Pharmaron Beijing Co.Ltd(300759) (Beijing) new drug Technology Co., Ltd
Work report of the board of directors in 2021
All shareholders of Pharmaron Beijing Co.Ltd(300759) (Beijing) new drug Technology Co., Ltd.:
In the year of 2021, the board of directors of the company earnestly implemented the resolutions adopted by the general meeting of shareholders and actively promoted the implementation of the resolutions of the board of directors in strict accordance with the provisions of the company law, the securities law, the Listing Rules of gem of Shenzhen Stock Exchange, the listing rules of stock of stock exchange of Hong Kong Limited and other laws and regulations, as well as the articles of association, the rules of procedure of the board of directors and other rules and regulations, Continuously standardizing corporate governance, all directors conscientiously perform their duties and perform their duties diligently, ensuring the sustainable and stable development of the company. The main work of the board of directors in 2021 is as follows:
1、 Business operation of the company in 2021
In 2021, the company continued to build a whole process and integrated service platform, and further improved the R & D and production service system of small molecule drugs throughout the whole process of drug discovery, preclinical, clinical development and commercialization by deepening the collaboration of business in both vertical and horizontal directions. At the same time, the company actively expands the macromolecule, cell and gene therapy service platform, and is committed to becoming a global leader in the integrated service of the whole process of multi therapy drug R & D. All employees of the company made concerted efforts. During the reporting period, the company achieved an operating revenue of 74437697 million yuan, an increase of 45.00% over the same period last year (if calculated according to the exchange rate of the same period last year, the operating revenue increased by 52.25% over the same period last year); With the increase of income, the scale effect of profit was further enhanced, and the operating profit was 1914337300 yuan; The gross profit margin of the main business reached 36.02%, a decrease of 1.38 percentage points over last year (if calculated according to the exchange rate of the same period last year, the gross profit margin of the main business was 38.76%, an increase of 1.36 percentage points over last year); The net profit attributable to the shareholders of the listed company was 1661028600 yuan, an increase of 41.68% over the same period last year; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 1340802300 yuan, an increase of 67.46% over the same period last year. In order to meet the demand of continuous growth of the company’s business, the company continues to expand its talent team. As of December 31, 2021, the total number of employees has reached 14923, including 13455 R & D, production technology and clinical service personnel, accounting for 90.16% of the total number of the company. As of December 31, 2021, the number of R & D, production technology and clinical service personnel has increased by 3628 compared with December 31, 2020.
In 2021, the company continued to implement the customer-centric concept, and about 90% of its revenue came from large, diversified and loyal repeat customers, including the world’s top 20 pharmaceutical enterprises. Among them, the revenue of customers from the world’s top 20 pharmaceutical enterprises accounted for 18.97% of the company’s operating revenue. At the same time, the company actively expanded its customer base and introduced more than 800 new customers in 2021. In 2021, the revenue from customers in North America accounted for 64.20%, the revenue from customers in Europe (including the UK) accounted for 15.63%, the revenue from customers in China accounted for 17.13%, and the revenue from customers in other regions accounted for 3.04%. With the increasing number of customers of the company, the revenue concentration of the top 20 customers further decreased from 41.06% in 2020 to 33.75% in 2021, and the revenue structure continued to be optimized. While the income concentration decreased, the average customer income of the top 20 customers increased by 19.21% compared with 2020. The service advantage of whole process integration became more and more obvious, and the customer loyalty was further improved. In addition, the company carried out extensive technical cooperation with customers and jointly published research results, which were published in J. MED in 2021 Chem.， Bioorg. Med. Chem. Lett. And J. Pharm Sci. And other international academic journals published 29 articles and obtained 27 invention rights of patents outside China (the patent right belongs to the customer).
In order to build the strategy of full process and integrated service platform, the company has further improved the company’s international service platform and focused on the development of new business through internal construction and extension mergers and acquisitions, while increasing production capacity to meet the growth needs of existing business, so as to provide new impetus for the medium and long-term development of the company. During the reporting period, the company’s capital expenditure for internal construction and extension M & A was 2092821600 yuan and 143694400 yuan respectively, an increase of 59.05% and 30.61% respectively compared with 2020. With the promotion of internationalization strategy, the company has 10 operating entities and more than 1100 employees in the UK and the United States. In 2021, the operating revenue of overseas subsidiaries accounted for 13.70% of the company’s operating revenue.
In order to better support the long-term development and scale expansion of the company’s business, in June 2021, the company successfully completed the issuance of bonds convertible into H shares of the company to professional investors in the international capital market. The net proceeds from this issuance were about 37760407 million yuan. This issue is the first convertible bond issued by a company listed on the Hong Kong Stock Exchange in both RMB and US dollars at the same time. The convertible bond with a principal of US $300 million issued by the company has zero interest and zero return, and has obtained the highest conversion premium of US dollar convertible bonds of medical enterprises listed in Hong Kong stocks in history. This issue fully shows the trust of the capital market in the company’s operating ability and the high recognition of the company’s market competitiveness.
The company attaches great importance to improving and continuously improving the level of corporate governance in order to maximize long-term and overall interests. In order to improve the company’s ESG governance structure, the company’s board of directors deliberated and adopted the measures for the management of environment, society and corporate governance in April 2021, and established a three-level ESG governance structure with the board of directors and the strategy committee as the “governance layer”, the ESG Executive Committee as the “management layer”, and the “executive layer” composed of various departments and first-level subsidiaries. The ESG Executive Committee discussed the ESG work planning Regularly discuss and plan the work progress and the latest trends in the capital market, and report to the management. At the same time, the company set up 20212025 sustainable development goals from the four aspects of emission target, waste reduction target, energy efficiency benefit target and water efficiency target according to the feasibility of the target and the advanced nature of the industry, and formed the future work plan and specific sustainable development target measures.
In addition, during the reporting period, in order to continuously strengthen the management ability and bring information security into the scope of safe production, the company is committed to the comprehensive improvement and upgrading of the information security system of the global operation division. The company’s information security management system passed the ISO27001 international information security standard certification in November 2021 and obtained the certification certificate. In addition, the company improves employees’ information security awareness through employee information security training to ensure that the security of customer information, intellectual property rights and personal information of clinical subjects is continuously and effectively guaranteed.
2、 Performance of the board of directors
1. Meetings held
According to the development needs of the company, the board of directors held a meeting in time to make decisions on major matters. In the whole year, 10 meetings of the board of directors and 2 general meetings of shareholders were held.
Make decisions on important issues such as the proposal on profit distribution in 2020, the proposal on formulating environmental, social and corporate governance objectives and management measures, and the proposal on acquiring 100% equity of overseas companies. Conscientiously organized and implemented the resolutions of the meeting, which effectively promoted the development of the company. The board meeting held by the company in 2021 is as follows:
Proposal passed on the date of the session
The second board of directors on February 26, 2021 1 1. Proposal on acquiring 100% equity of overseas companies
Eighth meeting
1. Proposal on the work report of the board of directors in 2020
2. Proposal on 2020 general manager’s work report
3. Proposal on 2020 financial final accounts report
4. Proposal on 2020 profit distribution plan
5. Proposal on the company’s internal control self-evaluation report in 2020
6. Proposal on the full text and summary of the company’s 2020 annual report and the 2020 annual performance announcement of the second board of directors on March 26, 2021
The 9th meeting 7. Proposal on the remuneration scheme of the company’s directors
8. Proposal on remuneration scheme for senior management of the company
9. Proposal on the company’s employment of domestic accounting firms in 2021
10. Proposal on the company’s employment of overseas accounting firms in 2021
11. Proposal on confirmation of daily connected transactions and prediction of daily connected transactions in 2020
12. Proposal on applying for credit line from non related party financial institutions in 2021
13. Proposal on the prediction of the company’s external guarantee amount in 2021
14. Proposal on using some idle self owned funds to purchase financial products
15. Proposal on the confirmation of hedging product transactions in 2020 and the estimation of hedging product transaction amount in 202116. Proposal on the company’s social responsibility and environmental, social and governance report in 2020
17. Proposal on repurchase and cancellation of some restricted shares
18. Proposal on reduction of registered capital of the company
19. Proposal on Amending the articles of association of Pharmaron Beijing Co.Ltd(300759) (Beijing) new drug Technology Co., Ltd
20. Proposal on the general meeting of shareholders authorizing the board of directors of the company to handle matters related to the reduction of registered capital and the amendment of the articles of association to change the registration procedure in the market supervision and administration department
21. Proposal on requesting the general meeting of shareholders to give the board of directors general authorization to issue additional A shares and or H shares of the company
22. Proposal on address change of the company’s Hong Kong business registration certificate
23. Proposal on participating in private equity investment funds and related party transactions
24. Proposal on convening the 2020 annual general meeting of shareholders, the first A-share general meeting in 2021 and the first H-share general meeting in 2021
The second board of directors 1. Proposal on the company’s report for the first quarter of 2021
10th meeting April 28, 2021 2. On formulating environmental, social and corporate governance objectives and
