Tianjin Zhong Xin Pharmaceutical Group Corporation Limited AR 2017

164 Pages·2017·3.65 MB·English

TIANJIN ZHONG XIN PHARMACEUTICAL GROUP
CORPORATION LIMITED
ANNUAL
T
IA REPORT
N
JIN 2017
Z
H
O
N
G
X
IN
P
H
A
R
M
A
C
E
U
T
IC
A
L
G
R
O
U
P
C
O
R
P
O
R
A
T
IO
N
L
IM
IT
E
D
•
A
N
N
U
A
L
R
E
P
O
R
T
2
0
1
7
Tianjin Zhong Xin Pharmaceutical
Group Corporation Limited
17 Baidi Road, Nankai District,
Tianjin, PRC
CONTENTS
01 COMPANY INFORMATION
02 BRIEF INTRODUCTION OF THE COMPANY
04 EQUITY STRUCTURE OF THE COMPANY
05 STRUCTURE OF THE COMPANY
RESUMES OF DIRECTORS,
06
SUPERVISORS AND SENIOR MANAGERS
WORK REPORT OF THE CHAIRMAN OF
11
THE BOARD OF DIRECTORS
21 FINANCIAL REVIEW
23 WORK REPORT OF THE BOARD OF SUPERVISORS
24 FINANCIAL CONTENTS
125 PROXY FORM
128 INFORMATION ON SHAREHOLDING
PROPOSED RENEWAL OF MANDATE FOR
130
INTERESTED PERSON TRANSACTIONS
THE PROPOSED AMENDMENTS TO THE
146
ARTICLES OF ASSOCIATION OF THE COMPANY
ANNUAL REPORT 2017 01
COMPANY INFORMATION
Name of the Company: Tianjin Zhong Xin Pharmaceutical Group Corporation Limited
Registered address: 17 Baidi Road, Nankai District, Tianjin, PRC
Office address: Zhong Xin Mansion, 17 Baidi Road, Nankai District, Tianjin, PRC
Post code: 300193
Telephone: [phone]
Bank of Deposit: Chengdudao Sub-office, Tianjin Xinhua Sub-branch, the Industrial and
Commercial Bank of China
Registry of S-shares and Singapore Share
Transfer Office: Boardroom Corporate & Advisory Services Pte. Ltd.
Address of “S” Shares Registrar: 50 Raffles Place, Singapore Land Tower #32-01, Singapore 048623
Registry of A-shares: China Securities Depository & Clearing Co., Ltd Shanghai Branch
Address of “A” Shares Registrar: 36F China Insurance Mansion #166 Lujiazui East Road New Pudong District,
Shanghai, P.R.China, 200120
AUDITORS:
PRC Auditors: Ruihua Certified Public Accountants
International Auditors: RSM Chio Lim LLP
BOARD OF DIRECTORS:
Chairman: Mr. Li Li Qun
Executive Directors: Ms. Wang Lei, Ms. Yan Min, Mr. Zhou Hong
Independent and Non-executive Directors: Mr. Timothy Chen Teck-Leng, Mr. Vincent Toe Teow Heng,
Mr. Qiang Zhi Yuan
Secretary to the Board: Mr. Wong Gang (Singapore), Ms. Jiao Yan
SUPERVISORY COMMITTEE:
Chairman: Mr. Li Yong
Supervisor: Mr. Wang Mai
SENIOR EXECUTIVES:
General Manager: Ms. Yu Hong
Deputy General Manager: Mr. Zhang Jian
Deputy General Manager and
Chief Engineer: Mr. Zhou Hong
Chief Financial Officer: Ms. Yan Min
AUDIT COMMITTEE:
Chairman: Mr. Timothy Chen Teck-Leng
Members: Mr. Vincent Toe Teow Heng, Mr. Qiang Zhi Yuan
STRATEGY COMMITTEE:
Chairman: Mr. Li Li Qun
Member: Mr. Qiang Zhi Yuan
NOMINATION COMMITTEE:
Chairman: Mr. Qiang Zhi Yuan
Member: Mr. Vincent Toe Teow Heng
REMUNERATION COMMITTEE:
Chairman: Mr. Vincent Toe Teow Heng
Member: Mr. Timothy Chen Teck-Leng
02 TIANJIN ZHONG XIN PHARMACEUTICAL GROUP CORPORATION LIMITED
BRIEF INTRODUCTION OF THE COMPANY
Tianjin Zhong Xin Pharmaceutical Group Corporation Following the business philosophy of “pursuing harmony
Limited (“Zhong Xin Pharmaceutical” or “the between mankind and nature, and benefiting all human
Company”) is the core pharmaceutical manufacturing beings” and the development strategy of innovations of
arm of Tianjin Pharmaceutical Group Corporation Limited traditional Chinese medicine, Zhong Xin Pharmaceutical
(“Pharmaceutical Group”). With a long history, the Company is is devoted to innovative research, development and
recognised as a state-class high-tech enterprise featured with manufacture of full-range, good quality, high efficiency and
innovations in traditional Chinese medicine. It was listed on quick-acting medicines. At present, it owns 560 varieties
the Singapore Exchange in 1997 and on the Shanghai Stock of preparations in 17 types, 602 certificates of approval for
Exchange in 2001. preparations, and 9 certificates of approval for crude drugs.
Among them, 4 Chinese medicines have been honored
Zhong Xin Pharmaceutical takes Chinese traditional as National Treasure-like creations; Su Xiao Jiu Xin Pill
medicine as its core business, boasting a complete (for treatment of cardio-vascular ailments), invented by
industrial chain, product chain and human resource chain. famous Chinese medicine manufacture expert Professor
It currently owns 25 branch companies, 8 wholly-owned Zhang Chengui, who is also senior adviser of Zhong Xin
subsidiaries, 7 controlled subsidiaries and 9 associates Pharmaceutical and honorable director of its Technology
with minor stakes. Among the 49 units, 7 are subsidiaries Center, has been designated a national confidential
with minor stakes that are distributed in chemical drug, bio- prescription; Niu Huang Jiang Ya Pill (for treatment of
medicine and other strategic sectors and operated jointly hypertension), Niu Huang Jiang Ya Capsule (for treatment
with world famous pharmaceutical giants like SmithKline, of hypertension) and Jing Wan Hong (for treatment of scald)
while the rest 42 are branches and subsidiaries mainly have been classified as state secret in their respective
engaged in traditional Chinese medicine manufacturing and prescriptions and ingredients; 5 products have become
medical retail. The two major business blocks have given state-protected Chinese medicines; 94 product varieties
play to their respective and combined competitive edges are exclusively produced by the Company; 85 drugs have
and posted steady growth, placing the Company among been listed in the National Basic Medicine Catalog, and
well-performing listed companies in recent years. Da Ren 216 products are now available in the national medical
Tang, Le Ren Tang and Long Shun Rong, known as China insurance service system. The Company has already built
Time-honored Brands under the flag of the Company, have up a nationwide marketing network, and many of its
individually been awarded the honorable title of “Famous high-quality products have also been exported to more than
Chinese Trade Mark”, and the brand of Song Bo for 30 countries around the world, enjoying high reputation in
No. 6 Chinese Medicine Plant, a modern Chinese medicine the medicine community.
making icon, has also been awarded the honorable title.
This has helped Zhong Xin Pharmaceutical to advance to a
leading enterprise in protecting China Time-honored Brands.
ANNUAL REPORT 2017 03
Currently, the Company has one state-level enterprise Zhong Xin Pharmaceutical has all along dedicated its
technology center, five municipality-level enterprise career to the people’s health care, cherished harmony,
technology centers, one municipality-level modern honesty and responsibility, and adhered to the business
technology engineering center on Chinese medicine, and philosophy of “pursuing harmony between mankind and
a science and technology work station for post-doctoral nature and benefiting all human beings”. It is marching
studies approved by the Ministry of Personnel. It has got forward wholeheartedly to its strategic targets of “being
858 patents, including 461 for inventions, 60 for exclusive a listed company with top-grade performance, a well-
prescriptions and 41 for exclusive preparation formulas. known quality brand at home and abroad, and a leader in
After years of medical experiments and experiences, modernization of Chinese medicine”. Under the backdrop of
the Company has integrated and improved the world’s market economy, the Company will unswervingly foster and
most advanced equipments and technologies on Chinese deepen its social responsibility awareness and philosophy
medicine to form an integrated modern Chinese medicine of sustainable development, balance interested parties’
development platform with Zhong Xin Pharmaceutical’s expectation and requirement for sustainable development,
unique characteristics. It implements the Good Aquaculture persist in win-win cooperation with interested parties, stick
Practices (“GAP”), Good Laboratory Practice (“GLP”), Good to environmental protection, abide by social morality and
Clinical Practice (“GCP”), Good Manufacturing Practice business ethics, and earnestly integrate social responsibility
(“GMP”) and Good Supplying Practice (“GSP”) series of and philosophy of sustainable development in its routine
standards on a full scale and carries out full-course quality operations. It will always be the Company’s conscientious
control to ensure product safety and quality. pursuit in its course of development to uphold Chinese
people’s good traditions, observe the objective law of
business development, and promote harmony between
business development and social progress.
04 TIANJIN ZHONG XIN PHARMACEUTICAL GROUP CORPORATION LIMITED
EQUITY STRUCTURE OF THE COMPANY
Tradable state
shares with limit
Tradable LP shares Overseas public Domestic public
on sale (Tianjin
with limit on sale shares shares
Pharmaceutical
26.674% 26.012% 4.249%
Group Co. Ltd)
43.065%
Tianjin Zhong Xin Pharmaceutical Group
Corporation Limited
(15 wholly-owned or (9 associates with
(25 branch companies)
controlled subsidiaries) minor stake)
Long Shun Rong Tianjin Da Ren Tang Jinwanhong Sino-American Tianjin SmithKline &
Pharmaceutical Co., Ltd. (52%) French Lab., Ltd. (25%)
Le Ren Tang
Tianjin Shin Poong Pharmaceutical Tianjin Yiyao Printing Co., Ltd.
Da Ren Tang Co., Ltd. (55%) (35%)
No. 6 Chinese Medicine Plant Bin Hai Zhong Xin Pharmaceutical Tianjin Bio-chip Co., Ltd. (26.4%)
Co., Ltd. (53.6%)
Zhongxin Pharmaceutical Plant NewScen Coast Bio-Pharmaceutical
Beijing Zhong Xin Yaogu Medical Co., Ltd. (35%)
Xinxin Pharmaceutical Plant Co., Ltd. (100%)
Tianjin Hong Ren Tang
Sales Co. Zhong Xin Bohai Rim Pharmaceutical Co., Ltd. (40%)
Pharmaceutical Co., Ltd. (100%)
Marketing Co.
Dujiangyan Zhong Xin Chinese
Tianjin Zhong Xin Pharmaceutical Herbs Cultivation Co., Ltd. (30%)
Medicine Co.
Group Guowei Medical Co., Ltd. (51%)
Chengdu Zhongxin Pharmaceutical
Sales Center
Tianjin Zhong Xin Pharmaceutical Co., Ltd. (51%)
Group Xuzhi Medical Science and
Medicinal Materials Co.
Technology Co., Ltd. (51%) Chengdu Zhongxin Chain Store Co.,
Eight-District Branch Ltd. (51%)
Tianjin Da Ren Tang (Bozhou)
International Trade Co. Chinese Medicine Co., Ltd. (71%) Zhongxin Pharmaceutical Tangshan
Xinhua Co., Ltd. (51%)
Zhejiang Zhong Xin Chuang Rui
Xinxin Chemical Medicine Branch
Investment Co., Ltd. (100%)
Sales Branch Company
Tianjin Hebei Daren Hospital
of No. 6 Chinese Medicine Plant
(100%)
Sales Branch Company
Tianjin Chinese Medicinal Slices
of Le Ren Tang
Co., Ltd (100%)
Sales Branch Company
Tianjin Zhong Xin Chuyun Trading
of Da Ren Tang
Co., Ltd. (100%)
Long Shun Rong Beverage
Tianjin Xin Long Pharmaceutical
Co., Ltd. (51%)
Tianjin Long Shun Rong
Development Pharm Co., Ltd.
(100%)
Anguo Xinlong Chinese Herbal
Medicine Co., Ltd. (100%)
ANNUAL REPORT 2017 05
STRUCTURE OF THE COMPANY
Shareholders Civil Service
Meeting Department
Deputy General
Strategy Manager Corporation and
Committee Management
Department
Human Resource
Development
Nomination Deputy General Department
Committee Manager
Investment and
Development
Department
Remuneration
Deputy General International Trade
Committee
Manager (Business) Department
Audit Committee Deputy General Marketing Department
Manager
Internal Audit
Department
Board General
Board
Chairman Manager
General Managers’
Office
Secretary to
the Board Safety Technology
Department
Deputy General
Supervisory Manager & Chief Technology and Quality
Committee Engineer Control Department
Research and
Development Center
Chief Financial
Finance Department
Officer
06 TIANJIN ZHONG XIN PHARMACEUTICAL GROUP CORPORATION LIMITED
RESUMES OF
DIRECTORS, SUPERVISORS AND SENIOR MANAGERS
DIRECTORS
Mr. Li Li Qun (57) Ms. Wang Lei (46) Ms. Yan Min (48)
Chairman of Board of Directors Executive Director Executive Director and
9-2-302 Huaxin Apartment A-805 Jinbin Yadu Apartment Chief Financial Officer
Huachang Ave, Hedong District, Shaoxing Road, Hexi District, 8-1-402 Haida Mingyuan Apartment
Tianjin PRC Tianjin PRC Jinzhonghe Ave, Hebei District,
Tianjin PRC
Mr. Li Li Qun had previously held the Ms. Wang Lei, Senior Engineer and Ms. Yan Min, Senior Accountant,
following positions: deputy secretary PhD in Engineering. From July 1993 to bachelor degree, MBA. She was
of the Party Committee and the No. March 2001, she successively held the appointed as the manager of the
101 workshop supervisor of Tianjin posts of the Technician in workshop, finance department of the Company
Pharmaceutical Company, general Cadre in the Sale Department, and from December 2009 to May 2014,
manager and deputy secretary of the Chief in the After Sale Service the Deputy Chief Accountant and the
Party Committee of Tianjin Tianyao Section of Tianjin Zhongxin Da Ren Manager of the finance department
Pharmaceutical Co., Ltd, chairman of Tang Pharmaceutical Factory. For of the Company since May 2014, and
the board of Tianjin Wanning Health the period from March 2001 to April the assistant general manager of the
Products Co., Ltd, chairman of the 2004, she was firstly appointed as Company since November 2014.
board of Tianjin Gesibao Medicine Deputy Director of Planning Division
Industry Co., Ltd, secretary of the and then as the Deputy Director of
Party Committee, secretary of Industry Department in the Company.
the Disciplinary Committee and From April 2004 to January 2013,
chairman of the Union of Tianjin she served as the Deputy Director,
Jinyao Group Co., Ltd, secretary Executive Deputy Director, Secretary
of the Party Committee, secretary of the Party Committee, Director
of the Disciplinary Committee and cum Deputy Secretary of the Party
chairman of the Union of Tianjin Committee in succession and further
Pharmaceuticals Group Co., Ltd, promoted as Director cum Secretary
deputy chairman of the board of Lier of the Party Committee from January
Chemical Co., Ltd. From December 2013 to date in Tianjin Zhongxin
2013 to November 2015, he was Lerentang Pharmaceutical Factory.
appointed as chairman of the board From 15 May 2013 to 23 June 2013,
of Tianjin Tianyao Pharmaceutical Co., she was also a Supervisor of the
Ltd. From December 2015 to August Board of Supervisors of the Company.
2017, he was appointed as employee From June 2014 to October 2017,
supervisor and Chairman of the board she was a deputy general manager
of supervisors of the Company. Since of the Company. From October 2017
September 2015, he holds office as to March 2018, she was the general
secretary of the Party Committee of manger of the Company.
the Company.
ANNUAL REPORT 2017 07
DIRECTORS
Mr. Zhou Hong (47) Mr. Timothy Chen Teck-Leng (63) Mr. Vincent Toe Teow Heng (49)
Executive Director, Deputy General Lead Independent and Independent and
Manager, and Chief Engineer Non-Executive Director Non-Executive Director
3-4-101 Yibo li, Hongqiao District, 46, Meyer Road, #03-03, 9 Temasek Boulevard, #38-02
Tianjin PRC Singapore 437871 Suntec Tower 2, Singapore 038989
Mr. Zhou Hong is a Senior Engineer Mr. Timothy Chen Teck-Leng, Mr. Vincent Toe Teow Heng,
and holds a master’s degree in our independent director and the Singaporean, holds a Bachelor of
science. For the period from July chairman of the Audit Committee Business (First Class Honours, Gold
of the Company, obtained his B.Sc.
1992 to December 2007, he held the Medal) degree from the Nanyang
from the University of Tennessee in
position as Sales Executive, Deputy Technological University, graduating
1979 and his MBA from the Ohio
Director of Factory Workshop, Director at the top of his class, and obtained
State University in 1981, majoring in
of Factory Workshop, Leader of the his Chartered Financial Analyst
finance and asset/liability management
technical process and Head of the certification in 1997. Mr. Toe used
for financial institutions. He further
Technology Department of Tianjin completed Executive Management to work in DBS Bank Ltd. and JP
Zhong Xin Pharmaceutical Factory Development Program of Harvard Morgan Chase & Co (investment
No. 6. From December 2007 to Business School in 2002 and was banking division). He was formerly an
January 2010, he held the position awarded Certified Corporate Director Associate Director of UBS AG in Hong
of Deputy Director of Tianjin Zhong (I CD.D) qualification by the Canadian Kong and Singapore, which he actively
Xin Pharmaceutical Factory No. 6. Institute of Corporate Director in 2006. involved in the Transport, Leisure and
From January 2010 to July 2011, Hotel industries’ M&A advisory in
Mr. Chen has over 30 years of
he was promoted to the Executive Asia. Previously, he was the director
senior management experience in
Deputy Director of Tianjin Zhong Xin of certain companies which operate
international finance, insurance,
Pharmaceutical Factory No. 6. From primarily in China, including but not
banking and company advisory fields.
July 2011 to date, he is the Director limited to Yangzijiang Shipbuilding
Mr. Chen started his professional
and Executive Deputy Secretary of Holdings Ltd and China Sunshine
career with the Bank of America,
Tianjin Zhong Xin Pharmaceutical Singapore between 1981 and 1982 as Chemical Holdings Ltd. He is the
Factory No. 6. From December 2012 loans officer. From 1982 to 1983, he Independent director of Tianjin Zhong
to present, he is the Director of was the Assistant Vice President of Xin Pharmaceutical Co., Ltd since May
the Company. From March 2017 to Wells Fargo Bank, Singapore. From 2013. Also, Mr Toe is currently the
October 2017, he was an assistant to 1983 to 1985, he was the Account CEO of a fund management company
the General Manager of the Company. Manager at the International Banking in Singapore (ICH Gemini Pte Ltd).
From October 2017 to present, he Centre of the Bank of Nova Scotia.
Mr. Chen was appointed as the Senior
is the Deputy General Manager and
Representative of Sun Life Assurance
Chief Engineer of the Company.
Company of Canada from 1986 to
1999. From 2000 to 2005, he was
the President & CEO of Sun Life
Everbright Life Insurance Company
in China. He was also the General
Manager of Sun Life Financial, China
during the same period.
Mr. Chen is currently sitting on the
board of several Singapore-listed
companies. He is an independent
director in Yangzijiang Shipbuilding
Holdings Ltd, TMC Education
Corporation Ltd., Sysma Holdings Ltd,
Tyesoon Ltd and Logistics Holdings
Ltd.
08 TIANJIN ZHONG XIN PHARMACEUTICAL GROUP CORPORATION LIMITED
RESUMES OF
DIRECTORS, SUPERVISORS AND SENIOR MANAGERS
DIRECTORS
Mr. Qiang Zhi Yuan (61)
Independent and
Non-Executive Director
#25 Zhujiang Road, Hexi District,
Tianjin PRC
Mr. Qiang Zhi Yuan, born of Chinese
nationality, had obtained a PhD in
management (accounting), and is
a professor at Tianjin University of
Finance and Economics, a member of
the American Management Association
and China Market Association, the vice
president of Tianjin Science Research
Association, a senior management
consultant registered with the Certified
Management Consultant (CMC).
He was also the former director and
former deputy director of economics
research centre of Tianjin University
of Finance and Economics, the vice
president, president and vice Chairman
of Tianjin Northern Talent Co., Ltd.
From June 2009 to May 2014, he
worked as the dean in Graduate School
of Modern Economics Management
of Tianjin University of Finance and
Economics. From August 2007 to
December 2013, he was appointed as
independent director in Tianjin Lisheng
Pharmaceutical Co., Ltd. From June
2014 to June 2016, he worked as a
professor in Graduate School of Modern
Economics Management of Tianjin
University of Finance and Economics.
Since July 2016, he has served as a
professor (retired) at Tianjin University
of Finance and Economics. From May
2015 to present, he has been the
independent director of the Company.