NOTICE: JinYu Biotechnology (01548) has announced that on October 18, 2024 (New York time), Legend Biotech has entered into an agreement with the custodian JPMORGAN CHASE BANK, N.A. to amend the previous deposit agreement and previous certificates.

Under the previous deposit agreement, if any US deposit certificate holder does not provide voting instructions on specific agenda items in a timely manner, the holder is deemed to have instructed the custodian to entrust the voting rights to individuals designated by Legend Biotech at the relevant shareholders' meeting based on the common shares represented by the holder's US deposit certificate for the agenda items on which the holder did not provide actual instructions.

According to the agreement effective on the aforementioned date, Legend Biotech has irrevocably notified the custodian that it has decided to no longer exercise the voting rights, despite the existence of previous certificates, as the custodian's ability to grant any voting rights has been terminated.

As of September 30, 2024, the company beneficially owned 0.174 billion shares of Legend Biotech, accounting for approximately 47.56% of the total issued share capital of Legend Biotech.

After the termination of the voting rights, considering the active participation of Legend Biotech shareholders at the shareholders' meeting (i.e., a total of 95.7% of Legend Biotech shares were voted at the Legend Biotech 2024 Annual General Meeting held on October 21, 2024 (New York time)), the Board of Directors believes that the company has actually lost the power to unilaterally manage the finances and operational policies of the Legend Group at the shareholders' meeting. Therefore, the Board of Directors has decided to deconsolidate the Legend Group and treat it as an investment in an associate by the company.

The announcement states that after the deconsolidation, Legend Biotech will be reclassified as an associate (as defined in the Listing Rules), and the company will subsequently account for its investment in Legend Biotech using the equity method due to considering it has a significant influence over Legend Biotech. On the date of deconsolidation, the carrying amount of the company's investment will reflect the fair market value of the Legend Biotech shares it holds. The difference between the carrying amount of this investment on the date of deconsolidation and the company's share of the net assets of Legend Biotech will be allocated to identifiable intangible assets such as intellectual property, trademarks, and goodwill (if any). Accordingly, the company expects to recognize a one-time tax-exempt gain, reflecting the difference between its share in the fair market value of Legend Biotech and its share in the net assets of Legend Biotech on the date of deconsolidation. In the future, the company will recognize its share of results of Legend Biotech in its profit/loss and make appropriate adjustments, such as amortizing identifiable intangible assets based on the fair value at the date of deconsolidation.

The consolidated financial statements of the Group for the year ended December 31, 2024, prepared on this basis, will fairly reflect the overall performance and status of the Group according to the current situation of Legend Biotech.

In addition, the board of directors of the company expects that the derecognition of the consolidation of the Group for the year ended December 31, 2024, will have a significant impact. Due to the significant difference between the market value of Legend Biotech's stocks and the book value of its assets and liabilities at the derecognition date, it is expected that a substantial amount of income will be recognized upon derecognition.