Sisram Medical : INTERIM REPORT 2020

September 22, 2020 at 03:35 pm IST

M e d i c a l L td

(Incorporated in Israel with limited liability)

Enhancing Quality of Life

2020 Interim Report

Sisram Med

Stock Code:1696.HK

Notes to the Interim Condensed Consolidated Financial Statements

Contents

2 Chairman's Statement

4 Chief Executive Officer's Statement

Financial Highlights
Management Discussion and Analysis

Interim Condensed Consolidated Statement of Profit or Loss
Interim Condensed Consolidated Statement of Comprehensive Income
Interim Condensed Consolidated Statement of Financial Position

Interim Condensed Consolidated Statement of Changes in Equity
Interim Condensed Consolidated Statement of Cash Flows
Notes to the Historical Financial Information

37 General Information

42 Corporation Information

44 Definitions

| Interim

Chairman's Statement

and Agility as

Performance Accelerators

Throughout its 20 years of business activities in the energy-based medical devices market, Sisram has experienced quite a few changes in the industry, competition, and consumer behaviors. Most of these changes took time to mature and become the new norm while the Company leveraged opportunities to gradually consolidate its operation and structure, resulting in prolonged sustainable development amidst these challenges.

The COVID-19 pandemic affected all sectors and industries, changing everything we knew and were used to, with regards to its global impact on all of life's aspects in an instance. These days, immediate response to changing conditions is becoming a must, rather than a competitive advantage - making immediacy and digital synonyms. The pandemic accelerated our strategic plans for digital transformation. We all understand the importance of becoming more digital and more connected within

the corporate, as well as with business partners and customers. These are the basic building blocks of fast response and agility in adjusting to changing competition and consumption trends. As part of our perpetuate pursuit to excel our operation, we have initiated a digital transformation project

at Sisram, focused on delivering additional value to our partners and customers through technologies such as big data analysis and cloud- based services. This will later translate into change and improvement of internal processes such as operational efficiency and quality of service in a similar manor as with our successful digital marketing, clinical webinars and on-line training that are already implemented.

Sisram Medical Ltd | Interim Report 2020

Chairman's Statement

As a global company, Sisram, with business outreach across over 90 countries and regions worldwide, has leveraged all advantages of deploying global resources. Despite macroeconomics effects in these countries, operating results have been affected temporarily. Sisram leveraged its global setting to mitigated to some extent local economic impact during the first half of 2020. China, which was the first to be affected from the pandemic, was also the first to bounce back, with our operation in China demonstrating an impressive revenue increase. Our subsidiary in North America maintained its high revenue stream of the corresponding period, with a slight positive increase, these two operations along with our recently formed South Korean

subsidiary have compensated for the slowdown in

European and Latin American markets, which experienced longer periods of shutdown and

consequential revenue decrease. Encouraging back-to-routine signs are seen also among

countries such as Poland, Japan, Italy,

and The Netherlands with recovering demand showing as of June 2020. We

will continue to leverage our global setting advantage to facilitate

fast response and seize market opportunities as they arise.

Prospect

2020 is destined to be an extraordinary year. We are optimistic regarding the recovery of global demand in the medical aesthetics market and have full confidence in the Company's ability to grow amidst this global crisis. The Company will continue its business development efforts, capitalizing on all its competitive advantages, while maintaining its investments in research and

development, monitoring the global atmosphere and rising market opportunities.

With regards to global operation, we are committed to expanding our direct sales network, expanding the reach of our products and service, form and promote global synergies across

various regions and optimize global resources allocation.

The energy-based medical device industry is our starting point. We will maintain our position in the medical aesthetics market while exploring new industries opportunities.

As a leading member of Fosun Pharma's Med-tech Ecosystem, we will continue to proactively scout and evaluate potential collaborations for synergies, as well as seize opportunities for mergers and acquisitions to enhance Sisram's position

as a Med-Tech group.

Appreciation

Last but not least, I would like to express my sincere gratitude to our customers, key opinion leaders, Shareholders, partners, suppliers and employees for their contribution to our success as well as the future

achievement of our goals.

Liu Yi, Chairman

Sisram Medical Ltd | Interim Report 2020

"Our employees rose above this crisis, demonstrating motivation, creativity, hard work and even personal

development and skillset growth"

Chief Executive Officer's Statement

The Path

to the New Normal

Short and long-term perspective on how we operate -

People, Focus, Agility and Ensuring future prosperity.

People

Safeguard lives & livelihood

Decision making amid uncertainty is not easy. In a crisis, you want to lead and be led by a Winston Churchill, not a Neville Chamberlain.

The concern for our employees and the communities within we do business does not need to conflict with the concern for ensuring our ongoing business success.

The temptation for businesses in time of crisis is often to get small, to scale down and concentrate on bottom-line fundamentals. Resisting this urge and reminding ourselves of our principles and goals, particularly when success feels elusive, reinforces trust, confidence and morale among the stakeholders and is required for any future progress.

People' development and team building are not peripheral activities. In times of crisis, you need your employees' commitment and energy, both to deal with the crisis and to build the future. I am proud to say that our employees rose above this crisis, demonstrating motivation, creativity, hard work and even personal development and skillset growth. We have used the shutdown periods to increase the collaboration between the company's units - across subsidiaries and across corporate functions - circulating ideas, brainstorming, sharing success stories, resources, and output - creating

a sense of unity, purpose, belonging and confidence.

We believe in this industry; we have been in it for the last 20 years and plan to stay for many more to come. It is our duty to all our stakeholders to be more focused than ever on our long-term strategic goals. We strive to use this crisis to grow from.

Sisram Medical Ltd | Interim Report 2020

Chief Executive Officer's Statement

Focus

Focus does not mean downsizing. Focus can result in a better outcome - our North American subsidiary focused its efforts on selling the newest product launched early

2020 - Opus Plasma - the first plasma skin resurfacing technology. This focus of resources resulted in an outstanding demand from the market. Similarly, we continued

to focus global sales and marketing resources in the promotion of our new entry- level platform - DermaClear, a consumables-based product, providing immediate results at a lower cost. In addition, we prioritized our research & development activity,

reanalyzing new projects and focusing our efforts on a new hybrid technology-based platform about to be launched, following two years of development and fine tuning

thanks to an insightful collaboration with leading doctors around the world.

	Opus Plasma	DermaClear
	New, First & Only	Entry point, consumable
	The first plasma skin resurfacing	base platform
Agility	technology in the market

Being agile has many expressions. At Sisram, our main practice of agility is by shifting resources within corporate functions as well as within our global operation. One example of how we deploy agility is the shift in resources allocation conducted by Medical Nova, one of our leading subsidiaries, as part of its adjustment to the economic conditions. The subsidiary has rechannelled its outbound resources (sales and logistics) from capital equipment products, onto consumable products, following the understanding of customers' challenge committing to an expensive equipment with long ROI period, compared with lower cost products, offering immediate ROI such as injectables. Medical Nova demonstrated a 23.2% growth in revenue attributed to injectables in comparison with the corresponding period last year, thereby increasing the revenue contribution of injectables product line to 18.4% of the subsidiary's total revenue, up from 10.8%

in the corresponding period last year.

+23.2%

״Medical Nova demonstrated a 23.2% growth in revenue

attributed to injectables in comparison with the corresponding period last year"

Sisram Medical Ltd | Interim Report 2020

Chief Executive Officer's Statement

Ensuring future prosperity

Following a financial and operational internal evaluation process, we charted our short- and long-term actions through dealing with the pandemic impact. As a veteran company with a robust financial backbone, we tapped into our cash for the ongoing business operation during the second quarter of the year. This short-term action had enabled us to maintain our human capital almost intact and sustain our operational resilience, while addressing our leading goals:

Support our employees and business partners during these challenging times.
Return to normal operation with all necessary elements (sales, production, distribution, service, etc.) as soon as demand recovers.
Continue our strategic projects - upgrading IT infrastructures (ERP, CRM), our new campus, research & development projects, clinical studies, etc.
Protect our financial assets and company value.

Our decisions are reinforced by the rising demand we see throughout the second quarter of the year. In particular, the revenue derived in June 2020 is nearly identical to that of June 2019, and the value of new orders in June 2020 is up 6.9% compared with that of June 2019. This trend of recovery, with the growth in both product demand and revenue indicators, is continuing strongly in July 2020. Alongside our short-term resources and assets recovery, we were able to preserve our total net assets at the amount of US$ 325 million as of 30 June 2020, identical to that as of 31 December 2019.

Total AssetsNew Orders

		UP
US$	+6.9%
325
	June 20
Million		vs. June 19

Appreciation

On a closing note, I would like to take this opportunity to offer my sincere thanks to our customers, key opinion leaders, Shareholders, partners, suppliers and employees for their support and collaboration during these times and ensure all our stakeholders of our commitment to achieve future goals.

Lior M. Dayan

Chief Executive Officer

Sisram Medical Ltd | Interim Report 2020

Financial Highlights

	Six months ended June 30,

	2020	2019	2018
	US$'000	US$'000	US$'000
Operating results
Revenue	71,736	85,432	78,155
Gross profit	39,902	48,972	41,859
Profit before tax	6,394	15,573	13,642
Profit for the period	5,738	13,865	11,254
Profit for the period attributable to owners of the parent	5,504	13,209	11,254
Profitability
Gross margin	55.6%	57.3%	53.6%
Net profit margin	8.0%	16.2%	14.4%

	As at	As at	As at
	June 30,	December 31,	December 31,
	2020	2019	2018
	US$'000	US$'000	US$'000
Assets
Total assets	387,809	392,926	350,075
Equity attributable to owners of the parent	325,234	325,570	314,100
Total liabilities	62,575	67,356	35,975
Cash and bank balances	99,071	107,792	104,530

Sisram Medical Ltd | Interim Report 2020

Management Discussion and Analysis

1. Business review

2. Business review of first half of 2020

The Company is a leading global provider of energy- based medical aesthetic treatment systems, with comprehensive in-house capability to design, develop and produce such systems, which feature its innovative and proprietary technologies. Alma, the Company's core subsidiary, is also engaged in the injectables market with a distribution agreement from IBSA Derma, a Swiss cosmeceutical company and a leading subsidiary of IBSA Pharma Corporation, for the distribution of its products in Israel, Hong Kong, India and China. The "Alma" brand, as well as the brands of many of the Group's products such as "Soprano", "Harmony", "ClearLift", "Accent", "FemiLift" and "BeautiFill" are widely recognized and well regarded among treatment providers and treatment recipients worldwide. The Group also sells its treatment systems via distributors and direct sales customers in over 90 countries and jurisdictions worldwide.

The treatment systems developed and manufactured by the Company can be used for a broad range of non-invasive and minimally invasive medical aesthetic treatments. The Company has a comprehensive portfolio of treatment systems, including its Core product line and Beauty product line, which can be utilized to perform non-invasive medical aesthetic treatments such as hair removal, skin rejuvenation, skin resurfacing, body contouring, skin tightening, treatment of vascular and pigmented lesions, tattoo removal, acne treatment and cellulite reduction. The Company's treatment systems can also be utilized to perform minimally invasive treatments such as assisted liposuction and fat grafting, feminine health, treatment of varicose veins and ear, nose and throat procedures. The Company's flagship offerings include:

the "Soprano" family, primarily used for laser hair removal; (ii) the "Harmony" family, a versatile multi- application platform that can be used to treat more than 65 different FDA-cleared indications; (iii) the "Accent" family, primarily used for body contouring and skin tightening, all of which belong to its Core product line; (iv) "FemiLift", a minimally invasive treatment system for various feminine conditions; and (v) "BeautiFill" by LipoFlow platform, the first and only energy-based device cleared by the FDA for autologous fat grafting. In addition, the Company offers Beauty product line treatment systems such as REJUVE and SPADEEP.

Sisram Medical Ltd | Interim Report 2020

In the first half of 2020, Sisram's established global sales and distribution network recorded a total revenue of US$71.7 million for the Reporting Period, representing a decrease of 16.0% when compared to the corresponding period in 2019. The decrease was primarily attributable to the COVID-19 impact on the global economy. The prevalence, magnitude, and trends of the economic effects created by the pandemic across the globe are depicted in Sisram's business results. As a global company, active across over 90 countries worldwide, we experienced the macroeconomics impact in each country, yet thanks to our global spread, we were able to mitigate these effects overall. China, which was the first to be affected from the pandemic, was also the first to bounce back, with our Chinese operation demonstrating an impressive revenue increase during the Reporting Period in comparison with the corresponding period last year. Our North American subsidiary did not fully shut down and maintained its high revenue stream during the Reporting Period, with a slight positive increase in revenue when compared with the corresponding period in 2019. These two major markets, along with the South Korean subsidiary, have compensated greatly for the revenue decrease in Europe and Latin America countries that went through longer periods of shutdown. Encouraging back-to-routine signs are seen also among countries such as Poland, Japan, Italy, the Netherlands, etc., with recovering demand showing as at June 2020.

Profit for the period attributable to owners of the parent was US$5.5 million, which represent 7.7% of revenue for the Reporting Period. Such percentage decreased by 7.8% as compared to that for the corresponding period in 2019.

During the Reporting Period, gross profit of the Group amounted to US$39.9 million compared to US$49.0 million for the corresponding period in 2019, representing a decrease of 18.5%. The gross profit margin decreased to 55.6% for the Reporting Period from 57.3% for the corresponding period in 2019, primarily due to fixed manufacturing expenses such as salaries, facilities expenses and other fixed expenses. The establishment of direct operation offices in chosen territories has enabled the Company to shorten the supply chain, gain a higher brand visibility and ensure consistency among the communications with the target clientele. With this methodology in place, revenue derived from direct sales amounted to 54.2% of total revenue versus 45.8% of the total revenue attributed to sales via distributors.

During the Reporting Period, the Group recorded profit before tax of US$6.4 million and recorded profit for the period of US$5.7 million, representing a decrease of 58.9% and 58.6% respectively, when compared to the corresponding period in 2019. The decrease in profit before tax and profit for the period was mainly due to the decrease in revenue, the decrease in gross profit (US$9.1 million) and a decrease in sales expenses (US$0.3 million), mainly related to the direct operation in North America.

During the Reporting Period, the Group recorded an adjusted net profit of US$8.6 million representing a decrease of 47.2% when compared with the corresponding period of 2019. The adjusted net profit margin for the Reporting Period was 12.1%. The decrease in the adjusted net profit is mainly attributable to the outbreak of the COVID-19 which has had a significant impact on the global medical aesthetics industry. As a whole, the lower Profit for the Period reflects the Company's decision to prioritize the use of its resources to maintain its ongoing operations with minimal cutbacks in order to maintain its flexibility and resilience capabilities. Following the initial signs of recovery in market demand in June 2020, the Company is further enhancing its competitive position by expanding its scope of business and maintaining continuous and stable development of its business.

The Company's business fundamentals remain healthy. The Company has sufficient funds to meet its future business needs and sustain its operational resilience, while addressing the following leading goals:

Support employees and business partners during these challenging times.
Return to normal operation with all necessary elements (sales, production, distribution, service, etc.) as soon as demand recovers.
Continue its strategic projects - upgrading IT infrastructures (ERP, CRM), our new campus, R&D projects, clinical studies, etc.
Protect its financial assets and company value.

Management Discussion and Analysis

R&D

R&D investments are in the same level as in the corresponding period in 2019.
13.8% of corporate employees are R&D specialists.
We have launched 2 new products - (1) Opus Plasma - the first plasma skin resurfacing technology that swept the North American market by storm with an outstanding demand, and (2) "Harmony XL PRO" special edition with the new, groundbreaking applicator - doubling the power of previous solutions, providing visibly younger looking skin.
On the clinical research front, our provisional application in the USA for a patent on harvesting high quality stromal vascular fraction (SVF) cells and adipose-derived stromal cells (ASCs) from lipoaspirate fat has progressed according to plan. This patent and technology are expected to further expand our surgical and regenerative medicine applications.

Sales and Marketing

As a multi-national operation, Sisram is required to adjust its performance according to each country/ state limitations (USA, DACH, India, etc). This practice of global outlook with local focus that we call Glocalization methodology has been fully exploited during the COVID-19 outbreak to (1) monitor the pandemic rhythm and expression in each country,

plan the return to routine, and (3) coordinate the efforts across all subsidiaries and execute the plan. Adjusting to the new market dynamics, we have performed the following activities:

Upgrading webinars activities as a substitute to cancelled conferences, trainings, and sales meetings.
Launching multiple digital campaigns to generate B2B leads across different territories.
Increasing content creation and social media presence to keep B2B and B2C dialogue going.
Organising weekly video meetings with all distributors - making sure that we support our customers with solid answers, fast service, and positive reactions.

Sisram Medical Ltd | Interim Report 2020

Management Discussion and Analysis

Business Development

During the Reporting Period, we have

c o n t i n u o u s l y e x p l o r e d n e w b u s i n e s s opportunities, following the charted guidelines

strengthen our APAC position, diverse our business and create synergistic value with Alma.

Operations

On the operations front, we have focused on the following spearheads:

Addressing the pandemic effect
- Following the lockdowns in several territories and components supply shipments delays, we have analyzed and activated alternative sources of supply
  - mainly by replacing plastic parts with CNC machining metal parts.
- Enhance inbound materials visibility in response to decline in suppliers "on time delivery" performances.
- Evaluate and exercise alternative outbound logistics options, as air transportation was less available.
- Provide required IT tools to allow employees to work from home when applicable.
Ensuing the continuation of our future business plans:
- Global ERP project was initiated in January 2020 with the "go live" of the new ERP infrastructure in the headquarter. We plan to continue its deployment with "go live" in our rest companies till the mid of next year. Alma's new campus project is in execution phase with 91% of plan accomplished. The campus will consolidate five operation sites into one with future expansion capacity of 50%. Facility transition is planned to take place in August 2020.
- Competitive procurement project, including advanced supply control structural methods, has been designed and is in implementation process.

10 Sisram Medical Ltd | Interim Report 2020

3. Outlook for second half of 2020

In the second half of 2020, Sisram intends to adopt a constructive disruption strategy by evaluating and implementing near-future technologies, ventures, and synergies so as to bolster our global position. The Group's efforts throughout 2020 will strategically focus on digitalization, brand and eco-system building and lean innovation.

The fourth industrial revolution is happening NOW. The new business environment (as we came to learn these days) is composed of disruptive technologies and trends such as the IoT, robotics, virtual reality (VR) and artificial intelligence (AI), that are changing the way we live, work and consume.

Prior to COVID-19, Sisram identified the necessary tools and working paradigms to facilitate its future success in this new era. As we perceive it, COVID-19 is expected to play as a significant catalyst, accelerating this revolution. These days we are outlining Sisram's digital transformation strategy with two major objectives in sight:

Enable customers' centric operation mindset whereas activities are based on customer data, to facilitate informed decisions making corporate process.
Digitize existing processes, create new ones and centralize data.

We will continue to the pursuit of our mission to provide modular, cost-effective and high-performance systems based on the very latest clinical research and cutting-edge technologies, and to adhere to corporate vision of "Enhancing Quality of Life".

We plan to focus on the following targets:

Develop our market share in the new territories such as Australia and South Korea;
Continue the North America's sales and marketing focus following the successful results achieved in 2019;
Explore untapped direct operation opportunities worldwide;
Focus R&D and clinical resources to explore the combination of energy sources and regenerative medicine applications, develop technologies, products and protocols that will best utilize the findings of the Company's research;

Management Discussion and Analysis

Distribute affiliating products and technologies in a private label/ODM model;
Leverage Fosun's resources in China to capture a larger market share (for surgical, injectables, beauty and cosmeceuticals segments);
Follow our eco-system strategic planning by searching, evaluating, and executing relevant mergers and acquisitions' initiatives that will further strengthen our R&D capabilities, products portfolio and distribution channels.

4. Financial Review

During the Reporting Period, the unaudited interim results and the summary of financial results are as follows:

Revenue
During the Reporting Period, revenue of the Group decreased from US$85.4 million to US$71.7 million, representing a decrease of 16.0% when compared to the corresponding period in 2019. The overall decrease was primarily attributable to a decrease in the sales volume of main consoles and applicators for the Company's different products, due to the COVID-19 impact on the global economy. The pandemic significantly disrupted the global medical aesthetics industry in general and the clinical operations of hospitals, aesthetic clinics and doctors' practices in specific. As at the date of this interim report, the clinical operation of medical aesthetics practices have not been fully back to its normal level prior to the outbreak of COVID-19, although significant improvement is seen in June 2020 as compared to the Reporting Period.
Revenue by main product segments
We generate revenue from the following revenue streams: (i) sale of goods; and (ii) services and others. The revenue from sale of goods amounted to US$67.3 million, representing a decrease of 13.0% as compared to the corresponding period in 2019. The revenue from service and others amounted to US$4.5 million, representing a decrease of 45.3% as compared to the corresponding period in 2019, which was mainly attributed to the overall impact of COVID-19 on market demand.
The following table sets forth our revenue breakdown by main product lines and as a percentage of our total revenue for the six-month ended in the years indicated:

		Six months ended June 30
	2020	2019		YOY %
	(US$ in thousands, except for percentages)

Sale of Goods:
Non-invasive medical aesthetics:
Core	48,923	68.2%	60,150	70.4%	(18.7%)
Beauty	7,062	9.8%	4,649	5.4%	51.9%

Subtotal	55,985	78.0%	64,799	75.8%	(13.6%)
Minimally invasive	9,405	13.1%	11,171	13.1%	(15.8%)
Non-EBD*	1,894	2.6%	1,327	1.6%	42.7%

Subtotal	67,284	93.7%	77,297	90.5%	(13.0%)
Services and Others	4,452	6.3%	8,135	9.5%	(45.3%)

Total	71,736	100.0%	85,432	100.0%	(16.0%)

Non-EBD(Energy Based Devices) - includes sales of Dermal Fillers.

Sisram Medical Ltd | Interim Report 2020

Management Discussion and Analysis

We have derived a substantial majority of our revenue from our Core product line, representing 68.2% of our total revenue for the Reporting Period. This includes our flagship non-invasive medical aesthetics treatment systems: "Soprano", "Harmony" and "Accent" platforms, as well as our Aesthetic Precision product line. Revenue from the sale of our Core product line was US$48.9 million for the six months ended June 30, 2020, representing a decrease of 18.7% in comparison with a revenue of US$60.2 million in the corresponding period in 2019. The decrease is attributed the overall decline in sales volume due to the pandemic impact.

The significant increase in our Beauty product line revenue by 51.9%, amounting to US$7.1 million is attributed to a new product portfolio perspective we adopted prior to the pandemic outbreak. This outlook proved to be essential post the pandemic as it promotes the development of Value for Money products, an entry-level product, catering to vast customers segment, offering affordable treatments for consumers and quick return on investment for the customers.

Revenue from our Minimally invasive product line decreased by 15.8% and amounted to US$9.4 million compared to US$11.2 million for the corresponding period in 2019. The decrease is too attributed the overall decline in sales volume due to the pandemic impact.

Revenue by geographic segments

The following table sets forth our revenue by geographic segments for the six months ended in the years indicated (measured by the location of our direct sales customers and our distributors):

		Six months ended June 30
	2020	2019		YOY %
	(US$ in thousands, except for percentages)
Europe	16,367	22.8%	25,051	29.3%	(34.7%)
North America	22,848	31.9%	22,203	26.0%	2.9%
APAC	21,779	30.4%	21,474	25.1%	1.4%
Middle East and Africa	7,581	10.5%	10,494	12.3%	(27.8%)
Latin America	3,161	4.4%	6,210	7.3%	(49.1%)

Total	71,736	100.0%	85,432	100.0%	(16.0%)

During the Reporting Period, APAC, Europe and North America were the Company's most important geographic segments by revenue contribution, though sales were distributed broadly across many regions globally. The Company has strived to maintain and expand its geographically diverse sales network, which will allow the Company to readily capture strong regional demand, as well as help the Company to balance and minimise risks from regional economics downfalls.

The revenue derived from Europe decreased by 34.7% to US$16.4 million in the Reporting Period from US$25.1 million for the corresponding period in 2019. The decrease is in line with the volume of the pandemic impact on this continent.

The revenue derived from North America increased by 2.9% to US$22.9 million in the Reporting Period from US$22.2 million for the corresponding period in 2019. The increase is attributed to the moderate impact of the pandemic on this territory, with business operation only partially closed, which enabled our North American subsidiary to maintain its high revenue stream during the Reporting Period, with a slight positive increase in revenue when compared to the corresponding period in 2019.

12 Sisram Medical Ltd | Interim Report 2020

Management Discussion and Analysis

The revenue derived from APAC increased by 1.4% to US$21.8 million in the Reporting Period from US$21.5 million for the corresponding period in 2019. The increase is mainly attributed to our Chinese operation, with China, being the first country to be affected from the pandemic, was also the first to bounce back, demonstrating an impressive revenue increase during the Reporting Period in comparison with the corresponding period last year. Our recently formed South Korean subsidiary also contributed to the regional growth, showing constant revenue increase.

The revenue derived from Middle East and Africa decreased by 27.8% to US$7.6 million in the Reporting Period from US$10.5 million for the corresponding period in 2019. The decrease is mainly attributed to the impact of the pandemic on these territories.

The revenue derived from Latin America decreased by 49.1% to US$3.2 million in the Reporting Period from US$6.2 million for the corresponding period in 2019. The decrease is in line with the volume of the pandemic impact on this territory.

Cost of sales
During the Reporting Period, the cost of sales primarily comprised of the costs of production materials, and to a lesser extent, remuneration of production employees, the cost of rendering of services, and overheads and other miscellaneous costs relating to production. For the Reporting Period, the cost of sales of the Group decreased by 12.7% to US$31.8 million from US$36.5 million for the corresponding period in 2019, which is mainly due to decrease in sales volume.
Gross profit and gross profit margin
During the Reporting Period, gross profit of the Group decreased by 18.5% to US$39.9 million from US$49.0 million for the corresponding period in 2019 for the reasons set out in Revenue and Cost of sales above.
The gross profit margin decreased to 55.6% for the Reporting Period from 57.3% for the corresponding period in 2019. The decrease relates mainly due to fixed manufacturing expenses such as salaries, facilities expenses and other fixed expenses.
Selling and distribution expenses
The selling and distribution expenses primarily consist of: (i) employees' salaries and related cost; (ii) sales commission to sales employees and independent agents; (iii) marketing expenses such as participation in tradeshows and digital activities.
During the Reporting Period, selling and distribution expenses of the Group decreased by 1.4% to US$19.8 million from US$20.1 million for the corresponding period in 2019, the decrease resulted from lower commission expenses, and decrease of marketing events due to the pandemic.
Selling and distribution expense also include one time amortisation of deferred revenues asset arising from Nova's acquisition in the amount of US$0.5 million.

Sisram Medical Ltd | Interim Report 2020

Management Discussion and Analysis

Administrative expenses
Administrative expenses primarily consist of: (i) amortization of intangible assets; (ii) remuneration paid to administration employees; (iii) professional fees paid and administrative costs; (iv) fees relating to the operation facilities; and (v) other miscellaneous expenses.
During the Reporting Period, administrative expenses of the Group increased by 6.6% to US$8.1 million from US$7.6 million for the corresponding period in 2019. The increase is mainly attributed to the consolidation of two new subsidiaries (Alma Korea Limited and Alma Medical Australia Pty Ltd) expenses, we established a new IT team to manage and support the new ERP system, in addition one-time lease improvements depreciation in accordance with the moving to the new campus and the revaluation of contingent consideration related to the acquisition of Nova.
Administrative expenses also include amortization of intangible assets arising from the acquisitions of Alma and Nova. During the Reporting Period, the amortization expense amounted to US$3.1 million, the same amount in the corresponding period in 2019.
R&D
The Group's R&D expenses primarily consist of: (i) remuneration to R&D team members; (ii) cost of materials used in R&D efforts; (iii) expenses related to clinical studies; and (iv) expenses related to regulatory compliance and registration of patents and trademarks. During the Reporting Period, majority of R&D expenses were recorded in the period that such expenses were incurred and were not capitalized.
During the Reporting Period, R&D expenses are US$5.0 million, close amount to the corresponding period in 2019.
Finance costs
Finance costs are comprised mainly of interest on bank loans. During the Reporting Period, finance costs also include interest on lease liabilities, which were recognized upon the adoption of IFRS 16 - Leases on January 1, 2019. Finance costs decreased to US$0.3 million in the Reporting Period from US$0.5 million for the corresponding period in 2019, since lower interests are recorded on debts during the Reporting Period due to the repayment of bank loans.
Income tax expense
The Israeli corporate tax rates are both 23% in 2020 and 2019. Each entity in the Group is taxable based on its standalone results as measured by the local tax system.
During the Reporting Period, income tax expense decreased to US$0.7 million, representing a decrease of 61.6% from US$1.7 million for the corresponding period in 2019. This was primarily attributable to the lower income before tax.

14 Sisram Medical Ltd | Interim Report 2020

Management Discussion and Analysis

Profit for the period
As a result of the foregoing, during the Reporting Period, our profit for the period decreased by 58.6% to US$5.7 million from US$13.9 million for the corresponding period in 2019. The net profit margin of the Group for the six months ended in June 30, 2020 and 2019 were 8.0% and 16.2%, respectively.
Adjusted net profit and adjusted net profit margin
The Group calculates adjusted net profit by taking profit for the period and adjusting: (i) amortization of other intangible assets; (ii) changes in contingent consideration arising from the acquisition of Nova; and (iii) deferred tax liability arising from other intangible assets, which primarily relates acquisitions. The Group calculates adjusted net profit margin by dividing adjusted net profit by revenue.
The Group presents this financial measure because it is used to evaluate financial performance by excluding the impact of items that the Group does not consider indicative of the Group's ordinary operating performance.
The term adjusted net profit is not a financial measure defined under IFRSs. The use of adjusted net profit has material limitations as an analytical tool, as it does not include all items that impact net profit for the period. Items excluded from adjusted net profit are significant components in understanding and assessing the Group's operating and financial performance. The following table reconciles the adjusted net profit for the Reporting Period presented to the most directly comparable financial measure calculated and presented in accordance with IFRSs, which is profit for the period:

	Six months ended June 30

	2020	2019	YOY %
	US$'000	US$'000
PROFIT FOR THE PERIOD	5,738	13,865	58.6%
Adjusted for:
Amortization of other intangible assets
arising from the Alma Acquisition	2,305	2,305	0.0%
Amortization of other intangible assets
arising from the Nova acquisitions	812	283	186.9%
Contingent consideration arising from acquisitions	262	274	(4.4%)
Deduct: deferred tax arising from
other intangible assets	(471)	(349)	35.0%
Adjusted net profit	8,646	16,378	(47.2%)
Adjusted net profit margin	12.1%	19.2%

Sisram Medical Ltd | Interim Report 2020

Management Discussion and Analysis

5. Debt structure, liquidity and sources of funds

Treasury policy
The Board aims to have a better control in its treasury operations and endeavors to maintain an adequate level of cash and cash equivalents. The functional currency of the Group is the U.S. Dollar and most of the sales proceeds are denominated in U.S. Dollar. Please see "Risk Management - Foreign Currency Exposure" for further details. The Group generally finances its operation with internally generated resources.
To ensure that the financial resources have been used in the most cost-effective and efficient way, the Board would also consider various funding sources to address the Group's financial obligations and operational needs. The Board would also review and evaluate the adequacy and effectiveness of the treasury functions from time to time.
Gearing ratio
As at June 30, 2020 and June 30, 2019, the Group's cash and cash equivalents exceeded the total debt. As such, no gearing ratio was presented.
Interest coverage
During the Reporting Period, the interest coverage, which is calculated by EBIT (Earnings Before Interest and Taxes) divided by financial costs was 19.4 times as compared with 31.5 times for the corresponding period in 2019. The interest coverage decreased mainly because the Group's EBIT during the Reporting Period decreased by 58% to US$6.7 million from US$16.1 million for the corresponding period in 2019, and finance cost decreased by 31.9% to US$0.3 million from US$0.5 million for the corresponding period in 2019.
Available facilities
As at June 30, 2020, Sisram did not have any unutilized banking facilities. Sisram is mainly financing its operations through cash generated from operating activities.
Interest rate
As at June 30, 2020, total interest-bearing bank and other borrowings at a floating interest rate amounted to US$1.1 million (As at December 31, 2019: US$2.8 million).

16 Sisram Medical Ltd | Interim Report 2020

Management Discussion and Analysis

Maturity structure of outstanding debts
The following tables sets forth the maturity structure of outstanding debts as at June 30, 2020 and December 31, 2019.

			June 30, 2020			December 31, 2019
			US$'000			US$'000
		Effective			Effective
		interest rate			interest rate
		(%)	Maturity	US$'000	(%)	Maturity	US$'000
Current
Bank loan, secured (a)/(b)	3.25-3.65	2020	209	3.25-3.65		2020	958
	Current portion of long-term	PRIME+			6-month
	bank loans, secured	(1.9-2.2)	2020	593	LIBOR+3.75		2020	1,452

Bank loan, secured (a)/(b)			802				2,410
Non-current
Bank loan, secured (a)/(b)				6-month
		PRIME+			LIBOR+
		(1.9-2.2)	2021-2022	311	3.25-3.65	2021-2022	402
				1,113				2,812
Notes: LIBOR stands for London Interbank Offered Rate.
	PRIME stands for Israel Interbank Offered Rate.
					June 30,	December 31,
						2020		2019
					US$'000		US$'000

Within 1 year					802		2,410
1 to 2 years					248		297
2 to 5 years					63		105

Total					1,113		2,812

Sisram Medical Ltd | Interim Report 2020

Management Discussion and Analysis

Collateral and pledged assets
On April 13, 2014, the Company entered into a loan agreement pursuant to which an unconditional guarantee agreement with the banks was entered into, pursuant to which, the Company granted and pledged to the banks a continuing security interest in all the Company's assets. In addition, the Company granted and pledged to the banks all of the issued and outstanding shares of Alma and a floating charge over all of the present and future assets of the Company as they may be from time to time. The Company also agreed not to sell, transfer, assign, mortgage, pledge, lease, grant a security interest in, or encumber any of its assets. The Company has met all the aforementioned financial covenants. The last repayment on the loan was paid in April 2020.
Nova, Alma's subsidiary, entered into loan agreements pursuant to which Nova pledged to the banks all of the issued and outstanding shares of Nova and a floating charge over all of the present and future assets of Nova as they may be from time to time. The remaining balance of such loan amounted to US$0.9 million as at June 30, 2020, which is fully covered by Nova cash balance.

6. Cash flow

Sisram is using its cash primarily for its operating activities, payments of interest and principals of debts due, payments for purchases and capital expenditures and funding growth and expansion of its business.

The table below shows the cash flow of the Group generated from (or used in) operating activities, investing activities and financing activities for the Reporting Period and the corresponding period of 2019.

	Six months ended June 30

	2020	2019	YOY%
	US$'000	US$'000
Net cash flows from/(used in) operating activities	(110)	8,570	(101.3%)
Net cash flows from investing activities	2,360	46,632	(94.9%)
Net cash flows used in financing activities	(3,150)	(2,479)	27%
Net increase/(decrease) in cash and cash equivalents	(900)	52,723	(101.7%)
Cash and cash equivalents at the beginning of the period	99,735	33,840	194.7%
Effect of foreign exchange rate changes, net	152	147	3.4%
Cash and cash equivalents at the end of the period	98,987	86,710	14.2%
Cash and cash equivalents
Pledged bank balances for long term bank loans	84	58	44.8%
Term deposits with original maturity of more than three months	-	16,000	(100%)
Cash and bank balance at the end of the period	99,071	102,768	(3.6%)

18 Sisram Medical Ltd | Interim Report 2020

Management Discussion and Analysis

Net cash flows used in operating activities

During the Reporting Period, the net cash flows used in operating activities were US$0.1 million, which was primarily attributable to: (i) the profit before tax of US$6.4 million; (ii) total adjustments for profit or loss items of US$5.5 million; (iii) working capital adjustments of US$14 million; and (iv) income tax received, net of US$2 million.

Net cash flows from investing activities

During the Reporting Period, the net cash flows provided by investing activities were US$2.4 million, which was primarily attributable to: (i) maturity of short term bank deposits with the amount of US$8 million, (ii) US$0.6 million interest received from term deposits and (iii) US$6.2 million in purchase of plant and equipment.

Net cash flows used in financing activities

During the Reporting Period, the net cash flows used in financing activities was US$3.2 million, which was primarily attributable to: (i) repayments on loan and interest of US$1.4 million; and (ii) payment of lease payments of US$1.7 million.

7. Capital commitments and capital expenditures

During the Reporting Period, capital expenditures of the Group amounted to US$6.2 million, which mainly consisted of additions to the plant facility and ERP Costs.

As at June 30, 2020, the Group did not have any significant capital commitments.

8. Contingent liabilities

As at June 30, 2020, the Group did not have any contingent liabilities.

9. Material acquisition and disposal

During the Reporting Period, the Group did not conduct material acquisition or disposal.

10. Significant investments held and future plans for material investments and capital assets

Save for those disclosed in this interim report, there were no other significant investments held as at June 30, 2020. The Group did not have other plans for material investments and capital assets.

Sisram Medical Ltd | Interim Report 2020

Management Discussion and Analysis

11. Risk management

The operation and development of the Group are not exposed to any material risk factors, but they will be impacted to a certain extent by several factors as illustrated below:

Foreign currency exposure
The functional currency of the Group is the U.S. Dollar and most of the sales proceeds are denominated in the U.S. Dollar. However, the Company also generates revenue globally in a few other currencies, particularly Euros, and incurs costs mostly in New Israeli Shekels. Furthermore, the functional currencies of certain subsidiaries are currencies other than the U.S. Dollar, including the Euros, the Indian Rupee, the New Israeli Shekels, the HK Dollar, the South Korean Won and the Australian Dollar. As at the end of the Reporting Period, the assets and liabilities of these entities were translated into the U.S. Dollar at the exchange rates prevailing at the end of the Reporting Period and their statements of profit or loss were translated into the U.S. Dollar at the weighted average exchange rates for the period. As such, the Group's results of operations are sensitive to changes in foreign currency exchange rates.
The Company has formally established a hedging management framework in 2014 and the hedging transactions are mainly managed by the Company's finance department. By analyzing the currency balance sheet and trends in the foreign exchange markets, the Company has entered into forward contracts from time to time to mitigate the adverse effects of exchange rate fluctuations.
Interest rate exposure
It is the Group's strategy to use debts with fixed and floating interest rates to manage its interest costs. The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's debt obligations with floating interest rates.

12. Employees and remuneration policies

The following table sets forth the number of employees by function as at June 30, 2020:
	Number of
Function	Employees
Operations	186
R&D	69
Sales & Marketing	186
General and Administration	60

Total	501

Employees' headcount as at the end of Reporting Period decreased by 2% with the departure of 10 employees.

The employees' remuneration includes basic salary and a performance-based bonus. The performance-based bonus is determined by reference to the performance appraisal of the employees of the Group. Through clearly locating position-oriented performance targets and formulating performance standards, the Company has managed to assess employees' performance in an objective manner. By materializing reward and penalty in the performance-related portion of the employees, the Company is able to achieve the coexistence of incentives and restraints.

20 Sisram Medical Ltd | Interim Report 2020

Interim Condensed Consolidated Statement of Profit or Loss

		Six months ended June 30,

		2020	2019
	Notes	US$'000	US$'000
		(Unaudited)	(Unaudited)
REVENUE	4	71,736	85,432
Cost of sales		(31,834)	(36,460)
Gross profit		39,902	48,972
Other income and gains	4	988	1,438
Selling and distribution expenses		(19,834)	(20,122)
Administrative expenses		(8,088)	(7,586)
Research and development expenses		(4,955)	(4,944)
Other expenses		(1,271)	(1,674)
Finance costs		(348)	(511)
PROFIT BEFORE TAX	5	6,394	15,573
Income tax expense	6	(656)	(1,708)
PROFIT FOR THE PERIOD		5,738	13,865
Attributable to:
Owners of the parent		5,504	13,209
Non-controlling interests		234	656
		5,738	13,865
EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY
EQUITY HOLDERS OF THE PARENT
Basic and diluted
For profit for the period (US cents)	8	1.24	2.99

Sisram Medical Ltd | Interim Report 2020

Interim Condensed Consolidated Statement of Comprehensive Income

	Six months ended June 30,

	2020	2019
	US$'000	US$'000
	(Unaudited)	(Unaudited)
PROFIT FOR THE PERIOD	5,738	13,865
OTHER COMPREHENSIVE INCOME
Other comprehensive income that may be reclassified to profit or loss
in subsequent periods:
Exchange differences on translation of foreign operations	(306)	179
Effective portion of changes in fair value of hedging instruments arising
during the period	160	78
Net other comprehensive income that may be reclassified to profit or loss
in subsequent periods	(146)	257
Other comprehensive income that will not be reclassified to profit or loss
in subsequent periods:
Remeasurement loss of a defined benefit plan	(50)	-
Net other comprehensive income that will not be reclassified to profit or loss
in subsequent periods	(50)	-
OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX	(196)	257
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	5,542	14,122
Attributable to:
Owners of the parent	5,308	13,466
Non-controlling interests	234	656
	5,542	14,122

22 Sisram Medical Ltd | Interim Report 2020

Interim Condensed Consolidated Statement of Financial Position

		As at	As at
		June 30,	December 31,
		2020	2019
	Notes	US$'000	US$'000
		(Unaudited)	(Audited)
NON-CURRENT ASSETS
Plant and equipment	9	10,576	5,328
Right-of-use assets		7,452	8,921
Goodwill		111,183	111,183
Other intangible assets		55,955	58,630
Deferred tax assets		4,833	4,791
Trade receivables	10	6,228	6,183
Other non-current assets		191	211
Total non-current assets		196,418	195,247
CURRENT ASSETS
Inventories		37,117	33,018
Trade receivables	10	51,693	50,438
Prepayments, other receivables and other assets		3,201	4,195
Tax receivables		-	2,204
Derivative financial instruments		309	32
Cash and bank balances		99,071	107,792
Total current assets		191,391	197,679
CURRENT LIABILITIES
Contract liabilities		2,981	4,308
Trade payables	11	8,712	11,992
Other payables and accruals		28,250	17,881
Interest-bearing bank and other borrowings		802	2,410
Tax payables		746	-
Lease liabilities		3,022	2,921
Total current liabilities		44,513	39,512
NET CURRENT ASSETS		146,878	158,167
TOTAL ASSETS LESS CURRENT LIABILITIES		343,296	353,414
NON-CURRENT LIABILITIES
Contract liabilities		123	684
Interest-bearing bank and other borrowings		311	402
Lease liabilities		4,836	6,469
Deferred tax liabilities		10,289	10,645
Other long-term liabilities		2,503	9,644
Total non-current liabilities		18,062	27,844
NET ASSETS		325,234	325,570

Sisram Medical Ltd | Interim Report 2020

Interim Condensed Consolidated Statement of Financial Position

	As at	As at
	June 30,	December 31,
	2020	2019
Notes	US$'000	US$'000
	(Unaudited)	(Audited)
EQUITY
Equity attributable to owners of the parent
Share capital	1,254	1,254
Reserves	323,980	324,316
Total equity	325,234	325,570

24 Sisram Medical Ltd | Interim Report 2020

Interim Condensed Consolidated Statement of Changes in Equity

			Attributable to owners of the parent
	Share	Share	Other	Cashflow	Exchange			Non-
	hedge	fluctuation	Retained		controlling	Total
	capital	premium*	reserve*	reserves*	reserve*	earnings*	Total	interests	equity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
At January 1, 2020	1,254	240,766	14,389	-	(515)	69,676	325,570	-	325,570
Profit for the period	-	-	-	-	-	5,504	5,504	234	5,738
Other comprehensive income for the period:
Effective portion of changes in fair value
of hedging instruments arising during				160			160		160
the period	-	-	-	-	-	-
Exchange differences on translation of					(306)		(306)		(306)
foreign operations	-	-	-	-	-	-
Remeasurement loss of a defined benefit plan	-	-	-	-	-	(50)	(50)	-	(50)
Total comprehensive income for the period	-	-	-	160	(306)	5,454	5,308	234	5,542
Acquisition of a subsidiary	-	-	-	-	-	-	-	-	-
Final 2019 dividend declared	-	-	-	-	-	(6,264)	(6,264)	-	(6,264)
Reclassification of non-controlling interests of								(234)	(234)
a subsidiary embedded with put options	-	-	-	-	-	-	-
Fair value adjustment on non-controlling
interests of a subsidiary embedded with			620				620		620
put options	-	-	-	-	-	-
At June 30, 2020	1,254	240,766	15,009	160	(821)	68,866	325,234	-	325,234

These reserve accounts comprise the consolidated other reserves of US$323,980,000 in the consolidated statement of financial position.

			Attributable to owners of the parent

				Cashflow	Exchange			Non-
	Share	Share	Other	hedge	fluctuation	Retained		controlling	Total
	capital	premium*	reserve*	reserves*	reserve*	earnings*	Total	interests	equity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)

At January 1, 2019	1,254	240,766	17,580	(78)	(571)	55,149	314,100	-	314,100

Profit for the period	-	-	-	-	-	13,209	13,209	656	13,865
Other comprehensive income for the period:
Effective portion of changes in fair value
of hedging instruments arising during
the period	-	-	-	78	-	-	78	-	78
Exchange differences on translation of
foreign operations	-	-	-	-	179	-	179	-	179

Total comprehensive income for the period	-	-	-	78	179	13,209	13,466	656	14,122
Acquisition of a subsidiary	-	-	-	-	-	-	-	3,368	3,368
Dividend declared	-	-	-	-	-	(5,632)	(5,632)	-	(5,632)
Reclassification of non-controlling interests of
a subsidiary embedded with put options	-	-	-	-	-	-	-	(4,024)	(4,024)
Fair value adjustment on non-controlling
interests of a subsidiary embedded with
put options	-	-	(2,060)	-	-	-	(2,060)	-	(2,060)

At June 30, 2019	1,254	240,766	15,520	-	(392)	62,726	319,874	-	319,874

These reserve accounts comprise the consolidated other reserves of US$318,620,000 in the consolidated statement of financial position.

Sisram Medical Ltd | Interim Report 2020

Interim Condensed Consolidated Statement of Cash Flows

	Six months ended June 30,

	2020	2019
	US$'000	US$'000
	(Unaudited)	(Unaudited)
CASH FLOWS (USED IN)/FROM OPERATING ACTIVITIES
Cash (paid in)/generated from operations	(2,091)	10,842
Income tax received/(paid)	1,981	(2,272)
Net cash flows (used in)/from operating activities	(110)	8,570
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received	528	986
Purchases of items of plant and equipment	(6,168)	(1,326)
Acquisition of a subsidiary	-	(7,648)
Decrease in term deposits with original maturity of more than three months	8,000	54,620
Net cash flows from investing activities	2,360	46,632
CASH FLOWS USED IN FINANCING ACTIVITIES
Repayment of bank loans	(1,710)	(764)
Interest paid	(133)	(284)
Principal portion of lease payments	(1,675)	(1,762)
Proceeds from settlement of foreign currency forward contracts	368	331
Net cash flows used in financing activities	(3,150)	(2,479)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS	(900)	52,723
Cash and cash equivalents at beginning of period	99,735	33,840
Effect of foreign exchange rate changes, net	152	147
CASH AND CASH EQUIVALENTS AT END OF PERIOD	98,987	86,710
ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS
Cash and cash equivalents as stated in the consolidated statements of
cash flows	98,987	86,710
Pledged bank balances for long-term bank loans	84	58
Term deposits with original maturity of more than three months	-	16,000
Cash and bank balances as stated in the consolidated statements of
financial position	99,071	102,768

26 Sisram Medical Ltd | Interim Report 2020

Notes to the Historical Financial Information

1. CORPORATE INFORMATION

The Company is a limited liability company incorporated under the laws of the State of Israel on April 25, 2013. The registered office of the Company is located at 14 Halamish Street, Caesarea Industrial Park, Caesarea 38900, Israel.

The Company is an investment holding company. The Group were mainly involved in the design, development, manufacture and sale of energy-based aesthetic medical and minimally invasive treatment systems.

The shares of the Company were listed on the Main Board of the Stock Exchange on September 19, 2017.

2. BASIS OF PREPARATION AND CHANGES TO THE GROUP'S ACCOUNTING POLICIES

BASIS OF PREPARATION
The unaudited interim condensed consolidated financial information for the Reporting Period has been prepared in accordance with International Accounting Standards ("IAS") 34 Interim Financial Reporting approved by the International Accounting Standards Board. The unaudited interim condensed consolidated financial information does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's consolidated financial statements as at December 31, 2019.
These interim condensed consolidated financial statements have been prepared under the historical cost convention, except for derivative financial instruments, which have been measured at fair value. The interim condensed consolidated financial statements are presented in US$ and all values are rounded to the nearest thousand (US$'000) except when otherwise indicated.
CHANGES IN ACCOUNTING POLICIES
The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2019, except for the adoption of the following revised IFRSs for the first time for the current period's financial information.

Amendments to IFRS 3	Definition of a Business
Amendments to IFRS 9, IAS 39 and IFRS 7	Interest Rate Benchmark Reform
Amendments to IFRS 16	Covid-19-Related Rent Concessions (early adopted)
Amendments to IAS 1 and IAS 8	Definition of Material

Sisram Medical Ltd | Interim Report 2020

Notes to the Historical Financial Information

2. BASIS OF PREPARATION AND CHANGES TO THE GROUP'S ACCOUNTING POLICIES (Continued)

2.2. CHANGES IN ACCOUNTING POLICIES (Continued)

The nature and impact of the revised IFRSs are described below:

Amendments to IFRS 3 clarify and provide additional guidance on the definition of a business. The amendments clarify that for an integrated set of activities and assets to be considered a business, it must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. A business can exist without including all of the inputs and processes needed to create outputs. The amendments remove the assessment of whether market participants are capable of acquiring the business and continue to produce outputs. Instead, the focus is on whether acquired inputs and acquired substantive processes together significantly contribute to the ability to create outputs. The amendments have also narrowed the definition of outputs to focus on goods or services provided to customers, investment income or other income from ordinary activities. Furthermore, the amendments provide guidance to assess whether an acquired process is substantive and introduce an optional fair value concentration test to permit a simplified assessment of whether an acquired set of activities and assets is not a business. The Group has applied the amendments prospectively to transactions or other events that occurred on or after January 1, 2020. The amendments did not have any impact on the financial position and performance of the Group.
Amendments to IFRS 9, IAS 39 and IFRS 7 address the effects of interbank offered rate reform on financial reporting. The amendments provide temporary reliefs which enable hedge accounting to continue during the period of uncertainty before the replacement of an existing interest rate benchmark. In addition, the amendments require companies to provide additional information to investors about their hedging relationships which are directly affected by these uncertainties. The amendments did not have any impact on the financial position and performance of the Group as the Group does not have any interest rate hedge relationships.
Amendment to IFRS 16 provides a practical expedient for lessees to elect not to apply lease modification accounting for rent concessions arising as a direct consequence of the COVID-19 pandemic. The practical expedient applies only to rent concessions occurring as a direct consequence of the COVID-19 pandemic and only if (i) the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change; (ii) any reduction in lease payments affects only payments originally due on or before June 30, 2021; and (iii) there is no substantive change to other terms and conditions of the lease. The amendment is effective retrospectively for annual periods beginning on or after June 1, 2020 with earlier application permitted.
During the period ended June 30, 2020, no monthly lease payments for the leases of the Group's office buildings have been reduced or waived by the lessors as a result of the COVID-19 pandemic and there are no other changes to the terms of the leases.
Amendments to IAS 1 and IAS 8 provide a new definition of material. The new definition states that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments clarify that materiality will depend on the nature or magnitude of information. The amendments did not have any impact on the Group's interim condensed consolidated financial information.

28 Sisram Medical Ltd | Interim Report 2020

Notes to the Historical Financial Information

3. OPERATING SEGMENT INFORMATION

For management purposes, the Group's operating activities are related to a single operating segment, which is the design, development, manufacture and sale of energy-based aesthetic medical and minimally invasive treatment systems. Therefore, no analysis by operating segment is presented.

4. REVENUE, OTHER INCOME AND GAINS

An analysis of revenue is as follows:
	Six months ended June 30,

	2020	2019
	US$'000	US$'000
	(Unaudited)	(Unaudited)
Revenue from contracts with customers
Sale of goods	67,284	77,297
Services provided	4,452	8,135
	71,736	85,432
Disaggregated revenue information for revenue from contracts with customers
	Six months ended June 30,

	2020	2019
	US$'000	US$'000
	(Unaudited)	(Unaudited)
Types of goods or services
Sale of goods	67,284	77,297
Services provided	4,452	8,135
Total revenue from contracts with customers	71,736	85,432
Timing of revenue recognition
Goods transferred at a point in time	67,284	77,297
Services transferred over time	4,452	8,135
Total revenue from contracts with customers	71,736	85,432

Sisram Medical Ltd | Interim Report 2020

Notes to the Historical Financial Information

5. PROFIT BEFORE TAX

The Group's profit before tax from continuing operations is arrived at after charging:
	Six months ended June 30,

	2020	2019
	US$'000	US$'000
	(Unaudited)	(Unaudited)
Cost of inventories sold	20,508	25,366
Cost of services and others	11,326	11,094
Provision for impairment of inventories	303	637
Impairment of trade receivables	716	575
Foreign exchange differences, net	252	462

6. INCOME TAX

The Israeli corporate tax rates applicable to the Company were 23% for the six months ended June 30, 2019 and 2020. Each entity in the group is taxable based on its standalone results as measured by the local tax system.

No income tax has been provided for the Company itself as there was no assessable profit earned by the Company for the Reporting Period. Taxes on taxable income assessable elsewhere have been calculated at the rates of tax prevailing in the countries in which the Group operates.

Nova is taxed based upon the tax law in Israel, the country of residence. Income was taxed at corporate income tax rate of 23% for the six months ended June 30, 2019 and 2020.

Alma Lasers Ltd., the major operating subsidiary of the Company, was granted the status of "Preferred Enterprise" under the 2011 Amendment of the Investment Law and therefore enjoyed a preferential corporate tax rate of 16% during the Reporting Period.

In December 2016, the Israeli Knesset passed Amendment 73 to the Investment Law, which included a number of changes to the Investments Law regime. Certain changes were scheduled to come into effect beginning January 1, 2017, provided that regulations are promulgated by the Finance Ministry to implement the "Nexus Principles" based on The Organisation for Economic Co-operation and Development's guidelines recently published as part of the Base Erosion and Profit Shifting (BEPS) project. The regulations were approved in May 2017 and accordingly, have come into effect.

Applicable benefits under the new regime include:

Introduction of a benefit regime for "Preferred Technology Enterprises", granting a 12% tax rate in central Israel and a 7.5% tax rate in special areas - on income deriving from Intellectual Property, subject to a number of conditions being fulfilled, including a minimal amount or ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual income derived from exports. Technological Preferred Enterprise is defined as an enterprise which meets the aforementioned conditions and for which total consolidated revenues of its parent company and all subsidiaries are less than NIS10 billion. In cases where the parent company and all subsidiaries have more than NIS10 billion of consolidated revenues, the tax rate will be 6% in all Israel regions.

30 Sisram Medical Ltd | Interim Report 2020

Notes to the Historical Financial Information

6. INCOME TAX (Continued)

A Special Preferred Technological Enterprise ("SPTE") - where the parent company's total revenues are more than NIS10 billion in the tax year, its preferred income will be subject to a tax rate of 6%, regardless of the geographical location of the enterprise. On December 4, 2018, the Company received a ruling from the Israeli Income Tax Authority, which grants the Company the SPTE status, in accordance with the criteria in the law mentioned above and the conditions mentioned in the ruling, effective from January 1, 2017.

The following applies to SPTE:

A 6% capital gains tax rate on the sale of a preferred intangible asset to a foreign affiliated enterprise, in accordance with the criteria mentioned in the law.
A withholding tax rate of 20% for the dividends paid from a Preferred Technology Enterprise's income (with an exemption from such withholding tax applying to dividends paid to an Israeli company). Such rate may be reduced to 4% on the dividends paid to a foreign resident company, subject to certain conditions regarding the percentage of foreign ownership of the distributing entity.

As of June 30, 2020, Alma enjoyed a new preferential effective tax rate of 9.48%, for being a SPTE for the period ended June 30, 2020.

The U.S. Tax Cuts and Jobs Act of 2017 ("TCJA") was approved by the U.S. Congress on December 20, 2017 and signed into law by the U.S. President Donald J. Trump on December 22, 2017. This legislation has made complex and significant changes to the U.S. Internal Revenue Code. Such changes include a reduction in the corporate tax rate and limitations on certain corporate deductions and credits, among other changes. The changes include, but are not limited to:

RATE REDUCTION

The TCJA reduces the U.S. federal corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. In addition, the TCJA has made certain changes to the depreciation rules and was implemented new limits on the deductibility of certain expenses and deduction.

The income of the Alma Lasers GmbH, a subsidiary incorporated in Germany, is taxed based upon the tax law in Germany, the country of residence. Income was taxed at a flat corporate income tax rate of 15% during the Reporting Period and was also subject to additional trade income taxes of 15.825% as applicable.

The income of the Alma Lasers AT GmbH, a subsidiary incorporated in Austria, is taxed based upon the tax law in Austria, the country of residence. Income was taxed at a flat corporate income tax rate of 25% during the Reporting Period and was also subject to additional trade income taxes as applicable.

The income of Alma Medical Private Limited, a subsidiary incorporated in India, is taxed based upon the tax law in India, the country of residence. Income was taxed at a corporate income tax rate of 30.9% during the Reporting Period (which was not a flat rate but included many deductions/exemptions/rebates as per the Income Tax Act 1961) and the Company was also subject to withholding taxes as per the provisions of the said Income Tax Act 1961.

The income of Alma Medical HK Limited, a subsidiary incorporated in Hong Kong, is taxed at the rate of 16.5% on its estimated assessable profits arising in Hong Kong.

The income of Alma Medical Australia Pty Ltd, a subsidiary incorporated in Australia, is taxed at the rate of 26%.

Sisram Medical Ltd | Interim Report 2020

Notes to the Historical Financial Information

6. INCOME TAX (Continued)

RATE REDUCTION (Continued)

The income of Alma Korea Limited, a subsidiary incorporated in Korea, is taxed at the rate of 17%.

	Six months ended June 30,

	2020	2019
	US$'000	US$'000
	(Unaudited)	(Unaudited)
Current	1,054	1,260
Deferred	(398)	448
Total tax charge for the period	656	1,708

7. DIVIDENDS

The board of directors resolved not to declare any interim dividend for the period ended June 30, 2020. (six months ended June 30, 2019: Nil)

No dividends were paid during the period ended June 30,2020 (six months ended June 30, 2019: Nil). Dividends in the sum of US$6,264,000 was paid in August 2020 by the Company.

8. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT

The calculation of the basic earnings per share amount is based on the profit for the six months ended June 30, 2020 and 2019 attributable to ordinary equity holders of the parent, and the weighted average number of ordinary shares of 442,155,600 (six months ended June 30, 2019: 442,155,600) in issue during the period.

The calculation of basic earnings per share is based on:

Six months ended June 30,

	2020	2019
	US$'000	US$'000
	(Unaudited)	(Audited)
Earnings
Profit attributable to ordinary equity holders of the parent used in
the basic earnings per share calculation	5,504	13,209

Six months ended June 30,

20202019

Shares
Weighted average number of ordinary shares in issue during the period
used in the basic earnings per share calculation	442,155,600	442,155,600

No adjustment has been made to the basic earnings per share presented for the six months ended June 30, 2019 and 2020 as the Group had no potentially dilutive ordinary shares in issue during those periods.

32 Sisram Medical Ltd | Interim Report 2020

Notes to the Historical Financial Information

9. PLANT AND EQUIPMENT

During the six months ended June 30, 2020, the Group acquired plant and equipment with a cost of US$6,256,000 (six months ended June 30, 2019: US$1,326,000).

During the six months ended June 30, 2020, depreciation for plant and equipment was US$960,000 (six months ended June 30, 2019: US$574,000).

During the six months ended June 30, 2020, disposal of plant and equipment was US$48,000 (six months ended June 30, 2019: Nil).

10. TRADE RECEIVABLES

	As at	As at
	June 30,	December 31,
	2020	2019
	US$'000	US$'000
	(Unaudited)	(Audited)
Trade receivables	59,268	57,350
Impairment	(1,347)	(729)
	57,921	56,621

An ageing analysis of the trade receivables as at the end of the Reporting Period, based on the invoice date and net of loss allowance, is as follows:

	As at	As at
	June 30,	December 31,
	2020	2019
	US$'000	US$'000
	(Unaudited)	(Audited)
Within 1 month	14,594	15,949
1 to 2 months	6,557	7,575
2 to 3 months	3,037	3,918
3 months to 1 year	27,505	22,996
Over 1 year	6,228	6,183
	57,921	56,621

Sisram Medical Ltd | Interim Report 2020

Notes to the Historical Financial Information

11. TRADE PAYABLES

An ageing analysis of the trade payables as at the end of Reporting Period, based on the invoice date, is as follows:

	As at	As at
	June 30,	December 31,
	2020	2019
	US$'000	US$'000
	(Unaudited)	(Audited)
Within 1 month	3,809	8,982
1 to 2 months	1,949	2,596
2 to 3 months	2,447	266
Over 3 months	507	148
	8,712	11,992

12. COMMITMENTS

The Group did not have any significant capital commitments as at the end of the Reporting Period.

13. RELATED PARTY TRANSACTIONS

Compensation of key management personnel of the Group:

	Six months ended June 30,

	2020	2019
	US$'000	US$'000
	(Unaudited)	(Unaudited)
Salaries, allowances and benefits in kind	620	664
Performance related bonuses	254	336
Total compensation paid to key management personnel	874	1,000

In December 2019, Alma signed contracts with Chindex (Beijing) International Trade Co. Ltd ("Chindex") in which Chindex will provide Alma regulation services of registration in China. Alma paid US$409,747 to Chindex for the period ended June 30, 2020

34 Sisram Medical Ltd | Interim Report 2020

Notes to the Historical Financial Information

14. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS

As at June 30, 2020 and December 31, 2019, the fair values of the Group's financial assets, financial liabilities and long-term borrowings approximated to their respective carrying amounts.

Management has assessed that the fair values of cash and bank balances, trade receivables, financial assets included in prepayments, deposits, and other receivables, trade payables, financial liabilities included in other payables and accruals and the current portion of interest-bearing bank and other borrowings approximate to their carrying amounts largely due to the short term maturities of these instruments.

The Group's corporate finance team headed by the chief financial officer is responsible for determining the policies and procedures for the fair value measurement of financial instruments. At the end of the Reporting Period, the corporate finance team analyses the movements in the values of financial instruments and determines the major inputs applied in the valuation. The valuation is reviewed and approved by the chief financial officer.

The fair values of the non-current portion of interest-bearing bank and other borrowings and other long-term liabilities have been calculated by discounting the expected future cash flows using rates currently available for instruments with similar terms, credit risk and remaining maturities. The Group's own non-performance risk for the non-current portion of interest-bearing bank borrowings as at the end of the Reporting Period was assessed to be insignificant.

The Group enters into derivative financial instruments with The Hongkong and Shanghai Banking Corporation Limited. Derivative financial instruments, including forward currency contracts, are measured using valuation techniques similar to forward pricing models, using present value calculations. The models incorporate various market observable inputs including the credit quality of counterparties, foreign exchange spot and forward rates. The carrying amounts of forward currency contracts are the same as their fair values.

FAIR VALUE HIERARCHY

The following tables illustrate the fair value measurement hierarchy of the Group's financial instruments:

Assets measured at fair value:

As at June 30, 2020 (Unaudited)

	Fair value measurement using
	Quoted prices	Significant	Significant
	in active	observable	unobservable
	markets	inputs	inputs
	(Level 1)	(Level 2)	(Level 3)	Total
	US$'000	US$'000	US$'000	US$'000
Foreign exchange forward contracts	-	309	-	309

Sisram Medical Ltd | Interim Report 2020

Notes to the Historical Financial Information

14. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS (Continued)

FAIR VALUE HIERARCHY (Continued)

As at December 31, 2019 (Audited)

	Fair value measurement using
	Quoted prices	Significant	Significant
	in active	observable	unobservable
	markets	inputs	inputs
	(Level 1)	(Level 2)	(Level 3)	Total
	US$'000	US$'000	US$'000	US$'000
Foreign exchange forward contracts	-	32	-	32

During the period, there were no transfers of fair value measurements between Level 1 and Level 2 and no transfers into or out of Level 3 for both financial assets and financial liabilities.

15. COMPARATIVE AMOUNTS

Certain comparative amounts have been reclassified to conform with current year's presentation and disclosures.

36 Sisram Medical Ltd | Interim Report 2020

General Information

Results and Dividends

The Group's results for the six months ended June 30, 2020 and the state of affairs of the Group as at June 30, 2020 are set out in the interim condensed consolidated financial statements and the accompanying notes on pages 21 to 36. The Board has not recommended the distribution of any interim dividend for the Reporting Period.

The Global Offering

On September 19, 2017, the shares of the Company were listed on the Main Board of the Stock Exchange. The Global Offering of the Shares comprises the Hong Kong public offering of initially 11,000,000 Shares and the international offering (including the preferential offering) of initially 99,000,000 Shares (subject to, in each case, reallocation and the over-allotment option granted by the Company).

Use of Proceeds from the Global Offering

Total net proceeds from the Global Offering amounted to approximately HK$771.3 million. As at the end of the Reporting Period, approximately HK$389.26 million has been used in accordance with the plan disclosed in the Prospectus of the Company (as adjusted in accordance with the announcement issued by the Company on October 8, 2018). Details of the use of proceeds are set out below:

			Amounts utilized
			during the period
		Amount not	from January 1,	Actual amounts	Amounts not yet
		utilized as at	2020 to	utilized up to	utilized as at
	Intended amount	December 31,	June 30,	June 30,	June 30,	Expected
Intended use of proceeds as set out in the	to be used set out	2019	2020	2020	2020	year of full
Prospectus	in the Prospectus	(HK$ million)	(HK$ million)	(HK$ million)	(HK$ million)	utilisation
(a) Expanding sales channels and distribution
network and intensify marketing efforts
Expand sales channels in the United States,	approximately	23.06	-	63.33	23.06	2022
Germany and India and distribution	11.2%
network globally	(HK$86.39 million)
Invest in global digital marketing	approximately	25.22	1.28	4.60	23.94	2021
	3.7%
	(HK$28.54 million)
Develop analytics capabilities	approximately	27.32	-	1.23	27.32	2022
	3.7%
	(HK$28.54 million)
(b) Capital investments
Upgrade existing or establish new service	approximately	32.44	0.13	0.47	32.31	2023
centers in direct sales markets	4.2%
	(HK$32.78 million)
Upgrade and remap production lines	approximately	26.25	26.25	35.90	-	N/A
	4.7%
	(HK$35.90 million)
Optimize and update information technology	approximately	29.10	1.92	8.72	27.18	2022
systems and infrastructure	4.7%
	(HK$35.90 million)

Sisram Medical Ltd | Interim Report 2020

General Information

				Amounts utilized
				during the period
			Amount not	from January 1,	Actual amounts	Amounts not yet
			utilized as at	2020 to	utilized up to	utilized as at
		Intended amount	December 31,	June 30,	June 30,	June 30,	Expected
Intended use of proceeds as set out in the	to be used set out	2019	2020	2020	2020	year of full
Prospectus	in the Prospectus	(HK$ million)	(HK$ million)	(HK$ million)	(HK$ million)	utilisation
(c)	Research and development activities
	Develop and expand minimally invasive	approximately	35.46	0.23	0.67	35.23	2023
	product line	4.7%
		(HK$35.90 million)
	Increase the funding for clinical studies in the	approximately	34.71	0.14	1.33	34.57	2024
	United States	4.7%
		(HK$35.90 million)
	Bolster regulatory capabilities	approximately	21.80	4.99	19.09	16.81	2023
		4.7%
		(HK$35.90 million)
(d)	Repay buy-out loan from Fosun Industrial	approximately	-	-	71.74	-	N/A
		9.3%
		(HK$71.74 million)
(e)	Strategic acquisition, enter into strategic	approximately	159.35	2.14	70.32	157.21	2021
	partnerships and other business development	29.5%
		(HK$227.53 million)
(f)	Supplement working capital and other general approximately	4.42	-	72.71	4.42	2021
	corporate purpose	10.0%
		(HK$77.13 million)
(g)	Repay a loan with HSBC Bank Plc, Israel	approximately	-	-	39.15	-	N/A
	Discount Bank Ltd. and Mizrahi Tefahot Bank 5.1%
	Ltd.	(HK$39.15 million)

Share Capital

As at the date of this interim report, the authorised share capital of the Company is NIS10,000,000, comprising 1,000,000,000 Shares of NIS0.01 each, among which, 442,155,600 Shares are issued and fully paid.

Purchase, Sale or Redemption of Listed Securities by the Company

During the Reporting Period, neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company's listed securities.

Sufficiency of Public Float

Based on the information that is publicly available to the Company and to the best knowledge of the Directors, the Company has maintained a public float of no less than 25% of the issued Shares as at the date of this interim report.

38 Sisram Medical Ltd | Interim Report 2020

General Information

Directors' and Chief Executive's Interests and Short Position in Shares, Underlying Shares and Debentures

As at June 30, 2020, the interest and/or short positions of Directors and chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or as otherwise should be notified to the Company and the Stock Exchange pursuant to the Model Code as set out in Appendix

10 to the Listing Rules were as follows:

					Percentage of
	The company				shareholding in
	in which the	The class	Capacity and	Number of	the relevant
Name of Directors	interests are held	of shares	nature	shares held	class of shares
Lior Moshe DAYAN	Company	Ordinary Shares	Beneficial owner	113,500	0.03%
Yifang WU	Fosun Pharma	H Shares	Beneficial owner	342,000	0.06%
		A Shares	Beneficial owner	718,900	0.04%
Yao WANG	Fosun Pharma	A Shares	Beneficial owner	50,000	0.002%

Save as disclosed in the foregoing, as at June 30, 2020, none of the Directors or chief executive of the Company or their respective close associates had any interests or short positions in any shares, underlying shares, or debentures of the Company or any of its associated corporations as recorded in the register required to be kept pursuant to Section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

During the Reporting Period, no rights to acquire benefits by means of the acquisition of shares or debentures of the Company were granted to any Directors or their respective spouses or minor children, or were any such rights exercised by them; nor was the Company, its holding company, or any of its subsidiaries or fellow subsidiaries a party to any arrangement which enabled the Directors to acquire such rights in any other body corporate.

Sisram Medical Ltd | Interim Report 2020

General Information

Interests and Short Positions of Substantial Shareholders in Shares and Underlying Shares

As at June 30, 2020, so far as is known to the Directors, the persons or entities, other than the Directors or chief executive of the Company, who had interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who were deemed to be directly or indirectly interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Company were as follows:

		Number of Shares	Approximate
Name of Shareholders	Capacity	held or interested	Percentage (%)
CML	Beneficial owner	127,318,640	(L)(1)	28.79%
Ample Up(2)	Beneficial owner	203,240,160	(L)
	Interest in controlled corporation	127,318,640	(L)

		330,558,800	(L)	74.76%
Fosun Industrial(3)	Interest in controlled corporation	330,558,800	(L)	74.76%
Fosun Pharma(4)	Interest in controlled corporation	330,558,800	(L)	74.76%
Fosun High Tech(5)	Interest in controlled corporation	330,558,800	(L)	74.76%
Fosun International(6)	Interest in controlled corporation	330,558,800	(L)	74.76%
FHL(7)	Interest in controlled corporation	330,558,800	(L)	74.76%
FIHL(8)	Interest in controlled corporation	330,558,800	(L)	74.76%
Guangchang GUO(9)	Interest in controlled corporation	330,558,800	(L)	74.76%

Notes:

(L): Long Positions
CML is wholly owned by Ample Up. Ample Up is deemed to be interested in the Shares in which CML is interested as legal and beneficial owner.
Ample Up is wholly owned by Fosun Industrial. Therefore, Fosun Industrial is deemed to be interested in an aggregate holding of 330,558,800 Shares which Ample Up is interested in, comprising 203,240,160 Shares held by Ample Up and 127,318,640 Shares held by CML.
Fosun Industrial is wholly owned by Fosun Pharma. Therefore, Fosun Pharma is deemed to be interested in the Shares in which Fosun Industrial is deemed to be interested.

Fosun High Tech controls the exercise of more than one-third of the voting rights at the general meeting of Fosun Pharma. Fosun High Tech is deemed to be interested in the Shares in which Fosun Pharma is deemed to be interested.
Fosun High Tech is wholly owned by Fosun International. Fosun International is deemed to be interested in the Shares in which Fosun High Tech is deemed to be interested.
FHL controls the exercise of more than one-third of the voting rights at the general meeting of Fosun International. FHL is deemed to be interested in the Shares in which Fosun International is deemed to be interested.
FHL is wholly owned by FIHL. FIHL is deemed to be interested in the Shares in which FHL is deemed to be interested.
Guangchang GUO controls the exercise of more than one-third of the voting rights at the general meeting of FIHL. Guangchang GUO is deemed to be interested in the Shares in which FIHL is deemed to be interested.

40 Sisram Medical Ltd | Interim Report 2020

General Information

Save as disclosed herein, there is no other person known to the Directors or chief executive of the Company who, as at June 30, 2020, had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 under Part XV of the SFO or who is, directly or indirectly, interested in 5% of more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Company.

Code for Securities Transactions

The Company has adopted Directors' and Chief Executive Officer's Dealing Policy which is no less exacting than the required standard pursuant to the Model Code as set out in Appendix 10 to the Listing Rules as its code of conduct regarding Directors' securities transactions. Having made specific enquiries to all Directors, all Directors have confirmed that they have fully complied with the relevant requirements set out in its own code of conduct during the Reporting Period.

Compliance with the Corporate Governance Code

The Company is committed to enhancing shareholder value by achieving high standards of corporate conduct, transparency and accountability. The Board is of the view that, during the Reporting Period, the Company has been in full compliance with all code provisions of the Corporate Governance Code and Corporate Governance Report as contained in Appendix 14 to the Listing Rules.

Review of Interim Report by the Audit Committee of the Company

The audit committee of the Company comprised Mr. Heung Sang Addy FONG, Mr. Chi Fung Leo CHAN and Ms. Jenny CHEN, all being independent non-executive Directors. The audit committee of the Company has reviewed the unaudited interim results and the interim report of the Group for the six months ended June 30, 2020.

Share Option Scheme

During the Reporting Period, the Group has no share option scheme.

Sisram Medical Ltd | Interim Report 2020

Corporate Information

Directors

Executive Directors

Mr. Yi LIU (劉毅) (Chairman)

Mr. Lior Moshe DAYAN (Chief Executive Officer) Mr. Guojun BU (步國軍) (Chief Financial Officer)

Non-executive Directors

Mr. Yifang WU (吳以芳)

Mr. Yao WANG (汪曜)

Ms. Kun DAI (戴昆) (1)

Ms. Rongli FENG (馮蓉麗) (2)

Independent Non-executive Directors

Mr. Heung Sang Addy FONG (方香生)

Mr. Chi Fung Leo CHAN (陳志峰)

Ms. Jenny CHEN (陳怡芳)

Mr. Kai Yu Kenneth LIU (廖啟宇)

Audit Committee

Mr. Heung Sang Addy FONG (方香生) (Chairman)

Mr. Chi Fung Leo CHAN (陳志峰)

Ms. Jenny CHEN (陳怡芳)

Nomination Committee

Mr. Yi LIU (劉毅) (Chairman)

Mr. Heung Sang Addy FONG (方香生)

Mr. Chi Fung Leo CHAN (陳志峰)

Remuneration Committee

Mr. Chi Fung Leo CHAN (陳志峰) (Chairman)

Mr. Yi LIU (劉毅)

Mr. Heung Sang Addy FONG (方香生)

Authorized Representatives

Mr. Yi LIU (劉毅)

Ms. Mei Ha Wendy KAM (甘美霞)

Headquarters, Registered Office and Principal Place of Business in Israel

14 Halamish Street

Caesarea Industrial Park

Caesarea 38900

Israel

Principal Place of Business in Hong Kong

Level 54

Hopewell Centre

183 Queen's Road East

Hong Kong

Hong Kong Share Registrar

Computershare Hong Kong Investor Services Limited

Shops 1712-1716, 17th Floor

Hopewell Centre

183 Queen's Road East

Wanchai

Hong Kong

Auditors

Ernst & Young

Certified Public Accountants

22/F, CITIC Tower

1 Tim Mei Avenue

Central

Hong Kong

Company Secretary

Ms. Mei Ha Wendy KAM (甘美霞) (FCS (PE), FCIS)

Notes:

Ms. Kun DAI resigned as a non-executive Director on April 30, 2020.
Ms. Rongli FENG was appointed as a non-executive Director on August 20, 2020.

42 Sisram Medical Ltd | Interim Report 2020

Corporate Information

Hong Kong Legal Adviser

Freshfields Bruckhaus Deringer

55/F, One Island East

Taikoo Place, Quarry Bay

Hong Kong

Israeli Legal Adviser

Weinstock Zecler & Co, Law Offices 5 Azrieli Center

Tel-Aviv Israel 67025

Stock Short Name

SISRAM MED

Stock Code

01696

Company Website

www.sisram-medical.com

Sisram Medical Ltd | Interim Report 2020

Definitions

In this interim report, the following expressions have the meanings set out below unless the context requires otherwise.

"Alma Acquisition"

"Alma" or "Alma Lasers"

"Ample Up"

"APAC"

"Board" or "Board of Directors" "CG Code"

"CML"

"Company" or "Sisram"

"Controlling Shareholder"

"COVID-19"

"DACH"

"Director(s)"

"FDA"

"FHL"

"FIHL"

the acquisition of Alma Lasers by the Company, which was completed on May 27, 2013

Alma Lasers Ltd., a company incorporated in Israel with limited liability, a wholly-owned subsidiary of the Company

Ample Up Limited (能悅有限公司), a company incorporated in Hong Kong with limited liability, and a wholly owned subsidiary of Fosun Pharma

Asia-Pacific

the board of Directors of the Company

the Corporate Governance Code and the Corporate Governance Report

Chindex Medical Limited (美中互利醫療有限公司), a wholly-owned subsidiary of Fosun Pharma

Sisram Medical Ltd (復銳醫療科技有限公司*), a company incorporated in Israel with limited liability, the Shares of which are listed on the Stock Exchange

has the meaning ascribed thereto under the Listing Rules

Coronavirus disease 2019

Germany, Austria and Switzerland

the director(s) of the Company

Food and Drug Administration of the United States

Fosun Holdings Limited (復星控股有限公司), a company incorporated in Hong Kong with limited liability, which is wholly owned by FIHL

Fosun International Holdings Ltd. (復星國際控股有限公司), a company incorporated in the British Virgin Islands with limited liability

44 Sisram Medical Ltd | Interim Report 2020

"Fosun High Tech"

"Fosun Industrial"

"Fosun International"

"Fosun Pharma"

"Fosun Pharma Group"

"Global Offering"

"Group", "we", "us" or "our"

"HK$"

"Hong Kong" "IFRSs" "IoT" "Listing Rules"

"Model Code" "NIS" "Nova"

Definitions

Shanghai Fosun High Technology (Group) Co., Ltd. (上海復星高科技（集團) 有限公司), a wholly-owned subsidiary of Fosun International

Fosun Industrial Co., Limited (復星實業（香港）有限公司), a wholly-owned subsidiary of Fosun Pharma

Fosun International Limited (復星國際有限公司), a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange

Shanghai Fosun Pharmaceutical (Group) Co., Ltd.* (上海復星醫藥（集團) 股份有限公司), a joint stock company established in the PRC with limited liability, the H shares and A shares of which are listed and traded on the Main Board of the Stock Exchange and the Shanghai Stock Exchange, respectively

Fosun Pharma and its subsidiaries (excluding the Group)

the initial public offering of the Company's shares

the Company and its subsidiaries

Hong Kong dollars, the lawful currency of Hong Kong

Hong Kong Special Administration Region of the PRC

International Financial Reporting Standards

Internet of Things

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

the Model Code for Securities Transactions by Directors of Listed Issuers

New Israeli Shekels, the lawful currency of Israel

Nova Medical Israel Ltd., a private company organised under the laws of Israel

Sisram Medical Ltd | Interim Report 2020

Definitions

"Plan Assets"

"PRC" or "China"

"Prospectus"

"R&D"

"Reporting Period" "SFO"

"Shareholder(s)"

"Share(s)"

"Stock Exchange"

"US$"

"YOY"

"2011 Amendment of the Investment Law"

For identification purpose only

assets held by a long-term employee benefit fund or qualifying insurance policies

the People's Republic of China, which for purpose of this interim report only, excludes Hong Kong, Macau Special Administrative Region and Taiwan

the prospectus issued by the Company on September 5, 2017 in connection with the Hong Kong public offering and the international offering of the Shares

research and development

the six months ended June 30, 2020

the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong)

holder(s) of the Share(s)

the share(s) in the capital of the Company

the Stock Exchange of Hong Kong Limited

United States Dollars, the lawful currency of the United States

year over year

the Law for the Encouragement of Capital Investments, 1959 (as amended in 2011)

46 Sisram Medical Ltd | Interim Report 2020

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Sisram Medical Ltd. published this content on 22 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 September 2020 10:04:04 UTC

Market Closed - Hong Kong S.E. Other stock markets 01:38:03 23/05/2024 pm IST			5-day change	1st Jan Change
4.03 ^HKD	-6.06%		-3.36%	-23.38%

21/03	Sisram Medical’s Profit Down in Fiscal 2023	MT
20/03	Sisram Medical Ltd Announces Ordinary Final Cash Dividend for the Year Ended December 31, 2023	CI

Sisram Medical’s Profit Down in Fiscal 2023	21/03	MT
Sisram Medical Ltd Announces Ordinary Final Cash Dividend for the Year Ended December 31, 2023	20/03	CI
Sisram Medical Ltd Reports Earnings Results for the Full Year Ended December 31, 2023	20/03	CI
Sisram Medical Ltd Enters into Strategic Partnership with Prollenium	08/01	CI
Sisram Medical Ltd Announces the Registration Application of Profhilo	29/11	CI
Sisram Medical Expects 2023 Revenue To Be Consistent Amid Israel War; Shares Drop 5%	13/11	MT
Sisram Medical's H1 Profit on Lower Revenue	24/23/24	MT
Sisram Medical Ltd Reports Earnings Results for the Half Year Ended June 30, 2023	23/23/23	CI
Sisram Medical Ltd Announces Final Ordinary Dividend for the Year Ended December 31, 2022, Payable 07 September 2023	11/23/11	CI
Sisram Medical Announces the Launch of Alma Veil for the U.S. Market	25/23/25	CI
Sisram Medical Completes Acquisition of Business Related to Alma Lasers	29/23/29	MT
PhotonMed HK completed the acquisition of 40% stake in Alma Hong Kong 2023 Limited from Sisram Medical Ltd.	28/23/28	CI
FDA Clears Sisram Medical's Adipose Tissue Processing Device for Marketing in the US	16/23/16	MT
Sisram Medical Ltd. Receives the Clearance from the U.S. Food and Drug Administration	16/23/16	CI
Chinese Regulator Accepts Sisram Medical’s Drug Registration Application	11/23/11	MT
Sisram Medical Ltd Announces Drug Registration Application of Rt002	11/23/11	CI
PhotonMed HK entered into an agreement to acquire 40% stake in Alma Hong Kong 2023 Limited from Sisram Medical Ltd for CNY 270 million.	30/23/30	CI
Sisram Medical Ltd Provides Revenue Guidance for the Year 2023	21/23/21	CI
Sisram Medical Ltd Declares a Final Dividend for the Year Ended December 31, 2022	21/23/21	CI
Sisram Medical Ltd Reports Earnings Results for the Full Year Ended December 31, 2022	21/23/21	CI
Sisram Medical Ltd Announces Resignation of Mr. Guojun Bu from the Position of Executive Director of the Company with Effect from January 1, 2023	29/22/29	CI
Sisram Medical Ltd Announces Resignation of Mr. Guojun Bu from the Position of Chief Financial Officer of the Company with Effect from January 1, 2023	29/22/29	CI
Sisram Medical's H1 Net Profit Rises 25.9%	22/22/22	MT
Sisram Medical Ltd Provides Revenue Guidance for the Year 2022	19/22/19	CI
Sisram Medical Ltd Reports Earnings Results for the Half Year Ended June 30, 2022	19/22/19	CI

	1st Jan change	Capi.
SISRAM MEDICAL LTD	-23.38%	257M
EL.EN. S.P.A.	+2.87%	867M
LASEROPTEK CO., LTD.	-36.57%	74.06M

Sisram Medical Ltd

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IL0011418113

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Sisram Medical : INTERIM REPORT 2020

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