The Resolution of the 39th Session of the 6th Board of Directors


The Resolution of the 39th Session of the 6th Board of Directors

Company Announcement
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Stock Code: 002422        Stock Abbreviation: Kelun Pharmaceutical     Announcement No.: 2021-048


Sichuan Kelun Pharmaceutical Co., Ltd.

The Resolution of the 39th Session of the 6th Board of Directors


The company and all members of its Board of Directors hereby confirm that all information disclosed herein is true, accurate and complete with no false or misleading statement or material omission.


The 39th session of the 6th Board of Directors of Sichuan Kelun Pharmaceutical Co., Ltd. (hereinafter referred to as “the company” or “Kelun Pharmaceutical”) was notified to all directors, supervisors and senior executives by telephone and email on March 17, 2021. The 39th session of the 6th Board of Directors of the company was held in Chengdu on March 19, 2021 in the forms of on-site and telephone conference. The session should be attended by eight directors and all of them attended. Among them, directors Mr. Liu Gexin, Mr. Wang Jingyi, Ms. Zhang Tengwen, Mr. He Guosheng and independent directors Mr. Zhang Tao, Mr. Wang Guangji and Ms. Li Yuedong attended the session in the form of telephone conference and other directors attended the session on site. The company's supervisors and senior managers sat in on the session. The session was held in compliance with the Company Law and other laws, administrative regulations, departmental rules, regulatory documents and the Articles of Association. The resolutions made are legal and effective.


The session was chaired by Mr. Liu Gexin, Chairman of the Company. The directors deliberated and voted on the following proposals, and made following resolutions:


I. The Proposal on Approving the Capital Increase of the Holding Subsidiary Kelun-Biotech was approved with 8 votes in favour, 0 against and 0 abstention.


Due to the need for the business development of holding subsidiary Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. (hereinafter referred to as “Kelun-Biotech”), Kelun-Biotech was approved to increase the registered capital to RMB 116,050,609. The newly added registered capital of RMB 11,850,609 was subscribed at a total of RMB 511,782,500 (or equivalent US dollars) (hereinafter referred to as “the transaction” or “the capital increase”) by Wealthy Linkage Limited (hereinafter referred to as “IDG Capital”), Advanced Manufacturing Industry Investment Fund II (Limited Partnership) (hereinafter referred to as “SDIC”), LAV Kecheng Hong Kong Limited (hereinafter referred to as “LAV”), Suzhou Likang Equity Investment Center (Limited Partnership) (hereinafter referred to as “Suzhou Likang”) and Zhuhai Liangheng Equity Investment Partnership (Limited Partnership) (hereinafter referred to as “Hillhouse Capital”). After negotiation, the pre-money valuation of the capital increase of Kelun-Biotech was RMB 4,500,000,000. After the completion of the capital increase, IDG Capital, SDIC, LAV, Suzhou Likang and Hillhouse Capital will hold 4.5250%, 4.4894%, 0.6651%, 0.3325% and 0.1995% shares of Kelun-Biotech respectively. Chengdu Kelun Huide Enterprise Management Center (Limited Partnership), Chengdu Kelun Huineng Enterprise Management Center (Limited Partnership), Chengdu Kelun Huizhi Enterprise Management Center (Limited Partnership), Chengdu Kelun Huicai Enterprise Management Center (Limited Partnership) and other employee shareholding platforms will hold 6.4627% shares of Kelun-Biotech. Ningbo Daoyi Enterprise Management Consulting Co., Ltd. will hold 3.6191% shares of Kelun-Biotech. Mr. Wang Jingyi will hold 8.6169% shares of Kelun-Biotech. The company will hold 51.7017% shares of Kelun-Biotech and remains the controlling shareholder of Kelun-Biotech.


The relevant agreements of the transaction stipulate the rights of the investors, such as investors can ask Kelun-Biotech or the actual controller of the company, in terms of the shares they hold, to repurchase the shares in the way of principal plus fixed annual return rate as agreed in the agreement under the circumstances of Kelun-Biotech cannot realize qualified initial public offering and etc. At the same time, the agreements also stipulate the redemption rights, preemptive rights, rights of first refusal, co-sale rights, liquidation preference, anti-dilution rights of the investors as well as the situations of automatic invalidation and automatic recovery of the investors` rights, etc. The company shall sign relevant agreements of the transaction with the parties mentioned above after the approval of the Board of Directors.


As a holding subsidiary of the company, Kelun-Biotech has been focusing on the R&D, production and sales of innovative drugs. The purpose of the capital increase is to further introduce investors and optimize the capital structure, enhance the capital strength and improve the ability of sustainable and healthy development of Kelun-Biotech. The introduction of investors to increase the capital of holding subsidiaries of the company will not adversely affect the financial and business status of the company, and will not damage the interests of the company and all shareholders.


Documents for future reference:                                         

The Resolution of the 39th Session of the 6th Board of Directors signed by directors of the Company

                                                                                                                                                                                                                                                                                   Board of Directors

                                                                                                                                       Sichuan Kelun Pharmaceutical Co., Ltd. 

                                                                                                                                                             March 22, 2021



This document is a translated version of the Chinese version announcement, and the published Chinese version announcement shall prevail. The complete published Chinese version announcement may be obtained at www.kelun.com.

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