costs of GMP project 432295.36 0.00 60320.28 0.00 371975.08
Others 25946027.65 15377601.43 8676159.85 0.00 32647469.23
Total 170049601.98 33651675.57 21713671.84 696.58 181986909.13
21. Deferred income tax assets/ deferred income tax liabilities
(1). Deferred income tax assets without offsetting
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Deductible Deferred income Deductible Deferred income
temporary tax assets temporary tax assets
difference difference
Provision for impairment of assets 326259145.56 56016844.67 348200387.60 59268643.32
Accrued expenses 887638522.48 152746927.85 889520767.20 148230373.91
Deductible losses 58721109.38 13371060.50 183558004.28 33002594.88
Deferred income 400453231.97 63736584.79 395262933.81 63372920.07
Unrealised gains from intra-company transactions 635794496.11 95580596.75 617172492.65 101762569.57
Changes in fair value of other equity instruments 118885323.02 29721330.76 116897135.04 29224283.76
Share incentive costs 62318267.43 9695365.81 55129055.25 8614498.87
Changes in fair value of financial assets held for trading 590584.82 92059.97 5004.11 1229.82
Other deductible temporary difference 169158973.41 28477670.18 148783538.98 25421355.03
Total 2659819654.18 449438441.28 2754529318.92 468898469.23
(2). Deferred income tax liabilities without offsetting
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Taxable temporary Deferred income Taxable temporary Deferred income
difference tax liabilities difference tax liabilities
Changes in fair value of financial assets held for trading 17689686.66 2880440.01 18644355.09 3365228.40
Accelerated depreciation of fixed assets 602549563.46 90938715.69 564348918.93 85208619.02
Changes in fair value of other equity instruments 332982405.84 62857308.90 497704254.93 92895008.26
Unrealised gains from intra-company transactions 105940000.00 20791000.00 105940000.00 20791000.00
Total 1059161655.96 177467464.60 1186637528.95 202259855.68
(3). Deferred income tax assets or liabilities listed as net amount after offset
□Applicable √N/A
146Interim Report2021
(4). Details of unrecognised deferred tax assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Deductible temporary difference 321087280.75 316754374.35
Deductible losses 1301620194.83 1116620167.81
Total 1622707475.58 1433374542.16
(5). Deductible loss of deferred income tax assets not recognised will be due in the following years
√Applicable □N/A
Unit: Yuan Currency: RMB
Year Balance at the End Balance at the Beginning Note
of the Period of the Period
2021106488275.41108384223.02
2022140099365.81141475583.52
2023196709050.80197436530.74
2024385135868.11385190825.59
2025254428962.67277697732.91
2026213126260.370.00
Indefinite 5632411.66 6435272.03
Total 1301620194.83 1116620167.81 /
Other descriptions:
□Applicable √N/A
22. Other non-current assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Gross carrying Provision for Carrying amount Gross carrying Provision for Carrying amount
amount impairment amount impairment
Remaining VAT credit 48613133.35 0.00 48613133.35 33826183.51 0.00 33826183.51
Prepayment for 380729188.61 0.00 380729188.61 300277977.91 0.00 300277977.91
acquisition of project
and equipment
Prepayment for 47353109.07 0.00 47353109.07 39453749.30 0.00 39453749.30
acquisition of
technical know-how
Total 476695431.03 0.00 476695431.03 373557910.72 0.00 373557910.72
23. Short-term loans
(1) Classification of short-term loans
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Loans on credit 1390704871.11 1850000000.00
Loans on guarantee 371215105.43 260942804.06
Total 1761919976.54 2110942804.06
147(2) Outstanding and overdue short-term loans
□Applicable √N/A
Other descriptions:
□Applicable √N/A
24. Financial liabilities held for trading
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the Beginning Increase for the Decrease for the Balance at the End
of the Period Period Period of the Period
Financial liabilities held for trading 212.07 555857.77 0.00 556069.84
Of which:
Derivative financial liabilities 212.07 555857.77 0.00 556069.84
Total 212.07 555857.77 0.00 556069.84
Other descriptions:
Derivative financial liabilities represent foreign currency forward contracts loss from unexpired contracts measured at fair
value was recognised as financial liabilities held for trading at balance sheet date.25. Bills payables
√Applicable □N/A
Unit: Yuan Currency: RMB
Type Balance at the End Balance at the Beginning
of the Period of the Period
Bank acceptance bills 1492064332.85 1087759353.31
Total 1492064332.85 1087759353.31
The total of bills payable due but not yet paid during the period is RMB 0.00.26. Accounts payables
(1). Presentations of accounts payable
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Within 1year 786673041.94 770352354.22
Over 1 year 62838547.08 62279852.31
Total 849511589.02 832632206.53
(2). Significant accounts payable aged more than one year
□Applicable √N/A
Other descriptions:
□Applicable √N/A
148Interim Report2021
27. Contract liabilities
(1). Descriptions of contract liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Within 1 year 75052137.96 125816111.93
Over 1 year 28235104.69 7606242.10
Total 103287242.65 133422354.03
(2). Significant changes in the carrying amount during the reporting period and reasons therefor
□Applicable √N/A
Other descriptions:
√Applicable □N/A
As at the End of the Period there was no significant contract liabilities aged over 1 year; the amount of income recognised
during the Period which was included in the carrying amount of the contract liabilities at the Beginning of the Period was RMB
82991828.73.28. Employee benefits payables
(1) Descriptions of employee benefits payables
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the Beginning Increase for the Decrease for the Balance at the End
of the Period Period Period of the Period
I. Short-term salary 474099711.48 825783860.97 1069474099.85 230409472.60
II. Post-resignation benefits-defined 981049.03 57990499.69 58648731.01 322817.71
contribution plans
III. Dismissal benefits 1441038.00 343144.63 487961.63 1296221.00
Total 476521798.51 884117505.29 1128610792.49 232028511.31
(2) Descriptions of Short-term remuneration
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the Beginning Increase for the Decrease for the Balance at the End
of the Period Period Period of the Period
I. Salaries bonuses allowances and 317711687.49 727973036.73 869969786.64 175714937.58
subsidies
II. Employee welfare 5159583.88 28721790.57 28751214.21 5130160.24
III. Social insurance 648169.59 26545226.65 26658494.08 534902.16
Of which: Medical insurances 479191.24 23616007.39 23656541.10 438657.53
Work-related injury insurances 120278.27 1224190.00 1286160.08 58308.19
Maternity insurances 48700.08 1705029.26 1715792.90 37936.44
IV. Housing provident fund 1812818.16 23931717.93 24536811.16 1207724.93
V. Labour union fees and employee 268119.84 2367496.13 2096703.76 538912.21
education fees
VI. Special funds of the share 148499332.52 16244592.96 117461090.00 47282835.48
ownership scheme
Total 474099711.48 825783860.97 1069474099.85 230409472.60
149(3) Defined contribution plan
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the Beginning Increase for the Decrease for the Balance at the End
of the Period Period Period of the Period
Post-resignation benefits
Of which: 1. Basic pension insurance 891463.38 56168276.50 56763969.15 295770.73
2. Unemployment insurance 89585.65 1822223.19 1884761.86 27046.98
Total 981049.03 57990499.69 58648731.01 322817.71
Other descriptions:
√Applicable □N/A
The Company participates in pension insurance and unemployment insurance plans established by the government in
accordance with relevant requirements. According to the plans the Company makes contributions to these plans in accordance
with relevant requirements of the local government. Save for the above contributions the Company no longer undertakes
further payment obligation. The corresponding cost is charged to the profit or loss for the current period or the cost of relevant
assets when it occurs.29. Taxes payables
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Value added tax 85484417.95 73761952.33
Urban maintenance and construction tax 8057879.37 8540571.43
Enterprise income tax 145765077.99 197934880.78
Property tax 9208984.75 3335394.01
Land use tax 2793149.99 1861774.91
Individual income tax 13006451.03 5176424.28
Stamp duty 511310.80 573412.18
Education surcharges 5733934.17 5877893.41
Others 1675114.57 1279879.11
Total 272236320.62 298342182.44
30. Other payables
Item Listing
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Dividends payable 6997318.79 8418590.50
Other payables 3102069597.24 2839269475.09
Total 3109066916.03 2847688065.59
150Interim Report2021
Dividends payable
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Dividends on ordinary shares 65508.79 20174.46
Dividends payable--Qingyuan Xinbeijiang (Group) Company 1200710.00 1200710.00
Dividends payable--Other legal persons and individual shares 3311300.00 3311300.00
of subsidiaries
Dividends payable--Staff shares of subsidiaries 2419800.00 2419800.00
Dividends payable--Zhuhai Zhong Hui Yuan Investment 0.00 1466606.04
Partnership (Limited Partnership)
Total 6997318.79 8418590.50
Other payables
(1) Other payables by nature
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Office expenses 60338410.75 54902934.12
Deposits under guarantees 86172313.73 84683431.06
Business promotion expenses 1358132384.91 1188695632.04
Technology transfer funds 13446534.45 10072731.53
Accrued expenses 1528717647.21 1432467048.13
Others 55262306.19 68447698.21
Total 3102069597.24 2839269475.09
The obligations of repurchasing restricted shares of the directors the senior management and their spouses amounted
RMB0.00 at the End of the Period.Other descriptions:
√Applicable □N/A
Of which the breakdown of accrued expenses was as follows:
Item 30 June 2021 31 December 2020 Reason for outstanding at
the End of the Period
Utilities expenses 24268503.00 28252339.28 Not yet paid
Research expenses 30383351.14 31246236.75 Not yet paid
Business development and promotion expenses 1357871549.47 1282377335.13 Not yet paid
Audit and information disclosure expenses 4690386.16 3876590.50 Not yet paid
Others 111503857.44 86714546.47 Not yet paid
Total 1528717647.21 1432467048.13
15131. Non-current liabilities due within one year
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Lease liabilities due within one year 9015086.52 8539077.05
Total 9015086.52 8539077.05
32. Other current liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Tax for items pending for settlement 4754676.57 6267034.79
Total 4754676.57 6267034.79
33. Long-term loans
(1) Classification of long-term loans
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Loans on credit 638453815.00 360324027.48
Long-term loans due within 1 year 0.00 0.00
Total 638453815.00 360324027.48
Other descriptions including interest rate range:
√Applicable □N/A
Interest rate range: 3.55%-3.70%
34. Lease liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Amount payable under lease 15958036.00 18356857.09
Lease liabilities due within one year -9015086.53 -8539077.05
Total 6942949.47 9817780.04
Other descriptions:
During January to June 2021 the amount of interest expenses of lease liabilities was RMB0.5584 million which was recorded
in finance expenses – interest expenses.152Interim Report2021
35. Deferred income
Deferred income
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the Beginning Increase for the Decrease for the Balance at the End Reason
of the Period Period Period of the Period
Government grants 467562770.49 39283500.00 38729280.01 468116990.48 /
Total 467562770.49 39283500.00 38729280.01 468116990.48 /
Projects involving government grants:
√Applicable □N/A
Unit: Yuan Currency: RMB
Liabilities Balance Amount Amount Other Balance Related
at the of additional charged to changes at the to assets/
Beginning grant for Non-operating End of Related
of the the income for the to
Year Period the Period Period income
Study on the technology of antifungal drug caspofungin 1500000.00 0.00 0.00 0.00 1500000.00 Related to
(抗真菌药卡泊芬净工艺研究 ) assets
Laboratory project of respiratory system inhalation preparation 5000000.00 0.00 538700.00 151700.00 4309600.00 Related to
engineering laboratory project assets
(呼吸系统吸入制剂工程实验室项目)
Construction of a recycling production base for carbapenem 3625000.00 0.00 0.00 0.00 3625000.00 Related to
products(碳青霉烯类系列产品循环化生产基地建设 ) assets
Research and development and industrialization of non-steroidal 5000000.00 0.00 0.00 0.00 5000000.00 Related to
anti-inflammatory drug Celecoxib capsules assets
(非甾体抗炎药物塞来昔布胶囊研发及产业化)
Construction of an integrated production line for fully automatic 2420000.00 0.00 0.00 0.00 2420000.00 Related to
blister-type dry powder inhalant micro-filling and winding assets
(全自动泡罩型干粉吸入剂微量灌封与卷绕一体化生产线建设)
Change in National Science and Technology Major Project* 150000.00 0.00 0.00 0.00 150000.00 Related to
Research funding for lipid injection * Baiyunshan Hanfang transfer assets
(国家重大专项项目变更*注射脂质研究经费*白云山汉方转入)
Research on common key technologies for the large-scale 365700.00 0.00 0.00 0.00 365700.00 Related to
development of new inhalation preparations assets
(新型吸入制剂规模化发展共性关键技术研究)
Large-scale development subsidy for new inhalation 2262600.00 0.00 0.00 0.00 2262600.00 Related to
preparations(新型吸入制剂规模化发展补助 ) assets
Meropenem special fund subsidy(美罗培南专项资金补助 ) 10000000.00 0.00 0.00 10000000.00 0.00 Related to
assets
Project Subsidy of meropenem internationalization 3300000.00 0.00 0.00 3300000.00 0.00 Related to
(美罗培南国际化项目补助 ) assets
Project Subsidy of Marine mollusk kinetic protein 23840000.00 0.00 0.00 0.00 23840000.00 Related to
(海洋软体动物动能蛋白项目补助 ) assets
New inhalation drug formulation creation project 54154400.00 13094000.00 0.00 0.00 67248400.00 Related to
(新型吸入给药制剂创制项目 ) assets
Zhimu total sapogenin project(知母总皂甙元项目 ) 8900000.00 0.00 0.00 0.00 8900000.00 Related to
assets
Receive financial appropriations for small molecule peptide 399999.84 0.00 40000.02 0.00 359999.82 Related to
projects(收财政拨款用于小分子肽项目 ) assets
Glucocorticoid inhalation suspension project 0.00 3600000.00 0.00 0.00 3600000.00 Related to
(糖皮质激素吸入混悬液项目 ) assets
153Liabilities Balance Amount Amount Other Balance Related
at the of additional charged to changes at the to assets/
Beginning grant for Non-operating End of Related
of the the income for the to
Year Period the Period Period income
Leulu total sterone project(漏芦总甾酮项目 ) 2500000.00 0.00 0.00 0.00 2500000.00 Related to
assets
R&D of active substances with bone and joint repair and health care 1077356.16 0.00 59853.12 0.00 1017503.04 Related to
functions(具有骨关节修复与保健功能的活性物质研发 ) assets
Key technology research and development of budesonide nebulized 4500000.00 0.00 0.00 0.00 4500000.00 Related to
inhalation solution(布地奈德雾化吸入溶液关键技术研发 ) assets
Return of land holding tax(土地使用税返还 ) 3674691.16 0.00 53514.87 0.00 3621176.29 Related to
assets
Special Fund for environmental protection of wastewater membrane 9708.66 0.00 9708.66 0.00 0.00 Related to
concentration system(废水膜浓缩系统环保专项资金 ) assets
Subsidies for The development of pharmaceutical APIs industry 41960547.60 0.00 609596.40 0.00 41350951.20 Related to
(医药原料药行业发展支持资金补助 ) assets
Receive innovation voucher(Jingjin Filter Press Equipment) 313332.99 0.00 40000.07 0.00 273332.92 Related to
(收创新券 (景津压滤设备 )) assets
Xinxiang High-tech Project Fund Support 1917508.44 0.00 28198.68 0.00 1889309.76 Related to
(新乡高新技术项目资金扶持 ) assets
Hepatitis B vaccine methanol yeast expression system 500000.00 0.00 0.00 0.00 500000.00 Related to
(乙肝疫苗甲醇酵母表达系统 ) assets
New recombinant protein vaccine technology platform and 9000002.00 0.00 0.00 0.00 9000002.00 Related to
Industrialization of Cervical Cancer Vaccine assets
(新型重组蛋白疫苗技术平台及宫颈癌疫苗产业化)
Research on Common Co-construction Technology of 1900000.00 900000.00 0.00 0.00 2800000.00 Related to
Pharmaceutical Inhalation Preparations(开发区财政局拔款创业领 assets
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 1500000.00 0.00 0.00 0.00 1500000.00 Related to
research technology service platform project talent funding assets
(呼吸系统药物研发和临床研究技术服务平台项目人才经费)
Science and technology help the economy key special projects 500000.00 0.00 0.00 0.00 500000.00 Related to
(科技助力经济重点专项 ) assets
City Service Development Special(市服务发展专项 ) 800000.00 0.00 0.00 0.00 800000.00 Related to
assets
Patent funding(专利资助 ) 0.00 200000.00 0.00 0.00 200000.00 Related to
income
Research and development subsidy for ω-3-Fish Oil Medium and 350000.00 0.00 0.00 0.00 350000.00 Related to
Long Chain Fat Emulsion Injection assets
(ω-3鱼油中/长链脂肪乳注射液研究开发补助)
R&D and industrialization of innovative Ilaprazole Series 20988166.29 0.00 2455000.02 0.00 18533166.27 Related to
(艾普拉唑系列创新药物研发及产业化 ) assets
Research and development funds for new drug for Class I Treatment 8000000.00 0.00 0.00 0.00 8000000.00 Related to
of Necrosis Factor in Human Tumour from Human Source(I类治疗 income
用人源化抗人肿瘤坏死因子α单克隆抗体新药研制资金)
Strategic emerging industries in 2014 (sustained release 16700000.00 0.00 0.00 0.00 16700000.00 Related to
microspheres)(2014年战略性新兴产业 (缓释微球 )) assets
Fund for industrialization of prolonged-action microsphere 13300000.00 0.00 0.00 0.00 13300000.00 Related to
preparation(长效微球制剂的产业化款项 ) assets
Construction project for industrialization of prolonged-action 7024025.85 8329800.00 431665.47 0.00 14922160.38 Related to
microsphere preparation (phase I) assets
(长效微球制剂产业化建设项目(一期工程))
154Interim Report2021
Liabilities Balance Amount Amount Other Balance Related
at the of additional charged to changes at the to assets/
Beginning grant for Non-operating End of Related
of the the income for the to
Year Period the Period Period income
Pilot-scale enlargement and industrialization of prolonged-action 2400000.00 0.00 0.00 0.00 2400000.00 Related to
injection microsphere products assets
(长效注射微球产品的中试放大和产业化)
Project subsidy from the Ministry of Industry and Information 2400000.00 0.00 0.00 0.00 2400000.00 Related to
Technology(工业和信息化部项目补助款 ) assets
Project subsidy from the Ministry of Industry and Information 1597750.00 0.00 115500.00 0.00 1482250.00 Related to
Technology(工业和信息化部项目补助款 ) assets
Construction of Drug Conformity Evaluation Research Center 1200000.10 0.00 80000.00 0.00 1120000.10 Related to
Platform (药物一致性评价研究中心平台建设 ) assets
R&D and Commercialisation of Mouse Nerve Growth Factor for 50606036.20 0.00 5280044.56 0.00 45325991.64 Related to
Injection(注射用鼠神经生长因子研发及产业化 ) assets
Demonstration project on the application of solar photovoltaic 3557499.51 0.00 551000.02 0.00 3006499.49 Related to
architecture(太阳能光电建筑应用示范项目 ) assets
Subsidy for the Tender of Technology Upgrade Project for PVC Soft 3111850.32 0.00 204182.88 0.00 2907667.44 Related to
Bag Supported by Provincial Finance Departments assets
(省财政支持技改招标项目补助金PVC软袋 )
Technical transformation project of Shenqi Fuzheng Injection with 19500000.02 0.00 1911764.70 0.00 17588235.32 Related to
flexible bag (软袋参芪扶正注射液技改项目 ) assets
Provision for technology transformation funds and subsequent 6589119.08 0.00 564781.68 0.00 6024337.40 Related to
grants(技术改造资金拨款及事后补奖 ) assets
Provision for technology transformation funds and subsequent 10648600.33 0.00 1644464.76 0.00 9004135.57 Related to
grants (技术改造资金拨款及事后补奖 ) assets
Electricity distribution transformer performance enhancement for 428000.00 0.00 24000.00 0.00 404000.00 Related to
energy-saving and emission reduction projects assets
(节能减排项目配电变压器能效提升)
R&D and industrialization team of chemical drug liquid preparation 1000000.00 0.00 444166.64 0.00 555833.36 Related to
(化药液体制剂研发与产业化团队 ) assets
Innovation capacity building of technology center (antibody 5248234.16 0.00 222877.68 0.00 5025356.48 Related to
laboratory) (技术中心创新能力建设 (抗体药物实验室 )) assets
Innovation capacity building of technology center (antibody 241769.82 0.00 37665.18 0.00 204104.64 Related to
laboratory)(技术中心创新能力建设 (抗体药物实验室 )) income
Achievement transfer of blood screening (BCI) nucleic acid 6000000.00 0.00 6000000.00 0.00 0.00 Related to
detection testing(血液筛查 (BCI)核酸检测试剂成果转化 ) assets
Technological upgrading and transformation projects of workshop 571428.64 0.00 53571.42 0.00 517857.22 Related to
for acarbose (APIs for α-glucosidase inhibitor)(α-葡萄糖苷酶抑 assets
制剂类原料药阿卡波糖生产车间工艺升级技术改造项目)
R&D and industrialization of Statins 60000.36 0.00 14999.94 0.00 45000.42 Related to
(降血脂他汀类药物的研发与产业化 ) assets
Scientific technology award and subsidy for technological 139491.80 0.00 55462.80 0.00 84029.00 Related to
innovative project(科学技术奖及科技创新项目资助 ) assets
Scientific technology award and subsidy for technological 3400000.00 0.00 600000.00 0.00 2800000.00 Related to
innovative project (科学技术奖及科技创新项目资助 ) income
Zhuhai industrial enterprise "cloud and platform" service coupons 114972.73 0.00 12770.44 0.00 102202.29 Related to
supporting funds income
(珠海市工业企业"上云上平台"服务券支持资金)
Commissioner workstation(特派员工作站 ) 145000.00 0.00 30000.00 0.00 115000.00 Related to
assets
155Liabilities Balance Amount Amount Other Balance Related
at the of additional charged to changes at the to assets/
Beginning grant for Non-operating End of Related
of the the income for the to
Year Period the Period Period income
Industrial revitalisation supporting funds (产业振兴扶持资金 ) 3603500.01 0.00 579000.00 0.00 3024500.01 Related to
assets
Phase IV clinical study of innovative drug Ilaprazole 8210800.00 0.00 0.00 0.00 8210800.00 Related to
(创新药物艾普拉唑 IV期临床研究 ) assets
Government grant for industrial transformation 508333.67 0.00 99999.96 0.00 408333.71 Related to
(工业转型政府扶持资金 ) assets
New industrialization development grant (新型工业化发展奖金 ) 1304166.42 609700.00 175000.02 0.00 1738866.40 Related to
assets
Policy fund for leading industrial enterprises loan Interests 566666.61 0.00 100000.02 0.00 466666.59 Related to
(工业龙头企业贷款贴息政策资金 ) assets
Supporting funds for five advantageous industrial clusters and one 400000.16 0.00 49999.98 0.00 350000.18 Related to
high-tech industry(新型研发机构补助 ) assets
Subsidy for new R&D institution 2000000.00 1800000.00 0.00 0.00 3800000.00 Related to
assets
Zhuhai innovation and enterprising team and high-level talent 2700000.00 6300000.00 0.00 0.00 9000000.00 Related to
enterprising project (paclitaxel micellar for injection)(珠海市创新 assets
创业团队和高层次人才创业项目(注射液紫杉醇胶束))
Capital project for innovation and entrepreneurship team funding 8500000.00 0.00 0.00 0.00 8500000.00 Related to
program(创新创业团队资助计划资金项目 ) assets
Fund for R&D and industrialization of innovative Ilaprazole 5600000.00 0.00 0.00 0.00 5600000.00 Related to
series(艾普拉唑系列创新药物研发及产业化项目资金 ) assets
Key projects of industrial core and key technologies of Zhuhai 3000000.00 0.00 0.00 0.00 3000000.00 Related to
(Ryanodex) assets
(珠海市产业核心和关键技术攻关方向项目(丹曲林钠))
Fund for key projects of industrial core and key technologies of 2000000.00 0.00 0.00 0.00 2000000.00 Related to
Zhuhai (2nd batch) assets
(珠海市产业核心和关键技术攻关方向项目资金(第二批))
Innovative drug of Ilaprazole sodium for injection 2400000.00 0.00 0.00 0.00 2400000.00 Related to
(创新药注射用艾普拉唑钠针剂 ) assets
Technological transformation projects of new Cefuroxime 1533100.00 0.00 0.00 0.00 1533100.00 Related to
(新型头孢粉针剂技术改造项目 ) assets
Internet benchmarking project for advanced drug Manufacturing 765000.00 0.00 45000.00 0.00 720000.00 Related to
(先进药品制造互联网标杆项目 ) assets
Cleaner Production Audit Project (清洁生产审核项目 ) 190000.04 0.00 5000.00 0.00 185000.04 Related to
assets
Green factory(绿色工厂 ) 1261666.67 0.00 65000.00 0.00 1196666.67 Related to
assets
HCG project construction(HCG项目建设 ) 3783485.81 0.00 197825.00 0.00 3585660.81 Related to
assets
Sewage treatment system upgrade project 72269.96 0.00 4015.00 0.00 68254.96 Related to
(污水处理系统升级改造项目 ) assets
R&D and industrialization of Recombinant Human Chorionic 1287500.00 0.00 75000.00 0.00 1212500.00 Related to
Gonadotropin for Injection assets
(注射用重组人绒促性素研发及产业化)
Subsidies for online monitoring equipment and installations of 105000.00 0.00 11250.00 0.00 93750.00 Related to
coalfired boilers(燃煤锅炉在线监控设备装置补助资金 ) assets
156Interim Report2021
Liabilities Balance Amount Amount Other Balance Related
at the of additional charged to changes at the to assets/
Beginning grant for Non-operating End of Related
of the the income for the to
Year Period the Period Period income
Funds for joint R&D and industrialization of integrated platform for 1550000.00 0.00 0.00 0.00 1550000.00 Related to
molecular diagnostics assets
(集成一体化分子诊断平台的合作研发及产业化资金)
Project supporting fund for the first batch of special funds for 850000.00 0.00 250000.00 0.00 600000.00 Related to
scientific and technological innovation in 2019 assets
(2019年度第一批科技创新专项资金立项配套资助)
Provincial industrial innovation (provincial enterprise technology 1403733.33 0.00 0.00 0.00 1403733.33 Related to
center) project in 2019 assets
(2019年省产业创新(省级企业技术中心)项目)
Guangdong Province Science and Technology Department special 350000.00 0.00 0.00 0.00 350000.00 Related to
emergency fund for scientific and technological research on assets
prevention and control of COVID-19(广东省科学技术厅汇防控新
型冠状病毒感染科技攻关应急专项款)
Zhuhai Financial Bureau cum COVID-19 emergency technology 250000.00 0.00 0.00 0.00 250000.00 Related to
special emergency fund assets
(珠海市财政局汇新冠应急科技攻关专项款)
China Postdoctoral Science Foundation subsidy funds 160000.00 0.00 0.00 0.00 160000.00 Related to
(中国博士后科学基金会资助经费 ) income
Pre-appropriation of special grants for industrialization of diagnostic 4601200.00 0.00 1497000.00 0.00 3104200.00 Related to
reagents for COVID-19 assets
(新型冠状病毒检测试剂产业化项目补助金预拨)
Xiangzhou District equipment purchase subsidy supporting funds 13555.75 0.00 0.00 0.00 13555.75 Related to
(special funds for prevention and control of pandemic) assets
(香洲区购置设备补贴扶持资金(疫情防控专项资金))
Zhuhai innovation and enterprising team and high-level talent 12000000.00 0.00 0.00 0.00 12000000.00 Related to
enterprising project Phase I funds assets
(珠海市创新创业团队和高层次人才创业项目首期资金)
Overall relocation and deployment expansion project 20000000.00 0.00 0.00 0.00 20000000.00 Related to
(整体搬迁调迁扩建项目 ) assets
Study on intestinal absorption of Ilaprazole and biodistribution 0.00 800000.00 0.00 0.00 800000.00 Related to
(艾普拉唑体内肠吸收和生物分布研究 ) income
Data-driven industrial chain collaboration platform demonstration 0.00 3650000.00 0.00 0.00 3650000.00 Related to
project(数据驱动的产业链协同平台示范项目 ) assets
Environmental protection bureau RTO project special funds 200000.00 0.00 10000.02 0.00 189999.98 Related to
(环保局RTO项目资金 ) assets
Total 467562770.49 39283500.00 25277580.01 13451700.00 468116990.48
36. Other non-current liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
The overall relocation and expansion project of Sichuan 78000000.00 78000000.00
Guangda Pharmaceutical Manufacturing
Total 78000000.00 78000000.00
15737. Share capital
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the Changes for the Period (+ -) Balance at
Beginning of Issuance of Reserve fund Others Sub-total the End of
the Period new shares capitalised the Period
I. Tradable shares subject to selling
restrictions
1. Domestic legal person shares 0 0 0 0 0 0
2. Domestic natural person shares 0 0 0 0 0 0
3. Overseas legal person shares 0 0 0 0 0 0
Tradable shares subject to selling 0 0 0 0 0 0
restrictions in aggregate
II. Tradable shares
1. Ordinary shares denominated in 1952780764 5812453 0 0 5812453 1958593217
RMB
2.Domestically listed foreign shares 0 0 0 0 0 0
Tradable shares in aggregate 1952780764 5812453 0 0 5812453 1958593217
Total number of shares 1952780764 5812453 0 0 5812453 1958593217
Other descriptions:
The increase in share capital in the current period is due to the exercise of stock options
38. Capital reserve
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the Beginning Increase for the Decrease for the Balance at the End
of the Period Period Period of the Period
Capital premium (Share premium) 2531019936.35 104734986.31 71706339.93 2564048582.73
Other capital reserve 2268737.93 58220810.33 416819.97 60072728.29
Total 2533288674.28 162955796.64 72123159.90 2624121311.02
Other descriptionsincluding changes for the current period and reasons therefor:
The increase in the share premium for the period represented: 1. An increase in share premium of RMB 40944662.85
as a result of the effective exercise of 5812453 share options during the Period; 2. An increase in share premium of
RMB55805982.88 as a result of the effective exercise of Livzon Group in accordance with the Company's shareholding
ratio; 3. Upon the exercise of share options of the Company and subsidiary Livzon Group pursuant to the taxation rules
the difference between deductible expenses before taxation and the amount of provision reduced income tax payable by
RMB7814226.56 the share premium was increased accordingly; 4. the increase in share premium by disproportionate capital
decrease to a subsidiary due to the difference of RMB170114.02 between the capital contribution and the corresponding share
of net assets of the subsidiary.The decrease in the share premium for the Period represented the decrease in share premium caused by cancellation of
71706339.93 repurchased shares of Livzon Group.Other capital reserve increase for the Period includes: 1. Withdrawal of share incentive expenses of RMB5667743.67 of
the Company and subsidiary Livzon Group; 2. Capital reserve increase of RMB1768427.84 due to changes in shareholding
percentage of the Company as well as other changes in equity caused by disproportionate capital increase under the equity
method of subsidiary Livzon Group; 3. Capital reserve increase of RMB50784638.82 due to changes in shareholding
percentage of the Company as well as other changes in equity caused by equity incentive exercise and share repurchase of
subsidiary Livzon Group.158Interim Report2021
Other capital reserve decrease for the Period includes: Capital reserve decrease of RMB 416819.97 due to changes in
shareholding percentage of the Company caused by the reorganization of the equity structure of Livzon Group's holding
subsidiary
39. Treasury shares
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the Increase for Decrease for Balance at
Beginning of the Period the Period the End of
the Period the Period
Repurchase of A Shares due to Share Ownership 253637154.50 0.00 0.00 253637154.50
Scheme and Share Options Incentive Scheme
Repurchase of shares to be cancelled 0.00 229511622.91 0.00 229511622.91
Total 253637154.50 229511622.91 0.00 483148777.41
Other descriptionsincluding changes for the current period and reasons therefor:
The increase of treasury shares during the period represented: The company repurchased 16199998 shares totally through
centralized bidding transactions with RMB229511622.91(Including transaction expense) and the repurchase of shares aimed
to be used to reduce the company's registered capital.40. Other comprehensive income
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the For the Period Balance at the
Beginning of Amount Less: amount recognised Less: Attributable to Attributable End of the
The Period incurred before in other comprehensive income tax the parent to minority Period
income tax income in the Previous expenses company interests after
for the Period Period transferred to after tax tax
profit or loss or retained
earnings for the Period
I. Other comprehensive income not to be 180616463.38 37787760.71 171926789.47 2706556.05 -61841866.88 -75003717.93 118774596.50
re-classified into profit or loss
Change in fair value of other investments 180616463.38 37787760.71 171926789.47 2706556.05 -61841866.88 -75003717.93 118774596.50
in equity instruments
II. Other comprehensive income to be -64315904.10 -24273180.95 0.00 0.00 -18219204.58 -6053976.37 -82535108.68
reclassified into profit or loss
Of which:Other comprehensive income 51589.71 0.00 0.00 0.00 0.00 0.00 51589.71
to be reclassified into profit or loss under
the equity method
Translation differences of financial -64367493.82 -24273180.95 0.00 0.00 -18219204.58 -6053976.37 -82586698.40
statements denominated in foreign
currency
Total of other comprehensive income 116300559.28 13514579.76 171926789.47 2706556.05 -80061071.46 -81057694.30 36239487.82
15941. Surplus reserve
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the Beginning Increase for Decrease for Balance at the End
of the Period the Period the Period of the Period
Statutory surplus reserve 474626867.82 0.00 0.00 474626867.82
Discretionary surplus reserve 40210642.44 0.00 0.00 40210642.44
Reserve funds 1103954.93 0.00 0.00 1103954.93
Total 515941465.19 0.00 0.00 515941465.19
42. Retained earnings
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous
Period
Retained earnings for the end of Last Period before adjustment 6231451582.26 5443313968.30
Adjustment for total retained earnings as at the beginning of the Period 0.00 0.00
(+ for increase and – for decrease)
Retained earnings at the beginning of the Period after adjustment 6231451582.26 5443313968.30
Add: Net earnings attributable to the owners of the parent company for the Period 687347494.53 1120439799.25
Gain on disposal of other equity investments 77041425.92 38047665.80
Less: Appropriation to statutory surplus reserve 0.00 61926327.89
Appropriation to discretionary surplus reserve 0.00 0.00
Dividends payable to ordinary shares 288675388.05 308423523.20
Dividends of ordinary shares capitalised 0.00 0.00
Retained earnings at the end of the Period 6707165114.66 6231451582.26
Descriptions of appropriation of profits
Unit: Yuan Currency: RMB
Item January to June 2021 January to June 2020
Dividends:
Final dividends in respect of the year 2020 paid during the year (Note 1) 288675388.05
Final dividends in respect of the year 2019 paid during the year (Note 2) 308423523.20
Dividends proposed after the balance sheet date:
Final dividends proposed for the year 2020 (Note 1) 288675388.05
Final dividends proposed for the year 2019 (Note 2) 308423523.20
Note 1: According to the 2020 Annual Profit Distribution Plan approved at 2020 Annual General Meeting of Shareholders on
21 May 2021 of the Company it is expected to distribute cash dividend of RMB0.15 for every share to all Shareholders of
the Company. And the total cash distributed is RMB288675388.05 based on 1924502587 shares which calculated by the
1958593217 issued shares registered in the Shanghai Branch of China Securities Depository and Clearing Co. Ltd on 24
June of 2021after deducting the 34090630 shares repurchased in the repurchase account.Note 2: According to the 2019 Annual Profit Distribution Plan approved at 2019 Annual General Meeting of Shareholders on
29 May 2020 of the Company it is expected to distribute cash dividend of RMB0.16 for every share to all Shareholders of
the Company. And the total cash distributed is RMB 308423523.20 based on 1927647020 shares which calculated by the
1947537633 issued shares registered in the Shanghai Branch of China Securities Depository and Clearing Co. Ltd on 2 July
of 2020 after deducting the 19890613 shares repurchased in the repurchase account.43. Operating income and operating cost
160Interim Report2021
(1) Operating income and operating cost
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Income Cost Income Cost
Principal activities 7783517167.36 2702753651.01 6446765028.83 2259894172.65
Other activities 51855107.30 40252083.92 28937876.57 17661483.57
Total 7835372274.66 2743005734.93 6475702905.40 2277555656.22
Other descriptions:
Breakdown information of principal activities income
· Breakdown by product types
Item January to June 2021 January to June 2020
Income Cost Income Cost
Chemical APIs and Intermediates 2258879617.33 1517873006.34 1944505474.06 1247747581.38
Chemical drug preparation products 4434234171.70 840614882.95 2877556231.64 604329731.47
Traditional Chinese drug preparation products 633012054.83 168867289.58 661763939.48 174711733.59
Health care products 62421585.01 17301631.46 71956835.88 23140142.05
Diagnostic reagents and equipment 390683579.78 156931989.53 889021644.89 209072484.83
Others 0.00 0.00 304498.92 367872.33
Industry and Commerce Subtotal 7779231008.65 2701588799.86 6445108624.87 2259369545.65
Service industry 4286158.71 1164851.15 1656403.96 524627.00
Total 7783517167.36 2702753651.01 6446765028.83 2259894172.65
· Breakdown by major operating regions
Item January to June 2021 January to June 2020
Income Cost Income Cost
Domestic 6520552394.49 1840235327.71 4944972684.84 1447749632.26
Overseas 1262964772.87 862518323.30 1501792343.99 812144540.39
Total 7783517167.36 2702753651.01 6446765028.83 2259894172.65
· Breakdown by time of income recognition
Item January to June 2021 January to June 2020
Income Cost Income Cost
Commodities (recognised at a point of time) 7783517167.36 2702753651.01 6446765028.83 2259894172.65
Total 7783517167.36 2702753651.01 6446765028.83 2259894172.65
· Operating income of top five customers
Period Total operating income of Proportion of main business income
the top five customers in the same period (%)
January to June 2021 630159477.01 8.10
January to June 2020 502052025.62 7.79
16144. Taxes and surcharges
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Urban maintenance and construction tax 37829206.02 31685270.91
Education surcharges 28856430.50 24460082.16
Land use tax 5029764.24 5049996.52
Property tax 11683354.15 10311551.71
Stamp duty and others 6946337.65 3461599.42
Total 90345092.56 74968500.72
Other descriptions:
The bases of calculations for major taxes and surcharges are set out in Note IV. Taxation.45. Selling expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Marketing and promotional expenses 2221503601.12 1554305361.03
Staff salaries 203807784.32 165804587.76
Office entertainment and travelling expenses 27758220.54 16881140.04
Business meeting expenses 6762806.37 1479731.41
Others 40117344.95 64776842.51
Total 2499949757.30 1803247662.75
46. Administrative expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Staff salaries 163036323.73 190839885.45
Share incentive expenses 13424119.37 16209269.94
Depreciation and amortisation 55667766.18 46640826.92
Loss on suspension of operations 31970734.79 30214503.31
Others 133822147.10 118018345.35
Total 397921091.17 401922830.97
47. R&D expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Material costs 144814730.87 84595860.71
Staff salaries 187188506.60 120937178.09
Share incentive expenses 175632.62 397092.72
Testing fees 182107386.82 77364904.32
Depreciation and amortisation 55398138.72 38891600.95
Others 53277992.78 50336604.93
Total 622962388.41 372523241.72
162Interim Report2021
48. Finance expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Interest expenses 38708820.91 13912163.40
Interest income -78035350.84 -109006742.62
Exchange (gains)/losses -6123814.35 -7891504.27
Commission charges and others 3723581.51 3572237.74
Total -41726762.77 -99413845.75
49. Other income
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Government grants(Related to assets) 24627144.39 19642257.65
Government grants(Related to income) 104833852.88 100193952.45
Tax withholding commission charges 1994381.60 2651149.04
Extra tax deductions for tax refunds 0.00 23224.44
Total 131455378.87 122510583.58
Other descriptions:
For specific information on government grants please refer to Note V. 62. Government grants for details.50. Investment income
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the
Previous Period
Investment income from financial assets held for trading during the holding period 75810.76 348024.60
Investment income from disposal of financial assets held for trading 22232401.40 -195439.54
Dividend income from other equity instrument investments during the holding period 12328961.74 5188104.54
Long-term equity investments income under equity method 9750424.27 2918469.78
Investment income from disposal of long-term equity investments 2423029.20 108312122.27
Income generated from revaluation of remaining 0.00 7958514.22
equity measured at fair value upon loss of control
Total 46810627.37 124529795.87
51. Gains from changes in fair value
√Applicable □N/A
Unit: Yuan Currency: RMB
Sources of gains from changes in fair value For the Period For the Previous Period
Financial assets held for trading 33851438.22 -3091727.29
Of which: Debt instrument investments 17055.84 -1274254.56
Equity instrument investments 43142356.83 9412.89
Derivative financial assets -9307974.45 -1826885.62
Financial liabilities held for trading -534891.07 -1269050.22
Of which: Derivative financial liabilities -534891.07 -1269050.22
Total 33316547.15 -4360777.51
16352. Credit impairment loss
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Bad debt loss of bills receivables 0.00 50000.00
Bad debt loss of accounts receivables -8839388.74 -7294129.48
Bad debt loss of other receivables -645906.93 -524728.52
Total -9485295.67 -7768858.00
53. Asset impairment losses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
I. Losses on bad debts
II. Losses on decline in value of inventories and on impairment of -28787578.96 -13106362.66
contract performance costs
III. Losses on impairment of long-term equity investments
IV. Losses on impairment of property
V. Losses on impairment of fixed assets -90481.03 -188983.76
VI. Losses on impairment of project materials
VII. Losses on impairment of construction in progress
VIII. Losses on impairment of bearer biological assets
IX. Losses on impairment on oil and gas assets
X. Losses on impairment of intangible assets
XI. Losses on impairment of goodwill
XII. Others
Total -28878059.99 -13295346.42
54. Gains on disposal of assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Gains on disposal of fixed assets ("-" represents losses) 664575.34 -75589.89
Gains on disposal of Intangible assets ("-" represents losses) 17263196.60 0.00
Total 17927771.94 -75589.89
Other descriptions:
□Applicable √N/A
164Interim Report2021
55. Non-operating income
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Amount charged to
Period nonrecurring gains or
losses during the Period
Total gains or losses from disposal of non-current assets 662808.97 66167.50 662808.97
Of which: Gains from disposal of fixed assets 662808.97 66167.50 662808.97
Income from scraps 1887207.65 653473.54 1887207.65
Waiver of payables 390917.12 121010.03 390917.12
Compensation income 52270.26 1033127.99 52270.26
Others 1648160.71 399780.59 1648160.71
Total 4641364.71 2273559.65 4641364.71
Government grants included in current profit or loss
□Applicable √N/A
Other descriptions:
□Applicable √N/A
56. Non-operating expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Amount charged to
Period nonrecurring gains or
losses during the Period
Total losses on disposal of non-current assets 2965842.31 2425514.55 2965842.31
Of which: Losses on disposal of fixed assets 2965842.31 2425514.55 2965842.31
External donation 2336297.53 16658988.01 2336297.53
Others 737831.60 1879791.59 737831.60
Total 6039971.44 20964294.15 6039971.44
57. Income tax expenses
(1) Table of income tax expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Current income tax 210262491.71 268135292.74
Deferred income tax 34303242.59 -9878302.82
Total 244565734.30 258256989.92
165(2) Reconciliation of income tax expenses to the accounting profit
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period
Total profit 1712663336.00
Income tax expenses calculated at legal/applicable tax rate 428165834.00
Effect of different tax rates applicable to subsidiaries -4031716.51
Effect of tax reduction and exemption -230199399.20
Effect of non-deductible costs expenses and losses 4139041.89
Effect of deductible tax losses for which no deferred tax assets were recognised in prior periods -5230456.10
Effect of deductible tax losses or deductible temporary differences for which no deferred tax 55810633.89
asset was recognised in the current period
Others -4088203.67
Income tax expenses 244565734.30
Other descriptions:
√N/A
58. Items in the cash flow statement
(1). Cash received relating to other operating activities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Government grants 142823778.95 111077040.92
Interest income 77872010.67 108899882.64
deposit 101088.40 1296146.00
Recovery of employee loans 10917333.48 4883393.83
Deposits under guarantee 20000882.26 34819578.78
Movements in capital and others 32457345.34 54705464.21
Total 284172439.10 315681506.38
(2). Cash paid relating to other operating activities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Business promotion expenses 2370624490.78 1610294633.31
R&D expenses 388887165.89 180297615.13
Bank charges 3723581.51 3563605.91
Deposits for letter of credit and bank acceptance bills 13196993.75 9018113.89
Other expenses paid 345181558.78 401341025.92
Movements in capital and others 28848576.74 27675794.46
Total 3150462367.45 2232190788.62
166Interim Report2021
(3). Cash received relating to other investing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Deposits under guarantee 13359977.34 0.00
Insurance claims 0.00 19828856.24
Others 1600.00 229160.14
Total 13361577.34 20058016.38
(4). Cash paid relating to other investing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Deposits under guarantee 165000.00 45000.00
Foreign exchange forward contract losses 1397587.39 3492944.44
Others 3658.70 0.00
Total 1566246.09 3537944.44
(5). Cash received relating to other financing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Collection and advance payment of individual income tax 2809612.35 4933246.35
Total 2809612.35 4933246.35
(6). Cash paid relating to other financing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Repurchase of shares 396161155.31 497014973.64
Capital reduction in minority interests in subsidiary 324225000.00 0.00
Collection and advance payment of individual income tax 2531100.50 0.00
Total 722917255.81 497014973.64
16759. Supplemental information to cash flow statement
(1) Supplemental information to cash flow statement
√Applicable □N/A
Unit: Yuan Currency: RMB
Supplemental information For the Period For the Previous
Period
1. Reconciliation from net profit to cash flow from operating activities:
Net profit 1468097601.70 1589490941.98
Add: Asset impairment loss 28878059.99 13295346.42
Credit impairment loss 9485295.67 7768858.00
Depreciation of fixed assets depletion of oil and gas assets depreciation of 270738090.75 253728694.30
bearer biological assets
Amortisation of use of right assets
Amortisation of intangible assets 26718305.93 14424153.41
Amortisation of long-term prepaid expenses 21713671.84 14988040.36
Losses on disposal of fixed assets intangible assets and other long-term assets -17927771.94 75589.89
(gain is indicated by "-")
Losses on retirement of fixed assets (gain is indicated by "-") 2303033.34 2359347.05
Losses on changes in fair values (gain is indicated by "-") -33316547.15 4360777.51
Financial expenses (gain is indicated by "-") 43511052.15 7860833.24
Investment losses (gain is indicated by "-") -46810627.37 -124529795.87
Decrease in deferred tax assets (increase is indicated by "-") 19964526.43 -27240425.30
Increase in deferred tax liabilities (decrease is indicated by "-") 5245308.28 18879117.61
Decrease in inventories (increase is indicated by "-") -73016408.46 -335683555.42
Decrease in receivables from operating activities (increase is indicated by "-") -1194193008.38 -584490793.13
Increase in payables from operating activities (decrease is indicated by "-") 209621503.66 366277129.69
Others 4775426.92 27427476.77
Net cash flow from operating activities 745787513.36 1248991736.51
2. Major investment and financing activities irrelevant to cash income and expenses:
Conversion of debts into capital 0.00 0.00
Convertible corporate bonds due within 1 year 0.00 0.00
Fixed assets capitalised under finance leases 0.00 0.00
3. Net change in cash and cash equivalents:
Cash balance at the end of the period 10192939435.47 8770226038.79
Less: Cash balance at the beginning of the period 12122781311.49 10940305225.81
Add: Balance of cash equivalents at the end of the period 0.00 0.00
Less: Balance of cash equivalents at the beginning of the period 0.00 0.00
Net increase in cash and cash equivalents -1929841876.02 -2170079187.02
(2) Net cash payment for acquisition of subsidiaries during the Period
√N/A
168Interim Report2021
(3). Net cash received from disposal of subsidiaries during the Period Item
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period
Cash or cash equivalents received during the Period from disposal of subsidiaries during the Period 10000000.00
Of which: Zhuhai Qiao Biotechnology Co. Ltd. (珠海启奥生物技术有限公司 ) 10000000.00
Less: Cash and cash equivalents held by subsidiaries on the date when the Company loses control 6688779.47
Of which: Zhuhai Livzon Genetic Testing Technology Co. Ltd. (珠海市丽珠基因检测科技有限公司 ) 6688779.47
Add: Cash or cash equivalents received during the Period from disposal of subsidiaries during previous
periods
Net cash received from disposal of subsidiaries 3311220.53
(4). Composition of cash and cash equivalents
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Ⅰ Cash 10192939435.47 12122781311.49
Of which: Cash on hand 653340.73 197923.25
Bank deposits that are readily available for payment 10080998574.47 12031569238.87
Other monetary funds that are readily available for payment 111287520.27 91014149.37
Ⅱ Cash equivalents 0.00 0.00
Of which: Bond investments due within three months 0.00 0.00
III. Balance of cash and cash equivalents at the end of the period 10192939435.47 12122781311.49
Other descriptions:
□Applicable √N/A
60. Assets with restricted ownership or right of use
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Carrying amount at the Reasons for restriction
End of the Period
Time deposit 100000000.00 Expected to hold to maturity
Bills receivables 802531287.95 Bills pooling business pledged bills receivables
Other monetary funds 62807505.71 Deposits for L/C bank acceptance draft and forward settlement
Total 965338793.66 /
16961. Monetary items denominated in foreign currencies
(1). Monetary items denominated in foreign currencies
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance in foreign currency Exchange rate Equivalent RMB balance
at the End of the Period at the End of the Period
Monetary funds - -
Of which: USD 162905369.86 6.46010 1052384979.84
　　　 HKD 569437832.81 0.83208 473817831.92
　　　 Euro 102653.76 7.68620 789017.34
　　　 MOP 2492385.85 0.80840 2014844.72
　　　 GBP 1940.10 8.94100 17346.43
Accounts receivables - -
Of which: USD 91214004.17 6.46010 589251588.34
　　　 MOP 2254691.45 0.80840 1822692.57
Other receivables - -
Of which: HKD 3625953.36 0.83208 3017083.27
　　　 MOP 581188.00 0.80840 469832.38
Accounts payables - -
Of which: CHF 36737.77 7.01340 257656.68
　　　 MOP 435857.17 0.80840 352346.94
Other payables - -
Of which: HKD 117682.21 0.83208 97921.01
　　　 USD 2595716.72 6.46010 16768589.58
(2). Descriptions of overseas operating entities including disclosure of the main overseas
business locations functional currency and the basis for selection of important overseas operating entities and the reasons for
changes in functional currency (if any)
□Applicable √N/A
62. Government grants
1. Basic information of government grants
√Applicable □N/A
Unit: Yuan Currency: RMB
Category Amount Line item Amount included in profit or
loss for the current period
Related to assets 455850683.55 Deferred income 0.00
Related to income 12266306.93 Deferred income 0.00
Related to assets 24627144.39 Other income 24627144.39
Related to income 104833852.88 Other income 104833852.88
170Interim Report2021
2. Return of government grants
√Applicable □N/A
Unit: Yuan Currency: RMB
Items Amount Reasons
Respiratory system inhalation preparation engineering laboratory project 151700.00 Balance returned
Meropenem special fund subsidy 10000000.00 Project withdrawal
Meropenem Internationalization Project Subsidy 3300000.00 Project withdrawal
Export credit insurance subsidies 407687.30 Duplicate funding
Total 13859387.30
Other descriptions
(1). Government grants included in deferred income will be measured by gross amount method
Items of grants Type Balance at the Amount Amount Other Balance Amount Related to
Beginning of additional charged to changes at the End charged to assets/
of the grant for profit and loss of the profit and loss income
Year the Period for the Period Period for the Period
Study on the technology of antifungal drug caspofungin Fiscal 1500000.00 0.00 0.00 0.00 1500000.00 Other income Related to
(抗真菌药卡泊芬净工艺研究 ) appropriation assets
Laboratory project of respiratory system inhalation preparation engineering Fiscal 5000000.00 0.00 538700.00 151700.00 4309600.00 Other income Related to
laboratory project(呼吸系统吸入制剂工程实验室项目 ) appropriation assets
Construction of a recycling production base for carbapenem products Fiscal 3625000.00 0.00 0.00 0.00 3625000.00 Other income Related to
(碳青霉烯类系列产品循环化生产基地建设 ) appropriation assets
Research and development and industrialization of non-steroidal anti- Fiscal 5000000.00 0.00 0.00 0.00 5000000.00 Other income Related to
inflammatory drug Celecoxib capsules appropriation assets
(非甾体抗炎药物塞来昔布胶囊研发及产业化)
Construction of an integrated production line for fully automatic blister-type Fiscal 2420000.00 0.00 0.00 0.00 2420000.00 Other income Related to
dry powder inhalant micro-filling and winding appropriation assets
(全自动泡罩型干粉吸入剂微量灌封与卷绕一体化生产线建设)
Change in National Science and Technology Major Project* Research Fiscal 150000.00 0.00 0.00 0.00 150000.00 Other income Related to
funding for lipid injection * Baiyunshan Hanfang transfer appropriation assets
(国家重大专项项目变更*注射脂质研究经费*白云山汉方转入)
Research on common key technologies for the large-scale development of Fiscal 365700.00 0.00 0.00 0.00 365700.00 Other income Related to
new inhalation preparations(新型吸入制剂规模化发展共性关键技术研究 ) appropriation assets
Large-scale development subsidy for new inhalation preparations Fiscal 2262600.00 0.00 0.00 0.00 2262600.00 Other income Related to
(新型吸入制剂规模化发展补助 ) appropriation assets
Meropenem special fund subsidy(美罗培南专项资金补助 ) Fiscal 10000000.00 0.00 0.00 10000000.00 0.00 Other income Related to
appropriation assets
Project Subsidy of meropenem internationalization Fiscal 3300000.00 0.00 0.00 3300000.00 0.00 Other income Related to
(美罗培南国际化项目补助 ) appropriation assets
Project Subsidy of Marine mollusk kinetic protein Fiscal 23840000.00 0.00 0.00 0.00 23840000.00 Other income Related to
(海洋软体动物动能蛋白项目补助 ) appropriation assets
New inhalation drug formulation creation project Fiscal 54154400.00 13094000.00 0.00 0.00 67248400.00 Other income Related to
(新型吸入给药制剂创制项目 ) appropriation assets
Zhimu total sapogenin project(知母总皂甙元项目 ) Fiscal 8900000.00 0.00 0.00 0.00 8900000.00 Other income Related to
appropriation assets
Receive financial appropriations for small molecule peptide projects Fiscal 399999.84 0.00 40000.02 0.00 359999.82 Other income Related to
(收财政拨款用于小分子肽项目 ) appropriation assets
Glucocorticoid inhalation suspension project(糖皮质激素吸入混悬液项目 ) Fiscal 0.00 3600000.00 0.00 0.00 3600000.00 Other income Related to
appropriation assets
Leulu total sterone project(漏芦总甾酮项目 ) Fiscal 2500000.00 0.00 0.00 0.00 2500000.00 Other income Related to
appropriation assets
R&D of active substances with bone and joint repair and health care Fiscal 1077356.16 0.00 59853.12 0.00 1017503.04 Other income Related to
functions(具有骨关节修复与保健功能的活性物质研发 ) appropriation assets
171Items of grants Type Balance at the Amount Amount Other Balance Amount Related to
Beginning of additional charged to changes at the End charged to assets/
of the grant for profit and loss of the profit and loss income
Year the Period for the Period Period for the Period
Key technology research and development of budesonide nebulized Fiscal 4500000.00 0.00 0.00 0.00 4500000.00 Other income Related to
inhalation solution(布地奈德雾化吸入溶液关键技术研发 ) appropriation assets
Return of land holding tax(土地使用税返还 ) Fiscal 3674691.16 0.00 53514.87 0.00 3621176.29 Other income Related to
appropriation assets
Special Fund for environmental protection of wastewater membrane Fiscal 9708.66 0.00 9708.66 0.00 0.00 Other income Related to
concentration system(废水膜浓缩系统环保专项资金 ) appropriation assets
Subsidies for The development of pharmaceutical APIs industry Fiscal 41960547.60 0.00 609596.40 0.00 41350951.20 Other income Related to
(医药原料药行业发展支持资金补助 ) appropriation assets
Receive innovation voucher(Jingjin Filter Press Equipment) Fiscal 313332.99 0.00 40000.07 0.00 273332.92 Other income Related to
(收创新券 (景津压滤设备 )) appropriation assets
Xinxiang High-tech Project Fund Support(新乡高新技术项目资金扶持 ) Fiscal 1917508.44 0.00 28198.68 0.00 1889309.76 Other income Related to
appropriation assets
Hepatitis B vaccine methanol yeast expression system Fiscal 500000.00 0.00 0.00 0.00 500000.00 Other income Related to
(乙肝疫苗甲醇酵母表达系统 ) appropriation assets
New recombinant protein vaccine technology platform and Industrialization Fiscal 9000002.00 0.00 0.00 0.00 9000002.00 Other income Related to
of Cervical Cancer Vaccine appropriation assets
(新型重组蛋白疫苗技术平台及宫颈癌疫苗产业化)
Research on Common Co-construction Technology of Pharmaceutical Fiscal 1900000.00 900000.00 0.00 0.00 2800000.00 Other income Related to
Inhalation Preparations(开发区财政局拔款创业领军人才项目 : 药品吸入 appropriation assets
制剂共性共建技术的研究)
Research and development of respiratory system drug and clinical research Fiscal 1500000.00 0.00 0.00 0.00 1500000.00 Other income Related to
technology service platform project talent funding appropriation assets
(呼吸系统药物研发和临床研究技术服务平台项目人才经费)
Science and technology help the economy key special projects Fiscal 500000.00 0.00 0.00 0.00 500000.00 Other income Related to
(科技助力经济重点专项 ) appropriation assets
City Service Development Special(市服务发展专项 ) Fiscal 800000.00 0.00 0.00 0.00 800000.00 Other income Related to
appropriation assets
Patent funding(专利资助 ) Fiscal 0.00 200000.00 0.00 0.00 200000.00 Other income Related to
appropriation income
Research and development subsidy for ω-3-Fish Oil Medium and Long Fiscal 350000.00 0.00 0.00 0.00 350000.00 Other income Related to
Chain Fat Emulsion Injection appropriation assets
(ω-3鱼油中/长链脂肪乳注射液研究开发补助)
R&D and industrialization of innovative Ilaprazole Series Fiscal 20988166.29 0.00 2455000.02 0.00 18533166.27 Other income Related to
(艾普拉唑系列创新药物研发及产业化 ) appropriation assets
Research and development funds for new drug for Class I Treatment of Fiscal 8000000.00 0.00 0.00 0.00 8000000.00 Other income Related to
Necrosis Factor in Human Tumour from Human Source appropriation income
(I类治疗用人源化抗人肿瘤坏死因子α单克隆抗体新药研制资金 )
Strategic emerging industries in 2014 (sustained release microspheres)(2014 Fiscal 16700000.00 0.00 0.00 0.00 16700000.00 Other income Related to
年战略性新兴产业 (缓释微球 )) appropriation assets
Fund for industrialization of prolonged-action microsphere preparation Fiscal 13300000.00 0.00 0.00 0.00 13300000.00 Other income Related to
(长效微球制剂的产业化款项 ) appropriation assets
Construction project for industrialization of prolonged-action microsphere Fiscal 7024025.85 8329800.00 431665.47 0.00 14922160.38 Other income Related to
preparation (phase I) (长效微球制剂产业化建设项目 (一期工程 )) appropriation assets
Pilot-scale enlargement and industrialization of prolonged-action injection Fiscal 2400000.00 0.00 0.00 0.00 2400000.00 Other income Related to
microsphere products(长效注射微球产品的中试放大和产业化 ) appropriation assets
Project subsidy from the Ministry of Industry and Information Technology Fiscal 2400000.00 0.00 0.00 0.00 2400000.00 Other income Related to
(工业和信息化部项目补助款 ) appropriation assets
Project subsidy from the Ministry of Industry and Information Technology Fiscal 1597750.00 0.00 115500.00 0.00 1482250.00 Other income Related to
(工业和信息化部项目补助款 ) appropriation assets
172Interim Report2021
Items of grants Type Balance at the Amount Amount Other Balance Amount Related to
Beginning of additional charged to changes at the End charged to assets/
of the grant for profit and loss of the profit and loss income
Year the Period for the Period Period for the Period
Construction of Drug Conformity Evaluation Research Center Platform Fiscal 1200000.10 0.00 80000.00 0.00 1120000.10 Other income Related to
(药物一致性评价研究中心平台建设 ) appropriation assets
R&D and Commercialisation of Mouse Nerve Growth Factor for Injection Fiscal 50606036.20 0.00 5280044.56 0.00 45325991.64 Other income Related to
(注射用鼠神经生长因子研发及产业化 ) appropriation assets
Demonstration project on the application of solar photovoltaic Fiscal 3557499.51 0.00 551000.02 0.00 3006499.49 Other income Related to
architecture(太阳能光电建筑应用示范项目 ) appropriation assets
Subsidy for the Tender of Technology Upgrade Project for PVC Soft Bag Fiscal 3111850.32 0.00 204182.88 0.00 2907667.44 Other income Related to
Supported by Provincial Finance Departments appropriation assets
(省财政支持技改招标项目补助金PVC软袋 )
Technical transformation project of Shenqi Fuzheng Injection with flexible Fiscal 19500000.02 0.00 1911764.70 0.00 17588235.32 Other income Related to
bag (软袋参芪扶正注射液技改项目 ) appropriation assets
Provision for technology transformation funds and subsequent grants Fiscal 6589119.08 0.00 564781.68 0.00 6024337.40 Other income Related to
(技术改造资金拨款及事后补奖 ) appropriation assets
Provision for technology transformation funds and subsequent grants Fiscal 10648600.33 0.00 1644464.76 0.00 9004135.57 Other income Related to
(技术改造资金拨款及事后补奖 ) appropriation assets
Electricity distribution transformer performance enhancement for energy- Fiscal 428000.00 0.00 24000.00 0.00 404000.00 Other income Related to
saving and emission reduction projects appropriation assets
(节能减排项目配电变压器能效提升)
R&D and industrialization team of chemical drug liquid preparation Fiscal 1000000.00 0.00 444166.64 0.00 555833.36 Other income Related to
(化药液体制剂研发与产业化团队 ) appropriation assets
Innovation capacity building of technology center (antibody laboratory) Fiscal 5248234.16 0.00 222877.68 0.00 5025356.48 Other income Related to
(技术中心创新能力建设 (抗体药物实验室 )) appropriation assets
Innovation capacity building of technology center (antibody laboratory) Fiscal 241769.82 0.00 37665.18 0.00 204104.64 Other income Related to
(技术中心创新能力建设 (抗体药物实验室 )) appropriation income
Achievement transfer of blood screening (BCI) nucleic acid detection Fiscal 6000000.00 0.00 6000000.00 0.00 0.00 Other income Related to
testing(血液筛查 (BCI)核酸检测试剂成果转化 ) appropriation assets
Technological upgrading and transformation projects of workshop for Fiscal 571428.64 0.00 53571.42 0.00 517857.22 Other income Related to
acarbose (APIs for α-glucosidase inhibitor)(α-葡萄糖苷酶抑制剂类原料 appropriation 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 Statins(降血脂他汀类药物的研发与产业化 ) Fiscal 60000.36 0.00 14999.94 0.00 45000.42 Other income Related to
appropriation assets
Scientific technology award and subsidy for technological innovative Fiscal 139491.80 0.00 55462.80 0.00 84029.00 Other income Related to
project(科学技术奖及科技创新项目资助 ) appropriation assets
Scientific technology award and subsidy for technological innovative project Fiscal 3400000.00 0.00 600000.00 0.00 2800000.00 Other income Related to
(科学技术奖及科技创新项目资助 ) appropriation income
Zhuhai industrial enterprise "cloud and platform" service coupons supporting Fiscal 114972.73 0.00 12770.44 0.00 102202.29 Other income Related to
funds(珠海市工业企业 "上云上平台 "服务券支持资金 ) appropriation income
Commissioner workstation(特派员工作站 ) Fiscal 145000.00 0.00 30000.00 0.00 115000.00 Other income Related to
appropriation assets
Industrial revitalisation supporting funds (产业振兴扶持资金 ) Fiscal 3603500.01 0.00 579000.00 0.00 3024500.01 Other income Related to
appropriation assets
Phase IV clinical study of innovative drug Ilaprazole Fiscal 8210800.00 0.00 0.00 0.00 8210800.00 Other income Related to
(创新药物艾普拉唑 IV期临床研究 ) appropriation assets
Government grant for industrial transformation (工业转型政府扶持资金 ) Fiscal 508333.67 0.00 99999.96 0.00 408333.71 Other income Related to
appropriation assets
New industrialization development grant (新型工业化发展奖金 ) Fiscal 1304166.42 609700.00 175000.02 0.00 1738866.40 Other income Related to
appropriation assets
Policy fund for leading industrial enterprises loan Interests Fiscal 566666.61 0.00 100000.02 0.00 466666.59 Other income Related to
(工业龙头企业贷款贴息政策资金 ) appropriation assets
173Items of grants Type Balance at the Amount Amount Other Balance Amount Related to
Beginning of additional charged to changes at the End charged to assets/
of the grant for profit and loss of the profit and loss income
Year the Period for the Period Period for the Period
Supporting funds for five advantageous industrial clusters and one high-tech Fiscal 400000.16 0.00 49999.98 0.00 350000.18 Other income Related to
industry (新型研发机构补助 ) appropriation assets
Subsidy for new R&D institution Fiscal 2000000.00 1800000.00 0.00 0.00 3800000.00 Other income Related to
appropriation assets
Zhuhai innovation and enterprising team and high-level talent enterprising Fiscal 2700000.00 6300000.00 0.00 0.00 9000000.00 Other income Related to
project (paclitaxel micellar for injection) appropriation assets
(珠海市创新创业团队和高层次人才创业项目(注射液紫杉醇胶束))
Capital project for innovation and entrepreneurship team funding program Fiscal 8500000.00 0.00 0.00 0.00 8500000.00 Other income Related to
(创新创业团队资助计划资金项目 ) appropriation assets
Fund for R&D and industrialization of innovative Ilaprazole series Fiscal 5600000.00 0.00 0.00 0.00 5600000.00 Other income Related to
(艾普拉唑系列创新药物研发及产业化项目资金 ) appropriation assets
Key projects of industrial core and key technologies of Zhuhai (Ryanodex) Fiscal 3000000.00 0.00 0.00 0.00 3000000.00 Other income Related to
(珠海市产业核心和关键技术攻关方向项目 (丹曲林钠 )) appropriation assets
Fund for key projects of industrial core and key technologies of Zhuhai Fiscal 2000000.00 0.00 0.00 0.00 2000000.00 Other income Related to
(2nd batch)(珠海市产业核心和关键技术攻关方向项目资金 (第二批 )) appropriation assets
Innovative drug of Ilaprazole sodium for injection Fiscal 2400000.00 0.00 0.00 0.00 2400000.00 Other income Related to
(创新药注射用艾普拉唑钠针剂 ) appropriation assets
Technological transformation projects of new Cefuroxime Fiscal 1533100.00 0.00 0.00 0.00 1533100.00 Other income Related to
(新型头孢粉针剂技术改造项目 ) appropriation assets
Internet benchmarking project for advanced drug Manufacturing Fiscal 765000.00 0.00 45000.00 0.00 720000.00 Other income Related to
(先进药品制造互联网标杆项目 ) appropriation assets
Cleaner Production Audit Project(清洁生产审核项目 ) Fiscal 190000.04 0.00 5000.00 0.00 185000.04 Other income Related to
appropriation assets
Green factory(绿色工厂 ) Fiscal 1261666.67 0.00 65000.00 0.00 1196666.67 Other income Related to
appropriation assets
HCG project construction(HCG项目建设 ) Fiscal 3783485.81 0.00 197825.00 0.00 3585660.81 Other income Related to
appropriation assets
Sewage treatment system upgrade project (污水处理系统升级改造项目 ) Fiscal 72269.96 0.00 4015.00 0.00 68254.96 Other income Related to
appropriation assets
R&D and industrialization of Recombinant Human Chorionic Gonadotropin Fiscal 1287500.00 0.00 75000.00 0.00 1212500.00 Other income Related to
for Injection(注射用重组人绒促性素研发及产业化 ) appropriation assets
Subsidies for online monitoring equipment and installations of coalfired Fiscal 105000.00 0.00 11250.00 0.00 93750.00 Other income Related to
boilers(燃煤锅炉在线监控设备装置补助资金 ) appropriation assets
Funds for joint R&D and industrialization of integrated platform for Fiscal 1550000.00 0.00 0.00 0.00 1550000.00 Other income Related to
molecular diagnostics appropriation assets
(集成一体化分子诊断平台的合作研发及产业化资金)
Project supporting fund for the first batch of special funds for scientific and Fiscal 850000.00 0.00 250000.00 0.00 600000.00 Other income Related to
technological innovation in 2019 appropriation assets
(2019年度第一批科技创新专项资金立项配套资助)
Provincial industrial innovation (provincial enterprise technology center) Fiscal 1403733.33 0.00 0.00 0.00 1403733.33 Other income Related to
project in 2019 (2019年省产业创新 (省级企业技术中心 )项目 ) appropriation assets
Guangdong Province Science and Technology Department special emergency Fiscal 350000.00 0.00 0.00 0.00 350000.00 Other income Related to
fund for scientific and technological research on prevention and control of appropriation assets
COVID-19
(广东省科学技术厅汇防控新型冠状病毒感染科技攻关应急专项款)
Zhuhai Financial Bureau cum COVID-19 emergency technology special Fiscal 250000.00 0.00 0.00 0.00 250000.00 Other income Related to
emergency fund (珠海市财政局汇新冠应急科技攻关专项款 ) appropriation assets
China Postdoctoral Science Foundation subsidy funds Fiscal 160000.00 0.00 0.00 0.00 160000.00 Other income Related to
(中国博士后科学基金会资助经费 ) appropriation income
174Interim Report2021
Items of grants Type Balance at the Amount Amount Other Balance Amount Related to
Beginning of additional charged to changes at the End charged to assets/
of the grant for profit and loss of the profit and loss income
Year the Period for the Period Period for the Period
Pre-appropriation of special grants for industrialization of diagnostic reagents Fiscal 4601200.00 0.00 1497000.00 0.00 3104200.00 Other income Related to
for COVID-19(新型冠状病毒检测试剂产业化项目补助金预拨 ) appropriation assets
Xiangzhou District equipment purchase subsidy supporting funds (special Fiscal 13555.75 0.00 0.00 0.00 13555.75 Other income Related to
funds for prevention and control of pandemic) appropriation assets
(香洲区购置设备补贴扶持资金(疫情防控专项资金))
Zhuhai innovation and enterprising team and high-level talent enterprising Fiscal 12000000.00 0.00 0.00 0.00 12000000.00 Other income Related to
project Phase I funds appropriation assets
(珠海市创新创业团队和高层次人才创业项目首期资金)
Overall relocation and deployment expansion project Fiscal 20000000.00 0.00 0.00 0.00 20000000.00 Other income Related to
(整体搬迁调迁扩建项目 ) appropriation assets
Study on intestinal absorption of Ilaprazole and biodistribution Fiscal 0.00 800000.00 0.00 0.00 800000.00 Other income Related to
(艾普拉唑体内肠吸收和生物分布研究 ) appropriation income
Data-driven industrial chain collaboration platform demonstration project Fiscal 0.00 3650000.00 0.00 0.00 3650000.00 Other income Related to
(数据驱动的产业链协同平台示范项目 ) appropriation assets
Environmental protection bureau RTO project special funds Fiscal 200000.00 0.00 10000.02 0.00 189999.98 Other income Related to
(环保局RTO项目资金 ) appropriation assets
Total 467562770.49 39283500.00 25277580.01 13451700.00 468116990.48
(2) Government grants charged to profit and loss for the Period by adopting gross amount method
Projects with grants Typy Amount Amount Presentation Related to assets/
charged to charged to item in profit income
profit and loss profit and and loss
for the Previous loss for the
Period Period
Social security subsidy (社保补助 ) Fiscal appropriation 969927.26 61986.60 Other income Related to income
Construction of HCG Project (HCG项目建设 ) Fiscal appropriation 66555.00 197825.00 Other income Related to assets
Technological Upgrading and Transformation Projects of Workshop for Acarbose (API of Glucosidase Fiscal appropriation 53571.42 53571.42 Other income Related to assets
Inhibitor)(α-葡萄糖苷酶抑制剂类原料药阿卡波糖生产车间工艺升级技术改造项目 )
R&D and industrialization of innovative Ilaprazole series(艾普拉唑系列创新药物研发及产业化 ) Fiscal appropriation 2455000.02 2455000.02 Other income Related to assets
R&D and industrialization of innovative Ilaprazole series(艾普拉唑系列创新药物研发及产业化 ) Fiscal appropriation 374064.90 0.00 Other income Related to income
Set-up and research fund for postdoctoral Station(博士后建站和科研补贴 ) Fiscal appropriation 0.00 100000.00 Other income Related to income
Fiscal Subsidy and Operating Subsidy(财政补贴及经营运营补贴 ) Fiscal appropriation 70300735.00 83032194.60 Other income Related to income
Industrial supporting funds(产业扶持资金 ) Fiscal appropriation 0.00 143000.00 Other income Related to income
Industrial revitalisation supporting funds(产业振兴扶持资金 ) Fiscal appropriation 579000.00 579000.00 Other income Related to assets
Inland transportation subsidy for export enterprises(出口企业内陆运输补助 ) Fiscal appropriation 0.00 163000.00 Other income Related to income
Export credit insurance subsidy(出口信保补贴 ) Fiscal appropriation 2120056.54 258812.70 Other income Related to income
Export insurance premium subsidy(出口用保险保费补助款 ) Fiscal appropriation 0.00 347965.00 Other income Related to income
Special Funds for Promoting High-quality Economic Development(促进经济高质量发展专项资金 ) Fiscal appropriation 0.00 328020.00 Other income Related to income
Grants to high-growth technology companies from Dazhangjiang project A04 Fiscal appropriation 0.00 1500000.00 Other income Related to income
(大张江项目A04对高增长技术企业资助款 )
Transfer other income based on asset-related special appropriations / Bone and joint repair and health Fiscal appropriation 59853.68 59853.12 Other income Related to assets
care (from January2020)
(根据资产相关的专项拨款转其他收益/骨关节修复与保健(从2020.1月起))
Policy fund for leading industrial enterprises loan interests(工业龙头企业贷款贴息政策资金 ) Fiscal appropriation 100000.02 100000.02 Other income Related to assets
Government grant for industrial transformation(工业转型政府扶持资金 ) Fiscal appropriation 99999.89 99999.96 Other income Related to assets
Domestic patent annual fee rewards(国内专利年费奖励 ) Fiscal appropriation 8000.00 2500.00 Other income Related to income
175Projects with grants Typy Amount Amount Presentation Related to assets/
charged to charged to item in profit income
profit and loss profit and and loss
for the Previous loss for the
Period Period
Marine small molecule peptide beauty moisturizing health drink project Fiscal appropriation 40000.02 40000.02 Other income Related to assets
(海洋小分子肽美容补水保健饮料项目)
Provision for technology transformation funds and subsequent grants Fiscal appropriation 1659558.81 2209246.44 Other income Related to assets
(技术改造资金拨款及事后补奖)
Provision for technology transformation funds and subsequent grants Fiscal appropriation 335100.00 0.00 Other income Related to income
(技术改造资金拨款及事后补奖)
Construction of 500 cubic meters/day wastewater membrane concentration system Fiscal appropriation 29126.22 9708.66 Other income Related to assets
(建设500立方米/日废水膜浓缩系统)
R&D and commercialisation of Statins(降血脂他汀类药物的研发与产业化 ) Fiscal appropriation 14999.94 14999.94 Other income Related to assets
Energy-saving and emission reduction projects(节能减排项目 ) Fiscal appropriation -15984.98 43015.02 Other income Related to assets
Special Fund and Encouraging funds for Energy Saving and Emission Reduction Fiscal appropriation 0.00 628000.00 Other income Related to income
(节能减排专项资金及奖励金)
Scientific technology award and subsidy for technological innovative project Fiscal appropriation 1327272.76 1200000.00 Other income Related to income
(科学技术奖及科技创新项目资助)
Scientific technology award and subsidy for technological innovative project Fiscal appropriation 55462.80 305462.80 Other income Related to assets
(科学技术奖及科技创新项目资助)
Conformity Evaluation Research of Quality of Varieties such as Livzon Dele Fiscal appropriation 115500.00 115500.00 Other income Related to assets
(丽珠得乐等品种质量一致性评价研究)
Green factory(绿色工 厂 ) Fiscal appropriation 19999.98 65000.00 Other income Related to assets
Innovative talent support during the "13th Five-Year Plan" period in Pudong New Area Fiscal appropriation 0.00 500000.00 Other income Related to income
(浦东新区"十三五"期间创新型人才扶持)
Others Fiscal appropriation 398540.87 153712.03 Other income Related to income
Enterprise Technology Center Innovation Capacity Development (Antibody Laboratory) Fiscal appropriation 43458.18 37665.18 Other income Related to income
(企业技术中心创新能力建设(抗体药物试验室))
Enterprise Technology Center Innovation Capacity Development (Antibody Laboratory) Fiscal appropriation 320099.38 222877.68 Other income Related to assets
(企业技术中心创新能力建设(抗体药物试验室))
Employment Assurance and Re-employment and Attraction to Graduates of Tertiary Academic Fiscal appropriation 2068112.68 769100.46 Other income Related to income
Institutions Subsidy(企业稳岗及再就业和吸纳高校毕业生补贴款 )
Enterprise R&D subsidy funds (企业研发补助资金 ) Fiscal appropriation 560000.00 720000.00 Other income Related to income
Enterprise R&D investment support plan(企业研发投入支持计划款 ) Fiscal appropriation 887000.00 1000000.00 Other income Related to income
Subsidy for online monitoring equipment for coalfired boilers(燃煤锅炉在线监控设备装置补助 ) Fiscal appropriation 11250.00 11250.00 Other income Related to assets
Technical transformation project of Shenqi Fuzheng Injection with flexible bag Fiscal appropriation 1911764.70 1911764.70 Other income Related to assets
(软袋参芪扶正注射液技改项目)
Shenzhen Economic and Trade Bureau Electricity Cost Reduction Subsidy Fiscal appropriation 148808.00 387715.44 Other income Related to income
(深圳经贸局用电降成本补助)
Subsidy of Shenzhen New Inhalation Preparation Engineering Laboratory Fiscal appropriation 0.00 538700.00 Other income Related to assets
(深圳新型吸入剂工程实验室补助)
Maternity benefits (生育津贴 ) Fiscal appropriation 81367.44 222116.49 Other income Related to income
Subsidy for the Tender of Technology Upgrade Project for PVC Soft Bag Supported by Provincial Fiscal appropriation 204182.88 204182.88 Other income Related to assets
Finance Departments(省财政支持技改招标项目补助金PVC软袋 )
Provincial Science and Technology Innovation Strategy Special Fund(省科技创新战略专项资金 ) Fiscal appropriation 1500000.00 444166.64 Other income Related to assets
Subsidy funds allocated by the Bureau of Finance (财政局拨付补助资金 ) Fiscal appropriation 649596.36 649596.47 Other income Related to assets
Demonstration project on the application of solar photovoltaic architecture Fiscal appropriation 551000.04 551000.02 Other income Related to assets
(太阳能光电建筑应用示范项目)
Commissioner workstation (特派员工作站 ) Fiscal appropriation 30000.00 30000.00 Other income Related to assets
Subsidy for Rental and Property Fee of the Investment and Promotion Center Fiscal appropriation 0.00 67500.00 Other income Related to income
(投促中心租金及物业费补贴)
176Interim Report2021
Projects with grants Typy Amount Amount Presentation Related to assets/
charged to charged to item in profit income
profit and loss profit and and loss
for the Previous loss for the
Period Period
Return of land transfer fee (土地出让金返还 ) Fiscal appropriation 28198.68 28198.68 Other income Related to assets
Return of land holding tax(土地使用税返还 ) Fiscal appropriation 53514.90 53514.87 Other income Related to assets
Job stabilization subsidy (稳岗补贴 ) Fiscal appropriation 382402.59 23920.00 Other income Related to income
Supporting funds for five advantageous industrial clusters and one high-tech industry Fiscal appropriation 49999.98 49999.98 Other income Related to assets
(五优一新扶持资金)
Internet Benchmarking Project for Advanced Drug Manufacturing(先进药品制造互联网标杆项目 ) Fiscal appropriation 45000.00 45000.00 Other income Related to assets
New industrialization development funds(新型工业化发展资金 ) Fiscal appropriation 175000.09 175000.02 Other income Related to assets
Pre-appropriation of subsidies for the industrialization project of new coronavirus detection Fiscal appropriation 0.00 1497000.00 Other income Related to assets
reagents(新型冠状病毒检测试剂产业化项目补助金预拨 )
Achievement transfer of blood screening (BCI) nucleic acid detection testing Fiscal appropriation 0.00 6000000.00 Other income Related to assets
(血液筛查 (BCI)核酸检测试剂成果转化 )
R&D subsidy (研究开发费补助 ) Fiscal appropriation 1371600.00 2420000.00 Other income Related to income
Construction of Drug Conformity Evaluation Research Center Platform Fiscal appropriation 79999.98 80000.00 Other income Related to assets
(药物一致性评价研究中心平台建设)
One-off employment subsidy(一次性吸纳就业补贴 ) Fiscal appropriation 0.00 62400.00 Other income Related to income
Subsidies for work-based training(以工代训补贴 ) Fiscal appropriation 0.00 101047.17 Other income Related to income
Electricity subsidy(用电补贴 ) Fiscal appropriation 0.00 793292.78 Other income Related to income
Electricity Incentive Funds(用电奖励资金 ) Fiscal appropriation 0.00 301257.43 Other income Related to income
Government Subsidy for Long-acting Microspheres Major New Drug Creation Fiscal appropriation 15000.00 431665.47 Other income Related to assets
(长效微球重大新药创制政府补助)
Government Subsidy for Long-acting Microspheres Major New Drug Creation Fiscal appropriation 592670.00 0.00 Other income Related to income
(长效微球重大新药创制政府补助)
R&D and Commercialisation of Mouse Nerve Growth Factor for Injection Fiscal appropriation 5280044.58 5280044.56 Other income Related to assets
(注射用鼠神经生长因子研发及产业化)
R&D and commercialisation of Recombinant Human Chorionic Gonadotropin for Injection Fiscal appropriation 75000.00 75000.00 Other income Related to assets
(注射用重组人绒促性素研发及产业化)
Patent (Intellectual Property) Support Fund(专利 (知识产权 )资助资金 ) Fiscal appropriation 128500.00 779370.00 Other income Related to income
Patent grant(专利补助 ) Fiscal appropriation 30400.00 10000.00 Other income Related to income
Respiratory system drug R&D and clinical research technology service platform project talent Fiscal appropriation 1500000.00 0.00 Other income Related to assets
funding(呼吸系统药物研发和临床研究技术服务平台项目人才经费 )
Special subsidy of Guangzhou technology-based small and medium-sized enterprises technology Fiscal appropriation 1500000.00 0.00 Other income Related to assets
innovation in 2020(2020年广州市科技型中小企业技术创新专题补助 )
Subsidies for leading talents in Guangzhou Development Zone Science and Technology Innovation Fiscal appropriation 226844.00 0.00 Other income Related to assets
Bureau (Huangpu Science and Technology Bureau)
(广州开发区科技创新局(黄埔区科技局)区领军人才场地补贴)
Technology transformation of recycling system of Acarbose project Fiscal appropriation 103119.26 0.00 Other income Related to assets
(阿卡波糖糖回收系统技术改造项目)
Credit insurance subsidy (信保补助 ) Fiscal appropriation 184732.00 0.00 Other income Related to income
Intellectual Property Rights Protection Fund (知识产权维权资助 ) Fiscal appropriation 131740.03 0.00 Other income Related to income
The first batch of funding for the Enterprise Research and Development Funding Program Fiscal appropriation 1824000.00 0.00 Other income Related to income
(企业研究开发资助计划第一批资助款)
Truck (Isuzu) scrap subsidy(货车 (五十铃 )报废补贴款 ) Fiscal appropriation 12000.00 0.00 Other income Related to income
Support for further steady growth in 2019 (2019年进一步稳增长资助 ) Fiscal appropriation 400000.00 0.00 Other income Related to income
Sewage treatment fee subsidy(污水处理费补贴 ) Fiscal appropriation 46926.75 0.00 Other income Related to income
Funding for the integration of industrialization and industrialization(两化融合资助款 ) Fiscal appropriation 50000.00 0.00 Other income Related to income
Government subsidies for the Quality and Brand Double Improvement Funding Program Fiscal appropriation 800000.00 0.00 Other income Related to income
(质量品牌双提升资助计划政府补助)
177Projects with grants Typy Amount Amount Presentation Related to assets/
charged to charged to item in profit income
profit and loss profit and and loss
for the Previous loss for the
Period Period
2020 Support Plan Funding (2020年扶持计划资助款 ) Fiscal appropriation 953000.00 0.00 Other income Related to income
2016 Guangdong Provincial Enterprise Research and Development Provincial Financial Subsidy Fund Fiscal appropriation 200000.00 0.00 Other income Related to income
Project (2016年广东省企业研究开发省级财政补助资金项目 )
Subsidy Funds from the Bureau of Commerce of Macun District(马村区商务局补助资金 ) Fiscal appropriation 2428700.00 0.00 Other income Related to income
Special funds for the development of advanced manufacturing industry in Henan Province Fiscal appropriation 2000000.00 0.00 Other income Related to income
(河南省先进制造业发展专项资金)
Value-added tax deduction(增值税加计抵减 ) Fiscal appropriation 41584.45 0.00 Other income Related to income
Shanghai Industrial Insurance supports enterprises to stabilize job subsidies Fiscal appropriation 60673.00 0.00 Other income Related to income
(上海市实业保险支持企业稳定岗位补贴)
District Innovation Voucher Funding(区创新券资助 ) Fiscal appropriation 8100.00 0.00 Other income Related to income
Xinxiang High-tech District Science and Technology Bureau Provincial R&D Platform Certification Fiscal appropriation 100000.00 0.00 Other income Related to income
Award Supplement(新乡高新区科技局省级研发平台认定奖补 )
Capital projects of innovation and entrepreneurship team funding program Fiscal appropriation 600000.00 0.00 Other income Related to income
(创新创业团队资助计划资金项目)
Promoting Imports of Foreign Trade Development Special Fund(外贸经济发展专项资金 ) Fiscal appropriation 86080.00 0.00 Other income Related to income
Special funds for industry and informatization(工业和信息化专项资金 ) Fiscal appropriation 40000.00 0.00 Other income Related to income
Incentive funds for expansion of export scale(扩大出口规模奖励基金 ) Fiscal appropriation 389300.00 0.00 Other income Related to income
Special funds for key leading enterprises in the 13th Five-Year Plan (2019)(十三五重点领军企业专 Fiscal appropriation 4784100.00 0.00 Other income Related to income
项资金(2019年))
Special capital replenishment for industrial enterprise Restructuring(工业企业结构调整专项资补资 ) Fiscal appropriation 1940000.00 0.00 Other income Related to income
National Key R&D Program "Network Collaborative Manufacturing and Smart Factory" Special Fiscal appropriation 515000.00 0.00 Other income Related to income
Project(国家重点研发计划 "网络协同制造和智能工厂 "专项 )
Network reconstruction and system optimization of actinomycete drug synthesis biological system Fiscal appropriation 470000.00 0.00 Other income Related to income
(放线菌药物合成生物体系的网络重构与系统优化)
Export credit insurance subsidy in the second half of 2019 (2019年下半年出口信保补贴资金 ) Fiscal appropriation 0.00 304900.00 Other income Related to income
2019 SME subsidies (2019年中小开补贴 ) Fiscal appropriation 0.00 107500.00 Other income Related to income
Advanced Group and Advanced Individual Subsidy in 2020(2020年度先进集团和先进个人补助 ) Fiscal appropriation 0.00 20000.00 Other income Related to income
Special funds for corporate R&D financial subsidies in 2020(2020年企业研发财政补助专项资金 ) Fiscal appropriation 0.00 265000.00 Other income Related to income
The 9th batch of Yantian District enterprise trial training subsidies in 2020 Fiscal appropriation 0.00 153240.00 Other income Related to income
(2020年盐田区企业试岗培训补贴第9批次)
Investment projects in weak links of the industrial chain in 2021(2021年产业链薄弱环节投资项目 ) Fiscal appropriation 0.00 3000000.00 Other income Related to income
The first batch of funding support for the development of science and technology industries in 2021 Fiscal appropriation 0.00 200000.00 Other income Related to income
(2021年第一批科技类产业发展资金扶持资助)
Industrial added value growth rate project(工业增加值增速达标项目 ) Fiscal appropriation 0.00 2880000.00 Other income Related to income
Funding for the Enterprise Research and Development Funding Program(企业研究开发资助 ) Fiscal appropriation 0.00 871000.00 Other income Related to income
Supporting subsidy for "Talents Plan" and subsidy for talents introduction and cultivation Fiscal appropriation 0.00 150000.00 Other income Related to income
("人才计划"配套补贴及引才育才补贴)
The second batch of funding for the 2020 science and technology innovation special fund Fiscal appropriation 0.00 767637.00 Other income Related to income
(2020年度科技创新专项资金第二批资助)
Total 119836210.10 129460997.27
178Interim Report2021
(3). Government grants adopting the netting method to offset the relevant cost
Items of grants Type The amount of The amount of Presentation items Related to assets/
related costs offset related costs offset to offset related income
in the previous year in this yeear costs
Loan discount Fiscal appropriation 0.00 510800.00 Financial expenses Related to income
Total 0.00 510800.00
VI. Change to Consolidation Scope
1. Business combination not involving enterprises under common control:
□Applicable √N/A
2. Business combination involving enterprises under common control
□Applicable √N/A
3. Reverse purchase
□Applicable √N/A
4. Disposal of subsidiaries
Was there any circumstance under which a single disposal of the investment in subsidiaries will lose control?
□Applicable √N/A
Other descriptions:
□Applicable √N/A
5. Changes in scope of consolidation due to other reasons
Descriptions of changes in scope of consolidation caused by other reasons (such as establishment of a new subsidiary and
liquidation of a subsidiary etc.) and their relevant information:
□Applicable √N/A
6. Others
√Applicable □N/A
(1) The Livzon Group loss of control of subsidiaries by once disposal
Name of subsidiary Amount of Disposal Mode of Time of Recognisation Differences arising Goodwill
disposal for ratio disposal ceased for the time from disposal amount related to the
equity % control of ceased and portion of net subsidiary
control assets held by disposal in the
investment for the consolidated
range of consolidated financial
financial statement statement
Zhuhai Qiao 10000000.00 60 Sale 2021.6.11 Asset delivery 2423029.20 —
Biotechnology Co. (indirect
Ltd. (珠海启奥生 holding)
物技术有限公司)
179Continued:
Name of subsidiary Percentage of Book value of Fair value of Gain/loss Recognisation Profit or loss arising
the remaining the remaining the remaining arising from and major from transformation
equity at the equity at the equity at the remeasurement assumptions for of other
date of ceased date of ceased date of ceased at fair value fair value of the comprehensive
control control control remaining equity income which is
at the date of related to equity
ceased control investment
Zhuhai Qiao — — — — — —
Biotechnology Co.Ltd.(珠海启奥生
物技术有限公司)
(2). On 30 March 2021 the Livzon Group and Shanghai Frontier Health Pharmaceutical Technology Co. Ltd. (上海方予健康医药科
技有限公司 ) established Shanghai Liyu Biotechnology Co. Ltd. (上海丽予生物医药有限责任公司 ) with a registered capital
of RMB 3 million of which the Company contributed RMB 1.65 million and is interested in 55% of its registered capital and
Shanghai Frontier contributed RMB 0.81 million and is interested in 45% of its registered capital.
(3). On 9 February 2021 Zhuhai Livzon Diagnostics Inc. (珠海丽珠试剂股份有限公司 ) a subsidiary of Livzon Group established
Zhuhai Liye Biotechnology Co. Ltd. (珠海市丽业生物技术有限公司) with a registered capital of RMB50 million and is interested
in 100% of its registered capital.
(4). On 25 May 2021 Fuzhou Fuxing Pharmaceutical Co. Ltd. (福州市福兴制药有限公司 ) a subsidiary of Livzon Group completed
deregistration at the Administration for Industry and Commerce.VII EQUITY IN OTHER ENTITIES
1. Equity in subsidiaries
(1). Group structure
√Applicable □N/A
Name of subsidiary Principal Place of Nature of Percentage of Acquisition Method
Place of Registration Business Shareholding (%)
Business Direct Indirect
Topsino Industries Limited Hong Kong Hong Kong Business 100 Set-up
Shenzhen Taitai Genomics Inc. Co. Ltd. Shenzhen Shenzhen Industry 75 25 Set-up
Shenzhen Taitai Pharmaceutical Industry Co. Ltd. Shenzhen Shenzhen Industry 100 Set-up
Health Investment Holdings Ltd. The British The British Investment 100 Set-up
(Health Investment) Virgin Islands Virgin Islands
Joincare Pharmaceutical Group Industry Co.Ltd. The British The British Investment 100 Set-up
(BVI)* Virgin Islands Virgin Islands
Joincare Pharmaceutical Group Industry Co. Ltd. Cayman Cayman Investment 100 Set-up
(CAYMAN ISLANDS)
Zhuhai Jiankangyuan Biology Medicine Co. Ltd. Zhuhai Zhuhai Industry 90.89 Set-up
Xinxiang Haibin Pharmaceutical Co. Ltd.(Xinxiang Xinxiang Xinxiang Industry 100 Set-up
Haibin)
Shenzhen Fenglei Electric Power Investment Co. Ltd. Shenzhen Shenzhen Investment 100 Set-up
(Fenglei Electric Power)
Jiaozuo Joincare Bio Technological Co. Ltd.(Jiaozuo Jiaozuo Jiaozuo Industry 75 25 Set-up
Joincare)
Shanghai Frontier Health Pharmaceutical Technology Shanghai Shanghai Industry 65 Set-up
Co. Ltd.(Shanghai Frontier)
180Interim Report2021
Name of subsidiary Principal Place of Nature of Percentage of Acquisition Method
Place of Registration Business Shareholding (%)
Business Direct Indirect
Shenzhen Taitai Biological Technology Co. Ltd. Shenzhen Shenzhen Industry 100 Set-up
(Taitai Biological)
Guangzhou Joincare Respiratory Medicine Guangzhou Guangzhou Industry 26 Set-up
Engineering Technology Co. Ltd.(Joincare
Respiratory)
Guangdong Taitai Forenstic Test Institute Shenzhen Shenzhen Business 100 Set-up
Joincare Haibin Pharmaceutical Co. Ltd. Shenzhen Shenzhen Industry 25 75 Set-up
Shenzhen Haibin Pharmaceutical Co. Ltd. Shenzhen Shenzhen Industry 97.87 2.13 Consolidation not under common control
Joincare Daily-Use & Health Care Co. Ltd. Shenzhen Shenzhen Business 80 20 Consolidation not under common control
Health Pharmaceuticals (China) Limited Zhuhai Zhuhai Industry 100 Consolidation not under common control
Livzon Pharmaceutical Group Inc. (Livzon Group) Zhuhai Zhuhai Industry 23.66 21.11 Consolidation not under common control
Hong Kong Health Pharmaceutical Industry Company Hong Kong Hong Kong Investment 100 Consolidation not under common control
Limited
Health Pharmaceutical Industry Company Limited Hong Kong Hong Kong Investment 100 Consolidation not under common control
Shenzhen Hiyeah Industry Co. Ltd. Shenzhen Shenzhen Business 97.58 2.42 Consolidation not under common control
Guangzhou Hiyeah Industry Co. Ltd. Guangzhou Guangzhou Industry 100 Consolidation not under common control
Zhongshan Renhe Health Products Co. Ltd. Zhongshan Zhongshan Industry 100 Consolidation not under common control
Shenzhen Jiekang Health Care Co. Ltd. Shenzhen Shenzhen Industry 100 Consolidation not under common control
Joincare (Guangdong) Special medicine Food Co. Ltd. Shaoguan Shaoguan Industry 100 Set-up
Henan Joincare Biomedical Research Institute Co. Jiaozuo Jiaozuo Industry 66.93 Set-up
Ltd.Other descriptions:
Subsidiaries not included in the scope of consolidation in the current period:
Name of subsidiary Registered Capital Actual investment Own interest
Guangzhou Hiyeah Industry Co. Ltd. RMB 3000000.00 3000000.00 100%
Zhongshan Renhe Health Products Co. Ltd. RMB 500000.00 500000.00 100%
Shenzhen Jiekang Health Care Co. Ltd. RMB 4000000.00 4000000.00 100%
Guangzhou Hiyeah Industry Co. Ltd. Zhongshan Renhe Health Products Co. Ltd. and Shenzhen Jiekang Health Care Co.Ltd. are wholly-owned subsidiaries of Hiyeah Industry. They entered the liquidation process in 2008. They have been closed
for many years and completed the tax cancellation procedures. So they are not included in the scope of the consolidated
statement.
(2). Important non-wholly owned subsidiaries
√Applicable □N/A
Unit: Yuan Currency: RMB
Name of subsidiary Percentage Gain or loss for the Dividends distributed Balance of minority
of minority Period attributable to to the minority interest interest at the End of
interest (%) minority interest for the Period the Period
Livzon Group 55.2362 586374083.96 644923997.09 6629008742.72
Descriptions of the difference between the shareholding ratio of minority shareholders and their
proportion of voting rights in a subsidiary:
□Applicable √N/A
Other descriptions:
□Applicable √N/A
181(3). Important non-wholly owned subsidiaries
√Applicable □N/A
Unit: 10000 Yuan Currency: RMB
Name of Balance at the End of the Period
subsidiary Current assets Non-current Total assets Current Non-current Total liabilities
assets liabilities liabilities
Livzon Group 1425831.41 680051.65 2105883.06 648576.89 111927.09 760503.98
Name of Balance at the Beginning of the Period
subsidiary Current assets Non-current Total assets Current Non-current Total liabilities
assets liabilities liabilities
Livzon Group 1462735.7 596345.88 2059081.58 608288.89 86784.49 695073.38
Name of Amount for the Period
subsidiary Revenue Net profit Total Comprehensive income Cash flow from operating activities
Livzon Group 623553.10 117978.14 103223.26 67491.10
Name of Amount for the Previous Period
subsidiary Revenue Net profit Total Comprehensive income Cash flow from operating activities
Livzon Group 509523.83 133072.86 135639.95 87357.69
(4). Significant restrictions on the use of enterprise group assets and settlement of enterprise
group debts:
□Applicable √N/A
(5). Financial supports or other supports offered for the structured entities included in the
scope of consolidated financial statements:
□Applicable √N/A
Other descriptions:
□Applicable √N/A
2. Transactions that Result in Change of Owners' Equity in Subsidiaries without Losing Control
□Applicable √N/A
3. Interests in joint ventures or associates
√Applicable □N/A
(1). Significant joint ventures or associates
√Applicable □N/A
Name of Main Place of registration Business nature Shareholding(%) Accounting treatment
subsidiary business Direct Indirect of investment in joint
place ventures or joint ventures
Jiaozuo Jinguan Jiaozuo Zhaozhanggong Village Electricity production 0.00 49 Equity method
Jiahua Electric City Daiwang Town Macun power supply
Power Co. Ltd. Henan District Jiaozuo City comprehensive
Province Henan Province utilisation of fly ash
(2). Key financial information of significant joint ventures
□Applicable √N/A
182Interim Report2021
(3). Key financial information of significant associates
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End Balance at the Beginning
of the Period / Amount of the Period / Amount
for the Period for the Previous Period
Jiaozuo Jinguan Jiahua Jiaozuo Jinguan Jiahua
Electric Power Co. Ltd. Electric Power Co. Ltd.Current assets 880051682.08 747232522.21
Of which: cash equivalents 175689080.15 174001731.35
Non-current assets 305034548.34 319027493.06
Total assets 1185086230.42 1066260015.27
Current liabilities 537496499.49 423866168.40
Non-current liabilities 14767039.03 14902039.03
Total liabilities 552263538.52 438768207.43
Net asset 632822691.90 627491807.84
Of which: Minority interests 0.00 0.00
Total equity attributable to shareholders of the parent company 632822691.90 627491807.84
Share of net assets calculated by shareholding ratio 310083119.03 307470985.84
Adjustment items 9327247.20 9085381.21
Goodwill
Unrealised profit on internal transactions
Provision for diminution in value
Others 9327247.20 9085381.21
Book value of equity investment in associates 319410366.23 316556367.05
Fair value of equity investment in associates with public quotation
Revenue 326758406.59 354586544.07
Finance expenses 9179331.31 3374218.39
Income tax expense 1776961.35 5131338.79
Net profit 5824488.12 15394015.97
Net profit from discontinued operations
Other comprehensive income
Total Comprehensive income 5824488.12 15394015.97
Cash flow from operating activities -103889799.14 17628220.14
Dividends received from associates in the current year
(4). Summarized accounting information for other non-important associates
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End Balance at the Beginning
of the Period / Amount of the Period / Amount
for the Period for the Previous Period
Associates:
Total carrying amount of investment 1025238284.45 311723232.68
Total amount calculated by percentage of shareholding
net profit 6896425.09 -4957827.18
other comprehensive income 0.00 0.00
total comprehensive income 6896425.09 -4957827.18
183(5). Descriptions of significant restrictions on the ability of joint ventures or associates to transfer funds to the Company
□Applicable √N/A
(6). Excess losses incurred by joint ventures or associates
□Applicable √N/A
(7). Unrecognised commitments related to investments in joint ventures
□Applicable √N/A
(8). Contingent liabilities related to investments in joint ventures or associates
□Applicable √N/A
4. Significant joint operations
□Applicable √N/A
5. Interests in structured entities not included in the scope of consolidated financial statements
Descriptions of structured entities not included in the scope of consolidated financial statements:
□Applicable √N/A
6. Others
□Applicable √N/A
VIII. Risks Management of Financial Instruments
√Applicable □N/A
The major financial instruments of the Company include cash bills receivable and accounts receivable other receivables non-
current assets due within one year other current assets financial assets held for trading other equity instrument investments
long-term receivables bills payable and accounts payable other payables short-term borrowings and financial liabilities
held for trading. 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 risksThe 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) are settled
in Hong Kong dollars. 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 non-hedging foreign currency forward contracts 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:
184Interim Report2021
· 30 June 2021
Unit: 1000 Yuan
Item HKD item USD item Euro item GBP item CHF item MOP item
Financial assets in foreign currency:
Monetary funds 473817.83 1052384.98 789.02 17.35 2014.84 0.00
Financial assets held for trading 222000.94 0.00 0.00 0.00 0.00 0.00
Accounts receivables 0.00 589251.59 0.00 0.00 1822.69 0.00
Other receivables 3017.08 0.00 0.00 0.00 469.83 0.00
Other equity instrument investments 501192.42 0.00 0.00 0.00 0.00 0.00
Subtotal: 1200028.28 1641636.57 789.02 17.35 4307.37 0.00
Financial liabilities in foreign currency:
Accounts payables 0.00 0.00 0.00 0.00 352.35 257.66
Other payables 97.92 16768.59 0.00 0.00 0.00 0.00
Subtotal: 97.92 16768.59 0.00 0.00 352.35 257.66
· 31 December 2020
Unit: 1000 Yuan
Item HKD item USD item Euro item JPY item GBP item MOP item
Financial assets in foreign currency:
Monetary funds 335766.40 1086139.94 644.45 0.00 17.25 1120.27
Financial assets held for trading 5596.91 0.00 0.00 0.00 0.00 0.00
Accounts receivables 0.00 483761.81 1275.65 0.00 0.00 2335.99
Other receivables 3042.50 435.46 0.00 0.00 0.00 474.95
Other equity instrument investments 697310.50 0.00 0.00 0.00 0.00 0.00
Subtotal: 1041716.32 1570337.22 1920.10 0.00 17.25 3931.21
Financial liabilities in foreign currency:
Accounts payables 0.00 218.39 45.46 6688.92 0.00 0.00
Other payables 206.06 7401.12 0.00 0.00 0.00 0.00
Subtotal: 206.06 7619.51 45.46 6688.92 0.00 0.00
As at 30 June 2021 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 RMB141465100 (31
December 2020: approximately RMB130168110).
(2). Interest rate risk
The Company's exposures to interest rate risk are mainly arising from interest-bearing liabilities such as bank borrowings and
bonds payables. The interest rates are 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.185(3). Credit risk
Credit risk is primarily attributable to cash and cash equivalents restricted funds accounts receivables and other receivables.In respect of cash at banks they were placed at several banks with good reputations for which the credit risk was limited.In respect of receivables the Company shall assess the credit limit granted to customers for credit purpose. Moreover as the
customer base of the Company is large the credit risk on accounts receivables is not concentrated. In respect of the settlement
of bills receivables since more quality bills such as bank acceptance bills are used it's expected that there should be no
significant credit risks as for whether the Company determines to hold for redemption upon maturity or endorse for payment to
external parties based on capital requirements. 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 9.30%
(31 December 2020: 11.32%); among the other receivables of the Company the other receivables of the top five customers
accounted for 71.50% (31 December 2020: 71.95%).
(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:
· 30 June 2021
Item Within 1 year 1-2 years 2-5 years Over 5 years Total
Financial assets:
Monetary funds 10355746941.18 0.00 0.00 0.00 10355746941.18
Financial assets held for 241873785.15 0.00 0.00 0.00 241873785.15
trading
Bills receivables 1826155857.39 0.00 0.00 0.00 1826155857.39
Accounts receivables 2876172105.89 0.00 0.00 0.00 2876172105.89
Other receivables 196852291.71 0.00 0.00 0.00 196852291.71
Non-current assets due 8520000.00 0.00 0.00 0.00 8520000.00
within one year
Long-term receivables 0.00 584284.36 0.00 0.00 584284.36
Subtotal: 15505320981.32 584284.36 0.00 0.00 15505905265.68
Financial liabilities:
Short-term borrowings 1761919976.54 0.00 0.00 0.00 1761919976.54
Financial liabilities held 556069.84 0.00 0.00 0.00 556069.84
for trading
Bills payables 1492064332.85 0.00 0.00 0.00 1492064332.85
Accounts payables 849511589.02 0.00 0.00 0.00 849511589.02
Other payables 3109066916.03 0.00 0.00 0.00 3109066916.03
Non-current liabilities 9015086.52 0.00 0.00 0.00 9015086.52
due within one year
Lease liabilities 0.00 4932084.43 2010865.04 0.00 6942949.47
Long-term borrowings 0.00 0.00 638453815.00 0.00 638453815.00
Subtotal: 7222133970.80 4932084.43 640464680.04 0.00 7867530735.27
186Interim Report2021
· 31 December 2020
Item Within 1 year 1-2 years 2-5 years Over 5 years Total
Financial assets:
Monetary funds 12289098613.19 0.00 0.00 0.00 12289098613.19
Financial assets held for 28328748.72 0.00 0.00 0.00 28328748.72
trading
Bills receivables 1343013818.54 0.00 0.00 0.00 1343013818.54
Accounts receivables 2447406222.52 0.00 0.00 0.00 2447406222.52
Other receivables 177240162.81 0.00 0.00 0.00 177240162.81
Non-current assets due 19934376.07 0.00 0.00 0.00 19934376.07
within one year
Long-term receivables 0.00 584284.36 0.00 0.00 584284.36
Subtotal: 16305021941.85 584284.36 0.00 0.00 16305606226.21
Financial liabilities:
Short-term borrowings 2110942804.06 0.00 0.00 0.00 2110942804.06
Financial liabilities held 212.07 0.00 0.00 0.00 212.07
for trading
Bills payables 1087759353.31 0.00 0.00 0.00 1087759353.31
Accounts payables 832632206.53 0.00 0.00 0.00 832632206.53
Other payables 2847688065.59 0.00 0.00 0.00 2847688065.59
Non-current liabilities 8539077.05 0.00 0.00 0.00 8539077.05
due within one year
Lease liabilities 0.00 6266093.09 3551686.95 9817780.04
Long-term borrowings 0.00 0.00 360324027.48 0.00 360324027.48
Subtotal: 6887561718.61 6266093.09 363875714.43 0.00 7257703526.13
2. Capital management
The capital management policies are made to keep the continuous operation of the Company to enhance the return to
shareholders to 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 30
June 2021 the Company's gearing ratio is 32.19% (31 December 2020: 31.68%).1873. Transfer of financial assets
(1). Financial assets which are transferred but have not been derecognised in their entirety
Nil.
(2). Financial assets which have been transferred and ceased to be recognised but still have involvement with the transferor
On 30 June 2021 the Company's carrying amounts of bank acceptance bills undue and endorsed to suppliers for settling
account payables is RMB312339291.89 (31 December 2020: RMB327932359.58); the Company has no commercial
acceptance bills undue and endorsed to suppliers for settling account payables (31 December 2020: RMB0.00). On 30 June
2021 the due dates fall into 1 to 12 months. In accordance with the Law of Negotiable Instruments the holders of the bills
have a right of recourse against the Company if payment is refused by the bank of acceptance (the "Continuing Involvement").In the opinion of the Company the Company has transferred substantially all risks and rewards. Accordingly their full carrying
amounts and the associated account payables have been derecognised. The maximum loss and the undiscounted cash flows
from the Continuing Involvement and repurchasing is equal to their carrying amounts. In the opinion of the Company the fair
values of the Continuing Involvement are not significant.During January to June 2021 no gain or loss was generated by the Company on the date of transfer of the bills. The Company
had no current or accumulated gain or expense arising from the Continuing Involvement in financial assets which had been
derecognised. The endorsement was incurred evenly throughout the Period.IX. FAIR VALUE
1. Closing balance of the fair value of assets and liabilities measured at fair value
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Closing balance of fair value
Level 1 Level 2 Level 3 Total
fair value fair value fair value
measurement measurement measurement
I. Continuous fair value measurement
(Ⅰ )Recurring fair value measurement 238093196.95 3780588.20 0.00 241873785.15
1. Financial assets at fair value through profit or loss
(1)Debt instrument investments 926807.89 0.00 0.00 926807.89
(2)Equity instrument investments 237166389.06 0.00 0.00 237166389.06
(3)Derivative financial assets 0.00 3780588.20 0.00 3780588.20
2. Financial assets at fair value through profit or loss
(1)Investments in debt instruments
(2)Investments in equity instruments
(II) Other debt investments
(III) Other investments in equity instruments 200427353.28 0.00 1175969840.91 1376397194.19
(IV) Investment properties
1. A land use right that is used to be leased out.2. A building that is leased out.3. A land use right held for transfer upon capital appreciation
(V) Biological asset
1. Consumable biological assets
2. Productive biological assets
Total assets continuously measured at fair value 438520550.23 3780588.20 1175969840.91 1618270979.34
188Interim Report2021
Item Closing balance of fair value
Level 1 Level 2 Level 3 Total
fair value fair value fair value
measurement measurement measurement
(VI) Held-for-trading financial liabilities
1. Financial liabilities at fair value through profit or loss
Of which: Issued tradable bonds
Derivative financial liabilities 0.00 556069.84 0.00 556069.84
Others
2. Financial liabilities designated as at fair value through
profit or loss
Total liabilities measured at fair value on a recurring basis 0.00 556069.84 0.00 556069.84
II. Non-recurring fair value measurement
(Ⅰ )Held-for-sale assets 0.00 0.00 0.00 0.00
Total assets measured at fair value on a non-recurring basis 0.00 0.00 0.00 0.00
Total liabilities measured at fair value on a non-recurring 0.00 0.00 0.00 0.00
basis
2. Basis for determining the market price of continuous and non-continuous level 1 fair value
measurement items
√Applicable □N/A
When listed and traded on the Shanghai Stock Exchange Shenzhen Stock Exchange Hong Kong Stock Exchange and the
United States its fair value is determined by the closing price on the last trading day of the reporting period.3. Valuation techniques and qualitative and quantitative information of key parameters adopted for continuous and non-
continuous level 2 fair value measurement items
√Applicable □N/A
Item Fair value at the Valuation techniques
End of the Period
Derivative financial assets 3780588.20 The fair value is measured at the forward exchange rate quoted by the
respective matured contract
Derivative financial liabilities 556069.84 The fair value is measured at the forward exchange rate quoted by the
respective matured contract
Valuation techniques and quantitative and quantitative information of key parameters adopted for level 2 fair value
measurement items (1) The derivative financial instruments are foreign exchange forward contracts and the fair value is
calculated and determined based on the corresponding forward exchange rate of the expiring contract. (2) The fair value
of some other equity instruments held is determined by the equity value recorded in the equity notice provided by the
counterparty at the end of the year.4. Valuation techniques and qualitative and quantitative information of key parameters adopted for continuous and non-
continuous level 3 fair value measurement items
√Applicable □N/A
The fair value of some other equity instruments held is the best estimate based on the cost or the present value of expected
future net cash flows.1895. Reconciliation between opening and closing carrying amounts and sensitivity analysis of
unobservable parameters for continuous level 3 fair value measurement items
√Applicable □N/A
Item Fair value at the Valuation
End of the Period techniques
Other equity instrument investments- Shanghai Yunfeng Xinchuang Equity 120279650.08 Net asset method
Investment Center
Other equity instrument investments - Shanghai JingYi Investment Center (L.P.) 66908461.62 Net asset method
Other equity instrument investments-Qianhai Equity Investment Fund(L.P.) 280307004.00 Net asset method
Other equity instrument investments –Apricot Forest Inc 149384486.40 Income approach
Other equity instrument investments -PANTHEONDL.P. 11445746.78 Net asset method
Other equity instrument investments – China Resources Bank of Zhuhai Co. Ltd. 170772300.00 Market method
Other equity instrument investments -GLOBALHEALTHSCIENCE 227873899.09 Net asset method
Other equity instrument investments -SCCVENTUREVI2018-BL.P. 13566215.68 Net asset method
Other equity instrument investments -NextechVOncologyS.C.S.SICAV-SIF 31350997.34 Net asset method
Other equity instrument investments -Others 104081079.92 Cost method
In case of transfers among levels for the current period explain the transfer reasons and policies for determining transfer time
point for continuous fair value measurement items
□Applicable √ N/A
6. Changes in valuation techniques for the current period and reasons for changes
□Applicable √ N/A
7. Fair value of financial assets and liabilities not measured at fair value
□Applicable √ N/A
8. Others
□Applicable √ N/A
X. RELATED PARTIES AND RELATED TRANSACTIONS
1. Parent company of the Company
√Applicable □N/A
Unit: Yuan Currency: RMB
Name of Place of Nature of business Registered Percentage of the Percentage of the
parent registration capital entity's shareholding entity's voting rights
company held by the parent held by the parent
company (%) company (%)
Shenzhen Shenzhen investment and 80000000.00 45.73 45.73
Baiyeyuan establishment of industry
Investment domestic commerce
Co. Ltd. and material supply and
marketing
Notes to the parent company of the Company:
The parent company of the Company is Shenzhen Baiyeyuan Investment Co. Ltd. which was established on 21 January1999
and its main business scope is investment and establishment of industry domestic commerce and material supply and
marketing.190Interim Report2021
The de facto controller of the Company: Zhu Baoguo
Other descriptions:
(1) Parent company's registered capital and its changes
Name of parent company Balance at the Beginning Increase for Decrease for Balance at the End
of the Period the Period the Period of the Period
Shenzhen Baiyeyuan Investment Co. Ltd. 80000000.00 0.00 0.00 80000000.00
(2) Shares of the company held by the parent company and their changes
Name of parent company Balance at the Proportion Increase for Decrease for Balance at Proportion
Beginning of the Period the Period the End of
the Period the Period
Shenzhen Baiyeyuan 895653653.00 45.87% 0.00 0.00 895653653.00 45.73%
Investment Co. Ltd.2. The Company's subsidiaries
For details of the subsidiaries of the Company please refer to note Ⅶ .1.√Applicable □N/A
Please refer to note for the details of subsidiaries.3. Joint ventures and associates of the Company
For details of the significant joint ventures or associates of the Company please see the notes.√Applicable □N/A
Please refer to note Ⅶ .3. for the details of the joint ventures and associates.Other joint ventures or associates entered into transactions with the Company during the Period or during the prior period with
remaining closing balance were as follows:
√Applicable □N/A
Name of joint ventures and associates Relationship with the Company
Jiaozuo Jinguan Jiahua Electric Power Co. Ltd. Associate
Guangdong Blue Treasure Pharmaceutical Co. Ltd. Associate
Novastage Pharmaceuticals (Shenzhen) Ltd. Associate
Shenzhen City Youbao Technology Co. Ltd. Associate
AbCyte Therapeutics Inc. Associate
L&L Biopharma Co. Ltd. Associate
Zhuhai Sanmed Biotech Inc. Associate
Aetio Biotherapy Inc Associate
Jiangsu Atom Bioscience and Pharmaceutical Co. Ltd. Associate
Tianjin Tongrentang Group Co. Ltd. Associate
Infinite Intelligence Pharma Associate
Zhuhai Sanmed Gene Diagnostics Ltd. (formerly known as Livzon Gene Diagnostics Inc.) A company controlled by the
associate
Other descriptions
□Applicable √ N/A
1914. Other related parties of the Company
√Applicable □N/A
Name of other related parties Relationship with the Company
Shenzhen Taitelixing Investment Development Co. Ltd. Others
Sichuan Healthy Deer Hospital Management Co. Ltd. and its subsidiaries Others
Zhuhai Medpha Biotechnology Co. Ltd. Others
Zhuhai Xianghetai Investment Management Partnership (Limited Partnership) Others
Zhuhai Zhong Hui Yuan Investment Partnership (Limited Partnership) Others
Zhuhai Liying Investment Management Partnership (Limited Partnership) Others
Directors Supervisors and other senior management personnel Others
5. Related transactions
(1). Sales and purchase of goods rendering and receipt of services
Purchase of goods receipt of services
√Applicable □N/A
Unit: Yuan Currency: RMB
Related party Description of related Amount for the Amount for the
party transaction Period Previous Period
Guangdong Blue Treasure Pharmaceutical Co. Ltd. Raw materials 3122300.89 2497840.69
Sichuan Healthy Deer Hospital Management Co. Ltd. Finished goods 12157.00 0.00
and its subsidiaries
L&L Biopharma Co. Ltd. R&D 188679.24 0.00
Shenzhen City Youbao Technology Co. Ltd. Training 141700.00 0.00
Zhuhai Sanmed Biotech Inc. Finished goods 0.00 21238.94
Zhuhai Medpha Biotechnology Co. Ltd. Raw materials 0.00 18053.10
Jiaozuo Jinguan Jiahua Electric Power Co. Ltd. Electricity steam 103613339.79 91823924.68
Total 107078176.92 94361057.41
Sales of goods provision of services
√Applicable □N/A
Unit: Yuan Currency: RMB
Related party Description of related party Amount for Amount for
transaction the Period the Previous
Period
Guangdong Blue Treasure Pharmaceutical Co. Ltd. Finished goods Water and power 30514098.48 11316544.20
Zhuhai Medpha Biotechnology Co. Ltd. Macromolecule materials 0.00 116516.81
Zhuhai Sanmed Gene Diagnostics Ltd. Finished goods Water and power 199918.70 0.00
Sichuan Healthy Deer Hospital Management Co. Ltd. Finished goods 2697554.00 0.00
and its subsidiaries
Zhuhai Sanmed Biotech Inc. Water electricity power and others 292011.06 987045.99
Total 33703582.24 12420107.00
Descriptions of related party transactions with respect to the sales and purchase of goods rendering and receipt of services
□Applicable √ N/A
192Interim Report2021
(2). Related entrusted management/contracting and entrusting management/outsourcing
Table of the entrusted management/contracting of the Company:
□Applicable √ N/A
Descriptions of related trusteeship/outsourcing
□Applicable √ N/A
Table of the entrusting management/outsourcing of the Company:
□Applicable √ N/A
Descriptions of related management/outsourcing
□Applicable √ N/A
(3). Related party leases
The Company as a lessor
√Applicable □N/A
Unit: Yuan Currency: RMB
Name of lessee Type of leased Lease income Lease income
assets recognised for the recognised for the
Period Previous Period
Zhuhai Sanmed Biotech Inc. Buildings 1113149.50 1597855.26
Zhuhai Sanmed Gene Diagnostics Ltd. Buildings 120000.00 0.00
Shenzhen Baiyeyuan Investment Co. Ltd. Buildings 9445.88 9445.88
Novastage Pharmaceuticals (Shenzhen) Ltd. Buildings & 163189.08 0.00
Equipment
Shenzhen Taitelixing Investment Development Co. Ltd. Buildings 9360.00 9360.00
Shenzhen Healthy Deer Information Technology Co. Ltd. Buildings 8587.16 8587.16
Shenzhen City Youbao Technology Co. Ltd. Buildings 8587.16 8587.16
Total 1432318.78 1633835.46
The Company as a lessee:
□Applicable √ N/A
Descriptions of related leases
□Applicable √ N/A
(4). Related party guarantees
The Company as the guarantor
√Applicable □N/A
Unit: 10000 Yuan Currency: RMB
Name of guaranteed party Guarantee amount Actual date of event Guarantee maturity date Performance
completed or not
Jinguan Electric Power 4800.00 2021/2/23 2022/2/23 No
Jinguan Electric Power 10000.00 2021/3/3 2022/2/25 No
Jinguan Electric Power 4000.00 2020/7/13 2021/7/13 No
Jinguan Electric Power 5000.00 2020/7/20 2021/7/20 No
Jinguan Electric Power 3200.00 2020/9/17 2021/9/17 No
Jinguan Electric Power 3000.00 2020/10/12 2021/10/12 No
Jinguan Electric Power 4000.00 2020/10/15 2021/10/15 No
Sanmed Biotech 2900.00 2021/1/1 2021/5/6 Yes
The Company as the guaranteed party
□Applicable √ N/A
Descriptions of guarantees with related parties
√Applicable □N/A
193· In order to ensure the stable development of production and operation of Jinguan Electric Power the Company and its
controlling subsidiary Jiaozuo Joincare jointly provided a revolving guarantee line with balance of no more than RMB350
million (inclusive) for Jinguan Electric Power (specific guarantors shall be specified in the guarantee contracts) according
to "the Resolution on Providing Loan Guarantee for Jinguan Electric Power by the Company and Its Controlling Subsidiary
Jiaozuo Joincare" considered and approved at the First Extraordinary General Meeting of the Company on 6 July 2016 with
the guarantee period starting from the date when the resolution was considered and approved to 31 December 2019. Pursuant
to "the Resolution on Providing Loan Guarantee for Jinguan Electric Power by the Company and Its Controlling Subsidiary
Jiaozuo Joincare" considered and approved at the 2017 Annual General Meeting of the Company on 22 May 2018 the
Company and its controlling subsidiary Jiaozuo Joincare jointly provided a revolving guarantee line with balance of no more
than RMB350 million (inclusive) for Jinguan Electric Power (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 line
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 line with balance of no more than RMB450 million (inclusive) on 16 April 2019 due to the actual business needs of
Jinguan Electric Power with the guarantee period starting from the date when the resolution was considered and approved to
31 December 2022.As at 30 June 2021 the Company provided Jinguan Electric Power with guarantees for loans of RMB340 million including
RMB100 million in Shenzhen Branch of China Zheshang Bank RMB80 million in Shenzhen Branch of Nanyang Commercial
Bank and RMB160 million in Shenzhen Branch of China Everbright Bank.In order to ensure the safety of secured loans Jinguan Electric Power provided counter guarantees for the said guarantees
provided by the Company based on its owned assets and undertook that it would unconditionally provide mutual guarantees
for the Company or its controlling subsidiary designated with total line of no more than RMB450 million (inclusive) whenever
the Company deemed necessary.· The Company has provided a "Letter of Undertaking for Counter Guarantee" pursuant to which it has undertaken to provide
a joint liability guarantee for 33.07% of the obligation of Livzon Group under the guarantee provided to Livzon MABPharm
Inc. * (珠海市丽珠单抗生物技术有限公司 ) and the guarantee period of which will be expired on the expiry date of Livzon
Group's obligation thereunder.· Zhuhai Liying Investment Management Partnership (Limited Partnership) (珠海丽英投资管理合伙企业 (有限合伙 )) the
other shareholder of Livzon Diagnostics has provided a "Letter of Undertaking for Counter Guarantee" pursuant to which
it has undertaken to provide a joint liability guarantee for 9.025% of the obligation of Livzon Group under the guarantee
provided to Livzon Diagnostics and the guarantee period of which will be expired on the expiry date of Livzon Group's
obligation thereunder.· Zhuhai Zhong Hui Yuan Investment Partnership (Limited Partnership) (珠 海 中 汇 源 投 资 合 伙 企 业 (有 限 合 伙 )) the
other shareholder of Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc. (丽珠集团新北江制药股份有限公
司 ) has provided a "Letter of Undertaking for Counter Guarantee" pursuant to which it has undertaken to provide a joint
liability guarantee for 8.44% of the obligation of Livzon Group under the guarantee provided to Livzon Group Xinbeijiang
Pharmaceutical Manufacturing Inc.(丽珠集团新北江制药股份有限公司 ) and the guarantee period of which will be expired
on the expiry date of Livzon Group's obligation thereunder.· Other shareholders of Zhuhai Sanmed Biotech Inc. (珠海圣美生物诊断技术有限公司 ) including Li Lin and Shi Jianfeng
have provided "Letter of Undertaking for Counter Guarantee" pursuant to which they have undertaken to provide a joint
liability guarantee for a total of 74.0822% of the obligation of Livzon Group under the guarantee provided to Zhuhai Sanmed
Biotech Inc. (珠海圣美生物诊断技术有限公司 ) and the guarantee period of which will be expired on the expiry date of
Livzon Group's obligation under the guarantee.194Interim Report2021
· On 24 December 2020 Livzon Group signed a guarantee agreement with Zhuhai Branch of Industrial and Commercial Bank
of China Limited * (中国工商银行股份有限公司珠海分行 ) in the amount of RMB29 million to secure the credit facility
granted to Zhuhai Sanmed Biotech Inc. (珠海圣美生物诊断技术有限公司 ) by Zhuhai Branch of Industrial and Commercial
Bank of China Limited * (中国工商银行股份有限公司珠海分行 ) and the guarantee period of which will be expired on 24
December 2021. During the Period Livzon Group provided guarantee to Zhuhai Sanmed Biotech Inc. (珠海圣美生物诊断
技术有限公司 ) at an actual amount of RMB29 million. As at 30 June 2021 the total balance of actual amount guaranteed by
Livzon Group to Zhuhai Sanmed Biotech Inc. (珠海圣美生物诊断技术有限公司 ) was nil.
(5). Lending funds of related parties
□Applicable √N/A
(6). Asset transfer and debt restructuring between related parties
□Applicable √N/A
(7). Remuneration of key management personnel
√Applicable □N/A
Unit: 10000 Yuan Currency: RMB
Item Amount for the current period Amount for the prior period
Remuneration of key management personnel 602.27 607.70
Of which:
Non-Independent Director 333.95 389.76
Independent Director 14.40 14.40
Supervisors 77.33 70.83
Other senior management 176.59 132.71
(8). Other related transactions
□Applicable √N/A
6. Amounts due from/to related parties
(1). Amounts due from related parties
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Related parties Balance at the End of the Period Balance at the Beginning of the Period
Book balance Provision for Book balance Provision for
bad debts bad debts
Bills receivables Guangdong Blue Treasure Pharmaceutical Co. Ltd. 7417434.22 0.00 0.00 0.00
Accounts receivables Guangdong Blue Treasure Pharmaceutical Co. Ltd. 15278880.00 152788.80 5092960.00 52457.49
Accounts receivables Sichuan Healthy Deer Hospital Management Co. Ltd. 541193.60 169010.36 0.00 0.00
and its subisidaries
Accounts receivables Zhuhai Sanmed Gene Diagnostics Inc. 64268.10 643.04 38563.14 374.06
Prepayments Sichuan Healthy Deer Hospital Management Co. Ltd. 153900.00 0.00 153900.00 0.00
Prepayments Zhuhai Sanmed Biotech Inc. 211200.00 0.00 211200.00 0.00
Prepayments Shenzhen City Youbao Technology Co. Ltd 478150.00 0.00 0.00 0.00
Other receivables Zhongshan Renhe Health Products Co. Ltd. 469895.78 469895.78 469895.78 469895.78
Other receivables Shenzhen Jiekang Health Care Co. Ltd. 18577246.63 18577246.63 18577246.63 18577246.63
Other receivables Guangdong Blue Treasure Pharmaceutical Co. Ltd. 1338551.32 17936.59 0.00 0.00
Other receivables Zhuhai Sanmed Biotech Inc. 159723.45 1597.23 15000000.00 415461.96
Other receivables Zhuhai Sanmed Gene Diagnostics Inc. 15795.00 691.82 10530.00 291.65
Non-current assets Zhuhai Zhong Hui Yuan Investment Partnership 0.00 0.00 10967767.26 0.00
due within one year: (Limited Partnership)
Other non-current Zhuhai Liying Investment Management 1840994.29 0.00 1740994.29 0.00
assets: Partnership(Limited Partnership)
195(2). Amount due to related parties
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Related parties Balance at the End Balance at the Beginning
of the Period of the Period
Bills payables Guangdong Blue Treasure Pharmaceutical Co. Ltd. 2768280.00 0.00
Accounts payables Jiaozuo Jinguan Jiahua Electric Power Co. Ltd. 43805257.36 31681080.57
Accounts payables Guangdong Blue Treasure Pharmaceutical Co. Ltd. 379960.00 0.00
Dividends payable Zhuhai Zhong Hui Yuan Investment Partnership 0.00 1466606.04
(Limited Partnership)
7. Commitments of related parties
□Applicable √N/A
8. Others
□Applicable √N/A
XI. SHARE-BASED PAYMENT
1. General information about share-based payment
√Applicable □N/A
Unit: Share Currency: RMB
Total equity instruments granted during the Current Period by the Company 0
Total equity instruments exercised during the Current Period by the Company 5812453
Total equity instruments of the Company expired during the Current Period 0
Range of exercise price of share option of the Company outstanding and remaining term of Note
contract as at the End of the Period
Range of exercise price of other equity instruments of the Company and remaining term of —
contract as at the End of the Period
Note: Share Option
· On 13 December 2018 "the Resolution on 2018 Share Options Incentive Scheme (Draft) and its summary" "the Resolution
on Administrative Measures for Appraisal System of the 2018 Share Options Incentive Scheme of Livzon Pharmaceutical
Group Inc." and "the Resolution on the General Meeting for Granting Mandate to the Board to Deal with Matters Regarding
the 2018 Share Options Incentive Scheme" were considered and approved at the 2018 Third Extraordinary General Meeting.On 21 December 2018 "the Resolution in Relation to the Adjustment of the Quantity to be Granted and the List of Incentive
Participants of the Grant under 2018 Share Options Incentive Scheme" and "the Resolution on the First Grant of Share Options
to Incentive Participants" were considered and approved at the 6th Meeting of the 7th Session of the Board and the 5th
Meeting of the 7th Session of the Supervisory Committee. On 24 January 2019 "the Resolution in Relation to the Adjustment
of the Quantity to be Granted and the List of Incentive Participants of the Grant under 2018 Share Options Incentive Scheme"
was considered and approved at the 7th Meeting of the 7th Session of the Board and the 6th Meeting of the 7th Session of
the Supervisory Committee pursuant to which21 December 2018 was set as the date of grant on which 35.72 million share
options were granted to 320 incentive participants at an exercise price of RMB8.21 per share option.Pursuant to "the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not Yet Exercised
under the 2018 Share Option Incentive Plan" considered and approved at the 12th Meeting of the 7th Session of the Board
of the Company on 10 June 2019 3.95 million share options that have been granted but not yet exercised by 39 Incentive
Participants who resigned due to personal reasons and did not meet the incentive conditions are canceled. After the completion
of the cancellation the number of Incentive Participants for the first grant of the 2018 share options incentive scheme of the
Company was adjusted from 320 to 281 while the number of share options under the first grant was adjusted from 35.72
million to 31.77 million.196Interim Report2021
Pursuant to "the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not Yet Exercised
under the 2018 Share Option Incentive Plan" considered and approved at the 17th Meeting of the 7th Session of the Board
of the Company on 28 October 2019 2.46 million share options that have been granted but not yet exercised by 23 Incentive
Participants who resigned due to personal reasons and did not meet the incentive conditions are canceled. After the completion
of the cancellation the number of Incentive Participants for the first grant of the 2018 share options incentive scheme of the
Company was adjusted from 281 to 258 while the number of share options under the first grant was adjusted from 31.77
million to 29.31 million.Pursuant to "the Resolution on Fulfillment of Exercise Conditions for the First Exercise Period of the First Grant under the
2018 Share Options Incentive Scheme" considered and approved at the 19th Meeting of the 7th Session of the Board of the
Company on 4 December 2019 it was believed that the exercise conditions for the first exercise period of the first grant under
the Incentive Scheme had been achieved and it was agreed that the 258 incentive participants who had fulfilled the exercise
conditions might exercise the share options on voluntary basis. The number of exercisable share options was 11.724 million
and the exercise period was from 21 December 2019 to 20 December 2020.Pursuant to "the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not Yet Exercised
under the 2018 Share Option Incentive Plan" considered and approved at the 30th Meeting of the 7th Session of the Board of
the Company on 14 August 2020 1.488 million share options that have been granted but not yet exercised by 23 Incentive
Participants under the first grant who resigned due to personal reasons and did not meet the incentive conditions are canceled.After the completion of the cancellation the number of Incentive Participants for the first grant of the 2018 share options
incentive scheme of the Company was adjusted from 258 to 235 while the number of share options under the first grant was
adjusted from 18928900 to 17444100.Pursuant to "the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not Yet Exercised
under the 2018 Share Option Incentive Plan" considered and approved at the 33rd Meeting of the 7th Session of the Board
of the Company on 16 November 2020 96000 share options that have been granted but not yet exercised by 2 Incentive
Participants under the first grant who resigned due to personal reasons and did not meet the incentive conditions are canceled.After the completion of the cancellation the number of Incentive Participants for the first grant of the 2018 share options
incentive scheme of the Company was adjusted from 235 to 233 while the number of share options under the first grant was
adjusted from 16940000 to 16844400.Pursuant to "the Resolution on Fulfillment of Exercise Conditions for the Second Exercise Period of the First Grant under the
2018 Share Options Incentive Scheme" considered and approved at the 35th Meeting of the 7th Session of the Board of the
Company on 30 November 2020 it was believed that the exercise conditions for the second exercise period of the first grant
under the Incentive Scheme had been achieved and it was agreed that the incentive participants who had fulfilled the exercise
conditions might exercise the share options on voluntary basis. The number of exercisable share options was 8001000 and
the exercise period was from 21 December 2020 to 20 December 2021.As at 30 June 2021 the number of share options exercised for the Period was 17377701 and the number of outstanding share
options was 10332299.· Pursuant to "the Resolution on the Grant of Share Options to Incentive Participants under the Reserved Grant" considered
and approved at the 16th Meeting of the 7th Session of the Board of the Company on 23 September 2019 23 September 2019
was set as the date of grant on which 8.99 million share options were granted to 187 incentive participants.Pursuant to "the Resolution in Relation to the Adjustment of the Quantity to be Granted and the List of Incentive Participants
of the Reserved Grant under 2018 Share Options Incentive Scheme" considered and approved at the 17th Meeting of the 7th
Session of the Board of the Company on 28 October 2019 the number of Incentive Participants for the Reserved Grant of
share options was adjusted from 187 to 186 while the number of share options under the Reserved Grant was adjusted from
8.99 million to 8.97 million.197Pursuant to "the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not Yet Exercised
under the 2018 Share Option Incentive Plan" considered and approved at the 30th Meeting of the 7th Session of the Board
of the Company on 14 August 2020 1.88 million share options that have been granted but not yet exercised by 28 Incentive
Participants under the Reserved Grant who resigned due to personal reasons and did not meet the incentive conditions are
canceled. After the completion of the cancellation the number of Incentive Participants for the Reserved Grant of the 2018
Share Options Incentive Scheme of the Company was adjusted from 186 to 158 while the number of share options under the
Reserved Grant was adjusted from 8.97 million to 7.09 million.Pursuant to "the Resolution on Fulfillment of Exercise Conditions for the First Exercise Period of the Reserved Grant under
the 2018 Share Options Incentive Scheme" considered and approved at the 31st Meeting of the 7th Session of the Board of
the Company on 27 August 2020 it was believed that the exercise conditions for the first exercise period of the reserved grant
under the Incentive Scheme had been achieved and it was agreed that the incentive participants who had fulfilled the exercise
conditions might exercise the share options on voluntary basis. The number of exercisable share options was 3545000 and
the exercise period was from 23 September 2020 to 22 September 2021.Pursuant to "the Resolution relating to Cancellation of Certain Share Options of the Company Granted but Not Yet Exercised
under the 2018 Share Option Incentive Plan" considered and approved at the 33rd Meeting of the 7th Session of the Board
of the Company on 16 November 2020 450000 share options that have been granted but not yet exercised by 8 Incentive
Participants under the Reserved Grant who resigned due to personal reasons and did not meet the incentive conditions are
canceled. After the completion of the cancellation the number of Incentive Participants for the reserved grant of the 2018 share
options incentive scheme of the Company was adjusted from 158 to 150 while the number of share options under the reserved
grant was adjusted from 4616500 to 4166500.As at 30 June 2021 the number of share options exercised for the Period was 3182178 and the number of outstanding share
options was 3457822.
(2) Livzon Group a subsidiary of the Company
Total equity instruments granted during the Current Period by the Company (share) -
Total equity instruments exercised during the Current Period by the Company (share) 3641051
Total equity instruments of the Company expired during the Current Period (share) -
Range of exercise price of share option of the Company outstanding and remaining term of Note 1
contract as at the end of the Period
Range of exercise price of other equity instruments of the Company and remaining term of Note 2
contract as at the end of the Period
Note 1: Share Option
· On 5 September 2018 "the Resolution on 2018 Share Options Incentive Scheme (Revised Draft) and its summary"
the "Resolution on Administrative Measures for Appraisal System of the 2018 Share Options Incentive Scheme of Livzon
Pharmaceutical Group Inc." and "the Resolution on the General Meeting For Granting Mandate to the Board to Deal with
Matters Regarding the 2018 Share Options Incentive Scheme" were considered and approved at the 2018 Third Extraordinary
General Meeting the 2018 Third Class Meeting of A Shareholders and the 2018 Third Class Meeting of H Shareholders of
Livzon Group. Pursuant to "the Resolution in Relation to the Adjustment of the List of Incentive Participants of the First Grant
and the Quantity to be Granted for the First Grant under 2018 Share Options Incentive Scheme" and "the Resolution on the
Related Matters of the First Grant of 2018 Share Options Incentive Scheme" considered and approved at the 19th Meeting of
the 9th Session of the Board of Livzon Group on 11 September 2018 11 September 2018 was set as the date of grant on which
17475500 Share Options were granted to 1050 Incentive Participants at an exercise price of RMB47.01 per share option.Pursuant to "the Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option Incentive Plan"
considered and approved at the 32nd Meeting of the 9th Session of the Board of Livzon Group on 18 September 2019 254995
share options that have been granted but not yet exercised by 17 Incentive Participants who resigned due to personal reasons
and did not meet the incentive conditions are canceled. After the completion of the cancellation the number of Incentive
Participants for the first grant of the 2018 share options incentive scheme of Livzon Group was adjusted from 1050 to 1033
while the number of share options under the first grant was adjusted from 22718150 to 22463155.198Interim Report2021
Pursuant to "the Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option Incentive Plan"
considered and approved at the 4th Meeting of the 10th Session of the Board of Livzon Group on 23 October 2020 162912
share options under the first exercise period held but not yet exercised by 55 Incentive Participants and 1535765 share options
granted and no longer meeting the exercising conditions to 129 Incentive Participants who had resigned due to personal
reasons and were therefore no longer qualified for the incentive are canceled. After the completion of the cancellation the
number of Incentive Participants for the first grant of the 2018 Share Options Incentive Scheme of Livzon Group was adjusted
from 1033 to 904 while the number of share options under the first grant was adjusted from 22463155 to 20764478. As
at 30 June 2021 the number of share options exercised for the Period was 11985775 and the number of outstanding share
options was 8778703.· Pursuant to "the Resolution relating to Relevant Issues concerning the Reserved Grant under the 2018 Share Options
Incentive Scheme" considered and approved at the 31st Meeting of the 9th Session of the Board of Livzon Group on 28 August
2019 the Board approved 28 August 2019 as the date of grant on which 2535000 share options were granted to 145 Incentive
Participants and the exercise price was RMB28.87 per A share.Pursuant to "the Resolution relating to Adjusting the List of Incentive Participants under the Reserved Grant of the 2018 Share
Options Incentive Scheme" considered and approved at the 32nd Meeting of the 9th Session of the Board of Livzon Group
on 18 September 2019 the number of Incentive Participants under the reserved grant of the share option incentive plan was
adjusted from 145 to 170.On 28 October 2019 the Reserved Grant of the share options has completed registration. During the process of registration 1
Incentive Participant was no longer qualified for incentive due to his resignation and 2 Incentive Participants voluntarily gave
up the Share Options to be granted by Livzon Group due to personal reasons. Therefore the number of Incentive Participants
under the Reserved Grant is adjusted from 170 to 167 and the total number of Share Options under the Reserved Grant is
adjusted from 2535000 to 2524500.Pursuant to "the Resolution relating to Cancellation of Certain Share Options under the 2018 Share Option Incentive Plan"
considered and approved at the 4th Meeting of the 10th Session of the Board of Livzon Group on 23 October 2020 309900
share options granted and no longer meeting the exercising conditions to 10 incentive participants who had resigned due to
personal reasons and were therefore no longer qualified for the incentive are canceled. After the completion of the cancellation
the number of Incentive Participants under the Reserved Grant of the 2018 Share Options Incentive Scheme of Livzon Group
was adjusted from 167 to 157 while the number of share options under the Reserved Grant was adjusted from 2524500
to 2214600. As at 30 June 2021 the number of share options exercised for the Period was 1727997 and t he number of
outstanding share options was 486603.Note 2: Other equity incentives
Pursuant to "the Resolution on the Disposal of Certain Equity of a Holding Subsidiary and Connected Transaction" considered
and approved at the 34th Meeting of the 9th Session of the Board of Livzon Group on 8 November 2019 it was agreed that
9.5% equity interests (totally 8382100 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 RMB21122892. Pursuant to the Assets Appraisal Report on
the Valuation of the Shareholders' Equity as a Whole of Zhuhai Livzon Diagnostics Inc. in Relation to the Proposed Equity
Transfer by Livzon Pharmaceutical Group Inc. (Huaya Zhengxin Appraisal Report [2019] No. A02-0011) the valuation of
the shareholders' equity as a whole of Zhuhai Livzon Diagnostics Inc. as at 30 June 2019 was RMB647.3075 million and the
above equity transfer price was lower than its fair value therefore it constitutes a share-based payment. The total share-based
payment of the transaction is RMB40.4017 million which should be amortized within 5 years according to the partnership
agreement.199Pursuant 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 4643839 shares and the scheme participants shall contribute a total of RMB11702474.28 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 88232932 shares to 92876771 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 RMB11702474. 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 RMB20709000 which should be amortized within 5 years
according to the Partnership Agreement and share incentive expenses were recognized due to the share-based payment as a
result of the change in the shares/shareholding of the shareholders of Zhuhai Livzon Diagnostics Inc.2. Equity settled share-based payments
√Applicable □N/A
Unit: Yuan Currency: RMB
Determination on fair value of equity instruments as the date of grant Black-Scholes Model
market price
Basis for determining quantity of exercisable equity instruments —
Reasons for significant discrepancies between estimate for the Period and Previous Period Nil
Accumulated amount of equity settled share-based payments included in capital reserve 163314210.90
Total expense recognised for equity settled share-based payments for the Period 13599751.99
3. Cash settled share-based payments
□Applicable √N/A
4. Modifications to and termination of share-based payment
□Applicable √N/A
5. Others
□Applicable √N/A
XII. COMMITMENTS AND CONTINGENCIES
1. Significant commitments
√Applicable □N/A
Significant commitments to outsiders as of the balance sheet data and their nature and amount
(1) Capital commitments
Contracted but not recognised in the financial statement Balance at the End Balance at the Beginning
of the Period of the Period
Commitments in relation to acquisition of long-term assets 651951984.61 673900118.24
200Interim Report2021
(2) Operating lease commitments
As at 30 June 2021 the Company signed the non-cancellable operating leases as follows:
Minimum lease payments under non-cancellable operating leases payable Balance at the End
of the Period
Within one year from the balance sheet date 10033022.95
In the second year from the balance sheet date 5004084.43
In the third year from the balance sheet date 2176941.39
Subsequent years 1293888.68
Total 18507937.45
(3) Other commitments
Nil.
(4) Performance of previous commitments
The Company has duly performed the capital expenditure commitments and the operating lease commitments as at 30 June
2021 and the other commitments.2. Contingencies
(1). Significant contingencies as of the balance sheet date
□Applicable √N/A
(2). Please also make explanations thereof if the Company has no significant contingency to be disclosed:
√Applicable □N/A
As at 30 June 2021 there were no significant contingencies required to be disclosed by the Company.3. Others
□Applicable √N/A
X III. Events after the Balance Sheet Date
1. Significant non-adjustment events
□Applicable √N/A
2. Profit distribution
□Applicable √N/A
3. Sales returns
□Applicable √N/A
4. Descriptions of other events after the balance sheet date
□Applicable √N/A
XIV. Other significant events
1. Corrections of previous accounting errors
(1). Retrospective restatement
□Applicable √N/A
(2). Prospective application
□Applicable √N/A
2012. Debt restructuring
□Applicable √N/A
3. Replacement of assets
(1). Exchange of non-monetary assets
□Applicable √N/A
(2). Replacement of other assets
□Applicable √N/A
4. Annuity plan
□Applicable √N/A
5. Discontinued operation
□Applicable √N/A
6. Segment information
(1). Determination basis and accounting policies of reporting segments
□Applicable √N/A
(2). Financial information of reporting segments
□Applicable √N/A
(3). If the Company has no reporting segment or is unable to disclose total assets and liabilities of each reporting segments please
give the reason therefor
□Applicable √N/A
(4). Other descriptions
□Applicable √N/A
7. Other significant transactions and events affecting the investors' decisions
√Applicable □N/A
1. Important supplier
Jiaozuo Xincheng Huai Medicine Co. Ltd. (hereinafter referred to as "Xincheng Company") is a supplier of Chinese herbs of
the Company. The Company purchased Chinese herbs of RMB9836700 (tax inclusive) from Xincheng Company during the
current period accounting for 90.19% of the total amount of purchases of Chinese herbs (excluding Livzon Group). Xincheng
Company delivered commodities to the Company according to the Purchase Contract of the Company and issued VAT special
invoices after acceptance by the Company. As at 30 June 2021 the balance of prepayment of the Company to Xincheng
Company was RMB18178593.12
2. Adjustment to the use of proceeds from Fund-Raising in Investment Projects
(1) The Company
Pursuant to "the Resolution on Extension of Certain Projects Invested with Proceeds" considered and approved at the 44th
Meeting of the 7th Session of the Board of the Company on 29 March 2021 it was agreed that the Company extended the time
to start construction of the project of Zhuhai Health Industry Base to the second half of 2021. The specific commencement
time was up to the construction completion time of municipal supporting works on the project construction site.
(2) Livzon Group a subsidiary of the Company
On 22 March 2021 the Board of Livzon Group considered and approved "the Resolution on Adjustment to Certain Projects
Invested with Proceeds" (《关于调整部分募集资金投资项目投资计划的议案》) to adjust the "Project for Indepth Development
and Industrialization Upgrade of Innovative Ilaprazole Series (艾普拉唑系列创新产品深度开发及产业化升级项目 )" after
which the remaining proceeds to be invested in the project is RMB203996700 and the project is expected to be ready for its
intended use by 31 December 2024. The expected annual investment amount will be RMB119924000 RMB54676000
RMB16000000 and RMB13396700 in the next four years.202Interim Report2021
3. 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 From January to June 2021
Short-term leases 5904972.07
Leases of low value assets 0.00
Total 5904972.07
As at the date of the balance sheet other than the matters mentioned above the Company has no other significant events that
need to be disclosed.4. Medium to Long-term Business Partner Share Ownership Scheme
(1) The Company
On 29 June 2021 the 2021 second extraordinary general meeting of the Company reviewed and approved "the Resolution on
the First Phase Ownership Scheme under Medium to Long-term Business Partner Share Ownership Scheme of the Company
(Draft) and its Summary". On 4 August 2021 the First Phase Ownership Scheme under Medium to Long-term Business
Partner Share Ownership Scheme of the Company purchased a total of 2430800 shares of the Company through the "Joincare
Pharmaceutical Group Industry Co. Ltd.-the First Phase Ownership Scheme under Medium to Long-term Business Partner
Share Ownership Scheme-Employee Ownership Scheme No. 1 Single Asset Management Plan of Guosen Securities and
Joincare" (健康元药业集团股份有限公司－中长期事业合伙人持股计划之第一期持股计划 -国信证券健康元员工持
股1号单一资产管理计划 ) by way of non-trade transfer representing 0.12% of total share capital of the Company with an
average transaction price of RMB12.75 per share and a transaction amount of RMB30992700.00. The purchase of shares
under the First Phase Ownership Scheme under Medium to Long-term Business Partner Share Ownership Scheme of the
Company has been completed and these shares will be locked up for 36 months (from 4 August 2021 to 3 August 2024) as
required.
(2) Livzon Group a subsidiary of the Company
On 6 May 2021 the 2021 second extraordinary general meeting of Livzon Group reviewed and approved relevant resolutions
including the Resolution on the First Phase Ownership Scheme under Medium to Long-term Business Partner Share
Ownership Scheme of the Company (Draft) and its Summary. On 26 May 2021 the First Phase Ownership Scheme under
Medium to Long-term Business Partner Share Ownership Scheme of Livzon Group purchased a total of 2348960 shares of
the Company through the "CITIC Securities – the First Phase Business Partner Share Ownership Scheme of Livzon Group
– Medium and Long-term Business Partner Employee Ownership Scheme No. 1 Single Asset Management Plan of CITIC
Securities and Livzon Group" (中信证券－丽珠集团事业合伙人持股计划第一期－中信证券丽珠集团中长期事业合伙
人员工持股计划1号单一资产管理计划 ) by way of centralized price bidding representing 0.25% of total share capital of
Livzon Group with an average transaction price of RMB49.92 per share and a transaction amount of RMB117268338.21.The purchase of shares under the First Phase Ownership Scheme under Medium to Long-term Business Partner Share
Ownership Scheme of Livzon Group has been completed and these shares will be locked up for 36 months (from 27 May
2021 to 26 May 2024) as required.203XV. Notes to the Key Components of Financial Statements of the Parent Company
1. Bills receivables
Type of bill Balance at the End of the Period Balance at the Beginning of the Period
Book balance Provision Carrying value Book balance Provision Carrying value
for bad for bad
debts debts
Bank acceptance bills 327812619.63 0.00 327812619.63 53571233.65 0.00 53571233.65
Commercial acceptance bill 0.00 0.00 0.00 0.00 0.00 0.00
Total 327812619.63 0.00 327812619.63 53571233.65 0.00 53571233.65
(1) Bills receivables that were pledged at the End of the Period
Type of bill Pledged amount at the End of the Period
Bank acceptance bills 261413610.72
(2) Bills receivable endorsed or discounted at the End of the Period but not yet mature at the date of balance sheet
Item Amount derecognised at Amount not derecognised at
the End of the Period the End of the Period
Bank acceptance bills endorsed but not yet mature 39082245.20
Bank acceptance bills discounted but not yet mature 0.00
Total 39082245.20
(3) There were no bills transferred into accounts receivables for non-performance by the issuer at the End of the Period.
(4) Classification by the method of bad debt provision
Type Balance at the End of the Period Balance at the Beginning of the Period
Book balance Provision for bad debts Book balance Provision for bad debts Book balance Provision for bad debts
Amount Percentage Amount Percentage Amount Amount Percentage Amount Percentage Carrying value
(%)(%)(%)(%)
Provision for bad debt on
an individual basis
Provision for bad debt on 327812619.63 100.00 0.00 0.00 327812619.63 53571233.65 100.00 0.00 0.00 53571233.65
a collective basis
Of which:
　Bank acceptance bills 327812619.63 100.00 0.00 0.00 327812619.63 53571233.65 100.00 0.00 0.00 53571233.65
Total 327812619.63 100.00 0.00 0.00 327812619.63 53571233.65 100.00 0.00 0.00 53571233.65
(5) Provision for bad debt made recovered or reversed during the Period
Amount of provision for bad debt
Balance at the Beginning of the Period 0.00
Provision made for the Period 0.00
Recovery or reversal for the Period 0.00
Write-off for the Period 0.00
Balance at the End of the Period 0.00
(6) There are no bills receivables actually written-off for the Period.
204Interim Report2021
2. Accounts receivables
(1). Disclosure using the aging analysis method
√Applicable □N/A
Unit: Yuan Currency: RMB
Aging Balance at the End of the Period
Within 1 year 345333522.98
1-2 years 2915495.82
2-3 years 2076234.72
3-4 years 326079.69
4-5 years 233302.90
Over 5 years 7825902.46
Provisions for bad debts -12626960.84
Total 346083577.73
(2). Classification by the method of bad debt provision
√Applicable □N/A
Unit: Yuan Currency: RMB
Type Balance at the End of the Period Balance at the Beginning of the Period
Book balance Provision for bad debts Carrying value Book balance Provision for bad debts Carrying value
Amount Percentage Amount Expected Amount Percentage Amount Expected
(%) credit loss (%) credit loss
rate (%) rate (%)
Provision for bad debt 1120703.15 0.31 1120703.15 100.00 0.00 1120703.15 0.29 1120703.15 100.00 0.00
on an individual basis
Of which:
Amount due from 1120703.15 0.31 1120703.15 100.00 0.00 1120703.15 0.29 1120703.15 100.00 0.00
domestic customers
Amount due from 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
overseas customers
Provision for bad debt 357589835.42 99.69 11506257.69 3.22 346083577.73 386433230.10 99.71 16938369.88 4.38 369494860.22
on a collective basis
Of which:
Amount due from 357589835.42 99.69 11506257.69 3.22 346083577.73 386433230.10 99.71 16938369.88 4.38 369494860.22
domestic customers
Amount due from 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
overseas customers
Total 358710538.57 / 12626960.84 / 346083577.73 387553933.25 / 18059073.03 / 369494860.22
Provision for bad debt on an individual basis:
√Applicable □N/A
Unit: Yuan Currency: RMB
Name Balance at the End of the Period
Book balance Provision for bad Expected credit loss Reason for provision made
debts rate (%)
Payment for goods 1120703.15 1120703.15 100.00 Not expected to be recoverable
Total 1120703.15 1120703.15 100.00 /
Provision for bad debt on an individual basis:
□Applicable √N/A
205Provision for bad debt on a collective basis:
√Applicable □N/A
Item on a collective basis: Due from domestic customers
Unit: Yuan Currency: RMB
Aging Balance at the End of the Period
Book balance Provision for bad debts Carrying Value (%)
Within 1 year 345333522.98 3323335.22 0.96
1-2 years (including 2 years) 2915495.82 225774.79 7.74
2-3 years (including 3 years) 1791574.03 557472.21 31.12
3-4 years (including 4 years) 265813.09 162906.55 61.29
4-5 years (including 5 years) 233302.90 186642.32 80.00
Over 5 years 7050126.60 7050126.60 100.00
Total 357589835.42 11506257.69 3.22
Standards of provision for bad debts made by portfolio and descriptions thereof:
□Applicable √N/A
If the provision for bad debts is made in accordance with the general model of expected credit lossesplease refer to other
receivables disclosure:
□Applicable √N/A
(3). Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the Changes for the current period Balance at the
Beginning of Provision Recovery or Removal/write-off Other changes End of
the Period reversal the Period
Provision for bad debt 18059073.03 469608.21 0.00 5901720.40 0.00 12626960.84
on an individual basis
Total 18059073.03 469608.21 0.00 5901720.40 0.00 12626960.84
As at 30 June 2021 and 31 December 2020 the Company had no accounts receivables that are past due but not impaired.Significant recovery or reversal of bad debt provision for the current period:
□Applicable √N/A
(4). Accounts receivable actually written off for the current period
□Applicable √N/A
(5). The top five balances of accounts receivable by debtors as at the End of the Period
√Applicable □N/A
The total of the top five balances of accounts receivable by debtors as at the End of the Period was RMB50433128.10 for
the Period representing14.06% of the total balance of account receivables for the End of the Period the aggregate balance of
corresponding provisions for bad debts as at the End of the Period was RMB494244.66.
(6). There are no derecognised accounts receivables in the Company due to the transfer of financial assets.
□Applicable √N/A
(7). There is no amount of assets or liabilities for which accounts receivable have been transferred but involvement continues in the
Company.□Applicable √N/A
Other descriptions:
□Applicable √N/A
206Interim Report2021
3. Other receivables
Item Listing
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Dividend receivables 74175069.86 69999500.00
Other receivables 356399511.85 306776204.09
Total 430574581.71 376775704.09
Other descriptions:
□Applicable √N/A
(1). Dividend receivables
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Topsino 49999500.00 49999500.00
Fenglei Electric Power 20000000.00 20000000.00
China Galaxy Securities Co. Ltd. 4175569.86 0.00
Total 74175069.86 69999500.00
(2). Significant dividends receivable aged more than 1 year
□Applicable √N/A
(3). Provision for bad debt
□Applicable √N/A
Other descriptions:
□Applicable √N/A
(4). Other receivables
1).Disclosure by aging
√Applicable □N/A
Unit: Yuan Currency: RMB
Aging Balance at the End of the Period
Subtotal within 1 year 355790742.88
1-2 years 482890.44
2-3 years 245712.36
3-4 years 0.00
4-5 years 20000.00
Over 5 years 20656816.67
Provision for bad debts -20796650.50
Total 356399511.85
207(1).Disclosure by nature of the amount
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End Balance at the Beginning
of the Period of the Period
Other receivables of each company within the scope of 260749351.24 209567199.87
combination
Capital reduction 92347581.27 92347581.27
Treasury bonds and Margin 18982036.71 18982036.71
External entities balances 2246244.02 2074984.69
Margin 1349683.01 1452703.18
Others 1521266.10 3517018.63
Total 377196162.35 327941524.35
2).Provision made for bad debts
√Applicable □N/A
As at the End of the Period provision for bad debts at step 1:
Type Book balance Expected credit Provision for Carrying Reason
losses rate over bad debts value
the next 12
months (%)
Provision for bad debt on an individual basis 92347581.27 0.00 0.00 92347581.27
Capital reduction 92347581.27 0.00 0.00 92347581.27 Expected
to be
recoverable
Provision for bad debt on a collective basis 260749351.24 0.00 0.00 260749351.24
Other receivables of each company within 260749351.24 0.00 0.00 260749351.24 Expected
the scope of combination to be
recoverable
Total 353096932.51 0.00 0.00 353096932.51
As at the End of the Period provision for bad debts at step 2:
Type Book balance Expected credit Provision for Carrying Reason
losses rate over bad debts value
the lifetime (%)
Provision for bad debt on an individual 0.00 0.00 0.00 0.00
basis
Provision for bad debt on a collective basis 5117193.13 35.46 1814613.79 3302579.34
Receivable deposits and deposits and rental 1349683.01 35.76 482581.64 867101.37
fees
Other receivables 3767510.12 35.36 1332032.15 2435477.97
Total 5117193.13 35.46 1814613.79 3302579.34
208Interim Report2021
As at the End of the Period provision for bad debts at step 3:
Type Book balance Expected credit Provision for Carrying Reason
losses rate over bad debts value
the lifetime (%)
Provision for bad debt on an individual basis 18982036.71 100.00 18982036.71 0.00
National debt and Margin 18982036.71 100.00 18982036.71 0.00 Not
expected
to be
recoverable
Provision for bad debt on a collective basis 0.00 0.00 0.00 0.00
Total 18982036.71 100.00 18982036.71 0.00
As at 31 December 2020 provision made for bad debts:
As at 31 December 2020 provision for bad debts at step 1:
Type Book balance Expected credit Provision for Carrying value Reason
losses rate over bad debts
the next 12
months (%)
Provision for bad debt on an individual basis 92347581.27 0.00 0.00 92347581.27
Capital reduction 92347581.27 0.00 0.00 92347581.27 Expected
to be
recoverable
Provision for bad debt on a collective basis 209567199.87 0.00 0.00 209567199.87
Other receivables of each company within 209567199.87 0.00 0.00 209567199.87 Expected
the scope of combination to be
recoverable
Total 301914781.14 0.00 0.00 301914781.14
As at 31 December 2020 provision for bad debts at step 2:
Type Book balance Expected credit Provision for Carrying value Reason
losses rate over bad debts
the lifetime (%)
Provision for bad debt on an individual 0.00 0.00 0.00 0.00
basis
Provision for bad debt on a collective basis 7044706.50 30.99 2183283.55 4861422.95
Receivable deposits and deposits and rental 1452703.18 41.56 603754.83 848948.35
fees
Other receivables 5592003.32 28.25 1579528.72 4012474.60
Total 7044706.50 30.99 2183283.55 4861422.95
209As at 31 December 2020 provision for bad debts at step 3:
Type Book balance Expected credit Provision for Carrying Reason
losses rate over bad debts value
the lifetime (%)
Provision for bad debt on an individual basis 18982036.71 100.00 18982036.71 0.00
Treasury bonds and Margin 18982036.71 100.00 18982036.71 0.00 Not
expected
to be
recoverable
Provision for bad debt on a collective basis 0.00 0.00 0.00 0.00
Total 18982036.71 100.00 18982036.71 0.00
3).Provision for bad debts made recovered or reversed during the Period
Unit: Yuan Currency: RMB
Provision for bad debts Step 1 Step 2 Step 3 Total
Expected credit Expected credit losses Expected credit losses
losses over the over the lifetime over the lifetime
next 12 months (without impairment of (with impairment of
credit) credit)
Balance at the Beginning of the Period 0.00 2183283.55 18982036.71 21165320.26
Balance at the Beginning of the Period
transferred for the Period
-- Transferred to step 2 0.00 0.00 0.00 0.00
-- Transferred to step 3 0.00 0.00 0.00 0.00
-- Reversed in step 2 0.00 0.00 0.00 0.00
-- Reversed in step 1 0.00 0.00 0.00 0.00
Provisions made for the Period 0.00 -368669.76 0.00 -368669.76
Reversals for the Period 0.00 0.00 0.00 0.00
Write-off for the Period 0.00 0.00 0.00 0.00
Settlement for the Period 0.00 0.00 0.00 0.00
Other changes 0.00 0.00 0.00 0.00
Balance at the End of the Period 0.00 1814613.79 18982036.71 20796650.50
Descriptions of the significant changes in the gross carrying amount of other receivables for which the changes in loss
allowance occur for the current period:
□Applicable √N/A
Provision for bad debts in the current period and the basis for assessing whether the credit risk of
financial instruments has increased significantly:
□Applicable √N/A
4).Other receivables actually written off during the Period
□Applicable √N/A
Descriptions of significant other receivables that are written off:
210Interim Report2021
□Applicable √N/A
5).Other receivables with five largest amount by creditors at the End of the Period
√Applicable □N/A
Unit: Yuan Currency: RMB
Name of unit Nature of Balance at Ageing Proportion Balance of
receivables the End of to total other provision for
the Period receivables at bad debts at
the End of the the End of the
Period (%) Period
Shenzhen Fenglei Electric Power Current account 129955604.29 Within 1 year 34.45 0.00
Investment Co. Ltd.Shanghai Yunfeng Xinchuang Capital 92347581.27 1-2 years 24.48 0.00
Capital Management Center (L.P.) reduction
Topsino Industries Limited Current account 57355070.81 Within 1 year 15.21 0.00
Huaxia Securities Co. Ltd National debt 18982036.71 Above 5 years 5.03 18982036.71
and Margin
Shenzhen Haibin Pharmaceutical Current account 17000000.00 Within 1 year 4.51 0.00
Co. Ltd.Total / 315640293.08 / 83.68 18982036.71
6).Receivables involving government grants
□Applicable √N/A
7).Other receivables derecognised due to the transfer of financial assets
□Applicable √N/A
8).Assets and liabilities generated by the transfer of other receivables and continuing
involvement therein
□Applicable √N/A
Other descriptions:
□Applicable √N/A
4. Long-term equity investments
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Book balance Provision for Carrying value Book balance Provision for Carrying value
impairment impairment
Investments in 3513007112.11 7010047.91 3505997064.20 3193969921.11 7010047.91 3186959873.20
subsidiaries
Investments in 85516346.50 0.00 85516346.50 86816710.23 0.00 86816710.23
associates and
joint ventures
Total 3598523458.61 7010047.91 3591513410.70 3280786631.34 7010047.91 3273776583.43
211(1). Investments in subsidiaries
√Applicable □N/A
Unit: Yuan Currency: RMB
Investee Balance at Increase Decrease Balance at Provision for Balance of
the Beginning during the during the the End of impairment provision for
of the Year Period Period the Period for the impairment
Period at the End of
the Period
Livzon 608741654.08 0.00 0.00 608741654.08 0.00 0.00
Haibin Pharma" 783054186.38 0.00 0.00 783054186.38 0.00 0.00
Joincare Daily-Use 24116498.56 0.00 0.00 24116498.56 0.00 1610047.91
Topsino 813552689.31 0.00 0.00 813552689.31 0.00 0.00
Taitai Genomics 37500000.00 0.00 0.00 37500000.00 0.00 0.00
Taitai Pharmaceutical 105939709.72 0.00 0.00 105939709.72 0.00 0.00
Shenzhen Hiyeah 170100000.00 0.00 0.00 170100000.00 0.00 5400000.00
Zhuhai Jiankangyuan 59868800.00 0.00 0.00 59868800.00 0.00 0.00
Fenglei Electric Power 100763433.06 0.00 0.00 100763433.06 0.00 0.00
Jiaozuo Joincare 375000000.00 0.00 0.00 375000000.00 0.00 0.00
Shanghai Frontier 32500000.00 0.00 0.00 32500000.00 0.00 0.00
Taitai Biological 4832950.00 0.00 0.00 4832950.00 0.00 0.00
Joincare Haibin 75000000.00 25000000.00 0.00 100000000.00 0.00 0.00
Joincare (Guangdong) 3000000.00 0.00 0.00 3000000.00 0.00 0.00
Special medicine Food
Co. Ltd.Zhuhai Livzon 0.00 294037191.00 0.00 294037191.00 0.00 0.00
Biotechnology Co. Ltd.*
Total 3193969921.11 319037191.00 0.00 3513007112.11 0.00 7010047.91
* Zhuhai Livzon Biotechnology Co. Ltd. is a subsidiary within the consolidation scope of Livzon Group. Which originally
held 100% indirectly by Livzon Group. In this period due to the restructuring of the equity structure of the holding subsidiary
of Livzon Group Livzon Group held 51% of its equity and the Company held 33.07% of its equity.212Interim Report2021
(2). Investments in associates
√Applicable □N/A
Unit: Yuan Currency: RMB
Investee Balance Change during the Period Balance at the Balance of
at the Increased Decreased Investment Adjustment Other Cash Provision Others End of the provision for
Beginning investmen invest profit and in other equity dividend for Im Period impairment at
of the Year ment loss under com changes or profit -pairment the End of
the equity -prehensive distribution the Period
method income declared
Associates
Ningbo Ningrong Biological 28301318.36 0.00 0.00 -703515.76 0.00 0.00 0.00 0.00 0.00 27597802.60 0.00
Medicine Co. Ltd.Feellife Health Inc. 10176384.11 0.00 0.00 59209.04 0.00 0.00 0.00 0.00 0.00 10235593.15 0.00
Novastage Pharmaceuticals 19561050.64 0.00 0.00 -586430.17 0.00 0.00 0.00 0.00 0.00 18974620.47 0.00
(Shenzhen) Ltd.Jiangsu Baining Yingchuang 28777957.12 0.00 0.00 -69626.84 0.00 0.00 0.00 0.00 0.00 28708330.28 0.00
Medical Technology Co. Ltd
Total 86816710.23 0.00 0.00 -1300363.73 0.00 0.00 0.00 0.00 0.00 85516346.50 0.00
Other descriptions:
□Applicable √N/A
5. Operating income and operating cost
Operating income and operating cost
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Cost Income Cost Income
Principal activities 759577957.14 459140124.45 622917602.23 406597849.43
Other activities 8294340.88 2648591.72 6514507.02 1644179.76
Total 767872298.02 461788716.17 629432109.25 408242029.19
Other descriptions:
Descriptions of operating income
· Operating income and operating cost presented by product types
Item For the Period For the Previous Period
Cost Income Income Cost
Health care products 62009176.42 39684403.79 65092265.82 40485042.19
Chemical drug preparation products 674814842.94 406252524.34 535236858.38 351949315.70
Traditional Chinese drug preparation 22753937.78 13203196.32 22588478.03 14163491.54
Total 759577957.14 459140124.45 622917602.23 406597849.43
213· Operating income and operating cost presented by major operating regions
Item For the Period For the Previous Period
Cost Income Cost Income
Domestic 759577957.14 459140124.45 622917602.23 406597849.43
Total 759577957.14 459140124.45 622917602.23 406597849.43
· Operating income and operating cost presented by time of income recognition
Item For the Period For the Previous Period
Income Cost Income Cost
Commodities (transferred at a point in 759577957.14 459140124.45 622917602.23 406597849.43
time)
Total 759577957.14 459140124.45 622917602.23 406597849.43
6. Investment income
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous
Period
Long-term equity investments income under cost method 592353897.50 274498761.01
Long-term equity investments income under equity method -1300363.73 -261761.49
Investment income from disposal of long-term equity investments 0.00 0.00
Investment income from financial assets held for trading during its holding period 0.00 0.00
Dividend income from other equity instrument investments 4175569.86 3836778.08
Interest income from debt investment during the holding period 0.00 0.00
Interest income from other debt investments during the holding period 0.00 0.00
Investment income from disposal of financial assets held for trading 48524.94 0.00
Investment income from disposal of other investments in equity instruments 0.00 0.00
Investment income from disposal of debt investments 0.00 0.00
Investment income from disposal of other debt investments 0.00 0.00
Total 595277628.57 278073777.60
7. Others
□Applicable √N/A
214Interim Report2021
XVI. Supporting Information
1. Statement of non-recurring profit or loss
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Amount
Profit or loss from disposal of non-current assets 20350801.14
Return exemption and discharge of taxes resulting from approving ultra vires or without formal 0.00
approval or incidentally incurred
Government grants as included in the current profit or loss however except for those which are 129460997.27
closely related to the normal business of an enterprise comply with the policies of the State and are
continuously entitled with specific amount or quantity according to certain standards
Funds occupation fees charged from non-financial enterprises 0.00
Gains resulting from the investment cost of the enterprise for the purpose of acquisition of the 0.00
subsidiaries joint operation and joint ventures is lower than the fair value of net identifiable assets of
the investee as entitled at the time of receipt of the investment
Profit or loss from exchange of non-monetary assets 0.00
Profit or loss from investment or management of assets by the others 0.00
Provision for impairment of assets accrued due to force majeure factors such as natural disasters 0.00
Profit or loss from debts restructuring 0.00
Enterprise restructuring fees such as the expenses for employees' settlement and the integration fees 0.00
Profit or loss exceeding the fair value and generated from the transaction of which the transaction price 0.00
is obviously unfair
Net profit or loss over the current period of the subsidiaries as a result of business combination under 0.00
common control from the beginning of the year to the date of consolidation
Profit or loss from contingent issues irrelevant to the Company's normal business 0.00
Except for the efficient hedging related to the Company's normal business profit or loss from changes 55548948.55
in fair value as generated from financial assets and financial liabilities held for trading and gains from
investment as a result of the disposal of financial assets and financial liabilities held for trading and
debt investments
Reversals of provision for impairment of accounts receivable with individual impairment test 0.00
Profit or loss from entrusted loans 0.00
Gains or losses from changes in the fair values of investment properties that are subsequently 0.00
measured using the fair value model
Impact of a one-time adjustment on current profit and loss according to the requirements of tax and 0.00
accounting laws and regulations
Custody fees of entrusted operation 0.00
Other non-operating income and expenses besides the above items -1398606.73
Other items that conform to the definition of non-recurring profit or loss 0.00
Effect of income tax -26198216.42
Effect of minority equity -88308756.71
Total 89455167.10
Provide explanations for classifying non-recurring profit and loss items defined in the Explanatory Announcement No. 1 for
Public Company Information Disclosures –Non-recurring Profits and Losses and for classifying non-recurring profit and loss
items listed in the Explanatory Announcement No. 1 for Public Company Information Disclosures –Non-recurring Profits and
Lossesas recurring profit and loss item.□Applicable √N/A
2152. Rate of return on net assets and earnings per share
√Applicable □N/A
Profit for the reporting period Weighted average return Earnings per share
on equity (%) Basic EPS Diluted EPS
Net loss attributable to the Company's ordinary shareholders 6.04 0.3514 0.3504
Net profit attributable to the parent company's shareholders 5.26 0.3057 0.3048
excluding non-recurring profit or loss
3. Differences in accounting data under domestic and foreign accounting standards
□Applicable √N/A
4. Others
□Applicable √N/A
Board Chairman: Zhu Baoguo
Date of Submission Approved by the Board: 25 August 2021
Revised information
□Applicable √N/A216